Case: Dollar Company, Madras Vs. Collector Of Madras

1. This is a pedestrian appeal by a land-owner whose property, having been acquired compulsorily by the State, asks for more compensation, probably appetised by increases over the Collectors award granted by the City Civil Court and the High Court. The grounds urged are conventional, based on comparison of prices shown in land Sales in the neighbourhood and the general escalation of urban land values in the country.2. 127 odd grounds (a ground is around 5 1/2 cents; actually 2,400 sq. ft) were acquired in 1959 for the construction of a Housing Colony for the Madras Port Trust employers by the then Madras State. They comprise R.S. No. 4032/1 and other items with which we are not concerned, since the owners of those items have not come up in appeal to this Court. The relevant notification under S. 4 (1) was made on August 12, 1959 and so the compensation has to be pegged to the market value as on that date. Of course, 16 years have rolled by since, thanks to delay which has come to stay in the administrative and forensic processes of our land. That is by the way. The Land Acquisition Officer awarded Rs. 800/- per ground. The City Civil Court, approaching the problem of valuation plot-wise, as for a housing colony, made the necessary deductions involved in that process and awarded at the rate of Rs. 1,000/per ground. The High Court, on appeal, made an upward revision, discarding the trial courts approach and awarded Rs. 1,800/- per ground. The State has not come up in appeal, but the unquenched claimant asks for more in appeal, demanding, at least Rs. 2,200/- per ground.

Court's reasoning:
7. Property valuation as a practised art is greatly influenced by legal and economic constraints. But, in this case, we do not have any complex considerations since helpful indicators are available. Price paid by the owner recently represents an expression of market value, as bona fide evidence of value, subject to such matters as (a) the relationship of the parties; (b) the market conditions and the terms of sale and (c) the date of sale. It may not end the enquiry but goes a long way to solve the problem. In this connection it may be useful to refer to the decision of this Court in S.L.A. Officer v. T. A. Setty. AIR 1959 SC 429  where it was observed:"It is not disputed that the function of the court in awarding compensation under the Act is to ascertain the market value of the land at the date of the notification under Section 4 (1) and the methods of valuation may be (1) opinion of experts, (2) the price paid within a reasonable time in bona fide transactions of purchase ofthe lands acquiredor the lands adjacent to the lands acquired and possessing similar advantages and (3) a number of years purchase of the actual or immediately prospective profits of the lands acquired." (p. 432, paraSri Natesan switched on to the prices of other lands in the locality to overcome theobstacle of his clients purchase. This is specious logic.When decisive evidence of the market value of the land compulsorily acquired is unavailable you seek light from comparable neighbourhood. Such is not the case here. Even so, we travelled with counsel on to other lands, to gather whether any grave error had crept into the High Courts assessment. The discovery made was that lands in the near neighbourhood were sold sometime earlier at prices ranging from Rs. 300/to Rs. 400/and in one case Rs. 900/(Exs. R2 to R7) while distant neighbours like that covered by Ex. C11 were valued by court at around Rs. 2,200/or Rs. 2,400/per ground. This wide disparity may be a trifle mystifying. Even so, we go by lands close by and not by one a mileaway as Ex. C11 plot. In an industrial area, land prices are sensitive to an intricate variety of factors.Propinquity to highway or ports and many industrial and social imponderables enter the verdict of evaluation. So much so we cannot automatically assert, with reference to a piece of land aaway, that it serves as a guide or fixing the price of the suit plot.What the High Court has done is to have at the back of its mind the various sales, Exhibits R2 to R7, which fall far below the value demanded by the claimant and the high prices awarded by the same High Court in regard to other lands distances away, have regard to the then growing industrial potential and make an intelligent guess.Maybe as the learned Advocate General has pointed out, in the light of evidence regarding the precise land and the particular owner, there was no justification for awarding such a high price as has been done but the State has not bothered to come up in appeal and we cannot hold that the High Court was in error in making out of the totality of materials available, a best judgment assessment of the market value.No serious flaw in principle, no omission to consider important material or like infirmity has been pointed out to fault the judges on thegenerally speaking, there has been an inflationary spiral in India which has not spared realty. But there is evidence in the present case to show that between 1949 and 1952 lands in this very area stood stationary in their prices. Various geoeconomic factors have affected land prices, some to boost them, others to slump them. Therefore we cannot be persuaded to hold that a relentless rise in land prices has come to stay. Take but one example: If a land adjoins a factory which needs to be expanded further, a higher price may be offered by that factory owner. Likewise, if a heavy tax on construction of buildings or ceiling on vacant urban land is in the offing, prices of building sites may come down. It may even be said that such a factor as the application of the MISA to smugglers may depress prices of many items, including land and foreign cars, in Certain places. Another exotic example. In some American cities the influx of certain coloured races into the downtown area brings down the market value of real estate, under current social conditions.13. While it is true that the area we are concerned with is an industrial belt, we cannot forget that there are housing colonies also as adjuncts so that some lands may be less suitable for industrial buildings but may stiff be useful for workers houses. It is in evidence that the plots acquired here had ponds, the appellant himself having filled up the pond in his plot. This shows incidentally thatconstructions may requireat high cost. We need not guess at the various chancy factors except to state that having due regard to the conspectus of circumstances, including the appellants own cost price, the Court has made a sound judgment. In this view, we do not think there is need for further discussion of the facts pressed before us by the appellant. We agree with him that the purpose for which the land is acquired has no bearing on the value to be determined by the Court but our conclusion remains unaltered.14. We see no reason, no law nor justice, to interfere with the judgment under appeal. Maybe, the appellant is aggrieved that slightly inferior lands acquired simultaneously and adjoining his plot have been given the same value as has been awarded to him. It may also be that each court he has approached has improved upon the price awarded by the earlier one and therefore he might have obtained certificate hopefully. And looking at his lost land now, years later, when real estate has risen in price much more, he may sigh at what is fixed and strive to get more. But a closer examination has disclosed no error in principle in the High Courts judgment nor has any of the limited grounds on which this Courts jurisdiction can be legitimately exercised been made out.