Collector, Raigarh Vs. Dr. Harisingh
Thakur & ANR [1978] INSC 216 (27 October 1978)
SINGH, JASWANT SINGH, JASWANT PATHAK, R.S.
SEN, A.P. (J)
CITATION: 1979 AIR 472 1979 SCR (2) 183 1979
SCC (1) 236
CITATOR INFO:
R 1983 SC1190 (11)
ACT:
Land Acquisition Act, 1894 (1 of 1894) Ss. 4,
9, 18, 23 and 24-Agricultural land acquired for doubling railway track-Payment
of compensation-Potential value of such land as a building site-Reliance on
comparative sales/capitalisation basis for ascertainment of quantum of
compensation.
HEADNOTE:
Agricultural land belonging to the
respondents was acquired by the railways for doubling the railway line,
compensation payable for the acquired land was fixed at Re. 1/6 per sq. ft. But
the respondent claimed Re. -/12/- per sq. ft. On the ground that the land had a
great potential value as a building site. On reference the Additional District
Judge enhanced the rate of compensation to Re. - /41- per sq. ft. and allowed
solatium at 15%. On appeal the High Court enhanced the compensation to Re.
-/8/- per sq. ft.
on further appeal to this Court it was
contended on behalf of the appellants that the courts below had erred in
treating the land, which was primarily agricultural land, as abadi land
overlooking that it had not been declared as such.
[Per Jaswant Singh & Pathak, J. Sen, J.
dissenting] Dismissing the appeals.
HELD: (1) Taking all the facts into
consideration it cannot be said that the basis on which the Additional District
Judge and the High Court proceeded was wrong or that the quantum of
compensation awarded by the High Court was in any way excessive or exorbitant.
[188 F] (2) The question as to whether a land has potential value as a building
site or not is primarily one of fact depending upon several factors such as its
condition and situation, the user to which it is put or is reasonably capable
of being put, its suitability for building purposes, its proximity to
residential, commercial and industrial areas and educational, cultural or
medical institutions, existing amenities like water, electricity and drainage
and the possibility of their future extension, whether the nearby town is a
developing or a prospering town with prospects of development schemes and the
presence or absence of pressure of building activity towards the land acquired
or in the neighbourhood thereof. [ 87F-F] (3) In the instant case it was clear
from the observations of the Special Land Acquisition officer and the Addl.
District Judge that the land had great potential value as a building site.
Moreover the Spl. Land Acquisition officer did not lead any evidence worth the
name to show the price of comparable sites but remained content with the
production only of the sale statement prepared by the Revenue Inspector.. The
sale statement consisted mostly of sales relating to the year 1951 which is not
relevant to the question on hand. Without examining the vendors or vendees, the
sale statement was not admissible in evidence and could not be relied upon.
From the material on record it was clear that Raigarh was a growing town.
Instead of utilising the land for doubling the railway track 184 the railway
had built staff quarters. On three sides of the land there were pucca buildings
and on the fourth side there was a metalled road. [187G-H 188C-D.
[Per Sen, J.(dissenting)]
1. Upon compulsory acquisition of property,
the owner is entitled to the value of the property in its actual condition at
the time of expropriation with all its advantages and with all its
possibilities, excluding any advantage due to the carrying out of the claim for
the purpose for which the property is acquired. The value of the acquired
property with all its possibilities had to be adjudged on the material on
record. [191 F, H] Vyricharla Narayana Gajapatiraju v. Revenue Divisional
officer, Vizagapatnam, 66 IA 104, followed.
2. The market price must be fixed with
reference to the date of the notification under s. 4 irrespective of any trend,
for an increase to the value thereof. The basis for determination of the market
value of the land within s. 23(1)(i) of the Act is the value of the land to the
owner.
Only such transactions would be relevant
which can fairly be said to afford a fair criterion of the value of the ,,
property as at the date of the notification. That test is clearly not fulfilled
in l? the present case[192A-B]
3. In a reference under s. 18 of the Act the
burden of providing that the amount of compensation awarded by the Collector is
inadequate lies upon the claimant, and he must show affirmatively that the Collector
had proceeded upon a wrong basis. The nature and the burden of establishing
that he was wrong, depend on the nature of the enquiry held by him. When the
proceedings before the Collector disclose that the award was not reasonably
supported by the material before him or when the basis was the application of a
"multiple" which could not be justified on any rational ground, the
burden can be discharged by slight evidence.
But that is not the case here. [191C-D]
4. In the present case the High Court fell
into an error in overlooking the fact that the acquired land was agricultural
land. It was recorded as a raiyati land. The land was not recorded as abadi as
wrongly assumed by the High Court. The claimants admitted that the land was
actually under cultivation. The Revenue Inspector stated that the land was a
paddy field and was surrounded by agricultural lands. That being so the
District Judge was clearly wrong in treating the land to be abadi and
calculating compensation on the footing of its being a building site.
[189E-190A]
5. Secondly, the land was lying undeveloped
and undiverted. Unless there was a development scheme the land could not be
valued as a building site. At the time of the notification under s. 4(1) there
was no recent building activity near about the land. The land could be put to
better use provided it was fully developed as a building site. The claimants
were therefore entitled to the valuation of the land as agricultural land with
an additional allowance for its future potentiality as a building site.
[190H-191B]
6. In fixing the amount of compensation the
court has to take into consideration the prevailing market value of the land at
the date of the notification under. 4(1) and such market value has to be
determined by reference to the price which a willing seller might have
reasonably expected for similar property from 1 a willing purchaser. In a
comparable sale the features are: (1) it must be 185 within a reasonable time
of the date of notification under s. 4(1), (2) it should be a bona fide
transaction; (3) it should be a sale of the land acquired or of the land
adjacent to the land acquired and (4) it should possess similar advantages.
[92G-193A]
7. In the instant case-the sale deeds relied
upon by the High Court could not obviously be the basis for the determination
of the market value of the land. These sale deeds had clearly been brought into
existence by the claimants in quick succession in an attempt to inflate. the
price of the land after they became aware of the proposed acquisition. The
transactions which were examined by the High Court were apparently fictitious
and unreal and are speculative in nature and could not be taken into account at
all. [193B-C, 193H-194A]
8. On the evidence produced it could not be
said that valuation should be made on the basis of potentiality of the land as
building site. There is complete absence of evidence of building activity of a
substantial nature being carried on in the neighbourhood of the acquired land
at about the time when the notification was issued. The claimants themselves
did admit that the land was agricultural land.
[195B, 194F-C] Raghubans Narain Singh v. The
U.P. Govt., [1967] 1 SCR 389; N. B. Jeejabhoy v. The District Collector, Thana,
C.A. Nos. 313 to 315 of 1965 decided on Aug 1965: referred to.
9. In the absence of comparable sales, the
only other alternative to adopt is the capitalised value. Compensation in
respect of the agricultural land should be allowed on the basis of 20 years'
purchases. The capitalisation basis cannot, however, be accepted in a case
where there is no evidence of the profits yielded from the land. [195C]
CIVIL APPELLATE JURISDICTION: Civil Appeal
NOS. 64-65 of 1969.
(From the Judgment and Decree dated 1-12-61
of the Madhya Pradesh High Court in Misc. First Appeal No. 43 of 1959).
S. K. Gambhir for the appellant in CA 64 and
Respondent in CA 65/69.
G . L. Sanghi, K. John and J. Sinha for the
respondent in CA 64 and appellant in CA 65/69.
The Judgment of Jaswant Singh and R. S.
Pathak, JJ. was delivered by Jaswant Singh, J. A. P. Sen, J. gave a dissenting
opinion.
JASWANT SINGH, J.-These two cross appeals by
certificates of fitness granted by the High Court of Madhya Pradesh at Jabalpur
are directed against the judgment and decree dated December l, 1961 of the said
High Court dismissing the Misc. (First) Appeal No. 42 of 1959 preferred by the
appellant from the Award dated December 20, 1958 of the II Additional District
Judge, Raigarh in Miscellaneous Judicial Case No. 59 of 1958 being a reference
under section 18 of the Land Acquisition Act, made at the instance of the
appellant in 13- 817SCI/78 186 respect of the Award dated August 23, 1957 of
the Land Acquisition officer, Raigarh.
The facts giving rise to these appeals are:
on an undertaking given by him to pay full compensation with interest from the
date of possession to the date of payment of compensation as provided in the
Land Acquisition Act, 1894 (hereinafter referred to as 'the Act') the District
Engineer, South Eastern Railway, Raigarh, took advance possession on January
17, 1957 of five plots of agricultural land admeasuring 3.38 acres and another
plot of agricultural land admeasuring 0.14 acres adjoining the railway track
situate in village Darogamuda, Tehsil and District Raigarh, a suburb of Raigarh
belonging to respondents I and 2 respectively for doubling the railway line
between Rourkela and Durg in the South Eastern Railway. Subsequently
Notification dated February 8, 1957 under section 4(1) of the Act for
acquisition of the aforesaid plots of land was issued and published in the
Government Gazette dated February 15, 1957. This was followed on March 21, 1957
by a notification under section 6 of the, Act. Although in the r statements
filed by them under section 9(2) of the Act the respondents claimed
compensation at the rate of Rs. 32,670/- per acre i.e. at the rate of -/12/-
per square foot on the ground that the plots of land in question had a great
potential value as a building site and Rs. 500/- for improvements and Rs. 100/-
as the value of one tree, the Special Land Acuisition officer, Raigarh by his
award dated August 23, 1957 awarded compensation at the rate of Rs. 3,327/14/-
per acre which roughly worked out at -/1/6 per square foot on the basis of the
statement of sales furnished by A.S.L.R. (L.A.) prepared by Jujhar Singh
N.A.W.I. Not satisfied with the quantum of compensation, the respondents made
an application to the Special Land Acquisition officer requesting him to refer
the matter to the court under section 18 of the ;1 Act. According to the
request of the respondents, the Special Land . Acquisition officer made the
aforesaid references to the II Additional District Judge, Raigarh, who by his
award dated December 20, 1958 enhanced the rate of compensation to -/4/- per
square foot and awarded Rs. 36,808/4/- and Rs. 1,524/8/- to respondents l and 2
respectively as compensation. The Additional District Judge also allowed the
solatium at the rate of 15% amounting to Rs. 5.521/4/- and Rs. 228/12/- to
respondents 1 and 2 respectively. Aggrieved by the said , Award of the II
Additional District Judge, the appellant preferred an appeal to the High Court
of Madhya Pradesh at Jabalpur which was registered as Miscellaneous (First)
Appeal No. 43 of 1959. In the said appeal, the respondents filed cross
objections claiming enhancement of compensation by Rs. 84,518.39 P. The High
Court by its 187 judgment dated December 1, 1961 dismissed the aforesaid appeal
preferred by the appellant but allowed the cross objections filed by the respondents
holding the reasonable rate of compensation to be -/8/per square foot.
Consequently respondent No. 1 was held entitled to Rs. 73,616-8-O as
compensation and Rs. 11,042-8-0 as solatium and respondent No. 2 was held
entitled to Rs. 3,049-0-0 as compensation and Rs. 457-8-O as solatium. It is
against this judgment of the High Court that the present appeals are directed.
Appearing for the appellant, Mr. Gambhir
while admitting that in an appeal under Article 136 of the Constitution, the
Court is only concerned with finding out whether the principles on the basis of
which compensation has been computed for acquisition of land under the Act have
been rightly applied or not and cannot re-appraise the evidence, has urged that
the Additional District Judge and the High Court have erred in treating the
land in question which was primarily an agricultural land as abadi land
overlooking that it had not been declared as such.
Mr. Sanghi has on the other hand urged that
even according to the findings of the Additional District Judge, who made the
spot inspection, as also of the High Court, it is abundantly clear that the
land in question was Abadi land and has been rightly treated as such. Mr.
Sanghi has further urged that the said site has great potentialities as
building site.
The question as to whether a land has
potential value of a building site or not is primarily one of fact depending
upon several factors such as its condition and situation, the user to which it
is put or is reasonably capable of being put, its suitability for building
purposes, its proximity to residential, commercial and industrial areas and
educational, cultural or medical institutions, existing amenities like water,
electricity and drainage and the possibility of their future extension, whether
the nearby town is a developing, or a prospering town with prospects of
development schemes and the presence or absence of pressure of building
activity towards the land acquired or in the neighbourhood thereof. the instant
case, the fact that the land in question has a great potential value as a
building site is evident not only from the observations made by the Special
Land Acquisition officer himself in his aforesaid award to the effect that the
land has assumed semi-abadi site hut also from the following observations made
in his judgment dated December 20, 1958 by the Additional District Judge who
had the advantage of inspecting the site:- "The land abuts Raigarh town.
It is within Municipal limits and the nazul perimeter extends upto it. To the
east of 188 the plot there are some kutcha buildings inhabited by respectable
persons. To the North is a Municipal road leading to the railway quarters to
the west. To the west beyond the railway quarters, there is further habitation`
and the locality is called "Banglapara" within Municipal limits. The
plot did have a potential value as a building site and it is further supported
by the fact that the plot has been used by the Railway authorities for
construction of staff quarters thereon though the land was acquired for
doubling the rail way line." It is also not disputed that the Special Land
Acquisition officer did not lead any evidence worth the name to show the price
of the comparable sites in question and remained content with the production only
of the sale statement made by Jujhar Singh, N.A.W.I. Now the sale statement
consisted mostly of sales relating to the year 1951 which is not relevant for
the question in hand.
Moreover, the sale statement by itself
without examining either the vendors or the vendees or the persons attesting
the sale deeds is not admissible in evidence and cannot be relied upon. The
sale deed dated December 14, 1956 in favour of Dr. Das for 4,800 square feet of
land out of contigious Khasra No. 256 in lieu of Rs. 2,000/- i.e., at
approximately 6 1/2 annas per square foot (which has been relied upon by the
Additional District Judge and the High Court) could be taken as a safe guide
for determine nation of the compensation. From the material adduced in the
case, it appears that Raigarh is a growing town, that instead of utilising the
land for doubling the railway track, the railway has built staff quarters
thereon, that on three sides of the acquired land, there already existed pucca
buildings and on the fourth side, there is a metalled road.
It is also in evidence that some lawyers have
put up some constructions near the sites in question. Taking all the facts into
consideration. it cannot be said that the basis on which the Additional
District Judge and the High Court proceeded is wrong or that the quantum of
compensation awarded by the High Court is in any way excessive or exorbitant.
As neither the interest nor compensation on
account of severance was claimed in the High Court either by Dr. Harisingh
Thakur or by Tikam Singh Thakur, we do not think they can justifiably put up
claims in that behalf. Mr. Sanghi appearing on their behalf has fairly stated
that he would not like to press his cross appeal.
In the result, we do not find any merit in
either of the aforesaid appeals. W.- would accordingly dismiss them with costs.
SEN J.-I have had the advantage-of reading
the judgment by my learned brother Jaswant Singh. Since the appeal involves an
important 189 question affecting valuation which has been overlooked by the
High Court, I would like to say a few words of my own.
Normally, this Court does not interfere in
appeal with the valuation by the High Court in land acquisition cases, unless
the judgment cannot be supported, as it stands, either by reason of a wrong
application of principles or because some important point in evidence has been
overlooked or mis-applied: The Special Land Acquisition officer, Bangalore v.
Adinarayan Setty(1).
With respect, I venture to say that the
judgment of the High Court cannot be supported by reason of a wrong application
of principles. It overlooked the fact that there was no discernible basis on
which the Additional District Judge could have changed the mode of valuation
adopted by the Special Land Acquisition officer treating the land acquired to
be agricultural land and in awarding compensation upon the basis as if it were
a building site.
Indeed, there was no atempt on their part to
determine the ''intrinsic character of the land", namely, whether the land
acquired should be classified as agricultural land or not.
In the present case, the High Court obviously
fell into an error in overlooking the, fact that the acquired land situate in
village Darogamuda, admeasuring 3.52 acres, was, on the 8th February, 1957 i.e.
On the date of the issue of the notification under s. 4(1) of the Act,
agricultural land. It was recorded as a raiyati land belonging to the two
claimants, Dr. Harisingh Thakur and his brother Vikram Singh Thakur who were
ex-gaontiyas of village Darogamuda. The land was not recorded as abadi as
wrongly assumed by the High Court. Perhaps it was misled by the mis-description
of the land as abadi in the reference made by the Collector under s. 18(1).
This is an admitted position between the
parties. In response to the notice of admissions and denials of documents
served by the claimants, the Collector admitted panchsala khasra for the years
1952-53 to 1953-54 and kistbandi khatouni for the years 1952-53 and 1953-54.
The claimant Dr. Harisingh Thakur, AW1 admits during his crossexamination that
till the month of December 1956, the lands were actually under his cultivation
and he had reaped the crops before delivering possession of the same on the
17th January, 1957 to the District Engineer, South-Eastern Railway. He further
admits that throughout the land was under cultivation i.e. from the time,- of
his forefathers.
In fact, Jujhar Singh NAW1, Assistant
Superintendent Land Records, who was at the relevant time a Revenue Inspector,
states that the,. land (1) [1959] Supp. (1) S.C.R. 404.
190 acquired was a paddy field and was
surrounded by agricultural lands. That being so, the District Judge, was
clearly wrong in treating the land to be abadi and calculating compensation on
the footing of its being a building site.
In awarding compensation at a flat rate of
Rs. 3,327.87 P. per acre, the Special Land Acquisition officer took notice of
the fact that the land is situate in village Darogamuda, a suburb of Raigarh,
which is a town of great commercial importance, though beyond its nazul perimeter.
He also took notice of the fact that the land abuts the railway track and there
were agricultural fields on two sides. On the other two sides, there existed
kutcha hutments of backward classes and a few railway buildings. The award of
compensation at the rate of Rs. 3,327.87 P. per acre was based on average of
sales of lands in recent years as prepared by Jujhar Singh, Revenue Inspector
NAW 1. The Special Land Acquisition officer accordingly observed:
"The average value based on the above
noted sales comes to Rs. 3,327/14/- per acre and in my opinion it truly re
presents the average market value of lands in this predominantly agricultural
locality which has assumed semi-abadi site value due to the constructions of
houses mostly by low class people besides a few buildings of Railway
Department. It is for this reason that the average value per acre comes to as
much as Rs.
3,327/14/- per acre else the lands in
question would have fetched lower price, available in respect of agricultural
lands to which class they really belong and stand assessed as such till
today." While it is no doubt true, as my learned brother Jaswant Singh has
rightly observed, that the statement of average of sales, prepared by Jujhar
Singh NAW 1, was not admissible in evidence unless the Collector proved the
transactions in question, upon which it was based, there is no denying the fact
that the acquired land was nothing but agricultural land and the mode of
valuation had necessarily to be upon that basis.
Now, if the purpose for which the land was
acquired, i.e., for the construction of staff quarters in connection with the
doubling of the railway line by the South-Eastern Railway, has no bearing on
the question of valuation, the future possibilities of the land, which admittedly
was agricultural land, lying in the vicinity of Raigarh if applied to the most
lucrative use, having regard to its the then condition, was very little as a
building site. The land was lying undeveloped and undiverted. Unless there was
a development scheme, the land could not 191 be valued as a building site. The
land could, however, be put to that use if there was such development scheme.
At the time of the notification under s. 4(1), there was no recent building
activity near about the land, which was either under cultivation or lying
desolate. But as l have already said, the land could be put to a better use
provided it was fully developed as a building site. The claimants were,
therefore, entitled to the evaluation of the land as agricultural land with an
additional allowance being made for its future potentiality as a building site.
I just cannot imagine what could be the utility of the acquired land on a
building site, looking to its proximity to the railway track. It would, indeed,
be very little.
In a reference under 9. 18 of the Act, the
burden of proving that the amount of compensation awarded by the Collector is
inadequate lies upon the claimant, and he must show affirmatively that the
Collector had proceeded upon a wrong basis. The nature and the burden of
establishing that he was wrong, depend on the nature of the enquiry held by
him. When the proceedings before the Collector disclose that the award was not
reasonably supported by the material before him, or when the basis was the
application of a 'multiple' which could not be justified on any rational
ground, the burden can be discharged by a slight evidence.
But that is not the case here. The claimants
have led no trustworthy evidence. It is equally well-settled that where the
claimant leads no evidence to show that the conclusions reached in the award
were inadequate, or, that it offered unsatisfactory compensation, the award has
to be confirmed.
Upon a compulsory acquisition of property,
the owner is entitled to the value of the property in its actual condition, at
the time of expropriation, with all its advantages and with all its
possibilities, excluding any advantage due to the carrying out of the claim for
the purpose for which the property is acquired. In Vyricharla Narayana
Gajapatjiraju v. Revenue Divisional Officer Vizagapatnam(1) the Privy Council
state:
"For the land is not to be valued merely
by reference to the use to which it is being put at the time at which the value
has to be determined.... but also by reference to the uses to which it is
reasonably capable of being put in the future. It is possibilities of the land
and not its realized possibilities that must be taken into consideration."
The value of the acquired property, with all its possibilities has to be all
adjudged on the material on record.
(1) 66. I.A. 104.
192 The market price must be fixed with
reference to the date of the. notification under s. 4 irrespective of any
trend, if any, for an increase in the value thereof. The basis for
determination of the market value of tell land within s. 23 (1) (i) of the Act
is the value of the land to the owner. Only such transactions would be relevant
which can fairly be said to afford a fair criterion of the value of the
property as at the date of the notification. That test is clearly not fulfilled
in the present case.
Clause fifthly in s. 24 interdicts the court
from considering any prospective increase in value due to acquisition. Market
value of the land acquired has to be fixed with reference to the date of
notification under s. 4 (1) . In Vyricharla Narayana Gajapatiraju v. Revenue
Divisional Officer, Vizagapatam (supra) the Privy Council observed that where
the owner is a person who could turn the potentiality of the land into account,
it is immaterial that the utilization of the same potentiality is also the
purpose for which the land is acquired. The Underlying principle is that a
speculative rise in price of land due to acquisition should not be an element
which should enter into computation. Sometimes the prices shown in sale deeds
executed subsequent in point of time are not the actual prices paid. The sales
may be. unreal and may not reflect the true value of the land. There always
elapses a certain interval between the time when the intention to acquire Ea
certain land first becomes known and the actual notification under s. 4(1) is
issued. Here though the notification under s. 4(1) was issued on 8th February,
1957, but the claimants had, in fact, delivered the possession to the District
Engineer, South-Eastern Railway on the 17th January, 1957, and were indeed, as
it appears from the evidence, aware of the fact that the land was being
acquired by the South- Eastern Railway much earlier, i.e., in December, 1956.
In view of this, the prospective rise in value, if any, has to be kept out of
consideration.
the principles to determine the quantum of
compensation are contained in s. 23(1) of the Act. The court in fixing the
amount has to take into consideration the prevailing market value of the land
at The date of the notification under s. 4(1) and the said market value has to
be determined by reference to the price which a willing seller might have
reasonably expected for similar property from a willing purchaser. The
underlying principle of fixing the market value with reference to comparable
sales is to reduce the element of speculation. In a comparable sale, the
features are: (i) it must be within a reasonable time of the date of
notification under s. 4.(1); (ii) it should be a bona fide transaction; (iii)
it should be a sale of the land acquired or of the land adjacent to the
acquired; and (iv) it should possess 193 similar advantages. Before such
instances of sales can be considered there must be material evidence either by
the production of the sale deeds or by examining the parties to the deeds or
persons having knowledge of the sales, to prove that the transactions are
genuine.
In the light of these principles, the three
sale deeds relied upon by the High Court, Ext. P-14, Ext. P-15 and Ext.P-17,
pertaining to the small portions of the acquired land executed by the
claimants, could not obviously be the basis for the determination of the market
value of the land.
These sale deeds had clearly been brought
into existence by the claimants in quick succession, in an attempt to inflate
the price of the land, after they became aware of the proposed acquisition. Of
these, the land covered by the sale deed Ext.P-14, dated 14th December, 1956
executed by Tikam Singh Thakur, i.e., just a month before the delivery of the
possession, shows a sale of a plot measuring 4,800 sq.ft. to Dr. Dhirendra
Chandra Das, AW 2, for a price of Rs. 2,000/-.
The rate works out to about 42P per sq. ft.
It evidently could not afford a fair criterion of the value of the property on
the date of the notification under s. 4(1). Dr.
Das admits that he is in Railway service and
when he purchased the land he knew that it was being acquired by the
South-Eastern Railway. No doubt Dr. Das is a willing friend of Dr. Harisingh
Thakur prepared to lend a helping hand but, by no stretch of imagination, could
he be treated to be a willing purchaser. in the true sense of the term. Though
Dr.
Das asserts that he had purchased the land
for building a house, he admits that he did not construct upon it because he
would have been required to invest considerable money for levelling the land
making it fit to be utilised as a building site. This transaction indubitably
does not appear to be a real sale and could not furnish any guide for
determination of the true market value.
I am afraid, the other two sale deeds,
Ext.P-15 dated 19th December, 1956 and Ext.P-17 dated 21st February, 1957
executed by Dr. Harisingh Thakur, by which he sold 300 sq. ft. Of the acquired
land to Jhallu Dani, AW 13 for Rs. 150/- and 280 sq. ft to Baido, AW 15, for
Rs. 200/- were, in fact, fictitious sales effected by him after delivery of
possession to the South-Eastern Railway. The transactions speak for themselves.
Indeed, Ext. P-17 was executed by him after issue of the notification under
s.4(1). The first sale was effected by the claimants to show the price of the
land to be 50P per sq. ft. They were evidently not satisfied by this and,
therefore, brought the other sale deed into existence, a few days after the
notification, showing the rate to be about 72P per sq. ft. It is needless to
stress that such fictitious and unreal transactions which are but 194
speculative in nature could not be taken into account by the High Court at all.
In Raghubans Narain Singh v. The Uttar
Pradesh Government (1) this Court quoted with approval the following passage
from one of its earlier decision in N. B. Jeajabhoy v. The District Collector,
Thana,(2) where it was said:
"the question therefore turns upon the
facts of each case. In the context of building potentiality many questions will
have to be asked and answered: whether there is pressure on the land for
building activity, whether the acquired land is suitable for building purpose,
whether the extension of the said activity is towards the land acquired, what is
the pace of the progress and how far the said activity has ex tended and within
what time, whether buildings have been put up on the lands purchased for
building purposes, what is the distance between the built in land and the land
acquired and similar other questions will have to be answered. It is the
overall picture drawn on the said relevant circumstances that affords the
solution." In Raghubans Narain Singh's case (supra) there was evidence to
the effect that there was a school building near the acquired land, that the
land abutted on the road and that some houses had been built on the opposite
side of the road. It was nevertheless held by this Court that all this did not
constitute evidence of building potentiality. It was pointed out that there should
be evidence, on the record, 'of building activity of a substantial nature,
being carried on in the neighbourhood of the acquired land, at about the time
when the notification was issued'.
There is complete absence of such evidence in
this case. It is beyond doubt that the acquired land was agricultural land, and
had not been diverted for non- agricultural purposes. Indeed, the claimant, Dr.
Harisingh Thakur had himself admitted the land to be agricultural land. The
land is on the outskirts of Raigarh town but that itself does not show that the
land had a potential value for building purposes. It was for the claimants to
show that at the relevant time there was a tendency of the town to develop in
that direction and that prior to the acquisition new buildings had been
constructed in the neighbourhood.
Topography of the acquired land which abuts
the railway track is given by Jujhar Singh, NAW 1, the then Revenue Inspector,
who states that actually paddy used to be grown on the land. To the north of
this land, there was cultivation. Beyond it, there was a 10 ft.
(1) [1967] I S.C.R. 489.
(2) C.A. Nos. 313 to 315 of 1965 decided on
August 30, 1965.
195 broad pucca road. About three furlongs
way from the land was the house of Ambalal. About one and a quarter miles away
there was a skin godown. In the east, there were small huts.
Beyond them, in the east, at a distance of
about half a furlong, there was the house of Jairamvalji. In the west, about a
furlong away, there was an old bungalow. At about the same distance, there is
the burial ground. In between and all around, there were agricultural fields.
That is the total evidence of the case. On this evidence it cannot be said that
valuation should be made on the basis of the potentiality of the land as building
site.
In the absence of comparable sales, the only
other alternative to adopt is the capitalised value. Compensation in respect of
the agricultural land should be allowed on the basis of 20 years' purchase. The
capitalisation basis cannot, however, be accepted in a case where, as in the
instant case there is no evidence of the profits yielded from the land.
I would, therefore, for these reasons allow
the appeal of the State of Madhya Pradesh.
It is with reluctance that I have written
this separate opinion. There has never been a public undertaking in this
country Governmental, Municipal, city or industrial, but that the land-holder
has generally secured anything from four to forty times as much for the land as
its agricultural price, i.e., many times its real value. This result
unfortunately springs from a general tendency of District Judges in hearing a
reference under s.18 of the Land Acquisition Act, 1894, to assume that purely
agricultural lands, merely by their proximity to a city or town, become endowed
with 'special adaptability' as a building site.
While it is not suggested that unfairly low
value should be offered, on the other hand the temptation to over-generosity
must be equally resisted. Such generosity at the public expense reacts against the
development and against the prosperity of the country and imposes an
unnecessary burden on the taxpayer.
Per Curiam In accordance with the opinion of
the majority, the appeals are dismissed with casts.
N.V.K. Appeals dismissed.
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