K. Posayya
& Ors Vs. Special Tahsildar [1995] INSC 277 (10 May 1995)
Ramaswamy,
K. Ramaswamy, K. Venkatachala N. (J) K. Ramaswamy. J.
CITATION:
1995 AIR 1641 1995 SCC (5) 233 JT 1995 (5) 174 1995 SCALE (3)683
ACT:
HEAD NOTE:
THE
10TH DAY OF MAY,1995 Present:
Hon'ble
Mr. Justice K.Ramaswamy Hon'ble Mr. Justice N.Venkatachala Mr. P.P. Rao, Sr.
Adv. Mr. Naramimha P.S. and Mr. V.G. Pragasam, Advs. with him for the
Appellants Mr. Guntur Prabhakar, Adv. for the Respondent
The
following Judgment of the Court was delivered:
IN THE
SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NOS.
5568-5571..........OF 1995 (Arising out of SLP Nos.17933-36/94) K. POSAYYA
& ORS. ...APPELLANTS VERSUS CIVIL APPEAL NOS 5572-5574 OF 1995 (Arising out
of SLP Nos.19266-68/94)
Leave
granted.
Jelluru
and Yerrakaluva Reservoir to prevent inundation of agricultural lands and to
control floods, was taken out and 500 acres of land was acquired as a part of Vengalrayasagar
project for submersion. Notification under s. 4(1) of the Land Acquisition Act,
1894, (for short, `the Act') was published on March 22, 1979. 400 acres of land, as a part of that Scheme situated in Alivelu
village in Polavaram Mandal in West Godavari District of Andhra Pradesh was
acquired, out of which, we are concerned with about 163.80 acres in these
appeals. The Land Acquisition Officer in his award dated July 31, 1980, fixed the market value of the
lands at Rs. 400/- per acre. The lands are rain-fed in which dry crops were
raised prior to acquisition. On reference under s.18, the Subordinate Judge
enhanced the compensation to Rs. 22,000/- per acre. The High Court in the
impugned judgment in Appeal No. 1341 and batch of 1992 reduced the compensation
to Rs.400/- per acre. Thus these appeals by special leave.
Shri
PP Rao, learned senior counsel for the appellants, contended that Alivelu
village is situated in notified tribal area in which the Scheduled Areas Land
Transfer Regulation Act, 1970 is in force which prohibits sale of the lands by
the tribals to the non-tribals. The appellants being tribals could not secure
any sale deed. In the neighbouring village under Ex.A-1 dated October 12, 1980
when one acre of land was sold for a sum of Rs. 20,000/-, the High Court was
not justified in refusing to act upon the same. Equally, it is contended that
in another judgment and decree of the High Court, in relation to lands acquired
for Vengalrayasagar project, determined the compensation at the rate of
Rs.20,000/- per acre, the appellants are entitled to at least to Rs.22,000/-
per acre. Being the tribal, they cannot afford to purchase the lands elsewhere.
The court, therefore, should grant compensation at "reinstatement
value" for rehabilitation of the tribals under Ex.A-5 and A- 6, the awards
made by the reference court in OP No. 17- 18/80, the Subordinate Judge awarded
at the rate of Rs.22,000/- per acre which became final. The High Court
misapplied the principle laid by this Court in Administrator General of West
Bengal v. Collector, Varanasi, AIR 1988 SC 943, in reducing the price applying
the principle of deduction of 50% to the agricultural lands. The High Court,
therefore, erred in wrong application of the principles of law in determining
the compensation to the agricultural land.
The
question, therefore, is, what is the correct principle of law to be applied in
determining the market value of vast extent of lands were acquired for a
project.
Admittedly,
Ex.A-1 dated December
31, 1980 is the torch
light for the claimants to lay higher claim. It is a post notification sale of
the land situated in Chakradevarapalli.
According
to the claimants, it is situated at a distance of 3 to 4 kilometers from the
village Alivelu. According to Land Acquisition Officer, the distance between
the two villages is 30 Kms. Possession of these lands, admittedly, was taken
between April 15, 1977 i.e. prior to the notification under s.4(1) and July 14,
1980, shortly after the notification under s.4(1). It would, thus, be clear
that the sale deed was brought into existence after the notification and
possession was taken of the lands. This is the notorious document relied in all
the references running into 302. Only the attestor was examined in proof of the
documents. It would be obvious that it was a brought up document to inflate the
market value of the lands under acquisition not only in this village but in the
surrounding villages. The High Court, therefore, was right in rejecting the
said document and refuse to place reliance for determination of the
compensation. Exhibit A-2, judgment of the single Judge of the High Court in AS
No.2500/86 arising out of OP No.49/84 of the same reference court. The lands
therein were acquired for Vengalrayasagar project. They are the wet lands.
Since the counsel for the Government did not appear and no material was placed
on record and since in earlier cases, award was confirmed for a sum of
Rs.22,000/- per acre, the single Judge enhanced the compensation to
Rs.22,000/-. That is obviously illegal approach adopted by the High Court in
determining the market value of project area, large tracts of lands covered by
the project. It would appear that the learned Judge was not brought to the
notice of other references. Therefore, it cannot be formed the basis to fix the
market value at a higher rate, though the judgment may be wrong.
Equally
the judgment in Ex.A-3 dated February 14, 1985
in AS No. 232/82 and batch arising out of OP No. 111/80 and batch of the Band
situated in Tadavai village, the Division Bench determined market value at the
rate of Rs. 20,000/- per acre. The foundation for the said determination was
the notorious sale-deed Ex.A-1 which was marked therein as A-3.
Equally,
Ex. A-4 in OP No. 57/84 of the reference court is founded upon the earlier
decision. Ex.A-5 and A-6, namely, OP Nos.17-18/89 dated November 29, 1990 were
founded on the judgments-Ex. A-2 etc. in which Subordinate Judge granted at the
rate of Rs. 22,000/- per acre. Since the very basis of determination of the
compensation is clearly erroneous, Ex.A-5 and A-6 cannot form any basis for
determination of the compensation. The Division Bench of the High Court in this
appeal, placing reliance on Ex.A-5 and A-6 which arose from the same village Alivelu,
reduced the market value to Rs.12,000/- per acre on the ratio in Administrator
General of West Bengal's case. It is true, as rightly
contended by Shri Rao, that the ratio therein relates to the urban lands fit
for building purpose and the same principle cannot be applied in determination
of the market value of agricultural land. The contention that the doctrine of
reinstatement value in determination of the market value to the lands of
depressed value due to operation of the Andhra Pradesh Scheduled Areas Land
Transfer Regulation Act, 1970 prohibiting alienation of the land between the tribals
and non-tribals, though, prima facie appears to be alluring but on deeper
consideration, it cannot to commend acceptance.
What
is relevant in fixation of the market value of the land under s.23(1) is
prevailing price as on the date of notification under s.4(1). The reasoning of
the High Court that since the tribals have no capacity to purchase the land and
the lands, therefore, are not possessed of market value also is not a correct
approach.
It is
settled law that market value is to be determined either on the basis of the
prevailing prices of sale and purchase between willing vendor and willing
vendee or value of the crops realised applying suitable 10 years multi-plier or
in case of land valued of expert valuer like urban properties could be
considered for determination of the compensation. Market value cannot be fixed
with mathematical precision but must be based on sound discretion exercised by
the reference court in arriving at just and reasonable price. It should not be
based on feats of imagination or flight of fancy. Determination of compensation
for compulsory acquisition involves consideration of the price which a typothical
willing purchaser can be expected to pay for the lands in the existing use as
well as relatable potentialities. The acid test is the arm chair of the willing
vendor would offer and a prudent willing buyer, taking all relevant prevailing
conditions of the normal market, fertility of the land, location, suitability
of the purpose it was purchased, its existing potentialities and likely use to
which the land is capable of being put in the same condition would offer to pay
the price, as on the date of the notification. In case of acquisition of large
tracts of lands for projects situated in several villages, stray sale-deed of
small extent here and there would not form the basis to determine the
compensation. The reference court should be circumspect, pragmatic and careful
in analysing the evidence and arriving at just and fair market value of the
lands under acquisition which could be fetched on the date of the notification.
The nature of the land, the crops raised and the nature of the income likely to
be derived from the lands, the expenditure to be incurred for raising the crops
and the net profits etc. would be the relevant factors in arriving at the net
market value and if evidence is produced in that behalf on its basis applying
the suitable 10 years multi-plier, the market value need to be determined. The
owner or claimant should not be put to loss by under valuation. But, at the
same time public exchequer should not be put to undue burden by excess
valuation. It is the statutory duty of the Court to maintain the balance
between diverse interests.
Claimant
stands in the position of plaintiff and the onus is on him to adduce necessary
and relevant evidence in proof of the objection for higher compensation. The
court is also enjoined to carefully scrutinise and analyse the evidence and
applying the arm chair test of a prudent purchaser and a willing vendor or the realised
income on the crops, the true, correct and fair market value should be arrived
at. The reference court has absolutely failed to apply these tests in
determining the compensation. Rejecting the evidence relied on by the claimants
under Ex. A-1 to A- 6, there is no other evidence to enhance the compensation.
The
doctrine of reinstatement value cannot be applied in determining the market
value under s.23(1) of the Act. The reason is obvious. There will always be a
gap between the date of the notification and the date of payment. To recompensate
the loss, payment of interest under s.28, solatium under s.23(2) and
appropriate cases after the Amendment Act 68/84 has come into force, 12% per
annum of the additional amount under s.23(1-A) are provided for. It would,
therefore, be illogical and unrealistic to apply the doctrine of reinstatement
value in determination of the compensation under s.23(1).
In
this view, though the High Court has applied wrong principle but the conclusion
reached by the High Court in determining the compensation at Rs.12,000/- per
acre cannot be said to be illegal warranting interference. Before parting with
the case, we express hope that the State Government should settle all the
claims in a Lok Adalat as was done in respect of acquisition of lands for Srisailam
Project and Vishakhapatnam Steel Project. The appeals are accordingly
dismissed. No costs.
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