The
State of M.P. Vs. Harishankar Goel & Anr
[1996] INSC 907 (7
August 1996)
Ramaswamy,
K.Ramaswamy, K.G.B. Pattanaik (J)
CITATION:
1996 SCALE (6)39
ACT:
HEAD NOTE:
W I T
H CIVIL APPEAL NO.2796 OF 1987 AND CIVIL APPEAL NO.2298 OF 1987
O R D
E R
These appeals
arise from the judgment of the High Court of Madhya Pradesh. On a difference of
opinion among two learned judges, third Judge on reference in Miscellaneous
Appeal No.82/75 and 83/75 enhanced the compensation. The notification under
Section 4(1) of the Land Acquisition Act 1 of 1894 was published on January 17, 1964 acquiring 33 bighas 15 biswas of
land belonging to two different individuals for industrial purpose. The land
Acquisition Officer by his award under Section 11 determined compensation on March 14, 1966 at Rs. 3,150/- per bigha treating
the lands to be agricultural lands. On reference under Section 18, the
Additional District Judge by his award and decree dated May 15, 1975 enhanced the compensation to Rs.1/-
per sq. ft. and also awarded statutory benefits. On appeal, learned Judge B.C.Verma,
J. determined compensation at 0.90/- per sq. ft. deducted 15% towards
developmental charges. Learned Judge R.C. Srivastava, J. determined the
compensation at Rs. 0.50 per sq. ft . and deducted 25% towards developmental
charges. On reference, learned Judge T.N. Singh, J. agreed with the
determination of compensation B.C. Verma, J. at Rs.0.90 per sq. ft. but
deducted 20% towards developmental charges. He also awarded enhanced solatium,
interest and additional amount as available under the Amendment Act 68 of 1984.
Thus these appeals by the State and also cross appeal by the claimants claiming
compensation at Rs.1/- per sq. ft.
The
question that arises for consideration is as to what is the rate. of compensation
that the lands are capable to secure in an open market. It is not in dispute
that though they were the agricultural lands as on the date of notification the
respondents who are no other than the builders and developers had, after the
purchase obtained sanction under Section 172 of the Madhya Pradesh Revenue Code
for conversion of the land into non-agricultural lands, but no sanction from
the municipality for construction of any colonisation, was obtained. Even
learned Judge B.C. Verma, J. had noted in his judgment that though the
respondents- claimants had entered into the agreement of sales with the
prospective purchasers, they had not completed the sale transactions. Those
agreements were brought into existence to bolster the claims. However, the learned
Judge found that the lands were situated very near to the Vickoy moped factory.
They abut the Jhansi
Road;
Sitholi
railway station is one mile from the acquired lands, but they are situated
outside the municipal limits of Gwalior Municipal Corporation. Their lands are
fit for developing industries, housing colonies, godown, petrol pumps etc:. The
evidence also disclosed that the land was not improved and it was not even
land. Considered in this background, the learned Judge had accepted the sale
deed executed by one of the claimants for a small extent of land at Rs. 0.50
per sq. ft. but having found that the lands were possessed of potential value,
determined the compensation at Rs.0.90 per sq. ft. and, as stated earlier,
deducted 15% towards developmental charges. Learned Judge Srivastava, J.
relied
upon the very sale deeds put forth by the claimants and held that they could
not claim higher than what they had put up, namely, Rs. 0.50 per sq. ft. and,
therefore, determined the compensation on that premise and deducted 25% towards
developmental charges. As seen, learned T.N. Singh, J. had agreed with B.C. Verma,
J. in determining the compensation at. Rs. 0.90 per sq. ft.
The
question, therefore, is: what would be the reasonable market value the lands
are capable to fetch as on the date of the notification had it been sold in the
open market to a willing purchaser? It is seen that when 33 and odd bighas of
land was sought to be sold in the open market, no willing prudent purchaser
would with any credulity agree to purchase it on sq.ft. basis. It is well
settled law that the judge determining compensation in a compulsory acquisition
should eschew feats of imagination sit in the arm chair of a willing purchaser
and put a question to himself whether as a willing prudent purchaser he would
offer the same price sought to be awarded for the acquired land. It would,
therefore, be clear that the learned Judges did not apply correct legal tests
to determine the compensation but determine the compensation on the basis of sq.ft.
Which is illegal. per se. We, therefore, hold that the learned Judges had
applied wrong principle of law in determining compensation.
The
question then arises is what would be the just and adequate compensation which
the land are capable to fetch in the open market? It is seen that the land are
situated beyond the municipal limit and on uneven land. But for the Vickoy moped
factory, there was no other immediate development. The claimants themselves
purchased the lands as builders develop the lands. They did not file their own
sale deeds to show at what rate they had purchased the land which would have
furnished best material. Admittedly, on sanction from the Municipal Corporation
or any competent authority was obtained in that behalf to construct housing
colony. Necessarily when the land was to await some time for development either
for industrial or colonisation, the price that could not be secured at the rate
was put forth by the claimants. They themselves had sold at Rs. 0.50 per sq.ft.
for a small extent of land. The learned Judges, therefore, had not correctly
appreciated the correct principles of law in determining the compensation.
Having found that the ends were possessed of potential value the compensation
could determined on the basis of the market value on square yard basis.
Considered from this perspective, we are of the view that the market value for
the land would be Rs.4/- per sq. yd. and we agree with learned Judge Srivastava,
J. that the deduction should be 25% towards developmental charges since it is
in evidence that acquisition is for industrial purpose and electricity was
immediately available as found by learned Judge T.N. Singh, J. The lands are
adjacent to national highway. It is settled law that normally 33-1/3% should be
deducted towards developmental charges. In this case as a special case, 25% is
deducted. It will not be treated as present.
The
learned Judges were wholly wrong in applying the Amendment Act 68 of 1984 since
the acquisition was made in the year 1964 and the Collector had made the award
on March 14, 1966 and the reference Court itself determined the compensation on
May 15, 1975. Under those circumstances, the claimants are not entitled to the
additional benefits of enhanced solatium under Section 23(2) at 30% interest
under proviso to Section 28 at 9% for the first year from the date of taking
possession and thereafter at 15% till date of deposit on the enhanced
compensation and additional amount under Section 23(1-A). The judgment in that
behalf also stands set aside. Instead, the claimants will be entitled to solatium
at 15% on the enhanced compensation and interest at 4% on the enhanced
compensation from the date of taking possession till date of deposit into
Court.
The
appeals of the State are accordingly allowed and the cross appeal of the
claimants stands dismissed, but in the circumstances, without costs.
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