The
Manipur Tea Co. Pvt. Ltd. Vs. The Collector of Hailakandi [1996] INSC 1609 (13 December 1996)
K. Ramaswamy,
G.T. Nanavati
ACT:
HEAD NOTE:
THE
13TH DAY OF DECEMBER 1996 present:
Hon'ble
Mr. Justice K. Ramaswamy Hon'ble Mr. Justice G.T.Nanavati Dr. A.M. Shighvi, Sr.
Adv., Manoj Arora, Ms.S.Hazarika, Ms. H. Wahi, Advs. With him for the appellant
S.N. Chaudhary, Sr. Adv. and S.A. Syed, Adv. with him for the Respondent
O R D
E R
The
following Order of the Court was delivered:
Leave
granted.
We
have heard learned counsel on both sides.
These
appeals by special leave arise from the judgment of Division Bench of Assam
High Court, made on August
17, 1992 in First
Appeal Nos.67/87 and 11-14/88. Notification under Section 4(1) of the Land
Acquisition Act, 1894 (for short, the "Act") were published on
5.9.1981, 21.9.1982, 23.9.1982 and 24.9.1982 acquiring 123 Bighas 11 Cottahs
and 13 Chitaks of the appellants' tea Estate for laying Railway tracks. The
Collector by his award dated March 19, 1985 and also by another award dated
March 25, 1985 awarded in respect of the lands acquired a sum of Rs.17,59,975/-
against the total claim of Rs.1,77,92,238/- on the computation made in that
Court enhanced the compensation to Rs.43,89,038/- with solatium, and interest
thereon in the sum of Rs.67,60,730/- has been awarded as additional
compensation. On appeal, the High Court reduced the compensation from Rs.43,89,038
to Rs.40,89,038/-. feeling aggrieved by the impugned judgment, these appeals
have been filed by the appellant.
Dr.
A.m. Singhvi, learned senior counsel appearing for the appellant, contents that
the High Court and the reference Court committed a grievous error in relying
upon the sale statistics earlierelied on by the Land Acquisition Officer
without examining any witness which formed basis for his award. The Courts also
had wrongly rejected three sale deeds Exs.17(1) to 17(3) proved on behalf of
the appellant and, therefore is clear error of law in reaching that conclusion.
On the face of it, we find force in the contention. The sale statistics relied
on by the Land Acquisition Officer are not unless persons connected with the
sale deeds and the documents, also made part of the record, are examined.
Therefore, the sale statistics cannot ipso facto form a basis to determine the
compensation. As regards the three sale deeds relied on by the appellant, both
the High Court as well as the reference Court came to the conclusion that they
relate to the agricultural land while the acquisition is in respect of tea garden.
Therefore,
they could not form the basis to determine compensation. Moreover, it was also
found that they relate to sale transactions which took place 5 years prior to
the date of the notification published under section 4(1).
Neither
the vendees were examined as witnesses. Therefore, the rejection of those sale
deeds is perfectly in accordance with law. They do not form any base for
determination of the compensation. It is settled law that the burden is on the
claimants to prove by adducing cogent, reliable and acceptable evidence the
market value under Section 23(1) of the Act. The burden does not shift over to
the Government but it is the duty of the duty of the Court to assess the
evidence adduced by the claimants and determine the compensation on the
touchstone of prudent purchaser in the open market, i.e., whether he would
offer market value at the rates proposed by the Court. The evidence has to be
put to the test whether the sale deed or the evidence adduced would offer the
market value higher than that has been determined by the Land Acquisition
Officer. The compensation awarded by the Land Acquisition Officer is an offer
that blinds the Government but it is not conclusive. It is for the claimants to
prove as to what would be the reasonable compensation which the land is capable
of fetching in the open market. The question is: whether the Land under
acquisition, if put to the private sale in an open market, would be capable to
secure the same price as offered by way of determination of the compensation
after compulsory acquisition. Considered from this perspective, the Court
considered the evidence adduced and determined the compensation. The High Court
and the reference Court, therefore, correctly applied the test and did not
accept three sale deeds produced by the appellant in determining the
compensation which relate to the agricultural land; not the tea garden or
estate. Having rejected the sale deeds relied on by the appellant to do justice
to the respondent, they relied on sale statistics relied by the Land
Acquisition Officer. Under these circumstances, we do not find any ground in
the approach adopted by the Courts below.
It is
then contended that tea garden always secured higher market value than the
paddy fields. In that behalf, reliance was placed upon Section 42 of the West
Bengal Estate Acquisition Act, 1953 and similar provision in Assam Land
Acquisition Act and Assessment Ordinance, 1989, as applicable, to show that the
market value of tea garden is required to be determined at the rate twice the
value of paddy. A distinction has been made between the two in determination of
compensation, by the statute as tea gardens are required to be assessed at the
rate 2-1/2 times higher than the paddy fields. Therefore, the said yardstick is
required to be adopted in determining the compensation. We do not agree with
the contention.
The
principle of determination of the compensation under Section 23(1) of the Act
is entirely different and distinct from the principles applicable in
determining the compensation under Land Reforms Act. What is required to be
determined is the prevailing market value of the Land as on the date of the
notification published under Section 4(1) of the Act and, therefore, the
principle for determination of the compensation under the Land Reforms Act or
the Acquisition Act has no relevance or bearing.
It is
then contended that the courts below have committed error in not granting
escalation charges for the determination of the compensation to the tea garden.
In that behalf, it is contended that the reference Court proceeded in paragraph
30 on the be sis that the age of the tea bushes would be 35 to 40 years. The
report of the Tocklai Experimental Station of Tea Research would indicate that
the life of the trees would be more than 25 to 30 years. The yield would be
more than 25 to 30 years and thereafter gradually decrease. The Court below
were not right in determining 20 years as the age of the bushes and on that
basis fix the yield per month at Rs.270/-. In fact even on the basis of those
calculations, the claimants are entitled to more that Rs.367/- per month. It is
now an admitted position that except one witness, Bharthakur who has stated
about the age of the trees, there is no evidence in proof of the above
statistics given by the Research Station.
Therefore,
though the Land Acquisition Officer had relied upon that statement in
determining the compensation, in trial, before the Court that did not ipso
facto form part of the record unless the person connected with the Research
Station was examined as witness in that behalf. Admittedly, no witness has been
examined. In fact, if State had filed an appeal perhaps the things would have
been different. The High Court and the reference Court had adopted wrong
principle of law with a view to give the benefit to the appellant rather than
dismissing its application for enhancement of the compensation. The District
Judge as well as the High Court preceded on the basis of the said report and
fixed the age of the bush at 20 years for the maximum yield. Therefore, we do
not find any legal base to interfere with that.
Further,
Dr. Singhvi says that it being an arithmetical mistake, liberty may be given to
the claimants to approach the reference Court for amendment of the decree. It
may do so, if it is open to it. The District Judge as well as the High Court have
held that for the remaining 15 years the tea bushes would give their yield
though every year, it would gradually decrease. They have taken 200 gms. per
bush as the average yield as stated in paragraph 30 of the award which reads as
under:
"In
other words, the tea bushes are not likely to produce 400 gms. of made tea for
the remaining 15 years. The production will go down gradually till the economic
viability will become zero at the end of 15 years. In order to assess the
quantum of viability, we are to take the mean of 200 gms. per year in average
per bush for the 15 years. The yield per bush as on today cannot be expected
during next 15 years. In spite of increasing variable costs such as costs of
manure etc. the return will gradually go down till its economical viability
becomes zero after 15 years." The finding thus recorded is a pure question
of fact considering the economic viability, the nature of the yield and the
longevity of the trees. Therefore, the reference Court rightly had put it as
200 gms. per year for average bush for 15 years and this calculation was made
in paragraph 81 and the actual amount receivable, namely, (15 years X 200 gms.)
(21.81 - 14.00) - 3 X 7.81 per bush - and Rs.23.43 per bush was fixed. Under
these circumstances, it was held that they are entitled to compensation at that
rate per bush and the Collector, after deducting the amount already paid was
directed to make the balance payment. It being an arena of appreciation of
evidence on the factual matrix, we are not inclined to interfere with that
finding.
It is
next contended that the reference Court having noticed that in three months an
area of 90 Cottas 11 Chittaks was sold on May 21, 1979 @ Rs.2,539,68 per bigha
and 18 Cottas 13 Chittaks of land was sold on March 7, 1980 @ Rs.1,268,83 per bigha
and a further area of 1 bigha 4 Cottas and 4 chittaks was sold @ Rs. 4,948.45
per bigha on January 3, 1981, which would show that there was a gradual rise in
the prices, fixing the escalation charges at Rs.270/- per months was wrong;
instead, escalation must be @ Rs.367/-. Thus the principle adopted by the Court
is not correct in law. In fact, the above finding is incorrect in law for the
reason that the persons connected with those sale deeds were not examined to
show the nature of the land under acquisition and of the lands under the sale
deeds. The circumstances under which the purchase came to be made, the relative
distance of the land and the respective prevailing prices in respect of those
areas are the factors to be taken into account. In this case, such an attempt
was not made. It was required to be proved that there was really an increase in
the value of the land. As a matter of fact, it has to be established that there
is gradual increase, every month, in the value of the land of that area and,
therefore, when the compulsory acquisition was made, the appellant was entitled
to higher compensation. Though the State has not approached this Court, we can
hold that there is no illegality committed by the Courts below in granting the
escalation at Rs.270/- per bush.
It is
then contended that the reference Court awarded a sum of Rs.4,71,312/- as
severance charges. The High Court has found that due to the severance, the
appellant had to put not only the fencing but also the drainage to protect the
tea garden and the expenses incurred therefor came to the tune to
Rs.2,36,010/-. Instead of adding severance charges awarded by the reference
Court, the High Court has reduced the compensation. Therefore, it committed an
error of law. We find no force in the contention.
Clause
thirdly, of Section 23(1) envisages that the damage (if any) sustained by the
person interested, at the time of the Collector's taking possession of the
land, by reason of severing such land from his other land is required to
determined as compensation under sub-section (1) of Section 23. It is seen that
by reason of the acquisition of the land of the appellant to lay of Railway
tracks, the contiguity of the tea estate was severed and 2/3rd of the estate
had remained on one side and 1/3 on the other. The question is: what would be
the compensation for that severance? The question is confined to the extent of
expenditure. The compensation has to be awarded for such severance. It is
stated by the claimants that they were required to put up fencing for
protecting the tea estate and also the drainage channel. It is sen that the
High Court has proceeded on that premise and it is not a case of the parties that
on account of the acquisition of the land, the tea estate is exposed to the
public and the public have access into the tea estate only the railway tracks
would pass through the estate and, therefore, setting up of the fencing or of
the drainage to protect the tea estate may not be necessary. We need not go
into that question since the State has not come in appeal. Suffice it to state
that the High Court having found that the appellant was required to set up a
fencing and the drainage channel, and amount of Rs.2,36,000/- as estimated,
would be sufficient to meet the expenditure. It being an estimate made by the
appellant, we do not find any error of law warranting interference.
It is
then contended that by operation of the proviso to section 28 of the Act, the
claimants would be entitled to interest for one year from the date of taking
possession @ 9% per annum and for the balance period @ 15% per annum on the
enhanced compensation. We find force in the contention.
It is
sought to be contended for respondents that the reference Court and the High
Court have proceeded on the principle that the Court has discretion to award
interest @ 15% or less and on facts, the Court found that 9% would be
reasonable rate of interest. We find that the approach adopted by the reference
Court and High Court is not correct since the statute has given measure of
amassment of interest for the first year @ 9% from the date of taking
possession and on expiry thereof @ 15% till date of deposit into Court on the
enhanced compensation. It is a legislative principle that the claimant would be
entitled to the rate of interest for the said period.
Under
these circumstances, though the word 'may' has been used in proviso to Section
28 of the Act, it has to construed as 'shall' and, therefore, the claimants
would be entitled to interest at the rate of 9% on enhanced compensation for
one year and thereafter @ 15% till date of deposit in the Court.
The
appeals are accordingly allowed only to this extent. But, in the circumstances,
without costs.
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