Union of India & Ors Vs. Shri Chain
Singh & Ors [1997] INSC 532 (8 May 1997)
K.
RAMASWAMY, K.S. PARIPOORNAM
ACT:
HEADNOTE:
WITH
CIVIL
APPEAL NO. 3569-70OF 1997 [Arising out of SLP (C) No. 11052-53/97 CC
3592-93/97)] O R D E R Leave granted. We have heard learned counsel on both
sides.
The
land to an extent of 1007 kanals and 6 marlas situated in village Sansoo in Tehsil
and District Udhampur was initially requisitioned under Section 6 of the Jammu and Kashmir Requisition and Acquisition of
Immovable Property Act. On December 26, 1968,
proceedings for acquisition of the land were initiated. The compensation was
determined under Section 8 of the Act by the Land Acquisition officer at the
rate of Rs. 12, 000/-, Rs. 10, 000/- and Rs. 9, 000/- per kanal to Warhal Changhi,
Warhal Mandi and Banjar Kadeem lands respectively. Dissatisfied therewith, an
application under From 'G' seeking reference was filed. The Arbitrator was
appointed under Rule 9 read with Section 8(1) of the Act. Thereafter the
Arbitrator determined the compensation at the rate of 70, 000/- per kanal, On
appeal, the learned single judge confirmed the same and the Division Bench held
that no Letters Patent Appeal would lie. Thus, this appeal by special leave.
It is
seen that the Land Acquisition Officer has addcued the oral as well as
documentary evidence. The claimants also filed the documentary evidence as well
as the oral evidence. On consideration of the evidence, the Arbitrator as well
as the High Court have held that the lands are situated in a developed area and
possessed of and commanded good market value for sale in the open market to a
willing purchaser and, therefore, they are capable of fetching market value
raging from Rs. 1 lakh to Rs. 2 lakhs per acre and in view of the fact that the
sale deeds relied on were in respect of small pieces of land they determined
the compensation at the rate of Rs. 70, 000/- per acre.
The
question is: whether the view taken by the Arbitrator as well as by the High
Court is correct in law? It is settled law that under Section 8(3) of the Act,
as amended by Act 6 of 1977, the compensation payable for the acquired property
under Section 7 shall, in the absence of an agreement, be the price which the
requisitioned party would have fetched in the open market, if it had remained
in the same condition as it was at the time of the requisition, and been sold
on the date of the acquisition in the same condition. In other words, the
principle required to be applied would be that the existing conditions as on
the date of the acquisition (as if existed in conditions) in which the land
existed on the date of requisition, be the determining factor for fixing the
compensation as per the market value prevailing as on the date of the
acquisition and compensation has to be determined accordingly.
This
Curt in Union of India vs. Hari Krishan Khosla (dead) by Lrs, [(1993) Supp. 2
SCC 149 at 166, para 61] considered the question under the Requisition and
Acquisition of the Immovable Property Act, 1952 which is pari material to the Act,
and held thus:
"
We are of the opinion that the amount of compensation can be fixed by agreement
under Section 8 (1) (b). In the absence of such an agreement, it is left to the
discretion of the arbitrator. The arbitrator under Section 8 (1) (e) is to hear
the dispute. Thereafter he is to determine the compensation which appears to
him to be just. He must have regard to the circumstances of each case while
applying the provisions of Sub- Section (3) (a) of Section 8 which reads as
under:
"8.
(3) The compensation payable for the acquisition of any property under Section
7 shall be (a) the price which the requisitioned property would have fetched in
the open market, if it has remained in the same condition as it was at the time
of requisitioning and been sold on the date of acquisition or (b) * * *
(emphasis supplied) In our view, the significant omission of solatium is
indicative of the legislative intent necessitating stress on the expressions
" just" and "circumstances of each case" occurring in
sub-section (1) (e) thereof Yet another distinguishing feature is the
expression " open market".
The
reason why solatium h as not been provided is that "open market"
contemplates a bargain between a free buyer and a free seller unfettered by the
consideration of requisition and consequent acquisition." The principle
for determination of market value has been laid down by this Court in a catena
of decisions one of which is Periyar & Rubbers LTd. vs. State of Kerala
[(1991) 4 SCC at 207, para 16] which reads as under:
"Equally
it is statutory to note that the claimant has legal and legitimate right to a
fair and reasonable compensation to the land he is deprived of by legal
process.
The
claimant has to be recompensated for rehabilitation or to purchase similar
lands elsewhere. In some cases for lack of comparable sales it may not be
possible to adduce evidence of sale transactions of the neighbouring lands
possessed of same or similar quality. SO insistence of adduction of precise or
scientific evidence would cause disadvantage to the claimants in not getting
the reasonable and proper market value prevailing on the date of notification
under Section 1(1).
Therefore,
it is the paramount duty of the Land Acquisition Judge/authority to keep before
him always the even scales to adopt pragmatic approach without indulging in
"facts of imagination" and assess the market value which is
reasonably capable to fetch reasonable market value. What is fair and
reasonable market value is always a question of fact depending on the nature of
the evidence, circumstances and probabilities in each case. The guiding star
would be the conduct of a hypothetical willing vendor would offer the lands and
a willing purchaser in normal human conduct would be willing to buy as a
prudent man in normal market conditions as on the date of the notification
under Section 4(1) but not an anxious buyer dealing at arm's length nor facade
of sale or fictitious sales brought about in quick succession or otherwise to
inflate the market value." Thus, it could be seen that the endeavor of the
court or the arbitrator should be to sit in the arm chair of a prudent willing
purchaser; keep the consideration of the feats of imagination at bay; seek
answer to the question whether a willing and prudent buyer would offer to
purchase the land from the open market from a willing seller, at the same rate
which is proposed to be determined by the Land Acquisition Officer/Court. All
the relevant features, viz., the nature of the land, the quality of the land,
the market conditions prevailing as on the date of the acquisition, the income
derived from the land etc., should be taken into consideration. Thus, the
question is: if the similar land remains in the same condition at the time of
acquisition, would a prudent purchaser after to purchase 1007 kanals at Rs.
70,000/- per kanal? The Court is required to consider what will be the true
market value in that behalf. The arbitrator and the High Court have thrown the
tests laid by judicial decisions to winds. It is seen that in the acquisition
proceedings, the Tehsildar had collected various documents which now have been
proved through the witnesses as to the value as on June 30, 1987 and they have
worked out the compensation at the rate of Rs. 12, 000/- per Kanal for the Warhal
Changhi, Rs. 10,000/- for Warhan Mandi and Rs. 9,000/- for banjar Kadeem. It is
not disputed nor can it be disputed that the lands had developed in and around
the land on account of the military estate established in that village. The
present development has been taken into consideration which is wrong in law.
There is no doubt that the land owners are not having any other land except the
small piece of land. But that would not be a consideration for totally ignoring
the prevailing market value and fixing the compensation de hors the prevailing
market value. The documents reliod on by the claimants show in the map filed
before us, that the lands are situated far away from the lands under
acquisition, Equally, the lands in respect of which sale deeds were filed by the
Government are situated in Sansoo village itself which is very near to the
acquired lands. The market value fetched by the lands, i.e., small pieces of
the extent of 4 and 5 marlas respectively, between August 10, 1996 and April
27, 1987 hardly work out to minimum of Rs. 10,000/- and the maximum of Rs. 20,
000/-.
Even
the sale deeds relied on by the claimants are of maximum of 6 marlas of land;
though the house was constructed, it was sold for Rs. 32,000/-. Thus, the
compensation worked out to Rs. 80,000/- per kanal.
Under
these circumstances, considering the totality of the facts and circumstances
and sitting in the arm chair of a willing purchaser, we think that the
appropriate market value would be Rs. 30,000/- per kanal and the High Court and
the Arbitrator, therefore, have committed manifest error in determining the
compensation (C,A, 3568/97) Accordingly, the appeal is allowed. The claimants
are entitled to interest as per the Act. With regard to the determination of
the value of the trees, we are not inclined to disturb the determination made
by the Arbitrator. It is open to the appellants to have the excess amount
recovered from the respective persons as per rule. No costs.
CA No.
3569-70/97 [@ SLP (C) No. 11052-53/97 CC 3592- 93/97] filed by the claimants
stand dismissed.
No
costs.
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