National Fertilizers
Ltd. Vs. Jagga Singh (Deceased) through L.R.S & ANR.
J U D G M E N T
A. K. PATNAIK, J.
1.
These
are the appeals by way of special leave against the judgment and order dated 13.07.2005
of the Division Bench of the Punjab and Haryana High Court, Chandigarh, in Letters
Patent Appeals determining the market value of acquired land @ Rs.120/- per square
yard (for short `the impugned judgment').
2.
The
facts relevant for deciding these appeals briefly are that the National
Fertilizers Limited (for short `the NFL') is a Government of India Undertaking engaged
in the business of manufacturing fertilizers and has a plant in Bhatinda in the
State of Punjab. To meet the requirement of dwelling houses for the employees of
NFL, the State of Punjab acquired 29.68 acres of land in village Bhatinda by
notification dated 24.01.1983 issued under Section 4 of the Land Acquisition
Act, 1894 (for short `the Act').
The District
Collector sent the market rates to the Land Acquisition Collector for different
classes of agricultural or revenue land and these were for Nehri - Rs.56,000/-
per acre, for Barani - Rs. 23,000/- per acre and for Gair Mumkin - Rs.23,000/-
per acre. The Land Acquisition Collector determined the compensation at 50% above
the rates sent by the District Collector for each of the aforesaid classes of land
in his award dated 19.03.1986. Not satisfied with the award, the landowners
made a reference under Section 18 of the Act to the civil court. Besides the
State, NFL was impleaded as a defendant in the reference.
By order dated
29.04.1991, the learned Additional District Judge determined the compensation
for all the three classes of land at a uniform rate of Rs.32.50 per square yard
after considering two unregistered sale agreements (Exhibits A-X and A-Y) and
the order of the High Court in Sadhu Singh's case determining the compensation for
land acquired for extension of the military cantonment in the year 1976.
The land owners challenged
the order of the Additional District Judge before the High Court in Regular
First Appeals. The State of Punjab and NFL also challenged the order of the
learned Additional District Judge before the High Court in Regular First
Appeals. The learned Single Judge of the High Court, who heard the appeals,
sustained the determination of compensation made by the learned Additional District
Judge and dismissed the appeals by a common order dated 09.09.1994.
3.
Aggrieved,
the land owners as well as NFL challenged the order dated 09.09.1994 of the learned
Single Judge before the Division Bench of the High Court in Letters Patent Appeals.
In the impugned judgment, the Division Bench of the High Court held that as
Exhibits A-X and A-Y were unregistered and did not bear any date, these
documents could not be considered for determination of compensation.
The Division Bench
also found from the site plan that the military cantonment for which Sadhu
Singh's land was acquired was far away from the land acquired in the present case.
The Division Bench also found that the land of Sadhu Singh was acquired for the
military cantonment in the year 1976 whereas the lands acquired in the present case
were included in the municipal limits of Bhatinda city in 1977 and around the
land acquired in the present case, various colonies had come up in the municipal
limits of Bhatinda.
The Division Bench further
found from the site plan that the land of Karam Singh which had been acquired
for a municipal park was much nearer to the land of the land owners acquired in
the present case.
The Division Bench, therefore,
took the view in the impugned judgment that the order passed by the High Court
in the case of Sadhu Singh for the land acquired for military cantonment could
not be preferred over the order of the High Court passed in the case of Karam
Singh for land acquired for municipal park in the year 1983 for making the
assessment of market value of the land acquired in the present case and determined
Rs.120/- per square yard as just and reasonable market value for the land acquired
in the present case and adopted the reasoning given in the order dated
08.11.1989 of the High Court (Exhibit A-15) in the case of Karam Singh (RFA
No.906 of 1988).
4.
Learned
counsel appearing for the appellant submitted that the Division Bench of the
High Court was not correct in coming to the conclusion that the assessment of
compensation in Karam Singh's case was more comparable and relevant for making
assessment of market value of the land acquired in the present case.
He submitted that in
Karam Singh's case a very small area of land measuring 1058 sq. yards was
acquired whereas in the present case a much bigger area of acre 29.68 was
acquired. He submitted that in Karam Singh's case the land was a developed land
located in the heart of the Bhatinda town, but in the present case the acquired
land was water-logged and used for agricultural purpose and was away from the city.
He referred to the order
of the High Court passed in Karam Singh's case to show that the land acquired
in that case had a great potential value for being used for commercial and
residential purposes. He submitted that the land acquired in Karam Singh's case
was at a distance of about 200 karmas from the scheme of Improvement Trust on the
Amrik Singh Road.
He submitted that at a
short distance from the land acquired in Karam Singh's case, towards the city, there
were shops of jewellers, iron furniture factory, cinema hall as well as Sepal
Hotel. He argued that these facts made a big difference to the value of the
land that was acquired in Karam Singh's case and that the assessment of
compensation in Karam Singh's case was not at all relevant to the assessment of
compensation for the land acquired in the present case.
5.
Learned
counsel for the appellant submitted that the learned Additional District Judge and
the learned Single Judge have therefore rightly taken the view that the value
of the land acquired in the case of Karam Singh could not be the basis for determining
the compensation for the land acquired in the present case.
He submitted that the
learned Additional District Judge and the learned Single Judge of the High
Court have in the present case taken the average price of two sale transactions
in Exhibits A-X and A-Y as well as the market value of the land acquired in the
year 1976 in the case of Sadhu Singh and after adding an increase of 12% per
annum arrived at the value of the land acquired in the present case in 1983 at Rs.32.50
per sq. yard, which was just and reasonable.
6.
Learned
counsel for the appellant cited Chimanlal Hargovinddas v. Special Land Acquisition
Officer, Poona and Another [(1988) 3 SCC 751] in which this Court has listed
the plus factors and minus factors which have to be taken into consideration
for determining the market value of land in land acquisition cases.
He submitted that in this
decision this Court has mentioned largeness of area of land in the list of
minus factors for determination of the market value of the land. He also relied
on Hasanali Khanbhai & Sons and Others v. State of Gujarat [(1995) 5 SCC 422]
in which deduction to the extent of 60% of the value of land on account of the large
size of the land adopted by the High Court was found to be justified.
He also relied on K. Vasundara
Devi v. Revenue Divisional Officer in which it was held that sufficient deduction
should be made to arrive at the just and fair market value of large tracts of land,
which were not developed.
He also relied on Kanta
Devi and Others v. State of Haryana and Another [(2008) 15 SCC 201] in which this
Court made deduction of 60% for meeting the expenditure towards development
charges.
7.
Learned
counsel for the respondent-land owners, on the other hand, submitted that all the
witnesses produced by the land owners before the Additional District Judge have
testified to the fact that the acquired land is situated on the National Highway
leading from Bhatinda to Ferozepur via Goniana and was within the municipal
limits of Bhatinda and was situated by the side of a metal road.
He submitted that the
witnesses have also testified that the acquired land was surrounded by many
industrial concerns and residential colonies, such as thermal plant, the plant
of NFL as well as colony of the employees of the two plants and Sucha Singh Colony,
Amar Singh Colony, Kheta Singh Colony, Mandir Colony etc.
He submitted that the
witnesses have also stated that the abadi of Bhatinda town has extended towards
the land acquired in the present case and three sides of the acquired land are already
occupied and on the fourth side is the metal road. He submitted that the learned
Additional District Judge has taken note of all such evidence or the witnesses and
has held that the land acquired in the present case has the potentiality of urban
land and not of agricultural land.
8.
Learned
counsel for the respondent-landowners submitted that the land acquired in the
present case may be at some distance from the land acquired in Karam Singh's
case but this cannot be a ground for not treating the acquired land in the present
case as comparable with the land acquired in Karam Singh's case for the purpose
of determination of compensation.
In support of his
submission he relied on Thakarsibhai Devjibhai and Others v. Executive Engineer,
Gujarat and Another [(2001) 9 SCC 584] in which this Court has held that if the
quality, including potentiality, of two areas of land is similar then distance between
the two would not by itself lead to a change in their respective market values.
He submitted that it
is not correct as has been submitted on behalf of the appellant that the acquired
land was a low waterlogged agricultural land and as per the evidence of RW-1, the
Patwari,
Land Acquisition, Industries
Department, Government of Punjab, the level of the acquired land was the same
as that of the existing land of township of the NFL. He submitted that the
quality of the acquired land and the quality of the land acquired in the case
of Karam Singh were therefore one and the same and the Division Bench of the
High Court has rightly held that the compensation determined for the land
acquired in the case of Karam Singh should be the basis for determination of compensation
of the acquired land in the present case.
He submitted that in
any case the value of the acquired land in Karam Singh's case was determined by
the High Court under Ext.A-15 at Rs.176/- per square yard and the Division Bench
in the impugned order has applied a cut and determined the compensation for the
land acquired in the present case at a reduced rate of Rs.120/- per square yard
and this was a just and reasonable compensation awarded for the land acquired
in the present case.
9.
Learned
counsel for the respondent-landowners next submitted that the determination of compensation
by the learned Single Judge of the High Court in the present case on the basis
of land acquired in Sadhu Singh's case was not at all correct because the land acquired
in the case of Sadhu Singh was located in the cantonment area and the
acquisition was in 1976, whereas the Municipal Council of Bhatinda was
constituted only in 1977 and the land in the present case was acquired in 1983 when
the land was within the municipal limits.
He submitted that the
acquisition in Sadhu Singh's case was made in 1976 more than seven years before
the acquisition in the present case and therefore the value of land as determined
in Sadhu Singh's case cannot be the basis for determination of compensation in the
present case.
He cited General Manager,
Oil and Natural Gas Corporation Limited v. Rameshbhai Jivanbhai Patel and Another
[(2008) 14 SCC 745] in which this Court has held that sale transactions which precede
the subject acquisition by only a few years, i.e. upto four to five years, can
be relied upon but relying on sale transactions beyond that would be unsafe, even
if it relates to a neighbouring land.
He submitted that in the
absence of any appropriate sale transaction of the year 1983 in respect of land
in an around the acquired land in the present case, the Division Bench rightly relied
on the judicial precedent in the case of Karam Singh and determined the compensation
at the rate of Rs.120/- per square yard.
He relied on Pal Singh
and Others v. Union Territory of Chandigarh [(1992) 4 SCC 400] wherein this
Court has observed that a judgment of a court in a land acquisition case determining
the market value of a land in the vicinity of the acquired lands, even though not
inter partes, is admissible in evidence either as an instance or one from which
the market value of the acquired land could be deduced or inferred.
He submitted that
Ext.A-15 which was the order of the High Court in the case of Karam Singh has
therefore been rightly relied upon by the Division Bench of the High Court in determining
the compensation of Rs.120/- per square yard for the land acquired in the
present case.
10.
We
have considered the submissions of the learned counsel for the parties and we
find that while the case of the appellant is that the learned Additional District
Judge and the learned Single Judge correctly determined the compensation payable
to the landowners for the land acquired in the present case at the rate of
Rs.32.50 per sq. yard, the case of the respondent-landowners is that the
Division Bench of the High Court has correctly determined the compensation in
the impugned judgment at the rate of Rs.120/- per sq. yard.
Therefore, the question
that we have to decide in these appeals is whether the compensation for the lands
acquired as determined by the Additional District Judge and as upheld by the
order of the learned Single Judge is a correct assessment of the market value of
the acquired land or the compensation as determined by the Division Bench of
the High Court in the impugned judgment is a more accurate assessment of the
market value of the land acquired in present case.
11.
We
may first deal with the determination of the compensation by the Additional District
Judge as affirmed by the learned Single Judge of the High Court in the Regular
First Appeals.
The Additional
District Judge has taken into consideration two sale agreements (Exts. A-X and A-Y).
Exhibit A-X is executed by one Satish Gupta agreeing to transfer his plot of land
measuring 400 sq. yards for Rs.17,300/- to one Sham Singh and Exhibit A-Y is
executed by one Balram Shukla agreeing to transfer his plot of 400 sq. yards for
Rs.17,000/- to Satnam Singh.
The average sale price
in these two sale agreements comes to Rs.42.87 per sq. yard. The sale agreements
are between the employees of NFL, who were members of the NFL Employees
Co-operative Society.
The Division Bench of
the High Court has held in the impugned judgment that these sale agreements,
which have no details with regard to the date of execution and were not really sale
deeds, could not have been taken into consideration for determining the market
value of the acquired land.
We have perused a
copy of the sale agreement between Balram Shukla and Satnam Singh, which has
been annexed in Civil Appeal No.3033 of 2008 as Annexure P-13 and we find that
the sale agreement does not mention the date on which the agreement has been
entered into.
In the absence of any
date of the sale agreement, the sale agreement could not have constituted the basis
for determination of the market value of land in 1983 when the land was
acquired in the present case.
The Division Bench of
the High Court, therefore, was right in taking the view that Exhibits A-X and A-Y
cannot constitute the basis for determination of the market value of the acquired
land in the present case.
12.
The
learned Additional District Judge has also relied on the order of the High
Court determining compensation of land acquired in the case of Sadhu Singh (RFA
No.1207 of 1984). The land in the case of Sadhu Singh was acquired within the revenue
village of Bhatinda for extension of the military cantonment by notification dated
29.10.1976 and the High Court determined a rate of compensation of Rs.17/- per sq.
yard.
The Additional District
Judge has given an increase of 12% per annum on this rate of Rs.17/- per sq.
yard from 29.10.1976 to 24.01.1983 to arrive at the market value of the land as
on 24.01.1983, i.e. the date of notification under Section 4 of the Act in the
present case.
The learned Single
Judge of the High Court while sustaining the order of the learned Additional Judge,
has held that although the exact location of the land is not given in Sadhu
Singh's case, yet the same can be made the basis for determining the market value
of the acquired land in the present case as the land acquired in the Sadhu
Singh's case was within municipal limits of Bhatinda.
In our considered
opinion, the reliance on order of the High Court passed in Sadhu Singh's case
by the learned Additional District Judge and the learned Single Judge was not
correct because from the site plan it appears that the land in Sadhu Singh's
case which was acquired for military cantonment was far away from the land acquired
in the present case which was located adjacent to the colony of NFL and other colonies.
From the site plan,
we also find that compared to the land acquired in Sadhu Singh's case, the land
acquired in Karam Singh's case was much more nearer to the land acquired in the
present case.
13.
The
Division Bench of the High Court has thus relied upon its order in the case of Karam
Singh (RFA No.906 of 1988) passed on 08.11.1989 which was marked in the
reference proceedings as Ext. A-15. The land in the case of Karam Singh was acquired
for a municipal park by notification issued under Section 4 of the Land
Acquisition Act on 30.08.1983 and is located within the municipal limits.
In Karam Singh's case
there was evidence of three transactions of sale of the same date i.e., 29.06.1973,
showing that some land in the area had been sold at the rate of Rs.100/- per sq.
yard, some land in the area had been sold at Rs.70.30 paise per sq. yard and
some land in the area had been sold at the rate of Rs.62.50 per sq. yard and the
Court took the average rate of the three sale transactions which worked out to
Rs.80/- per sq. yard.
The Court then added an
increase of 12% per annum for ten years to arrive at the value of the land in the
year 1983 when the land was acquired and the figure worked out at Rs.176/- per
sq. yard. For finding out the market value of the land acquired in the present
case, the Division Bench of the High Court applied a cut to this rate of
Rs.176/- per sq. yard and determined the rate of Rs.120/- per sq. yard as just and
reasonable value of the land acquired in the present case considering the
location and potentiality of the acquired land.
The Division Bench has,
therefore, taken into consideration the fact that the land in Karam Singh's
case was located in the heart of the Bhatinda town, whereas the land acquired
in the present case was slightly away from the heart of the town and was located
adjacent to the existing colony of the NFL and other colonies, namely, the
residential colonies of the thermal plant, Sucha Singh Colony, Amar Singh Colony,
Kheta Singh Colony, Mandir Colony, etc. and reduced the market value of the land
acquired in the present case.
14.
We
may now consider whether any further cut to the rate of Rs.120/- per sq. yard
as determined by the Division Bench of the High Court in the impugned judgment was
called for, considering the size and quality of the land acquired in the
present case.
Regarding the size of
the land, the argument of learned counsel for the appellant is that the size of
the land acquired in the case of Karam Singh was .04 acres (1058 sq. yards),
whereas the size of the land acquired in the present case is acre 29.68 (143651
sq. yards).
But on a reading of
the order dated 08.11.1989 of the High Court in the case of Karam Singh (RFA No.906
of 1988) marked as Annexure Ext.A-15, we find that the High Court has taken
into consideration three sale deeds of the same date to work out the average rate
of the land at Rs.80/- per sq. yard in 1973 and applied an increase of 12% per
annum to arrive at the figure of Rs.176/- per sq. yard, but has not mentioned
the size of the lands which were sold under the three sale deeds.
In the absence of the
size of the plots of land which were sold under the sale deeds, which were taken
into consideration by the High Court while determining the market rate of the
land in Karam Singh's case, it is difficult to accept the contention of the learned
counsel for the appellant that the determination of market value of the land in
Karam Singh's case was in respect of land which was sold was much smaller in size
as compared to the land which was acquired in the present case.
Regarding quality of
the land acquired in the present case, learned counsel for the appellant submitted
that the land in Karam Singh's case was developed urban land meant for residential
and commercial purpose, whereas the land acquired in the present case was low, water-logged
agricultural land. We, however, find from the evidence of Basant Singh Patwari,
Land Acquisition,
Industries Department
Punjab, Chandigarh, examined as RW-1, that the level of the land, which was acquired
in the present case, was that of the existing land of the township of NFL.
The learned
Additional District Judge in his order dated 29.04.1991 has in fact held, after
considering all the oral and documentary evidence adduced by the parties, that the
market value of the land acquired in the present case has to be determined on the
basis of its potentiality for urban development and not on the basis of the
revenue or agricultural classification of the land as done by the Collector because
the land acquired in the present case had a great potential value for urban
purposes, i.e. commercial, industrial and residential.
We, therefore, do not
find any merit in the submission of learned counsel for the appellant that a
cut of 60% should have been applied to the rate as determined in Karam Singh's
case considering the larger size and lower quality of the land acquired in the
present case.
In our opinion, the
cut applied by the Division Bench of the High Court in the impugned judgment so
as to reduce the value from Rs.176/- per sq. yard to Rs.120/- per sq. yard was
just and reasonable in the facts of the present case.
15.
In
the result, we do not find any merit in these appeals and we dismiss the same and
award a cost of Rs.10,000/- in favour of the respondents in each of the
appeals.
.............................J.
(Cyriac Joseph)
.............................J.
(A. K. Patnaik)
New
Delhi,
November
15, 2011.
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