Collector and another vs Frena Boga

This appeal is directed against the judgment and decree (Award) dated 29th June, 2000 passed by Principal District Judge, Srinagar, in case

titled Mrs. Frena Boga vs. General Manager Industries Centre, Srinagar, hereinafter referred to as impugned award, whereby and where under the

compensation awarded at Rs.6500/ per kanal came to be enhanced to Rs. 15000/ per kanal.

It is necessary to give a flask back of the case, the womb of which has given birth to the present appeal.

It appears that land measuring 535 kanals and 2 marlas came to be acquired for establishment of industrial complex at Khonmoh. Collector

passed award dated 16th November, 1979 whereby Rs.6500/ came to be awarded as compensation per kanal.

It appears that Collector made reference to the District Court on 21st August, 1996 which came to be diarized as reference No. 8 of 16th

October, 1996. After hearing the parties, the impugned award came to be passed.

It appears that respondent claimant had prayed for awarding Rs. 15000/ as compensation per kanal instead of Rs.6500/. Collector resisted the

said reference and following issues were framed.

Whether the petitioners have not been paid compensation according to the market rate per kanal keeping in view of the nature, location and

prospects of future development of the land? OPP

Whether the petitioners are entitled to Rs. 15.000/ per kanal as compensation? OPP

Whether the petitioners had accepted the award passed and so the reference is not maintainable, if so on what grounds? OPR

Whether the petition is barred by limitation? OPR

Relief.

The entire case revolves round issue No. 3, thus I deem it proper to decide issue No. 3 at the first instance.

The trial court held that claimant made the application for enhancing the compensation within the stipulated period, thus it shall be deemed that

the claimants had received the compensation under protest and accordingly decided issue No. 3 in favour of the claimants/ respondents herein and

against the Collector/ appellant herein.

lam of the considered view that finding returned by the trial court is perverse, illegal and without any force for the following reasons:

If the claimant receives compensation without any protest he cannot file an application for making reference. It is profitable to reproduce Section

32 of the Land Acquisition Act, hereinafter referred to as the Act, herein, which reads as under:

Payment of compensation or deposit of same in Court.

(1) On making an award under section 11. the Collector shall tender payment of the compensation awarded by him to the persons

interestedentitled thereto, according to the award, and shall pay it to them unless prevented by someone or more of the contingencies mentioned in

the next subsection.

(2) If they shall not consent to receive it, or if there be no person competent to alienate the land, or if there be any dispute as to the title to receive

the compensation or as to the apportionment of it, the Collector shall deposit the amount of the compensation in the Court, to which a reference

under section 18 would be submitted:

Provided that any person admitted to be interested may receive such payment under protest as to the sufficiency of the amount:

Provided also that no person who has received the amount otherwise than under protest shall be entitled to make any application under section 18:

......... .....................

While going through this provision of law, it is crystal clear that when compensation is received without any protest by the claimant he is

precluded from challenging the award and cannot seek enhancement of compensation. The claimant cannot be allowed to seek enhancement of

compensation after receiving the money without any protest. Apex Court in case titled as Wardington Lyngdoh v. Collector, Mawkyrwat, reported

in AIR 1995 SC2340 has held that reference is not maintainable when compensation has been received without protest. It is profitable to

reproduce para5 of the said judgment herein:

''5. It will thus be clear that the persons interested in the land are entitled to receive compensation awarded by the Collector under S. 11 under

protest and entitled to object to the compensation determined by ""the Collector. No person who had received the amount otherwise than under

protest should be entitled to make the application under S. 18 within the limitation prescribed under the proviso to subs. (2) of S.18 together with

the grounds on which the objections have been taken. Thereon the Collector is enjoined to make a reference to the Civil Court with the statement

in the manner stated in S. 19.

Apex Court has also taken the same view in case titled Orissa I.I.D Corpn. v. Supai Munda, reported in AIR 2004 SC 39Q. It is profitable to

reproduce para13 of the said judgment herein:

Learned counsel for the appellants stressed to press the proviso to Section 31 (2) of the Act, which provides that the reference under Section

18 of the Act is incapable unless a person has received the compensation amount under protest. This benefit will not be available to the appellants

in the present case because, as already noticed, the claimant has received the compensation under duress.

It was neither the case of the claimant that he had received compensation under protest nor he had pleaded that he was made to receive the

amount under duress, threat or compulsion. Trial court vide impugned award returned a finding which is not as per the pleadings of the parties.

Accordingly, the finding returned by the trial court is not sustainable.

I have gone through the entire record. Claimant has not received compensation under protest which is crystal clear from the record. It is

profitable to reproduce the relevant portion of the said receipt herein:

Received Rs.36,26,605.18 Thirty Six lacs twenty six thousand and six hundred and five and 18p through Rev. Deposit Refund bills U/P. Sd/

Attorney and Custodian for Frene. 20/11/79

While going through this document which is on record, it pains me to observe herein that prima facie it appears that word 'UP' has been

inserted and is of different ink. This is a serious matter which needs probe.

It appears that in terms of the impugned award crores of rupees are to be paid to the claimant which shall be loss to the public exchequer.

Compensation is not a bone in disguise. It is the duty of the courts and Collector to pass a reasonable award in order to save public money from

getting wasted in any way. The interests of public are of paramount importance.

Delhi High Court in case titled as M/s Jayanti Gas Service v. Delhi Vidyut Board, reported in AIR 2000 Delhi page 52 has observed that public

interests are of paramount consideration and is a relevant factor.

It prima facie appears that filing of application and making reference is an after thought. The Collector had acquired land of the claimant and of

some other land holders, namely, Abdul Aziz Mir and others. Said persons had made an application for enhancement of compensation and

reference in their case came to be made well in time and the compensation came to be enhanced and accordingly paid to the said Abdul Aziz Mir

and others. If respondent, herein, had made application on 10th December, 1979, which is the date given in the application of respondent then

why Collector had not made reference along with reference of Abdul Aziz Mir in the same year or why he had not made reference separately in

the same year and what were the reasons for waiting for a long period of thirteen years. Perhaps it appears that, after noticing that the said

claimants received enhanced compensation, respondent made an application before Collector and thereafter reference came to be made in the

year 1996. This is also a serious matter needs probe.

The finding of the trial court is otherwise erroneous because the judgment which was relied upon by the reference court is not in favour of the

respondentclaimant but against the claimant. It is profitable to reproduce the relevant portion of the impugned award herein, which reads as under:

................It is settled position of law that when the applications made for enhancement of compensation within the stipulated period as provided

by law. The compensation amount as per award even if received shall be deemed to have been received under protest. In this connection I am

fortified by an authority reported as AIR 1974 Calcutta 669 the relevant portion of the authority has been quoted by V. G. Rama Chandran in his

book titled ""The Law of Land Acquisition and Compensation"" at page 400 in the following words:

The Calcutta High Court upheld the reference though the claimant received the award amount subsequently without protest. When the Land

Acquisition Officer makes a reference to the Judge a legal presumption arises that he was satisfied as to the right of the claimant to ask for the

reference. The reference cannot become subsequently incompetent merely because the claimant received later the award amount without protest.

The very fact that the reference was made at the instance of the claimant would show that the acceptance of the amount was under protest. An

endorsement of the Land Acquisition Officer of the fact of protest is not necessary.

The ratio laid down is that if the claimant has made an application for making reference and accordingly reference came to be made and

thereafter or later the claimant received the awarded amount without .protest that cannot make the reference incompetent. Applying the test to the

instant case, the award came to be made on 16.11.1979, the amount came to be received on 20.11.1979 and thereafter purportedly application

appears to have been made on 10""1 December, 1979. Viewed thus, the reference court has committed an error.

Issues 1 and 2 are interlinked/ inter dependent thus 1 deem it proper to return finding mi both these issues as under;

The claimant/ respondent have examined witnesses, namely, Mohammad Ismail, Ghulam Hassan, Ghulam Mohammad Wani, Mohammad Subhan

Mir, Abdul Gani Bhat, Ghulam Qadirand Mohammad Ashraf Beigh.

All the witnesses examined by the claimants have deposed that the Collector had awarded Rs.6500/ per kanal but later on an amount of Rs.

15000/ per kanal was paid to Abdul Aziz and others as per the judgment of the District Judge, Srinagar. Claimantrespondent has not led any

documentary evidence or any other proof in order to prove and establish that the amount awarded was meager and prevalent market value at the

relevant point of time was more than Rs.6000/.

The oral evidence cannot be made basis for holding that the amount awarded is meager. Apex Court has held in a judgment passed in State of

J and K v. Mohammad Mateen Wani, reported in 1998 SC 2470, that oral evidence cannot be accepted as a guiding factor for determining the

market price of the acquired land. It is profitable to reproduce relevant portion of the said judgment herein;

Coming to the challenge as regards the enhanced compensation for the land we find that the sale instances relied upon by the claimants can

hardly be treated as comparable instances. The sale instances relate to small parcels of lands not more than 3 to 4 marlas each. Only one sale

instance was sought to be proved by the claimants through the evidence of Mohd. Shaban, who had stated that three marlas of land in the close

vicinity of the acquired land was sold to a cooperative society (a) Rs.33,000/ per kanal. Other sale instances although produced on record but the

same were not proved by the claimants either by examining the vendor or the vendee. As stated earlier these sale instances are of a very smaller

area and, therefore, they cannot be said to be comparable sale instances to determine the market prices of such a big chunk of acquired land. The

other evidence adduced by the claimants is consisted of the oral testimonies of lumbardars and local zamindars. Their oral evidence could hardly

be accepted as a guide for determining the market prices of the acquired land because they were not experts. The net result, therefore, is that the

evidence of the claimants as regards the sale instances cannot be accepted as a measure to determine the market price of the acquired land........

It appears that trial court got swayed by the judgment passed in the reference titled Abdul Aziz and others Vs. Collector, mention of which

made hereinabove despite of the fact that the claimant failed to prove that what was the prevalent market value per kanal at the relevant time and

that the potential value of the land of, Aziz Mir and others and, claimant was similar. Not to speak of proof there is no material on the file which

could be made basis in order to sustain the judgment.

Claimants were under legal obligation to prove their case because the position of the claimant is as of a plaintiff and Collector as of defendant.

Apex Court in a case titled Union of India v. Ram Phool reported in 2003(10) SCC 166 has taken the same view. It is profitable to reproduce

para6 of the said judgment herein, which reads as under;

6................// has been held in a catena of decisions of this Court that the sale price in respect of a small bit of transaction would not be the

determinative factor for deciding the market value of a vast stretch of land. As has been stated earlier, the extent of land acquired in the case in

hand i.e. 5484 bighas. In that view of the matter, we have no hesitation to come to the conclusion that the High Court has wholly erred in relying

upon Exhibit Al in determining the market value of the acquired land extending to 54tf4 bighas. Since the onus is on the claimant to lead evidence

on the determination of market value and if Exhibit Al is taken out of consideration, then there is no residue of evidence on which the determination

made by the High Court enhancing the compensation awarded by the Reference Court could be sustained. We, therefore, set aside the impugned

judgment of the High Court and affirm the market value as determined by the Reference Court. These appeals are allowed. Cross appeals filed by

the claimants are dismissed.

Apex Court has held in the case titled Chimanlal v. Spl. Land Acquisition Officer, Poona reported in AIR 1988 SC 1652 as under;

The following factors must be etched on the menial screen:

(I).............

(2).............

(3).............

(4) The claimant is in the position of a plaintiff who has to show that the price offered for his land in the award is inadequate on the basis of the

materials produced in the Court. Of course the materials placed and proved by the other side can also be taken into account for this purpose.

Apex Court has also held that the onus is on the claimants to prove that compensation awarded was not adequate and what was the prevalent

market rate at the relevant time.

The claimantrespondent had to prove that what a willing buyer would have offered to a willing seller as sale prices per kanal at the relevant

point of time.

Apex Court has held in case Special Deputy Collector v. Kurra Sambasiva Rao, reported in AIR 1997 SC 2625, as under;

Whether fair and reasonable and adequate market value is always a question of fact depends on the evidence adduced, circumstantial

evidence, and probabilities arising in each case. The guiding star or the acid test would be whether a hypothetical willing vendor would offer the

lands and a willing purchase in normal human conduct would be willing to buy as a prudent man in normal market conditions prevailing in the open

market in the locality in which the acquired land are situated as on the date of the notification under Section 4(1) of the Act; but not an anxious

buyer dealing at arm 's length with throw away price, nor facade of sale or fictitious sales brought about in quick succession or otherwise to inflate

the market value. The judge should sit in the arm chair of the said willing buyer and seek an answer to the question whether in the given set of

circumstances as a prudent buyer he would offer the same market value which the court proposed to fix for the acquired lands in the available

market conditions. The court is, therefore, enjoined with the bounden duty of public function and judicial dispensation in determination of the

market value of the acquired land and compulsory acquisition.

While going through this judgment, the acid test is that what a willing buyer in a normal human conduct would be willing to buy as a prudent

man in a normal market conditions prevailing in the open market in the locality. The test is not what an anxious buyer will offer in order to inflate the

market value. It is the duty of the Judge to sit in the armed chair of the said willing buyer and seek answer.

Apex Court has taken same view in case Union of India v. Ram Phool reported in 2003(10) SCC166.

Applying the test to the instant case, I am of the considered view that claimant has failed to prove that compensation was not adequate. The

trial court has fallen in error while enhancing the compensation without any proof.

Issue No.4.

It appears that reference is an afterthought, as discussed hereinabove. Thus this issue is decided accordingly.

In view of the above discussion, I am of the considered view that reference was not maintainable and accordingly the impugned award is set

aside and reference is dismissed.

Registry is directed to prepare a decree sheet accordingly.

Chief Secretary is directed to conduct enquiry in the matter. It is made clear that the observations made by this Court shall not influence him or

enquiry officer. In case Chief Secretary/ enquiry officer comes to the conclusion that mischief has been committed then he shall lodge FIR in order

to bring the guilty to the book. Chief Secretary shall submit monthly report before the learned Registrar Judicial of this Court at Srinagar.

The learned Registrar Judicial shall mark and initial every page of the record of the Collector and send it to Chief Secretary along with a copy

of this judgment under a sealed cover, for information and compliance.

Registry to send down the record of reference court along with a copy of this judgment.

Appeal is accordingly allowed.