Jaswant Singh vs State of Punjab

G.S. Singhvi, J.

These appeals have been filed by the land holders claimants for enhancement of compensation for their land which was acquired for expansion of New Grain Market, Amloh.

In view of the fact that a common question of law arises for adjudication in all the appeals, we are deciding them by one order.

23 Acres 3 kanals and 2 marlas of land situated in Revenue Estate of villages Amloh and Managarh, District Patiala, were acquired by the State Government vide notification dated 23.2.1982. Vide his award dated 24.1.1984 the Land Acquisition Collector directed the payment of compensation to the claimants @ Rs. 62,000/ per acre. The appellants and other claimants filed reference applications before the District Judge, Patiala, who determined the market price of land @ Rs. 1,00,000/ per acre.

The claimants remained dissatisfied and, therefore, they filed regular appeals. The learned Single Judge enhanced the compensation from Rs. 1,00,000/ per acre to Rs. 1,55,500/ per acre. He also directed the grant of benefit of the Land Acquisition (Amendment) Act, 1984 to the claimants.

In these appeals the claimants have prayed for further enhancement of compensation to Rs. 4,00,000/ per acre.

We have heard Shri D.N. Tanwar, learned counsel for the appellants in appeal Nos. 37 to 40 of 1988 and the learned Advocate General and have carefully scanned the entire record which include the evidence produced by the parties before the Land Acquisition Collector, the award of the Land Acquisition Collector, the judgment of the learned District Judge, Patiala as well as the judgment of the learned Single Judge.

While deciding LPA No. 382 of 1987, Risali and 3 others v. State of Haryana and another, 1998(1) R.C.R.(Civil) 564 on August 7, 1997, alongwith 25 other Letters Patent Appeals, we had outlined the jurisdiction of the LPA Bench in these matters by observing as under :

"At the outset, we consider it appropriate to remind ourselves that we are not hearing the first appeal against the judgment rendered by the competent Court but are hearing an appeal against the judgment of the learned Single Judge and the parameters which apply for reappreciating the evidence while hearing a first appeal cannot be invoked while exercising jurisdiction under Clause X of the Letters Patent. What we have to examine is whether the impugned judgments suffer from any error of law. An error of law which can be discovered by a detailed appreciation of the evidence produced by the parties before the Land Acquisition Collector or after reevaluation of the findings recorded by the learned Additional District Judge and the learned Single Judge cannot be termed as an error of law apparent on the face of the record. Therefore, unless we are convinced that the learned Single Judge has over looked any material evidence or has applied wrong principles of law while deciding the first appeals filed by the appellants, there will be no justification to interfere with the impugned judgment."

Keeping in view the aforesaid principle of law, we shall decide whether the impugned judgment is erroneous in law and whether the appellants are entitled to the enhancement of compensation @ Rs. 4,00,000/ per acre instead Rs. 1,55,500/ per acre.

Shri D.N. Tanwar argued that the learned District Judge, Patiala as well as the learned Single Judge have misread the evidence produced by the claimants and they have failed to apply the settled principles of law which govern the fixation of market price. Learned counsel submitted that the land of the appellants was one in small pieces measuring few marlas and, therefore, the sale instances of small pieces should have been given due weightage while assessing the market price. Shri Tanwar argued that the learned District Judge has seriously erred in ignoring the sale transactions marked at ExhibitsA/1 and A/2 and the same error has been repeated by the learned Single Judge. According to the learned counsel, the acquired land has great potential for urbanisation and, therefore, compensation to the tune of Rs. 4,00,000/ lacs per acre should have been awarded to the appellants. Shri Grewal argued that the learned Single Judge has not committed any error in discarding ExhibitsA/1 and A/2 because the reference Court had found that these transactions were manipulated with a view to artificially inflate the market price of the acquired land. He submitted that the formula adopted by the learned Single Judge, namely, averaging of the price of the various sale transactions, is legal and just and the appellants are not entitled to further enhancement.

Having thoughtfully considered the submissions made by Shri Tanwar and Shri Grewal, we are of the opinion that there is no merit in the claim of the appellants for further enhancement of the compensation. The reference court gave cogent reasons for not relying upon the sale transactions produced by the appellants and the learned Single Judge has affirmed the findings of the reference court after making an independent evaluation of the reasons assigned by the reference Court. Even then the learned Single Judge was quite liberal and considerate in enhancing the compensation to Rs. 1,55,500/.

While dealing with the issue of market price, the reference Court took into account the various sale instances cited by the claimants and held that the Collector was not justified in fixing the market price at Rs. 65,880/ per acre. It then observed :

"Now I take up the sale instances of the claimants. As per these transactions the average price of an acre ranges between Rs. 121/2 lacs and Rs. 90,000/. The lowest price of Rs. 90,000/ is worked out from sale instance Ex. A11. In rest of the sales the average price of an acre is more than Rs. 1,22,000/. There is no denying the fact that all the sales pertain to very small pieces of land. The sold out plots covered by these sales are measuring 2 Biswas to 7 Biswas generally. Only in one or two sales the sold out area consists of 10 Biswas. Perusal of Ex.A9 clearly shows that the acquired land was completely landlocked having no approach or access. Some of the sale instances i.e. Exh. A1, A2, A4, A8, A24, A25 and A26 are quite close to the acquired land, but their lands except the land covered by Ex.A2 are abutting on the main road of Amloh town. The sold out plots are either situated in the residential locality or in the commercial areas and in both cases they are surrounded by built area. In these circumstances even a small distance will make material difference in the value of the land. I am in full agreement with the Collector that the spot inspection by the sitting Board made on 22.4.1981 was widely known to the owners of the lands that their land was being acquired for expansion of the grain market. In this view of the matter all sales which took place subsequent to this date will have to be regarded as coloured transactions entered into with the object of proving inflated market value. This will hit the sales covered by Exhs. A1, A2, A9, A26, A27 and A23. Rest of the instances also do not provide any reliable data for evaluating the acquired land for the reason that the lands covered by them consist of very small plots and in some cases the lands are not comparable with the acquired land. Nevertheless, the sale transactions do indicate that at some distance from the acquired land along the main road the properties were being sold at very high rates. The close vicinity of the acquired land to the town of Amloh undoubtedly spells out the potential value of the acquired land for its being covered (converted ?) into residential or commercial sites. Looking to all the facts and circumstances of the case, in my view, the just and reasonable price of the acquired land is rupees one lac per acre. Accordingly, the market price of the acquired land is pegged at this rate. This disposes of issue No. 1.

Some of the claimants are owners of small plots of land which they had purchased for consideration which are higher than the above rate except in Ex. A11. In case the plot owners are paid less than what they had actually spent, it will be sheer injustice. However, all of them cannot reasonably be put in this category. The claimants who are plot holders apparently fall in the two groups :

(i) Who made purchases of the plots before 22.4.1981, the date on which the Board set up by the Government for the selection of the site of the grain market visited the spot and approved the site;

(ii) Who did so after that date. It is true that we cannot presume a sale transaction as sham or fictitious transaction. Rather the presumption would be in favour of its being bona fide and genuine one. Likewise we cannot presume that fictitious or inflated consideration has been entered into a particular sale deed. Nevertheless, we cannot lose sight of the background and the circumstances in which the sales of the acquired land were effected after it had become publiclly known that land was earmarked for acquisition. In recent times acquisition has become a common place occurrence and every body is aware how planned or organised efforts are made by the owners to create evidence to support inflated claim to compensation, after the land is acquired. Amloh where the acquired land is situated is a Sub Tehsil town. In such small places grain markets are all important places. Rather they constitute the nucleus of commercial activity. We daily read in Newspapers regarding congestion in the old grain markets and the popular demands for the setting up of new grain markets or for the expansion of the existing one. Against this background Collector''s observation that visit to the spot of the sitting boards for the selection of the site for grain market gave wide publicity to the fact that the land was going to be acquired. In such a situation, with a view to support claim to inflated amount of compensation the landowners created false sales. Some vendees also collude to indulge in speculation and thereby make good profit. In view of the rejection of the sale instances by the Collector which had come into existence after the date on which the site selection Board had visited the spot and approved the suitability of the site, it was necessary for the concerned vendee claimants to prove that the prices entered in the saledeed were fixed bona fide and actually paid, but for the reasons not disclosed on record, no such endeavour was made by them. The sale prices purporting to have been paid in their cases for plots which are not situated on a road or even a Kacha thoroughfare, are far in excess of the prices paid on other sales brought on record by the claimants pertaining to plots abutting on the main road of Amloh and surrounding by developed residential and commercial areas. In the light of the facts mentioned above, and the observations by the Collector incorporated in his award, I feel disinclined to compensate the owners of these plots by awarding compensation equal to the sale price entered in the saledeeds. As regards other plots which are covered by sales which occurred during the year 197879 i.e. long prior to the selection of the site, the market value should equal to the prices paid and sale expenses incurred by the vendee claimants."

The learned Single Judge considered the issue of market price and observed :

"Since majority of the claimants own land in marlas and biswas, the small instances would also be relevant in determining the amount of compensation, payable to them. Again going back to the table of instances of part of the acquired land, the sale instance like A1 and A2 show unexplained disparity with instances ExhibitsA9 and A11, which are of few months later. Instances ExhibitsA1 and A2 can safely be ruled out of consideration. Moreover, all the remaining instances of the acquired land, that is, exhibits A5 to A7 and A9 to A10 show that from 1978 to 1981 the price ranged between Rs. 80,000/ to Rs. 1,98,000/ per acre, whereas instances Exhibits A1 and A2 of are very small area like two marlas and the price fetched was about Rs. 6 lacs per acre. Since, vide Exhibit A5, in November, 1979, the price was about Rs. 2 lacs per acre, I am of the view that it will meet the ends of justice if the average of instances Exhibits A5 to A7 and A9 and A10 is taken, and that average comes to Rs. 1,65,500/ per acre.

If it were to be argued on behalf of the claimants that the price in 1978 and 1979 was less as compared to the land near about the date of acquisition, in that situation, average of Exhibits A9 and A11 could be taken and the average works out to Rs. 1,26,120/ per acre. In this matter, there would have been loss to the claimants and because of the peculiar facts of this case, I consider it just and proper to take the average of all the sale instances, barring Exhibits A1 and A2, which are of the acquired land.

The counsel for the claimants has laid great stress to follow the sale instance of agreement of sale Exhibit A12 dated 1st November, 1981, which was closest to the date of acquisition. The criticism against this agreement is the same as against the sale instances Exhibits A1 and A2. If we have a look at instances Exhibits A9 and A11, we find that in August and June 1981, the price of the acquired land ranged between Rs. 1,62,000/ and Rs. 90,000/ per acre. This remained unexplained on behalf of the claimants as to how did the price go so high within a couple of months. It is not disputed that the vendors of sale instances Exhibits A1 and A2 and A12 are the claimants before me and have sought enhancement of compensation for much bigger chunk of their acquired land. Although there is no definite evidence produced by the State before the District Judge that these persons had come to know of the proposed acquisition, all the same instances Exhibits A9 and A11 are pointer to the fact that if in June and August 1981 the price ranged between Rs. 90,000/ and Rs. 1,62,000/ per acre, how is it that in April 1981, it was about Rs. 6 lacs per acre, and in November 1981 Rs. 121/2 lacs per acre. Hence instance agreement Exhibit A12 has been ruled out of consideration.

In view of the above, I fix the market value of the acquired land at Rs. 1,55,500/ per acre. However, the claimants, who are vendees under the sale instances Exhibits A1, A2, A5 and A9, have paid price more than fixed by this court, would get the price paid by them under the sale deed plus stamp and registration charges so as to compensate them for the actual cost incurred by them."

The reasons given by the reference Court as well as the learned Single Judge for not accepting the sale instances like ExhibitA/1 and ExhibitA/2 are quite rational and appropriate. We fully agree with the reference Court that the sale transactions with high prices were created with a view to inflate the price of the land and there was no justification to rely on them for the purpose of fixation of the market price. We also agree with the learned Single Judge that having regard to the nature of the land and various sale transactions, the method of averaging should be adopted for the purpose of fixing market price. By applying that method the market price has rightly been fixed by the learned Single Judge at Rs. 1,55,500/ per acre and we see no ground to accord further enhancement as no manifest injustice has been caused to the appellants.

For the reasons mentioned above, the appeals are dismissed.