Land Acquisition Officer and Special Tahsildar (LA) Municipality, Visakhapatnam vs B. Appalanarasayya and Another

P. Venkatarama Reddi, J

This is an appeal filed by the State under Sections 54 of the Land Acquisition Act (for short ''the Act'') questioning the Award of the First Additional District Judge, Visakhapatnam in O.P.No.221 of 1981 on a reference made u/s 18 of the Act. The land acquired is of an extent of 1480 square metres or 1770 square yards situated in T.S. No.1127/1, Block No. 14 of Chengalraopet Ward, within the Visakhapatnam municipal limits. The acquisition was for the purpose of Outer Harbour project. The Notification u/s 4(1) of the Act was published on 26-5-1977.

In his Award i.e. Ex.B1 dated 28-3-1980, the Land Acquisition Officer pointed out that the land was on the rear side of Old Minerva Talkies behind which there was thick slum area. He commented that although the land was in the midst of built up locality, there were constraints on construction on account of the problem of sea erosion. He further commented that the land was left vacant for that reason and there was not much of demand in that locality. Having so observed about the physical features of the land, he referred to the sale deed dated 8-11-1976 pertaining to 93 square yards in the adjacent block No. 13 of the same Chengalraopet Ward. The LAO observed that the said plot of land was about 150 yards from the acquired land towards northern side. Some other sale transactions of the year 1976 were discarded on the ground they were not comparable sales. The sale price paid for the aforementioned plot was Rs.64.29 ps. per square yard. The LAO assessed the market value of the acquired land at the same rate i.e. Rs.64.29 per square yard.

The reference Court did not accept the theory of the LAO that the land in question being in slum area and liable for sea erosion, did not have good demand at the relevant time. The learned Judge observed that the land was in developed area and was about one Kilometer from the Municipal Corporation Office and quite close to the outer Harbour. He also observed that it was adjoining the beach road and important localities such as Kurupam Market, Puma Market etc. were not far away from it. He also relied on the version of PW4 that except the acquired land, there was no other vacant site in the said area. He, therefore, expressed the view that the acquired land had great potentiality as house site. He also relied on the statement in the award that the area lies in the built-up locality. The fact that there was a slum close to the site was considered to be irrelevant. Coming to the sale transactions, the Court observed that the sale relied upon by the Land Acquisition Officer (Ex.B2) took place in January, 1976 though the document was registered in November 1976 and at best, it represents the value as on 3-1-1976 only. The learned Judge also observed that the necessary material was not placed before the Court to show that the site covered by Ex.B2 was similar to the acquired site. Then, he referred to the three sale deeds (Exs.A1, A2 and A3) produced by the claimant and came to the conclusion that the sites sold thereunder are not comparable to the acquired site. As far as Ex.A2 is concerned, though the Court was not inclined to treat it as a comparable sale, nevertheless, placed sonic reliance on that sale. Ultimately, he fixed the market value at Rs.100/- per square yard as against Rs.64.29 per square yard fixed by the Land Acquisition Collector.

The learned Government Pleader contends that the lower Court proceeded on certain wrong assumptions regarding the potentialities of the land and having rightly discarded the sale transactions relating to small plots relied upon by the claimant, it ought to have confirmed the award passed by the LAO. It is submitted that there is no basis for enhancement upto Rs.100/- per square yard.

Though notices were served on the respondents, no one appears for the respondents; that placed additional burden on us to closely scrutinise the oral and documentary evidence.

We find considerable force in the contentions advanced by the learned Government Pleader. No doubt, the acquired land which is situated within the municipal limits of a fast developing Visakhapatnam town and close to the beach road, must be presumed to have reasonably good demand for building purposes. However, the handicaps it suffers and which have been highlighted by the LAO in his award cannot be discarded altogether. It is a well known feet of which judicial notice could be taken that till the Outer Harbour Project was completed, the problem of sea erosion confronted the area abutting the beach in some measure or the other. The fact that it was close to the slum area is also a little disadvantageous factor. The lower Court brushed aside these minus factors and unjustifiably found fault with the LAO. Moreover, the lower Court took into account the locational advantages of the acquired land as they existed on the date of passing the Award i.e. in September 1984. For instance, the Court had taken into account the fact that the Outer Harbour was close to the acquired land though Outer Harbour came into existence subsequent to the acquisition. The learned Judge was also not justified in referring to the fact that the Municipal Corporation Office was only one Kilometer away and the market areas were not too far. One Kilometer is not a short distance for the purpose of assessing the value of the urban property. PW3 stated in categorical terms that in Visakhapatnam, there will be difference in value as between the lands situated in the same ward also. He further stated that the site values in beach area increased after the outer-harbour was constructed. The reference to other offices and colonies nearby in the oral evidence, was only with regard to the fact situation obtaining on the date of giving evidence. But, we have to sec the position as on the date of Section 4(1) notification (vide observations in paragraph 9 in Special Deputy Collector and Anr. v. Kurra Sambasiva Rao and Ors., 1997 (6) Supreme 150. So also, the statement of PW4 that "except the present site there are no vacant sites at present in that area" was given undue importance by the learned Judge. Here again, the learned Judge had forgotten the fact that PW4 was referring to the factual position as on the date of giving evidence i.e. in October 1982. Thus, one cannot but entertain the impression that the learned District Judge exaggerated the potentialities of the acquired land, apart from disregarding the deficiencies it has.

Now, we will have look into the sale transactions relied upon by the claimant. Ex,A1 is a sale deed dated 17-12-1977. 18 Sq. Yards together with an old tile-roofed house was sold for Rs.10,000/-. PW5 states that the cost of structure was about Rs.3,000/- to Rs.4,000/-. But it is only a bald assertion. He further states that by the date of his purchase, there was electricity and water tap connections for the house. PW4 stated that after purchase, he put up a cement slab and let out the house. The boundaries show that there are houses all around. The area in which the house is located is mentioned as 18 square yards in the sale deed. As rightly observed by the lower Court, it is difficult to assess the value of the vacant site, from this transaction. Obviously, the bargain was for the house as whole. It is difficult to bifurcate the value of the appurtenant site that had gone into the bargain.

Coming to Ex.A3 dated 2-4-1977, as rightly observed by the learned Judge, it is very near to Poorna Market and is surrounded by houses on three sides and road on one side. The site of an extent of 57 1/2 sq. yards was sold at the rate of Rs. 150/- per sq. yard. PW2, the vendor stated that the site was situated at Panda street, opposite to Navarang Talkies and by the side of Durgamma temple. PW2 also stated that Poorna market was at a distance of one furlong to the site. She admitted that the; value of the said site was more, being nearer to the Poorna Market. She farther stated that vendees purchased the site both for residential and business purposes. In view of these distinguishing features, the lower Court is quite justified in discarding this sale.

The other document which remains for consideration is Ex.A2 dated 1-12-J976. This sale transactions was half-heartedly relied upon by the lower Court. 37 sq. yards in T.S.No.57 situated in Godavari Ward was sold at. Rs.3,700/-. That means the rate per Square yard works out to Rs. 100/-. The site is near Kurupam market and is at a distance of 20 yards from the main road. PW3, the vendee did not give the distance between the acquired land and site purchased by him. However, he was frank enough to admit that sites at Kurupam Market are more valuable than the sites near the Minerva beach area. He also clarified that there would be difference of value in sites for every 100 yards in Visakhapatnam area depending upon the importance of locality. He further stated that difference in rates between the sites in town area and sites near the beach will be more than half. He was also frank enough to say that he purchased the site for more value as he required it for business purpose. He also stated that the site was in the midst of several houses. There is another significant fact which was spoken to by PW3. He stated that the rates abutting the beach road increased after the Outer Harbour was constructed. Thus, going by location of site covered by Ex.A2 and the evidence of PW3, we have no hesitation to hold that the sale transaction evidenced by Ex. A2 cannot be regarded as a comparable sale at all and cannot be taken as the basis for fixation of market value of the land in question.

The next question is whether and to what extent the market value needs to be enhanced. The learned Government Pleader reminds us of the legal position so well settled by a catena of decisions by referring to the following observations in the case of Spl. Deputy Collector v. Kurra Sambasiva Rao, (supra)

"..... It is welt settled legal position that the claimants stand in the position of plaintiffs. Burden of proof is always on the claimants to prove by adduction of cogent and acceptable evidence that the lands are capable of fetching higher compensation than what is determined by the Land Acquisition Officer ..... The burden of proof that the amount awarded by the Land Acquisition Officer/Collector is not adequate is always on the claimant....."

The learned Counsel submits that the claimants failed to discharge the burden cast on him inasmuch as none of the sales relied upon by them furnish proper guidance in the fixation of market value of the acquired land. The learned Government Pleader submits that the Land Acquisition Collector having taken into account the sale of land in close proximity from the point of view of time and distance, cannot be said to have committed an error. If at all, he was more considerate towards the claimant as he did not make any deduction although the plot sold under Ex.B2 was a small plot. It is not the case of the claimants that the said plot is at a distance from the acquired land or it stands on a different footing.

We are of the view that even taking Ex.B2 sale, which is the one relied upon by the LAO as the basis, the compensation for the acquired land has to be stepped up and it cannot be allowed to remain at the same figure arrived at by the L.A.O. There is a gap of six months between the date of sale in Ex.B2 and the date of notification in the instant case. The lower Court erred in thinking that the sale-deed Ex.B2 was executed on 3-1-1976 and registered on 8-11-1976. We have gone through the document and we find that the document was executed on 8-11-1976 and registered on the next day. Thus, the gap is about six months as already noted. It is a well known and undisputed feet that Visakhapatnam (now a city) has been developing fast right from 1970s. The steady raise in land values from time to time is a feature which cannot be seriously disputed. The proposal to construct outer Harbour was known by the date of acquisition. The prospective purchaser will naturally bear that in view as it had the incidental effect of checking sea erosion. It is true that the plot, of land sold under Ex.B2 was a small plot of less than 100 sq. yards whereas the acquired land is about 1700 sq. yards. May be, the prospective purchaser will have to leave out some land towards road. As against this minus factor, there is one aspect which counts towards additional weightage to be given for the land in question while assessing the market value on a comparative basis. A small plot of less than 100 sq. yards can only be put to limited uses. The range of buyers will also be limited. A fairly large extent of site in the urban area will be useful for a variety of purposes including commercial purpose. The demand for such plot will naturally come from more affluent sections of society who would like to either construct decent houses or commercial complex. The value of such optimum size site will naturally be more than a tiny plot. We would like to make it clear that we are not here concerned with a large tract of land which, when compared with a small extent, definitely fetches lesser price.

Having thus considered the pros and cons and taking into account all the relevant factors, we are of the considered view that the market value of the acquired land can reasonably be fixed at Rs.75/- per square yard i.e. about Rs.10/- more than the market value fixed by the L.A.O.

Accordingly, the appeal is partly allowed and the market value of the acquired land is fixed at Rs.75/- per square yard. The award of the lower Court also requires to be modified as regards the solatium and interest awarded. As the award of UK Court was passed on 18-9-1984 which is between the two crucial dates viz., 30-4-1982 and 24-9-1984 the claimant will be entitled to the enhanced rate of solatium and interest as per the Land Acquisition (Amendment) Act (Central Act 68 of 84) in view of the Judgment of the Supreme Court in K.S. Paripoornan v. State of Kerala, AIR 1995 SC 1012.

The Judgment and decree of the lower Court shall stand modified accordingly as regards the market rate, solatium and interest. No costs.