M/S ASSAM PLYWOOD LIMITED vs LAND ACQUISITION OFFICER AND ANR

1.Heard Mr M.K.Choudhury, learned Senior counsel assisted by Mr.A.Barkataki learned counsel appearing for the appellant and also heard

Mr.B.Pathak, learned counsel appearing for the respondent No.2 and Ms.K.Phukan, learned Govt. Advocate appearing for the respondent No.1.

Land measuring 1bigha 0 katha 11 lechas covered by dag No. 1364 of KP Patta No. 757 of village Sahar Ulubari in the district of Kamrup within

the heart of the city of Guwahati belonging to the present appellant Company was acquired by the respondent No. 1 for respondent No. 2 to construct

a mini Telcom exchange vide notification No. RL 298/95/33 dated 9.3.1999 published in the Assam Gazette on 23.3.1999 and declaration of No.

RLAÂ 218/95/26 dated 19.3.1999 issued u/s 6 of the Land Acquisition Act, 1894 (in short the Act,1894) by exercising power u/s 17(4) of the Act

1894 without giving any opportunity to the present appellant for filing objection. The possession of the said land was handed over on 10.3.2000 and the

respondent No. 1 assessed the market value at Rs. 75,000/- per katha of the said land so acquired.

Being aggrieved the appellant filed requisite application for reference which was allowed and thereafter the appellant preferred an application u/s

18 of the Land Acquisition Act 1894 in the Court of learned District Judge, Kamrup. The learned Reference Court after taking evidence and hearing

the parties enhanced the land value from Rs.75,000/- per katha to Rs. 3 lacs per katha vide judgment dated 28.7.2004. Being aggrieved by the said

judgment and award dated 28.7.2004, the appellant has preferred this appeal u/s 54 of the Act 1894 for further enhancement.

Mr.Choudhury, learned Senior counsel submits that the learned Court below failed to consider the various exhibits of sale deeds showing the value

of land much prior to the date of notification u/s 4(1) of the Act, 1894. Moreover the Court below failed to consider the potentiality of the acquired

land inasmuch the acquired plot of land is very much within the heart of the city of Guwahati. The basis of calculation of the learned Court below was

clearly not as per guidelines of various decisions of the Supreme Court. Referring Section 25 of the Act, 1894 and submitting that the language of the

said Section 25 of the Act, 1894 itself is substantive in nature and as such there is no limit in assessment of the value of land by the Reference Court.

It is further submitted that had the Reference court considered the exhibits on record i.e. the sale deeds which were executed prior to the date of

notification then the value would have come to Rs.6 lacs per katha instead of the one arrived at by the court below at Rs. 3 lacs. Under such

circumstances , Â Â Mr.Choudhury submits that the judgment and award passed by the court below is not proper and as such the findings of the

Reference Court with respect to the value of the land is liable to be enhanced.

The Reference Court enhanced the value of the land solely on the basis of the aluation certificate issued by the Addl. Deputy Commissioner

without considering the sale deeds of the adjacent land and / or the potentiality of the land. The Court below on its own finding came to the conclusion

that from 1992 to 1995 the land at Japorigog/Sahar Ulubari was sold at Rs. 7.2 lacs per Katha . But the learned court below failed to consider the

said aspect of the matter. The land acquired is situated at Dr.B.K.Kakati Road and even then the court below failed to consider its potentiality in its

true intent. Accordingly Mr. Choudhury sought for the value as arrived by the Court below to be enhanced. In order to buttress his argument

Mr.Choudhury relies the following decisions:

1.(1985) 3 SCC 737(Bhag Singh and others Vs. Union Territory of Chandigarh)

2.(2000) 7 SCC 756 (Krishi Utpadan Mandi Samiti Vs Kanhaiya Lal and others)

3.(2008) 10 SCC 797(Bhimasha Vs Special Land Acquisition Officer and another)

4.(2015) 2 SCC 544 (Major General Kapil Mehra and others Vs.Union of India and another)

5.(2016) 4 SCC 544(Ashok Kumar and another Vs.State of Haryana)

Mr.Pathak on the other hand submits that the land mentioned in the sale deeds which were exhibited by the appellant was not nearby to the land so

acquired inasmuch as the revenue villages are different. The land under the revenue village Japorigog is situated at G.S.Road and on the other hand

the acquired land stands much more interior from Dr.B.K.Kakati road. The appellant has on it the burden to prove the fact of potentiality and the land

value prevailing in and around the land acquired prior to the date of notification but had failed to discharge its burden inasmuch as the sale deeds which

are exhibited located far away from the land so acquired. For instance the sale deed bearing No. 2168 dated 30.3.1992 is a plot of land measuring 1

katha and 1 ½ lechas situated at the village Sahar  Ulubari. On the other hand registered sale deed No. 3830 dated 16.9.1994 measuring 1 bighaÂ

5 lechas is situated at village Japarigog showing the sale of said plot of land at Rs. 32,52,000/-. On the other hand the sale deed No. 3150 dated

3.7.1995 consists land measuring 2 bighas of village Japorigog which fetched price of Rs 65 lacs. From the said sale  deeds it is very much apparent

that the said land are not contiguous from the one so acquired. Drawing the reference of Ext. 11, Mr.Phatak submits that the said report was obtained

by the appellant with respect to the valuation of the land purchased by the appellant  Company out of which a portion has been acquired and the

subject matter of this appeal. The said report took into the consideration of sale deeds in the year 1992,1993 and 1994 and came to the conclusion that

the average per katha value of the land comes to Rs. 1,25,859/-. However market value of the said land as on date of issuance of the exhibit -11 i.e.

22.11.1996, the value of per katha land comes to Rs.3 lacs. The learned court below considered the potentiality of the said land as per Ext.11 and

accordingly enhanced the value of the acquired land to Rs. 3 lacs per katha. Submitting further that as everything has been taking into care of,

including the factor of potentiality under  such circumstances there is no point in further enhancing the value already enhanced by the Reference

Court.

Mr.Pathak in order to support his submission relies on the following decisions:

1.AIR 2004 SC 1179(Panna Lal Ghosh and others Vs Land Acquisition Collector and others)

2.(1991) 4 SCC 195(Periyar and Pareekanni Rubbers Ltd Vs State of Kerala)

3.(2008) 14 SCC 745(General Manager,Oil and natural Gas Corporation Limited)

4.(2014) 14 SCC 466(Himmat Singh and others Vs State of Madhya Pradesh and another)

Considered the submission of the learned counsels. Before entering into the judgment and award passed by the learned Reference Court let me

look into the yardstick of various decisions of the Hon’ble Apex Court in this field for assessment of value of land so acquired:-

(i) In 1985 3 SCC 737(Supra) the Hon’ble Apex Court prescribes the manner in which the land value is to be assessed:  “3………..It must

be remembered that this was not a dispute between two private citizens where it would be quite just and legitimate to confine the claimant to the claim

made by him and not to award him any higher amount than that claimed though even in such a case there may be situations where an amount higher

than that claimed can be awarded to the claimant as for instance where an amount is claimed as due at the foot of an account. Here was a claim

made by the appellants against the State Government for compensation for acquisition of their land and under the law, the State was bound to pay to

the appellants compensation on the basis of the market value of the land acquired and if according to the judgments of the learned Single Judge and

the Division Bench, the market value of the land acquired was higher than that awarded by the Land Acquisition Collector or the Additional District

Judge, there is no reason why the appellants should have been denied the benefit of payment of the market value so determined. To deny this

benefit to the appellants would tantamount to permitting the State Government to acquire the land of the appellants on payment of less than the true

market value. There may be cases where, as for instance, under agrarian reform legislation, the holder of land may, legitimately, as a matter of social

justice, with a view to eliminating concentration of land in the hands of a few and bringing about its equitable distribution, be deprived of land which is

not being personally cultivated by him or which is in excess of the ceiling area with payment of  little compensation or no compensation at all , but

where land is acquired under the Land Acquisition Act, 1894, it would not be fair and just to deprive the holder of his land without payment of the true

market value when the law, in so many terms, declares that he shall be paid such market value. The State Government must do what is fair and just to

the citizen and should not as far as possible, except in cases where tax or revenue is received or recovered without protest or where the State

Government would otherwise be irretrievably be prejudiced, take up a technical plea to defeat the legitimate and just claim of the

citizen……………â€​

(ii) In (2015) 2 SCC 262(Supra) the Hon’ble Apex Court discussed as to how the market value is assessed:

 “10.The first question that emerges is, what would be the reasonable market value which the acquired lands are capable of fetching. While

fixing the market value of the acquired land, the land acquisition officer is required to keep in mind the following factors (i) existing geographical

situation of the land (ii) existing use of the land;(iii) already available advantages, like proximity to National or State Highway or road and/ or

developed area; and (iv) market value of other land situated in the same locality/village/area or adjacent or very near to the acquired land.

The standard method of determination of the market value of any acquired land is by the valuer evaluating the land on the date of valuation

publication of notification under Section 4(1) of the Act, acting as a hypothetical purchaser willing to purchase the land in open market at the prevailing

price on that day, from a seller willing to sell such land at a reasonable price. Thus, the market value is determined with reference to the open market

sale of comparable land in the neighborhood, by a willing seller to a willing buyer, on or before the date of preliminary notification, as that would give a

fair indication of the market value.

While taking comparable sales method of valuation of land for fixing the market value of the acquired land, there are certain factors which are

required to be satisfied and only on fulfillment of those factors, the compensation can be awarded according to the value of the land stated in the sale

deed. In Karnataka Urban Water Supply and  rainage Boad V K.S. Gangadharappa, factors which merit consideration as comparable sales are,

interalia, laid down as under:  “8. ‘16 “9. It can be broadly stated that the element of speculation is reduced to minimum if the underlying

principles of fixation of market value with reference to comparable sales are made:

(i)When sale is within a reasonable time of the date of issuance of notification under Section 4(1);

(ii) it should be a bona-fide transaction

(iii)it should be of the land acquired or of the land adjacent to the land acquired; and

(iv) it should possess similar advantages.

It is only when these factors are present, it can merit a consideration as a comparable case(see Land Acquisition Officer V.T. Adinarayan

Setty)†(iii). In (2008) 14 SCC 745(supra) para 18 the Hon’ble Apex Court prescribes the method as to how the increasing market value is to be

calculated and considered in fixing the land value as follows:

“18.The increase in market value is calculated with reference to the market value during the immediate preceding year. When market value is

sought to be ascertained with reference to a transaction which took place some years before the acquisition, the method adopted is to calculate the

year to year increase. As the percentage of increase is always with reference to the previous year’s market value, the appropriate method is to

calculate the increase cumulatively and not applying a flat rate………………….†(IV) In (1991) 4 SCC 195(supra) the Hon’ble Apex Court

defines the duty of the courts of facts while appreciating the evidence on record in a land acquisition proceeding as follows:   “17.In Narasingh

Rao case, I have dealt with in paragraph 8 thus: “The object of the inquiry is to bring on record the price fetched or capable of fetching, the relative

situation of the land acquired and the subject of the sale transaction, their fertility, suitability, nature of the use to which they are put to, income derived

or other special distinctive features  possessed of by the respective lands either single or some or all relevant to the facts in issue. In this process the

courts are not mere umpires but to take intelligent participation and to see whether the counsel on either side are directing towards this goal or the

court itself to intervene in this regard.†Therefore, it is the paramount duty of the courts of facts to subject the evidence to close scrutiny, objectively

assess the evidence tendered by the parties on proper considerations thereof in correct perspective to arrive at reasonable market value. The

attending facts and circumstances in each case would furnish guidance to arrive at the market value of the acquired lands. The neighbourhood lands

possessed of similar potentialities or same advantageous features or any advantageous special circumstances available in each case also are to be

taken into account. Thus, the object of the assessment of the evidence is to arrive at a fair and reasonable market value of the lands and in that

process sometimes trench on the border of the guess work but mechanical assessment has to be eschewed. The judges are to draw from their

experience and the normal human conduct of parties in bona fide and genuine sale transactions is the guiding star in evaluating evidence. Misplaced

sympathies or undue emphasis solely on the claimants’ right to compensation would place heavy burden on the public exchequer to which

everyone contributes by direct or indirect taxesâ€​.

(v). (2014) 14 SCC 466(supra) Hon’ble Apex Court prescribes the manner in which the escalation in land prices to be considered: “13.In Ranjit

Singh V.UT of Chandigarh , Land Acquisition Officer V.Ramanjulu, Krishi Utpaddan Mandi Samiti V.Bipin Kumar, Sardar Jogendra Singh V.State of

U.P., Revenue Divl. Officer-cum-LA) V.Sk.Azam Saheb and ONGC Ltd.V.Rameshbhai Jivanbhai Patel, this Court has repeatedly held that the

exercise undertaken for fixing market value and determination of the compensation payable to the landowner should necessarily involve consideration

of escalation in land price. In the last mentioned judgment , the Court noticed the earlier precedents and observed as under(ONGC Ltd case, SCC pp

750-51,paras 12-15).

“12. We have examined the facts of the three decisions relied on by the respondents. They all related to acquisition of lands in urban or semi urban

areas. Ranjit Singh related to acquisition for development of  Sector 41 of Chandigarh. Ramanjulu related to acquisition of the third phase of an

existing and established industrial estate in an urban area. Bipin Kumar related to an acquisition of lands adjoining Badaun-Delhi Highway in a semi-

urban area where building construction activity was going on all around the acquired lands

Primarily, the increase in land prices depends on four factors: situation of the land, nature of development in surrounding area, availability of land

for development in the area, and the demand for land in the    area. In rural areas, unless there is any prospect of development in the vicinity,

increase in prices would be slow, steady and gradual, without any sudden spurts or jumps. On the other hand, in urban or semi urban areas, where the

development is faster, where the demand for land is high and where there is construction activity all around, the escalation in market price is at a much

higher rate, as compared to rural areas. In some pockets in big cities, due to rapid development and high demand for land, the escalations in prices

have touched even 30 % to 50% or more per year, during the nineties.

On the other extreme, in remote rural areas where there was no chance of any develop0ment and hardly any buyers, the prices stagnated for

years or rose marginally at a nominal rate of 1% or 2% per annum. There is thus a significant difference in increases in market value of lands in

urban/semi urban areas and increases in market value of lands in the rural areas. Therefore, if the increase in market value in urban/semi urban areas

is about 10% to 15% per annum, the corresponding increases in rural areas would at best be only around half of it , that is, about 5% to 7.5% per

annum. This rule of thumb refers to the general trend in the nineties, to be adopted in the absence of clear and specific evidence relating to increase in

prices. Where there are special reasons for applying a higher rate of increase, or any specific evidence relating to the actual increase in prices, then

the increase to be applied would depend upon  the same.

15.Normally, recourse is taken to the mode of determining the market value by providing appropriate escalation over the proved market value of

nearby lands in previous years(as evidenced by sale transactions or acquisitions),where there is no evidence of any contemporaneous sale transactions

or acquisitions of comparable lands in the neighbourhood. The said method is reasonably safe where the relied â€"on sale transactions/acquisitions

precede the subject acquisition by only a few years, that is, up to four to five years. Beyond that it may be unsafe, even if it relates to a neighbouring

land. What may be a reliable standard if the gap is of only a few years, may become unsafe and unreliable standard where the gap is larger. For

example, for determining the market value of a land acquired in 1992, adopting the annual increase  ethod with reference to a sale or acquisition in

1970 or 1980 may have many pitfalls. This is because, over the course of years, the ‘rate’ of annual increase may itself undergo drastic change

apart from the likelihood of occurrence of varying periods of stagnation in prices or sudden spurts in prices affecting the very standard of increase.â€​

Keeping the aforesaid principles laid down by the Hon’ble Apex Court in mind let me examine the judgment and award of the learned

Reference Court. The Court below considered the evidence on record. PW 1 is an employee of office of the Deputy Commissioner, Kamrup. He

proved the fact of acquisition of land. PW 1 however in his crossexamination admitted that the land is situated near B.K.Kakati Road. PW 2 and PW

3 proved the certified copy of the registered sale deed No. 3150/95 Ext. 5 by way of which income Tax department purchased 2 bighas of land at

village Japorigog on 3.7.1995 at a total consideration of Rs 65 lacs. On the other hand PW 3 proved the certified copy of the sale deed bearing No.

2168 dated 30.3.1992 by way of which Steel Authority of India purchased 1 katha and ½ lechas of land at a total sale price of Rs.  17, 50,000/-

and the land is situated at village Sahar Ulubari Ist Part. PW 5 is the attorney of the claimant Company. He deposed that the land is within the heart of

the Guwahati city who claimed that the land so acquired was not less than of a value of Rs.6 lacs per katha. PW. 4 is an official witness who

prepared valuation of the land of the appellant Company, a portion of which was acquired and the subject matter of this appeal. Ext.11 is the report of

valuation by the Circle Officer, Ulubari. He deposed that the average price as in the year, 1996 of the said plot of land comes to Rs 1,25,859/- and

considering the price hike the Additional Deputy Commissioner accepted the suggestion of the Circle Officer and fixed the value at Rs. 3 lacs per

katha as per Ext. 11. The learned court after considering the material piece of evidence on record came to the findings that from the year 1992 to

1995 the average rate of land sold within the localities of Japorigog and Sahar Ulubari was Rs. 7.62 lacs per katha. Thereafter the learned court below

considered the valuation of Rs. 3 lacs as per Ext. 11 as because the acquisition process was much after the period of 1992 to 1996 and considering the

potentiality of the said land held that the amount fixed by the competent authority at Rs 75,000/- per bigha was not fair, reasonable and adequate.

Accordingly the court below held that Rs. 3 lacs per katha which is the value assessed by the Addl. Deputy Commissioner to be just and proper.

Now the question before this court is whether the said enhancement of Rs 3 lacs by he learned Reference Court is proper and it needs further

enhancement. The object of the enquiry and the duty of the court of facts in a land acquisition proceeding is to objectively assess the evidence

tendered by the parties on proper and correct perspective keeping in view the aforesaid principles and thereafter to arrive at a reasonable market

value. While arriving at such reasonable market value question of potentiality for any advantageous special circumstances are also to be taken into

account. Misplaced sympathies or undue emphasis solely on the claimants’ right to compensate is to be avoided. On the other hand it is the duty of

the court to consider the escalation in land price which depends on the situation of the land, nature of development in surrounding area, available of

land for development in the area. As held in (2014) 14 SCC 466(supra) the increase in land price in the urban areas would be at a much higher rate if

compared to rural area where the growth rate is too slow compared to the one in the urban area. But for calculating the said increase in price, theÂ

court must consider the sale transaction preceding the process of acquisition by only  a few years i.e. up to four years or five years.

In the decision reported in (2008) 14 SCC 745 (Supra) it was held that the appropriate method to calculate the increase of the value of the land is

to take the cumulative increase instead of applying a flat rate.

Now in the present case in hand it is seen that the learned court below has considered the value of Rs.3 lacs per katha as calculated on the basis

of average sale price for the year 1992,1993 and 1994. The nature of the land considered in the said sale deeds were commercial category and on the

basis of said average valuation it came to Rs 1,25,859/- per katha. The said average value was projected to be 3 lacs per katha as on 22.11.1996.

The notification was issued in the month of March, 1999. The factor of potentiality has been taken into the consideration by the Reference court.

It has come to the finding that the land in question is situated within the heart of the city. B.K.Kakati Road is situated contiguous to the acquired land

and the court below also took into consideration that many commercial institutions, both Government and semi Government are situated within the

vicinity of the acquired land and accordingly came to the conclusion that the said aspects of the potentiality were not considered by the competent

authority and raised the value to Rs.3 lacs per katha. But the learned Reference Court failed to consider the escalation of land value component in the

proper perspective.

Mr. Pathak submits that the learned court below had considered the potentiality and as such accepted the value of Rs. 3 lacs per katha. It is not

disputed that the land of sale deeds relied by the appellants are situated in a different village except the land covered by one of the sale deeds. Two

bighas of land which fetched Rs. 65 lacs is situated at a village other than the present revenue village. On the other hand there is no dispute raised by

the respondent so far the valuation in Ext. 11 is concerned inasmuch as the valuation assessed covers land under Sahar Ulubari and Sahar Sarania and

the average value assessed to be Rs.1,25,859/- as on 22.11.1996 and the value so considered are for the year 1992,1993 and 1994. In such

circumstances it would be proper to consider the enhancement of the said average value to Rs. 3 lacs as on 22.11.1996 as the basis for escalation of

the price of the land so acquired inasmuch as there is no other piece of evidence to calculate a cumulative escalation annually. The percentage of

escalation from the year 1994 till 1996 considering the value at Rs. 3 lacs as on 22.11.1996 comes to 69 % of the average value of Rs.1,25,859/- as

shown below. It would be pertinent to mention here that there is no denial of the fact that the acquired land is within the heart of the city of Guwahati

and there is dearth of vacant land for purchase within the vicinity of the land so acquired. 15. The escalated value of the land as per Ext.11 as on

22.11.1996 (i.e. the date on which the Ext 11 was issued) comes to Rs.3 lacs per katha which the learned Reference Court accepted the same to be

on the date of notification i.e. in March, 1999 which in my opinion  is not correct because of the potentiality and escalation of the land value so

acquired. If the value of land is taken to be Rs.1,25,859/- per katha in the year 1994 then the escalated value of land as on 22.11.1996 is Rs. 3 lacs as

per Ext 11 and the escalation percentage per year would come to 69% because till 21.11.1996 it comes to 138.32% i.e in two years span(1994 to

1996) till the end of the year 1996. Therefore annual  escalation can safely be taken to be half of 138.32 % which is 69%.

The enhanced value as on 22.11.1996 is 3 lacs and keeping the said amount of Rs. 3 lacs as the base price for the year 1996 and considering the

rate of escalation at 69% per year the value of land in the year 1997-1998 would come to Rs 3 lacs X 0.69 + 3 lacs = 5,07,000/- per katha.

Accordingly the land value is enhanced to Rs 5 lacs per katha as on date of acquisition. The said enhancement would be just and proper from Rs.3

lacs per katha considering the potentiality of the land which is situated within the heart of the city of Guwahati.

Accordingly this appeal succeeds the value of land so acquired is enhanced to Rs 5 lacs per katha and the judgment and award of the learned

Reference Court is modified by enhancing the rate so fixed.

The respondents are directed to pay the enhanced rate of Rs.5 lacs per katha alongwith the consequential enhancements, as awarded by the

learned Reference Court within a period of 3(three) months from the date of the award to the appellant.

Send back the LCR.