Rameshchandra Sharma & Others vs State Of Madhya Pradesh & Another

Date of

Sale-deed",Area of land,"Price paid

(Rs.)","Rate per

Hect. (Rs.)",Exhibit

31/05/82,0.105 Hect.,"6,000/-","57,143/-",P/1

16/02/83,"0.177 Hect.

(unirrigated)","7,000/-","39,548/-",P/2

16/02/83,"0.038 Hect.

(unirrigated)","2,900/-","76,316/-",P/3

24/01/83,0.627 Hect.,"45,000/-","71,770/-",P/4

14/12/83,0.419 Hect.,"54,000/-","1,28,878/-",P/5

02/01/82,0.475 Hect.,"20,000/-","42,105/-",P/6

02/03/83,"0.209 Hect.

Fallow-

Barren land","22,000/-","1,05,263/-",P/16

02/01/82,0.475 Hect.,"20,000/-","42,105/-",P/17

Description.,Award made by LAO,"Award made by

Reference Court.",Claim made in appeal.,

Marketvalue

of land","Rs. 3,54,137 =60 at the

rate of Rs 37,900/- per

hectare","Rs.5,13,920 at the rate

of Rs 55,000/- per

hectare.","Rs.12,61,460/- at the

rate of Rs 1,35,000/-

per hectare.",

Calf

Pan/Machine/

building/

cattle shed","Rs. 88,570 /- Claim

rejected for cattle shed

on the finding that they

had been made after

issuance of notification

u/s 4 of the Act.","Rs.88570/- Claim in

respect of cattle shed

rejected for the same

reasons","Rs.3,61,430/-",

Standing

crops",Rs.2205/-,"Rs.30,000/-","Rs.1,70,000/-",

Tube-

wells/open

dug wells","Claim rejected in

respect of two wells

and one tube well on

the finding that they

had been dug after

issuance of notification

u/s 4 of the Act.","Rs.57,270/-","Rs.17,730/-",

Loss to

machinery",Nil,Nil,"Rs.41,140/-",

Loss caused

to dairy

business",Nil,Nil,"Rs.1,00,000/-",

Total,"Rs.5,11,342=72

Out of this amount, Rs

29,694=45 and Rs

29,694=50 (Total

Rs.59,388.95)Â paidto

the state Bank of Indore

towards outstanding

loans of Rajendra and

Prakashchandra resp.","Rs.6,89,760/-","Rs.19,51,760/-

Less 6,89,760/-",

,,,"Rs.12,62,000/-",

State failed to produce any evidence to establish nature of the land, therefore, the appellants deserve compensation @ Rs.1,00,000/- per Hect.",,,,

Per contra, Shri Amit Singh Sisodia, learned Govt. Advocate, appearing for the respondent, State, submitted that the LAO has rightly assessed the",,,,

compensation @ Rs.37,900/- per Hect. on the basis of sale-deeds produced by the appellants as well as market guidelines for the relevant period",,,,

produced by the state. Without any evidence and material on record, the Reference Court has enhanced the compensation up to Rs.55,000/- per Hect.",,,,

In support of their claim, the claimants did not produce any material to establish that agricultural activities were going on the land in question such as",,,,

land-revenue; rin-pustika' sale of fertilizer and seeds; sale of crops, etc., therefore, it cannot be presumed that agricultural activities were going on. In",,,,

fact, on the land in question, there was a dairy farm owned by the appellants. The well and tube-wells were used not for agricultural purposes, but for",,,,

the dairy purposes. Hence, the appeal filed by the claimants is liable to be dismissed and the appeal filed by the State deserves to be allowed by setting",,,,

aside the impugned award passed by the Reference Court.,,,,

Before appreciating the rival submissions raised by the learned counsel for the parties, it would be appropriate to have in mind certain decisions of",,,,

apex Court in this field. That when the land owners sought the reference seeking enhancement of compensation, then the burden lies on them to prove",,,,

their case by adducing reliable evidence and also to establish that the compensation offered by the Land Acquisition Officer is inadequate and the,,,,

lands are capable of fetching higher market value. In case of Basant Kumar v/s Union of India : (1996) 11 SCC 542; Special Land Acquisition,,,,

Officer, v/s Karigowda (2010) 5 SCC 708 and Ahmedabad Municipal Corpn. v/s Sharadaben : (1996) 8 SCC 93, the apex Court has held that it is for",,,,

the appellant to prove his case if he is claiming enhancement of a compensation granted by the Land Acquisition Officer. It is the duty of the Court to,,,,

scrutinize the evidence and apply the test of prudent and willing purchaser whether he would be willing to purchase in market the said very land. In the,,,,

case of Hookiyar Singh v/s Special Land Acquisition Officer : (1996) 3 SCC 766, it has been held that the Court must not indulge in the feats of",,,,

imagination but consider the very fact that the prudent purchaser in open market is ready to purchase the said land at the rate claimed by the,,,,

claimants. It has also been held by the apex Court in the case of G.Narayan Rao v/s Land Acquisition Officer (1996) 10 SCC 607 that the claimants,,,,

must establish that at the time of date of notification under Section 4 of the Act of 1984, any buyer or purchaser were available. The similar view has",,,,

been followed in the case of State of U.P. v/s Ram Kumari Devi : (1996) 8 SCC 577. In the case of Gujrat Industrial Development Corporation v/s,,,,

Narottambhai Morarbhai : (1996) 11 SCC 159, the apex Court has observed that the criteria and rate for sale of small piece of land and big area of the",,,,

land are always different. The small plots are easily saleable at higher rate; whereas the large area of the plots do not get the higher rates. Therefore,",,,,

while assessing the compensation the Court must keep in the mind that area of the land under acquisition.,,,,

For the purpose of calculation of compensation and to arrive fair market value of agricultural land various facts and circumstances of the case are,,,,

liable to be consider by the court. The Court must exercise its discretion by adopting different methods; like (a) Sales statistics method; (b),,,,

Capitalisation of net income method; and (c) Agricultural yield basis method. The Supreme Court in the case of Special Land Acquisition Officer v/s,,,,

Karigowda : (2010) 5 SCC 708 has held as under :-,,,,

“70. To examine what method could be adopted for determining the market value of land and criticism of the method adopted by the Land,,,,

Acquisition Collector, by the courts, that the same is not in accordance with law, we must notice various methods which are normally adopted by the",,,,

Courts for determining the fair market value of the land and which of the method can be more properly applied in the facts and circumstances of this,,,,

case.,,,,

Sections 23 and 24 of the Act spell out the have and have nots, applicable to the scheme of awarding compensation by the Collector but do not",,,,

describe the methodology which should be adopted by the courts in determining the fair market value of the land at the relevant time. By development,,,,

of law, the courts have adopted different methods for computing the compensation payable to the land owners depending upon the facts and",,,,

circumstances of the case. The Courts have been exercising their discretion by adopting different methods, inter alia the following methods have a",,,,

larger acceptance in law :,,,,

(a) Sales Statistics Method : In applying this method, it has been stated that, sales must be genuine and bonafide, should have been executed at the",,,,

time proximate to the date of notification under Section 4 of the Act, the land covered by the sale must be in the vicinity of the acquired land and the",,,,

land should be comparable to the acquired land. The land covered under the sale instance should have similar potential and occasion as that of the,,,,

acquired land {Faridabad Gas Power Project, N.T.P.C. Ltd. & Ors. v. Om Prakash & Ors. [2009 (4) SCC 719], Shaji Kuriakose & Anr. v. Indian Oil",,,,

Corp. Ltd. & Ors. [AIR 2001 SC 3341], Ravinder Narain & Anr. v. Union of India [2003 (4) SCC 481]}.",,,,

(b) Capitalization of Net Income Method : This method has also been applied by the courts. In this method of determination of market value,",,,,

capitalization of net income method or expert opinion method has been applied. {Union of India & Anr. v. Smt. Shanti Devi & Ors. [1983 (4) SCC,,,,

542], Executive Director v. Sarat Chandra Bisoi & Anr. [2000 (6) SCC 326], Nelson Fernandes & Ors. V. Special Land Acquisition Officer, South",,,,

Goa & Ors. (supra).,,,,

(c) Agriculture Yield Basis Method : Agricultural yield of the acquired land with reference to revenue records and keeping in mind the potential and,,,,

nature of the land - wet (irrigated), dry and barren (banjar).",,,,

Normally, where the compensation is awarded on agricultural yield or capitalization method basis, the principle of multiplier is also applied for final",,,,

determination. These are broadly the methods which are applied by the courts with further reduction on account of development charges. In some,,,,

cases, depending upon the peculiar facts, this Court has accepted the principle of granting compound increase at the rate of 10% to 15% of the fair",,,,

market value determined in accordance with law to avoid any unfair loss to the claimants suffering from compulsive acquisition. However, this",,,,

consideration should squarely fall within the parameters of Section 23 while taking care that the negative mandate contained in Section 24 of the Act is,,,,

not offended. How one or any of the principles afore-stated is to be applied by the courts, would depend on the facts and circumstances of a given",,,,

case.,,,,

It is a settled principle of law that lands of adjacent villages can be made the basis for determining the fair market value of the acquired land. This,,,,

principle of law is qualified by -: 10:- First Appeal No.131 of 1999. clear dictum of this Court itself that whenever direct evidence i.e. instances of the,,,,

same villages are available, then it is most desirable that the court should consider that evidence. But where such evidence is not available court can",,,,

safely rely upon the sales statistics of adjoining lands provided the instances are comparable and the potentiality and location of the land is somewhat,,,,

similar. The evidence tendered in relation to the land of the adjacent villages would be a relevant piece of evidence for such determination. Once it is,,,,

shown that situation and potential of the land in two different villages are the same then they could be awarded similar compensation or such other,,,,

compensation as would be just and fair.,,,,

The cases of acquisition are not unknown to our legal system where lands of a number of villages are acquired for the same public purpose or,,,,

different schemes but on the commonality of purpose and unite development. The parties are expected to place documentary evidence on record that,,,,

price of the land of adjoining village has an increasing trend and the court may adopt such a price as the same is not impermissible. Where there is,,,,

commonality of purpose and common development, compensation based on statistical data of adjacent villages was held to be proper. Usefully,",,,,

reference can be made to the judgments of this Court to the cases of Kanwar Singh & Ors. v. Union of India [JT 1998 (7) SC 397] and Union of,,,,

India v. Bal Ram & Anr. [AIR 2004 SC 3981].,,,,

In this regard we may also make a reference to the judgment of this Court in the case of Kanwar Singh & Ors. v. Union of India [AIR 1999 SC,,,,

317], where sale instance of the adjacent villages were taken into consideration for the purpose of determining the fair market value of the land in",,,,

question and their comparability, potential and acquisition for the same purpose was hardly in dispute. It was not only permissible but even more",,,,

practical for the courts to take into consideration the sale statistics of the adjacent villages for determining the fair market value of the acquired,,,,

land.â€​,,,,

The Division Bench of this Court in the case of M.P.Housing Board (supra) has also scrutinized the various earlier judgments of the apex Court in,,,,

respect of calculation of amount of compensation. Para 14 to 18 of the judgment are reproduced below :-,,,,

“14. In the case of Kanwar Singh v. Union of India, (1998) 8 SCC 136, it has been held that the amount of compensation for the land acquired",,,,

depends on the market value of land on the date immediately before the notification under Section 4 of the Act or when same land is acquired and,,,,

offer of compensation is made through an award. The market value has to be determined on the basis of evidence produced before the Court. It was,,,,

further held that the consideration in terms of price received for land under bona fide transactions on the date or preceding the date of notification,,,,

issued under Section 4 of the Act generally shows the market value of the acquired land and the market value of the acquired land to be assessed in,,,,

terms of those transactions. It is also noteworthy to state here that in the case of Hansali Walichand v. State of Maharashtra, (1998) 2 SCC 388, Their",,,,

Lordships held that the land having future potential on account of its location can not be ignored and realised potential is not the sole pivotal factor. 15.,,,,

In this regard it is noteworthy to refer to the decision rendered in the case of Land Acquisition Officer, Revenue Divisional Officer v. L. Kamalamma,",,,,

(1998) 2 SCC 385, where in it has been held by Their Lordships that when no sales of comparable land were available where large chunks of land had",,,,

been sold, even land transactions in respect of small extent of land could be taken note of as indicating the price that it may fetch in respect of large",,,,

tracts of land by making appropriate deductions such as for development of the land by providing enough space for roads, sewers, drains, expenses",,,,

involved in formation of a layout, lump sum payment as also the waiting period required for selling the sites that would be formed.",,,,

In this case we may also refer to the decision rendered in the case of Union of India v. Mangat (Dead) by L.Rs. and Ors., (2000) 10 SCC 609,",,,,

wherein Their Lordships held in Para 8 as under:--,,,,

Even if one was to disregard the quality of the land, i.e., irrigated, semi-irrigated or barren, one can not be oblivious of the fact that the market",,,,

value of land which abuts on the national highway would be much more than the land which is away from it. A price of the land which is landlocked,,,,

and which is farther away from the national highway can not be the same as that which abuts on the national highway. The formula which had been,,,,

applied by the High Court, however, seems to indicate that the price of the entire land irrespective of the location of different parcels of land is the",,,,

same. The formula which was applied by the learned Single Judge of the High Court is obviously incorrect.""",,,,

In this regard we may profitably refer to the decision rendered in the case of Kasturi v. State of Haryana, (2003) 1 SCC 354, wherein it was held",,,,

when there is difference between a developed area and an area having potential value though yet to be developed cut 20% towards development,,,,

charges as against the normal 1/3rd, from the amount of compensation was treated to be justified in the facts and circumstances of the case.",,,,

In this regard it is worth referring to the decision rendered in the case of Land Acquisition Officer v. B. Vijender Reddy and Ors., (2001) 10 SCC",,,,

In the aforesaid case a two Judge Bench of the Apex Court held as under:--,,,,

13 ....... It is true, in the fixation of rate of compensation under the Land Acquisition Act, there is always some element of guesswork. But that has to",,,,

be based on some foundation. It must spring from the totality of evidence, the pattern of rate, the pattern of escalation and escalation of price in the",,,,

years preceding and succeeding Section 4 notification etc. In other words, the guesswork could reasonably be inferable from it. It is always possible to",,,,

assess the rate within this realm. In the present case, we find there are three exemplars, i.e., Exhibits A-l and A-2 which are three years preceding",,,,

the date of notification and Exhibit A-3 which is of the same point of time when Section 4 notification was issued.""",,,,

Recently, the apex Court in the case of Union of India V/s. Dyagala Devamma (Civil Appeal No.69866987/2018) decided on 25.7.2018, has held",,,,

as under :,,,,

In Chimanlal Hargovinddas v. Special Land Acquisition Officer, Poona and Anr. : (1988) 3 SCC 751, this Court dealt with the question as to how",,,,

the Court should determine the valuation of the lands under acquisition and what broad principle of law relating to acquisition of land under the Act,,,,

should be kept in consideration to determine the proper market value of the acquired land.,,,,

In Para 4 of the judgment, this Court laid down as many as 17 principles, which are reproduced below for perusal:",,,,

(1) to (4)........................................,,,,

(5) The market value of land under acquisition has to be determined as on the crucial date of publication of the notification Under Section 4 of the,,,,

Land Acquisition Act (dates of notifications Under Sections 6 and 9 are irrelevant).,,,,

(6) The determination has to be made standing on the date line of valuation (date of publication of notification Under Section 4) as if the valuer is a,,,,

hypothetical purchaser willing to purchase land from the open market and is prepared to pay a reasonable price as on that day. It has also to be,,,,

assumed that the vendor is willing to sell the land at a reasonable price.,,,,

(7) In doing so by the instances method, the court has to correlate the market value reflected in the most comparable instance which provides the",,,,

index of market value.,,,,

(8) Only genuine instances have to be taken into account. (Sometimes instances are rigged up in anticipation of acquisition of land.),,,,

(9) Even post-notification instances can be taken into account (1) if they are very proximate, (2) genuine and",,,,

(3) the acquisition itself has not motivated the purchaser to pay a higher price on account of the resultant improvement in development prospects.,,,,

(10) The most comparable instances out of the genuine instances have to be identified on the following considerations:,,,,

(i) proximity from time angle,",,,,

Plus factors,Plus factors,,,

smallness of size,1. largeness of area,,,

proximity to a road,2. situation in the interior at a distance from the road.,,,

Frontage on a road,"3. narrow strip of land with very small frontage

compared to depth.",,,

Nearness to developed area,"4. lower level requiring the depressed portion to be

filled up.",,,

Regular shape,5. remoteness from developed locality,,,

Level vis-a-vis land under acquisition.,"6. some special disadvan tageous factor which would

deter a purchaser",,,

7 . Special value for an owner of an

adjoining property to whom it may have

some very special advantage.",,,,

assessing the compensation. Admittedly, at the time of acquisition of the land, some of the lands were used as agricultural and some for dairy farm",,,,

and some for residential purposes, therefore, compensation under different heads have been awarded.",,,,

The LAO had assessed the compensation of entire land @ Rs.37,900/- per Hect. on the basis of average sale value of the sale-deeds. The",,,,

Reference Court has enhanced up to Rs.55,000/- per Hect on the basis of average value of sale-deeds and even the sale-deeds (Ex. P/15 and P/17)",,,,

having the maximum value of the sale were also considered and according to which, the value of the land was Rs.60,000/- per Hect. Therefore, the",,,,

Reference Court has almost doubled the compensation as assessed by the LAO. Even if there was no categorisation of the land, but the maximum",,,,

amount of compensation have been awarded to the appellants. The appellants produced as many as 18 sale-deeds, but none of sale-deed describe the",,,,

nature as to whether it was agricultural or non-agricultural and so far as crops are concerned, additional amount of compensation has already been",,,,

awarded in their favour. Therefore, the appellants are not entitled for any further enhancement.",,,,

In view of the foregoing discussion, both the appeals being devoid of any merit, deserve to be and are hereby dismissed.",,,,

No order as to costs.,,,,