The Asst. Commissioner Land Acquisition Officer vs Ammanna

Ashok B. Hinchigeri, J.—These appeals are filed by the Government aggrieved by the common judgment and award dated 04.01.2012 passed by the Reference Court (Court of II Additional Senior Civil Judge, Bijapur) in LAC Nos. 43, 44, 45, 46, 47 and 48 of 2010. In each one of the appeals, the claimants have filed the cross objections agitating their entitlement to higher compensation.

The facts of the case in brief are that the lands in question were acquired for the purpose of construction of minor irrigation tank in Ittangihal village, Bijapur taluk. In that regard, the preliminary notification was issued on 29.01.2009. The Land Acquisition Officer passed the award on 25.10.2009 determining the market value at Rs. 28,000/- per acre for dry land and Rs. 65,000/- per acre for irrigated land. Dissatisfied with the meager awarding of the amounts, the claimants sought reference. The Reference Court based on the sales statistics method raised the market value to Rs. 18,59,000/- per acre.

Sri Manvendra Reddy, learned Government Advocate for the appellants submits: that the Reference Court has erred in determining the market value based on the sale deeds at Exs. P30 to P33. According to him, the Reference Court ought to have employed the capitalization method, as the lands in question are all agricultural lands. He brings to our notice that PW-1 has admitted that they are agricultural lands and that they are 8 1/2 kilometers away from Bijapur city. Just because the claimants have stated that their lands are in the vicinity of Bijapur Municipal Corporation, the Reference Court is not justified in awarding Rs. 18,59,000/- as the market value for one acre of land. He submits that the sale deed at Ex. P34 ought to have been taken as the basis for the determination of the market value. Ex. P34 is the sale deed in respect of agricultural land measuring 22 acres 10 guntas in Madabhavi village, which according to him is very close to Ittangihal village.

Per contra, Sri Shivanand Patil, learned counsel for the cross objectors/claimants submits that the Reference Court has erred in deducting 65% towards the cost of development. He relies on the Apex Court judgment in the case of Ashrafi and Others Vs. State of Haryana and Others, in support of his submission that the deduction towards the cost of development cannot exceed 33.3%. He also relies on the Apex Court judgment in the case of Subh Ram and Others Vs. Haryana State and Another, for advancing the submission that the purpose of acquisition is a relevant factor in the matter of determining the market value. Since the entire acquired land is being put to use, there is no need to earmark any part of the land for providing amenities in the layout. He has also relied on the Apex Court judgment in the case of Mohinder Singh Vs. State of Haryana, wherein the deduction of 40% made towards the development cost by the High Court was held to be bad and the deduction of 1/4th of market value made by the Reference Court was restored.

In the course of reply to the arguments urged on behalf of the cross objectors, Sri Manvendra Reddy submits that the permissible deductions are upto 75% as held by the Apex Court in the case of Chandrashekar (D) by L.Rs. and Others Vs. Land Acquisition Officer and Another, . He read out para 39, which is extracted herein below:

"39. Our conclusions in respect of the quantum of permissible deductions have been recorded in paras 23 to 27 hereinabove. While determining the validity of individual deductions, it is also imperative to examine whether or not the total deductions put together fall within legal parameters. We have upheld 55% deduction accorded by the High Court towards "development". We have also individually upheld deduction of 10% on account of "de-escalation'''', as also, the deduction of 5% on account of "waiting period". Cumulatively these deductions would amount to 70% (55+10 + 5= 70). The outer benchmark for deductions laid down by this Court in Lal Chand case and in A.P. Housing Board case is 75%. Cumulatively also the deductions allowed by the High Court fall well within the parameters laid down by this Court. We therefore find no infirmity in the quantum of accumulated deductions applied by the High Court during the course of making an assessment of the market value of the acquired land."

He pointedly brings to our notice that the aforementioned judgment is in the context of the SLP arising from the land acquisition in Gulbarga district. He also brings to our notice the Division Bench judgment, dated 20.06.2014 passed, in MFA No. 32505/2011 and connected matters in the case of the State of Karnataka vs. M.A. Aziz and others, where the deduction is taken at the rate of 60 to 65% of the market value towards the cost of development.

The submissions of the learned counsel have received our thoughtful consideration. The copies of the deposition, exhibits, etc. are made available to us at the Bar. Our perusal of the cross-examination part of PW-1 shows that much of what PW-1 has deposed in the course of examination-in-chief is not questioned, disputed or discredited. Further, for the reasons best known to the Assistant Commissioner-cum-Land Acquisition Officer, he has not entered the witness box.

The submission urged on behalf of the Government that the capitalization method should have been employed does not take the Government anywhere. No party has laid any foundation for the employment of capitalization method. As far as the submission that the determination of the market value should have been on the footing that the acquired lands are agricultural lands also does not commend itself to us. As held by the Apex Court in the case of National Fertilizers Ltd. Vs. Jagga Singh (Deceased) through L.Rs. and Another, , the market value has to be determined on the basis of potentiality for urban development and not on the basis of revenue or agricultural classification. The determination of the market value cannot be only on the basis of realised potentiality; the probable economic event coupled with the unique features of the land cannot be ignored.

It is not in dispute that the nearby lands in the same village are used for the formation of layout by the Karnataka Housing Board (for short ''KHB''). It has carved out as many as 700 sites. Sale deeds executed by KHB in favour of its allottees are produced as Exs. P30 to P33. They are executed in November, 2007. The sale consideration per square foot comes to Rs. 121.94/- and per gunta it comes to Rs. 1,32,792/-. Per acre it aggregates to Rs. 53,11 680/-. The Reference Court has deducted 65% of the said amount and arrived at the market value at Rs. 18,59,000/- per acre.

Now the question that falls for our consideration is whether the Reference Court is justified in deducting 65% of the market value towards the cost of development. That the entire acquired land is going to be utilized for the tank purpose and no portion of the land is required to be reserved for any civic amenities is a matter which is to be neglected in determining the compensation. Section 24 (clause fifthly) of the Land Acquisition Act, 1894 reads as follows:

"any increase to the value of the land acquired likely to accrue from the use to which it will be put when acquired;"

Interpreting the said provision the Apex Court in the case of Subh Ram and others (supra) has held that the use to which the acquired land may be put, can have no bearing upon the deduction to be made towards development cost. Nor can the purpose of acquisition be used to increase the compensation awardable with reference to the expected profits from the future user. The observation of the Hon''ble Supreme Court in certain cases that purpose of acquisition is a relevant factor, unless properly understood and carefully applied with reference to special circumstances, may lead to absurd or unjust results. The said observation may not apply in all cases and all circumstances, as the general rule is that the landowner has to be is being compensated for what he has lost and not with reference to the purpose of acquisition. The purpose of acquisition can never be a factor to increase the market value of the acquired land. The Hon''ble Supreme Court has further held in the said case that if the valuation of a large extent of agricultural or undeveloped land is to be based on the sale price of the similarly developed plot in a private layout, then the standard deductions should be one-third (for roads, etc.) plus one-third (for expenditure of development), in all two-thirds (or 67%), as development cost from the market value of the small plot. The percentage of deduction may, however vary between 20% to 75% depending on several circumstances. It is held therein that when the deduction is made from the value of a small residential plot towards the development cost, to arrive at the value of a large tract of agricultural or undeveloped land with development potential, the deduction has nothing to do with the purpose for which the land is acquired. Yet another thing made clear is that where the market value of the agricultural land is determined with reference to the sale price of neighbouring agricultural land, no deduction need be made towards the development cost.

In the case of Mohinder singh (supra) deduction at 1/4th of the market value is approved as the acquired lands were in the midst of an already developed land.

Going by the version of the claimants only, the lands are agricultural lands which are 8 1/2 kilometers away from. Bijapur City. In the case of K.S. Shivadevamma and others Vs. Assistant Commissioner and Land Acqusition Officer and another, , the extent of deduction for development charges at the rate of 53% plus 33% is upheld in respect of the lands possessed of potential value for building purposes, but not capable of putting to immediate use for building purpose.

In the case of Ashrafi (supra), the discussion revolved round the belting system and in respect of the land which were more or less converted into lands, which were ready for use for the purpose of construction.

The perusal of the judgments, to which the references are made hereinabove, would only indicate one thing and that is there cannot be any hard and fast rule that the deduction towards the cost of development should be at a particular rate or percentage. It depends on the nature of the land, their potentiality, their location, more particularly their proximity to the heart of a city or town. Considering all these aspects of the matter, the Reference Court has deducted the cost of development at 65%. As we do not find it to be on the higher side, we are not inclined to reduce the percentage of deduction towards the cost of development.

However, on one count we are persuaded to enhance the market value. The exemplar sale deeds are executed in November, 2007, which have served as the foundation for the determination of the market value of the lands in respect of which the preliminary notification was issued in January, 2009. There is a gap of one year two months. As the prices of the properties in Bijapur and perhaps in all other cities have only been seeing the upward trend, we deem it necessary and just to give the appreciation at the rate of 10% to Rs. 18,59,000/determined by the Reference Court. The amounts awardable are as follows:

Rs. 18,59,000/- + 1,85,900/- = Rs. 20,44,900/- rounded off to Rs. 20,45,000/-

Needless to observe that the appellants are also entitled to the proportionate increase in the additional market value, solatium and interest besides the proportionate cost.

In the result, MFA Nos. 31809/2012, 31810/2012, 31811/2012, 31812/2012, 31813/2012 and 31814/2012 are dismissed. MFA Crob. Nos. 1505/2013, 1506/2013, 1507/2013, 1508/2013, 1509/2013 and 1510/2013 are partly allowed.