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Judgment
K. Chandru, J.—Heard the arguments of Mr. V. Ravi, learned Special Government Pleader (AS) for the Appellants, Mr. R. Muthukumarasamy, learned Senior Counsel assisted by Mr. P.D. Audikesavalu for Food Corporation of India, Mr. R. Subramaniam, appearing for Mr. R. Saseedharan for Respondents in A.S. No. 108/2005 and Mr. N. Manoharan, learned Counsel for Respondents in A.S. No. 44/2006. A.S. 108/2005 is filed by the Acquiring Authority challenging the judgment and decree passed in L.A.O.P. No. 51/1997 dated 28.04.2004 on the file of the 1st Additional Sub-Court, Coimbatore. A.S. acquiring authority 44 of 2006 is filed by the Acquiring Authority challenging the judgment and decree dated 31.12.2004 on the file of the 1st Additional Sub-Court, Coimbatore.
In A.S. No. 108/2005 (L.A.O.P. No. 51/1997), the lands of the claimants situated in S. No. 318/1, Vilankuruchi village to the extent of 5.07 acres were acquired for the purpose of locating godown for the Food Corporation of India. The said land as per the village map, filed before the Reference Court in Ex.R.3 shows that it is situated adjacent to the Railway Line leading to the Coimbatore junction. The lands were also situated adjacent to the godown of a Cooperative Society in S. No. 323. There is also a railway goods shed belonging to the Southern Railways. The Acquiring Authority issued a Notification u/s 4(1) dated 16.05.1984 after following due procedure. Award came to be passed in Award No. 7/89 dated 10.04.1989. The Acquiring Authority fixed the compensation at the rate of Rs. 40,000/-per acre (Rs. 400/- per cent). The aggrieved land owner raised objection against the low rate of compensation. Since no reference was made, he filed a Writ Petition before this Court in 1996 and on a direction being issued by this Court, a reference u/s 18 was made to the Reference Court. The reference was registered as L.A.O.P. No. 51/1997. Before the Reference Court, on behalf of the claimants, 5 documents were filed and marked as Ex.C.1 to Ex.C.5 and two of the claimants got themselves examined as C.W.1 and C.W.2. On the side of the Acquiring Authority, one Narayana Murthy, who was a Superintendent in the Revenue Divisional Office was examined as R.W.1 and four documents were filed and marked as Exhibits R.1 to R.4.
On considering the evidence (both oral and documentary), the Court below fixed the market rate of compensation at Rs. 3,50,000/- per acre and since the lands were considered to be house sites, it gave deduction of 20% for future development and reduced the compensation from Rs. 3,50,000/- to Rs. 2,80,000/- per acre. It is as against the said judgment, the present Appeal has been filed.
In A.S. No. 44/2006, the challenge is to the judgment and decree in L.A.O.P. No. 2/2004. In that case, the land which was situated in S. No. 18/1 B, 22/2 and 23/2 Krishnarayapuram village to the extent of 1.66 acres were acquired for the formation of the road leading to the godown established by the Food Corporation of India in the Krishnarayapuram village. Since the Acquiring Authority fixed the compensation at the rate of Rs. 40,000/- per acre, the matter was referred for determination of the market value by the reference Court u/s 18 of the Land Acquisition Act.
Before the Reference Court, on behalf of the claimants/land owners, two witnesses were examined as C.W.1 and C.W.1 and on their side, 18 documents were filed and marked as Ex.C.1 to C.18. On the side of the Acquiring Authority, one Narayana Murhty was examined as R.W.1 and on their side, 4 documents were filed and marked as Exhibits R.1 to R.4. The requisitioning body had also examined one Hema Chandran as R.W.2 and marked two documents viz., Ex.R.5 and Ex.R.6.
The Reference Court on the basis of these materials came to the conclusion vide its judgment dated 31.12.2004 and held that the claimants/land owners are entitled for the compensation at the rate of Rs. 5,500/- per cent or Rs. 5,50,000/- per acre as compensation. Aggrieved by the same, A.S. No. 44 of 2006 came to be filed.
In assailing both the judgments, Mr. R. Muthukumarasamy, learned Senior Counsel appearing for the Food Corporation of India, (requisitioning body) contended that the Court below did not take into account the relevant factors while considering the exhibits produced on the side of the claimants, which are the exemplars of sale of small plots. The reference Court committed a grave error. It also did not see the locational disadvantage on acquiring the said land. The exemplars which were taken into account are far away from the acquired lands, whereas, the data land produced by the authorities are more closer and comparable. In explaining the location, the learned Senior Counsel pointed out that S. No. 318 was far away from Coimbatore-Sathyamangalam Road and did not have any access to the road and it was the Food Corporation of India while had established the access road. It was stated that on the northern side of the railway line, the lands were classified as unassessed dry waste. Whereas, on the southern side of the land, the lands were already developed into house sites and housing colonies have come into existence. The Court below had committed a grave error in arriving at an higher market rate of compensation.
Pointing out the discrepancies in respect of A.S. No. 108/2005 (L.A.O.P. No. 51/1997), he submitted that the Court below erred in relying upon Ex.C.1, which related to S. No. 89/1, Krishnarayapuram dated 31.03.1982, wherein, 2.5 cents were sold at Rs. 2,000/- per cent. In Ex.C.2, in Survey No. 345, 346/1, 6 cents of land were sold for a sum of Rs. 3,000/- per cent on 12.04.1984, which is also adjacent to Souripalayam village. Likewise, in Ex.C.3 in S. No. 488/1 dated 30.10.1982 in Vilankurichi village, 6 cents were sold for a sum of Rs. 5,000/-. The recital itself showed that the lands were sold to set up a workshop. He submitted that these 3 lands were far away from Coimbatore-Sathyamangalam road. On the channel proceeding from Echeri, he also submitted that they are admittedly on the southern side of the railway line, whereas, the acquired land were on the northern side of the railway line. They are all well developed house sites and further, they are all smaller lands having been paid fancy rates, whereas the land in S. No. 318/1 is a huge extent of land upto 5.07 acres and hence in the same rate ought not to have been fixed for them.
Similarly in A.S. No. 44/2006, he submitted that it is only some strip of land i.e. 1.66 acres has been taken into account for the road leading to the godown. Before the Court below, the claimants relied on several exhibits, which is admittedly post 4(1) Notification. He submitted that Ex.C.8, C.9 and C.10 came into existence after 4(1) Notification. Therefore, no reliance can be placed upon. In the other exhibits viz., Ex.C.5 to Ex.C.7 and. Ex.C.11 were admittedly before 4(1) notification and they are not comparable lands, while Ex.C.10 and Ex.C.5 were on the southern side of the railway line and they are not comparable and Ex.C.6 and Ex.C.7 were more closer to the Highways and Ex.C.9 is right on the Highways itself, whereas, the acquired land is far away from the Highways. Therefore, he submitted that in respect of the data land, which was taken into account, the sale transaction took place on 29.06.1983 to the extent of 3.2 acres in S. No. 63 and the land was sold for a sum of Rs. 400/- per cent is a reliable document.
In this connection, the learned Senior Counsel also relied upon the judgment of the Supreme Court reported in the case of Chaturbhuja Modi and Others Vs. State of Orissa and Another, for the purpose of contending that the lands on both sides cannot be compared unless they are similarly situated. Further while the purchase of their extent of land was done on a acre basis, and hence the smaller extent of land cannot be compared. For this purpose, he relied upon paragraph 10 of the said judgment, which is usefully extracted as follows:
The High Court appears to have taken notice of the aforementioned criteria and has given some discount in compensation as the land under Exhibit 1 is a very small piece of land and the land acquired in the case in hand is much larger is size. After giving the said discount, the High Court computed the compensation at the rate of Rs. 3,00,000/- per acre for the acquired land. While determining compensation, some conjecture is unavoidable as it is generally not possible to have any documentary evidence of sale of land of similar nature and in the near vicinity of the acquired land. The value shown in Exhibit 1 cannot be assessed as the value of the acquired land for the reason that the said land which is sold under Exhibit 1 is a very small piece of land, whereas the acquired land being a large tract of land. This Court has held in Administrator General of West Bengal Vs. Collector, Varanasi, that where large tracts of land are required to be valued, valuation in transactions with regard to small plots is not to be taken as the real basis for determining the compensation of large tracts of land. It follows that where the market-value of large block of land is determined on the basis of sale transactions for smaller property, appropriate deduction has to be made for making allowance for the loss of the acquired land required to be used for internal development such as construction of roads, drains, sewers, open spaces and the expenditure involved in providing other amenities like water, electricity etc. The extent of area required to be set apart has to be assessed by the Court having regard to the shape, size and situation of the concerned block of land.
The learned Senior Counsel also placed reliance upon another judgment of the Supreme Court reported in the case of Lal Chand Vs. Union of India (UOI) and Another, for contending that if small extent of land has to be taken into basis, then a larger deduction has to be made towards size of the land apart from other deductions towards development charges for the lands that were acquired. Therefore, he pleaded that the compensation worked out by the Courts below should be interfered with.
Mr. V. Ravi, learned Special Government Pleader (AS) also adopted his arguments.
Per contra, Mr. R. Subramaniam, assisted by Mr. R. Saseedharan and Mr. N. Manoharan, learned Counsel for the claimants strenuously contended that they are the real aggrieved parties and they have not filed any Appeal because of their economic incapacity. In the present case, ever as per admission of R.W.1 in his cross-examination, the acquired lands were situated within the Coimbatore Corporation limits and adjacent to the Railway line. Already many housing colonies have come up with all infrastructure available and those facts were taken note of by the Court below. It is further submitted that merely because that the godown is situated on the northern side, the value of the land will not get diminished. Both sides of the railway line, Vilankurichi village spread over. Adjacent to the godown, there is Railway Station. The channel which was referred to by the learned Senior Counsel, (which according to the Acquiring Authority will cut through the village thus reduce the cost of land compared to the price of the lands situated on the northern side) was not in existence even at the time of the acquisition proceedings. He further submitted that it is not as if that the Court below cannot take note of the exemplars of sale of small plots. The Supreme Court has consistently held that in the absence of any other reliable data, such exemplars of sale of small plots can be taken note of vide its decision reported in the case of Rishi Pal Singh and Others Vs. Meerut Development Authority and Another, It is also held that the exemplars of small plots has to be considered after making adequate discount.
The learned Counsel also submitted that the Supreme Court in Special Land Acquisition Officer Vs. Indian Standard Metal Co. Ltd., has held that the state of development of acquired land and nearby areas at the time of acquisition, proximity and orientation with respect of any major highways can also be considered for the purpose of fixing market rate of compensation. He further placed reliance upon judgment of the Supreme Court in Subh Ram and Others Vs. Haryana State and Another, and contended that for locating the godown for Food Corporation of India, no development is required since land is already uniform and in the potential form of house sites.
He relied upon Sagunthala (Dead) through LRs. Vs. Special Tehsildar (L.A.) and Others, for contending that the purpose of land for which acquisition effected was also to be considered.
He also brought to the notice of this Court the latest judgment of the Supreme Court dated 11.08.2010 in A. Natesam Pillai Vs. Spl. Tahsildar, Land Acquisition, Tiruchy, and relied upon paragraphs viz., 20, 21 and 22 and submitted that the exercise undertaken by the reference Court does not call for any interference and the relevant portion is usefully extracted as follows:
This building potentiality of acquired land must also be taken into consideration while determining compensation. In P. Ram Reddy and Others Vs. Land Acquisition Officer, Hyderabad Urban Development Authority, Hyderabad and Others, , this Court held as follows:
Building potentiality of acquired land. Market value of land acquired under the LA Act is the main component of the amount of compensation awardable for such land u/s 23(1) of the LA Act. The market value of such land must relate to the last of the dates of publication of notification or giving of public notice of substance of such notification according to Section 4(1) of the LA Act Such market value of the acquired land cannot only be its value with reference to the actual use to which it was put on the relevant date envisaged u/s 4(1) of the LA Act, but ought to be its value with reference to the better use to which it is reasonably capable of being put in the immediate or near future. Possibility of the acquired land put to certain use on the date envisaged u/s 4(1) of the LA Act, of becoming available for better use in the immediate or near future, is regarded as its potentiality. It is for this reason that the market value of the acquired land when has to be determined with reference to the date envisaged u/s 4(1) of the LA Act, the same has to be done note merely with reference to the use to which it was put on such date, but also on the possibility of it becoming available in the immediate or near future for better use, i.e., on its potentiality. When the acquired land has the potentiality of being used for building purposes in the immediate or near future it is such potentiality which regarded as building potentiality of the acquired land. Therefore, if the acquired land has the building potentiality, its value, like the value of any other potentiality of the land should necessarily be taken into account for determining the market value of such land. Therefore, when a land with building potentiality is acquired, the price which its willing seller could reasonably expect to obtain from its willing purchaser with reference to the date envisaged u/s 4(1) of the LA Act, ought to necessarily include that portion of the price of the land attributable to its building potentiality. Such price of the acquired land then becomes its market value envisaged u/s 23(1) of the LA Act. If that be the market value of the acquired land with building potentiality, which acquired land could be regarded to have a building potentiality and how the market value of such acquired land with such building potentiality requires to be measured or determined are matters which remain for our consideration now.
This Court in Hasanali Khanbhai and Sons and Others Vs. State of Gujarat, also held that:
3....But it is settled law by series of judgments of this Court that the Court is not like an umpire but is required to determine the correct market value after taking all the relevant circumstances, evinces active participation in adduction of evidence; calls to his aid his judicial experience; evaluate the relevant facts from the evidence on record applying correct principles of law which would be just and proper for the land under acquisition. It is its constitutional, statutory and social duty. The Court should eschew aside feats of imagination but occupy the armchair of a prudent, willing but not too anxious, purchaser and always ask the question as to what are the prevailing conditions and whether a willing purchaser would as a prudent man in the normal market conditions offer to purchase the acquired land at the rates mentioned in the Sale Deeds. After due evaluation taking all relevant and germane facts into consideration, the Court must answer as to what would be the just and fair market value....
Therefore, it is clear from the aforementioned decisions of this Court that the potentiality of the acquired land, in so far as it relates to the use to which it is reasonably capable of being put in the immediate or near future, must be given due consideration. The present acquired land has all the potentiality to be used as building sites, even in the immediate future, as it is located at a place in and around which building activity has already started. The evidence on record also clearly indicates that acquired land is abutting the main road. The acquired land is also surrounded by schools, Panchayat union office, shops and residential building in all three sides. The High Court also found, as a matter of fact, that the area where the acquired land is situated is fit for construction of houses. On an overall consideration and appreciation of the records, we feel that the deduction due to the small size of the exemplar land can easily be set off with the corresponding increase in price of the acquired land when compared with the land in Ex.A.3 from the point of view of potential value.
Mr. R. Subramaniam, the learned Counsel also submitted that in awarding compensation, the Court below erroneously calculated interest rate and they are entitled to get statutory interest as per law and he also pressed into service the judgment of the Supreme Court reported in the case of K.S. Paripoornan Vs. State of Kerala and Others, in working out the compensation including the interest. According to the learned Counsel, the claimants/land owners are entitled to interest at the rate of 9% for the first year and thereafter, till the date of possession at the rate of 15%. Though the Acquiring Authority calculated the rate of interest correctly, the reference Court did not adhere to the same and fixed its own rate of interest viz., 12% without following the law on the subject. In the light of the above submission, it has to be seen whether the Court below had erred in awarding interest on the low rate.
It is also seen that the data land relied on by the authorities has no relevance and it is in the interior portion of the village, whereas, the exemplars relied on by the claimants were more closer and nearer to the acquired land. Even if the post 4(1) Notification land deals are excluded the relevant exemplar, which had taken place before 4(1) Notification are available and no exception can be taken for those documents. Though it was contended that they are small plots, the Court below had given 20% deduction because of the smallness of the land. The land do not require any further development and no charges need to be deducted on that score. At this juncture, the Court has also consider the plight of the land owners. They were aggrieved by the rate of compensation since the lands acquired can be sold as house plots and has greater appreciation value. But the value paid to them are less due to compulsory acquisition. R.W.1 himself had admitted that the acquired lands comes within the city limit and closer to the railway line and the highways and also that the surrounding areas is a housing colony. Hence, it cannot be said that the compensation fixed is on the higher side. The fact that the access road was put up by the Food Corporation of India will not diminish the market rate of compensation. In reality, the land owner in A.S. No. 44 of 2006 had to suffer due to the severance of the land by losing a portion of the land in the middle. As really held by the Supreme Court in A. Natesam Pillai''s case (cited supra), potential value has to be taken into account.
It must also be noted that in A.S. No. 108/2005 (L.A.O.P. No. 51/1997), the Court below erred in fixing the interest erroneously as the uniform rate of 12% interest. Hence, the rate of interest on the compensation awarded by the Court below has to be worked out in accordance with the law laid down by the Supreme Court in the case of K.S. Paripoornan Vs. State of Kerala and Others, Considering the above facts and circumstances of the case, this Court do no find any errors in the judgments of the Court below in fixing the market rate of compensation. Hence, both the Appeals Suits are dismissed with the direction found in paragraph 20 of this judgment. However, there will be no orders as to costs. It is needless to state that the learned Special Government Pleader and the Standing Counsel for Food Corporation of India are entitled to get separate set of fees though a common judgment is pronounced in these two Appeal Suits.