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Judgment
Bhan, J.—Leave granted in the special leave petitions.
This order shall dispose of CA No. 12515 of 1996, CA Nos. 13370-13371/1996and CA No. 2238-42 of 2002 @ SLP © Nos. 21304-21308 of1996) as common question of law and facts are involved in these appeals.The facts of Civil Appeal Nos. 1552-1554 of 2000 being different would bereferred to in the later part of this judgment.
For the disposal of Civil Appeal Nos. 12515 of 1996, Civil AppealNos. 13370-71 of 1996 and CA No. 2238-2242 of 2002 (@ SLP © Nos.21304-21308 of 1996, the facts are referred to from Civil Appeal No. 12515of 1996.
The brief facts are as follows:
The State of Karnataka issued a notification u/s 4(1) ofthe Land Acquisition Act, 1894 (hereinafter referred to as 'the Act') seekingto acquire the plots belonging to the claimants of Village Murnal for a publicpurpose, namely, Bagalkot new township. The notification was published inthe Karnataka Gazette on 19th July, 1985. The declaration u/s 6was published in the Karnataka Gazette on 14th August, 1987. The SpecialLand Acquisition Officer, BTDA, Bagalkot passed the award on 3rd June,1988. He fixed the market value of the acquired plots at the rate of Rs.3,500/- per acre treating the land as agricultural.
Aggrieved by the award the claimants submitted applications underSection 18 of the Act seeking enhancement of the market value. In thereference application u/s 18, it was alleged by the claimants thatbefore passing the award, the Land Acquisition Officer did not issue anynotice; the compensation awarded was too low, meagre and inadequate. Themarket value of the acquired property was more than Rs. 30/- per sq. ft., themethod adopted for valuing the property was not proper and legal. TheLand Acquisition Officer illegally treated the land to be agricultural. It wasstated that the land under acquisition fell within the municipal limits ofBagalkot. On notice being served, respondents put an appearance throughthe AGP.
In support of their case, the claimants examined PW1 and PW2.Exhibits P1 to P29 were got marked. Respondents did not produce anyevidence.
The reference Court on appreciation of the evidence came to theconclusion that the acquired plots were on the southern side of the Belgaum-RaichurRoad at a distance of 200 feet. On one side of the Belgaum-Bagalkotroad, plots were situated and on the other side there was engineering collegecampus and K.I.D. Colony staff quarters etc.. The plots were adjacent to theengineering college. Near about the acquired plots some other persons hadcarved out plots on which construction was going on. PW1 stated that hewas preparing to put up the building on the plot but in the meanwhile theGovernment acquired the land. Vidhyagiri Housing Colony, BTDA Office,new Circuit House, engineering college hostel and staff quarters wereadjacent to the land acquired. From this it was concluded by the ReferenceCourt that the land under acquisition was surrounded on all four sides bybuildings and had a lot of potential for further development. A finding wasrecorded that the land under acquisition was within the municipal limits.
No evidence was produced by the parties by way of comparable saletransactions to prove the market value. Evidence was also not forthcomingfor adoption of the capitalisation method. On behalf of the claimants,reliance was placed on Ex. P.27, a notification issued u/s 4 dated19th January, 1978 by the Housing Urban Development Corporation and thejudgment in Land Acquisition Case No. 240 of 1981 relating thereto whichwas later confirmed in appeal by the High Court.
It was noticed by the reference Court that the notification, Ex. P.27,was dated 19th January, 1978. The land under acquisition under thatnotification was in close proximity of the land under acquisition in theseappeals. The reference Court had determined the market value of the land inLAC No. 240 of 1981 at Rs. 3 per sq. ft. which was later confirmed by theHigh Court in MFA No. 929 of 1987. Notification u/s 4, in thepresent case, is of 19th July, 1985. Keeping in view that there was adistance of seven years in the earlier acquisition and the subsequentacquisition and the fact that lot of development had already taken place andwas continuing to take place, the reference Court taking the base price of theland in that area at Rs. 3/- per sq. ft. for the year 1979 granted anappreciation in the value of land at 10% for every subsequent year. Whilegiving the appreciation of the value @ 10% for the next seven years thereference Court fixed the value of the land at Rs. 6.85 per sq. ft. Aftermaking a deduction of 20% towards development charges the payablemarket value was fixed at Rs. 5.50 per sq. ft. which comes to Rs. 2,39,580/-per acre. Statutory benefits of solatium and interest, as applicable, wereordered to be paid over and above the market value.
The State of Karnataka filed appeals before the High Court whichhave been dismissed by the impugned judgment.
Counsel for the appellant strenuously contended that the referenceCourt as well as the High Court have erred in giving an appreciation at therate of 10% per annum for every subsequent year. That the reference Courtcommitted a factual error in calculating the value of the land at Rs. 6.85 persq. ft., According to him, even if, appreciation of value of land is taken at10% on the base price of Rs. 3 for the year 1979, for the next seven years, then the market value of the land in the year 1985 would come to Rs. 5.10 per sq. ft. and not Rs. 6.85 per sq. ft.
Counsel for the respondents fairly conceded that the reference courtmade a factual error in arriving at the value of the land at the rate of Rs. 6.85 per sq. ft. for that year 1985 even taking the appreciation at 10% for the subsequent years. There was no error in giving an appreciation of 10% peryear as lot of developmental activities were going on in an around BagalkotIn fact a new township for Bagalkot was being built as the old area ofBagalkot had Sub-merited in water. But according to him no deduction could be made for development of the land as the base price of Rs. 3/- had been fixed by the High Court in MFA 929 of 1987 after making deductions for the development charges.
After due deliberations on the contentions raised by the counsel for the parties, we are of the opinion that the given facts and circumstancesof the present case the appreciation of 10% per annum given for the subsequent years is neither excessive nor unreasonable so as to call for ourinterference. Counsel for the parties did not dispute that after the sub-version of the old township area of Bagalkot in water, a new township wasbeing built up. For this lot of developmental activities are taking place. This is evident from the fact that number of acquisitions have been made for the development of the new township of Bagalkot. In this order, referencehas been made to the earlier acquisition of 1979. In Civil Appeal Nos.1552-54 of 2000 as well acquisition of the land was made for formation of a linkroad to the new town. We agree with the counsel for the appellant that thereference Court wrongly valued the land at Rs. 6.85 per sq. ft. for the year1985 taking the base price of the land at Rs. 3/- per sq. ft. for the year 1979 on an appreciation of 10% per annum for every subsequent years. Theappreciation of value of land at 10% on the base price of Rs. 3/- per sq. ft.would increase the value of the land @ 0.30 paise per year. 0.30 paisemultiplied by 7 would come to Rs., 2.10 paise. If the appreciation in valueof the land for the next seven years is taken at Rs. 2.10 paise and added tothe base value of Rs. 3/-, the market value of the land under acquisition inthe year 1985 would come to Rs. 5.10 paise. We agree with the counsel for the respondents that deductions on account of development charges from the price fixed cannot be made as the base price of Rs. 3/- had been determinedin the earlier cases after taking into account the development charges.
Taking an overall view of the matter, we fix the value of the land at Rs. 5/- per sq. ft. instead of Rs. 5.50 per sq. ft. which was fixed by thereference Court and upheld by the High Court. The appeal is partly accepted. The market value is fixed at Rs. 5/- per sq. ft. In addition, theclaimants would be entitled to the statutory benefits of solatium and interest etc. These group of appeals before us shall stand allowed to that extend inview of the notification made in the market value to be adopted.
CA Nos. 1552-1554 of 2000
In these appeals the land was acquired by issuing a notification underSection 4 dated 22nd August, 1991, for a public purpose, namely, theformation of link road to the new town, Baglakot Township. It is notdisputed that the land under acquisition is adjacent to the land in CivilAppeal No. 12515 of 1996 and other connected cases. The potential valueof the land under acquisition in these appeals is the same as in the earliercases. The reference Court granted an appreciation of 10% for everysubsequent year. Taking the base price at Rs. 5.50 per sq. ft. fixed foracquisition of the land in the year 1985, as in the earlier cases, at the rate of10% in the value of the land for every subsequent year. As the earlieracquisition was of 1985 and this acquisition is of the year 1991, appreciationfor six years was granted. The reference Court determined the payable market value at Rs. 7/- per sq. ft. which was later confirmed by the HighCourt. In addition statutory benefits of solatium and interest etc. were alsogranted. In the earlier notification for the year 1985 we have fixed themarket value of the land for the year 1985 at Rs. 5/- per sq. ft. On giving an appreciation of 10% in the value of the land for every subsequent year for aperiod of six years the value of the land would come to Rs. 8/- per sq. ft. Theclaimants have not filed either cross appeals or cross objections. The overallvalue of Rs. 7/- per. sq. ft. fixed by the reference Court and confirmed by theHigh Court is thus reasonable and does not call for any interference.
For the reason stated above, the Civil Appeal No. 12515 of 1996.Civil Appeal Nos. 13370-71 of 1996 and CA Nos. 2238-2242 of 2002@SLPC Nos. 21304-21308 of 1996 are partly allowed to the extent indicated in his judgment. Civil Appeal Nos. 1552-1554 of 2000 are dismissed.Parties shall bear their own costs.