U.P.State Electricity Board Lucknow vs Laxmi Narain & Anr.

S.K. Phaujdar, J.—This first appeal is directed against the award of the IInd Addl. Distt. Judge, Agra, recorded on a reference under Section 18 of the Land Acquisition Act, 1894 (in short the Act'') in LA case No. 181 of 1986 which was started before the IInd Addi. District Judge at Agra. The reference was made on the basis of the claim made by Laxmi Narain (the present respondent 1) in connection with an award dated 1541985. His land in plot No. 101 measuring 3 bighas, 15 biswas and 10 biswancies (10405 sq. yards) in Mauza Ashafabad, District Firozabad, was acquired for construction of a 220 KV substation and staff quarters of the U.P. State Electricity Board. A notification was made under Section 4 (1) of the Act on 1991980 and it was followed by a notification under Section 6 (1) of the Act on 1111980. The claimant had filed his claim before the Land Acquisition Officer and compensation was awarded for the acquired 10405 sq. yards of land at the rate of Rs. 18.90 per sq. yard. The Land Acquisition Officer awarded an additional amount of 12 percent per annum on the above sum from the date of notification under Section 4 up to the date of possession. He also allowed solatium at the rate of 30 percent and interest at the rate of 9 percent from the date of taking possession for a period of one year and, thereafter, at the rate of 15 percent per annum. A further amount of Rs. 2703/ was awarded for a well standing on the land. In all, a payment of Rs. 3,75,240.56 p. was made to the claimant.

The claimant had laid a claim at the rate of Rs. 10/ per sq. ft. i.e. Rs. 90/ per sq. yard before the Land Acquisition Officer and the award of the Land Acquisition Officer dissatisfied him and on his prayer the reference under Section 18 of the Act was made on 1131986. The claimants asserted before the reference Court that the compensation awarded was inadequate and he should have been paid at the rate of Rs. 90/ per s q. yard as the land acquired was situated on the AgraKanpur road near the town of Firozabad and had the potentially of a building site. It was stated that facilities of water, electricity, tube well, railways and roadways were available near and surrounding the property and the Land Acquisition Officer had failed to consider the cost of development and of the trees at the time of giving the award.

The claim was opposed by the present appellant contending that the compensation awarded was adequate and proper and was not liable to be enhanced. It was stated that the land was situated away from the road and was only an agricultural land. There were no facilities of water, electricity etc. as alleged by the claimant. Interest and other payment were also duly awarded. The land had no potentiality as a building site and the claim was liable to be dismissed.

The reference Court framed three issues as follows:

Whether the compensation awarded by the Special Land Acquisition Officer was inadequate and, if so, what would be the reasonable, compensation for the land acquired.

Whether the claimant was entitled to solatium and interest at the enhanced rate; and

To what relief, if any, was the claimant entitled ?

On issue No. 1 the reference Court considered the saledeeds produced as exemplars and was of the view that the claimant was entitled to get compensation at the rate of Rs. 65/ per sq. yard. On the second issue, the reference Court found that the claimant had been awarded solatium, additional amount and interest at the rates he had claimed. He only observed that these rates would be applicable on the enhancement made by the reference Court. Accordingly, he decided issue No. 3 also to conclude that the claimant was entitled to a compensation of Rs. 6,76,325/ and on that amount he was further entitled to an additional sum at the rate of Rs. 12/ percent per annum from 1991980 to 2561981 and to interest at the rate of 9 percent per annum on the aforesaid amount w.e.f. 2561981 for one year and thereafter at the rate of 15 percent till the date of actual payment and the amount awarded/received by him shall be deducted from the sum awarded by the reference Court.

In this appeal, learned Counsel for the parties did not question the rate of additional payment, interest or solatium as granted by the Land Acquisition Officer and as confirmed by the reference Court. The amount of compensation, however, rather the rate of compensation per sq. yard of land was seriously disputed by the appellant. The learned Counsel for the appellant also supplemented his oral submissions by a written note of arguments quoting copiously the case laws relied on by him. Learned Counsel for the respondent also analysed the evidence to say that the reference Court had rightly enhanced the amount and he also relied on certain case laws.

The enhancement was made with reference to certain sales which were proved by producing certain copies of saledeeds. These saledeeds were challenged on several grounds. It was stated that without production of the original sale deeds the certified copies could not have been acted upon. It was further stated that the saledeeds could not have been read as exemplars as they were not of the vicinity of the suitproperty or of the time of acquisition. It was further argued that without examination of vendor and vendee of the saledeeds those could not have been relied upon. The saledeed were also challenged on the ground that the same were for small areas and the same rate could not have been given to a large chunk of land. It was stated further that the land was simply an agricultural one without any facility of electricity as admitted by the claimant and the compensation could not have been awarded at the rate prevalent for abadi lands. The learned Counsel for the respondent submitted that the land in question was very near the Firozabad township and had the potentiality of a building site and could have fetched in the open market a better price than even the rate awarded by the reference Court.

I may now take up the caselaws that have been referred to in the written notes. In support of the contention that the saledeeds for small area could not act as exemplars for a big area of land under acquisition, the learned Counsel for the appellant relied on a decision reported in 1996 (1) SCC at page 310 (Prahlad Singh and other v. Union of India). In this case, it was observed, with reference to Section 23 of the Act in fixing the valuation of land for compensation that the price fetched for small plots cannot be applied to large extent of land. It was a case where 8.40 acres of land was acquired out of which the land of the appellants was small in extent. The claimant proposed that the compensation should be enhanced from Rs. 10 per sqr. yard to Rs. 12 per sq. yard on the basis of a saledeed of 560 sq. yard in which the price was fixed at Rs. 12 per sq. yard. The Court was of the view that since it was a small extent of land which formed the basis of the case to determine compensation at the rate of Rs. 10 per sq. yard, the same price would commend when large extent of land is offered for sale to willing purchaser. In this case, however, the High Court had fixed a rate of Rs. 10 persq. yard in another case of that area. In this context reliance was placed on another decision as 1996 (7) SCC 3 (Ratan Lal Gupta and others v. Union of India). It was held herein that when the market value of the acquired land is to be determined on the basis of small plots of land the same price cannot be expected to be realised when a large tract of land is offered to a willing purchaser by a willing vendor. It was further observed herein that the price of land in a developed area cannot be adopted as a pointer to determine the compensation of lands in an undeveloped area. The same view was expresed by the Supreme Court in another case as reported in the case 1995 (2) SCC 428 (Nikky v. Union of India). In this case also two sale instances of 1971 and 1974 was proposed to be relied on for determination of the market valuation of the land acquired, and the Court was of the view that those instances were for small extent of lands and they did not provide reasonable and safe basis nor can be relied on to determine compensation of large extent of land. The finding of the High Court determining the rate of compensation at the rate of Rs. 50000/ per acre was held proper. It was a land near Chandigarh and acquisition was made for establishment of a brick kiln for Chandigarh Housing Board. Initially the compensation was at the rate of Rs. 21,000/ to Rs. 48,000/ according to classification of the land made by the Collector. The reference Court made it uniformly irrespective of classification, at the rate of Rs. 27,000/ per acre. The High Court enhanced the compensation to Rs. 50000/ per acre and still dissatisfied the appellant went to the Supreme Court for further enhancement and the prayer was refused. The exemplars relied upon by the appellant were two sales in 1971 and 1974 showing the price rate at Rs. 37,500/ to Rs. 62,000/ per acre and upon those exemplars the above observation was made. The Bombay High Court, in the case AIR 1969 Bomb. 9, also held that when the land acquired was of a large area of about 5 acres, the price paid for small plots of land could not form the basis for ascertaining the market value of the acquired land notwithstanding the fact that the lands sold therein were in the vicinity of the acquired land. In the decision of the Supreme Court, 1995 (1) SCC 717, also there was an observation that in determining the marked value of a big plot, evidence price of small places of land was not relevant. A similar view was taken by the Orissa High Court in the case of Land Acquisition Collector v. Santa Singh, 1992 (2) Land Acquisition Laws 37.

The other challenges directed against the saledeed were that the originals were not produced and the vendor and vendee of the saledeed, were not examined. On this point, the appellant relied on a decision of the Supreme Court 1995 (7) SCC 347 (State of U.P. v. Rejendra Singh). It was held herein that the burden lies on the claimant, like a plaintiff, to prove proper, just and adequate compensation to the acquired land. Thereafter the burden would shift on the State to disprove it. It was held further the sale transactions were not evidenced unless the vendor and vendee had been examined in the court. It was also held herein that the reference Court could carefully evaluate the evidence and determine the marketfee avoiding unjust burden on the exchequre. The matter arises out of an acquisition of more than 5 acres of agricultural land in the district of Azamgarh. The award of the Land Acquisition Officer was made in 1985 and, upon a reference, an award was given by the reference Court in 1988 enhancing the compensation to Rs. 30,000 per acre. Upon first appeal the amount was further enhanced to almost Rs. 70,000/ per acre and, thereafter, upon special leave, the Supreme Court was approached. In making the observations, as indicated above, the Supreme Court set aside the awards of the reference Court and of the High Court and remitted that matter to the reference Court to give an opportunity to the parties to adduce evidence and to determine the compensation according to law. In the case under reference Court sale transactions were relied upon but neither the vendors nor the vendee was examined in any case nor was it established that the sale consideration which passed thereunder was true and the price for which the sales came to be executed were real ones between the willing vendors and willing vendee. The remand order was made under the above circumstances. This was also a case arising from the State of Uttar Pradesh. On the point of production of the original saledeed, learned Counsel for the respondent relied on Section 90A of the Indian Evidence Act as introduced in Uttar Pradesh by an amending Act in the year 1954. Under Section 90A where a registered document or a duly certified copy thereof is produced from any custody which the Court considered proper, the Court was entitled to draw a presumption that the original was executed by the person by whom it purports to have been executed. Learned Counsel for the respondent also drew my attention to the provisions of Section 51A of the Land Acquisition Act as introduced by Amending Act No. 68 of 1984. Under this Section a certified copy of a document registered under the Registration Act including a copy given under Section 57 of that Act may be accepted as evidence of the transaction recorded in such document. In the case of State of Uttar Pradesh v. Rejendra Singh, (supra) neither of the parties raised the question of relevancy of Section 90A of the Indian Evidence Act or Section 51A of the Land Acquisition Act to the facts of that case and the Supreme Court had not given any interpretation to these two provisions of law allowing the reference Court to presume the truth of a sale transaction from the certified copy of a registered saledeed. The observation that the vendor or the vendee was to be examined is to be seen in the light of the facts agitated before the Supreme Court and it has observed that "it was the duty of the Court to carefully assess the evidence on the touchstone of human conduct and prudent purchaser". It is to be inferred, therefore, that the requirement of examination of the vendor and the vendee was stated in the peculiar circumstances of the case before the Supreme Court and not in any way as an interpretation of Section 90A of the Indian Evidence Actor Section51A of the Land Acquisition Act, The contention of the appellant on this point, therefore, is to be discarded.

A reading of the judgment indicates that the Judge took up the question of adequacy of the compensation awarded by the Special Land Acquisition Officer, under issue No. 1. The learned reference Court had narrated the claim of Laxmi Narain regarding the situation of the land and the facilities available thereto. He had also indicated what was the defence evidence on the point. But he had mainly built up his reasonings for enhancement of compensation on the basis of saledeed dated 551980, 1811980, 2051981. Hed had rightly discarded the other saledeeds produced by the claimant which had no proximity of time with the acquisition. His reasoning for discarding the saledeeds produced by the defendants was that it was executed much prior to the date of acquisition. It may be noted that this saledeed reduced by the defendants was dated 101980. He also discarded it on the ground that it was not in the proximity of the acquired land.

The land acquired measured a little more than 10,000/ sq. yard. The land was admittedly not an abadi one. Ext. 1 in the reference Court indicated that it measured 3 bighas 15 biswas and 10 biswancies out of which 2 bigha and 10 biswancies were unirrigated and only one bigha and 15 biswas were irrigated. There is nothing in Ext. 1 to indicate that it was an abadi one. Ext. 2 is a saledeed dated 551980. This was for sale of land in a residential area measuring 1320 sq. ft. and the price paid was Rs. 12,000. This sale was, therefore, for a small piece of land measuring less than 150 sq. yard in a residential area. Ext. 3 is again a sale of 100 sq. ft. of land for Rs. 800/ and it was admitted that the land was selling at Rs. 5/ per sq. ft. although a higher rate was given in this transaction. The boundary of the land as given in Ext. 2 indicates that there was a lane to the East, houses to the West and South and a road to the North indicating clearly that it was also a building site. This area was also only 11 sq. yard compared to 10000 sq. for the acquired land. Ext. 4 is also for this very land and this saledeed is dated May, 1981, and the sale price Rs. 1000/. The other saledeed had no proximity of time with the acquisition and it is not necessary to discuss the merits thereof. The defence sale deed was Ext. A1 showing sale of a part of a land measuring 10 biswa at the rate of Rs. 2.50 per sq. ft. yard, i.e. Rs. 22.50 per sq. yard, but here also the area is too small compared to the area under acquisition.

It must, therefore, be hold that the exemplars relied upon by the parties could not have been acted upon in view of the consistent decisions of the Supreme Court that for a large extent of land comparison cannot be made with the saleprice of small areas of land. The learned reference Court also missed to note that the exemplars relied upon by him to enhance the compensation were all for residential plots whereas the acquired plot was not a residential one. Rather, admittedly, it was an agricultural land. It is true that he had made an observation that the plot was quite near the road and had a building potentiality. On this observation again, the learned Counsel for the appellant placed a caselaw as 1995 (1) SCC 424. It was held herein, in paragraph 5, that Section 24 of the Land Acquisition Act expressly prohibited and put an embarge on the Court in taking the factors mentioned in Section 24, as relevant in determining the market value. Potential value for future development is not a relevant point in clause fifthly of Section 24."

Upon these considerations, it must be held that the approach of the learned reference Court in determining the market value was not according to law and the award recorded by it must be set aside. This Court, however, is not left with any standard from which the market value in the area can be assessed. It is necessary to have evidence on that point on record. Accordingly, the appeal stands allowed. The award of the learned reference Court is set aside and the case is remitted back to the reference Court to give a fresh opportunity to the claimant as well as the other party to adduce proper evidence towards determination of market value of the land and then to determine the compensation according to law. The lower Court records and a copy of the present order be sent down immediately to the concerned reference Court. The parties are directed to bear their costs, and further asked that they should appear before the reference Court on 23rd September, 1995.