1. Two Appeals are filed by the original claimants and remaining two Appeals are filed by the State Govt. to challenge the Judgments and Awards of L.A.R. No. 1243/2002 and 1244/2002, which were pending in the Court of the Civil Judge [Sr.Division], Osmanabad. As the compensation is enhanced u/s 18 of the Land Acquisition Act [for short, 'Act'], State Govt. has challenged the decision and as the compensation is not given as per some sale instances proved by the claimants, they have filed the Appeals. Both sides are heard.
2. The lands of both the claimants are acquired for the construction of residential quarters for the servants of State Govt. 40 R. land of claimant from Reference No. 1243/2002 is acquired from S.No. 220/4/b. 20 R. portion from the same land of the claimant from Reference No. 1244/2002 is acquired for the same purpose and for the purpose of construction of road and for aforesaid purpose one more land of 30 R. portion from S.No. 212/2/6 of the claimant from Reference No. 1244/2002 is acquired. The lands are situated at Bhoom and within the local limits of municipal council, Bhoom.
3. The possession of the lands was taken by private negotiations by the Govt. on 14/09/1984. In the case of land of claimant from Reference No. 1243/2002, the Notification u/s 4 of the Act was published in official gazette on 04/02/1999. On the same day, the Notification was published in other matter also. However, the Award was prepared in the matter of claimant from Reference No. 1243/2002 on 26/03/2002 and in the other matter, the Award was prepared by the Special Land Acquisition Officer [for short, 'S.L.A.O.'] on 06/04/2002.
4. The S.L.A.O. collected information about the sale instances of Bhoom of 3 years period preceding the date of publication of Notification u/s 4 of the Act. Land S.No. 220/4/b was already converted to non agriculture purpose use. Surrounding both lands viz. S.Nos. 220/4/b and 212, there are offices of Govt. department, there is office of Municipal Council, there is Rural hospital, there are schools and colleges and there is also the area of M.I.D.C. As per the census of the year 1991, the population of Bhoom was 17,510.
5. In both the Awards, the S.L.A.O. considered 8 sale instances of Bhoom, which were executed between 10/06/1996 and 16/02/1998. There were 3 sale instances in respect of some portions of S.No. 212 of the year 1996 and 1998. The minimum price given was Rs. 17.7 per Sq. Ft. and the maximum price given was Rs.43/- per Sq. Ft. [in the year 1998]. There were 2 sale instances in respect of land S.No. 220 and in both the cases, 92 R. portion was sold for the consideration of Rs. 35,000/- and so the price was Rs. 38/- per Sq. Ft.
6. The S.L.A.O. took into consideration the two sale instances in respect of S.No. 220 of the year 1997 and held that in 1997 the price was around Rs. 377/- per Sq. Mtr. He gave enhancement of 23 % as the sale deed was more than 2 years old and held that the land converted to non agriculture purpose of such small piece, would have been sold in the year 1999 @ Rs. 463.7/- per Sq. Mtr.
7. Before fixing the market price for giving compensation, the S.L.A.O. considered the plan approved by the Town Planner when S.No. 220/2/4 was converted to non agriculture land. On the basis of the plan, S.L.A.O. held that 2336 Sq. Mtrs. area was available for use from the area of 40 R. of the claimant of L.A.R. No. 1243/2002. Then the S.L.A.O. divided area of 2336 Sq. Mtrs. into two portions. The S.L.A.O. held that area of 701 Sq. Mtrs. was having frontage of main road, public road and so the rate of Rs. 600/- per Sq. Mtr. can be given to that portion. He held that for the area of 1635 Sq. Mtrs., the rate of Rs. 464/- per Sq. Mtr., as fixed above, can be given. From the amount of compensation, he held that the development charges @ 5 % per Sq. Mtr. need to be deducted as per the rules of development made for the area situated within the limits of local body. He held that 5% amount needs to be deducted towards the fees of the developers and 15 % amount needs to be deducted as the profit, the developer could have earned. Thus, he gave the rate of Rs. 232/- per Sq. Mtr. if the area of 40 R., which was actually acquired, is considered.
8. In second matter, for ascertaining the market price of portion of 20 R. acquired from S.No. 220/4/b, the S.L.A.O. considered the same two sale instances of the year 1997. However, the S.L.A.O. held that the market price was around Rs. 350/- per Sq. Mtr. when in the previous matter, he had held that the market price was around Rs. 377/- per Sq. Mtr. He held that after giving increase of 10 % per year in respect of sale instance, the market price on the relevant date can be Rs. 452/- per Sq. Mtr. In the previous matter, he had held that the market price of the land from sale instances of relevant date was around Rs. 464/- per Sq. Mtr. It is surprising that the same S.L.A.O. had prepared both the Awards but he held that the market price of the same sale instance land on the relevant date, which was the same for both the cases, was different.
9. In the first matter, as already observed, the area of 1664 Sq. Mtrs. was deducted from the area of 40 R. by holding that this area was required to be kept vacant and compensation was calculated in respect of the remaining area. In the second matter, the S.L.A.O. considered the area which was already left for development in the development plan like for second road, 68.85 Sq. Mtrs. for gardening plant, 336 Mtrs. For 5BJ%5D .odt first internal development road [68.85 Sq.Mtrs.], etc.
10. In the second matter, the S.L.A.O. considered the set back also, the space which was not allowed to be developed due to existence of adjacent State road as per State Highway Act [area of 135 Sq. Mtrs.]. Thus, from the total area of 20 R., the S.L.A.O. deducted 609.30 Sq. Mtrs. area and held that the compensation can be given only in respect of remaining area of 1390 Sq. Mtrs. In the second case also, the compensation at the same rate is not given for the area of 1390 Sq. Mtrs. The S.L.A.O. further held that the area of 1390 Sq. Mtrs. could not have been actually used and reduced the area further by 848 Sq. Mtrs. He then calculated the compensation in respect of the area of 848 Sq. Mtrs. and gave the rate of Rs. 452/- per Sq. Mtr. From this amount also, he reduced the amount of 5 % as the development charges of local body, 5 % as the fees of the developer and 15 % as the profit which could have been made by the developer. Due to this procedure adopted by the S.L.A.O., the rate actually given even for the area of 1390 Sq. Mtrs. Is Rs. 217/- per Sq. Mtr. For the road which was in existence as the internal road in the development map, he gave nominal price of Rupee 1-/-.
11. In the second matter, 30 R. from S.No. 212/1/b is acquired. The S.L.A.O. divided this land into 2 pieces like it was done in the first Land Acquisition Reference. He held that for the area of 1000 Sq. Mtrs., there was frontage of State road and so different rate needs to be given. He further held that the area of only 1220 Sq. Mtrs. could have been used from the remaining area of 2000 Sq. Mtrs. if the property was developed. No particular reasons are given for such deduction. This land was not converted to non agriculture land. Sale instance of aforesaid rate of more than R s. 460/- per Sq. Mtr. was available, though in respect of S.No. 220. In the second matter, on the basis of other sale deed, he held that the market price of the sale instance land was around Rs. 271.7/- per Sq. Mtr. He gave increase for the period of more than 2 years in this rate and he assumed that the sale instance land could have been sold @ Rs. 351/- per Sq. Mtr. on the relevant date. He calculated compensation by using this rate for the area of 1220 Sq. Mtrs. From this compensation also, he deducted the charges like 5 % development fees of local body, 5 % as the development fees to the developer and 15 % as the profit of the developer. Due to this approach, it can be said that he gave the rate of Rs. 168/- per Sq. Mtr. for the area of 2000 Sq. Mtrs., the second piece of land which was not that adjacent to the public road. For the area of 1000 Sq. Mtrs., which was just adjacent to the State road, the S.L.A.O. considered the sale deed of 1997 which was in respect of S.No. 220. For this rate, he gave increase of 10 %, but in this case also he committed mistake and held that the market price of the sale instance land on the relevant date was Rs. 351/- per Sq. Mtr. He did not give the compensation at this rate in respect of acquired area of 1000 Sq. Mtrs. but he deducted 35 % space from the area of 1000 Sq. Mtrs. by holding that such area was required to be left for development. He calculated the compensation in respect of the remaining area of 650 Sq. Mtrs. and gave rate of Rs. 351/- per Sq. Mtr. Like in other matters, from this compensation amount also he deducted the development fees of the local body of 5 %, development fees of 5 % of the developer and 15 % profit of the developer. Thus, it can be said that for the area of 1000 Sq. Mtrs., which was adjacent to the State road, he gave the rate of 179 per Sq. Mtr. if the compensation is considered for this area.
12. The Reference Court has considered the sale instance at Exh. 31 as comparable sale instance. The Reference Court held that in the sale instances, the rate was Rs. 100/- per Sq. feet. First the Reference Court deducted 20 % area from the total area acquired in both the References and then gave rate of Rs. 70/- per Sq. feet [Rs. 700/- per Sq. Mtr.] for 80 % area.
13. The Reference Court has awarded the statutory benefits and interest in both the matters as follows :
[i] Interest @ 9 % per annum u/s 34 of the Act for first year starting from 14/09/1984 [date of possession].
[ii] Interest @ 15 % per annum u/s 34 of the Act after completion of one year from 14/09/1984 till the period 13/08/2003, the date of decision of the Reference Court.
[iii] The Reference Court gave the component of 12 % from 23/03/1999 to 06/04/2002.
[iv] Solatium at statutory rate is given.
14. The State is feeling aggrieved as compensation is enhanced by the Reference Court by giving the rate of R s. 700/- per Sq. Mtr. and by holding that the compensation needs to be given for more area than what was given by the S.L.A.O. The State is aggrieved also for the reason that interest @ 9 % and 15 % per annum is given from the date of possession, when in law it is not permissible to give interest for the period prior to the date of Notification u/s 4 of the Act. On the other hand, the claimants have contended in the Appeals that when the sale instances like Exhs. 30 and 31 were proved, the Reference Court ought to have given higher rate as per the rate mentioned in the sale instances. There is also the grievance that the area to the extent of 20 % is reduced for giving the compensation.
15. Broadly, it can be said that the S.L.A.O. had considered the sale instances of the year 1998 and had held that the market price was more than Rs. 40/- per Sq. feet for the sale instance land in the year 1998. The sale instance at Exh. 31 used by the Reference Court was of the transaction dated 04/09/1996. For consideration of Rs. 1.9/- Lakh, open space of the size 49.5 x 16.5 feet was sold and this portion of house Nos. 1480 and 1481/1 was situated at Bhoom. As per the description of the property given in the sale instance, the total area sold comes to around 816.7/- Sq. feet. Considering the consideration given for this area, it can be said that the rate of Rs. 232.5/- per Sq. feet was given in the year 1996. However, the Reference Court held that the area sold in this sale deed was 1906 Sq. Fts. It appears that the 2 portions of the property described in the sale deed at the beginning were considered as the portion sold, when only the area of 816.7/- Sq. feet was sold. At this stage, it needs to be observed that in the sale deed, the survey number, on which two house properties were situated, is not given in the sale deed. The properties were described in assessment record of Municipal Council as the house properties and so they were having all the amenities and they were fully developed. Though only open space is mentioned in the sale deed, house number was given by the local body and so the possibility like the presence of construction on the space can not be ruled out.
16. The other sale instance proved by the claimant is Exh. 30, which is dated 05/04/1995. The area of 33 feet x 10.5 Mtrs. from S.No. 220 was sold under the sale deed. To this property also in the assessment record of the local body, number was given as municipal house No. 2012. Thus, this property was also having all the amenities of fully developed property and it was considered as the house by the local body. The aforesaid area was sold for the consideration of Rs. 3/- Lakh and the area sold was around 1122 Sq. feet. Thus, the rate was given around Rs. 267/- per Sq. feet. In this matter also, the Reference Court committed mistake in ascertaining the rate given to the land of the sale instance. However, the rate of Exh. 30 was not considered for awarding compensation. It can be further said that the rates of both the sale deeds from Exhs. 30 and 31 were not used and applied by the Reference Court.
17. No reason is given by the Reference Court as to why it was giving the rate of Rs. 70/- per Sq. feet. It can be said that the S.L.A.O. had considered the sale instances in respect of S.Nos. 212 and 220 of highest rate which were in respect of open space.
18. It is already observed that in Exhs. 30 and 31, though it is shown that they were open space, they were house properties and they were given number as such by local body. They were fully developed properties situated within the local limits and as they were house properties having independent number, they could have been sold by mentioning house numbers. Same is not the case in respect of the properties acquired in the present matter. Unfortunately, in the evidence of S.L.A.O. examined by the Govt., explanation was not sought by the counsel of the claimant or the Govt. Pleader as to why the sale instances at Exhs. 30 and 31 were not considered. In any case, there is sufficient record of aforesaid nature and so this Court holds that Exhs. 30 and 31 can not be considered as comparable sale instances. Even in the claim made before the S.L.A.O., the rate was not claimed on the basis of Exhs. 30 and 31 and it was claimed as Rs. 150/- per Sq. feet without giving any justification. These circumstances are brought on record in the cross examination of the S.L.A.O. In the cases like present one, the circumstance that the possession was taken by the Govt. in the year 1984, can not be ignored as it is relevant. The possibility of creation of record of sale deeds of higher rate is always there, as in future the S.L.A.O. is expected to ascertain the market price and to prepare the Award. In view of such possibility, the Courts are expected to closely scrutinize the evidence of sale instance given by the claimant. It is always necessary to ascertain as to whether the consideration shown in the sale instances was the real consideration. In one sale instance, meager consideration was paid in the presence of the Sub Registrar and it was shown that the consideration of Rs. 1/- Lakh was to be paid by the purchaser afterwards. Further, the possibility of existence of construction on the property described in the sale instance is there, as they were described as house properties in the record of local body. The value of the construction is not known and so, the sale instances are not comparable sale instances.
19. In the present matter, only 2 pieces of land from S.No. 220/4/6 were converted to non agriculture land. At the time of conversion of the agriculture land to non agriculture land, development plan is required to be prepared by the owner and approval of Planning authority is required to be obtained. In respect of S.No. 220, there was such development plan in existence, but in the present matter, that development plan can not be given much weight as the property was not actually developed or sold on the basis of the development plan. The development plan is prepared as per the requirements of the owner and the steps which he wants to take for development. It can be said that at the most the maximum space which is required to be kept for development of such pieces of land as per the development rules can be considered. The circumstance that the Govt. wanted to use all the 3 pieces of lands together for the construction of residential quarters of Govt. employees need to be kept in mind. The Govt. must have submitted new development plan in respect of 3 properties. The State ought to have produced that record in the References. Unfortunately that was not done. The approach of the S.L.A.O. that in respect of the portion which could not have been developed by the owner due to the provisions of the High Way Act, compensation can not be given in respect of the said portion, was also not correct. This space was also owned by the claimant and so if the Govt. wanted to acquire the land even for road widening purpose, Govt. was required to pay compensation in respect of that portion.
20. The observation made above shows that the approach of the S.L.A.O. was not correct. It is already observed that the 2 sale instances like Exhs. 30 and 31 can not be treated as comparable sale instances and the Reference Court has given the compensation on the basis of the rate given in Exh. 31. Both the sides have challenged the decision of the Reference Court and the challenge of the Govt. is on the other ground also, as already quoted. The question arises as to how the market rate can be ascertained in the present matters.
21. Both the sides placed reliance on some reported cases on the procedure which needs to be followed to ascertain the compensation in such cases. For the State, learned A.G.P. placed reliance on the case reported as (2005) 4 Supreme Court Cases 789 [Viluben Jhalejar Contractor (Dead) by L.Rs. Vs. State of Gujrat]. In this case the principles for determination of market value are considered and discussed by the Apex Court. The observations are at para No. 20, as under:
The amount of compensation can not be ascertained with mathematical accuracy. A comparable instance has to be identified having regard to the proximity from time angle as well as proximity from situation angle. For determining the market value of the land under acquisition, suitable adjustment has to be made having regard to various positive and negative factors visavis the land under acquisition by placing the two in juxtaposition. The positive and negative factors are as under :
| Positive factors | Negative factors |
| (i) smallness of size | (i) largeness of area |
| (ii) proximity to a road | (i) situation in the interior at a distance from the road |
| (iii) frontage on a road | (iii) narrow strip of land with very smallfrontage compared todepth |
| (iv) nearness to developed area | (iv) lower level requiring the depressed portion to be filled up |
| (v) regular shape | (v) remoteness fromdeveloped locality |
| (vi) level visavisland under acquisition | (vi) some special disadvantageous factors which woulddeter a purchaser. |
| (vii) special value for an owner of an adjoining property to whom it may have some very special advantage. |
23. The S.L.A.O. had considered the sale deed dated 24/02/1998, but as the copy of said sale deed was not produced, it is difficult to say as to whether the said land had the advantage of frontage of State road. It also needs to be kept in mind that due to existence of State road on one side of the land, on that side it would not have been necessary to prepare one more road at the time of development of the property. Some observations are already made in respect of the development plan which must have been prepared by the Govt. in respect of the lands acquired. In the case reported as (2014) 16 Supreme Court Cases 274 [Indian Council of Medical Research Vs. T.N.Sanikop and Anr.] more observations are made by the Apex Court on the principles which are applicable in such cases for determining the market rate. In that case, the market rate was reduced from Rs. 1.65 Lakh which was shown in the sale instance for 4 R. land when the area acquired was 40 R. In the present matter also, the circumstance that bigger areas are acquired than the areas shown in the sale instances considered by the S.L.A.O., can be considered. On that ground, the rate could have been reduced to some extent, as some amount would have been spent for development of the area acquired as observed by the Apex Court. To what extent the rate can be reduced depends on many factors as observed by the Apex Court. It is already observed that the acquired lands were in the vicinity of Govt. offices, hospital, S.T. depot., District Court, school, college, etc. One road was adjacent to these lands and main road, Beed road, was at the distance of 50 100 Meters. In view of these circumstances, this Court holds that if at all some deduction can be made in the rate in view of the guide lines given by the Apex Court, that deduction can be at the most 33 %. There can not be deduction of area while giving compensation and 2 different rates can not be given for 2 different areas like the area adjacent to the State road and area beyond that adjacent portion.
24. On the basis of the highest rate sale instance available in the record of the S.L.A.O., this Court holds that the market price of the land from the sale instance on the relevant date was Rs. 473/- per Sq. Mtr. After deducting 33 % value, the market price comes to Rs. 317/- per Sq. Mtr. This Court holds that the compensation needs to be given at this rate and in respect of the entire area acquired in these References by the Govt. [viz. 40 R., 30 R., 20 R.].
25. Learned A.G.P. placed reliance on reported case viz. 2012 (4) ALL MR 779 [Lalitkumar Himmatlal Shah Vs. The State of Maharashtra and Ors.]. In this case, this Court considered reported cases of Apex Court viz. 2004 (5) ALL MR (SC) 435 [R.L.Jain (D) by L.Rs. Vs. DDA and Ors.] and [2004] 5 ALL MR [SC] 19 [ Smt. Lila Ghosh Vs. State of West Bengal].
At para No. 10, observations are made as under:
The issue involved in that case was whether in a case where possession is taken before issuance of Section 4 notification, the claimant is entitled to interest for such anterior period in accordance with Section 34 of the Act. The Hon'ble Supreme Court while dismissing the appeals filed by the claimants for grant of interest on compensation from the date of dispossession observed that the normal rule of payment of interest under Section 34 of the Act from the date of dispossession till the date of payment of compensation would apply only in cases where the land has been acquired after the issuance of the preliminary notification under Section 4 of the Act. The Supreme Court observed that the scheme of the Act does not contemplate taking of possession prior to the issuance of notification under 4 (1) of the Act and if the possession is taken prior to the said notification, it will be dehors the Act. It is for this reason that both Sections 11 (1) and 23 (1) enjoin the determination of the market value of the land on the date of publication of notification under Section 4 (1) of the Act for the purpose of determining the amount of compensation to be awarded for the land acquired under the Act. The Hon'ble Supreme Court observed that the provisions show in unmistakable terms that the publication of notification under Section 4 (1) is the sine qua non for any proceedings under the Act. In the facts of that case, the Collector had granted interest at the rate of nine per cent from the date of possession for a period of one year and at the rate of 15 per cent till the date of passing of the award. The Delhi Development Authority had filed an appeal before the High Court and the High Court while allowing the appeal filed by the Authority had held that the interest awarded under Section 34 of the Act was without jurisdiction and had set it aside.
26. In view of the observations made by the Apex Court and this Court with regard to the permissibility of giving interest in respect of the period between the date of possession and Section 4 notification when possession was taken prior to Section 4 Notification, this Court holds that the Reference Court has committed mistake in giving interest in respect of the said period. It is already observed that in the present matter, the interest @ 9 % per annum and also @ 15 % per annum is given from the date of possession, year 1984, when Notification was published u/s 4 of the Act, in the year 1999. In view of the law laid down in the aforesaid cases, this Court holds that the decision of the Reference Court needs to be interfered with for setting aside the said part of the order.
27. In the present matters, the record subsequently produced shows that, in view of the direction given by this Court, rental compensation was paid even when the present Appeals were pending. On this point, reliance was placed by the learned A.G.P. on the case reported as (2013) 14 Supreme Court Cases 8 [Kazi Akiloddin Sujaoddin Vs. State of Maharashtra and Ors.]. In this case, the Apex Court has laid down that the Court has no power to order to give rental compensation on the basis of the decision given by the Reference Court when the decision is under challenge in the First Appeal. Thus, if more rental compensation is already given, that needs to be adjusted.
28. In the result, following order is made.
ORDER
[i] All the Appeals, the Appeals filed by the claimants and the Appeals filed by the Govt., are partly allowed.
[ii] The Judgments and Awards of the Reference Court are modified to give the rate of Rs. 317/- per Sq. Mtrs. This rate is to be given in respect of the entire area of the claimants acquired by the Govt.
[iii] The claimants are entitled to solatium of 30 % on the compensation amount.
[iv] The claimants are entitled to the component of 12 % and it is to be paid from the date of Notification published u/s 4 of the Land Acquisition Act till the date of Award.
[v] The interest @ 9 % per annum is payable on the compensation amount for the period of one year from the date of Notification u/s 4 of the Land Acquisition Act and the interest @ 15 % per annum is payable from the date of Award till the date of realization of the compensation amount.
[vi] The rental compensation is to be calculated on the basis of aforesaid compensation fixed in these proceedings. The amount of rental compensation already paid is to be adjusted against the compensation awarded to the claimants, against the amount which is now payable to the claimants if higher rental compensation is already paid. If the claimants are entitled to get more amount than the amount already deposited by the Govt. in the Court, they will be entitled for the execution of the present Judgment and Award. Similarly, if more amount is already given by the Govt., the Govt. will be entitled to use the present decision for recovery of the amount paid in excess.
[vii] To aforesaid extent the Judgments and Awards of the Reference Court are set aside.
[viii] Award is to be prepared accordingly.
[ix] Authenticated copy of this Judgment be given to the parties.