1. Judgment dated 31/12/1999 delivered by Joint Civil Judge, Senior Division, Amravati in Reference proceedings land acquisition case 13 of 1988 under Section 18 of the Land Acquisition Act,1894 (hereinafter referred to as "the 1894 Act" for short), is assailed by both parties i.e., the landowners as also acquiring authority in these appeals under Section 54 thereof. Said reference arose out of award dated 16/7/1987 in L.A.C. 3/LAQ- 47/83/84 made by the Land Acquisition Officer for and on behalf State of Maharashtra. Notification under Section 4 of the 1894 Act was published on 19/2/1984. While admitting First Appeal No. 53/2001 filed by State, this Court on 12/2/2001 granted stay in terms of prayer clause (I) of Civil Application No.656/2001 on appellant- State depositing decreed amount with Trial Court within period of 8 weeks. That order continues to operate even today.
2. Civil Application (F) No. 2282/2011 is taken out by landowners pointing out death of appellant no.4 on 4th August 2011 and seeking leave to amend as per its schedule to bring his legal heir on record. State government is also asked to effect similar amendment in its First Appeal No. 53/2001, though no formal application is as yet moved by it. Shri J.J. Chandurkar, learned Counsel for said legal heir viz. Smt. Damyanti states that he is appearing for her in both the matters. State Government has without prejudice to its rights to verify the position, sought oral leave to substitute similarly. Accordingly, We permit respective Appellants to amend their respective memo of appeals forthwith.
3. Plot no. 1 Nazul Survey no. 14 of Amravati town formed subject matter of acquisition. The area as per last notification under Section 17 (1) dated 18/7/1985 is 54,168.86 Sq. Mtrs. and landowners claim it to be 60790 Sq. Mtrs. The award granted them compensation of Rs. 34,67,030/- towards land, structures, trees and statutory benefits. Trial Court or Reference Court found area acquired to be 59,870 Sq. Mtrs. as per report if Court Commissioner. By following hypothetical plotting method and using comparable sale instances, it arrived at rate of Rs. 19.50 per sq. ft. for belt-1 plots, Rs. 16.50 per sq. ft. for belt-2 plots and Rs. 13.70 per sq. ft. for belt-3 plots. Total amount for all three belts thus worked out by it was Rs. 74,06,128/-. It then followed judgment of Hon'ble Apex Court reported at AIR 1998 SC 700 (Hasanali Walimchand vs. State of Maharashtra) to deduct 50% towards developments and found Rs. 37,03,064/- as value of acquired land. It also found them entitled to Rs. 17,57,521/- towards costs of structures on acquired land, Rs.22,120/-as value of barbed wire fencing and Rs. 2990/- as value of trees. Out of this Rs. 54,85,895/- as sum of Rs. 20,30,116/- was already received by landowners, it granted them balance amount of Rs. 34,55,779/-. The premises were being used by State for office of Divisional Commissioner, Amravati since 1/1/1981 and on 6/8/1985 possession was taken by it after invoking urgency clause. Trial Court therefore granted them compensation under Section 23(1-A) of the 1894 Act, from 1/1/1981 till 16/7/1987 i.e., date of award calculated at 12% P.A., on the market value (Rs.14,77,740/-) of big bungalow. Said sum given by it is Rs. 11,52,637/-. It granted them compensation at 12% PA under Section 23(1-A) on other property from 6/8/1985 till 16/7/1987 at Rs. 9,21,877/-. It thus awarded to them total sum of Rs. 75,60,409/-. It deducted from this total, a sum of Rs. 20,30,116/- already awarded by land acquisition officer and declared landowners entitled to receive Rs. 55,30,293/- more with 30% solatium on it under Section 23(2), interest on balance costs and solatium at 9% on it from 16/7/1987 to 15/7/1988 and at 15% thereafter as per Section 28/34 of the 1894 Act. Before us there is no dispute that direction to pay solatium on Section 23(1-A) grant is unsustainable.
4. Shri Korde, learned Senior Counsel for landowners has strongly relied upon the appointment of district inspector of land records as court commissioner to find out exact area of land acquired to show that land in excess not covered under area in award under Section 11 is also found acquired and hence, grant of compensation by LAO is incorrect. He further argues that landowners and LAO have both resorted to hypothetical plotting method to determine compensation but then Trial Court has for valid reasons held report/lay-out drawn by landowners expert Shri Gandhi at Ex. 195 more reliable. In this view of matter, it could not have discarded the belting scheme used by Shri Gandhi and substituted it by its own estimate. The placement of acquired land, its more altitude and therefore superior position in market as compared to adjacent lands is all narrated in detail by Shri Gandhi and Trial Court overlooked it for no valid reason. Layout of Sant Sadguru Sitaram Maharaj Sansthan (SMS layout) Public Trust in plot no. 2 along with other plots in the vicinity have been used by Shri Gandhi as measure to determine the market value. The placement of said land is much better than adjacent plot no. 2 where a layout has come up in 1982/1983 and sales of plots from that layout are treated as comparable by Trial Court. Shri Gandhi therefore made 25% allowance over and above price fetched by plots in that layout and Trial Court could not have ignored it. Similarly, the layout in plot no. 1(acquired land) has got frontage on public roads on three sides and hence belting of all such plots in layout with said benefit in first belt by him could not have been faulted with. Deductions ordered by it are at variance with report of said expert and when evidence on record proved need of no such expenditure here, the Trial court could not have invoked the thumb rule. In any case, looking to instances of or nature/extent of development in adjacent layouts, deductions of 50% from land price determined is exorbitant and arbitrary. He also places strong reliance on evidence of Shri Ganeriwal the managing trustee of SMS Trust. The distance between plots in that layout and in proposed plots in acquired land is only 400 meters. Shri Gandhi has worked out market price of plots in acquired land after calculating the annual escalation, made allowance for valid reasons and assigned grounds for no development expenditure. He has not been subjected to any cross-examination in this regard and hence, Trial Court erred in not acting upon that evaluation. He points out that Shri Gandhi has already deducted about 25% of land-area for development activities like roads, garden etc. Hence, further deductions of 50% flat again by Trial Court is not supported by records and unwarranted. According to learned Senior Counsel landowners have suffered total deductions of 75% thereby. Shri Gandhi's layout held as better by Trial Court needed to be acted upon by maintaining belting exercise therein as it is. His reasons for not making any adjustment towards deferment factor also needed acceptance. Plans of Shri Gandhi and other plans on record are relied upon to show relative placement and to justify treatment thereto for valuation. Plots 53 to 63 placed behind first row must be treated as in 2 nd belt. It is urged that plots shown in yellow and on Chilamshah wali road must be valued at rate between 1st belt rate and 2nd belt rate.
5. Learned Senior Counsel then pointed out how the expert has applied a well known method of "sinking fund" and used CSR rates by adding 25% to it to match the type of construction available while working out its cost. The scientific method adopted by him have not been doubted in cross by the State. It is further contended that evidence of Shri Deshmukh, LAO is biased and hence, not acceptable. Similarly, though other witness Shri Kale accepted that structures may have future life of 30 to 40 years, he in calculations adopted it to be 7 years only. His evidence is also urged to be biased and his failure to support his computation in Court despite grant of adjournments is pressed into service to discard it. Comparative chart prepared to show at glance the working of costs of structures by following sinking fund method (used by Shri Gandhi) and constant% method (used by State's witness Shri Kale) to age and future life (30 years) of respective structures mostly due to Kale's evidence that future life was of about 30 to 40 years is also pressed into service.
6. He has placed reliance upon various judgments of Hon'ble Apex Court to substantiate his contentions and to demonstrate how the Trial Court has misdirected its exercise. (2011) 6 SCC 47 - (Trishala Jain and another vs. State Of Uttarchal and another) is relied upon to explain the principles of guesstimate. (2009) 15 SCC 769 (Lal Chand vs. Union of India and another) is shown to justify need of proper deduction for development costs and its extent. (2010) 1 SCC 444 - (Subh Ram and Others vs. State of Haryana and another) is cited to urge that 40% deduction is ideal in such matters. He invited attention to impugned judgment in an attempt to demonstrate those errors. He fairly stated that though damages awarded for period from 1/1/1981 till 19/2/1984 under Section 23(1-A) of the 1894 Act are unsustainable, he supported grant by pointing out the views expressed relief given by Hon'ble 3 Judges of Apex Court (2004) 4 SCC 79 (R.L. Jain vs. DDA and others), even for such loss of possession and need to award rental compensation in such facts. The Reference Court should have granted damages in lieu of rent lost and interest at the bank rate upon the sum of damages. Similar view reached in (2003) 7 SCC 448 (para 3 and 9) (State of Maharashtra and others vs. Maimuma Banu and others) is also shown. (2005) 12 SCC 443--(para 8 ) (Land Acquisition Officer and Asst. Commissioner vs. Hemanagouda and another) is also pressed into service and it is contended that as all relevant material is available, remand for that purpose is not necessary. How this Court has granted interest for period and possession prior to Section 4 notification is brought to our notice through 2009 (1) Mah.L.J. 299 (para 5) (State Of Maharashtra vs. Bhaskar Namdeo Wagh). Reliance is being placed on ground no. 38 in memo of appeal to argue that rental compensation at 12% needed to be calculated on Rs. 16,82,614/-without any deductions. He has added that if land sufficient to support the big bungalow is worked out by using FSI/FAR to be "1", the proportionate land needed is 21,795 Sq. ft. and in that eventuality, 12% of Rs. 15,97,651/- is to be awarded as rental compensation. In any case, grant of compensation at 12% is reasonable and as premises were being used for non-residential purposes, a higher rate is warranted. He also states that 12% additional component also should have been given on remaining property for the period from 19/2/1984 to 6/8/1985.
7. Shri Rohit Deo, learned Special Counsel has pointed out that entire area of plot no. 1 as per old property card has been acquired and landowners have failed to demonstrate their title to anything in excess of area in notification under Section 17 (1) dated 18/7/1985 i.e., 54,168.86 Sq. Mtrs. Landowners claimed it to be 60790 Sq. Mtrs. and Trial Court or Reference Court found area acquired to be 59,870 Sq. Mtrs. as per report if Court Commissioner. He argues that plot area recorded in property register i.e., settlement records way back in 1925 ought to have been accepted. Property cards at Exh. 247/248 reveal 54,000 Sq. Mtrs. area. The landowners had/have with them the original sale-deed which could have shown their entitlement to receive compensation for said area. As sale-deed is not produced,an adverse inference is/was warranted. Though the report Exh.24 of DILR appointed as Court Commissioner was not objected by State, that report does not establish title of Landowners to 59,870 Sq. Mtrs.
8. He pleads that there was no question of giving any rental compensation for period prior to Section 4 notification under the 1894 Act. The rental compensation for period from 1/1/1984 till Section 4 notification on 19/2/1984 is not payable in any proceedings under the 1894 Act. Judgment of Hon'ble Apex Court in R.L. Jain vs. DDA and Others (supra), does not lay down any law on these lines. Observations of Hon'ble Apex Court are under Article 142 of Constitution of India. According to him reference to Section 48 of the 1894 Act therein shows that dispossession therein was traceable to that Act. Other judgments relied upon by the landowners also show same features. By placing reliance upon (2002) 1 SCC 142 (para 7) (Siddappa Vasappa Kauri vs. Special Land Acquisition Officer), he points out that no compensation is payable for period prior to issuance of Section 4 notification and Section 23(1-A) is held to be unambiguous in this respect. He points out that here possession was never with Landowners and premises were allotted under C.P. and Berar Rent Control Order,1949 to State for office of Divisional Commissioner and accordingly establishment of Divisional Commissioner entered possession on 1/1/1981 and continued till 6/8/1985 when it was taken under the 1894 Act. In 1981, the acquisition was not even in contemplation. For that possession, fair rent or standard rent could have been claimed before appropriate forum and not in these proceedings. Quashing or setting aside or cancellation of that allotment by High Court does not render it a possession pursuant to the 1894 Act.
9. Coming down heavily on evidence/report of Shri Gandhi, he points out that being a paid expert, his evidence is not impartial. It also lacks relevant material which might have formed its base and as that material is not produced for perusal, his opinion can not be appreciated by this Court. Section 45 of Evidence Act is pressed into service. The report refers to experience of Shri Gandhi as ground but that experience and knowledge is not proved on record and hence, Shri Gandhi can not be relied upon as an expert. As area considered by him in his report/layout at Ex. 195 is itself drastically reduced, his layout is rendered irrelevant. Layout looked into by State is based upon accurate area and hence Trial Court ought to have been accepted it as base for calculations. In alternative, he urged that area of layout of Shri Gandhi acted upon by Trial Court needs to be scaled down proportionately and used as base but subject to other arguments about market rate, deferred value adjustment, development costs etc.
10. It is pointed out that earlier two reports of said expert at Exh. 204 dated 17/1/1985 and Exh. 205 dated 24th October,1985 reveal inconsistent and contrary position which is sufficient to impeach his credit and to ignore his report Exh. 195. Due to absence of title, Shri Gandhi has claimed flat Rate of Rs. 15 per Sq. feet for excess land. Comparison of these reports is done to show change in approach to favour his clients viz. Landowners. Last report Ex. 195 is prepared just 3 to 4 months prior to his deposition by Shri Gandhi. It is urged that obvious effort is to cure material defect and to adjust development charges. It is nothing but like an information booklet or brochure prepared at the instance of a builder to lure customers. He relies upon (1995) 2 SCC 305--( para 15,16) (P. Ram Reddy and Others vs. Land Acquisition Officer, Hyderabad Development Authority) to contend that even if it is presumed (without admitting it) that there is ineffective cross-examination, still the law courts are obliged to test probabilities and such improved version can not be mechanically used. In AIR 1952 SC 214 (para 22) (Bhagwan Singh vs. State of Punjab(I)) Hon'ble Apex Court shows how the Court has to compare the later statements of Shri Gandhi with his earlier admitted reports when all these mutually inconsistent reports/statements are admitted and available on record. Exh. 195, therefore must be rejected. Credit of such witness bringing on record all these 3 reports is impeached under Section 155(3) of Evidence Act. Trial Court has erred in acting upon deposition of such witness. Want of material on record to sustain findings of expert is found in 1996(3)All MR 507 (para 17) (Government of Goa vs. Jagannath V. Khalap) enough by this Court to lower him to a partisan witness. Thus , according to him the Government valuer has been erroneously rejected as data or calculations of costs is not produced and as he accepted Shri Gandhi's method of calculating depreciation. This observation is urged to be erroneous as there is no such acceptance or then conditions subject to which he accepted that method, are overlooked by Trial Court. Shri Kale has not been effectively cross-examined and his assertions are not even questioned. Only because off-hand he could not undertake or explain the cost-exercise undertaken, he could not have been disbelieved. Even if life of structures is presumed to be 99 to 100 years, depreciation rate would be 1 instead of 1.33 and it does not make material difference on total compensation payable in that regard.
11. In this background, he takes up the issue of land valuation. He states that because of layout on adjacent plot no. 2 of SMS Trust, the comparable sale instances are readily available. Due to proximity, both in time and location, Trial Court has rightly found it proper to rely on it. The consistent views of Hon'ble Apex Court in such situation permit escalation of 10% every year from date of sale deed till date of Section 4 notification. As alleged expert Shri Gandhi of Landowners has here granted it at compound rate of 25% annually, that too from the date of agreement for sale, the Trial Court has rightly rejected it. Judgment of this Court reported at 2008(3) All MR 379 (para-7 and 8) (State Of Maharashtra vs. Punja Trambak Lahamage) is relied upon to contend that date of actual transfer of title ie sale-deed is only decisive. Shri Gandhi could not have made allowance of 25% over the sale-deeds in SMS layout because of alleged superiority of plot 1 and when Landowners have sought to discredit State witness Shri Deshmukh's stand that SMS layout is located near city, same logic must hold good to deny such allowance. Evidence of Shri Deshmukh is not false and as he was LAO, he proved to be little obstinate about his award and calculations. He points out that law has always recognized as special the plots on highways and in 1984-85, Chilamshah Wali Road was a "Kuchha Road". Hence, Trial Court has rightly refused to accept plots on this kuchha road as in belt-1. He also states that 30% solatium can not be awarded on 12% component under Section 23(1-A). Subh Ram and Others vs. State of Haryana and another( supra) (paras 9,11,12 to 14, 24 and 32) as also Lal Chand vs. Union of India and another (supra) (paras 15 and 17) are pressed into service to buttress contention that 50% to 75% is the standard range of deductions in such cases.
12. In reply arguments, Shri Korde, learned Senior Counsel has contended lands received in possession by State from Landowners has to be decisive in the matter of computation of area relevant for determination of compensation. Emphasis of notification declaring intention to acquire is on entire plot no. 1 and its area is therefore secondary. Even plan prepared by Mr. Watkar for State Government is relied upon with argument that there is only mathematical error in calculation due to irregular area of plot no. 1. It is urged that if State is happy with acquisition of notified area, balance land over and above it must be left intact on spot in possession of Landowners. If this can not be done, they must receive compensation for entire area as per report of Court Commissioner. When Shri Deshmukh for State has accepted acquisition of whole plot no. 1, the dispute about correctness or otherwise of area recorded in revenue/property cards is irrelevant. He further points out that title of Landowners to said plot is not in dispute at all. While making award under Section 11, Collector/State has to declare true area of acquired land and it is subject to adjudication under Section 18 thereof. Landowners prayed appointment of commissioner to resolve this dispute on 7/5/1991 and vide order passed below Exh. 21, Trial Court granted it. This order was not assailed by the State. Thereafter, spot was surveyed on 2nd to 4th March, 1993 and report came to be filed on 8/7/1993. Trial Court fixed the case on 12/8/1993 for raising objection and then it was adjourned to 4/9/1993. As no body raised any objection to it, matter proceeded further to the stage of "issues". Even otherwise no error or prejudice is pointed out by the State and State can not take land for free. Earlier survey by Shri Watkar on 18-20 February, 1984 was behind the back of Landowners and with undue haste. Evidence of Shri Deshmukh is relied upon in support.
13. Learned Senior Counsel states that report of expert Shri Gandhi just before recording his evidence is in lieu of a detailed examination in chief to save time and labour. He has been subjected to cross-examination to the extent necessary by State. His earlier reports Exh. 204 and 205 were for use of LAO and Exh. 205 is corrigendum to Ex. 204. Why there is slight change in mode and manner of computation of development charges is fully explained by him in Ex. 195. Hence, in this background, effort made by Shri Deo, learned Counsel to doubt his veracity for the first time before this Court needs no cognizance. Had he been put these contentions in cross before the Trial Court, appropriate justification could have come on record. Though Shri Korde, learned Senior Counsel stated that he would not like to be too technical in this respect as Ex.204/205 available in writing were not put to Shri Gandhi, still, principles of natural justice prohibit such condemnation of witness. He points out that Shri Gandhi has not scaled down expenditure on development to make room for provision of developer's profits. AIR 1988 SC 1652 (para 4) (Chimanlal Hargovinddas vs. Special Land Acquisition Officer,Poona and another) is pressed into service to substantiate these contentions. It is contended that judgment in case of State Of Maharashtra vs. Punja Trambak Lahamage (supra) (para 7) cannot be construed as laying down a blanket proposition that in all facts, date of agreement needs to be ignored. It is urged that responsible judicial officer like joint charity commissioner functioning under the Bombay Public Trust Act,1950 has ascertained market value on the relevant date on which SMS Trust invited offers and then sanction to sell under Section 36 thereof has been accorded. Judgment of learned Single Judge of this Court in Arunodaya Prefab vs. M.D. Kambli ( Misc. Petition nos. 415 and 485 of 1974 decided on 17/11/1978 at Bombay) -[para 22], is pressed into service for said purpose. A separate note explaining calculation error due to mistake in finding out time-lag between sell-agreements in SMS layout and 19/2/1984 is also placed on record. Attention is invited to sale instances on record to demonstrate that annual hike of 25% by Shri Gandhi is not erroneous or perverse. Chart Annex. G with Exh. 195 is relied upon. It is urged that material not available in 1985 has been utilized while preparing report at Exh. 195 and as such, no fault has been shown in it. Depreciation of structures is argued to be a subjective factor and a prospective buyer is bound to evaluate utility of strong structure still standing on plot no. 1. It is urged that such technical concepts can not be used in present facts when witness for State has himself disclosed future life to be 40 years. Hence, charts prepared later by Landowners and submitted to this Court must be accepted to find out correct valuation of structures. At the end of his arguments, learned Counsel on 2/9/2011 stated that there is no annual compounding by Shri Gandhi at 25% and his earlier statements on these lines need to be ignored.
14. Shri Deo, learned counsel again attempted to demonstrate that Shri Gandhi has not given any explanation for bringing down drastically the development charges in Ex. 195. In Exh. 204, salable area of plot 1 considered is 4,98,100 Sq. Mtrs. with Rs. 77,50,767/- as its value. In Exh. 195, said area comes down to 4,80,522 Sq. Mtrs. while its price rises to Rs. 91,78,480/-. He points out that Settlement Map of 1927 itself shows area of plot no. 1 as acquired and the Landowners have made no efforts to correct it. Even to establish possession on such excess land, except for report of Court Commissioner at Ex. 24, there is no other material on record.
15. Briefly stated, the following are the points in dispute between parties:--
A) For what area, the Landowners are entitled to claim compensation? Answer- -For 54,168. 86 Sq. Mtrs.
B) Are they entitled to claim rental compensation or damages for period prior to Section 4 notification i.e., from 1/1/1981 till 19/2/1984? Answer-- No.
C) At what rate compensation for land needs to be granted? Answer-- Rs. 4311991/-
D) At what rate compensation for big bungalow and second bungalow needs to be granted? Answer-- Rs. 5,28,000/-.
E) Relief/Order:- See below for details. Appeal of Landowners is dismissed and Appeal of State Government is partly allowed.
16. As to Point No. A :- In AIR 2004 S.C.3491-(Meher Rusi Dalal v. Union of India), Hon'ble Apex Court holds that State Government need not acquire its own interest in land. Following observations are important here. "15. In our view, the High Court has clearly erred in setting aside the order of the Special Land Acquisition Officer declining a reference. It is settled law that in land acquisition proceedings the Government cannot and does not acquire its own interest. The interest which is acquired in land acquisition proceedings are interest of 3rd parties. This Court has as far back as in 1955, in the case of the Collector of Bombay v. Nusserwanji Rattanji Mistri and others, reported in (1955) 1 SCR 1311 negatived a contention that when land is acquired valuation is made of all interest thereon including the interest of the Government. This Court held as follows :
"We are unable to accept his ---- ---- ------- -- - - - ....... ........ ....... --------------- ...... --------------- but only for the acquisition of such interests in the land as do not already belong to the Government." With these observations, we are in entire agreement. When Government possesses an interest in land which is the subject of acquisition under the Act, that interest is itself outside such acquisition, because there can be no question of Government acquiring what is its own. An investigation into the nature and value of that interest will no doubt be necessary for determining the compensation payable for the interest outstanding in the claimants, but that would not make it the subject of acquisition. The language of Section 8 of Act No. VI of 1857 also supports this construction. Under that section, the lands vest in the Government "free from all other estates, rights, titles and interests," which must clearly mean other than those possessed by the Government. It is on this understanding of the section that the award, Exhibit P, is framed. The scheme of it is that the interests of the occupants are ascertained and valued, and the Government is directed to pay the compensation fixed for them. There is no valuation of the right of the Government to levy assessment on the lands, and there is no award of compensation therefor." Here, the Landowners have not shown their title to alleged excess land lying on spot and have also not taken pains to plead or prove any other interest or even legal possession. There is no effort even to seek compensation for any such or other interest. The report of DILR ie Court Commissioner does not show title of Landowners to this excess land. It is apparent that when the property card did not contain entire area lying on spot, Landowners ought to have brought on record their title to it by producing sale deed by which they purchased plot no. 1 in 1930. The settled possession or any right flowing therefrom are not the facets which even find mention. In absence of such an effort, it is obvious that contention that there is only mathematical error and even plan prepared by Mr. Watkar for department shows area in excess of what is recorded in property card does not require more consideration. The Trial Court has erroneously found the acquired area to be 59,870 Sq. Mtrs. or 6,44,440 Sq. feet. There is no material on record to demonstrate title of Landowners to more than 54,168.86 Sq. Mtrs. of area. Hence, they can claim compensation only for 54,168. 86 Sq. Mtrs. of land. Point no. A above is answered accordingly.
17. As to Point No. B :- Compensation claimed as analogous to rental compensation for period from 1/1/1981 till 19/2/1984 is the next dispute. Section 4 notification is published on 19.02.1984 and possession is taken on 06.08.1985. Perusal of judgment reported in the case of R.L. Jain .vrs. D.D.A and others (supra), relied upon by Shri Korde, learned Senior Counsel in this respect, shows consideration of question whether State Government taking possession before issuance of notification under Section 4[1] of the Land Acquisition Act and of entitlement of landowners to claim interest for such anterior period, in accordance with Section 34 of the Act. This judgment is by Hon'ble Larger Bench and in paragraph no.11, it has been observed that notification under Section 4[1] of the Act is sine qua non for any proceedings under the Act. In paragraph no.12, the words "such compensation" and "so taking possession" used in Section 34 are interpreted. The words "so taking possession" are found to make reference to Section 16 or Section 17 and it has been concluded that if possession is taken prior to issuance of notification under Section 4[1] of the Act, it cannot be in accordance with Section 16 or Section 17, will be without any law and consequently, cannot be recognized for the purposes of Act. The words "from the date on which he took possession of land" appearing in Section 28 of the Act are also construed to mean lawfully taking of possession under Section 16 of Section 17 of the Act. The judgment reported at 1991 (1) SCC 262 (Shree Vijay Cotton and Oil Mills Ltd. .vrs. State of Gujarat), is found not an authority for proposition that where possession is taken before issuance of notification under Section 4[1] of the Act, interest on compensation amount can be awarded in accordance with Section 34 of the Act w.e.f. the date of taking possession. In paragraph no.16, the earlier judgment reported at 1995 [2] SCC 142 (Special Tahsildar (LA) .vrs. M.A. Jabbar), delivered by Hon'ble two Judges is noted and in that judgment the Hon'ble Two Judges held that claimant would not be entitled to such additional sum for period anterior to publication of notification issued under Section 4[1] of the Act. Then reference is made to other judgment by Hon'ble Two Judges reported at 1995 [6] SCC 355 (Assistant Commissioner, Gadag Sub Division, Gadag .vrs. Mathapathi Basavannewwa and others), taking a contrary view and holding owner entitled to additional amount at 12% p.a., has also been noted. The view taken in Special Tahsildar (supra), is declared to be legally correct and view in case of Assistant Commissioner (supra), is overruled. The judgment of larger Bench of Hon'ble Apex Court in the case of Sidappa Vasappa Kauri .vrs. Special Land Acquisition Officer (supra), has also found the view taken in the case of Assistant Commissioner (supra), unsustainable. In paragraph no.16 of R.L. Jain vs. DDA and Others (supra), the Larger Bench has found it just and equitable that Collector, determines rate or damages for use of property to which the landowner is entitled while determining the compensation amount payable to land owners in respect of possession taken prior to issuance of preliminary notification. The said view is held to find support in Section 48 of the Act, and it has been further observed that for delayed payment of such amount for pre-notification possession, interest at bank rate should be awarded.
18. In Land Acquisition Officer and Asstt. Commissioner .vrs. Hemanagouda and another( supra), the Hon'ble Two Judges of Hon'ble Apex Court did not find it appropriate to deprive the landowners of their right to receive rent or damages for use of property prior to the date of acquisition. The landowners were given liberty to raise claim therefor before the Collector. In State of Maharashtra and others .vrs. Maimuna Banu and others (supra), the Hon'ble Two Judges have considered the grievance of similar placed landowners. Possession was taken by private negotiations. Facts mentioned in paragraph no.3 show that there non-payment of rental compensation within time prescription indicated in the resolution amounted to deprivation of valuable property and in paragraph no.8 it is noted that the Act does not provide for payment of any rental compensation. In paragraph no.9 it was found illogical and improper to turn a nelson's eye to the factual position and the Hon'ble Apex Court noted that in most of the cases, rental compensation was not paid. In State Of Maharashtra vs. Bhaskar Namdeo Wagh (supra), the Division Bench of this Court has found claimants entitled to 12% component under Section 23[1-A] of the Land Acquisition Act from the date of notification till the award is passed by the Land Acquisition Officer. There also possession was taken before issuance of notification under Section 4 of the Act. There after noticing the judgment of Hon'ble Apex Court in case of Special Tahsildar (supra), the Division Bench has granted 12% component from the date of Section 4 notification i.e. from 10.07.1993 till the date of award i.e. 12.09.1995.
19. In present facts, admittedly the possession was already with the office of the Commissioner and that possession was taken under C.P. and Berar House Rent Control Order, as premises were allotted to said office by Rent Controller. It is no doubt true that subsequently said allotment is set aside by this Court, but that is after 06.08.1985. In the meanwhile, notification under Section 4 was published on 19.02.1984 and possession thereafter was taken by invoking the urgency clause under Section 17 of the Land Acquisition Act on 06.08.1985. It appears that second bungalow on plot 1 was in possession of some third person and State took its possession from him. The Trial Court therefore, has correctly granted 12% component under Section 23[1-A] of the Act, from the date of Section 4 notification till taking of possession i.e. 06.08.1985. Possession delivered earlier on 1/1/1981 was under provisions of C.P. and Berar House Rent Control Order, 1949 and therefore, as a tenant. That possession was not taken in pursuance of any decision to acquire the said property. In this situation, claim by landowners has to be either for rent for said period from a tenant or then for mesne profits for wrongful dispossession. It cannot form subject matter of adjudication by Land Acquisition Officer under the scheme of Land Acquisition Act. In all precedents looked into above the taking of possession could have been related to Act and person taking possession were not having any other character like that of tenant. The judgments looked into above, clearly show that entitlement to such amount can be only when possession is taken by initiation of land acquisition proceedings i.e. after Section 4 notification. Division Bench of this Court in one matter has refused to interfere as period was only of one month, however, that judgment reported in the case of State Of Maharashtra vs. Bhaskar Namdeo Wagh (supra), does not law down any law in this respect. We, therefore, find claim for compensation for period from 01.01.1984 till 19.02.1984 in present proceedings misconceived. Point No. B is answered accordingly.
20. As to Point No. C :- Next important question is about market value of land on 19/2/1984.Both sides have adopted hypothetical plotting method and hence, the procedure to be followed here is not in doubt. Actual Layout in Plot no. 2 of SMS Trust is admitted position and during arguments sale instances therein only have been relied on as comparable. Before proceeding further, We find it appropriate to briefly mention the location of Plot. no. 1 as also plot no. 2. Plot no. 1 is bounded on its south by plot no. 2 and it has got abut 5 sides. Its 3 sides have direct frontage on roads i.e., Mini bye pass, Chilam Shah Wali Road and a cross road connecting these two roads. Though there is serious challenge to reading of evidence of Shri Gandhi- witness of Landowners as expert or then to his testimony on merits, plan drawn by him showing the relative placement of these two plots and location of sale instances looked into by him is not in dispute. Trial Court has considered this angle and only challenge before us by Landowners is to its not accepting 10% hike to plots in hypothetical layout in plot no. 1 or to alleged superior placement of plot 1 due to it altitude and commanding scene. Trial Court has treated sales in SMS layout as comparable and there is no serious dispute about it. Last report at Exh. 195 prepared by Shri Gandhi about 3 months prior to his entering the witness box reveals that total road frontage is 2200 running feet and out of it 1000 feet is on Calcutta -Bombay part of mini bye-pass - part of national high-way. This plot is situated in Camp-area which is classified as "A" area in Amravati Municipal Corporation formed later. Residences of District Judge, Commissioner, Collector and bungalows for other judges are in the vicinity in this area only across either the national high way or then Chilam Shah Wali Road. Bungalows of retired army officers are on west side. Being a corner plot, it has roads on three sides and being a level plateau at top of Camp area, enjoys westerly breeze, panoramic view and beautiful surroundings. Eastern view from plateau remains permanently unobstructed. Offices of R.T.O., Collector, Sub-registrar, Post and Telegraph, Zilla Parishad, P.W.D., Town Planning are all within half kilometer. Court, Educational Institutes including Medical College and District Hospital are within 1 to 2.5 Kms. Some shops are stated to be located near this plot and main market is at distance of 2.5 Kms. This description shows that except for its location at height, all other features are normal. It appears to be not in populated but in calm and quiet surroundings. What is market available for small such plots or land of this nature in Amravati is not apparent. Evidence to show price offered by a willing buyer and tendency to pay more by recognizing these features as special advantages was therefore essential for treating it as a feature necessitating any premium over and above market rate.
21. The land to be valued here is huge piece and use of hypothetical plotting method found necessary in paragraph 19 is not in dispute. Though before the Trial Court several witnesses were examined to bring on record the relevant sales, in arguments before us the acceptance of sale instances from SMS layout by it is not even assailed by any body. Arguments proceed on the base of those sale instances only. Narration in this regard in paragraph 24 of its judgment by it is not even whispered to be perverse. Thus its refusal to look into sale -deeds at Exh. Nos. 171,171-A,177,177-A,172, 173,180 and 175 as the same are of plots located at a distance from acquired land, does not call for any interference. In said paragraph and in next one it has noticed that sale instances from just adjacent plot no. 2 of SMS Layout are available and preferred to rely upon it. However, Trial Court has used layout prepared by Shri Gandhi and at Annex. D with his report Exh. 195 and discarded the layout plan prepared by A.D.T.P. At Exh. 232. Shri Gandhi's status is challenged before us on several grounds, it is apparent that about 5782 Sq. Mtrs. Area is required to be reduced from his drawing. Reason assigned by Trial Court to prefer it is of better land utilization. This is not demonstrated to be erroneous by the State. It therefore urged to reduce the land proportionately from area of each belt as arrived at by Trial Court. When hypothetical layout prepared for State by ADTP is found unacceptable for valid reasons and norm has to be maximum land utilization to cater to the interest of Landowners, We find it proper to accede to this argument of State.
22. Perusal of deposition of Anandprasad (Exh.75) on behalf of SMS Trust shows that SMS layout is on comparatively larger piece of land ad-measuring about 7,60,000 Sq. ft. and little nearer to City. Plot no. 1 is beyond plot no. 2 and at a height above plot no. 2. Plot no. 2 is not a plain ground but has a slope towards west. The difference in elevation on eastern and western side is about 20 feet. In 1981, SMS layout of 119 residential and 35 shop plots was approved by Amravati Municipal council. Then Trust advertised the plots. On 26/11/1981, Joint Charity Commissioner granted approval to SMS Trust to sell 16 shops and 53 residential plots. Accordingly, Sale deeds were executed by the Trust. From buyers who paid the balance sale consideration late and sale deeds were therefore executed little later, SMS Trust recovered interest for such delay as per the orders of Joint Charity Commissioner. In response to 2nd advertisement published in December,1981, offers were received in January, 1982. The Trust found these offers below their expectations and hence, plots were re-advertised. Application of Trust to sell to these offerers was allowed by the Joint Charity Commissioner on 17/4/1982. This witness has stated that plot no. 1 of Landowners is superior because of its location. He has also exhibited the sale-deeds and other documents like advertisement, certified copies of orders of Joint Charity Commissioner and Index-II. His cross-examination only brings on record no construction of any shop on any of its 35 plots from 1981 till 1995. His evidence has been recorded on 22/7/1996. Thus his sale instances are supported by relevant documents which can not be doubted.
23. Whether date of agreements entered into by SMS Trust or then the date of Sale-deeds by them is determinative is another dispute. According to Shri Deo, learned Counsel it is date of sale deed only and date of agreement can never be relevant. In State Of Maharashtra vs. Punja Trambak Lahamage (supra), where the Division bench rejected the demand claimants for enhancement for the period of 6 months between the date of agreement and date of sale-deed. It is observed as under :-- "7. Coming to the other aspect, the claim raised on behalf of the respondents in the State appeals is that they would be entitled to enhanced compensation because of the intervening period between 31st January, 1989 and 4th July, 1989 i.e. the date of the agreement to sell and the date of registration of the sale deed. This argument is based on the premise that the parties had agreed to sell the land ad-measuring 13 ares for Rs.15,000/- as on the date of agreement to sell i.e. 31st January, 1989 and the sale deed was registered on 4th July, 1989, being Exhibit-74. Computed on the basis that the market value of the land as on January, 1989 is Rs.1,15,385/- per hectare and the increasing trend in the price of the land as has been shown by the claimants, the value of Rs.1,15,385/- should be increased to determine the market value of the property as on 4-7-1989. This argument on behalf of the claimants proceeds on a fallacy of fact and law both. It is a settled rule of law that agreement to sell does not pass any title in the property. Agreement to sell is an agreement between the parties which would culminate into a registered sale deed only after the obligations of each of the parties to the agreement is fulfilled by them. Mere fact that under the agreement to sell, a time is given for payment of sale consideration by itself is no evidence on the fact that the value of the property will increase in the meanwhile. It is not even necessary that every agreement to sell results in execution of a registered sale deed. In simple words, the agreement to sell neither creates any title in the property nor is a document by which transfer of the property takes place between a willing seller and a willing buyer." The Division Bench also considers the judgment of Hon'ble Apex Court in AIR 2001 S.C. 2532 (State of Haryana v. Ram Singh), where Hon'ble Apex Court finds the High Court in error in rejecting Exhibits R/2 and R/3 as inadmissible only on the ground that the parties to the documents had not been examined by the State. Law stated is that a certified copy of a registered agreement for sale is not inadmissible in evidence unless the parties to the document are examined to prove it. It is pointed out that this does not however preclude the Court from rejecting the transaction itself as being malafide or sham provided such a challenge is laid before the Court. In facts of said case, there was no allegation that the sales transactions relied upon did not represent genuine transactions. The High Court was therefore in held error in refusing to consider the transactions evidenced therein merely because the parties to the documents were not examined. Therefore, the matter was remanded to the High Court to take a decision on the market value of the acquired land taking into consideration Exhibits R/2 and R/3 unless the claimants were permitted by the High Court to establish their inadmissibility.
24.. In AIR 1970 Guj. 91 (Collector, Baroda and another, v. Haridas Maganlal Parikh and others), the Division Bench was required to consider whether an agreement of sale was a relevant and good piece of evidence before the Court for the ascertainment of the market value of the land comprised thereunder and later on acquired by the Government. Having noted that an agreement of sale did not in fact create interest in the property as contemplated under Section 54 of the Transfer of Property Act, Gujrat High Court held that on that account alone, it cannot be eliminated from being considered as a relevant and good piece of evidence if established as a bonafide transaction between a willing purchaser and a willing vendor. It points out decision of the Hon'ble Supreme Court in AIR 1967 SC. 465-- (Raghubans Narain Singh v. Uttar Pradesh Govt.), where even an offer made by a person for the purchase of any property and though not accepted, was treated to be a relevant piece of evidence, and if that evidence is accepted as reliable, it can well serve as a good piece of evidence for determining the market value on that basis. In that case, the claimant led the evidence of one Zaidi, a Deputy Collector, prior to his retirement had written two letters to the claimant dated October 14, 1945 and November 20, 1945 expressing his desire to purchase the land in question. He had offered Rs. 18,000/-, but that offer was not accepted by the claimant who wanted Rs. 24,000/- as price. This part of the evidence was accepted by the District Judge and on that basis he valued the land at Rs. 18,000/-. In appeal, the High Court at Allahabad took a view that such evidence could not afford a true test about the value of the property. The claimant preferred an appeal to the Supreme Court against that decision and there while dealing with that part of the evidence about an offer made by witness Zaidi for the purchase of that property sought to be relied upon, the Supreme Court has observed that an offer does not come within the category of sales and purchases but nonetheless if a person who had made an offer himself gives evidence such evidence is relevant in that it is evidence that in his opinion that land was of a certain value. This part of the evidence was accepted by the Supreme Court and it upheld the view of the District Judge as against that of the High Court in that case. Gujrat High Court then finds that :- " It also appears that an agreement to sell in respect of any such property would be a relevant matter and can be used in relation to fixing the market value of the land. Such an agreement to sell stands on a stronger and better footing than what a onesided offer can help in determining the price of the land under acquisition. The agreement of sale is a bilateral contract enforceable in law. The vendor agrees to sell the property and the purchaser agrees to purchase the same as per the conditions set out in the agreement. There is an agreement of price in respect of the property comprised thereunder. What remains to be done is to have a deed passed in respect of the said property as per the terms or conditions set out in that agreement. In our view, therefore, such an agreement of sale, apart from the same being perfectly a relevant piece of evidence, can also be a basis for fixing the market value of the land under acquisition provided of course it is found to be a bonafide transaction between a willing or a prudent purchaser and a willing vendor."
25. The relevant sale deeds pressed into service to show escalation are either within few days of agreements or then with gap of about 6 months. Pawan Agrawal (Exh. 187) has deposed about two sales of plot no. 30 in SMS layout, first by SMS Trust to Smt. Meera Agrawal registered on 28/5/1982 as per agreement dated 26/11/1981 and later by Mrs. Meera to Vijay Agrawal on 11/1/1984. These sale deeds are at Exh. 102 and 188. It shows annual escalation calculated between 26/11/1981 to 11/1/1984 at 23.72%. Here time interval between agreement and actual sale by SMS is of 6 months and 2 days. Pramod Bathra (Exh. 192) has spoken of purchase of plot no. 42 in SMS layout on 5/12/1981 as per agreement dated 26/11/1981 and its sale by him on 23/6/1982 registered on 17/8/1982 to Smt. Usha Malani. These sale-deeds are at Exhs. 114 and 193. Appreciation here is 34.78% between 26/11/1981 to 23/6/1982. Here time interval between agreement and actual sale by SMS is of 9 days. At Exh. 189 is evidence of Avinash Deshmukh and he deposes about purchase and sale of plot no. 51. It is purchased from SMS Trust as per agreement dated 26/11/1981 on 17/12/1981 and sold on 19/6/1984 to Govind Rathod of which deed is registered on 19/6/1984 itself i.e., after Section 4 notification. Annual appreciation in this case is 31.21% by looking to period from 26/11/1981 to 19/6/1984. These sale deeds are at Ex. 123 and 190. Here time interval between agreement and actual sale by SMS is of 21 days. Looking to this time gap and facts at hand, it is apparent that the answer to the question about relevant date either way does not very materially affect the determination of escalation and market price. Here, the Joint Charity Commissioner has given sanctions under Section 36 of Bombay Public Trust Act to SMS Trust on 26/11/1981 and 17/4/1982. As held in Arunodaya Prefab vs. M.D. Kambli - Misc. Petition 415 and 485 of 1974 decided on 17/11/1978 by learned Single Judge of this Court, Joint Charity Commissioner has to satisfy himself about the adequacy of price offered and here these orders are not in any way dispute. Even sales, whether by SMS Trust to initial buyers or then by such purchasers from it to subsequently are not challenged as sham or bogus transactions. We therefore find that reliance on the agreement date to compute escalation in present matter and therefore acceptance of agreements for that purpose does not violate any legal provisions. In State Of Maharashtra vs. Punja Trambak Lahamage (supra) (para 7), claimant - landowners were demanding escalated value between agreement date 31 January 1989 and date of sale deed i.e., 4th July 1989. Thus, their own document of agreement was being capitalized for said claim and observations of this Court need to be understood in this background. This judgment nowhere lays down that even a third party genuine agreement for sale - a bonafide transaction can not be a relevant piece of evidence. Value to be given to it is obviously a question dependent on facts of each case.
26. Except Shri Gandhi other evidence on valuation of land is of Owner Madhaolal , LAO Shri Deshmukh and no other evidence is placed before us. Madhaolal has only said that valuation and area of acquired land is less. He chose to rely upon the report of expert. In cross, he could not give the year of construction of two buildings on acquired property. He stated that that there were no documents except one on record to support the area of acquired land as claimed by them. He accepted that distance between land acquired and Amravati market was about 6 Kms. He had no knowledge whether said land had non-agricultural potential. He was not aware whether it formed last corner of town on north-east side. Thus he has not placed his oath either to give market value of land or then of structures. Evidence of Shri Gandhi can be looked into little later. Sale instances of SMS layout are proved by examining the purchasers also. As there is no dispute about these instances, We are not referring to that oral evidence here. Exh. 219 is the evidence of then Sub-divisional Officer and LAO Shri N.K. Deshmukh. He functioned as such from 1986 to 1988. He got structures valued through PWD while land through Assistant Director of Town Planning i.e., ADTP. He also looked into sale instances. He has deposed that acquired land was on outskirts of Amravati and its last Nazul sheet. There was no development or any residential locality in the vicinity. He has also stated that in 1998 also there was no construction on shopping plots in SMS layout. He has then spoken of preparation of hypothetical layout, comparison with plots in SMS layout and recourse to belting method. He has stated that average rate of SMS layout was Rs. 90 per Sq. Mtr. and he awarded Rs. 100 for acquired land for first belt, Rs. 85 per Sq. Meter for 2nd belt and Rs. 72/- for third belt. His cross reveals his reluctance to answer inconvenient questions. He also accepted that letter for joint measurement was issued on 18/2/1984 to office of DILR and it was started on very same day. He agreed that the owners who were at Bombay therefore had no time to remain present. He further stated that as sale instances used by him were within one year of Section 4 notification, he did not give 10% annual hike. He did not accept that purpose of deduction on account of deferment factor was to compensate developer whose money remained blocked. He stated that plot no. 2 is slightly nearer to city than plot no. 1. He agreed that plot no. 1 is at higher level than plot no. 2 but then did not accept that it was superior. Though this witness has been cross examined at length and because of his attitude, several questions were required to noted by Trial Court in question--answer form, We are not going into details thereof. The contention of learned Senior Advocate that this witness was biased need no consideration here as witness was the land acquisition officer himself and was trying to justify ways and means adopted by him. Those ways and means were on record and as Trial Court needed to arrive at market value independently, said attitude is not decisive either way. We only wish to note that procedure followed by him to work out average rate of land in SMS layout is unsustainable. He admits that he has followed belting method but he considered the mean of rate of first row i.e., shopping plots and rate of last row of residential plots in SMS layout to determine said average and used it for hypothetical layout in acquired land. Size and number of first belt plots having access directly to national high-way, location of last belt plots, their number and distance from national high-way. SMS Layout has frontage of 579 feet on national high-way where it has laid total 35 shop plots of 30 ft. X 15 ft. Behind this are the rows of plots for residences. Depth of this layout is 1259 feet. There are total 6 cross roads and about 5 conservancy lanes till last row. The open space in layout is at other end of this layout. Thus due to inherent differences, such average-method used by LAO can not be of any assistance here.
27. Shri Gandhi in his evidence at Exh. 194. He is graduate in civil engineering practicing as Architect, Structural Engineer and Valuer as claimed for 35 years. He has stated that he is recognized valuer by finance ministry of Union of India. He has confirmed contents of report dated 21 August 1995 and it came to be exhibited as Exh. 195. He has considered area as 59870 Sq. Mtrs. as disclosed by Court Commissioner. He has then pointed out how hypothetical layout of ADTP did not provide for maximum land utilization. He also explained charts with his report and procedure for valuation undertaken by him. He pointed out comparable sales and how he added 25% hike annually and gave weightage of 10% to plots in acquired lands. Then he pointed out decrease of 33% from price of belt 1 plot for belt 2 and 50% for belt 3 plots. Rs. 25/- per Sq. foot is rate for first belt plots, Rs. 16.50 for plots in second belt and Rs. 12.50 per Sq. foot for plots in third belt. These details are in paras 12.00 to 14.00 of Exh. 195. In said paragraphs, he has also attempted to justify his figures by using sale instances. He, in cross examination, has attempted to show how his layout is legal and absence of need to leave lanes for conservancy. He has also stated that it is not necessary to provide for common sanitation system. He also accepted his earlier reports dated 17/1/1985 at Exh. 204 and dated 27/10/1985 at Exh. 205. This working is on the sale instances and as already noted above, it is futile to go in more details of his evidence in this regard as sale instances in SMS layout only need scrutiny and use in the light of settled legal position. Proximity in time and area are the tests vital to reach valuation.
28. Trial Court has granted annual hike of 10% after finding out rate by using comparable sale instances from SMS Layout. Perusal of various binding precedents in this connection show that normally such hike is presumed to be 10%. Effort before this Court is to justify said grant at 25% by Shri Gandhi and Annex. G with his report at Exh. 195 is heavily banked upon by Landowners. Trial Court has rejected oral evidence of Prabhakar Desmukh(Exh. 178), Imrahimkhan Dannekhan(Exh. 179), Balkrishna Dande (Exh.181), Vinod Padiya (Exh. 182) and sale deeds at Exh. 171,171-A, 177, 177-A, 172,173,180 and 175 as the same are about plots located at some distance. Four of these sales pertaining to two plots ie plot no. 81 and 16 located in sheet no. 19 figure in Annex. G. Undisputed calculations by Shri Gandhi in relation to these two plots show 67.34% and 50.22% per year hike on these two plots. It is obvious that when sale instances from adjacent SMS layout are available, reference to distant sales is really not warranted. Plan filed by Shri Gandhi at Annex. F to show sale instances utilized by him also show the distance. The other plots are located in already developed areas in City and hence rejection of those instances or then inclination of Trial Court to rely upon sales in SMS layout can not be faulted with. It is not the case of Landowners that any other similarly situated area at outskirts of City was also showing similar appreciation. Pawan Agrawal (Exh. 187) has deposed about two sales of plot no. 30 area 3910 Sq. ft in SMS layout, first by SMS Trust to his wife Smt. Meera Agrawal on 28/5/1982 and later by Mrs. Meera to Vijay Agrawal on 11/1/1984. These sale deeds are at Exh. 102 and 188. It shows annual escalation of 23.72%. Pramod Bathra (Exh. 192) has spoken of purchase of plot no. 42 area 4165 Sq. ft. in SMS layout on 5/12/1981 and its sale by him on 23/6/1982 to Smt. Usha Malani. These sale-deeds are at Exhs. 114 and 193. Appreciation here is 34.78%. At Exh. 189 is evidence of Avinash Deshmukh and he deposes about purchase of plot 51 area 4569.5 Sq. ft. and sale of its part 1779.5 Sq. ft by his mother. Plot no. 51 is purchased from SMS Trust as per agreement dated 26/11/1981 on 17/12/1981 and its part is sold on 19/6/1984 to Shri Rathod as per deed registered on same day. Annual appreciation in this case is worked out at 31.21%. These 3 instances on an average show appreciation of about 29% in SMS Layout. Trial Court has arrived at annual appreciation of 10% due to binding precedents. However, when these three undisputed instances are available on record, it is clear that there was no scope for adhering to presumption of 10% annual appreciation. There is nothing on record to hold that these three instances can not be accepted as representative of market trends. These instances are of residential plots either in second or third belt in SMS Layout. However, Landowners plot no. 1 is situated further away from town and at a height as compared to land of SMS layout. Evidence on record also shows that there is no shop or commercial development in the area till 1996 at-least. This appreciation in SMS Layout is not for shop plots and hence half of it can be safely used here. Hence, We are inclined to accept appreciation at 15% over and above SMS rate instead of 25% as canvassed by Landowners. More reasons for this course will appear little later in this judgment.
29. Shri Deo, learned counsel has contended that rate of shop-plots in SMS layout can not be applied to residential plots in Landowners hypothetical layout. However, shop-plots in SMS Layout are of 450 Sq. Ft. and buyers have purchased more that one such plot at a time. These plots are also on mini by pass i.e., National Highway. Till at least 1996, no shops had come up on any of these shop-plots. Moreover, the front plots in hypothetical layout have access either to same National High-way or other public road. The sale instances of second belt plots in SMS layout i.e., of plots not touching National Highway but having opening on internal layout roads are also available. Plot no. 12 ad-measuring 3200 Sq. ft. is sold by SMS to Smt. Deshmukh on 20/6/1984 as per sanction given by Joint Charity Commissioner on 26/11/1981 at Rs. 11.88 per sq. ft. Plot nos. 17 to 20 ad-measuring 10785 Sq. ft. are sold by SMS to M/s Pooja Builders on 28/6/1984 as per sanction given by Joint Charity Commissioner on 17/4/1982 at Rs. 12.05 per sq. ft. Plot nos. 21 to 23 ad-measuring 11615 Sq. ft. are sold by SMS to M/s Swati Corporation on 22/6/1983 as per sanction given by Joint Charity Commissioner on 17/4/1982 at Rs. 11.62 per sq. ft. Plot no. 29 ad- measuring 4725 Sq. ft. is sold by SMS to Shri M.M. Sikchi and Others on 30/6/1984 as per sanction given by Joint Charity Commissioner on 17/4/1982 at Rs. 11.64 per sq. ft. Plot no. 34 ad- measuring 3890.7 Sq. ft. is sold by SMS to Smt. K.D. Vaidya on 20/8/1984 at Rs. 10.79 per sq. ft. This plot is from third belt and date of sanction given by Joint Charity Commissioner could not be verified by us. But as sale is by public trust and there are only two sanction orders as deposed by Anandprasad (Exh. 75), the date has to be either 26/11/1981 or 17/4/1982. There are no instances on record of further sales in which these plots are again resold to find out appreciation. Hence, if We treat average plot rate to be Rs. 11.75 per sq. ft. in November 1981 and apply rate of 15% annual appreciation arrived at above for period of about 24 months, the rate works out to Rs. 15.25 per Sq. ft. on 19/2/1984 for second belt plots in SMS layout. In November, 1981, the average rate of shop plots or belt 1 plots in SMS is found to be Rs. 14.80 per sq. ft. by Trial Court. Thus then there was difference of about Rs. 3 per sq. ft. then. Rate of shop plots then was about 25% more than belt 2 residential plots. If this proportion is maintained and Rs. 15.25 is increased similarly to arrive at price of belt 1 plots i.e., shop plots in SMS Layout, it comes to Rs. 19.00 per sq. ft. Whether this shop plot rate in SMS Layout can be adopted for first belt residential plots in Landowners Layout is the issue. For their first belt plots LAO has granted rate of Rs. 9.29 per sq. ft., for belt II area at Rs. 7.90 per sq. ft. and for 3rd belt area plots rate allowed is Rs. 6.69 per sq. ft. Thus there is 18% rise on 3rd belt to derive price of belt 2 plots and 17.59% rise on 2nd belt to reach price of first belt plots. We have reached the rate of Rs. 15.25 per Sq. ft. on 19/2/1984 for second belt plots in SMS layout. If this is proportionately increased by 17.59%, it becomes Rs. 17.93 per Sq. Ft. for first belt residential plots (hypothetical) in SMS Layout as per LAO. However, Shri Gandhi has computed value of 2nd belt plots at 2/3rd of the first belt. If We increase the rate of Rs. 15.25 by 1/3rd, We get rate of Rs. 20.00 per Sq. ft. for these first belt plots (residential) in SMS. Thus in this hypothetical situation, rate of shop plots in SMS Layout on 19/2/1984 reached is Rs. 19.00 per Sq. Ft. ie. less than residential rate. Now question is what would a customer prefer! A mixed layout like SMS or then purely residential one like hypothetical layout here? Exercise in next paragraph demonstrates rate of Rs. 19.90 for first belt plots. It therefore brings forth the difference of Rs.1.97 per Sq. ft. on LAO determination. We are looking at the matter almost 27 years after Section 4 notification. The possible error if rate of Rs. 19.90 is held correct, may be of 10%. When the recourse has to be to guesstimate, it is apparent that market value can not be determined with mathematical precision. The evidence on record shows that though SMS Trust laid out shop plots, no shop activities had commenced till 1996 i.e., at-least for 15 years after said Layout was sanctioned. Whether People purchased shop plots, three or four together, perhaps for use as residential plots only? Trial Court has applied rate of Rs. 19.60 per Sq. ft. for first belt plots in Landowners hypothetical layout. Learned Senior Advocate has fairly pointed out the calculation error committed by the Trial Court in the process. He has successfully shown that if said mistake is corrected, these rates are required to be lowered to Rs.18.10 for first belt, Rs. 15.38 for second belt and 13.08 per Sq.Ft. for third/remaining belt plots. Though Trial Court is in error as it failed to note that time-gap was of 2 years and 85 days only, in view of the discussion above, We are not in position to find its rates either exorbitant or arbitrary.
30. As SMS sale instances are to be applied with 15% annual hike, We can also safely utilize average calculated at Rs. 14.80 per Sq. feet by Trial Court in paragraph 29 of its judgment for first belt plots for our consideration. Section 4 notification is issued on 19/2/1984 and sale deeds of plot no. 1 to 17 in SMS layout are registered on 5/12/1981. Agreements for all these shop plots are on 2/11/1981. Hence period from 2/11/1981 to 19/2/1984 of 2 years 3 months and 16 days is the period for which appreciation at 15% annually needs to be worked out. It works out to 34.48% or 34.50%. Thus with this hike, average rate as on 19/2/1984 comes to Rs. 19.90. Trial Court has applied such rate erroneously calculated by it @ Rs. 19.60 to first belt plots in Landowners layout. Shri Gandhi after this stage gave weightage of 10% to plots in first belt in acquired land and has arrived at his rate of second belt plots by reducing this rate by 33% and of third belt plots by decreasing it by 50%. Trial Court has reduced 15% from its rate of first belt and further 15% for third belt, to calculate rates of second and third belt respectively. We do not find any relevant material on record to justify this additional weightage of 10% or its demand by Landowners. As propriety of this exercise applying 15% factor undertaken by Trial Court is not seriously in dispute before us, if it is adopted and accordingly We find Rs. 16.90 and Rs.13.90 respectively to be the rates of second and third belt plots in Landowners hypothetical layout. Landowners have neither argued nor sought any specific increase in this rate. In this situation, We independently accept the rate as awarded at Rs. 19.60 for first belt plots, Rs. 16.66 for second belt plots and Rs. 13.80 per sq. ft. for third belt plots as used by the Trial Court. The consideration of material directly above obviates need to delve more into evidence of Shri Deshmukh and Shri Gandhi or into rival contentions in this regard. Appeal of State to reduce it further does not hold any water.
31. Now the belting exercise needs evaluation. Trial Court has treated 95,060 Sq. Ft. abutting National Highway as First belt plots. Those plots are plot nos. 1 to 14 and 15 to 17. Plots 18 to 32 situated at other periphery of the hypothetical layout (drawing of Shri Gandhi) are valued as second belt plots. Area of these plots 97,020 Sq. ft. Other plots bounded on outer side by belt 1 or 2 plots having access on internal layout roads are third belt plots. Their total area is 2,88,440 Sq. ft. Thus Trial Court has considered 4,80,520 Sq. Ft. as plotable land available for actual sale out of total area 6,44,440 Sq. ft. of plot no. 1. In his drawing Shri Gandhi has considered plots 1 to 32 at periphery of layout on public roads as belt 1 plots. Plots behind belt 1 plots as belt 2 plots. 11 plots forming boundary of SMS Layout and near big bungalow, including plot of big bungalow, are shown as third belt. Total area of plot 1 looked into by him is 6,44,440 Sq. ft. and plot area under three belts is 4,80,520 Sq. ft. Remaining land is for public utility. Land on which structures are erected are also shown as plots in his layout. If total land used by Trial Court and Shri Gandhi is presumed to be correct, it is apparent that reasons given by Trial Court for rejecting Layout of ADTP can not be faulted with. Layout of Shri Gandhi is not demonstrated to be contrary to any building bye-laws of Municipal Council or development control rules. Being hypothetical, it was not necessary for Landowners to get it sanctioned and State ought to have brought on record the irregularities or illegalities in it while Shri Gandhi was subjected to cross examination. As the total area considered by Landowners and Trial Court is required to be reduced, State has sought proportionate reduction from all three belt-areas as arrived at by Trial Court.
32. We have already disagreed with the finding that the acquired area was/is 59,870 Sq. Mtrs. or 6,44,440 Sq. feet. Not more than 54,168.86 Sq. Mtrs. of area could have been utilized by Landowners or Trial Court to prepare a hypothetical layout. ADTP has contemplated layout on land as acquired i.e., on 54,168 Sq. Mtrs. Utilizing the equation that 59,870 Sq. Mtrs. is equal to 6,44,440 Sq. feet, about 5702 Sq. Mtrs. (67,836 Sq. Ft) additional land is required to be proportionately deleted from 3 belts. Substance in challenge to area of each belt therefore needs to be verified first. Mini by pass road is National highway and Chilamshah Wali Road, though a public road, was not a tar road but a kuchha road then. It therefore was at rear of the layout but with potential to come on public road if there was plan to construct a pucca tar road in its place in near future. Kuchha road can not be given more importance that an internal road in hypothetical layout. Because of this possibility only, Trial Court has recognized it as second belt. We therefore can not yield to argument of learned Senior Advocate to treat plots 18 to 32 shown in yellow colour and valued as 2 nd belt plots by Trial Court to be at-least of an intermediate belt between category 1 and 2. We also can not accept the contention to value plots 53 to 63 located just behind plots on national highway as second belt plots. Efforts made by him to show plot no. 63 at-least as in second belt can not be countenanced. We fail to see any logic in recognizing plots situated at back of highway touch plots as second belt plots as those plots have to use internal layout roads only and are not situated differently than third belt plots demarcated in his drawing by Shri Gandhi. Uniform treatment as third belt to all such plots encircled by first and second belt plots by Trial Court appears more reasonable. We therefore proceed to reduce proportionately from each belt the area used in excess by Trial Court.
33. Proportionate deductions have to aim to adjust 5702 Sq. Mtrs. (67,836 Sq. Ft) of area. It forms about 10.49 th part of 59,870 Sq. Mtrs. or 9.49th portion of 6,44,440 Sq. feet. We therefore reduce about 1o% area form entire chart of land utilization proportionately from lands left open or for roads and each belt. After such an exercise, area acquired and becoming available in first belt is 95060-09506=85,554 Sq. ft., in second belt it is 97020- 09702=87,318 Sq. ft. and in third belt land available turns out to be 288440-028844=2,59,596 Sq. ft. Rate per square foot arrived at above for three belts is required to be applied to these three areas respectively. It thus leads to following :-- Belt. Area Rate. Valuation. First Belt 85,554 Sq. ft. X Rs. 19.60 = 1676858.40 Second belt 87,318 Sq. ft X Rs. 16.66 = 1454717.88 Third belt 2,59,596 Sq. ft. X Rs. 13.80 = 3582424.80 Thus, total market value of entire land including land on which structures stand is Rs. 6714001.08 67,14,001/- i.e., Rs. Sixty-Seven Lac Fourteen Thousand and One only. Thus there is no reason to consider separately the extent of land required to support the structures by invoking relevant building bye-laws or development control rules and FSI/FAR and add its value again to this land costs.
34. Deductions towards developments and deferred value are to be carried out from this figure of Rs. 67,14,001/-only. In Exh. 204, Shri Gandhi has given details of development expenses worth Rs. 10,93,000/-. He has also taken deferred value at 6% for 3 years. In Exh. 205 submitted after gap of about 9 months from Exh. 204, he has attempted to set off deferral value adjustment against annual escalation. In Exh. 195, expenditure towards developer's profit and legal selling expenses is mentioned for the first time and its figure disclosed is 11,02,000/-only. In Exh. 204, he shows following expenses:-- Work. Cost in Rs. - Construction of 90,350 sq. ft. Roads and asphalting at Rs. 6.50 Per Sq. ft. 5,87,275.00 - Garden development 65,650 Sq. ft. @ Rs. 2.50 Per Sq. Ft. 1,64,125.00 - Storm Water drain, 1000 Rmtrs. @ Rs. 200 per Rmtrs. 2,00,000.00 - Street lighting 80,000.00 - Architects charges @ 6% 61,884.00 Total liability thus computed by him in it was Rs. 10,93,284/- rounded up to Rs.10,93,000/-only. As against this, in report Exh. 195 prepared in 1996 on the eve of entering the witness box, the expenses disclosed in paragraph 18.50 are as under :-- Work. Cost in Rs. - Construction of water bound macadam road 99,480 Sq. Ft. @ Rs. 1 per Sq. ft. 99,480.00 - Garden development. 32,000.00 - 40 mm water main 2500 Rft. @ Rs. 13 per Running feet. 32,500.00 - Street light poles with cable, 36 in number @ Rs. 2000/-per no. 72,000.00 - Storm water trenches job 05,000.00 - Architects charges @ 6% 14,458.00. Total of all these items comes to Rs. 2,55,438/- and it has been rounded up to Rs. 2,55,000/-in this Exhibit. Its paragraph 19.00 deals with developer's profit and legal selling expenses. It is worked out at 12% of gross realization of estimated value of plots i.e., of Rs.91,78,480/-. Said profit is shown to be Rs. 11,02,000/-. Thus from Rs. 91,78,480/-, Rs.2,55,000/-and Rs. 11,02,000/- are subtracted by Shri Gandhi to arrive at rounded up net land value of Rs. 78,21,000/-.
35. Explanation given by Shri Gandhi is in 1996 when he saw adjacent layout and developments therein, he applied very same standards to his hypothetical layout. However, there is no explanation as to why the developer's profit worth Rs. 11,02,000/- could not be reflected in Exh. 204 or 205. His cross-examination particularly in paragraph 16 shows that he was aware of absence of municipal drain or sewerage main and has asserted that individual plot has to provide for it. In Exh. 195 there is no head of expenditure on storm water drain while in Exh. 204 he has made provision of Rs. 2,00,000/- therefor. He has denied need of common sanitation system. He has accepted that in layout, he has not shown any service lane or common sanitation plot. We therefore find this material sufficient not to accept his working of development expenditure. Similarly, when law requires market value to be worked out on section 4 notification date, the layout is presumed to be complete in all respects on said day and price rise or escalation thereafter is totally irrelevant in hypothetical plotting method. His attempt to set of deferral value against future escalation is therefore erroneous. Hence, his estimate of development expenditure can not be acted upon. Development expenses and developer's profit brought on record by State through its witness Shri Deshmukh (Exh. 219) is only Rs. 7,99,824/-. In award State through him (LAO) only gave Rs. 3,71,504/- for first belt plots at Rs. 9.29 per sq. ft., Rs. 10,25,678/- for belt II area at Rs. 7.90 per sq. ft. and Rs. 14,06,858/- for 3rd belt area plots at Rs. 6.69 per sq. ft. Total compensation worked out was Rs.28,04,040/-. With value of structures, trees and statutory benefits , award granted Landowners total compensation of Rs. 34,67,030/-. Out of total land value, about 25% was roughly taken as development expenditure by LAO Shri Deshmukh. In government layout plots shown are 94 while Shri Gandhi shows 63 plots. Government layout shows road area to be 24% while in Shri Gandhi's drawings it is 15%. It is not the case of Landowners that other layouts in the vicinity were sanctioned without proposal of tar road or sanitation or drainage. But then when number of plots and area under road in both layout are compared, it does not lead to any certain solution. Shri Deshmukh has attempted to work out average rate of plot per Sq. ft. in SMS Layout and there due to less frontage on national highway, area of plots in belt 1 (shop plots) are less as compared to such frontage available in Landowners hypothetical layout. In this situation, We find it safe to go by the case of Government and calculations of Shri Gandhi to compute development expenditure. When Rs.10,93,000/- envisaged as development expenditure in Exh. 204 is loaded with developer's profit of Rs. 11,02,000/- , it works out to Rs. 21,95,000/- only. As layout area is reduced by about 10%, We also reduce this figure by 10% and thus it totals to Rs. 19,75,550/-. Thus developer expenditure worked out is about 29%. This is only amount to be spent for development activities from consideration received from hypothetical buyers and land is already set apart for it. Hence, value proportionately of such land is not included in it. In paragraph 40 of impugned judgment, the Trial Court has held that the future escalation balances the deferral value and hence, has not found it necessary to make any provision for it. This reasoning is found wrong above by us. Shri Gandhi had made provision of 6% per year for three years for said purpose in Exh. 204 in January 1985 before withdrawing it in October, 1985. We accept the same proportion here. Total land value worked out by us is Rs. 67,14,001/- only. Subtracting Rs.1975550/- from it leaves sum of Rs. 4738451/- which Landowners get in lump-sum as compensation which otherwise would have been blocked for future at least 3 years. 6% of Rs. 4738451/- works out to Rs. 8,59,921/-for three years. When half of this figure i.e., Rs. 426460/-is added to Rs. 1975550/-, total comes to Rs. 2402010/-. Subtraction of this total form Rs. 67,14,001/-, leaves balance of Rs. 43,11,991/- which therefore is net land value. Point No. C is answered accordingly. As to Point No. D : Compensation of two residences i.e. big bungalow and second bungalow now need consideration. Landowners have solely relied upon their expert. How to approach evidence of said expert Shri Gandhi is also a moot question. In AIR 1995 SC. 840 - (Special Land Acquisition Officer v. Sri Siddappa Omanna Tumari) :- " 7. When the Collector makes the reference to the Court, he is enjoined by Section 19 to state the grounds on which he had determined the amount of compensation if the objection raised as to the acceptance of award of the Collector under Section 11 by the claimant was as regards the amount of compensation awarded for the land thereunder. The Collector has to state the grounds on which he had determined the amount of compensation where the objection raised by the claimant in his application for reference under Section 18 was as to inadequacy of compensation allowed by the award under Section 11, as required by sub-section (2) of Section 18 itself. Therefore, the legislative scheme contained in Sections 12, 18 and 19 while on the one hand entitles the claimant not to accept the award made under Section 11 as to the amount of compensation determined as payable for his acquired land and seek a reference to the court for determination of the amount of compensation payable for his land, on the other hand requires him to make good before the Court the objection raised by him as regards the inadequacy of the amount of compensation allowed for his land under the award made under Section 11, with a view to enable the Court to determine the amount of compensation exceeding the amount of compensation allowed by the award under Section 11, be it by reference to the improbabilities inherent in the award itself or on the evidence aliunde adduced by him to that effect. That is why, the position of a claimant in a reference before the Court, is considered to be that of the plaintiff in a suit requiring him to discharge the initial burden of proving that the amount of compensation determined in the award under Section 11 was inadequate, the same having not been determined on the basis of relevant material and by application of correct principles of valuation, either with reference to the contents of the award itself or with reference to other evidence aliunde adduced before the Court. Therefore, if the initial burden of proving the amount of compensation allowed in the award of the Collector was inadequate, is not discharged, the award of the Collector which is made final and conclusive evidence under Section 12, as regards matters contained therein will stand unaffected. But if the claimant, succeeds in proving that the amount determined under the award of the Collector was inadequate, the burden of proving the correctness of the award shifts on to the Collector who has to adduce sufficient evidence in that behalf to sustain such award. Hence, the Court which is required to decide the reference made to it under Section 18 of the Act, cannot determine the amount of compensation payable to the claimant for his land exceeding the amount determined in the award of the Collector made under Section 11 for the same land, unless it gets over the finality and conclusive evidentiary value attributed to it under Section 12, by recording a finding on consideration of relevant material therein that the amount of compensation determined under the award was inadequate for the reasons that weighed with it. 15. It has become a matter of common occurrence with the claimants who seek enhanced compensation for their acquired lands from court to produce the reports of valuation of their lands in court purported to have been prepared by the experts. No doubt, courts can act on such expert evidence in determining the market value of the acquired lands, but the court having regard to the fact that experts will have prepared the valuation reports in the court and will depose in support of such reports, at the instance of the claimants, must with care and caution examine such reports and evidence given in support thereof. Whenever valuation report made by an expert is produced in court, the opinion on the value of the acquired land given by such expert can be of no assistance in determining the market value of such land, unless such opinion is formed on relevant factual data or material, which is also produced before the court and proved to be genuine and reliable, as any other evidence. Besides, if the method of valuation of acquired land adopted by the expert in his report is found to be not in consonance with the recognized methods of valuation of similar lands, then also, the opinion expressed in his report and his evidence can be of no real assistance to the court in determining the market value of the acquired land. Since the exercise which will have been done by the expert in arriving at the market value of the land in his report on the basis of factual data bearing on such valuation, will be similar to that to be undertaken by the court. In determining the market value of the acquired land, it can no doubt receive assistance from such report, if it is rightly done and the data on which the report is based is placed before the court and its authenticity is established. 16. Therefore, when the valuation report of an acquired land is made by an expert on the basis of prices fetched or to be fetched by sale deeds or agreements to sell relating to the very acquired lands or the lands in the vicinity need arises for the court to examine and be satisfied about the authenticity of such documents and the truth of their contents and the normal circumstances in which they had come into existence and further the correct method adopted in preparation of the report, before acting on such report for determining the market value of the acquired land. The opinion expressed in the report that the author of the report has made the valuation of the acquired lands on the basis of his past experience of valuation of such lands should never weigh with the court in the matter of determination of market value of the acquired lands, for such assertions by themselves cannot be substituted for evidence on which it ought to be based and the method or valuation adaptable in such report. 17. Therefore, when a report of an expert is got produced by a claimant before the court giving market value of the acquired lands, the court may, choose to act upon such report for determination of the amount of compensation payable for the acquired lands, if the data or the material on the basis of which such report is based is produced before the Court and the authenticity of the same is made good and the method of valuation adopted therein is correct."
37. In Prabhakar Raghunath Patil v. State of Maharashtra, (2010) 13 SCC 107, Hon'ble Apex Court has appreciated the evidence of expert on structures. Reliance was placed by the appellants on the evidence of the expert witness and also on the circular dated 3-1-1991 issued by the Chief Engineer, Amravati in respect of cost of construction in justification of their prayer for the increase of the valuation of the structure. Under that circular the cost of residential building was fixed for Ground floor at Rs. 2800 per square metre, for First floor at Rs. 2200 per square metre and for Second floor at Rs. 2200 per square metre. Insofar as the opinion of the expert is concerned, he had not given any specific evidence as to what was the age of the structure when it was notified for acquisition. Hon'ble Court held that without making enquiry regarding the age of the structure, it would be difficult to assess its valuation and, therefore, the expert was not justified in not making an assessment with regard to the age of the structure. He was faulted on the basic principle of assessment of valuation of a construction. Hon'ble Court also noted that the cost of construction of the ground floor is always on the higher side while the cost of construction of first floor and second floor is on the lower side. The expert examined had also ignored the said fact going to the root of the valuation and for that also the evidence of the expert was held not reliable. The only evidence that, therefore, was available before Apex Court was the circular issued by the Chief Engineer, Amravati dated 3-1-1991 regarding district schedule rates in respect of cost of construction with reference to the Building and Construction Department of the State of Maharashtra. This High Court, had held that the aforesaid evidence for the year 1991 in District Amravati could not be a safe guide for the determination of the compensation of the structure acquired in the year 1983. Hon'ble Apex Court noted that the practice of issuing such circular by the Chief Engineer was for the first time introduced in the year 1991 and no such practice was in existence in the year 1983. But since there was at least some evidence indicating the district schedule rates for the standing structure in the year 1991, Hon'ble Court undertook the exercise of relating it back to the year 1983 after pointing out how and why it must be undertaken with great care and caution. The High Court, while referring to the oral evidence adduced by the expert, had stated found the fine condition of the structures and the superior quality of materials used for construction of the same beyond doubt. Hence, despite the ambiguity surrounding the age of the structures, as the condition and quality of the building was never called into question. Therefore, Hon'ble Apex Court raised the compensation awarded. It also observed that the margin of error in comparing schedule rates for construction of buildings in the same district would be lesser than in attempting to use future sale transactions as exemplars. Hon'ble Apex Court considered a deduction of 60% (approximate) from the said valuation of the cost of construction in 1991 appropriate, and accordingly arrived at a compensation of 1700 per square metre for the structure. This percentage of deduction at 60% is based on the building cost index between 1983 and 1991 published by the Central Public Works Department. Thus Hon'ble Apex Court did not accept the report of expert but relied upon other evidence/material brought on record by parties to determine the compensation for structure.
38. It is obvious that data of type and nature looked into by Shri Gandhi while determining the market price of plot no. 1 or then charts prepared by him to substantiate that exercise is not available when one comes to his report on valuation of structures. There he blindly accepts 1930 - the year of purchase of properties by his client i.e., Landowners, as year of construction and decides the age to be 54 as on 19/2/1984. He then points out approximate future life of the structures and treating total life thereof to be 85 years, he applies depreciation. He claims that he has used full replacement costs method to arrive at 1984 value of structures. rabhakar Raghunath Patil v. State of Here, we may point out that in P Maharashtra, (supra) Hon'ble Apex Court has made following observations on principles relevant for deciding the full replacement cost of structures:--"13. In Administrator General of W.B. v. Collector- (1988) 2 SCC 150=AIR 1988 Sc 943, this Court held that: "17. ... building value is estimated on the basis of the prime cost or replacement cost less depreciation. The rate of depreciation is, generally, arrived at by dividing the cost of construction (less the salvage value at the end of the period of utility) by the number of years of utility of the building. The factors that prolong the life and utility of the building, such as good maintenance, necessarily influence and bring down the rate of depreciation."
39. Admittedly, following buildings stand on the acquired land - One big bungalow; One small bungalow, One barrack type building, Two toilet blocks and Mali Shed. Award under Section 11, grants land owners sum of Rs. 3,78,000/- towards these structures, and before Reference Court they had claimed compensation of Rs. 18,22,000/-. They thus, claimed Rs. 14,44,000/- more towards these structures. Before us, learned Senior Counsel has restricted his arguments to only two structures namely - Big bungalow and small bungalow. Evidence available on record is of Government Valuer - Shri Manoharrao Gulabrao Kale at Exh.217 and his valuation report is at Exh.218. Land owners have relied upon evidence of Shri Gandhi and his report at Exh.195.
40. The Reference Court/Trial Court has found that Shri Kale, fixed the rate of construction of ground floor of big bungalow at Rs.1150/- per square meter and of first floor at Rs.1050/- per square meter. For small bungalow, he determined the rate at Rs.900/- per square meter. The valuation was claimed to be made on the basis of CSR rates of 1984. It is not in dispute that these rates are not placed on record, or even figure anywhere in his report Exh.218. His cross examination reveals that as measurements of existing structures were available with him, he was given time to point out how on the basis of CSR rates a particular valuation was arrived at by him. He got two adjournments also to substantiate his calculations. On one occasion CSR Rates were shown to him and he was called upon to justify his calculations, but he failed to produce anything on record to show correctness of his calculations by applying CSR Rates. Trial Court therefore, has refused to believe his report at Exh.218. The Trial Court has also noted the fact that he did not consider the Porch and Balcony for construction valuation and no reason was assigned for excluding the same. Then it found that he had deducted sum of Rs. 1,50,000/- from valuation of structure i.e. of Big bungalow on account of renovation expenses. No document could be produced to show that such expenses were actually incurred. Taking over all view of the matter, it did not rely upon the evidence of Shri Kale. For same reasons it also refused to accept evidence of the Land Acquisition Officer Shri Deshmukh.
41. In paragraph no.49 of its judgment, the Trial Court has referred to the evidence of Shri Gandhi. It found that he has looked into the construction of Porch and Balconies and arrived at construction cost by using data collected by him, his personal experience and CSR Rates for cross checking. It has given importance to admission by Shri Manohar Kale in his cross examination that Shri Gandhi has correctly applied the depreciation method. It further looked into the cross examination and found that assertions of Shri Gandhi were not shaken and hence, in view of these 5-6 lines, it proceeded to accept his evidence and relied upon his figure of Rs. 17,57,721/- as value of big bungalow, small bungalow, out houses, Porch, Balconies, Mali Shed and lavatory box. It deducted an amount of Rs. 3,78,000/- already awarded by the Land Acquisition Officer and fixed the compensation payable in this respect at Rs. 13,79,721/-. It also found that there was one Well, but then it was without water and hence of no use, but a disadvantage. It therefore, did not allow land owners anything towards value of that Well.
42. The Trial Court itself has relied upon the judgment reported at 1997 (2) Land Acquisition Laws 537 (Indian Rarearth Ltd. .vrs. Elsave Fernandis). It noted that as per said judgment, it was incumbent upon the valuation officer to show details of valuation in his report. If his report is supported by proper data, it would help the Court in finding out whether building and other structures were properly valued or not, and to show that valuation exercise was impartial and not arbitrary. It found that neither the Land Acquisition Officer Shri Deshmukh nor Shri Kale, had produced relevant material. However, one fails to understand why the Trial Court could not apply very same standard while appreciating the evidence of Shri Gandhi.
43. This brings us to consideration of evidence of Shri Gandhi on these two buildings i.e., big building and small building. In his examination-in-chief he has given his qualifications and thereafter has stated that he was practicing as Architect, Structural Engineer and Valuer for about 35 years and as on date on which his deposition was recorded, i.e. on 07.12.1996. He has stated that he was fellow of Institution of Valuers and a registered valuer with the Ministry of Finance, Government of India. He was panel valuer of Life Insurance Company and of Bombay High Court for immovable properties, and had worked as an Editor of a Technical Journal by name "Indian Valuer" for a duration of 6 years. He claimed that during practice he planned, designed and supervised number of residential and industrial buildings and fixed valuation of properties in rent fixation matters and also for taxation and loan advance purposes and land acquisition purposes. He also stated that he had appeared in the Court as an expert. He confirmed statement made by him in his report, and that report came to be exhibited as Exh.195. His cross-examination reveals in paragraph 22 that he inspected two buildings on 21.03.1984 and he had no knowledge whether main building was then repaired already by government. Thereafter, he visited the buildings on 11.07.1984 and 27.12.1988. He accepted that the building was very old having old structure and he could not trace any document about the date of construction. He accepted that he did not mention CSR rates in his report and his report was based upon his personal experience and data collected by him. He further volunteered that he used CSR to cross check and, therefore, CSR is not mentioned in his report. He adopted lump- sum per square feet prices as per his experience for valuation. He accepted various method, but stated that those methods were not for arriving at valuation of building, but for valuation of property which included land and building both. He further stated that he adopted rates on the basis of his own experience and he has mentioned those rates applicable to built up floor area basis. He included porch and galleries also in built up area. He accepted that porch of building has no plinth and he calculated total area of porch as built up area. He has given same average rate for porch as also for projecting balconies. He accepted that cost of first floor of any building is less then ground floor. He denied that porch and balconies needed to be excluded from cost estimation and he also denied that cost of projecting structure was also included and built up area. He accepted that because of thicker walls, carpet area is reduced. He accepted that he gave weightage of 35% in respect of big building. He further stated that he had not prepared detailed estimate of acquired building and he considered depreciation of about 22% for all the buildings. He denied that rate of depreciation is about 1% per year of the building cost and he stated that he applied "sinking fund of depreciation method". He took 1930 as base year for construction. He explained the term "sinking fund" to mean that funds required to be set aside every year to recoup capital invested in the building. No document was supplied to him by land owners for arriving at annual fund and according to him it was not necessary. The sinking fund method and calculation was based upon assumption. He further stated that other methods i.e. Straight Line Method, Constant Percentage Basis and Qualify Survey Method were not scientific. He further stated that he had not verified the Government Method of valuation, and therefore, could not say whether the rate given by him was higher than the government rate. He claimed that he determined the valuation on the basis of his experience and on the basis of the market rate prevailing in Amravati City.
44. His (Gandhi's) report at Exh.195, in it's paragraph no.5.00 shows type of construction of Bungalow No.1 as also Bungalow No.2. He has given general description like, old conventional bungalow built in Palatial style with number of large sized rooms at each floor, high ceiling, large size doors and windows of Burmah teak, which was than available freely, but very rate at the time of preparation of report. He has pointed out that the structure was load bearing and external walls were 21 inches thick. He has also given the length and breadth of brick pillars, he has pointed out teak wood paneled windows with iron fittings and oil paint, guard bars, different type of teak wood doors. Some doors were paneled and some were partly glazed and partly paneled. Upper floor doors and windows have curved glazed ornamental fan lights and have brass fittings. No specific number of doors or windows is disclosed by him. All wooden work is stated to be painted. Floor is stated to be of Shahabad Ladi on both the floors. Steel joists with ladi and brick coba on first floor and terrace of first floor is finished with patent stone paving of water proof coba. Use of ornamental concrete balusters provided with top decorative coping for a terraces to add to architectural beauty , is also mentioned. A concrete staircase with teak wood railing and first floor roof of Manglori tiled with teak wood trusses, teak wood perlins and teak wood boarding, is also mentioned. Best timber is used for roof work. It is mentioned that the bungalow is in good condition, due to use of quality material and good workmanship. There was no indication of white ants and timber was not decayed. Temporary sheds open on sides were provided at ground level touching walls of main building and it was having wooden bulley posts and asbestos corrugated sheets roof with natural ground, as its floor. A balcony covered at top with C.I. Jali and teak wood hand rail, is also mentioned. Electrical wiring is stated to be open type with wiring on teak wood battens. A toilet block with pipe fittings, waste line is connected to septic tank, is also noted. The report also mentions provision of standard plumbing and water supply fittings.
45. About bungalow no.2, report of Shri Gandhi discloses that it is a load bearing structure with 9 inches plinth and about 17feet height. It's side verandah has front height of 10 feet above plinth, 8 feet wide paved and a uncovered platform is also provided around the main building at plinth level. It has brick walls which are about 15 inches thick and teak wood paneled or partly glazed and partly paneled doors are fixed. Windows have teak wood with ornamental curve fan light and fly proof jali. Burmah teak is used for wood work. It's roof is of manglore tiles with teak wood perlins and teak wood boarding. Verandah has manglore tile roof with balli rafter. Entrance porch has manglore tile roof with teak wood trusses. Flooring is of plain cement tiles and some rooms have patent stone floor. Cooking platform is provided in kitchen. W.C. and bath are connected to waste lines and to septic tanks and soak pit. Standard electrical wiring work is also done.
46. This discussion shows that except for giving the details of structure, the report does not give other necessary background which might have looked into by said expert witness. He has undertaken the exercise of valuation in paragraph no.20 and there he has given calculations of area of bungalow no.1. The ground floor is stated to 5582 sq. ft. with porch and first floor is stated to be 3374 sq. ft with Balcony. Total floor area is given as 8956 sq. ft. He has then in next paragraph given rates felt by him as fair and reasonable cost of construction of a new (full replacement cost) such structure for Bungalow no.1. He has applied rate of Rs. 165/- per sq. ft. for bungalow no. 1 and for Bungalow no.2 he has disclosed rate of Rs.150/- per sq. ft. In paragraph thereafter, he has mentioned that the structures were built some time in the year 1930 and hence at the time of acquisition their age was 54 years. He has mentioned that all structures were in sound condition and actually in use and would last for a tenure of 30-40 years. Total life of the structure is, therefore, taken to be 85 years by him. He has then mentioned sinking fund method for depreciation and then proceeded to undertake mathematical calculations. He has arrived at depreciated value or present value of bungalow no.1 at Rs.11,60,064/- and of Bungalow no.2 at Rs. 3,41,722/-.
47. His exercise shows that he has applied same rate for ground floor and first floor of big bungalow. He has applied that rate even for structures which had no plinth, though in his evidence he has mentioned that he has cross-checked it by using CSR, there is no such mention anywhere in the said report at Exh.195. He has also mentioned that he has looked into the market rates prevailing in Amravati City, but that statement also no where figures in his report at Exh.195. The report itself is prepared on 21.08.1995 and recording of his evidence has commenced on 07.12.1996. In absence of either CSR rates or then rates verified from Amravati market on record, it is difficult to appreciate the rates worked out and applied by him. As already noted above, in paragraph no.20.20 of his report, he suddenly mentions the rate per square feet applied by him, without disclosing any basis therefor. Even if his experience is to be looked into, he has not pointed out it's use while preparing report at Exh.195. The report has obviously been obtained by the landowners for using in Court matters and Shri Gandhi was aware of its purpose. It cannot be forgotten that he had appeared before land acquisition officer, when that officer had undertaken efforts to find out market value of the acquired property. He has not given the rates of bricks or wood prevailing in 1984, rate of cement or steel then prevailing and even labour charges are not mentioned. He has not pointed out regular maintenance. It is, therefore, obvious that in absence of this relevant material, it is not possible to find out correctness or otherwise of his claim in Exh.195 in this regard. An expert like him has to describe the property in requisite details and thereafter mention the prevailing market position also, so as to enable the Court or the authority to ascertain the correctness of his stand by appreciating his line of application of mind. Here, though CSR rates were made available to one witness of State Government during his cross-examination and effort has been made to discard him, Landowners have not brought that rate on record and Shri Gandhi, has not pointed out that CSR also provided rates for same or similar type of construction. On the contrary, in paragraph no.26, this witness has stated that he has given positive weightage of 35% in respect of building no.1. During arguments, it was stated that the CSR rates consider cement and iron at controlled rate and not at open market rate. However, this fact and its use it also not apparent in report at Exh.195. The report, therefore, appears to be prepared only on the basis of the assumptions which the expert claims as supported by his experience, however, law does not permit use of said report for the purpose of determination of valuation. Landowners and said expert Shri Gandhi, ought to have produced relevant basic data, so as to enable the trial Court and thereafter, this Court to understand the nature of exercise undertaken by him and to verify it. We find that for reasons recorded by it to reject the report of Shri Kale, the trial Court also ought to have rejected the report of Shri Gandhi.
48. Here, Shri Gandhi does not disclose search made by him to find out age of construction and he remains satisfied with accepting year of purchase as year of construction. He has not given any data to show the contemporary rates of construction then prevalent in that area. He does not find it necessary to refer to CSR rates or any material gathered by him for arriving at his rates. Thus he refuses to supply anything to enable State to cross check his claim or to Court to evaluate it. In ultimate analysis, one has to only accept his word or the his experience to support that word. He includes structures without plinth and also values first floor at wrong rates. Depreciation rate applied by him is also not sustainable in the light of above verdict of Hon'ble Apex Court. We find that initial burden to show that valuation of structures by LAO is incorrect has itself not been discharged by Landowners. By pointing out cross examination of Shri Kale, effort was made to show that he could not and did not choose to substantiate exercise undertaken therein. It is not sufficient to rebut the presumption attached to award under Section 12 of Act. Moreover that also does not mean that Landowners automatically become entitled to something more towards costs of construction or as compensation for structures. Appreciation of evidence and approach of Court in such matters can be gathered from judgment in case of P. Ram Reddy and Others vs. Land Acquisition Officer, Hyderabad Development Authority (supra). Hon'ble Apex Court has held that in land acquisition references before Civil Courts, when witnesses give oral evidence in support of the claims of claimants for higher compensation the in-effective cross-examination of such witnesses, is not an uncommon feature if regard is had to the manner in which claims for enhanced compensation in land acquisition cases are defended in courts on behalf of the State. It is observed that if the courts were to accept such statements of witnesses as true merely because they are not subjected to cross-examination or effective cross-examination or because evidence in rebuttal thereof has not been adduced, it would amount to doling out public money to the claimants far in excess of their legitimate entitlement for just compensation payable for their lands. If such situation is prevented by courts dealing with claims for compensation by testing the statements of witnesses for claimants on the basis of probabilities, the Courts will have performed the duty justly expected of them. Hence, no Court which tests the oral evidence of the claimants on the touch-stone of probabilities calling into aid, its experience of life, men and matters and find such evidence to be untrustworthy, the same cannot be found fault with In Bhagwan Singh vs. State of Punjab(I) (supra) (Para 22), the Hon'ble Apex Court states that resort to Section 145 of Evidence Act would only be necessary if the witness 'denies' that he made the former statement. In that event it would be necessary to prove that he did, and 'if the former statement was reduced to writing,' then Section 145 requires that his attention must be drawn to those parts which are to be used for contradiction. But that position does not arise when the witness admits the former statement. In such a case all that is necessary is to look to the former statement of which no further proof is necessary, because of the admission that it was made. Here, We find that Shri Gandhi admits all his reports at Exh. 204,205 and Exh.195. We accordingly have refused to accept his evidence and report on valuation of structures. The land value also has been worked out by us independently. In this situation, as landowners have failed to bring anything on record to show that the valuation of big bungalow or other bungalow as per report at Exh.195, or then Exh. 195 can be looked into and have failed to substantiate their demand for enhancement of compensation on that account, no relief in that regard can be given to them. Merely because the valuation by the Land Acquisition Officer and grant of compensation for structures is not found to be substantiated, burden cast by law on Landowners is not discharged. Hence, the land owners cannot claim additional compensation for these two structures.
49. We will still briefly consider the valuation exercise undertaken by Shri kale and Shri Gandhi. Later has used rate of Rs. 165/-per Sq. ft. flat for entire big bungalow and Rs. 150/-per sq. ft. for bungalow no. 2 to reach its total replacement cost. This rate is same in Ex. 204 as also Exh. 195. He has used 4.5% on age 54 years of both these structures to calculate depreciation. There is no explanation or justification for using this figure or the calculating less depreciation in his evidence or report. When he takes total life of both these structures to be 85 years , replacement costs per year work out to Rs. 17,385/-for big bungalow and Rs. 5,121/-for second bungalow. Rs. 9,38,799/- is therefore depreciation for big bungalow for 54 years and Rs. 2,76,543/- is therefore total depreciation for bungalow 2. Even if the salvage value at the end of the period of utility of 85 years is presumed "nil", still the when Rs. 9,38,799/- is deducted from Rs. 14,77,740/-, Rs. 5,38,961/- works out to be the value of big bungalow as against Rs. 11,60,064/-stated by Shri Gandhi . Similarly, when Rs. 2,76,543/-is reduced from Rs. 4,35,300/-, Rs.1,58,757/- is the cost of bungalow no. 2 while he mentions it to be Rs. 3,41,722/-. Thus total replacement costs of both these bungalows comes to Rs. 6,97,718/- only. Thus even presuming or believing entire exercise of Shri Gandhi, the total costs of both these buildings is Rs.6,97,718/- while he takes it at Rs.15,01,786/-. His method or calculation do not find any support at-least on record. Though his report shows that both these bungalows have completed more than half of their life, depreciation shown by him is not proportionate as he has used full replacement cost method. For both bungalows, depreciation is little less than 25% of replacement cost. Depreciation amount is 21.49% of the value worked out by him. The factors that prolong the life and utility of the building, such as good maintenance, necessarily influence and bring down the rate of depreciation are not on record. There is no evidence of timely or annual repairs. On the contrary, State had claimed adjustment of Rs. 1,50,000/- spent by it on renovation/repairs of big bungalow and Trial Court has not accepted it. Methodology of Shri Gandhi runs counter to similar principles illustrated in "Administrator Genl. of West Bengal v. Collector, Varanasi"(supra) by Hon'ble Apex Court.
50. Shri Kale had worked out cost of ground floor of big bungalow at Rs. 5,98,900/-and of first floor at Rs. 2,94,000/-. Value of bungalow no. 2 reached by him is 2,47,980/- only. He has then taken the age of building to be 69 years and thereafter claims to have calculated depreciation as per page 14.40 of civil engineering hand-book. His computation does not disclose the total life period looked into by him. However, it appears to be 100 years. His exercise is not accepted for valid reasons by Trial Court and also does not help in determination of market value. But as burden has not been discharged by the Landowners, the grant in award can not be disturbed. His cross examination is not sufficient to prove any procedural or other error in method adopted by him or its result. LAO had accepted his calculations and then deducted Rs. 1,50,000/- allegedly spent on renovation by State. He therefore awarded Rs. 3,78,000/- as compensation towards structures. Trial Court has set aside this sum of Rs. 1,50,000/- as said expenditure has not been established at all. Evidence on record does not establish any such sum of Rs. 1,50,000/- or any other sum spent on renovation. We therefore maintain this finding of Trial Court and grant Landowners Rs. 5,28,000/- towards the structures. Point No. D is answered accordingly.
51. As to Point No. E :- As a result of this discussion, We find the quantum of compensation payable to Landowners under various heads as under :-- A. Towards Lands:- Rs. 4311991.00. B- Towards structures :- Maintained as per award. This includes Rs. 22,120/-towards fence but nothing towards Trees. Rs. 528000.00. C- Towards Trees:- Rs. 2990.00. Sub-Total of A to C = Rs. 4842981.00. D- 30% solatium u/S 23(2) of the Act on Rs. 4842981. = Rs. 1452894.00. Total of A to D = Rs. 6295875.00. Landowners have already received = Rs. 2030116.00. E. Net amount of compensation payable on plot no. 1 (Land+Structure+Trees+ = Rs. 4265759.00. Solatium) F. Addl. component at 12% on Rs. 4842981/- from 19/2/1984 till 6/8/1985 i.e., for 1 year and 5 months and 19 days (533 days) = Rs. 848649.00. Compensation towards plot 1 and Rental compensation - E and F. = Rs. 5114408.00. Interest at 9% on this sum of Rs. 51,14,408/- from 6/8/1985 to 5/8/1986 and thereafter, at 15% till date of its payment to Landowners. If Landowners have already recovered anything in excess of what We have found them entitled to, State Government is free to recover the same as per law with 15% interest on it from date on which it was paid by it till its recovery back by State Government. . Accordingly, We proceed to pass following order:--
ORDER.
Landowners are held entitled to receive :--
1. Rs. 42,65,759.00. (Forty Two Lac Sixty-Five Thousand Seven Hundred Fifty Nine Only) towards acquired lands, structures, trees and solatium.
2. Rs. 8,48,649.00 (Eight Lac Forty Eight Thousand Six Hundred Forty Nine only) towards 12% additional component under Section 23(1-A) of Act.
3. Interest at 9% on above sum of Rs. 51,14,408.00 (Fifty One Lac Fourteen Thousand Four Hundred and Eight Only) from 6/8/1985 to 5/8/1986 and thereafter at 15% till date of its payment to Landowners.
4. Appeal of State is partly allowed and that of Landowners is also dismissed. However, in the circumstances, parties to bear costs as incurred.
5. If Landowners have already recovered anything in excess from State , State Government is free to recover that excess sum as per law with 15% interest on it from date on which it was paid to Landowners till its recovery back by State Government.
6. Judgment dated 31/12/1999 delivered by Joint Civil Judge, Senior Division, Amravati in Reference proceedings land acquisition case 13 of 1988 is accordingly modified and substituted.
7. Decree be drawn accordingly in both matters.