State of M.P. Etc. Vs. Harishankar Goel and Another Etc. - Court Judgment

Excerpt:
property - compensation - sections 4 (1) and 23 and 28 of land acquisition act, 1894 - appeals against enhanced compensation - acquired land situated beyond municipal limits and on uneven land - no sanction from municipal corporation or any competent authority obtained to construct housing colony - land possessed of potential value compensation to be determined on basis of market value on square yard basis - enhancement of compensation not justified - appeals allowed. - multi state co-operative societies act (51 of 1984)sections 18 & 95: [s.b. sinha & dr. mukundakam sharma,jj] state co-operative society area of operation falling in two states on reorganisation of state held, it automatically becomes a multi-state society. procedure prescribed for conversion of state society to multi-state society under section 18 need not be followed. section 95: [s.b.sinha & dr.mukundakam sharma,jj] u.p. state re-organization act (2000), sections 67,86 & 93 - state co-operative society - bifurcation of state on reorganization area of operation of co-operative society falling in both states held, section 95 of the multi-state act, 1984 has been incorporated to meet a particular situation. the said section provides that it would be operative as a consequence of reorganisation of states and particularly when any area or portion of area of the society is bifurcated or divided and then falls in the jurisdiction of two state administrations. the idea is to obviate the administrative stalemate arising out of creation of a new state and new administration. the very purpose of having this kind of provision is to stop the applicability of a state co-operative societies act over more than one state as a state act cannot have extra-territorial operation and the multi-state co-operative societies cannot be regulated by a state co-operative societies act. section 67 of re-organisation act cannot prevent such conversion when under section 95 of the multi-state act already exists in the form of central law which takes care of and makes provisions for such co-operative societies which as and from the day of the re-organisation of a particular state become multi-state co-operative societies. section 95: [s.b. sinha & dr. mukundakam sharma, jj] uttaranchal co-operative societies act (5 of 2003), section 129 - u.p. state co-operative society - bifurcation of state on re-orgainsation - object of society falling in area of both states held, once a state co-operative society becomes multi-state society on re-organisation of state a state legislation viz. uttaranchal act 2003 which has been enacted subsequently cannot have an overriding effect over a central law viz. the multi-state act and make the central act inapplicable. the bye-laws of the u.p. state society which is an apex society have not been amended so far. the area of operation of the state-society as laid down in its bye-laws it still the same as it was on the date of the reorganization of the state of u.p. therefore, it would be legally impermissible to say that now the area of operation of the state apex society is confined to the state of u.p. alone and that it has ceased to be a multi-state co-operative society. as far as withdrawal of member-co-operative societies of the u.p. state co-operative society operating in the state of uttaranchal is concerned, the deemed conversion of a co-operative society into a multi-state co-operative society by virtue of section 95 of the multi-state act, 1984 is an irreversible process and the membership of a multi-state co-operative society in a particular state at a given point of time is only a fortuitous circumstances on the basis of which a multi-state co-operative society cannot automatically revert to assume the character of a state co-operative society. further, there is no provision in the multi-state act which permits such automatic conversion of a multi-state co-operative society into a state co-operative society by operation of law. - it is well settled law that the judge determining compensation in a compulsory acquisition should eschew feats of imagination; they did not file their own sale deeds to show at what rate they had purchased the land which would have furnished best material.1. these appeals arise from the judgment of the high court of madhya pradesh. on a difference of opinion among two learned judges, third judge on reference in miscellaneous appeal no. 82/75 and 83/75 enhanced the compensation. the notification under section 4(1) of the land acquisition act i of 1894 was published on january 17, 1964 acquiring 33 bighas 15 biswas of land belonging to two different individuals for industrial purpose. the land acquisition officer by his award under section 11 determined compensation on march 14, 1966 at rs. 3,150 per bigha treating the lands to be agricultural lands. on reference under section 18, the additional district judge by his award and decree dated may 15, 1975 enhanced the compensation to rs. 1 per sq. ft. and also awarded statutory benefits. on appeal, learned judge b.c. verma, j. determined compensation at 0.90 per sq. ft. deducted 15% towards developmental charges. learned judge r.c. srivastava, j. determined the compensation at rs. 0.50 per sq. ft. and deducted 25% towards developmental charges. on reference, learned judge t.n. singh, j. agreed with the determination of compensation b.c. verma, j. at rs. 0.90 per sq. ft. but deducted 20% towards developmental charges. he also awarded enhanced solatium, interest and additional amount as available under the amendment act 68 of 1984. thus these appeals by the state and also cross appeal by the claimants claiming compensation at rs. 1 per sq. ft.2. the question that arises for consideration is as to what is the rate of compensation that the lands are capable to secure in an open market. it is not in dispute that though they were the agricultural lands as on the date of notification the respondents who are no other than the builders and developers had, after the purchase obtained sanction under section 172 of the madhya pradesh revenue code for conversion of the land into non-agricultural lands, but no sanction from the municipality of construction of any colonisation, was obtained. even learned judge b.c. verma, j. had noted in his judgment that though the respondents - claimants had entered into the agreement of sales with the prospective purchasers, they had not completed the sale transactions. those agreements were brought into existence to bolster the claims. however, the learned judge found that the lands were situated very near to the vicky moped factory. they about the jhansi road; sitholi railway station is one mile from the acquired lands, but they are situated outside the municipal limits of gwalior municipal corporation. their lands are fit for developing industries, housing colonies, godown, petrol pumps etc. the evidence also disclosed that the land was not improved and it was not even land. considered in this background, the learned judge had accepted the sale deed executed by one of the claimants for a small extent of land at rs. 0.50 per sq. ft. but having found that the lands were possessed of potential value, determined the compensation at rs. 0.90 per sq. ft. and, as stated earlier, deducted 15% towards developmental charges. learned judge srivastava, j. relied upon the very sale deeds put forth by the claimants and held that they could not claim higher than what they had put up, namely, rs. 0.50 per sq. ft. and, therefore, determined the compensation on that premise and deducted 25% towards developmental charges. as seen, learned t.n. singh, j. had agreed with b.c. verma, j. in determining the compensation at rs. 0.90 per sq. ft.3. the question, therefore, is : what would be the reasonable market value the lands are capable to fetch as on the date of the notification had it been sold in the open market to a willing purchaser? it is seen that when 33 and odd bighas of land was sought to be sold in the open market, no willing prudent purchaser would with any credulity agree to purchase it on sq. ft. basis. it is well settled law that the judge determining compensation in a compulsory acquisition should eschew feats of imagination; sit in the arm chair of a willing purchaser and put a question to himself whether as a willing prudent purchaser, he would offer the same price sought to be awarded for the acquired land. it would, therefore, be clear that the learned judges did not apply correct legal tests to determine the compensation but determined the compensation on the basis of sq. ft. which is illegal per se. we, therefore, hold that the learned judges had applied wrong principle of law in determining compensation.4. the question then arises is what would be the just and adequate compensation which the lands are capable to fetch in the open market? it is seen that the lands are situated beyond the municipal limits and on uneven land. but for the vicky moped factory, there was no other immediate development. the claimants themselves purchased the lands as builders to develop the lands. they did not file their own sale deeds to show at what rate they had purchased the land which would have furnished best material. admittedly, no sanction from the municipal corporation or any competent authority was obtained in that behalf to construct housing colony. necessarily when the land was to await some time for development either for industrial or colonisation, the price that could not be secured at the rates was put forth by the claimants. they themselves had sold at rs. 0.50 per sq. ft. for a small extent of land. the learned judges, therefore, had not correctly appreciated the correct principles of law in determining the compensation. having found that the lands were possessed of potential value the compensation could be determined on the basis of the market value on square yard basis. considered from this perspective, we are of the view that the market value for the land would be rs. 4 pe sq. yd. and we agree with learned judge srivastava, j. that the deduction should be 25% towards developmental charges since it is in evidence that acquisition is for industrial purpose and electricity was immediately available as found by learned judge t.n, singh, j. the lands are adjacent to national high-way. it is settled law that normally 33-1/3% should be deducted towards developmental charges. in this case as a special case, 25% is deducted. it will not be treated as pretent.5. the learned judges were wholly wrong in applying the amendment act 68 of 1984 since the acquisition was made in the year 1964 and the collector had made the award on march 14, 1966 and the reference court itself determined the compensation on may 15, 1975. under those circumstances, the claimants are not entitled to the additional benefits of enhanced solatium under section 23(2) at 30%, interest under proviso to section 28 at 9% for the first year from the date of taking possession and thereafter at 15% till date of deposit on the enhanced compensation and additional amount under section 23(1-a). the judgment in that behalf also stands set aside. instead, the claimants will be entitled to solatium at 15% on the enhanced compensation and interest at 4% on the enhanced compensation from the date of taking possession till date of deposit into court.6. the appeals of the state are accordingly allowed and the cross appeal of the claimants stands dismissed, but in the circumstances, without costs.