FA/1310/1982 of SHANTABEN Vs OFFICER ON SPL DUTY (LAND ACQUISITION) on 10 December 1996

1. Whether Reporters of Local Papers may be allowed to see the Judgment ?����

2. To be referred to the Reporter or not ? —

3. Whether Their Lordships wish to see the fair copy of Judgment ? ����� —

4. Whether this case involves substantial question of law as to the interpretation of the Constitution of India, 1950

or any order made thereunder ?

5. Whether it is to be circulated to the Civil Judge? ���� —

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Shantaben,

W/o. of Babubhai Patel & Others. : Appellants.

��Versus

Officer on Special Duty & GIDC,A'bad. : Respondents.

First Appeal No. 1311 of 1982:

Babubhai Naranbhai Patel��: Appellant. VersusOfficer on Special Duty & Anr.��: Respondents.

First Appeal Nos. 862 & 863 of 1983 :Shankarbhai Jamnadas Patel since decd.through his heirs & L.Rs.��: Appellants. VersusOfficer on Special Duty & Anr.��: Respondents.

First Appeal No. 864 of 1983 :

Bakorbhai Somabhai Patel, since decd.,through his heirs & L.Rs. and Others. : Appellants. VersusOfficer on Special Duty & Anr.��: Respondents.

Keshavlal Shankerlal Rami.��: Appellant. VersusOfficer on Special Duty & Anr.��: Respondents.

================================================================Appearance:

Advocate for the Appellants: Shri M.I.Patel - in -��� First Appeal Nos. 1310 of 1982 & 1311 of 1982.

: Shri K.G. Sheth for Mr. G.H. Amin - in - First Appeals Nos. 862 of 1983, 863 of 1983 & 864 of 1983.

: Miss. Nayana Panchal for Mr. M.C. Shah - in - First Appeal No.943 of 1983.

Shah - in - First Appeal No.943 of

Mr. M.R. Anand, Government Pleader with Shri K.M. Mehta, A.G.P.,for Respondent No.1 in all the First Appeals.

Mr. M.B. Gandhi, Advocate for Respondent No.2 in all the FirstAppeals.

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Coram: B.C. Patel, J. & H.R. Shelat,J.

ORAL JUDGMENT: (Per: B.C. Patel, J.)

This group of appeals is preferred by the appellants,whose lands have been acquired under Section 18 of the LandAcquisition Act, 1894 (hereinafter referred to as `the Act')being aggrieved by the award made by the learned ExtraAssistant Judge, Nadiad, on 19-4-1982,

2. Mr. M.I. Patel, learned counsel as well as Counselfor the respondents have taken us through the entire recordand it appears that the lands under acquisition are in themunicipal limits and to be more precise, on the northernboundary of municipal limits of Nadiad. The blocks aredivided by Nadiad-Kapadwanj Railway Line. There isNadiad-Kapadwanj Highway towards the eastern boundary of oneblock of lands under acquisition. The judicial complex ofNadiad District Court is touching the south block. There isa tar road leading to Manjipura village (now known asNadiad-Memdabad road) on the western side of the lands underacquisition. It transpires from the record that JawaharnagarHousing Society has come up near the lands under acquisitionon Manjipura road. Lands bearing Survey Nos. 2406 & 2410are surrounded by the lands acquired/occupied by the housingcomplex constructed by the Gujarat Housing Board. Landbearing Survey No. 2408 which is touching Survey No. 2410on the western side and south to Survey No. 2407 and northto Survey No. 2489 abutting on road to Manjipura, is alsooccupied by the Housing Board where housing blocks areconstructed. Survey No. 2436 is also acquired and isseparated by the canal. There are other lands bearing foursurvey numbers situated on the bank of the canal. Thus theblock acquired is nearby the two main roads and the judicialcomplex. There is also existing, Industrial Estate ofGujarat Industrial Development Corporation on the westernside of the Nadiad-Kapadwanj line. S.T. Depot, Workshop,andpolice quarters have been constructed on the highway near theland under acquisition. As observed by the Land AcquisitionOfficer in his award, the lands under acquisition areagricultural lands. Some plots are situated on the Manjipuraroad on the western side of the existing flats of the GujaratHousing Board. It is also pointed out that Survey No. 2344is situated on the eastern side of the Nadiad-Kapadwanj roadand is adjacent to a canal. Survey Nos. 2390, 2391, 2392,2407, 2409 and 2411 are situated on Nadiad-Manjipura road.Through Survey Nos. 2385, 2388, 2392, 2393 and 2394, railwaypasses and these plots are thus divided. A part of SurveyNo. 2386 touches the railway line. Survey No. 2384 is alsosituated on the railway track and a part of it touches thecanal. Rest of the lands are not abutting on the road or on the railway track. As observed by the Land AcquisitionOfficer, the lands are situated within the municipal limitsof the city of Nadiad and few survey numbers underacquisition are advantageously situated. It is also foundthat lands of N.A. potentiality are situated within themunicipal limits close to District Court, Nadiad, GIDCIndustrial Estate and Housing Board flats. Mr. Patel,learned Advocate appearing for the appellants-claimantssubmitted that this part has not been properly appreciatedwhile determining the price of land to be paid to theclaimants.

3. It appears that Notification under Section 4 underthe Act was issued on 29th January 1971. However,declaration under the provisions of Section 6 was made on28th January 1974. That notification which is placed now onthe record makes it clear that Survey Nos. 2406, 2408,2378-A and 2410 of village Nadiad are dropped fromacquisition. The witnesses examined on behalf of theappellants have also pointed out the existence of theDistrict Court and the location of the roads. They alsopointed out the houses of S.R.P. (State Reserve Police),S.T. Workshop, S.T. Colony, and the Rest House of MahiCanal. The witnesses on behalf of the appellants have alsopointed out the existence of Jawaharnagar Housing Society andIndustrial Estate. The witnesses have also pointed out thehouses constructed by the Housing Board. It is theclaimants' case that there is a railway junction at Nadiadand at the relevant time the population was about 2.5 lakhsand in Nadiad there are several industrial estates.

4. The claimants have claimed that they were cultivatingthe lands and by growing different crops they used to earn atleast Rs. 1,000/- per biga.

5. With a view to point out the sale instances, it ispointed out, that one Lalitaben Naginbhai Patel executed anAgreement to Sale on 30-4-1970 (vide Exh.22) in favour of aco-operative society at the rate of Rs. 1,500/per guntha.That land is Survey No. 2411 and is situated to the northblock of the judicial complex and is on Nadiad-Manjipuraroad. The said plot is just touching Survey No. 2410 whichis dropped from acquisition and Survey No. 2409 which isacquired. Mr. Patel pointed out that no doubt the SaleDeeds were executed on 16-1-1976 and on 6-4-1976 vide Exhs.20 & 21. Another instance which is pointed out is of threesurvey numbers, being 2485, 2486 and 2493. In the evidence,it is stated that the said lands were acquired and in areference the price was determined at Rs. 250/- and for thatpurpose witness produced a certified copy, vide Exh. 23 ofone witness, Ishwarbhai. On perusing the record, it appears that it is not a case of acquisition but the Governmentdecided to grant the lands to GIDC. The letter dated 19thFebruary 1969 indicaing the grant of 17 acres and 24 gunthas,is placed on the record, vide Exh. 59. The price of theland is fixed at Rs. 250/- per guntha (Rs.10,000/- peracre). The appellants examined one Rasulbhai Kaji Abdulbhai,vide Exh.77 for indicating that lands admeasuring 88 gunthasbearing Survey No. 2397/1-2 was held by one ManilalBaghabhai and from said Manilal after obtaining permissionfrom the competent authority land is purchased. He hasstated that the Agreement to Sale was executed in 1968 fixingthe price at Rs.11,000/- including the sum of Rs.500/- forthe trees. He stated that the said Manibhai became the ownerof the land under the provisions contained in the BombayTenancy & Agricultural Lands Act. This witness has statedthat he is being paid Rs. 280/- per RA., but his demand isfor Rs. 1,000/- per RA.

6. The Reference Court, in Para 32, has held thatinstance of grant of land to GIDC at the rate of Rs.250/- perguntha, which is a waste land, cannot be considered as a saleinstance. The learned Judge, in para 32 has also observedthat in Map, Exh. 55 the lands are not noticed. Mr. Patel,therefore, submitted certified copy of the original Map, andas the learned advocates have no objection in placing thesaid Map on record, we have taken the Map on record. Itappears that the Trial Court had no opportunity to have alook at the map of a larger area, but looking to the Map,produced before us it is very clear that the lands referredas `waste lands' are situated on the western side of thelands under acquisition. Survey No. 2469 is situated onNadiad-Manjipura road and to its west, there is Survey No.2468 and on the northern side Survey No.2469 is situated.Just above Survey No. 2469 and to the north, Survey No.2471 is situated, and on the western boundary, Survey No.2485 and Survey No. 2486 are situated. After leaving oneSurvey number on the western boundary, there is Survey No.2496, and thus the waste lands are not far away from thelands in question. Mr. Patel, learned advocate submittedthat as the waste lands are not situated far away from thelands under acquisition but are located nearby the landsunder acquisition, and if the Government has transferred thelands at the rate of Rs. 250/- per guntha, then there is noearthly reason why that aspect should not have been takeninto consideration. According to him, the Trial Court hasseriously erred in not accepting the said piece of evidenceas an instance of sale. Mr. Anand as well as Mr. Gandhisubmitted that it is not a case of sale, but is a grant ofland by the Government to the GIDC, and the Government mayfix any price. One has to remember that the GIDC has paidRs. 250/- per guntha for waste land, while the lands under acquisition are agricultural lands. The GIDC has thoughtitto pay Rs. 250/- per guntha for the waste lands.

7. In Para 35 of the award, the Court has considered theevidence of Sale Deeds, one of Survey No. 2411, and anotherof Survey No. 2397. Mr. Patel, learned Advocate submittedthat the Agreement to Sale was executed, vide Exh. 22 on30th April 1970 and at the relevant time the land wasagricultural land and thereafter the application was made forconverting the same as non-agricultural land, and accordingto his submission the price agreed at the relevant time wasfor the agricultural lands, of course with a condition thatthe same should be converted as non-agricultural land.Looking to the situation which we have described above,according to Mr. Patel, the learned advocate, the use of theland for the purpose of housing accommodation ought to havebeen considered in proper perspective. Merely because theland is sold to a co-operative society, it cannot be saidthat the same cannot be taken into consideration. Thelearned Judge has observed that before the date of sale, thepermission was obtained for non-agricultural use and thetransaction was completed on 3-2-1970. Mr. Patel pointedout that transaction was completed in 1976 and in 1970,agreement to sale was executed. The Notification foracquisition of the land in question was issued on 29-1-1971,i.e., within a period of one year from the date of Agreementto Sale. Mr. Patel submitted that the learned Judge haserred in coming to the conclusion that the purchaser wouldnaturally be prepared to pay a high price and therefore theview taken by the learned Judge that the instance of saleshould not be considered in determining the market value ofthe agricultural land, is an erroneous view, and it issubmitted by him that it is the case between a willingpurchaser and a willing seller and they agreed to sell at therate of Rs.1,500/- per guntha. On behalf of the respondents,it was contended that the learned Judge has rightly rejectedthe sale instance. According to the counsel for therespondents the purchase was for construction of residentialhouses. On the east of the land, there is a Housing Boardcomplex consisting of residential blocks and this land abutson Nadiad-Manjipura road having a wide frontage and isideally situated for housing purposes, and therefore thebuyer would pay more price. The same price at the same ratemay not be awarded in respect of lands which are not adjacentto the lands, but certainly the land situated adjacent to thesaid land and abutting on the road would naturally attractthe same reasoning for a similar price. As the agreement tosale was executed on 30-4-1970 and sale deeds were executedin 1976, it does not mean that the price agreed was not atthe rate then prevailing. When NA permission is granted ?is a relevant question, and it is submitted by the

respondents that no exact evidence on this point is placed onrecord. In the Agreement to Sale and in the Sale Deed, thereis some variance and therefore it is submitted that it is notsafe to rely on the date on which the permission was granted.According to the respondents, if the NA permission wasgranted before the Agreement to Sale was executed, the matterwould stand on a different footing because the land could bepurchased by the purchaser for the purpose ofnon-agricultural use, but if an agricultural land is to betransferred without N.A. permission, the same cannot be usedfor the purpose of construction of the houses unless anduntil the NA permision is granted, and there is no certaintyas to when such permission will be granted. Mr. Patel,learned Advocate submitted that in the latter agreements,details of the lands are given and also as to its subsequentconversion into non-agricultural use, for which there is arecitalin Exhs.20 & 21. According to Mr. Patel, from thesetwo agreements N.A. permission had been issued vide letterNo. Land/Plot No.A. Vashi. S.R. 10. Vashi.2922 Nadiad(Rural) dated 9-1-1974. He also pointed out that even underthe Land Ceiling Act, permission was granted on 21-10-1974and only thereafter the State Government dropped the saidland in question from acquisition. It is true that inAgreement to Sale, there is a vague reference, while in Exhs.20 & 21, there is a specific reference to the date on whichthe N.A. permission came to be granted and also thepermission under the Land Ceiling Act. No doubt, it was asmall plot of land, while the acquisition is for a largerblock consisting several survey numbers admeasuring 19hectares (approximately) of land and therefore the claimantscannot claim the same price.

8. It is required to be noted that the price fetched fora smaller plot cannot form the safe base for valuation oflarge tracts of land as the two are not comparableproperties. The evidence of market-value of sales of small,developed plot is not a safe guide in valuing large extentsof land. The price fetched for a small developed plot cannotdirectly be adopted in valuing large block. If there isevidence to the effect that the lands can be used forbuilding purposes, that would be good selling proposition andthat valuation on the basis of the method of a hypotheticallay-out could with justification be adopted, then in valuingsuch small, laid-out sites. The valuation indicated by saleof comparable small sites in the area at or about the time ofthe notification would be relevant. The price fetched forsmall plots cannot directly be applied in a case of largeareas, for the reasons that the former reflects the `retail'price of land and the latter the `wholesale' price. (SeeAdministrator Genl. of West Bengal vs. Collector, Varanasi- AIR 1988 S.C. 943).

9. From the material placed on record, it is very clearthat the lands in question fall within the municipal limits.The topography indicates some of the plots are touching someroads of the city, canal and the railway track. Over andabove, the lands are situated touching the judicial complexlocated in the Nadiad city. Keeping the industrialdevelopment, which is also clear from the record, with regardto use of the land, potential value of the lands must be keptin view in fixing the amount of compensation. As held by theApex Court, the market value of a piece of property, forpurposes of Section 23 of the Act, is stated to be the priceat which the property changes hands from a willing seller toa willing, but not too anxious a buyer, dealing at armslength. The determination of market-value, as one author putit, is the prediction of an economic event, viz., theprice-outcome of a hypothetical sale, expressed in terms ofprobabilities. Prices fetched for similar lands with similaradvantages and potentialities under bonafide transactions ofsale at or about the time of the preliminary notification arethe usual, and indeed the best, evidences of market-value.Other methods of valuation are resorted to if the evidence ofsale of similar lands is not available.

10. It is known to every one that the commodity which thehuman-being cannot produce is the land. The need for land isday by day increasing very rapidly and particularly in urbanareas, the development has increased the price of landfantastically. In the instant case, it appears that in theyear 1968, in respect of Survey No. 2397/1-2 admeasuring 88gunthas, one Manilal Bhaghabhai entered into an agreementwith Rasulbhai Haji Abdulbhai for sale of land totalling toRs. 11,000/(Rs.10,500/for land and Rs.500/- for Mangotrees). This land was a new tenure land and yet for 88gunthas, the price determined was Rs.10,500/-, while thelands belonging to the appellants are old tenure land. If in1968 the price for 88 gunthas was determined at Rs. 10,500/-and in the month of April 1970 when the agreement came to beexecuted for another piece of land, the price that was agreedto was Rs.1500/- per guntha. Thus for new tenure land, theprice fixed was Rs.125/- per guntha, in 1968, while for oldtenure land, the price was Rs. 1500/- per guntha in 1970 andthe difference in price we find within a period of two years.Ofcourse location of land is also a relevant factor. Thusthe market has shot up fantistically and one cannot forgetthe aspect of rise in prices of land. Looking to the datesof transaction, it is very clear that there was upward trendin the price of land in the area and the market was notstable. If there was evidence to show that there were nofluctuations in the price between the dates of thepreliminary notification and the date of earlier and/or subsequent transaction, there would have been indicationabout stable market. The two instances make it clear thatthere were fluctuations in the prices and there was an upwardtrend in the price rise. In both the cases, permission wasthere to transfer the land as contended by the other side,and therefore, according to the respondents, the price thenprevailing in 1968 should be taken into consideration forawarding the amount of compensation, and not the priceprevalent in 1970 and that too of an instance of acooperative society.

11. Considering the decision of the Apex Court in thecase of Administrator General (Supra), it is clear that whena transaction of small plot is placed before the Court forbases of valuation of a large tract or block of lands, itwould not be proper to consider both at par. As the LandAcquisition Officer has indicated the potential value of theland and from the discussion it appears that the Court hasnot considered the same in proper perspective. It isrequired to be noted that even for a waste land,theGovernment has considered it fit to recover Rs.250/- perguntha. From the two instances, it clearly appears thatthere is sharp or speculative rise in price even beforeacquisition proceedings could be commenced and that factoritself is indicative of the fact that the people were willingto purchase the lands in that area for development eitherindustrial or housing and that cannot be lost sight of. Weare not relying on the price fixed by the Government but itis a factor indicating the use of the land in area and itspotentiality. When a large tract of land is acquired, itbecomes necessary to consider the deductions for the extentof land required for the formation of roads and other civicamenities; expenses of development of the sites by laying outroads, drains, sewers, water and electricity lines, and theinterest on the outlays' for the period of deferment of therealisation of the price; the profits on the venture etc.,and the deductions for land required for roads and otherdevelopmental expenses, as held by the Apex Court in the caseof Administrator General (Supra), can together, come uptoasmuch as 53%, and the Apex Court held that accordingly theprice fetched for small plots cannot directly be applied inthe case of large areas. But where the value fixed for thelarge extent of the land worked out to 40% of retail price,the Court held that there was no justification forinterference with determination of value acquired as, in thecase of such land with potentialities for profitable use, itwas necessary to acknowledge and make due allowance for, thepossibility that the land might not be applied for theprospective use at all or not so applied within a reasonabletime. In the case of Smt. Kausalya Devi Bogra & others vs.Land Acquisition Officer - AIR 1984 S.C. 892, in para 13,

"13. Two principles relating to the matter of fixation of compensation relevant for the present purpose may be kept in view. When large tracts are acquired, the transaction in respect of small properties do not offer a proper guideline. Therefore, the valuation in transactions in regard to smaller property is not taken as a real basis for determining the compensation for larger tracts of property [see Prithvi Raj Tanera v. State of Madhya Pradesh (1977) 2 SCR 633 : (AIR 1977 SC 1560); Padma Uppal v. State of Punjab, (1977) 1 SCR 329; (AIR 1977 SC 580)]. In certain other cases this Court indicated that for determining the market value of a large property on the basis of a sale transaction for smaller property, a deduction should be given. In Special Land Acquisition Officer, Bangalore v.T.Adinarayan Setty (1959) Suppl (1) SCR 404: (AIR 1959 SC 429), a reduction of 25% was indicated while there are certain other cases where the view is that the reduction should be to the extent of 1/3."

Considering the aforesaid aspects, we are of the view thatthe Trial Court, while deciding the Reference Applications,has committed an error in not considering the instances. TheTrial Court ought to have considered the developmentpotentialities of land. The Trial Court has considered thecase of each plot and its location by giving reasons. We areof the view that, looking to the overall circumstances of thecase, 30% rise if given to each claimant, ends of justicewould be met with. Thus appellants would be entitled toclaim 30% of the price awarded already.

12. In the result, the appeals are allowed. The awardpassed by the Trial Court, is modified to the extent that,instead of the price awarded, 30% enhancement shall be paidand calculating the same, further benefits in accordance withlaw shall be given to the claimants. Appeals allowedaccordingly with no order as to costs. ......