Skip to content


Gleitleger (India) Private Limited Vs. the Special Land Acquisition Officer - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMumbai High Court
Decided On
Case NumberFirst Appeal No. 376 of 1969
Judge
Reported in(1978)80BOMLR302
AppellantGleitleger (India) Private Limited
RespondentThe Special Land Acquisition Officer
DispositionAppeal dismissed
Excerpt:
.....price fixed by an arbitrator in compulsory acquisition cases cannot be equated with market value as between a willing purchaser and a willing seller.;pukhraj rupchand jain v. the state of maharashtra (1977) first appeal no. 794 of 1968 and state of madras v. a.m. nanjan [1976] a.i.r. s.c. 651, referred to. - - in our opinion, it is unsafe to rely upon this instance. 7-25 per square yard it is clearly stated 'not accepted by m/s voltas. nanjan [1976]3scr356 ,it is observed that the awards given by the collector are at least relevant material and may be in the nature of admission with regard to the value of the land on behalf of the state and if the land involved in the awards is comparable land in the reasonable proximity of the acquired land, the rates found in the said..........learned arbitrator as to how he had arrived at the figure of rs. 7-25 it is not possible for us to award compensation to the claimants at the rate of rs. 7-25 per square yard. now compensation for compulsory acquisition as governed by section 23 of the land acquisition act gives high priority to the market value of the land as on the date of the publication of the notification under section 4(1). the main criterion to determine the market value is what a willing purchaser would pay a willing seller and not what someone thinks ought to be the market value. one of the methods of valuation is the price paid for comparable property in the neighbourhood. the measure of value of the land is its market value. the owner is entitled to the value of the land with its intrinsic qualities and also.....
Judgment:

Aggarwal, J.

1. [His Lordship, after stating the facts of the case and dealing with points not relevant to this report, proceeded.] This bring us to the last category consisting of sale of survey Nos. 139, 168, 169, 173, 194, 282, 284, 287, 304, 306, 307, 360 and 421 admeasuring 15 acres 37 gunthas by Seva Mandal Trust to M/s Voltas Ltd. The price of Rs. 7-25 per square yard was fixed by Award dated September 12, 1967, exh. 121 declared by Shri Kantilal T. Desai. Mr. Khambatta submitted that this price can be taken into consideration in arriving at the market value of the acquired lands. The parties had agreed to sell and purchase the said lands and merely left the question of price to be determined by an experienced retired Judge. Mr. Khambatta further submitted that before making the award, the learned arbitrator had fixed several meetings and heard advocate for M/s Voltas Ltd., and also done all things necessary to enable him to determine the price and therefore this sale instance represents the correct value. Mr. Khambatta further pointed out that the lands of Seva Mandal are comparable with the acquired lands and therefore the price fixed by the learned arbitrator should be taken as between a willing purchaser and a willing seller. On the other hand, the learned Government Pleader, submitted that the value fixed by the learned arbitrator is contrary to the concept of market value as understood in fixing compensation of compulsory acquisition, nor the learned arbitrator was required to determine the market value. The learned arbitrator has given no reason for fixing the price and the price fixed by him cannot take place of market value as required to be considered between a willing purchaser and a willing seller. The claimants have also not led any evidence before the Court as to the circumstances in which the learned arbitrator fixed the price of Rs. 7-25 per square yard.

2. It is necessary to note that the award exh. 121 is based on an agreement of reference dated October 25, 1966. The lands referred to in the schedule to that agreement are not the subject-matter of any acquisition proceedings. There is also on record another agreement of reference dated October 26, 1966, exh. 154, the schedule whereof refers to lands which were the subject-matter of notification No. LAQ/SR 221 dated May 19, 1965, under Section 4(1) of the Land Acquisition Act, 1894. The award, if any, on the basis of exh. 154 is not on record.

3. There is considerable force in the submission of the learned Government Pleader that in the absence of any reason being given by the learned arbitrator as to how he had arrived at the figure of Rs. 7-25 it is not possible for us to award compensation to the claimants at the rate of Rs. 7-25 per square yard. Now compensation for compulsory acquisition as governed by Section 23 of the Land Acquisition Act gives high priority to the market value of the land as on the date of the publication of the notification under Section 4(1). The main criterion to determine the market value is what a willing purchaser would pay a willing seller and not what someone thinks ought to be the market value. One of the methods of valuation is the price paid for comparable property in the neighbourhood. The measure of value of the land is its market value. The owner is entitled to the value of the land with its intrinsic qualities and also its potentialities and other possibilities depending upon the facts and circumstances of each case. The question, before us is whether the price fixed by the learned arbitrator represents the market value. Can the price fixed by the learned arbitrator be said to be between a willing purchaser and a willing seller. In our view the price fixed by the learned arbitrator cannot be said to be the market value as understood in the concept of market value viz. as between a willing purchaser and willing seller. There is no open and free bargaining between the parties in fixing the price. The element of bargaining power is surrendered when that matter is left to an arbitrator. The process of the mind of an arbitrator is not made known for an arbitrator is not required to give reasons for his award. An award of an arbitrator is not a reasoned judicial decision. All that an arbitrator is required to do is to declare his decision without supporting it by any evidence on record and he can even ignore to take notice of evidence brought on record by the parties. All that he is required to do is to give an intelligible award which determines the rights of the parties in terms of the agreement of reference. Consistent with this position the award in the present case does not disclose how the rate of Rs. 7-25 per square yard was arrived at.

4. Mr. Khambatta frankly stated that he has not been able to trace any decision to support the view that price fixed by an arbitrator in compulsory acquisition cases could be equated with market value. Mr. Khambatta emphasised that the parties to the reverence had agreed to abide by the decision of the learned arbitrator and therefore the price awarded should be taken as a price between a willing buyer and a willing seller. We have given our anxious consideration to the fact that the learned arbitrator had wide and large experience and he must have taken all factors into consideration while fixing the price at Rs. 7-25 per square yard. But we cannot persuade ourselves to accept that price as basis of market value for fixing compensation under the Land Acquisition Act in the absence of any reasons for the decision. It is to be noted that no attempt was made on behalf of the claimants to adduce any evidence in respect of this instance. There is no material on record which can legitimately guide us in determining the compensation on the basis of this instance except the decision of the learned arbitrator that he had fixed the compensation after visiting the site taking evidence and hearing the. solicitors and advocates for the parties and after taking into consideration all things necessary. In our opinion, it is unsafe to rely upon this instance.

5. Mr. Khambatta lastly urged that the Government has itself relied upon the last instance of sale between Seva Mandal Trust and Voltas Ltd. and therefore it is binding on the Government. On the other hand the learned Government Pleader pointed out that in the relevant column the rate of Rs. 7-25 per square yard it is clearly stated 'not accepted by M/s Voltas.' He submitted that the opponents have not admitted the rate but a statement has been prepared on the basis of the judgment under appeal. Moreover in para. 20 of the judgment it is stated that (Shri K.T. Desai arbitrator decided on September 12, 1967 that the rate should be Rs. 7-25 per sq. yard, which is not agreed upon by Voltas Ltd.). The learned Government Pleader further pointed out that there is nothing on record to show that Voltas have accepted the award or paid the amount. Mr. Mevani the learned advocate on record who also appeared for the claimants pointed out that the evidence of the claimants' architect Shri Pandit shows that the payment was made by Voltas. We cannot overlook Pandit's statement, 'I do not know whether the rate fixed by the arbitrator was paid by Voitas to the owner of the land'. Moreover, Shri Pandit gave evidence on behalf of the claimants. He could not have personal knowledge about the alleged payment by Voltas. He was not competent to depose to these facts. Therefore, having regard to all these circumstances, it is not possible to accept Mr. Khambatta's submission, that the Government is liable to pay compensation at the rate of Rs. 7-25 per square yard merely because reference to the present instance has been made in the list prepared by the office of the Government Pleader.

6. The learned Government Pleader urged that a judgment given in another Land Acquisition matter under the present notification and also the same award is relevant for determining the compensation. He pointed out that this Court in an unreported decision in Pukhraj Rupchand Jain v. The State of Maharashtra (1977) First Appeal No. 794 of 1968, to which my learned brother Vaidya J. was a party in respect of the present notification had considered the sale instance of survey No. 192/1, 193/2 and 193/3 of village Majiwada. In that case Hoist-O-Mech. Ltd. had purchased the property at the rate of Rs. 12 per square yard. In that case, the land acquisition officer had awarded also compensation at the rate of Rs. 4 per square yard and upon Reference under Section 18, the lower Court had dismissed the reference. The claimants in that case came in appeal and the appeal was dismissed holding that there was no reason to interfere with the award as confirmed by the learned Civil Judge. In the State of Madras v. A.M. Nanjan : [1976]3SCR356 , it is observed that the awards given by the Collector are at least relevant material and may be in the nature of admission with regard to the value of the land on behalf of the State and if the land involved in the awards is comparable land in the reasonable proximity of the acquired land, the rates found in the said documents would be a reliable material to afford a basis to work upon for determination of the compensation on a later date. Therefore the compensation awarded to the claimants at the rate of Rs. 4 per square yard is fair and proper in view of the decision of this Court in Pukhraj Rupchand Jain v. The State of Maharashtra since the compensation confirmed in that appeal also related to the present notification and the present award.

7. To sum up the compensation awarded by the land acquisition officer is adequate and fair. The claimants have failed to establish before the lower Court and before us that the award made is not a fair award. Regarding the claimants' own purchase of the acquired lands they have not proved that the transactions were genuine in as much the consideration is not proved and all that is established is the factum of the transactions. Regarding the award of the learned arbitrator Shri Kantilal T. Dtesai, the price awarded does not indicate a proper market value as between a willing seller and a willing buyer. We, therefore, think that it would be hazardous to rely upon the price awarded as the basis for granting enhanced compensation on the facts of the present case. None of the instances cited before us are found to be relevant as far as the fixation of compensation is concerned.

8. In the result, the appeal is dismissed with costs.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //