1. These appeals arise out of the judgment and award dated 2-12-1980 made by the Civil Judge, Gadag, in L.A.C. No. 6/1979 on his file, awarding compensation at the rate of Rs. 3.50/- per gunta in addition to compensation paid to the structures, trees and well.
2. 9 acres of land were notified for acquisition for development of Horticulture in Gadag, pursuant to thepreliminary notification dated 20-12-1973. The lands were situate at the outskirts of Gadag City within the municipal limits. The Land Acquisition Officer suggested the compensation at the rate of Rs. 5000/- per acre in addition to compensation for structures, trees and well. Aggrieved by the said amount of compensation awarded, the claimants got the case referred to the Civil Judge, Gadag. The Learned Civil Judge, Gadag enhanced the market value to Rs. 350/- per gunta. He also enhanced the compensation for structures and trees as also for the well. Aggrieved by the said award, the LandAcquisition Officer and Asst. Commissioner, Gadag, has instituted M.F.A. No. 544/81 whereas the claimants have instituted M.F.A. No. 750/81 contending that the compensation awarded is on the lower side.
3. The Learned Govt. Pleader urged before us that the lands acquired were agricultural lands and award at Ext. P-2 which is judgment and award in M.F.A. 855/77, acquiring 26 guntas of land at the rate of Rs. 500/ per gunta, should notbe made the basis for awarding compensation in the present case. He further submitted that the situation of these two lands were not similar. According to him, the price paid for acquisition of 26 guntas, could not be made the basis for fixing the market value when in all 14 acres 9 guntas were acquired. He further submitted that the situation of 26 guntas of land was in developed area whereas the present land was in a developing area. Hence, he submitted that the market value fixed under Ext. P-2 should not be given in the present case for the purpose of compensation.
4. As against that, the Learned Counsel appearing for the claimants submitted that the lands acquired under Ext. P-2 and the present lands are similarly situated. Both lands were in developed area and as such the market value fixed in Ext. P-2 should have been given in the present case also.
5. Apart from the lands, the Learned Government Pleader submitted that only timber value or fuel value of trees could be given and compensation could not be awarded on the basis of yield from trees when the potential value of the lands was taken for fixing the market value. Hesubmitted that the compensation enhanced for structure and the well is not on proper basis.
6. The Learned Counsel for the claimants argued supporting the award passed by the Learned Civil Judge in that behalf.
7. The points, therefore, that arises for our consideration in these two appeals are :
(1) Whether Rs. 350/- per gunta fixed as market value by the Learned Civil Judge for the purposes of compensation is just and reasonable?
(2) Whether the Learned Civil Judge was justified in enhancing the compensation for the trees on the basis of their yield ?
(3) Whether the compensation awarded by the learned Civil Judge for the structures and well is just and proper?
8. It is no doubt a settled principle of law that compensation awarded for small plots like building sites cannot be made the basis for awarding compensation for large areas. That was first laid down by the Supreme Court of India in the case The Collector of Lakhimpur -v.- Bhuban Chandra Dutta, : AIR1971SC2015 of the judgment thus :
'In our opinion the High Court overlooked the fact that the plots which were the subject matter of the sale deeds Exhibits 1 to 4 werecomparatively of small areas and it is well known that when a large area like the one which was the subject matter of acquisition has to be sold it cannot possibly fetch a price at the same rate at small plots can be sold.'
This is followed by the Supreme Court of India in the case Smt. Padma Uppal Etc. -v.- State of Punjab and others, : 1SCR329 of the Judgment the Supreme Court has observed :
'A glance at the chart of the acquisitions which appears at page 85 of the Paper Book shows that the sales were of very small plots of land. In seven transactions out of eight to which our attention has been invited the land acquired was below 200 sq. yds. and in the eighth transaction, it was 250 sq.yds. it is also well settled that in determining compensation the value fetched for small plots of land cannot be applied to the lands covering a very large extent and that the large area of land cannot possibly fetch a price at the same rate at which small plots are sold. (See Collector of Lakhimpur -v.- Bhuban Chandra Dutta : AIR1971SC2015 ).'
The same proposition is reiterated by the Supreme Court of India in the Case Prithviraj -v.- State of Madhya Pradesh, : 2SCR633 and in Kousalya Bai Gogra and Others -v.- Land Acquisition officer, Aurangabad and Another, A.I.R 1984 SC 982.
9. Relying on these and on a Division Bench decision of this Court in the case Special Land Acquisition Officer and Asst. Commr., Mangalore -v.- Dr. K. Nemiraja Alva, 1971 (l) KLJ 140 thelearned Govt. Pleader submitted that the price fetched by small plots of land cannot be made the basis for fixing the market value for a large area. The proposition so submitted by the learned Govt. Pleader is unassailable. He, however further submitted that in the present case, the market value fixed under Ext. P-2 atRs. 500/-per gunta should not be made the basis for fixing the market value of the present acquired lands on the ground that the area acquired under Ext. P-2 is a small area. Alternatively, he submitted that, if at all, the valuation has to be fixed making allowance for development charges at 50% as laid down by this Court in the aforesaid Division Bench decision in the case of Dr. K. Nemiraja Alva. He also relied on the proposition laid down in the case of Asst. Commissioner & the Land Acquisition Officer, Davangere -v.- Bharath Oil Mills and others, 1973(2) Mys. L.J. 187. This was challenged by the learned Counsel for the claimants.
10. The Learned Counsel for the claimants pointed out that in the first place what is acquired under Ext. P-2 is not a small plot of land as in the case referred to above and nor was it a building site. He submitted that it is also a considerable extent of area similarly situated as the present acquired land. In Ext. P-2 we find that in M.F.A. 855/77 an area of 26gts. of land was acquired for the purpose of constructing approach road in Sy. No. 431/4B of Retageri village. It was an approach road to the railway over bridge of Gadag and Guntakal railway line. It may further be noted that pursuant to the same preliminary notification, further extent of 35gts. of land was acquired for the same purpose adjacent to the land in the other case. It is in M.F.A. 856/77. Together, therefore, 1 acre and 25 guntas were acquired. The learned Civil Judge granted compensation at the rate of Rs. 500/-per gunta having regard to the potential of the land being situated in the developing area. One of the claimants wentin appeal at M.F.A.856/77 and the compensation paid by the learned Civil Judge was enhanced by this Court to Rs. 750/, per gunta. In the other case, the Land Acquisition Officer went up in appeal and his appeal was dismissed con-firming the compensation at the rate of Rs. 500/- per gunta awarded by the learned Civil Judge. Thus, the facts of the case reveal that what was acquired in the L.A.Cs. concerned in M.F.A. Nos. 855 and 856 of 1977 were not merely plots of land but it was a large area covering 1 acre 21 guntas and the same was also agricultural land situate in developed area. Thus, there is no factual basis for the submission made by the learned Government Pleader that mere plots were acquired in M.F.As. and 855 & 856 of 1977. In all the cases of the Supreme Court referred to above, as pointed out, the value paid was for small plots of land, that could be made the basis for fixing the market value for larger area. Therefore, we are constrained to point out that since what was acquired in M.F.As 855 and 856 of 1977, were not small plots of land, but larger area of land covering 1 acre 21 gts. the argument of the learned Government Pleader that it could not be made the basis for fixing the market value of present lands holds no water. We reject it.
11. The Supreme Court in the case State of Madras -v.-A.M. Nanjan and Another, : 3SCR356 has ruled :
'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 later date. The awards, therefore, cannot be dismissed as inadmissible for the purpose of determination of the compensation.'
In the instant case, Ext. P-2 award represents the admission on behalf of the State with regard to the market value giventherein. It is a relevant and material piece of evidence. That land in the present case is within 6 furlongs and it is comparable to it being in developed area. There cannot be legal objection to make it the basis forfixing the market value in the present case.
12. The learned Civil Judge, in the course of his judgment at para-9, has observed thus :
'But, he is very sure and positive when he says that the value of the land depends upon their location and in this case also it is crystal clear that the lands acquired are surrounded by Ginning Mill and other factories and seeds processing centre and is very near and close to Hubli Karwar State High Way and admittedly, it is within the limits as can be found in the sworn statement of P.W. 1 in his cross examination and these admitted things go to conclusively prove that the situation of the lands acquired is definitely a location which can fetch better price and more price to the lands.'
13. Thus, these lands are situate in developed area within the limits of Gadag Municipality and the lands concerned in M.F.A. Nos. 855 and 856 of 1977 are also situate in the developed area within the limits of Gadag Municipality and they are also on the outskirts of the Gadag Municipality. It is clearly stated in the award-Ext. P-2 that approach road was to be constructed to the under bridge on theGadag Guntakal railway line. Thus, the lands are similarly situate and are comparable so far as potential is concerned.
14. In the case The Asst. Commr. & L.A.O., Davangere v.. The Bharat Oil Mills Ltd. and others this Court speaking through a Division Bench has pointed out :
'As laid down by the Judicial Committee of the Privy Council in GAJAPATHIRAJU -v.- DIVISIONAL OFFICER (A.I.R. 1939 P.C. 98) the land is not to be valued merely by reference to the use to which it is being put to at the time at which its value has to be determined, but also by reference to the use to which it is reasonably capable of being put in future. In the matter of determination of compensation for compulsory acquisition of land, the Land Acquisition Officer shall be guided by the provisions contained in Sections 23 and 24 of the Act. The compensation must be determined by reference to the price which a willing vendor may reasonably except to obtain from a willing purchaser. The vendor is to be treated as the vendor willing to sell at the 'market price' to use the words, of Section 23 of the Act. In the case of land, its value can be measured, by a consideration of the prices that have been obtained in the past for land of similar quality and in similar positions. As stated by Macleod,. J. as he then was, in Re : DHANJIBHOI BOMANJI (10 Bom, L.R. 701), 'there are only two ways in which a large area of land under acquisition can be valued : (1) by determining its value as a whole as it existed at the date of the notification ; (2) by ascertaining its then value on the basis of its being laid out for sale in building plots.'
In the instant case, the value is to be determined as a whole as it existed on the date of the notification on the basis of market value fixed for similarly situated lands by the Court and accepted by the Collector. That being so, Ext. P-2 becomes relevant and material. In Ext. P-2 reference is made to M.F.A. No. 856/77 and we find that in M.F.A. 856/77, for similarly situated lands on the outskirts of GadagMunicipality, this Court has granted market value at the rate of Rs. 750/- per gunta. There is no reason, therefore, not to adopt the same market value for the present lands similarly situate, the potential in each case being similar. The claimant, however, has confined his claim only to Rs. 500/-per gunta and therefore we hold that Rs. 500/- pergunta would be proper market value for the purpose of compensation, having regard to the location and potential of the land.
15. Adverting to the trees, it is true that the learned Civil Judge has enhanced the compensation on the basis of fruit yielding capacity of the trees and once the land value is fixed on the basis of potential it is not proper for the Court to fix the valuation on the basis of yielding capacity of the trees. It is so laid down by this Court in the case The LandAcquisition Officer and Assistant Commissioner, Coondapur -v.-Minor Kishanchand and another, I.L.R. 1978 Karnataka 865 thus :
'If compensation awarded on the basis of potentiality for building: purposes - Tree growth can be valued only on the basis of timber or fuel value but not on the basis of their yield.'
Hence, the enhanced compensation for trees has to be set aside.
16. The compensation awarded for the structure and the well, by the learned Civil Judge, does not make muchdifference from what is awarded for the same by the L.A.O. Hence, we have no reason to interfere with the value fixed by the learned Civil Judge for structure and the well.
17. In the result, M.F.A. 544/81 is partly allowed. The compensation fixed for the trees is reduced to what is awarded by the L.A.O. M.F.A. No. 750/81 is allowed. The market value fixed for the purpose of compensation at Rs. 350/- per gunta of land by the learned Civil Judge is enhanced to Rs. 500/-per gunta. No cost of these appeals. Interest shall run on the enhanced amount of compensation.