Skip to content


The Collector, Jabalpur and anr. Vs. Kamal Kumar JaIn and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtMadhya Pradesh High Court
Decided On
Case NumberFirst Appeal No. 158 of 1971
Judge
Reported inAIR1973MP288; 1973MPLJ779
ActsLand Acquisition Act, 1894 - Sections 18, 23 and 31(2)
AppellantThe Collector, Jabalpur and anr.
RespondentKamal Kumar JaIn and ors.
Appellant AdvocateM.V. Tamaskar, Govt. Adv.
Respondent AdvocateN.K. Patel, Adv. for Nos. 1 and 2, ;B.L. Patel, Adv. for Nos. 3 and 4 and ;B.M. Dwivedi, Adv. for No. 5
DispositionAppeal partly allowed
Cases Referred(Madh Pra) (Union of India v. Mrs. R. Val
Excerpt:
.....showing that the claimant was objecting to the amount of compensation fixed by the award of the land acquisition officer. it is preceded by section 18(1) under which the petitioner was a person 'who had not accepted the award'.it also ignores that the application for reference for enhancement of the compensation was already made by the petitioner under section 18. it also ignores section 12(1) under which the award was to be final 'except as hereinafter provided'.the words within inverted commas refer to all those provisions of the act which prevent the award from becoming final and include the making of the application for reference under section 18. there is no warrant for the extreme contention that the mere failure to write the words 'under protest' in the receipt under the first..........judge, jabalpur, in land acquisition case no. 7 of 1970 on a reference under section 18 of the land acquisition act.2. the brief facts of the case are that the military estate officer, madhya pradesh circle, jabalpur, applied for acquisition of 6.43 acres of private land located in village richhai, settlement no. 402, tahsil and district jabalpur, vide his letter dated 6-6-1967 for the purpose of construction of railway siding for the new vehicle factory, jabalpur, of the defence department of union of india. it consisted of two parts: (i) 6.36 acres of open area and (ii) 0.07 acre of covered area containing certain structures. in the present case we are concerned with regard to the acquisition of 6.36 acres of open land alone. the notification under section 4 read with section 17(1).....
Judgment:

Tankha, J.

1. This is a first appeal filed by the Collector, Jabalpur, and the State of Madhya Pradesh against the award, dated 17-8-1971, passed by the Third Additional District Judge, Jabalpur, in Land Acquisition Case No. 7 of 1970 on a reference under Section 18 of the Land Acquisition Act.

2. The brief facts of the case are that the Military Estate Officer, Madhya Pradesh Circle, Jabalpur, applied for acquisition of 6.43 acres of private land located in village Richhai, settlement No. 402, tahsil and district Jabalpur, vide his letter dated 6-6-1967 for the purpose of construction of Railway Siding for the new Vehicle Factory, Jabalpur, of the Defence Department of Union of India. It consisted of two parts: (i) 6.36 acres of open area and (ii) 0.07 acre of covered area containing certain structures. In the present case we are concerned with regard to the acquisition of 6.36 acres of open land alone. The notification under Section 4 read with Section 17(1) of the Land Acquisition Act was published in Madhya Pradesh Rajpatra (Part I), dated 29-9-1967. The notification under Section 6 of the aforesaid Act was published in Madhya Pradesh Rajpatra (Part I), dated 6-10-1967, waiving the objection clause under Section 5A of the Act and declaring that the land in question was urgently needed for the above-stated public purpose. The five land-holders concerned (the respondents) were also served with individual notices under Section 9 of the Act. All of them filed their separate claims demanding compensation at the rate of Rs. 2/- per sq. ft. on the basis of potential site value of the land. Advance possession of the lands was taken on 30-11-1967.

3. The Land Acquisition Officer made his award on 13-12-1967. He awarded compensation for the lands at the rate of Rupees 1,700/- per acre. He further allowed Rupees 500/- per acre for the lands of Nemichand and Co. (respondent No. 2) and Jeewanlal Bhailalbhai Patel (respondent No. 5), who had deposited diversion charges for their lands before acquisition, as also compensation for mango and guava trees standing on their lands at the rate of Rs. 96/- per mango tree and Rs. 24/- per guava-tree. In his opinion all the lands were agricultural lands consisting of ordinary soils like 'sehra' and 'domatta' and ordinary crops were grown on them in the past. They were not developed lands. All the five respondents were also awarded 15% of the compensation on account of compulsory acquisition and also allowed interest at the rate of 6% per annum from 30-11-1967 to the date of payment of compensation.

4. On reference under Section 18 of the Land Acquisition Act, the learned Additional District Judge was of opinion that the lands acquired had potential value for building and non-agricultural purpose and that the Land Acquisition Officer having awarded compensation in an arbitrary manner, it must be raised. He awarded compensation at the flat rate of Rs. 0.75 per sq. ft. and an separate compensation for diversion charges or levelling charges. The compensation worked out for respondents other than Nemichand and Co. (respondent No. 2) and Jeewanlal Bhailalbhai Patel was reduced at the rate of Rs. 500/- per acre as they did not prove that their lands were got diverted, and they had paid the diversion charges. The compensation for trees standing on the lands as also addition of 15% for compulsory acquisition and interest on the amount of compensation at the rate of 6% from 30-11-1967 to the date of payment as awarded by the Land Acquisition Officer were maintained.

5. Being aggrieved by the said award, the appellants have filed the present appeal.

6. Before we proceed to decide the points raised in this appeal, it may be mentioned here that during the pendency of land acquisition proceedings, Fernandize, one of the land-holders, died and his legal representatives were brought on record in his place.

7. The first contention of the learned counsel for the appellants is that Jeewanlal Bhailalbhai (respondent No. 5) had made the application for reference under Section 18 of the Act on 6-3-1969 and subsequent to that, on 17-3-1969, he accepted the compensation without recording 'under protest'. Therefore, in view of the second proviso to Section 31 of the Land Acquisition Act (hereinafter referred to as 'the Act'), he was not entitled to make any application under Section 18 of the Act. The said proviso reads as under :

'Provided also that no person who has received the amount otherwise than under protest shall be entitled to make any application under Section 18.'

The learned counsel relied upon a reported decision of Calcutta High Court in Suresh Chandra v. Land Acquisition Collector, AIR 1964 Cal 283 at Pp. 284 and 285. Wherein B. N. Banerjee J. held-

'Moreover an application for reference is not the proper document wherein to record such a protest. A protest ought to be made, firstly, in the application for receiving the disputed amount of compensation, if any such application is to be at all made and must be recorded in the receipt granted showing that the disputed amount of compensation money was accepted under protest. Since the petitioner failed to receive the compensation money under a properly recorded protest, I am disinclined to interfere in this matter.'

8. We, with due respect, do not agree with the aforesaid view. The second proviso to Section 31(2) of the Act prevents making of any application for reference under Section 18 of the Act after the amount of compensation has been received otherwise than under protest. If such an application was already made before receiving the amount of compensation, the Land Acquisition Officer is to refer it to the Civil Court provided it is within the time specified in Sub-section (2) of Section 18 of the Act. Thereafter, if the amount of compensation is received even without mentioning 'under protest', it is a strong circumstance showing that the claimant was objecting to the amount of compensation fixed by the award of the Land Acquisition Officer. Not mentioning of 'under protest' while withdrawing the amount of compensation cannot, in such circumstances, disentitle the claimant from consideration of his application seeking reference to the Civil Court. Withdrawal of the amount of compensation after making an application under Section 18 of the Act, in our opinion, only -implies 'withdrawal under protest'. We are fortified in our opinion in the absence ofany specific form prescribed under the Act or the Rules for recording the protest. Therefore, such protest can either be explicit or can be inferred by necessary implication from the circumstances. In the present case, since Jeewanlal Bhailalbhai (respondent No. 5) had already filed his application for reference of his claim to the Civil Court before the date of withdrawal of the compensation amount, the receiving of the amount would be deemed to be 'under protest', even though he may not have mentioned the words 'under protest' in his application for withdrawal of the amount, if any such application was to be at all made, or in the receipt granted showing that the amount had been received and accepted. In this view of the matter, the respondent No. 5 had, in our opinion, complied with the requirement of the first proviso to Sub-section (2) of Section 31 of the Act and his application under Section 18 of the Act was rightly considered. The acceptance of compensation was 'under protest', even though these words were not used in the receipt itself. The second proviso to Section 31(2) would thus not be applicable to the present case.

9. We are supported in our viewpoint by a reported decision of Delhi High Court in Tarachand v. Land Acquisition Collector, AIR 1971 Delhi 116 at P. 118. Wherein Deshpande, J. in paragraph 9 held-

'I am unable, however, to construe the first proviso to Section 31(2) to mean that in every case the words 'under protest' must be written in the receipt itself and that unless this is done, the compensation would be deemed to have been accepted unconditionally. Such a construction would be open to the charge that it is made in vacuum. It ignores the context in which the first proviso to Section 31(2) stands. It is preceded by Section 18(1) under which the petitioner was a person 'who had not accepted the award'. It also ignores that the application for reference for enhancement of the compensation was already made by the petitioner under Section 18. It also ignores Section 12(1) under which the award was to be final 'except as hereinafter provided'. The words within inverted commas refer to all those provisions of the Act which prevent the award from becoming final and include the making of the application for reference under Section 18. There is no warrant for the extreme contention that the mere failure to write the words 'under protest' in the receipt under the first proviso to Section 31(2) would be sufficient to destroy the pre-existing facts that the petitioner had not accepted the award and that the award had not become final against the petitioner because the petitioner had already made an application for reference under Section 18 of the Act'.

Similar view was taken by S. Rao, J. in Shantabai v. Dy. Collector, Land Acquisition, AIR 1971 Andh Pra 117.

10. The second contention of the learned counsel for the appellants is that the learned Additional District Judge was in error in granting compensation at the rate of 0.75 p. per sq. ft. holding that the lands acquired had potential value for building and non-agricultural purposes, instead of the rate per acre as was given by the Land Acquisition Officer treating the lands as agricultural lands,

11. For the determination of this point it is necessary to see the location and nature of the lands acquired. Two maps (Exs. A-36 and A-37) are on record showing the location of the lands acquired and the correctness of these maps is not disputed. The lands of all the five respondents are sandwitched between the Industrial Estate and the Heavy Vehicle Factory, and they consist of Khasra Nos. 348, 349, 350, and 351, area 0.04 1/2 acre, belonging to Kamalkumar Jain (respondent No. 1), Khasra Nos. 344/3, 353, 345, 346. 348, 349, 350 and 351, area 2.46 1/2 acres, belonging to Nemichand and Co. (respondent No. 2). Khasra No. 341, area 1.55 acres, belonging to Fer-nandize (respondent No. 3), Khasra No. 347, area 0.26 acre, belonging to Gaya Prasad (respondent No. 4) and Khasra Nos. 340, 336, 339, 337 and 338, area 2.01 acres, belonging to Jeewanlal Bhailalbhai Patel (respondent No. 5). There is railway line by the side of these lands, A Kachcha road connects the acquired lands with the Mirzapur road. The borders of Jabalpur City and Adhartal railway station are in proximity of these lands. Jabalpur is a growing town having several Central Government manufacturing establishments, besides private industries. Therefore, the location of the acquired lands being in proximity of such a developing city naturally raises their potential value. Beside that it is not disputed that for more than ten years these lands were not cultivated and lying barren as the soil was not fit for cultivation, being 'sehra' and 'domatta'. This fact gets support from construction of houses and a well by respondent No. 5 in a portion of the land acquired from him in order to make use of it for industrial purposes. Respondent No. 2 Company had got the lands acquired from it diverted for building purposes before the land acquisition proceedings were commenced. Respondent No. 1 had purchased the land acquired from him. 40' x 50', from respondent No. 2 in the year 1966 for house construction vide sale deed (Ex. A-1). These facts leave us beyond any doubt that the lands acquired were not ordinary agricultural lands but that they had potential value for building and non-agricultural purposes, and the finding of the learned Additional District Judge on the point is correct.

12. The question that remains to be decided is as to the quantum of compensation. Since we have held that the lands acquired were not fit for agriculture and hadpotential value for building and non-agricultural purposes, the award of the Land Acquisition Officer based on the lands being agricultural lands was prima facie incorrect. But it has to be seen if the award of compensation by the learned Additional District Judge at the rate of Rs. 0.75p. per sq. ft. is justified or not. Before we answer this point, it is necessary to consider another connected point raised by the learned counsel for the appellants that some of the respondents, particularly Nemichand and Cc. (respondent No. 2) deals in speculation business of real estate and they had purchased the lands acquired with the knowledge that the acquisition of those lands was imminent as they were located between the Industrial estate and Heavy Vehicle Factory and that they would be needed for the expansion of any one of the two at some future date. They had, therefore, inflated the value of the lands and that the transactions in the years 1965 and 1966 did not represent their true market value. Our attention was invited to sale deed (Ex. A-1) dated 2-8-1966 and sale deed (Ex. A-30) dated 9-2-1965 as not representing real land values but being speculative transactions. With regard to the genuineness of these sale deeds, we shall deal later when considering the correctness of the rate of compensation. If one can foresee that a particular area had potentiality for development and wants to invest money in purchase of lands there, he must pay the prevailing market price of the day. Since the lands acquired are situated between the Industrial Estate and the Heavy Vehicle Factory, both established in 1965, they held out promise for future development and that naturally increased their market value and a new market rate would come into existence. There may be speculation entering into the said rate but there is nothing undesirable if one desires to purchase such land or settle down in such place. We are supported in our view by a reported decision of a Division Bench of Bombay High Court in Dhusabhai v. Special Land Acquisition Officer. AIR 1959 Bom 520 at P. 523, wherein Vyas and Miabhoy, JJ. held as under:

'Having carefully examined and considered the contention pressed before us by Mr. Bhatt for some of the appellants in these appeals, we are of the view that there is considerable substance in these contentions. Early in the year 1946 it was common knowledge that the centre of educational life was to be established in and around this area. Everybody knew that this area at none too distant a date would pulsate and throb with the educational and intellectual life of the city. Everybody expected, and it could not be said that the expectation was not a legitimate expectation, that a great deal of development would take place on this side. If a person desires to acquire land or settle down in a place which is full of promise for development and holds out such prospects asstated above, the desire could not be condemned as a mere speculative desire. There could be nothing unreal or undesirable about it. If the impress of circumstances such as the establishment of a University, the founding of constituent colleges, building of hostels where the alumni of the University would reside, raises the tone of the market and gives impetus to the market, a new market rate would be created, may be by even speculation entering into the said rate, and the transactions would be governed by that rate. It could not be said that because of the creation of an increased market rate, no genuine or real purchases could take place. It would be too dangerous a proposition to lay down and too unfair a comment on human impulses to generalise and stigmatise every transaction of sale and lease-cum-sale entered into after the market had risen as a speculative transaction or demonstration of a profiteering tendency of a human mind. If a human mind foresees a probability of increased development towards a particular side, its natural reaction would be to acquire property on that side, and if a person wants to purchase land in that locality, he must pay the then prevailing price for the land. He may not wish to wait indefinitely; for if he waits, he might have to wait for ever and there might be left no land to purchase. If he purchases land in these circumstances and pays a price, which is the market price of the day, it cannot he said to be an unreal, bogus or speculative transaction. What is the speculation about it? Must we presume that it is not a genuine purchase and that the person does not wish to live there or that it is purely a profiteering transaction? He is attracted by the future which is held out by the area and he is really attracted. Therefore, he purchases the property there and pays the market price for it.'

13. Now, with regard to the rate of compensation, it is well settled that the compensation under Section 23(1) of the Act has to be determined on the basis of the market value of the land at the date of publication of the notification under Section 4 of the Act. A number of sale deeds have been filed and proved to show the market value of the lands acquired at the relevant time. Of these, except three sale deeds, namely, Ex. A-5 dated 24-12-1964. Ex. A-30 dated 9-2-1965 and Ex A-1 dated 2-8-1966, the rest are not relevant as they relate to lands situated in different villages or at long distance from the lands acquired or the dates of their sale are much earlier. This position is not disputed by the learned counsel appearing for the parties. The sale deed (Ex. A-5) dated 24-12-1964 relates to sale by one Maiku (A. W. 6) to respondent No, 4 Gaya Prasad of Khasra No. 347, area 0.28 acre, for Rs. 700/-. This land is within the area acquired. The genuineness of this sale is not disputed. The second sale deed (Ex. P-30) dated 9-2-1965 relates to sale by Rajendrakumar (A. W. 7) to Ramnarain (A. W. 14) of part of Khasra No. 354 (40' x 50') at the rate of Rs. 0.50p. per sq. ft. This land is located close to the lands acquired in village Richhal itself The third sale deed (Ex. A-1) dated 2-8-1966 relates to sale by Rejendrakumar (A. W. 7). Managing Partner of Nemichand and Co., in favour of respondent No. 1 Kamal Kumar (A. W. 1) of a part (40' x 50') of Khasra Nos. 350 and 351 at the rate of Rs. 0.75p, per sq. ft. These are lands which have also been acquired. From the evidence on record the genuineness of the sale deeds relating to these lands cannot be doubted. They all relate to the period prior to the date of the notification under Section 4 of the Act, viz., 29-9-1967. The rise in the market rate is clear from the perusal of these three sale deeds; and the sale deeds Exs. A-30 and A-1, which are for building purposes and mention the price paid, give a fair idea of the market rate at the relevant time. The sale (Ex. A-1) being of 1966 was at a rate Rs. 25p. higher than the rate of the sale in Ex. A-36 of 1965. This rise in price cannot be said to be unfair of speculative as in the year 1965 both the Industrial Estate and Heavy Vehicle factory had come into existence between which the lands under acquisition are located. The Court has to see that it does not give more because the object for which the lands are taken is likely to increase their value, while, on the other hand, if does not also give less because the same object is likely to increase the value of the remaining lands of the landholders, as laid down in Secretary of State for Foreign Affairs v. Charlesworth. Pilling & Co., (1901) 28 Ind App 121. The sale deed (Ex. A-5) relates to the period three years prior to the date of notification under Section 4 of the Act and cannot, therefore, form the basis for determining the market value of the lands in 1967. Besides, Maiku (A. W. 6), who executed the sale deed (Ex. A-5), belongs to a scheduled tribe and has stated that he sold the land under urgency as he was to complete the construction of his well. Thus after due consideration of every aspect we are of opinion that the rate of compensation at Rs. 0.75 per sq. ft. based on the market value determined on the sale deed dated 2-8-1966 (Ex. A-1) by the learned Additional District Judge is correct so far as respondent No. 2 is concerned but it would require interference so far as the award is made in respect of the lands belonging to the other respondents. We, therefore, affirm the rate of compensation so far as respondent No. 2 is concerned. As regards the other respondents, the learned Additional District Judge failed to take into consideration that the value fetched by small plots of land could not be applied as an exact or precise basis for determining the amount of compensation. Further if the lands acquired were sold after dividing them into plots as building sites, about 25% of the land would have been lost in providing roads and appreaches to the plots and expenses would have been incurred in developing the land. In our opinion, therefore, the proper rate of compensation for the lands acquired from these respondents should be Rs. 0.50p. per sq. ft. and not 0.75p. per sq. ft. We are supported in this view by an unreported decision of a Division 'Bench of this Court in First Appeal No. 86 of 1970, D/- 28-2-1973 (Madh Pra) (Union of India v. Mrs. R. Val 'D' Eremao). We accordingly award compensation to these respondents at the rate of Rs. 0.50p. per sq. ft. instead of Rs. 0.75 per sq. ft. The finding of the learned Additional District Judge that the amount of compensation payable to the respondents other than Nemichand and Co. (respondent No. 2) and Jiwanlal Bhailalbhai Patel (respondent No. 5), shall be reduced at the rate of Rs. 500/- per acre as they had failed to prove that they had got their lands diverted for non-agricultural purposes and had paid the diversion charges is correct and it is hereby affirmed. In addition all the respondents shall be entitled to 15% on the rate of compensation determined above, and also to interest at 6% per annum on the total amount of compensation payable to them from 30-11-1967 to the date of its payment. The award of compensation made in respect of the trees standing on the lands is also hereby affirmed.

14. In the result, the appeal is partly allowed to the extent stated above. Parties shall be entitled to costs of this appeal in proportion to their success and failure. Counsel's fee according to Schedule.


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