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Har Swarup Gupta Vs. Union of India - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtDelhi High Court
Decided On
Case NumberRegular First Appeal No. 247 of 1978
Judge
Reported in19(1981)DLT15
ActsLand Acquisition Act, 1894 - Sections 4
AppellantHar Swarup Gupta
RespondentUnion of India
Advocates: D.R. Dhamija,; Rajesh Tyagi and; Arun Kumar, Advs
Cases ReferredN. Jayaram Reddi v. Revenue Divisional Officer and Land Acquisition Officer
Excerpt:
.....- trial court refused enhancement on ground that it was rough guess - determination of market value not exact science - elements of speculation involved in process of evaluation - appellant ought to be allowed 10% increase over amount he paid from date of dispossession till date of payment. - - from the fact that the land was put to auction as 'many as eight times it appears that many were not willing to buy it for more than rs, 25,500.00 .it is said in the report that the auction was 'well attended and keenly contested'.even then the property had to be knocked down for rs. (12) in my opinion the price paid at the auction sale is the best criterion to determine the market value of the land in this case. while discussing the market value of the acquired land he observed..........he held that the amount paid by the appellant at the auction sale fairly represented the market value of the occupancy rights at the relevant time. he, thereforee, declined to make any enhancement. he dismissed the reference. (3) now in this appeal the appellant claims enhancement. what was the market value of the occupancy rights purchased by the appellant in the acquired land at the relevant time this is the question. counsel for the appellant argued that the court has to determine the market value of the land and the sale in evidence must be considered in connection with other sales of similar properties in the vicinity. the purchase price of the property, he said, may have been below, or it might have been above, its market value. the landowner may have bought a bargain or.....
Judgment:

Avadh Behari Rohatgi, J.

(1) This is an appeal from the order of the Additional District Judge dated May 30, 1978. I was heard thrice. Twice at the request of the appellant and a third time because I had some doubts in. my mind. At an auction sale held on January 31, 1961, the appellant purchased occupancy rights in land measuring 15 bighas 7 bids was in Khasra No. 147 of Village Sadhora Kalan having a garden in it for a sum of Rs. 25,500.00 The sale was made by the Custodian of evacuee property. Pursuant to a notification under Section 4 of the Land Acquisition Act, 1894 (the Act) dated October, 26, 1961, the Government acquired the land in question. In. due course the Land Acquisition Collector made the award (award No. 1398 dated September 27, 1962). He held that the compensation to which the appellant was entitled was the actual price he had paid at the auction sale. He, thereforee, awarded Rs. 25,500.00 to the appellant.

(2) On a reference under S. 18 of the Act the Additional District Judge confirmed the award of the collector. He held that the amount paid by the appellant at the auction sale fairly represented the market value of the occupancy rights at the relevant time. He, thereforee, declined to make any enhancement. He dismissed the reference.

(3) Now in this appeal the appellant claims enhancement. What was the market value of the occupancy rights purchased by the appellant in the acquired land at the relevant time This is the question. Counsel for the appellant argued that the court has to determine the market value of the land and the sale in evidence must be considered in connection with other sales of similar properties in the vicinity. The purchase price of the property, he said, may have been below, or it might have been above, its market value. The landowner may have bought a bargain or he may have overpaid. This is no concern of the acquiring authority which, under the law, is bound to pay the market value of the property taken, no more and no less. With this broad argument there can be no quarrel. But evidence of sale of the subject property itself is highly relevant. Every argument is in favor of its admissbility. A leading American authority has summarised the law in these words :

'When a parcel of land is taken by eminent domain, the price which the owner paid for it when he acquired it is one of the most important prices of evidence in determining its present value, provided the sale was recent, and was a voluntary transaction between parties each of whom was capable and desirous of protecting his own interests, and no change in conditions or marked fluctuation in values has occurred since the sale'.

And again:

'IF,however, the sale took place several years before the taking, evidence of the price is not admissible. Such evidence, however, even if the sale took place very near the taking in point of time, is not con- clusive, and is merely one point of evidence to be considered with all the evidence in the case, and subject to the Explanationns which the owner may give of the reasons which enabled him to make a purchase; at such a figure.'

(Nichols on Eminent Domain, Vol. 5 pp. 266-268).

(4) The appellant has based his claim for enhancement mainly on two documents. The first is the auction report dated February 10, 1961. The second is the collector's award. I will deal with these two documents separately.

(5) From the auction report it appears that the Ministry of Rehabilitation had fixed the reserve price of this land at Rs. 7.00 per sq. yard. But at that price no one was willing to buy. The appellant was the highest bidder at the auction sale held on January 31, 1961. His bid was for Rs. 25,500.00 . It was accepted. The report shows there was a previous bid for this land on January 4, 1960 for Rs. 45,000.00 . But it proved abortive. There was no fall of the hammer. Then the property was put to auction five times. No one was willing to give a bid. On September 8, 1960 a bid for Rs. 15,000.00 was received. Finally on January, 31, 1961 the appellant gave the bid for Rs. 2'5,500.00 .

(6) Counsel relies on the highest bid of Rs. 45,000.00 referred to in the report. But this, in my opinion, does not show that was the market price of the land. For all we know it may be a bogus bid. The bidder may have backed out. He may not have deposited the earnest money or if deposited, it may have been forfeited by the authorities. This is certain that the sale did not' go through. I am thereforee unable to hold that the previous bid of Rs. 45,000.00 on January 4,1960 was a genuine bid and represented the market value of the land. From the fact that the land was put to auction as 'many as eight times it appears that many were not willing to buy it for more than Rs, 25,500.00 . It is said in the report that the auction was 'well attended and keenly contested'. Even then the property had to be knocked down for Rs. 25,500.00 .

(7) Coming to the award counsel drew my attention to the three purchasers from the Custodian including the appellant. They are as under :

81. No. Name of the Khasra Area Rights Total Sale certifi- parties No. Big.-Bis. purcha Sale cate issued sed. price or not. 9. Sh. Harsarup 147 15-7 Occu- 25500 Issued. Gupta pancy 10. R.S. Amar 485/148 2-3 -do- 10200 -do- Nath 12. Sh. Bulaqi 486/148, 17-11 -do- 15000 -do- Dass 149 and 150.

(8) Counsel argued that the land of R.S. Amar Nath and Bulaqi Dass is adjacent to the appellant's land and thereforee it should be valued at least at Rs. 4800.00 per bigha. I cannot accept this argument. We do not know anything about the quality of the land purchased by R.S. Amarnath and Bulaqi Dass. Bulagi Dass was able to buy it at Rs. 850.00 per sq. bigha. His land may be inferior, low-lying, marshy etc. The land of R.S. Amarnath may be far superior, for all we know. It will all depend on the quality of the soil. Real estate presents a difficult problem since each piece of property is sui generis. No two pieces of real estate are exactly alike. There may be a great many things they have in common, to be sure, but there are always some differences. It is thereforee not possible to infer that the market value of the appellant's land was higher than Rs. 35,500.00 . Any inference such as is sought to be suggested will be purely conjectural and speculative.

(9) Counsel then raised another argument. He said that rehabilitation auction sales are not a true guide to the value of the land. He referred me to Bhagwan Singh v. Union of India, R. F. A. 98-D of 1965, decided on Feb. 19 1975 and Darshan Singh v. Union of India, R.F.A. 195-D of 1968 decided on January 31, 1974. As an absolute proposition of law it is difficult to accept it. The trier of the facts is required, under the law, to determine the just compensation on the evidence. It is open to him, as a trier of facts, to draw some conclusion about the market value from the price paid by the purchaser himself, if the purchase is recent. This method raises few collateral issues. Such evidence is almost always introduced by the taker of the land, and is generally held admissible, either as independent evidence of value or to contradict or rebut the owner's contention that his property is now worth a much larger sum.

(10) In the circumstances of this case it appears to me that the price paid at the auction sale truly reflects the market value. The sale was of a recent date. The appellant purchased it on January 31,1961. Section 4 notification was issued on October 26, 1961. There is hardly an interval of nine months. During this period of nine months there was no steep rise in prices. At least there is no evidence to that effect. Nor are there any special features or circumstances in this case which would persuade me to depart from the principle laid down in the Dollars Company Madras v. Collector of Madras, : AIR1975SC1670 . The Supreme Court has said :

'If the sale is of a recent date, then all that need normally be proved is that the sale was between a willing purchaser and willing seller that there has not been any appreciable rise or fall since and that nothing has been done on the land during the short interval to raise its value.'

This principle fully applies to this case. ..

(11) If the acquired property was the subject of a comparatively recent transaction, the sale is admissible as evidence of value in the compensation proceedings. The evidence is admissible provided it is within a reasonable time of the valuation date, between a willing buyer and a willing seller, and the character of the property has not been materially changed. The present case is one of a recent sale of the property taken and the purchaser is the claimant. The sale is admissible, to be sure. The purchase price will certainly influence the ultimate award of the just compensation to be made.

(12) In my opinion the price paid at the auction sale is the best criterion to determine the market value of the land in this case. The Collector in his award has referred to this aspect. While discussing the market value of the acquired land he observed that the purchases made by the claimants from the custodian were well within a year of the date of the notification under S. 4 of the Act and the purchase prices were 'a true indication of the market value of the land on the relevant date.' He came to the conclusion that the market value was the same as was paid to the custodian. thereforee' he awarded to these claimants the same price for which they had purchased their rights from the custodian. This is a sound principle. I cannot say that- the collector or the judge who accepted this reasoning was wrong.

(13) This conclusion is reinforced by two other factors. First, that the property was put to sale as many as eight times. No one was willing to pay the reserve price of Rs. 7.00 per sq. yard. The auction sale of January 31, 1961 was an open sale. Every one was entitled to bid. It was a 'well attended and keenly contested' sale, as the authorities said. The appellant said that many people did not attend the auction because it was a cold wintry morning. I cannot accept his testimony. There is no material' on the record to suggest that the auction price is not a guide to the value of the land or that the auction sale was a distress or depressed sale.

(14) Secondly, from the award it appears that the lands fetched prices according to their quality. Bulaqi Dass was able to purchase for Rs. 850.00 per bigha. The appellant purchased it for Rs. 1700.00 ;perbigha. R.S.Amar Nath got it for Rs. 4800.00 per bigha. In each case the collector awarded what the claimant had paid. This appears to me a fair and reasonable assessment of the market value. It is unnecessary to wander about to find the value of neighbouring lands. Nor it is necessary to guess the market value of the land when we have before us the actual purchase of the land in question by the appellant himself a few months before the date of Section 4 notification. This is a situation where law should express 'a judgment from experience as against a judgment from speculation,' Tanner v. Little. 240 U. S. 369. Or, as was put by Mr. Justice Gordone for the court in a relevant situation : 'Experience is than available to correct uncertain prophecy. Here is a book of wisdom that courts may not neglect. We find no rule of law that sets aclasp Upon its pages, and forbids us to look within.' (Singlair Refininy 'Co. v.Jenkins Petroleum Process Co. 289 U.S. 689.

(15) I can thereforee safely base my decision on the

'EXPERIENCEof the appellant himself as against a judgment from speculation based on other transactions.'

(Dollar Company (supra) at p. 1672).

(16) A judgment of Shri G.R. Luthra, Additional District Judge in the case of Bulaqi Dass v. Union af India, L.A.G.67of 1968decidedon March 30, 1968 was cited in evidence in the court below. Bulaqi Dass, as we have seen, had similarly purchased occupancy rights in 17 bighas 11 bis- was of land for Rs. 15,000.00 . He led considerable evidence to show that the prevailing market price of the land at the time of S. 4 notification was much higher. The judge did not accept this evidence. He held that the market value of the occupancy rights on the date of the notification was the actual amount paid by Bulaqi Dass for purchasing those rights. He however allowed to BulaqiDass 10/o increase over the amount he had paid because of the interval of nine months between the purchase and S. 4 notification.

(17) In the present case the learned judge has refused to allow this 10 per cent enhancement on the ground that it is a 'rough guess.' That this is a guess is true, but the determination of market value is not an exact science. Elements of speculation and conjecture will always enter ii). the process of evaluation, however rigid that process may be. Hadley has said,, 'a price is a fact and a value is an estimate of what the price ought to be.'

(18) In my opinion, the appellant ought to be allowed 10% increase over the amount which he had paid at the auction sale together with 15 per cent solarium, and 6 per cent interest per annum on the enhanced compensation from the date of dispossession till the date of payment and proportionate costs. I order accordingly. P.S. After the judgment had been prepared and before it was pronounced Mr. D.R. Dhamija on behalf of the appellant brought to my attention two decisions. One is Delhi Swastic Cooperalive House Building Society Ltd. v. Union of India, R.F.A. 359 of 1968 decided by me on 5th March, 1980. The other is N. Jayaram Reddi v. Revenue Divisional Officer and Land Acquisition Officer, Kurnool, : [1979]3SCR599 . On the basis of these two rulings he submits that the evidence other than that of the appellant's own sale can also he considered. I have dismassed this aspect in my judgment. I do not think I ought to change my view. The judgment stands.


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