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Manek Jamshedji Ratanshah Gheyara Vs. Special Land Acquisition Officer and anr. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtGujarat High Court
Decided On
Judge
Reported in(1981)22GLR829
AppellantManek Jamshedji Ratanshah Gheyara
RespondentSpecial Land Acquisition Officer and anr.
Excerpt:
- - yard, but the amount claimed by them is excessive looking to the situation of the field and the fact that the area on that site is not so well-developed and is yet to develop. it is not the function of the court to sit in appeal against the award, approve or disapprove its reasoning, or correct its error or affirm, modify or reverse the conclusion reached by the land acquisition officer, as if it were an appellate court. common sense is the best and most reliable guide......buildings for the gujarat housing board pursuant to a notification under section 4 of the land acquisition act, 1894 published on november 4, 1965. after reproducing, and we repeat, merely reproducing the oral and documentary evidence the learned trial judge has recorded his conclusion as regards the market value of the land under acquisition, as under:.from the above instances it is clear that the claimants have been awarded less amount then what they are entitled to. they have claimed at the rate of rs. 11.50 p. per sq. yard, but the amount claimed by them is excessive looking to the situation of the field and the fact that the area on that site is not so well-developed and is yet to develop. no doubt, there are other factories but the factories have been constructed after the.....
Judgment:

M.P. Thakkar, J.

1. Deplorable as it is, it is not realised by many of the trial Judges even so late in day that in Land Acquisition References when market value of land under acquisition is required to be determined by the instances method it has to be done on the basis of the market value reflected in the instances most proximate from the time and situation angle. And that this has to be done by correlating the value reflected in the ideal instance by a process of ratiocination by putting oneself in the shoes of a hypothetical purchaser. What we have realized from a number of judgments we have come across in the course of this sitting, is that so often the trial Judges merely reproduce the evidence at length and thereafter pronounce the market value without undertaking any methodical exercise in correlation or ratiocination. It almost becomes ipse dixit of the trial Judge. To illustrate the point we may refer to what has been done by the learned trial Judge in the land reference giving rise to the present appeal arising out of the acquisition of a large tract of land belonging to Parsi Panchayat, Surat, for the public purpose of constructing buildings for the Gujarat Housing Board pursuant to a Notification under Section 4 of the Land Acquisition Act, 1894 published on November 4, 1965. After reproducing, and we repeat, merely reproducing the oral and documentary evidence the learned trial Judge has recorded his conclusion as regards the market value of the land under acquisition, as under:.From the above instances it is clear that the claimants have been awarded less amount then what they are entitled to. They have claimed at the rate of Rs. 11.50 p. per sq. yard, but the amount claimed by them is excessive looking to the situation of the field and the fact that the area on that site is not so well-developed and is yet to develop. No doubt, there are other factories but the factories have been constructed after the notification on 11-10-1965 was issued. In such circumstances, the claimants are not entitled to claim compensation at the rate of Rs. 11.50 per sq. yard but looking to the various lease deeds and the documents produce in this case and looking to the situation of the land and the fact that they are on the eastern side of the railway tract which is not so developed as the western side of the tract, I think the amount of Rs. 7/- per sq. yard will be the reasonable compensation at the rate of Rs. 7/- per sq. yd....

It will be seen that the learned trial Judge has observed that having regard to the circumstances of the case, looking to the various documents, and the situation 'I think the amount of Rs. 7/- per sq. yd. will be reasonable compensation'. No effort has been made to correlate the market value reflected in the most pertinent instance in order to deduce the market value in respect of the land under acquisition. What is the value of such a determination? The Court has to discharge this delicate function in a rational manner. Valuation cannot be made by 'oracular' pronouncements without unfolding the working of the mind which must be focused on the relevant aspects. And there must be an application of mind to the aspect regarding valuation based on the comparative study of the rates recorded in the instances and their significance from the stand point of the land under valuation. The following factors must be etched on the mental screen:

(1) A reference under Section 18 of the Land Acquisition Act is not an appeal against the award and the Court cannot take into account the material relied upon by the Land Acquisition Officer in his Award unless the same material is produced and proved before the Court.

(2) So also the Award of the Land Acquisition Officer is not to be treated as a judgment of the trial-Court open or exposed to challenge before the Court hearing the Reference. It is mere offer made by the Land Acquisition Officer and the material utilised by him for making his valuation cannot be utilised by the Court unless produced and proved before it. It is not the function of the Court to sit in appeal against the Award, approve or disapprove its reasoning, or correct its error or affirm, modify or reverse the conclusion reached by the Land Acquisition Officer, as if it were an appellate Court.

(3) The Court has to treat the reference as an original proceeding before it and determine the market value afresh on the basis of the material produced before it.

(4) The claimant is in the position of a plaintiff who has to show that the price offered for his land in the award is inadequate on the basis of the materials produced in the Court. Of course the materials placed and proved by the other side can also be taken into account for this purpose.

(5) The market value of land under acquisition has to be determined as on the critical date of publication of the notification under Section 4 of the Land Acquisition Act (dates of Notifications under Sections 6 and 9 are irrelevant).

(6) The determination has to be made standing on the date line of valuation (date of publication of notification under Section 4) as if the valuer is a hypothatical purchaser willing to purchase land from the open market and is prepared to pay a reasonable price as on that day. It has also to be assumed that the vendor is willing to sell the land at a reasonable price.

(7) In doing so by the instances method, the Court has to correlate the market value reflected in the most comparable instance which provides the index of market value.

(8) Only genuine instances have to be taken into account. (Some times instances are rigged up in anticipation of Acquisition of land.)

(9) Even post notification instances can be taken into account (1) if they are very proximate, (2) genuine and (3) the acquisition itself has not motivated the purchaser to pay a higher price on account of the resultant improvement in development prospects.

(10) The most comparable instances out of the genuine instances have to be identified on the following considerations:

(i) proximity from time angle.

(ii) proximity from situation angle.

(11) Having identified the instances which provide the index of market value the price reflected therein may be taken as the norm and the market value of the land under acquisition may be deduced by making suitable adjustments for the plus and minus factors vis-a-vis land under acquisition by placing the two in juxtaposition.

(12) A balance-sheet of plus and minus factors may be drawn for this purpose and the relevant factors may be evaluated in terms of price variation as a prudent purchaser would do.

(13) The market value of the land under acquisition has thereafter to be deduced by loading be pike reflected in the instance taken as norm for plus fectors and unloading it for minus factors.

(14) The exercise indicated in Clauses (11) to (13) has to be under taken in a common sense manner as a prudent man of the world of business would do. We may illustrate some such illustrative (not exhaustive) factors:

Plus factors Miaus factors1. smallness of size. 1. largeness of area.2. proximity to aroad. 2. situation in the interior at adistance from the road.3. frontage on a road. 4. nearness to developed area. 3. narrow strip of land with verysmall frontage compared to depth.5. regular shape. 4. lower level requiring the depres-sed Portation to be filled up.6. level vis-a-vis land under 5. remoteness from developedacquisition locality. 7. special value for an owner of an 6. some special disadvantageous adjoining property to whom factor which would deter a pur it may have some very special chaseradvantage.(15) The evaluation of these factors of course depends on the facts of each case. There cannot be any hard and fast or rigid rule. Common sense is the best and most reliable guide. For instance, take the factor regarding the size. A building plot of land say 500 to 1000 sq. yds cannot be compared with a large tract or block of land of say 10000 sq.yds or more. Firstly while a smaller plot is within the reach of many a large block of land will have to be developed by preparing a lay out, carving out roads, leaving open space, plotting out smaller plots, waiting for purchasers (meanwhile the invested money will be blocked up) and the hazards of an entrepreneur. This factor can be discounted by making a deduction by way of an allowance at an appropriate rate ranging between 20% to 50% to account for land required to be set apart for carving out lands and plotting out small plots. The discounting will to some extent also depend on whether it is a rural area or urban area, whether building activity is picking up, and whether waiting period during which the capital of the entrepreneur would be locked up, will be longer or shorter and the attendant hazards.

(16) Every case must be dealt with on its own fact pattern bearing in mind all these factors as a prudent purchaser of land in which position the Judge must place himself.

(17) These are general guidelines to be applied with understanding informed with common sense.

(18) These are general guidelines to be applied with understanding informed with common sense.

2. In the instant case evidence pertaining to nine instances was cited on behalf of the claimants and evidence pertaining to one instance was cited on behalf of the State. It is not necessary to enter into the details pertaining to the various transactions inasmuch as we find that there exists one transaction which is comparable from the view point of the relevant date of the notification under Section 4 of the Land Acquisition Act, namely, November 4, 1965. This transaction is reflected in sale-deed Ex. 78. The transaction was recorded on September 22, 1964. The land belonging to the appellant Parsi Panchayat was sold to Surat Electricity Company. The land was comprised in Section Nos. 2 and 13 respectively admeasuring 18,997 sq. yds and 7,744 sq. yds. The land was sold at Rs. 10.50 per sq.yd. The evidence shows that this land is situated at a distance of 250 yards from the land under acquisition. It is, therefore, comparable from the stand point of situation. The transaction is recorded some one year prior to the date of the Notification with which we are concerned. It is therefore, a transaction which can be safely taken into account for the purpose of evaluating the land under acquisition. The evidence pertaining to this transaction was provided by C.W. 1 Sorabji Rustamji Katpitia, whose desposition is recorded at Ex. 27 No questions were put to this witness under cross-examination in order to elicit any circumstance justifying discarding of this transaction. The parcels of the land in this transaction are large parcels. One of the parcels is of 18,997 sq. yds. Thus, a meaningful comparison can be made even from the view point of size of the parcels. The market value reflected in this transaction is Rs. 10. 50 per sq. yds. in September 1964. In November 1965 the land under acquisition safely can therefore be valued at Rs. 10.50 per sq. yd on the same basis.

3. Since, however, the appellant has claimed only. Rs. 9/- per sq. yd. as market value of the land under acquisition, the same can be valued without any hesitation at the rate of Rs. 9/- per sq. yd.

4. In view of the market value reflected in the aforesaid transaction which, in our opinion, is comparable in all respects to the land under acquisition, the appeal must be allowed and-

1. the market value of the land under acquisition as on the material date, must be determined at Rs. 9/- per sq. yd.

2. The respondents shall pay to the appellant additional compensation at the rate Rs. 2/- per sq.yd. representing the difference between the rate determined by us (Rs. 9/- per sq. yd.) and the rate determined by the learned trial Judge (Rs. 7/-per sq. yd.);

3. the respondents shall pay to the appellant solatium at the rate of 15% on the additional amount of compensation granted by this Court.

4. the respondents shall pay interest at the rate of 4% from the date of taking possession till the date of realisation of the additional amount of compensation and solatium; and

5. the respondents shall also pay the costs on the additional amount throughout.


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