Jai Narain v. Union Of India .

A.B Rohatgi, J.:— These are three appeals from the order of the Additional District Judge dated December 6, 1961. Two appeals are by the owners (R.F.A 64-D and 71-D of 1962) and one appeal is by the taker of the land, Union of India, against the land owners (R.F.A 160-D of 1962). In these appeals the question relates to the amount of compensation payable to the owners of certain land situated in village Jia Sarai. The common question that arises in all the three appeals is: What was the value of the acquired land on January 10, 1959?

2. The owners' land situated in Jia Sarai was acquired by the Government for a public purpose, namely, building of the College of Engineering and Technology. Notification under Section 4 of the Land Acquisition Act 1894 (the Act) was issued on January 10, 1959. Simultaneously a declaration under Section 6 was made because of the urgent nature of the acquisition. In due course the Land Acquisition Collector made the award (Award No. 944). He offered compensation to the owners as under:

Chahi land —Rs. 2/- per sq. yard Rosali and sailab land —Rs. 1300/- per bigha Banjar Qadim land —Rs. 500/- per bigha. Ghair Mumkin land —Rs. 100/- per bigha.

3. The owners were dissatisfied with the collector's valuation. On that ground they demanded that the matter should be referred to the court under S.18 of the Act. On reference the Additional District Judge enhanced the compensation. He abolished the distinction of Chahi, Rosali, Sailab and Banjar Qadim. He made the award at the uniform rate of Rs. 2250/- per bigha. For Ghair Mumkin and, however, he awarded compensation at the rate of Rs. 500/- per bigha. From his decision the owners appeal to this court for further enhancement. The Union of India, on the other hand, in their appeal contend that the award of the Additional District Judge is excessive and unjustified and ought to be reduced.

4. Before the court two sale transactions were tendered in evidence. One was a sale of June 3, 1959. 15 biswas of land in this village Jia Sarai was sold by Chajju to Kailash Chand for Rs. 3000/-. The price works out to Rs. 4000/- per bigha. The other was also a sale of 3rd June, 1959. 14 biswas of land was purchased by Umrao from Chhajju for Rs. 3000/-. The price works out to a little more than Rs. 4000/- per bigha. About the situation of the land the learned judge came to the conclusion that the land had great potential value as a building site, surrounded as it was by colonies on three sides, namely, Hauz Khas Enclave, Green Park and Government Quarters. He found that the land was fit for building purposes. In fact, the collector himself had stated so in the award. Regarding the sale instances of 3rd June, 1959 the learned judge formed the view that these transactions could not be ignored altogether from consideration. For this view he relied on Assistant Development Officer, Asst. Development Officer, Trombay… v. Tayaballi Allibhoy Bohori…., A.I.R 1933 Bombay 361.

5. A transaction of sale of 1954 was also produced in evidence before the judge. On November 14, 1954 land was sold at the rate of Rs. 2250/- per bigha. This transaction appears to have influenced the judge's decision. It seems that he did not attach much importance to the sales of 3rd June, 1959, though in principle he conceded that they could not be ignored altogether from consideration. He said that “the price paid for under those sale deeds are higher for the reason that those plots were small ones and near Hauz Khas Enclave, while the land in dispute is a very large area.’ The learned judge therefore determined the value of land other than ghair mumkin at Rs. 2250/- per bigha. Of ghair mumkin he fixed the value at Rs. 500/- per bigha.

6. It appears to me that the sale transactions of 3rd June, 1959, though they were held to be relevant, were given no weight in the process of evaluation. The learned judge fixed the price for January 1959 that which prevailed in 1954. He premised the assessment on the fact that the purchase price in 1959 was the same as in 1954. As if nothing had happened during these five years. This conclusion cannot be supported on any principle. More so when there is evidence that in June, 1959 the land was being sold at Rs. 4000/- per bigha, though it is true the plots sold were small. But this is positive evidence of a rising market.

7. In R.F.A 71-D of 1962 the owners have made an application for additional evidence. They have produced a copy of Award No. 1248 of the Land Acquisition Collector. In this award for the land in this very village acquired pursuant to a notification dated November 13, 1959, the collector had fixed the value of the land at Rs. 3500/- per bigha. Counsel for Union of India has no objection to the admission of this award as it is the Government's own document. I, therefore, admit this evidence.

8. The real question is: What was the market value of the land on 10th January, 1959? The court in an endeavour to find working rules that will do substantial justice has adopted practical standard including that of market value. Market value is the price a piece of property will bring in the market when offered for sale by one who desires but is not compelled to sell, and purchased by one who is not compelled to purchase. The “willing buyer” and the “willing seller” concept is well rooted in determining, the compensation in compulsory acquisition.

9. All transactions must be relevant which can fairly be said to afford a fair criterion of the value of the property as at the date of the notification. If any considerable interval has elapsed the court will naturally attach little or no value to subsequent sales just as transactions long prior to the notification will usually be discarded (Asstt. Development Officer v. Tayaballi, A.I.R 1933 Bombay 361 (363)). This principle has recently been restated by the Privy Council in an appeal from Queensland in these words:

“Now it is plain that in assessing value for the purpose of compensation for resumption on compulsory acquisition a tribunal is not required to close its mind to transactions subsequent to the date of resumption; they may well be relevant or of assistance to a greater or lesser degree.”

10. Melwood Units Pty. Ltd. v. Commissioner of Main Roads (1979) 1 All E.R 161 (P.C) per Lord Russell).

11. Two points remain for consideration. Firstly, what is the relevancy of the two sales made on 3rd June, 1959? No doubt the sales were made after five months of the notification. But post-notification transactions must not necessarily be ignored altogether. No doubt these were small plots. The Supreme Court has repeatedly deplored the practice of determination of compensation on the value of small plots To follow the evidence of small sites is to follow a misleading guide. But they are not to be entirely disregarded because they afford some help in the task of fixing the proper price. They atleast indicate the range of prices and their trend.

12. Secondly what is the evidentiary value of Award No. 1248 now tendered in evidence? The value of the collector's award is that on November 13, 1959 the market price of the land was Rs. 3500/- per bigha in this village. The award of the collector is binding on the Government and therefore the price fixed by the collector on November 13, 1959 cannot be questioned by the taker of the land. (See Ezra v. Secretary of State for India, (1905) I.L.R 32 Cal. 605

13. Therefore, two facts stand out in bold relief. One is that the small building plots were being sold and purchased in June, 1959 at Rs. 4000/- per bigha. The second is that at the end of the year 1959 the collector had himself fixed the value of the land at Rs. 3500/- per bigha.

14. This is the picture of the scene. That the land had potential value for building purposes has been admitted by the collector himself. In the award the collector has said that the land in question is situated “near a locality which had gained much importance for building purpose. It enjoys an impact of the colonies and the housing scheme of the Ministry of Works, Housing and Supply.” Keeping all these factors in mind I would enhance the compensation by Rs. 1000/- per bigha and fix the price of the land as on January 10, 1959 at Rs. 3250/- per bigha instead of Rs. 2250/- as determined by the Additional District Judge. There will be no distinction in the various kinds of land. Even ghair mumkin land will be valued at this rate because ghair mumkin land was not inferior to other kinds of land for building purposes. Both the collector and the court have found that the land in question was an ideal building site and had great potential value for building purposes. On this point there is the evidence of Ram Kishan Jain, Secretary of D.L.F Housing and Construction Ltd. He said: “whatever be the classification of the land, it is of the same value if it is fit for building purposes.” Therefore, in the case of ghair mumkin land which was evaluated by the Additional District Judge at Rs. 500/- per bigha the value ought to be the same as of other lands, namely, Rs. 3250/- per bigha. So for ghair mumkine and the enhancement will be Rs. 2750/- per bigha.

15. In R.F.A 160-D of 1962 respondents 7 and 11 have died. No application has been made to bring their legal representatives on record. Nor has any such application been made by the legal representatives of these deceased persons in their own appeal (R.F.A 64-D of 1962). The appeal of the Union of India against respondents 7 and 11, therefore, abates. The shares of the respondents are distinct and separate. The death of these two respondents has no effect on the rest of the appeal.

16. In the appeal of the Union of India some other respondents have also died. In view of the fact that their legal representatives have been brought in the owner's appeal (64-D of 1962 and 71-D of 1962) the legal representatives will be deemed to have been brought in the appeal of the Union of India. This is the legal position in view of the judgment of the Supreme Court in N. Jayaram Reddi v. The Revenue Divisional Officer and Land Acqusition Officer, Kurnool, (1979) 3 SCC 578 : A.I.R 1979 S.C 1393.

R.F.A 64-D of 1962

17. For reasons recorded above appellants 1 to 6, 8 to 10, 12 to 26 are allowed enhancement in the manner following:

1. For their land other than ghair mumkin —Rs. 1000/- per bigha. 2. For their ghair mumkin land —Rs. 2750/- per bigha.

together with 15 per cent solatium and 6 per cent per annum interest on the enhanced compensation from the date of dispossession till the date of payment and proportionate costs. The appeal of appellants 7 and 11 has abated as their legal representatives have not been brought on the record.

R.F.A 71-D of 1962

18. For reasons recorded above the appellants are allowed enhancement in the manner following:

1. For their land other than ghair mumkin —Rs. 1000/- per bigha. 2. For their ghair mumkin land —Rs. 2750/- per bigha.

together with 15 per cent solatium and 6 per cent per annum interest on the enhanced compensation from the date of dispossession till the date of payment and proportionate costs.

R.F.A 160-D of 1962

19. For reasons recorded above this appeal of the Union of India automatically fails and is dismissed leaving the parties to bear their own costs. Cross-objections in R.F.A 160-D of 1962

20. These cross-objections were filed by respondents 13 to 16. These respondents are allowed enhancement of Rs. 1000/- per bigha together with 15 per cent solatium and 6 percent per annum interest on the enhanced compensation from the date of dispossession till the date of payment and proportionate costs.

21. Appeal allowed.