These are two appeals by the owners in land acquisition cases. This judgement will govern them both.
R.F.A 363 of 1968.
2. This is an appeal from the order of the Additional District Judge dated May 28, 1968. The appellant's land measuring 28 bighas 1 biswas and 57 bighas 10 biswas forming part of the revenue estate of Bahapur was acquired by the Union of India. Notification under Sec. 4 of the Land Acquisition Act (the Act) was issued on Jan. 2, 1957. Notification under Sec. 6 of the Act was issued on November 20, 1957. In due course the Land Acquisition Collector made the award. He offered compensation at Rs. 1000/- per bigha to the appellant. The appellant did not accept the offer. He sought a reference to the court under Sec. 18 of the Act for the proper determination of compensation.
3. On reference the Additional Judge fixed the market value of the acquired land at Rs. 40/- per square yard. Now the owner appeals for further enhancement and claims Rs. 7000/- per bigha.
4. The Additional District Judge found as a fact that the land in question abuts on the railway line on the western side and was specially suited for industrial purposes. It was an excellent site for industrial activity because the appellant's land had the special advantage of a railway siding. The land also abutted on a kucha road, ‘a cart road’ as it was called.
5. In 1955 a notification dated Dec. 7, 1955 which was at once under Sections 4, 6 and 17 of the Act was issued for the public purpose connected with the setting up of an “industrial estate” in this locality of Okhla. This notification immediately preceded the notification of Jan. 2, 1957 with which we are concerned in this case. Notification dated Jan. 2, 1957 was also issued for the same public purpose, namely, “industrial estate”. There was evidence before the Judge that at the material time the neighbouring lands were humming with activity and the industrial estate was coming into existence, though in phases. The Archbishop of Delhi, who was the president of Delhi Simla Catholic Archdiocese, appellant in this case, entered the witness box. He said : “When this land was acquired Okhla industrial estate was coming up.” This showed that the land had potential value. It was contiguous to the industrial estate. It abutted on the railway line. On this material the judge concluded thus :
“The land in dispute thus could have double advantage, one of the road and the other of the railway line (for railway siding).”
On the value of the land as an industrial site he said :
“The lands nearby were being used for industrial purposes and during the span of one year industrial estate of Okhla had also come up. This also appreciated the price of the land in dispute during the said period.”
6. That the land occupied an advantageous position no one can deny. Now we have an instance of a sale dated April 10, 1957 which was accepted by the judge as a guide to this conclusion. On April 10, 1957 an area measuring 5/6 share in 1708 square yards was sold for a sum of Rupees 9607.50 p. It works out to a price of Rs. 6.75 p. per square yard. In terms of per bigha it works out to Rs. 6800/- per bigha. The learned Additional District Judge thought that the price at which it was sold was Rs. 5.62 per square yard. This was a mistake. In fact 5/6 of 1708 square yards (and not 1708 square yards as the Judge thought) was sold. The price works out to Rs. 6800/- per bigha. This was a source of error in his judgement which, in my opinion, leads to a wrong estimate of the market value of the land.
7. The transaction of April 10, 1957 is a bona fide sale. No one has said that this was a collusive transaction. A part of Khasra No. 345 was sold at Rs. 6.75 per square yard. A part thereof had been sold as early as Sept. 9, 1953 at the price of Rs. 3.37 per square yard. This is clearly indicative of the fact that between 1953 and 1957 prices were rising in this area.
8. The learned Judge found that the sale of April 10, 1957 was a genuine transaction. Now there is only a difference of three months between the notification under Sec. 4 dated Jan. 2, 1957 and the sale of April 10, 1959. That the market was rising is also proved by another fact. A division bench of this court in R.F.A 20-D of 1964 (Delhi Simla Catholica Archiliocess… v. Union Of India….) decided on Sept. 24, 1974 has fixed the market value of the land as on Dec. 7, 1955 (which was the date of notification under Sec. 4 in that case) at Rs. 3400/- per bigha. This is positive proof that between Dec. 7, 1955 and April 10, 1957 there was an upward trend of price in this locality.
9. The principal argument raised before me on behalf of the Union of India is that the sale dated April 10, 1957 ought not to be taken into consideration in assessing the market value of the land in the present case. I was referred to State of West Bengal v. Secretary, Union Club, Purulia, (AIR 1972 Cal 225). It was said that a post notification sale cannot be taken note of in determining the market value of the acquired land. It is argued that the sale of April 10, 1957 was made after the notification dated Jan. 2, 1957 under Section 4 of the Act and the notification dated Jan. 2, 1957 was the sole reason for the spurt in prices, and therefore as required by Sections 23 and 24 of the Act this sale ought to be rejected out of hand.
10. I cannot accept this reasoning. In my opinion the sale dated April 10, 1957 is a highly pertinent instance and ought to be taken into account. It is well established that a sale near about the material time can be taken into consideration. As has been held :
“There is no rule that post-notification transaction of sale of land similar to the acquired land cannot be looked into. If in considering a post-notification sale, the court finds that after the publication of the notification, the price of the lands in the locality has been affected, in that case it will not be proper for the court to rely on such a transaction of sale, for it will not be of any guide for the determination of the market value of the acquired land.”
(Mugneeram Bangur and Co. v. State of West Bengal, AIR 1974 Cal 369 (376)).
11. The important fact in this case is that the land in question was contiguous to the industrial estate. It had, therefore, a special value because the industrial complex was next door to it. If the complex was to expand as it actually did, the appellant's land was the most convenient site on which to plan the industrial expansion. It was probably certain that within a reasonable time the adjoining land would be used for purposes connected with factories and industries which would give it a very much enhanced value.
12. We cannot look at the particular purpose which the Union of India in this case was going to put the land to when they took it under statutory powers. This is prohibited under Section 24 (fifthly) of the Act. But the court can certainly take into consideration that the adjoining land had already been acquired for industrial estate on December 7, 1955. This one single factor was going to enhance the value of the land. On Dec. 7, 1955 the first notification for setting up the industrial estate was issued. It was followed by a second notification Jan. 2, 1957 with which we are concerned in this case. The “industrial estate” was not a visionary project. It was being realised. It was a fact and a reality. There was actually activity on the land acquired by the notification of Dec. 9, 1955. That notification was a composite notification, at once under Sections 4, 6 and 17 of the Act. It showed urgency for the industrial estate. That the industrial estate had started coming up right form Dec. 1955 is an important element to be considered in compensation. The learned Judge has not given it the importance it deserved, though he was conscious of the potential value of the land.
13. The special suitability of the land for industrial activity is a factor of no mean importance. The land was able to command a higher price in the market. In such a case I can see no reason why an owner should not be entitled to have this fact taken into consideration in assessing compensation for his acquired lands. It is a true element of the market value. Special adaptability or potential value of the land for purposes of industrial activity must be taken into account. This tends to increase directly both the value and the market price of lands in the hands of a private owner and it has never been doubted that he could urge them in augmentation of the compensation which he was entitled to receive (See In re Lucas and Chester Field Gas and Water Board. (1909) 1 KB 16 (30). per Fletcher Multon L.J) No better example of land potential could be found than that we have in the present case.
14. “It is the possibilities of the land and not its realised possibilities that must be taken into consideration”, to use the words of Lord Romar (See Raja Vyricherla Narayana Gajapatiraju v. Revenue Divisional Officer, ILR (1939) Mad 532 (545) : (AIR 1939 PC 98)). It has to be remembered that “the value of potentiality must be ascertained” by the valuer “on such materials as are available to him and without indulging in feats of the imagination” (Raja Vyricherla, supra p. 548). Applying these principles to the facts of this case it can be said that the possibility that persons wishing to purchase land for an industrial purpose would give a higher price for the land in question is a factor that can properly be taken into consideration in estimating the market price.
15. Therefore my conclusion is that the valuer is entitled to take into consideration the increased value of the land, the value enhanced by reason of the industrial estate having been brought into existence on Dec. 7, 1955.
16. It is no doubt true that the notification of Jan. 2, 1957 gave a further fillip of the price of the land in this locality. But it will not be reasonable to conclude, as has been argued, that the notification dated Jan. 2, 1957 set spurs to prices. In early 1955 it was not this wild sea of inflation in which we are now navigating. Rise in prices was gradual. It was slow. None of that swell and tide which engulfs us today. All that the notification dated Jan. 2, 1957 did was to give a stimulus to the rising market which started rising right with the notification of Dec. 7, 1955, Not that it gave wings to prices to soar.
17. In my opinion the market value of the land on the given day of January 2, 1957 ought to be fixed at Rs. 6000/- per bigha, after making due allowance for the incentive which the notification of Jan. 2, 1957 may have given to the price of the land in this locality.
18. In my opinion there was not much difference in the prices between Jan. 2, 1957, the date of notification and April 10, 1957 the date of the sale. The sale on April 10, 1957 was made at the rate of Rs. 6800/- per bigha. I have fixed the price on the material date at Rs. 6000/- per bigha. For this conclusion there are three reasons. First, the gap in time between January 2, 1957 and April 10, 1957 is not so vast as to award the appellant anything lower than Rs. 6000/- per bigha. Second, the notification under Section 6 of the Act which also must have had its impact on the prices came much later. It was issued on Nov. 20, 1957 which under the law is the date of the acquisition. Third, the onus to prove that the notification of Jan. 2, 1957 really spurred the prices lay on the taker of the land. The Union of India have failed to show that notification made a substantial difference in prices. It is all a conjecture to say that prices solely rose due to the notification of January 2, 1957. When there is no such proof the court can safely rely on the post-notification sale of April 10, 1957 and take it as a guide to its conclusion.
19. For these reasons I allow the appeal. The appellant is allowed enhancement of Rs. 1968/- per bigha together with 15 per cent solatium and 6 per cent per annum interest on the enhanced compensation (including solatium) from the date of dispossession till the date of payment and proportionate costs.
R.F.A 112 of 1967.
20. This appellant's land measuring 2 bighas 10 biswas of Khasra No. 1553/418 in the revenue estate of village Bahapur was also acquired pursuant to the same notification dated January 2, 1957 under Section 4 of the Act. The land Acquisition Collector awarded him Rs. 1000/- per bigha. On a reference under Sec. 18 of the Act the Additional District Judge declined to make any enhancement. He dismissed the reference. The owner has come in appeal against his judgement dated January 23, 1967.
21. The appellant's land is situated in the close neighbourhood of the industrial estate which was brought into existence on Dec. 7, 1955. His land is in the immediate vicinity of Khasra No. 1541/416/1, 1550/418/1 and 417/2, which were acquired by virtue of the notification dated Dec. 7, 1955. The only difference in the case of this appellant and the appellant in R.F.A 363 of 1968 is that the present appellant's land does not enjoy the advantageous position of the railway line and the railway siding which was a special feature of land in R.F.A 363 of 1968. The land in dispute in this appeal is very near to the main Tughalaqbad Road. In that sense it has a distinct advantage. But this owner cannot claim the same compensation as I have awarded to the appellant in R.F.A 363 of 1968.
22. In my opinion the just and fair compensation to award in this case should be Rs. 5000/- per bigha. The Collector awarded him Rs. 1000/- per bigha. I, therefore, hold that the appellant is entitled to an enhancement of Rs. 4000/- per bigha together with 15 per cent solatium and 6 per cent per annum interest on the enhanced compensation (including solatium) from the date of dispossession till the date of payment and proportionate costs.
Order accordingly.