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Case Number
Advocates
  • S.C. Das Gupta
  • B.C. Dutt and Shib Kumar Majumdar
Judges
  • A.K Mukherjea
  • M.M Dutt, JJ.
Acts
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Equivalent Citations
citation codes
Case Number
Advocates
  • S.C. Das Gupta
  • B.C. Dutt and Shib Kumar Majumdar
Judges
  • A.K Mukherjea
  • M.M Dutt, JJ.
Acts
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Smart Summary

Structured Summary of the Opinion (M.M. Dutt, J. and Arun K. Mukherjea, J.)

Factual and Procedural Background

The State of West Bengal acquired 1.35 acres of land belonging to the Union Club of Purulia under the Land Acquisition Act. A notification under Section 4 was published on 4 September 1952; the declaration under Section 6 was published much later on 2 February 1961. The Land Acquisition Collector classified portions of the land as Bastu I and Bastu II and assessed values at Rs. 9,800 per acre for Bastu I and Rs. 7,800 per acre for Bastu II, resulting in an award of Rs. 15,313.40 as compensation.

The Union Club (respondent) objected to the Collector's award and sought a reference to the District Judge under Section 18 of the Act. Before the District Judge the respondent claimed compensation at the rate of Rs. 1,000 per cotta and relied on sale deeds marked Exhibits 4 to 4D; the District Judge accepted only Exhibit 4C (a sale deed dated 23 February 1953). The appellant (State) filed sale deeds marked Exhibits A to A(7), which the District Judge rejected. The District Judge found the acquired land to be entirely Bastu I and fixed the market value at Rs. 24,000 per acre, awarding compensation at that rate plus the statutory allowance under Section 23(2). The State appealed that judgment.

Legal Issues Presented

  1. Whether a post-notification sale (specifically Exhibit 4C dated 23 February 1953) can be relied upon to determine the market value of land acquired under the Land Acquisition Act.
  2. Whether the Collector's valuation (rates for Bastu I and Bastu II and resulting award) was adequate and, relatedly, what onus the claimant bears to prove inadequacy when the Collector has not disclosed the basis for his valuation.
  3. Whether sale transactions not relied upon by the Collector (Exhibits A to A(7)) are available to the State for enhancing the valuation on reference under Section 18.

Arguments of the Parties

Appellant's (State's) Arguments

  • Mr. Das Gupta contended that Exhibit 4C is a post-notification transaction and, as such, should not be relied upon in determining market value; he urged that post-notification sales are improper indicia for market value.
  • The appellant relied on sale deeds marked Exhibits A to A(7) as indicative of market value (three of these—A, A(2), A(4)—were specifically pressed in argument).

Respondent's (Union Club's) Arguments

  • The respondent claimed compensation at Rs. 1,000 per cotta and relied on sale deeds Exhibits 4 to 4D to establish market value; the District Judge relied on Exhibit 4C (sale dated 23 February 1953).
  • The respondent produced an estimate by a Government valuer (Exhibit 5) showing the land valued at Rs. 12,000 per acre to demonstrate the Collector's valuation was erroneous.
  • Counsel for the respondent relied on precedent (Charu Prokash Ghosh v. State of West Bengal, 72 Cal WN 235 : AIR 1967 Cal 631) supporting the proposition that transactions not relied upon by the Collector should not be used by the State to enhance valuation in a reference under Section 18.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Govt. of Bombay v. Karim Tar Mahomed, (1909) ILR 33 Bom 325 Sales after notification must be discarded if it is proved values were affected by circumstances arising after the notification date. The Court cited this authority to show that post-notification sales are not automatically excluded; they must be discarded only if it is proved that notification or subsequent events affected prices. The Court applied this to hold Exhibit 4C admissible because there was no proof of price-effect.
M.S. Nanjappa v. Special Land Acquisition Officer, AIR 1966 Mys 66 A bona fide sale entered into after notification cannot be excluded merely because it is subsequent to notification; subsequent transactions may reflect enhanced values attributable to acquisition or general market increases. The Court relied on this authority to support its view that post-notification bona fide sales can be considered and that courts must account for whether the sale price was influenced by acquisition-related enhancement or general market rise.
Charu Prokash Ghosh v. State of West Bengal, 72 Cal WN 235 : AIR 1967 Cal 631 Transactions not relied upon by the Collector could not be relied on by the State in a reference under Section 18 for enhancement of valuation. The Court considered this Bench decision as supportive of the respondent's submission that the State should not be permitted to rely on sale transactions which the Collector himself did not rely upon when making the award.
Sub-Collector, Ongole v. Yerra Anumanchamma, AIR 1967 Andh Pra 230 A sale transaction may be rejected where the officer who passed the award did not regard that transaction as relevant in fixing market value. The Court noted this authority to support the proposition that if the Collector did not rely on particular sales, those sales are not necessarily available to the State to improve upon the Collector's award in a reference.
Fink v. Secy. of State for India, (1907) ILR 34 Cal 599 Where the Collector makes no enquiry or gives no grounds for his valuation, the burden on the claimant to prove inadequacy is reduced to a nominal or slight burden. The Court applied this principle to hold that because the Collector did not disclose the basis of his valuation in the statement under Section 19(1)(d), the respondent's burden to prove inadequacy was negligible and that slight evidence sufficed to discharge it.

Court's Reasoning and Analysis

The Court proceeded through a sequence of legal analyses tied closely to the statutory scheme (Sections 18, 19(1)(d), 23(1) and 23(2) of the Land Acquisition Act) and the evidence on the record:

  1. On classification: The District Judge's finding that the entire acquired land was Bastu I was not challenged by the State's counsel; the Court accepted that factual finding for purposes of valuation.
  2. On admissibility of post-notification sale (Exhibit 4C): The Court explained that Section 23(1) requires the Court to determine market value and that one permissible method is to examine prices paid in bona fide transactions of the land acquired or adjacent similar land "within a reasonable time." There is no absolute rule excluding post-notification sales. Instead, such sales must be discarded only if it is proved that the publication of the notification or subsequent events affected local land values. The onus of proving such effect rests on the party objecting to the sale as a guide to market value.
  3. Applying that rule to the facts, the Court found no evidence before it that publication of the Section 4 notification affected land values in the locality. Consequently, Exhibit 4C (a post-notification sale) could not be excluded and was appropriately relied upon because it concerned similar Bastu I land in close proximity and showed a rate of Rs. 24,000 per acre.
  4. On the Collector's valuation and the burden of proof: The Court noted that the Collector failed to disclose the grounds for his Bastu I/Bastu II rates in the statement required by Section 19(1)(d). Relying on the Fink decision, the Court held that where a Collector gives no basis for valuation, the claimant's burden to show inadequacy is reduced to a nominal or slight burden. Because the Collector's statement disclosed only the bare rates without rationale, the respondent's onus was negligible and slight evidence sufficed to show inadequacy of the award.
  5. On the State's sale deeds (Exhibits A to A(7)): The Court sustained the District Judge's rejection of those deeds. Reasons included: (a) Exhibit A concerned low/low-lying land (paddy land) and was not comparable; (b) Exhibits A(2) and A(4) recorded apparently anomalous, very low prices for dwelling-houses with land and did not separate value of house from land, making them unreliable as comparables; (c) more generally, the Collector did not rely on these sale deeds in making his award, and the Court applied the view that the Government cannot, in a reference under Section 18, rely on transactions the Collector himself did not consider relevant.
  6. On the valuation outcome: Considering the admissible evidence (notably Exhibit 4C and the Government valuer's Exhibit 5), and recognizing the inadequacy of the Collector's unexplained valuation, the Court agreed with the District Judge's determination that the market value was Rs. 24,000 per acre.

Holding and Implications

Core Ruling: The judgment and award of the learned District Judge are affirmed; the appeal is dismissed.

Implications and Immediate Consequences

  • The valuation fixed by the District Judge—Rs. 24,000 per acre—stands. Compensation is to be paid at that rate for the acquired land, together with the usual statutory allowance under Section 23(2) of the Land Acquisition Act (as awarded by the District Judge).
  • The Collector's original award (Rs. 15,313.40) is held to be inadequate. Because the Collector did not disclose the basis for his valuation under Section 19(1)(d), the claimant's burden to overturn the award was reduced; slight evidence sufficed to show inadequacy.
  • The State cannot in this reference rely on sale transactions which the Collector did not rely upon in making his award (Exhibits A to A(7)), and certain sale deeds were found not to be comparable on the facts.
  • No order as to costs was made in the appeal; accordingly, each party bears its own costs in the appellate proceedings before this Court.
  • The opinion applies established principles (as recorded in the cited authorities) about treatment of post-notification sales and burden where the Collector fails to disclose valuation grounds; the Court did not purport to lay down any novel precedent beyond applying those principles to the facts of this case.

Disposition: Appeal dismissed. (Arun K. Mukherjea, J. agreed.)

Show full summary ...

    State Of West Bengal v. Secretary, Union Club, Purulia .

    M.M Dutt, J.:— This appeal has been preferred by the State of West Bengal against the award dated August 24. 1964, of the learned District Judge, Purulia, under Section 18 of the Land Acquisition Act (hereinafter referred to as the Act).

    2. The appellant State of West Bengal acquired 1.35 acres of land appertaining to certain plots belonging to the respondent, the Union Club of Purulia. The relevant notification under Section 4 of the Act was published on September 4. 1952 and the declaration under Section 6 of the Act was published long thereafter on February 2, 1961.

    3. The Land Acquisition Collector classified the land as Bastu I land and Bastu II land. He valued the Bastu I land at Rs. 9,800/- per acre and the Bastu II land at Rs. 7,800/- per acre. On the basis of the said rates the Land Acquisition Collector made an award of Rupees 15,313.40 as compensation for the land acquired. Being aggrieved by the said award of the Collector, the respondent made an application for a reference to the District Judge under Section 18 of the Act. Before the learned District Judge the respondent claimed compensation at the rate of Rs. 1,000/- per cotta. In support of their claim for compensation at the said rate, the respondent relied on certain sale deeds marked as Exhibits 4 to 4d. The learned District Judge could not place reliance on these sale transactions excepting the transaction evidenced by Exhibit 4C which is a sale deed dated February 23, 1953. The appellant also filed certain sale deeds marked as Exhibits A to A(7). The learned District Judge, however, rejected all these documents relied on by the appellant. The learned District Judge came to the finding that there was no distinction between Bastu I land and Bastu II land as made by the Land Acquisition Collector. According to the learned District Judge the acquired land was Bastu I land and no portion of it was Bastu II land. After considering the evidence of the witnesses of the parties and relying on the sale deed Exhibit 4C. the learned District Judge came to the conclusion that the acquired land should be valued at the rate of Rs. 24,000/- per acre. Upon these findings, the learned District Judge awarded compensation to the respondent in respect of the acquired land at the rate of Rs. 24,000/- per acre plus the usual statutary allowance under Section 23(2); of the Act. Hence this appeal by the State of West Bengal.

    4. The finding of the learned District Judge that the acquired land is Bastu I land, has not been challenged by Mr. Das Gupta, learned Advocate for the appellant. He however, strenuously urged that the sale deed Exhibit 4C being a post notification transaction should not be relied on in determining the market value of the acquired land. It was submitted by Mr. Das Gupta that under no circumstance a post notification transaction could be a proper indicia for ascertaining the market value of the land. We are however, unable to accept the said contention of Mr. Das Gupta. Under Section 23(1), the Court has to determine the market value of the land. One of the methods of valuation is the price paid, within a reasonable time, in bona fide transactions of purchase of land acquired, or of the land adjacent to the land acquired having similar advantages. Such transactions of sale indicate the price of the land acquired on the date of the notification. The Court has to consider whether or not any particular transaction of sale affords a fair criterion of the market value of the land acquired. There is no rule that a 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.

    5. Whether the notification has affected the price of the land in the neighbourhood of the acquired land or not cannot be assumed by the Court, but has to be determined on facts proved in the case. The onus to prove such facts is on the party who objects to any such transaction of sale being relied on by the Court for ascertaining the market value of the acquired land. The view which we take finds support from the decision in Govt. of Bombay v. Karim Tar Mahomed, (1909) ILR 33 Bom 325. It has been held in that decision that sales after the date of notification must be discarded when it has been proved that the values have been affected one way or the other by circumstances which have arisen after that date. A Division Bench of the Mysore High Court in M.S Nanjappa v. Special Land Acquisition Officer, AIR 1966 Mys 66, has taken the same view. It has been held in that case that bona fide sale transaction cannot be excluded from consideration merely on the ground that it was entered into subsequent to the date of the notification. Further, it has been held that in taking into consideration a subsequent transaction, enhanced values attributable to the very acquisition or to a general increase fin the market price should not be overlooked by the Court.

    6. There is no evidence in the present case before us that after the publication of the notification under Section 4, the land value was affected one way or the other. In the absence of any evidence showing that the value of land in the locality of the acquired land was affected after the publication of the notification under Section 4. the post notification transaction of sale by the sale deed Exhibit 4C cannot be excluded from consideration in the matter of determining the market value of the acquired land.

    7. It appears from Exhibit 4C that a parcel of Bastu 1 land was sold at the rate of Rs. 24,000/- per acre. The land sold is situate very near to the land acquired and it is similar to the acquired land. The learned District Judge was justified in relying upon this transaction of sale.

    8. The respondent relied on an estimate of valuation made by a Government valuer at the instance of the appellant for the purpose of showing that the market-price of the acquired land was much more than what the Collector had awarded. It appears from the estimate (Exhibit 5) that the acquired land was valued at the rate of Rs. 12,000/- per acre. The estimate on the face of it shows that the Collector's valuation is wrong.

    9. It has been already stated that the learned District Judge refused to rely on the sale deeds filed by the appellant. Out of these sale deeds Mr. Das Gupta relied on three of them. Exhibit A is dated February 8, 1952, and it shows 3 cottas of home-stead land was sold at Rs. 199/- only, that is, at the rate of Rs. 3,978/- per acre. Bibhuti Bhusan Dhole, who is the Secretary of the Purulia Union Club, says in his evidence that the land sold by the document (Exhibit A) is low land and there is pady-land adjacent to the same. It appears from the schedule of Exhibit A that the northern and southern boundary of the land sold has been described therein as “Landlord's Khas land,” This description supports the evidence of this witness. Moreover, the witness was not cross-examined on the point on behalf of the appellant. In our view, this particular sale cannot be said to be a comparable sale and the learned District Judge was right in rejecting the same.

    10. Exhibit A (2) is dated June 27, 1952, and Exhibit A (4) is dated March 16, 1951. By Exhibit A (2), a dwelling house appertaining to 2 cottas of land was sold at Rs. 49/- only and by Exhibit A (4) also another dwelling house standing on 1 cotta of land was sold at Rs. 100/- only. It is inconceivable that even in 1952. dwelling house standing on 1 cotta or 2 cottas of land in the town of Purulia could be sold either at Rs. 100/- or at Rs. 49/-. It is not known under what circumstances the same were sold at such a low price. Moreover, in neither of the documents the house and the land have been valued separately. The learned District Judge was perfectly justified in not placing any reliance on these two documents.

    11. For another reason, the sale deeds Exhibits A. A(2) and A (4) cannot be relied on. It does not appear that the Collector in determining the compensation of the acquired land made any enquiry in ascertaining the market value of land on the date of the notification, nor does it appear that the Collector relied on any of the sale deeds filed by the appellant. Even, assuming that the Collector made some enquiry as to the market value of the land at or near about the date of notification under Section 4, it is apparent from the price of the acquired land assessed by the Collector, that the Collector did not rely on the sale deeds Exhibits A. A(2) and A (4). Mr. Dutt. learned Advocate appearing on behalf of the respondent relied on a Bench decision of this Court in Charu Prokash Ghosh… v. State Of West Bengal…., 72 Cal WN 235 : (AIR 1967 Cal 631) which to some extent lends support to the contention that the transactions of sale which were not relied upon by the Collector could not be relied on by the State in a reference under Section 18 for the enhancement of the valuation. The Andhra Pradesh High Court in Sub-Collector, Ongole v. Yerra Anumanchamma, AIR 1967 Andh Pra 230, also refused to rely on a sale transaction on the ground that the officer who passed the award had not considered that as relevant in awarding the market value. In our opinion, when the Collector who acts as the agent of the Government in assessing the market value of the acquired land, has not relied on particular sale transactions it will not be open for the Government to rely on such transactions. In the instant case, the Collector did not place reliance on the sale deeds Exhibits A to A (7). The same cannot therefore, be considered in determining the market value of the acquired land. In any event, the sale deeds relied on by Mr. Das Gupta, namely, Exhibits A. A(2) & A (4) cannot be said to be comparable sales.

    12. Lastly, it was argued by Mr. Das Gupta that the onus lay on the respondent to prove that the Collector's valuation was erroneous and inadequate. There cannot be any doubt that the valuation made by the Collector is insufficient or inadequate must prove the same (sic). It has, however, been held by a Bench of this Court in Fink v. Secy. of State for India, (1907) ILR 34 Cal 599 that when the Collector makes no enquiry or gives no ground for his valuation, the burden of proof on the claimant is nominal. In this connection, we may refer to Clause (d) of Section 19(1) of the Act which provides that in making the reference, the Collector shall state for the information of the Court, in writing under his hand the grounds on which the amount of compensation was determined when the objection is to the amount of the compensation. In his statement, the Collector has only stated the rates of Bastu I land and Bastu II land. He has not disclosed the basis for the said rates of valuation. In our view, the Collector has not complied with the provision of Clause (d) of Section 19 (1). Where the Collector discloses the basis for his valuation, the Court is in a position to consider the same with reference to the evidence adduced by the referring claimant in discharging the onus that lies on him. Omission by the Collector to state the grounds on which the amount of compensation was determined prevents the Court from such consideration and consequently, the onus of the referring claimant becomes negligible.

    13. In such a case, only slight evidence adduced by the referring claimant will discharge the onus. Most respectfully we agree with the principle laid down by this Court in Fink's case referred to above. We have already stated that the Collector has not, in his statement under Section 19. disclosed the ground of his valuation. There is no evidence from which the basis for the Collector's valuation can be ascertained. For the reasons aforesaid, the onus of the respondent is negligible and only slight evidence would discharge the said onus. In our opinion, the respondent has been able to discharge their onus that the Collector's valuation was inadequate.

    14. The learned District Judge was right in not accepting the claim of the respondent that the acquired land should be valued at the rate of Rs. 1,000/- per cotta or Rs. 60,000/- per acre. At the same time, the learned District Judge could not accept the valuation made by the Collector and after considering the evidence adduced on behalf of the parties, the learned District Judge fixed the market value of the acquired land at the rate of Rs. 24,000/- per acre. We have ourselves considered the materials on record and we also come to the same conclusion as that of the learned District Judge, that the market value of the land should be at the rate of Rs. 24,000/- per acre.

    15. In the result, the judgment and award of the learned District Judge are affirmed and the appeal is dismissed. In view of the facts and circumstances of the case we do not make any order for costs in this appeal.

    16. Arun K. Mukherjea, J.:— I agree.

    17. Appeal dismissed.

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    Comments

    State Of West Bengal v. Secretary, Union Club, Purulia .
    (Dec 9, 1971)