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Sreedharan And Others v. State Of Kerala

Kerala High Court
Aug 11, 1966
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Structured Summary of the Opinion

Factual and Procedural Background

These appeals arise from references under s. 18 of the Travancore Land Acquisition Act (Act XI of 1089) made by the appellants (who were plaintiffs in the several land acquisition references) seeking enhanced compensation for lands compulsorily acquired by the State. The evidence for all cases was adduced by consent in L.A.R. 162 of 1959 and the main judgment is in that case. A.S. 418 of 1962 challenges the judgment in L.A.R. 162 of 1959.

The lands acquired comprised portions of several survey numbers (2646/1, 1656/1, 2657/1, 2658/1, 2659/1 and 2674) in Chanazhassery Pakuthy, Trivandrum taluk; these survey numbers originally lay in one compact block but the acquisition divided the block into two portions. The declaration under s. 6 of the Travancore Land Acquisition Act was made on 25.2.1958. The Land Acquisition Officer had awarded land value at Rs. 175 per cent; the appellants claimed Rs. 500 per cent before the subordinate judge, who fixed market value at Rs. 225 per cent. The appellants appealed seeking enhanced compensation.

Legal Issues Presented

  1. Whether the market value fixed by the subordinate judge (Rs. 225 per cent) for the acquired properties was correct, or whether the appellants are entitled to enhanced compensation (they sought Rs. 500 per cent).
  2. What weight should be given to the documentary comparators produced by the parties (Ex. P-1, P-2, P-3 produced by appellants; Ex. D-1 to D-4 produced by the State), including consideration of timing relative to the declaration under s. 6 and differences in location, road frontage and levels.
  3. Whether the potential value of the land (its suitability as house sites inside a busy part of Trivandrum) should be taken into account in fixing market value, consistent with authorities cited.
  4. Entitlement to additional statutory relief (solatium and interest) consequent upon any enhancement of the land value award.

Arguments of the Parties

Appellants' Arguments

  • The appellants claimed land value at the rate of Rs. 500 per cent for the acquired portions.
  • They relied on documentary comparators: Ex. P-1 (sale deed of 31/1/1923 for 5 cents showing Rs. 750 per cent equivalent), Ex. P-2 (sale deed 8/1/1959 for 4.220 cents with an effective sale agreement dated 1/1/1958 showing Rs. 680 per cent), and Ex. P-3 (judgment in L.A.R. 229 of 1959 awarding Rs. 350 per cent).
  • Witnesses (Pw.1 and Pw.2) deposed to proximity, levels, road frontages and that the acquired properties formed part of larger holdings, asserting that the acquired properties were not inferior to the comparators and had potential as house sites within a busy city locality.

State's Arguments

  • The State produced documents Ex. D-1 to D-4 (sale deeds from 1955–1957) to establish prevailing land values (e.g., Ex. D-1 suggested Rs. 280 per cent; Ex. D-3 suggested Rs. 350 per cent), and pointed out limitations in some documents where building values were not separated (Ex. D-2 and D-4).
  • The State and the learned judge questioned some comparators on grounds of relative advantage (road frontage, proximity to key junctions) and on timing (for example Ex. P-2 arising from an agreement after the declaration under s. 6).
  • The learned government pleader drew attention to earlier appellate judgments of this court (A.S. Nos. 574, 575 and 579 of 1961) awarding land value at Rs. 300 per cent in related acquisitions, to support the State's position on valuation.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Trustees for the Improvement of the City of Bombay v. Karsandas (1909) ILR 33 Bombay 28 Method of arriving at valuation of land by reference to prices realised by sales of neighbouring lands; caution that no sale will be precisely parallel and allowances for differences cannot be reduced to hard and fast rules. The court invoked this principle to emphasise that comparators will differ in circumstances and that differences must be assessed rather than applying rigid rules; it supported a careful, contextual approach to weigh the sale-deed evidence.
Gajapatiraju v. Revenue Divisional Officer (1939) P.C. 98 Land valuation must consider uses to which land is reasonably capable of being put in the future (possibilities rather than realised possibilities), while not valuing as though already built; embodied in the notion in s. 24(5) of the Act. The court relied on this authority to hold that the potential value of the acquired properties as house sites in a busy part of Trivandrum had to be considered, and that the subordinate judge had not adequately accounted for that potential.
Judgments of this Court in A.S. Nos. 574, 575 and 579 of 1961 (reported in the record) Comparable acquisitions in the same locality where land value was awarded at Rs. 300 per cent (Vaidialingam, J. awarded Rs. 300 per cent as against Rs. 200 by trial judge). The government pleader cited these judgments as relevant comparators. The court examined them but observed that those judgments did not explicitly take the potential of the lands as house sites into account; they were considered but not treated as dispositive.

Court's Reasoning and Analysis

The court proceeded by a careful comparison of the documentary and oral evidence produced by the parties and by evaluating the relevance and weight of each comparator in light of location, timing (relative to the declaration under s. 6), road frontage and levels. The court's step-by-step analysis, as recorded in the opinion, can be summarised as follows:

  1. Identification of evidence: The court catalogued the appellants' comparators (Ex. P-1, P-2, P-3) and the State's comparators (Ex. D-1 to D-4), noting the dates, areas and stated considerations (where available) in each document.
  2. Assessment of comparators' relevance: The court evaluated specific limitations/reasons to treat some comparators with caution:
    • Ex. P-1 (1923 sale) was very close to Sreekumar junction and was used to provide road frontage; the learned judge below had considered it an unsafe guide because of better advantages, but the appellate court said it could not be characterised as absolutely irrelevant.
    • Ex. P-2 (dated 8/1/1959 with an agreement dated 1/1/1958) had features (touches a particular road) and its agreement date was subsequent to the declaration under s. 6; the trial judge had rejected it partly for that reason, but the appellate court did not completely discard it.
    • Ex. P-3 (judgment in L.A.R. 229 of 1959) awarded Rs. 350 per cent and was geographically proximate (about 150 feet away) and acquired for the same purpose as the present acquisition.
    • Ex. D-2 and D-4 were of limited assistance because evidence did not separate building value from land value; Ex. D-1 and D-3 indicated values of Rs. 280 per cent and Rs. 350 per cent respectively for 1955 and 1957.
  3. Consideration of physical factors: The court rejected the contention that the acquired properties were materially inferior in level or importance to the comparators; witnesses indicated similar levels and road accessibility, and the acquired properties had road frontage through other properties owned by the plaintiffs.
  4. Principled valuation approach: The court emphasised (relying on Gajapatiraju) that valuation must account for the reasonable future uses of the land — the "possibilities" — and not merely its present state, while not assuming the land already realised those possibilities. The court found that the subordinate judge had not adequately taken into account the potential value of the acquired lands as house sites inside a busy part of Trivandrum.
  5. Evaluation of prior appellate decisions: The court reviewed earlier decisions (A.S. Nos. 574, 575 and 579 of 1961) cited by the State but observed that those decisions did not appear to consider the potential of the lands as house sites; thus they could not justify leaving the subordinate judge's valuation undisturbed.
  6. Conclusion on appropriate market value: On consideration of the totality of oral and documentary evidence, and factoring in the locality, proximity to junctions and potential as house sites, the court concluded that the market value fixed by the subordinate judge (Rs. 225 per cent) was very low and that the appellants were entitled to an enhancement to Rs. 400 per cent for all the lands involved.
  7. Ancillary relief: The court held that for the excess amount awarded by it (i.e., increase to Rs. 400 per cent) the appellants would be entitled to the usual solatium and interest at 4% per annum from the date of dispossession. Other aspects of the subordinate judge's judgments and decrees were confirmed, and costs were to be apportioned proportionately to success and failure.

Holding and Implications

Core Ruling: The court modified the judgments and decrees of the learned subordinate judge and allowed the appellants' land value for all the lands involved in the appeals at the rate of Rs. 400 per cent.

Consequent and direct effects on the parties (as stated in the opinion):

  • The appellants are entitled to the enhanced land value of Rs. 400 per cent for the acquired properties.
  • For the excess amount awarded by the court, the appellants are entitled to the usual solatium and interest at 4% per annum from the date of dispossession.
  • In all other respects the judgments and decrees of the subordinate court are confirmed.
  • The parties will pay and receive proportionate costs according to their respective success and failure.

Broader implications: The opinion does not elaborate broader legal or constitutional implications beyond its direct effect on the parties; it adjusts the compensation based on an assessment of comparators and the principle that potential uses of land must be considered in valuation.

Show all summary ...

1. These appeals arise out of the decisions of the additional subordinate judge, Trivandrum, On references under s. 18 of the travancore land acquisition act (act xi of 1089) at the instance of the appellants for enhanced compensation for the lands belonging to them compulsorily acquired by the state. The appellants are the same in all the appeals and they are the plaintiffs in the several land acquisition references. The evidence for all the cases was adduced by consent in l. A. R. 162 of 1559 and the main judgment is in that case a. S. 418 of 1962 is against the judgment in lar. 162 of 1959.

2. The properties acquired by the state formed part of the properties comprised in survey no. 2646/1 measuring 40 cents, In survey no. 1656/1 measuring 35 cents, In survey no. 2657/1 measuring 19 cents, In survey no. 2658/1 measuring 25 cents, In survey no. 2659/1 measuring 25 cents and in survey no 2674 measuring 59 cents in chanazhassery pakuthy, Trivandrum taluk. The properties comprised in ail these survey numbers were lying in one block before the acquisition. 5 cents from survey no. 2646/1, 5. 450 cents from survey no. 2656/1, 0. 275 cents from survey no. 2657/1, 2. 650 cents from survey no. 2658/1, 5. 750 cents from survey no. 2659/1 and 5. 725 cents from survey no. 2674 were compulsorily acquired by the state. The declaration under s. 6 of the travancore land acquisition act was on 25 21958. The land acquisition officer awarded land value at a uniform rate of rs. 175/ - per cent besides the value for the structures and trees in the properties though the claim of the appellants was at the rate of rs. 500/ - per cent. The appellants claimed before the subordinate judge land value at the rate of rs. 500/ - per cent. The subordinate judge fixed the market value for all the properties at the rate of rs. 225/ - per cent.

3. In the appeals also the claim of the appellants is to get compensation at the rate of rs. 500/ - per cent. Ex. D. 5 is the group sketch showing the location of the properties involved in the land acquisition proceedings and the adjacent properties. It is seen from ex. D. 5 and it is also admitted by the state that the acquired properties are situated in a very busy part of the trivandrum city. They are located centrally to the trivandrum central railway station, To the thampanoor bus station, To the model school and intermediate college junction and to the sreekumar theatre junction. It is seen that as a result of the acquisition the compact block of these survey numbers was divided into two portions.

4. Ex. P. 1 is a sale deed dated 31111123 for rs. 3750/ - in respect of 5 cents of land comprised in survey no. 2697 a and b. The land value is rs. 750/ - per cent. Ex. D. 5 shows that this property is very close to the sreekumar junction, And touches the road from the sreekumar junction to the subramoniaswami temple junction. Pw. 1 is the husband of one of the vendors in ex. P. 1. He deposed that ex. P. 1 property was purchased for providing a road frontage for the other properties of the vendees. The learned judge was therefore of the view that ex. P. 1 cannot be used as a safe guide for fixing the market value of the acquired properties. Ex. P. 2 is the sale deed dated 811959 in respect of 4. 220 cents of land in survey no. 2625b for a consideration of rs. 2750/ -. Though the sale deed is dated 811959 it is stated therein that the agreement of sale forming the basis of ex. P. 2 was concluded between the parties on 1111958. Pw. 2 is the vendee under ex. P - 2. Ex. D - 5 shows that the property comprised in ex. P - 2 touches the road leading from the women & children hospital junction to the model school and intermediate college junction. The land value under ex. P - 2 works out at the rate of rs. 680/ - per cent. The learned judge was not prepared to accept ex. P - 2 as a guide because even the agreement of sale which gave rise to ex. P - 2 was subsequent to the declaration under s. 6 of the land acquisition act and because ex. P - 2 property touches the road going from the model school junction to thampanoor women's and children hospital junction. Ex. P - 3 is a copy of judgment of the trivandrum sub court in lar. 229 of 1959 which related to the acquisition of a portion of the property from survey nos. 2632/1 and 2633/1. The land value was awarded at the rate of rs. 350/ - per cent by ex. P - 3. The learned judge is not quite correct in saying that survey nos. 2632/1 and 2634/2 touch the road from the subramaniaswami temple junction to the model school junction. It is seen from ex. D - 5 that out of the properties survey no. 2634 alone touches the road while survey no. 2632 is away from the road lying immediately to the south of survey no. 2634. The above are the documents produced by the plaintiffs.

5. I shall now come to the documents produced by the state to prove the land value prevalent on the date of the declaration under s. 6 of the land acquisition act. Ex. D - 1 is the copy of the sale deed dated 19 101955 in respect of the property comprised in survey nos. 2608/b and 3679 along with the compound wall constructed therein for rs. 20000/ -. It is seen from ex. D - 5 that a small portion of this property touches the road going from the sreekumar theatre junction to the subramaniaswami temple junction. The land value under ex. D - 1 works out at the rate of rs. 280/ - per cent. Ex. D - 2 is a copy of the sale deed dated 19101955 in respect of the properties comprised in survey nos. 2604, 2607, 2608 and 2679 along with the building standing thereon for a consideration of rs. 16000/ -. No evidence was adduced to show the value of the buildings on the property. It is therefore not possible to find out the land value from ex. D - 2. Ex. D - 3 is a copy of the sale deed dated 131957 in respect of 81/2 cents comprised in survey no. 2697/a for consideration of rs. 30000/ -. The land value under ex. D - 3 works out at the rate of rs. 350/ - per cent. Ex. D - 4 is the sale deed dated 22 41957 regarding 13 cents of property and buildings therein comprised in survey no. 2686 for a consideration of rs. 5200/ -. No evidence is available to show the value of the buildings included in ex. D - 4. It can therefore be seen that exx. D - 2 and d4 are of no assistance to fix the land value for the acquired properties. Exx. D - 1 and d - 3 show that the land value in 1955 and 1957 was at the rate of rs. 280/ - per cent and rs. 350/ - per cent and that out of the properties in ex. D - 1 only a small portion of the property included in survey no. 2679 touches the road.

6. Pw. 1 deposed that the acquired properties are about half a furlong away from the properties comprised in ex. P - 1 and both these properties are situated to the east of the road leading from the subramaniaswami temple junction to the sreekumar theatre junction. According to him the area was not well developed at the time of the execution of ex. P - 1. Pw. 2 is the vendee under ex. P - 2. The property comprised in ex. P - 2 forms the eastern boundary of the acquired properties. Pw - 2 deposed that the properties in ex. P - 2 and the acquired properties are on the same level. He would swear that the acquired properties formed part of 4 acres of land belonging to the plaintiffs which touch the road leading from the subramaniaswami temple junction to the sreekumar theatre. The learned judge is not therefore correct in saying that the acquired property had no road frontage. The acquired properties had road frontage through other properties owned by the plaintiffs. The land value on the basis of exx. P - 1, P - 2 and p - 3 works out at the rate of rs. 750/ - in 1123, Rs. 680/ - in 1958 and rs. 350/ - in 1959. The properties involved in ex. P - 3 are only 150 feet away from the acquired properties. The properties in ex. P - 3 were acquired for the same purpose for which the properties involved in the appeals before me were acquired. The value on the basis of exx. D - 1 and d - 3 works out at the rate of rs. 280/ - and rs. 350/ - per cent in the year 1955 and

in the year 1957.

7. It is not correct to say that the level of the acquired properties is very much lower in level than the properties in exx. P - 1 to p - 3 and d - 1 and d - 3. The acquired properties are not in any way less important than the properties comprised in exx. D - 1, D - 3 or d - 4. The value on the basis of ex. P - 2 though subsequent to the date of the acquisition, Cannot be completely discarded ex. P - 1 though of the year 1123 shows the price which was prevalent in the locality as early as 1123. It has therefore to be stated that ex. P - 1 cannot be characterised as absolutely irrelevant. The learned government pleader brought to my notice judgments of this court in a. S. Nos. 574, 575 and 579 of 1961. A. S. Nos 574 and 575 of 1961 related to the acquisition of portions of properties comprised in survey nos. 2557, And 2559 and a. S. 579 of 1961 related to the acquisition of a portion of the property comprised in survey no. 2577. The properties involved in these appeals were acquired for the same purpose for which the lands in the appeals before me were acquired. Survey nos. 2557 and 2559 are also shown in ex. D - 5 and lie in the same locality as the acquired properties. Vaidialingam, J. Awarded land value at the rate of rs. 300/ - per cent as against the award of rs. 200/ - passed by the learned trial judge. As was stated in the trustees for the improvement of the city of bombay v. Karsandas (1909) ilr. 33 bombay 28 in the method of arriving at valuation of land by reference to prices realised by sales of neighbouring lands, It is plain that no evidence of former sales can be obtained which shall be precisely parallel in all its circumstances to the sale of the particular land in question. Differences small or great, Exist in various conditions and what precise allowance should be made for these differences is not a matter which can be reduced to any hard and fast rules. Assuming that the property comprised in ext. P - 1 has better advantages than the acquired property it cannot be said that the acquired properties are far less inferior to the properties comprised in ex. P - 1. It is seen that the acquired properties are situated in a very busy part of trivandrum city accessible easily to four important junctions where colleges, Women and children hospital, Bus stand and railway station are located. The potential value of the lands has also to be taken into consideration. It is no doubt true that enhancement of value of the land because of the very purpose for which the acquisition is made cannot be taken into account in fixing the market value for awarding compensation under the act. Their lordships of the judicial committee of the privy council observed in gajapatiraju v. Revenue divisional officer air. 1939 pc. 98 at page 102.

"for it has been established by numerous authorities that the land is not to be valued merely by reference to the use to which it is being put at the time at which its value has to be determined (that time under the indian act being the date of the notification under s. 4 (1)) but also by reference to the uses to which it is reasonably capable of being put in the future. No authority indeed is required for this proposition. It is a self - evident one. No one can suppose in the case of land which is certain, Or even likely, To be used in the immediate or reasonably near future for building purposes but which at the valuation date is waste land or is being used for agricultural purposes, That the owner, However willing a vendor, Will be content to sell the land for its value as waste or agricultural land as the case may be. It is plain that in ascertaining its value, The possibility of its being used for building purposes would have to be taken into account. It is equally plain however that the land must not be valued as though it had already been built upon, A proposition that is embodied in s. 24 (5) of the act and is sometimes expressed by saying that it is the possibilities of the land and not its realised possibilities that must be taken into consideration."

i do not find from the judgments of the courts below that this aspect was kept in view by the learned judge in fixing the market value of the properties acquired. If the potential value of the acquired properties as house sites inside the busy part of trivandrum city is taken into consideration there cannot be much of difference in the condition of the properties comprised in exx. P - 1 and p - 2 and d - 1 and d - 3. Exx. D - 1 and d - 3 are of the years 1955 and 1957. In the judgments of this court land value was awarded at the rate of rs. 300/ - while in ex. P - 3 the land value was awarded at the rate of rs. 350/ -. On a perusal of the judgments of this court, I do not find the potential value of those lands capable of being used as house sites was taken into consideration. I am therefore of the view that the land value awarded by the learned judge is very low and the appellants are entitled to get an enhancement in the value. Considering the oral and documentary evidence adduced in the case i feel that the appellants are entitled to get land value at the rate of rs. 400/ - per cent. I therefore modify the judgments and decrees of the learned subordinate judge and allow the appellants land value for all the lands involved in all the appeals at the rate of rs. 400/ - per cent. For the excess amount awarded by me the appellants will be entitled to get usual solatium and also will be entitled to get interest at 4 per cent per annum from the date of dispossession. In all other respects the judgments and decrees of the court below are confirmed. The parties will pay and receive proportionate costs to the extent of their success and failure.