U.P Avas Evam Vikash Parishad And Etc. v. Babu Khan And Others, Etc. .

S.C Mohapatra, J.:— A scheme under Section 28 of the Uttar Pradesh Avas Evam Adhi-niyam, 1965 (hereinafter referred to as ‘the Adhiniyam’) was published covering 951.72 acres equivalent to 46, 80, 244 sq. yard, Notification under Section 30 of the Adhiniyam was however, published covering 202.48 acres which is equivalent to 9. 07, 954 sq. yards. As provided in the schedule as per Section 55 of the Adhiniyam, publication of scheme under Section 28 is treated as publication of notification under Section 4(1) of the Land Acqusition Act, 1894 (hereinafter referred to as ‘the Act’) and publication under Section 30 of the Adhiniyam is equivalant to notification under Section 6 of the Act. Although proceeding thereafter is to be completed under the Act, Section 28 of the Act was modified as provided in the Scheduled to the Adhiniyam. Therefore, on the basis of publication under Section 30 of the Adhiniyam when 202.48 acres land was acquired, Land Acquisition Officer initiated proceedings to determine the compensation to be paid to the land owners whose land was acqured. Following procedure under the Act, Land Acquisition Officer determined market value of the land acquired at the rate of Rs. 40/- per sq. yard and offered compensation to the land owners. Demanding higher compensation on basis of higher rate of market value of land, various land owners sought for reference under Section 18 of the Act on the basis of which references were made to civil court where market value has been determined at the rate of Rs. 150/- per sq. yard and deducted 10% out of it since land acquired constituted a large area.’ Being aggrieved by the awards these appeals have been filed by U.P Avas Evam Vikash Parishad (hereinafter referred to as the Parishad) as will as the State of U.P Jointly. Some of the land owners have filed cross objections confining their challenge to deduction of 10%

2. There is no material on record that the parishad as well as the State Government jointly agreed to file the appeals. When Mr. Srivastava, learned counsel for Parishad made submissions challenging deficiency of State Government in taking action under the Adhiniyam which is not open to the State Government to raise, we found it desirable to transpose State Government as respondent in these appeals since the Parishad ultimately will have to. pay the compensation and decree can be executed against it in case of non payment. Land in the present case is situated within the Municipality of Meerut. Entire area acquired was used by the owners for agiculture at the time when the scheme under Section 28 of the Adhiniyam was published on 13-8-1983. Keeping this in mind, market value as on 13-8-1983. is to be determined in view of Section 23(1)(a) of the Act. Persons claiming reference under Section 18 of the Act stand in position of plaintiff in the suit. They are to prove in the civil Court that compensation offerred by the Land Acquisition Collector is low and also are required to prove the prevailing market value on the date of publication of the scheme under Section 28 of the Adhiniyam. Owners have adduced of oral evidence in each of the reference and have also filed exemplers in support of their case Appellant Parishad has also filed one exempler and has examined a witness. Considering these materials Civil Court held that the land acquired has potentiality of homestead and enhanced the market value by determined higher rate.

3. On submission of learned counsel for the Parishad and the various groups of land owners following questions arise for consideration in these appeals.:—

(1) Whether the market value as determined by the Civil Court at Rs. 150/- per sq. yard and whether further deduction therefrom is justified?

(2) Whether solatium at the rate of 30% under Section 23(2) of the Act is to be awarded?

(3) Whether other staututory benefits under the Act as amended by Act 68(2) of 1984 are to be awarded?

(4) Whether appellant Parishad shall be permitted to assail the validity of reference proceedings under Section 18 of the Act in these appeals.

4. Main challenge of appellant Parishad is to the determination of the rate of land by the Civil Court in references on basis of which market value is to be determined. To decide this it is to be remembered that market value is the consideration which a bona fide purchaser would, be willing to pay for the acquired land. There are various methods which can be adopted to determine the market value. They are:

(i) Consideration paid by bona fide purchasers for land in the vicinity of the acquired land having similar advantages on or about the date of publication of a scheme under Section 28 of the Adhiniyam.

(ii) Capitalisation of the net annual profit of the acquired land;

(iii) Opinion of experts on the question of valuation.

These methods are available for determination of market value of land acquired under the Act since the same procedure is to be followed for acquisition under the Adhiniyam, these methods are also available for determination of market value. Although these methods are broadly applicable, they do not preclude the reference court from taking any other special circumstances into consideration, the requirement being always to arrive as near as possible at an estimate of the market value. In arriving at reasonably correct market value, it may be necessary to take even two or all the methods into account in asmuch as the exact valuation is not always possible as no two lands may be of the same either in respect of the situation of the extent or the potentiality nor is it possible in all cases to have reliable material from which that valuation can be accurately determined. See (1972) 1 SCC 480 : AIR 1972 SC 1417 (Smt. Tribeni Devi v. The Collector, Ranchi).

5. In the present cases, although the entire area is used for agriculture, neither party brought materials to record the net annual profit per unit of land from which the market value could have been determined by adopting capitalisation method and to that value premium of some reasonable amount could have been given for the available potentialities of being used as homestead. No expert has also been examined whose evidence could have been assessed for determination of market value. Parties have relied upon examplers and awards with oral evidence for determination of market value.

6. The Parishad has filed application for enter taining as additional evidence of some agreements to sell. If such agreements would have matured to sale transaction even subsequently, we might have consi dered the merit of the application since transaction near about the date of publication of scheme under Section 28 of the Adhiniyam may be useful to the court for determination of market value. There being no material that these agreements matured to sale transaction even after eight years of their execution, we are not inclined to place any reliance on these arguments. Accordingly, application for additional evidence is rejected.

7. Normally 200 acres of land would not have the same potentiality of homestead. In these cases, however, land owners have claimed compensation at the same rate and awards have been made by the collector as well as the reference couijt determining market value at same rate. We have therefore, no alternative than to assume that the entire area acquired has similar advantages and market value has to be determined by adopting the rate to be determined.

8. Seven exemplers filed relate to transactions between 13-5-1982 to 26-9-1983. Thus, one of the exemplers is after the scheme is published on 13-8-1983 and the others are earlier to the said date. Witnesses examined on behalf of the claimants have elaborately referred to the exemplers but no suggestion has been given by the appellant at any stage that the transactions under these exemplers are not bona fide. Accordingly, in absence of any material to suspect the transactions, we are of thd view that the transactions are bona fide. It is true that claimants are to prove that the transactions are bona fide and genuine as has been held by the Suprerne Court in a decision reported in 1994 Supp (1) SCC 564 : AIR 1994 SC 1142 (Parameshwari Devi (Dead) L. Rs. etc v. Pubjab State Electricity Board) However, when opportunity was available to a party to at least suggest that the tranactions are not bona fide and there is no material to suspect the transactions, observation of the Supreme Court would not assist in any manner to coclude that transactions are not bona fide. Whether a transaction is bona fide would depend on facts and circumstances of each case.

9. Exemplers filed by the claimants disclose rates between Rs. 110 per sq. yard to Rs. 150 per sq. yard Rate disclosed in the exempler filed by the appellant is Rs. 40/- per sq. yard. It is to be considered whether exemplers as relied upon by the claimants would be preferred to the exempler relied upon by the appel lant. It is also to be considered if all the exemplers are to be discarded and in case, they are so discarded what would be the effect of the same in determination of the market value.

10. Exempler relied upon by the appellant reflects a rate @ 40/- per sq. yard, land under this exempler is situated in Indira Nagar, which is an adjacent developed area. Exemplers relied upon by the land owners relate to Shiv Sagar Colony, Indira Nagar and Shiv Shakti Nagar. All the three areas are also developed areas. From the evidence it is clear that in these areas buildings in large number have come up, facilities of electricity, drainage and water supply area also provided. Learned Additional District Judge held that both parties having relied upon transactions of Indira Nagar, it can be accepted that acquired land has similar advantages of the land in Indira Nagar. It is to be kept in mind that in absence of transaction of land having similar advantages, exmplers relating to land in adjoining developed areas were filed. Admittedly, acquired land was not developed. It may only have the potentiality of development to be used as building sites. Facilities of drainage, electricity supply, water supply and pucca road are available in those developed areas. Land which is acquired measuring more than 200 acres has no such advantage. There is no acceptable evidence that such advantages are available in the acquired land. As the acquired land is within municiple area and is being surrounded by developed area with buildings and pucca roads, with other facilities and has the advantage of road passing through and by the side of the acquired land, we have concluded that it has potentiality of developing yet the same cannot be treated to have the similar advantages to land in the developed area. Rather evidence is clear that entire acquired area is used for the purpose of agriculture even in 1983 when the surrounding areas had already developed. Therefore, both the land Acquisition Collector and Civil Court are correct in their conclusion that the land though used as agricultural land has potentiality of being used as homestead. Thus, rates available for land in developed area cannot be adopted for determination of market value of the acquired land though they can be used for guidance to determine the market value by taking note of other circumstances as available in record.

11. Exempler filed by appellant has categorically provided that purchaser would take the risk of statutory prohibition if any of the transfer and vendor would not be responsible. For covering the risk, purchaser would normally demand reduction in the rate. He would be willing to pay a lesser rate because he is covering risk which is a disadvantage of the land purchased. Land Acquisition Collector is not correct in following the said transaction for determination of market value. On account of this advantage when lesser rate was paid, we are not inclined to accept this document for determination of market value of acquired land.

12. Mr. Srivastava learned counsel for the appellant strenuously contended that the exemplers relied upon by the claimants being in respect of the land situated in developed area cannot be accepted for determination of market value. Besides in one of the exemplers it has been stated that the market value is Rs. 60/- to 65/- per sq. yard and accordingly, determination of market value by the Civil Court is not correct. Where one of the exemplers relied upon by the claimants shows that the market value, even in developed area, is 60 to 70 rupees per sq. yard, there is no scope for demanding market value at higher rate of for the acquired land. Added to Mr. Srivastava submitted that all the exemplers relied upon are in respect of very small area, and, therefore, even accepting these transactions as bona fide purchasers were willing to pay consideration at a higher rate for small strips of land and they would not have been willing to pay at the same rate for the large area of more than 200 acres.

13. Mr. K.N Tripathi, learned counsel for some of the land owners, whose submissions are adopted by learned counsel far other land owners, has brought to our notice explanation given by some of the witnesses that to avoid stamp duty, sale deeds were executed reflecting lesser consideration and accordingly, on the basis of statement in one of the exemplers that the prevailing market value is 60-70 per sq. yard has to be read as indicating that in spite of the same higher consideration ami higher stamp duty was paid. If that would have been the prevailing rate, Land Acquisition Collector and the appellants would not have left any stone unturned to produce documents supporting the rate as stated by the witnesses orally.

14. On the materials available, we are satisfied that consideration at the rates between 110 to 150 rupees per sq. yard has been paid for the transactions in the exemplers relied upon by the claimants and the rates available are good materials for guiding us to determine the market value.

15. Though the exemplers filed on behalf of the claimants give an idea about the rates prevailing in respect of small strips of land in developed area, the same has to be adjusted in respect of small strips of land in contiguous undeveloped area. In respect of the lands covered in most of the exemplers no evidence of any deficiency has been brought to our notice. In respect of land covered under exempler dated 24-2-1983 reflecting rate of Rs. 110 per sq. yard oral evidence is that the same is below 4 to 5 ft, of road level. Therefore, in absence of any material so to any other disadvantage, this disadvantage of a piece of land can be given due weight to hold that such small strips of an area of 260 sq. yard in the acquired land would also have market value at the rate of Rs. 110/- per sq. yard.

16. Total area acquired in 202.78 acres which is equivalent to 9, 79, 954, sq. yards. A bona fide purchaser may be willing to pay consideration in respect of a small strip of 260 sq. yards at the rate of Rs. 110/- per sq. yard. He will not be at the same rate for an area of acquired land. Court has to make a guesss work to find out the rate at which a bona fide purchaser would be willing to pay. There is no definite standard to be adopted. However, one standard which appears to be reasonable to apply is to divide the large area to small strip of 260 sq. yards assuming that the small area is, to be used for building residences. If the entire area, space has to be left for sewarage, water supply line, road and provide other amenities like park space for educational institution, hospital etc. When a big area is acquired for housing project and rate for small strip of land having equal advantages is available, Supreme Court normally deducts ⅓rd from the rate. Therefore, it will not be unreasonable to deduct ⅓rd from Rs. 110/- to determine the market value.

17. Mr. Tripathi learned counsel for the claimants submitted that in absence of any evidence that the land as is situated would require further development, no deduction should have been at all. He alternatively submitted that 10% deduction made by learned reference court may be sufficient. Although Mr. Tripathi referred to Section 25 of the Act and submitted that there should not be no deduction beyond the rate at which deduction was made by the collector and even 10% deduction by reference court is not justified, we are not able to accept the same. No doubt, court cannot reduce the total amount of compensation awarded by the Collector in view of Section 25 of the Act. Yet, Section 25 does not provide that court is to accept the reason given by the Collector. Therefore, we are free to deduct from the rate available for a small strip of land to determine the market value, which appears to us reasonable. What woiild be reasonable guess work would depend upon material available in a given case. In the present case when for building project Supreme Court is normally deducting⅓rd of the rate as is found for a small strip of land, we have adopted the same. Thus market value, of acquired land comes to 73/- per sq. yard. Each of the claimants is entitled to market value at that rate.

18. Mr. Subzawari, learned counsel for some of claimants has brought to our notice evidence adduced in references in respect of those claimants, that on account of acquisition, they could not use the land for agriculture purpose and had to purchase agricultural land at a distance of about 20-25 kms. from Meerut. For carrying out agricultural operation in the newly purchased land, they are put to inconvenience and expenses and are thus, entitled to damages on that account. He has further submitted that the land of those claimants, which was included in the scheme under Section 28 land was not acquired, are not possible to be utilised for the purposes of agriculture or any other purpose. On that account also they would be entitled to compensation. This submission does not impress us at all. The witnesses examined stated that after getting compensation, land had been purchased at 20-25 kms. distance to avoid taxation of the compensation amount. There is no Clear evidence of damage sustained. Accordingly, no case for compensation on those account are not made out. We are not able to accept submission of Mr. Subzawari.

19. Mr. Srivastava, learned counsel for the Parishad next submitted that award of solatium and interest is not available to the land owners in compulsory acquisition of land under the Adhiniyam. In any case, provision of the Act as amended by Act. 68 of 1984 cannot be attracted. Mr. Tripathi learned counsel for some of the land owners tracing the application of the Act in Uttar Pradesh submitted that higher benefits given to land owners by amending the Act are also available to land owners for acquisition of land under the Adhiniyam. There appears to be much force in submission of Mr. Tripathi.

20. In 1954 the Act was amended in Uttar Pradesh and Section 23(2) providing for solatium was repealed. When no land owner was getting solatium in Uttar Pradesh in respect of compulsory acquisition of their land, the Adhiniyam came into force in 1965. Legislature in its wisdom allowed payment of solatium for land acquired under the Adhiniyam. Provision of payment of interest under the Act was not modified. Subsequently, repeal of provision under Section 23(2) of the Act in Uttar Pradesh was made ineffective and all persons whose land was acquired under the Act or the Adhiniyam became entitled to solatium. At this stage Central Act 68 of 1984 amended the Act. Provision in the Adhiniyam to grant solatium at the rate of 15% continued. Thus, persons whose land was acquired under the Act were entitled to all statutory benefits under Section 23(1 A), 23(2) and interest got the said benefits as per Act 68 of 1954 when the procedure for determination of market value for land acquired by application of provision of the Adhiniyam is under the Act, award is made under the Act and right of appeal is also under the Act, denial of apportunity of higher benefits to the land owners would be discriminatory to violate Art. 14 of the Constitution. Courts would interprete provision of law to favour constitutionality than interpreting the same to be discriminatory to violate fundamental rights under the Constitution. Accordingly, we hold that land owners are entitled to all the statutory benefits under the Act as amended by Act 68 of 1954 so far as applicable to them.

21. Mr. Srivastava, learned counsel for the appellant submitted that references to the Civil Court are incompetent as State Government has not complied with precondition as laid down in the Adhiniyam. No such a argument was advanced before the Civil Court. Added to it appellant took active part in the consideration of market value by the Civil Court and adduced evidence. Taking a chance of success, a party should not be permitted to raise question even though the same may be of law only unless the same touches jurisdiction of the authority. In the present case civil court has jurisdiction to consider the market value in reference. Therefore, even if it is assumed that some of the requirements had not been satisfied, we are not inclined to permit the appellant to raise such a question at appellate stage. Submission is rejected. In result, the appeals are allowed in part. Cross objections are dismissed. However, there shall be no order as to costs.

22. Appeal partly allowed.