DY. COLLECTOR, LAND ACQUISITION, GUJARAT & ANR. v. MADHUBAI GOBARBHAI & ANR.

A the land bearing S. No. 35 - a part of Village Giriya on 2.¹⁰.90 to one Vithalbhai Bhanjibhai. This witness in the cross-examination has admitted that lands of S. No. 89, 90 and 91 of the claimants are situated near Amreli-Rajkot road and that it is surrounded by the residential houses, B godowns etc. This witness has also stated that it is adjacent to posh area and this area is a developed one.

64Copy pinpoint64. In regard to the determination of the amount of compensation by the Reference Court, the High Court inter alia ' opining that the rate at which the compensation was granted c by • the Land Acquisition Officer i.e. at the rate of Rs. 12/- per sq.mt. for Bagayat land Rs. 8/- per sq.mt. for Jarayat land Rs. 50/- per sq. mt. for non agricultural land is wholly inadequate and upon discussing the materials brought on record in respect of some of the acquired lands vis-a-vis the locations of lands D for which deeds of sale have been executed held as under:

"While the claimants shall be entitled to compensation to be paid at the rate of Rs. 400/- per sq.mt. as decided by ~

Land Reference Cases Nos. 82/95, 83/95 and 84/95), I

which are likely to be converted to non agricultural lands."

Mr. Shelati would submit:

G i. That the Reference Court as also the High Court committed a serious error insofar as they failed to take into consideration that the deeds of sale whereupon reliance has been placed by. the claimants although parts of Survey Nos. 34 and 40/ H 9 being Plot Nos. 17 and 18 were sold at the rate

DY. COLLECTOR, LAND ACQUISITION, GUJARAT &' 565 ANR. 'v. MADHUBAI GOBARBHAI & ANR. [S.S. SINHA, J.]

of Rs. 129/- per square meter by reason of a deed of sale dated 28.7.1988, were in respect of a residential plot and a small piece of land, it being situated within Amreli city and within the municipal limit; being situated in a highly developed area, the same was not comparable with the lands in question, namely, Survey Nos. 89, 90/1 and 91 which are situated at a distance of 1.5 kilometers therefrom.

11. Although from index it would appear that by reason · C of a deed of sale dated 16.1.1991, One Navnitbhai Kakubhai Ganatra who was a claimant in C.A. No. 244/ 2000 sold the land to one Shri Chunilal Ranchhodbhai Parmar· in respect of part of plot No. 17 appertaining Survey Nos. 34 and 40/9 involving 138 square meters area of land for a sum of D Rs.55,200/-, i.e., at the rate of Rs.400/- per square meter, but the same could not have been relied upon on the self same grounds. The deed of sale dated 16. 1. 1991 executed by Navnitbhai Kakubhai Ganatra being one of the claimants being in C.A. E · No.244/2000 in favour of Shri Ashokbhai Nathabhai Parmar in respect of only 14~'.square meters of land in Plot No. 17 for a sum of Rs.57,200/- , i.e., at the rate of Rs.400/- per square meter could not have been relied uoon for the self same reasons. F

iii. No reliance could have been placed on the deeds of sale dated'28.12.1992 and 11.5.1992 concerning Survey Nos. 34 and 40/9 being Plot No. 6 and Survey No. 56/57 comprising area of 328 G square meter and 59.42 square meter respectively which were sold for a sum of Rs.2,30,000/-, i.e., at the rate of Rs. 701. 21 per square meter and Rs.40,000/-, i.e., at the rate of Rs.673.17 per square meter respectively. No reliance could also H

566 SUPREME COURT REPORTS (2009) 11 p.C.R.

A have been placed thereupon for the added reasons that the said deeds of sale were executed • subsequent to the date of notification.

iv. No reliance could have also been placed on the deeds of sale dated 27.¹⁰.1988 and 18.1.1991 in B respect of Survey No. 36/1 being Plot No. 8 and Survey No. 34 and 40/9 being Plot No. 10 comprising area of 592.5 sq. meter and 361 sq. meter respectively which were sold for a sum of Rs 83, 500, i.e., at the rate of Rs 140.92 per sq meter c and Rs 150000, i.e., at the rate of Rs 415. 51 per sq meter respectively. )·

v. No reliance furthermore could have been placed on the deed of sale dated 27.2.1989 and 28.5.1990 D in respect of Survey Nos. 89 being Plot No. 26 and 39 and Survey No. 82 being Plot No. 12 comprising area of 240 sq meter and 484 sq meter .. respectively which was sold for a sum of Rs 4400, that is, at the rate of Rs18.33 per sq meter and Rs E 12000 respectively, that is, at the rate of Rs. 28.4 per sq meter; the price variation being apparent on the face of the said deeds of sale; the fair market value should have been determined on the basis of the said deeds of sale dated 27.2.1989, 28.5.1990 F and 23.¹⁰.1990 by adding the market value at the , rate of 5% per year which should be a fair market value. Market value of the agricultural lands by no standard could have been compared with the market value of the non-agricultural lands. G Mr. Manish Singhvi, learned counsel appearing on behalf of the respondents, on the other hand, urged: ~ i. The lands in question being situated by the side of Amreli-Rajkot Highway which is a developed area H and being on the eastern side of river 'Thebi'. this

DY. COLLECTOR, LAND ACQUISITION, GUJARAT & 567 ... ANR. v. MADHUBAI GOBARBHAI &ANR. [S.B. SINHA, J.]

Court may not interfere with the impugned judgment. A

ii. The concurrent findings of fact having been arrived at by the Reference Court as also the High Court, the impugned judgment is unassailable particularly in view of the fact that the deeds of sale in respect of the same area are available. B

iii. The nature of the lands although were agriculture but they being situated within a developed area and having great potentiality of being converted into a non-agricultural land, the guiding principle for c determining the market value thereof, namely, that a willing purchaser would pay to a willing seller for a property having due regard to its existing condition, with all its existing advantages, and its potential probability, should be and has rightly been D • followed.

iv. The deeds of sale relied upon by the State being dated 2.11.1988, 27.2.1989, 4.4.1989 and 20.4.1989 could not have been relied upon inasmuch as admittedly they were grossly E undervalued and the Collector had issued notices upon them. The Collector himself having fixed the ~ prices of the land at Rs.125/-/ per square meter, the State should not be permitted to raise any contention contrary thereto or inconsistent therewith. F The said deeds of sale, in any event, having been executed four years prior to issuance of the Notification under Section 4(1) of the Land Acquisition Act should not be relied upon. G ... V. The findings of fact arrived at by the learned Reference court as also the High court relying on or on the basis of Exhibits 30, 51 and 53 showing the value of the land to be Rs.400/-, Rs.701/- and Rs.673 per square meter, no case has been made H

568 SUPREME COURT REPORTS [2009] 11 S.C.R.

A out for interference with the impugned judgment.

vi. Even the deed of sale dated 27.¹⁰.1988 (t.xhibit 55) shows the value of the land as Rs.140/- per square meter and the other deeds of sale which were marked as Exhibits 57, 58 :ind 60 having B been executed on 18.1.1991, 11 . I 0.1991 and 05.01.1991 i.e. being two year;:; p:·ior to the issuance of a notification and the consideration \ .. thereof being calculated at the rate of Rs.415/, Rs.425/- and Rs.292/- per square meter, the c impugned judgment should not be interfered with.

vii. D.W.3- Nandlal Trikamjibhai examined on behalf of the State in his deposition having clearly stated that the lands which were the subject matter of Exhibit D 74 were situated only four kilometers away from the acquired land of the claimants and, thus, the • amount of consideration should not be treated to be a sale instance for the purpose of determining the value of the acquired land being survey Nos. 89, 90/ E 1 and 91, which were surrounded by residential houses, godowns, etc. and also very near to the posh area of the town.

viii. The Collector himself having fixed the conversion r rate from agricultural land to non-agricultural land at F Rs.300/- per square meter, it would wholly be incorrect to contend that the same did not offer any indicia in regard to the value of the land for the enhancement of right in property from agricultural to non-agricultural land. G

65Copy pinpoint65. Indisputably, the agricultural lands adj-oin Chittal Road ,. whereas the non-agricultural lands are not.

The Reference Court while passing its award, inter alia, opined: H

DY. COLLECTOR, LAND ACQUISITION, GUJARAT & 569 ., ANR. v. MADHUBAI GOBARBHAI & ANR. [S.S. SINHA, J.]

"Now a days, nobody would allow to keep a wooden cabin A in one squ~re meter area in one's land on rental basis for Rs.8/- to Rs.12/- per sq. mtr. while in these Land Reference Cases, the Land Acquisition Officer has acquired whole lands permanently from the land owners/ claimants by paying compensation of Rs.8/- and Rs.12/- B per sq. mtr." It was furthermore opined: "During this period, one cup tea cost is minimum Rs.3/- and that too in the road side cabin." c

66Copy pinpoint66. In our opinion, the said observations were wholly irrelevant as it is now well settled that the Reference Court should sit in the arm chair of a willing and prudent purchaser and put a question to himself as to whether he would offer the same price sought to be awarded for the said land. We may D "' notice that a portion of land bearing Survey No. 89 was converted into non-agricultural use and the sale transaction of a portion thereof would show that 1000 sq. mtr. of land were purchased for Rs.18,000/- by a deed of sale executed on 2.8.1988 in terms whereof the value of tho land came to Rs.18/ E - per sq. mtr. We will advert to the question as to whether the same ought not to be relied upon as the land under the said deed of sale not only was converted into non-agricultural land , but even developed as well and all other activities were being carried out by dividing the same into plot a little later. F

67Copy pinpoint67. It is admitted that subsequently an agreement of sale was entered into in respect of those plots of land wherefor the market value was fixed at Rs.300/- per sq. mtr. It, however, appears that no agreement for sale was produced before the Reference Court. It was urged that the said purported agreement G .... for sale would not b~ relevant for Survey Nos, 90/1 and 91 as the same were agricultural lands.

68Copy pinpoint68. We may furthermore place on record the evidence of Deputy Collector, Mr. Mansuri wherein he stated, "Disputed lands are situated at a distance of 4 Kms. away from the H

570 SUPREME COURT REPORTS (2009] 11 S.C.R.

• A residential area of Amreli." According to the said witness he, having considered the four instances of sale which had taken .... place in village Giriya, had made his award.

69Copy pinpoint69. The Reference Court as also the High Court, however, proceeded on the premise that as the Collector of the District B himself determined the market value of Survey No. 39 in terms whereof a sum of Rs.300/- per sq. mtr. by way of premium (which is said to have been reduced at a later stage to Rs.100/ - per sq. mtr.) was fixed. c 70. Was it wholly irrelevant is the question.

71Copy pinpoint71. A part of Survey No. 89 was non-agricultural in nature but indisputably Survey Nos. 90/1 and 91 were agricultural lands. The value of agricultural lands could not have been compared with the value of non-agricultural lands; only because some witnesses contended that there was a potentiality of the said . lands becoming developed.

72Copy pinpoint72. We may, for the purpose of determination of the market value of the lands in question, notice certain sale transactions.

73Copy pinpoint73. By reason of a deed of sale dated 28. 7.1988 (Exhibit 48) Survey Nos. 34 and 40/9 (Plot No. 17 & 18) admeasuring an area of 739.21 sq. mtr. was sold for a consideration of ., ·- F Rs.96,000/- at the rate of Rs.129/- per sq. mtr. It is, however, admitted that the land in question consists of residential plots and is a small piece of land within the municipal limit of Amreli city, being situate at a distance of about 1.5 kms. from the acquired land. The deed of sale dated 16.1.1991 (Exhibit 30) G shows that 143 sq. mtr. of land in Plot No. 17 was sold for a sum of Rs.~7,200/-, that is, at the rate .of Rs.400/- per sq. mtr. It is said to be not only a residential plot, but also a small piece of land situate in village Amreli city in a highly developed area; the acquired land being about 1.5 kms. away therefrom. H

DY. COLLECTOR, LAND ACQUISITION, GUJARAT & 571 .. ANR. v. MADHUBAI GOBARBHAI & ANR. [S.B. SINHA, J.]

74Copy pinpoint74. Two deeds of sale subsequent to the date of A notification had also been brought on record being Exhibits 51 and 53 in respect of Survey Nos. 34, 40/9 and 56/57 at the rate of Rs.701.21 per sq. mtr. and Rs.673.17 per sq. mtr. respectively. The lands in question are said to be 2 kms. away from the acquired land. A deed of sale dated 27.¹⁰.1988 B (Exhibit 55), however, show that plot No. 8 to Survey No. 36/1 admeasuring 592.50 sq. mt. was sold at a price of Rs.83,500/ 1 -, i.e., at the rate of Rs.140.92 per square meter. The said land is said to be situated in a fully de1teloped residential area of Amreli City and is about 2 kms. away from the acquired c agricultural land of Survey No. 90/1, 90/2 and 91 of Village Giriya. By reason of another deed of sale dated 18.1.1991, 361.00 sq. mtr. of land in Survey Nos. 34 & 4019 Plot No. 10 was sold for a sum of Rs. 1,50,000/-, i.e., Rs.415.51 per sq. mtr. Two other deeds of sale being Exhibits 58 and 60 being D ,, dated 11.¹⁰.1991 and 5.1.1991 which were in respect of Survey Nos. 34, 40/9 Plot No. 60 Survey No. 41 Plot No. 14 was sold at the rate of Rs. 425.69 per sq. mtr. and Rs.292.30 per sq. mtr. for a sum of Rs.85,000/- and Rs.38,000/- respectively. E

75Copy pinpoint75. We may also notice the deeds of sale whereupon reliance has been placed by the State, the details whereof are as under:

S. Sale Vendor Vendee Revenue Area Sale Rate/ Type No. Deed Survey Deed Sq. of F No. & , No. Amo- mt. Land Date unt (Rs.) (Rs.) 18-33

1. 258 P.O.A. Tulsidas S.No.⁸⁹ 240 4400/ Non 27.2.⁸⁹ of Ambalal Plot No. Sq. Agri. G Shambhu Lathigara 26 & 39 mt. Vallabh Kabariya

- 2. 469 4.4.⁸⁹ P.O.A. of hambhu Chandresh kumar S.No. 89 Plot No. 480 Sq. 8800/ 18- Non 33 Agri. H

572 SUPREME COURT REPORTS (2009] 11 S.C.R.

A Vallabh Mansukhlal 35, 36, mt. Kabariya Zinzuvadiya 45 & 46 Siddik Habib Nagani

3. 582 Jayesh Chandrik- S.No.⁸⁹ 300. 70001- 23- Non B 20.4.⁸⁹ kumar aben Plot No.1 62 28 f.\gri. Durlabhji Jashvan- Sq. Mavani, tray mt. Amreli Kothiya •

4. 886 P.O.A.of Hitesh S.No.⁸⁹ 538 9500/- 17- Non c 3.6.⁸⁹ Shambhu Vallabh kumar Hiralal Plot No. 89, 58, Sq. mt. 66 l\gri.

Kabariya, Zinzuvadiya 71 Shri Siddikbhai Habibbhai Nagani D

5. 955 Mrs. Dalsukh 23i2Plot 1-61- 22500/- 1- A.gri. 20.6.⁸⁹ Diwaliben Hiraji 88Ha 39 Babubhai Jogani Rokad

6. 1066 P.OAof Revatiben S.No.82 484 12000/- 24- Non E 211.5.90 Ismail Haribhai Plot Sq. A.gri. Jusabbhai Solanki No.12 mt. Motiwala etc. 6 Persons lkbal

F 7. 1212 Ismail Karshan S.No.82 704 20000/- 28- Non 15.6.90 Jusabbhai Damji Plot No. Sq. 40 A.gri Motiwala Pithadiya 5&6 mt. etc.

8. 715 Asagarali Labhuben 2212. 1-53- 191510/ 8-05 C..gri. G 13.4.92 lnayatali Kanaji ~3/1 p 78 Saiyad Khanesa 0-83 -97 2-37- 75

9. 1348 Shambhu Pankajbhai S.No.⁸⁹, Ha. 1016 18500/- 18- Non -

DY. COLLECTOR, LAND ACQUISITION, GUJARAT & ANR. 573 , v. MADHUBAI GOBARBHAI & ANR. [S.S. SINHA, J.]

10. 2235 Bhanabhai Bhanabhai 35/P 3-67- 14000/- 00- Agri. 23.¹⁰.90 Naranbhai Naranbhai 04 38 ~'f'4'~

'Limbasiya Limbasiya (Ha) B P.O.A. of Vithalbhai ~.·

Shivlal Bhanjibhai F~ Bhanjibhai Limtiasiya Limbasiya

76Copy pinpoint76. The price variation and the market value shown is the two aifferent categories'6flhe land relied upon by the claimants and the State in the aforementioned chart is significant. The price variation between agricultural land and non-agricultural land almost d1~iri'ng the same period also is of some s·ignificance. 77; It is furthermore of some interest to note that within a short period of time, the price of the land had shot up and that too immediately after, the process of acquisition of land had started. It is furthermore important to note that there existed a significant price variation even in regard to the lands situated on Survey No. 89. which appears to be a very big plot.

78Copy pinpoint78. There cannot be any doubt or dispute whatsoever that different potentiality of land in different villages and even in different parts of the same village would be existing. It was therefore not proper for the High Court to treat all types of lands situated even in different villages as pertaining to a comparable category . This Court in certain case even has deprecated the pra~tice of awarding compensation on the basis of an award made in a neighbouring land.

79Copy pinpoint79. In Kanwar Singh & ors. vs. Union of India ((1998) 8 sec 1361 "If we go by the compensation awarded to claimants of H

574 SUPREME COURT REPORTS [2009] 11 S.C.R.

A adjoining village it would not lead to the correct assessment of market value of the land acquired in the village Rangpuri. For example village 'A' adjoins village 'B', village B adjoins village 'C, village 'C adjoins village 'D', so on and so form and in that process the entire Delhi B vJould be covered." [::;ee also Basant Kumar (supra)]

80Copy pinpoint80. It is, however, also true that the court is bound to take into consideration the potentiality of the land. c In N.B. Jeejabhoy v. The District Collector Thana C. A. Nos. 313 to 315of1965 decided on August 30, 1965, this Court held: "A vendor willing to sell his land at the market value will take into consideration a particular potentiality or special adaptability of the land in fixing the price. It is not the fancy or the obsession of the vendor that enters the market value, but the objective factor namely, whether the said potentiality can be turned to account within a reasonably near future ......... The question therefore turns upon the facts of each case. In the context of building potentiality many questions will have to be asked and answered : whether there is pressure on the land for building activity, whether the acquired land is suitable for building purposes, whether the extension of the said activity is towards the land acquired, what is the pace of the progress and how far the said activity has extended and within what time, whether buildings have been put up on lands purchased for building purposes, what is the distance between the built-in-land and the land acquired and similar other questions will have to be answered. It is the overall picture drawn on the said relevant circumst~mces that affords the solution."

In Raghubans Narain Singh v. The Uttar Pradesh Government Through Collector of Bijnor [1967 (1) SCR 489], this Court held: H

DY. COLLECTOR, LAND ACQUISITION, GUJARAT & 575 ANR. v. MADHUBAI GOBARBHAI & ANR. [S.B. SINHA, J.] "Market value on the basis of which compensation is payable under s. 23 of the Act means the price that a willing purchaser would pay to a willing seller fo: a property having due regard to its existing condition, with all its existing advantages, and its potential possibilities when laid out in its most advantageous manner, excluding any advantage due to the carrying out of the scheme for the purposes for which the property is compulsorily acquired."

{See also Mahabir Prasad Santuka and Ors. v. Collector, Cuttack and Ors [(1987) 1 SCC 587]} c

81Copy pinpoint81. So far as deeds of sale pertaining to the years 1988 and 1989 are concerned, the same were executed more than three years prior to the date of acquisition. However, in respect of the deeds of sale pertaining to Survey No. 89, in view of the under-valuation of the lands sold, the Collector fixed the same at the rate of Rs.125/- per sq. mtr. Furthermore, the Collector himself has fixed the premium of Rs.300/- per sq. mtr. for conversion from agricultural land to non-agricultural land. . Although the same by itself would not be a safe criterion for determining the market value, we are of the opinion that both of them may form the basis for arriving at a reasonable conclusion.

82Copy pinpoint82. For the aforementioned purpose, this Court must keep in mind that the distance of the lands sought to be acquired '1 'I apart from other factors. from the Highway also plays an important role. Evidence has been brought on record to show that some lands, which are the subject matter of the sale deeds on which reliance has been placed by the claimants, are situated at a distance of 1.5 to 4 kms from the Highway. In that view of the matter, it would, in our opinion, be safe to arrive at the market value as on the date of acquisition for the non- agricultural lands at Rs.250/- per sq. mtr. <(

83Copy pinpoint83. So far as the agricultural lands are concerned, even if they had the potentiality of being converted into a non- H

576 SUPREME COURT REPORTS [2009] 11 S.C.R.

A agricultural lands as on the date of notification, they were agricultural lands albeit in a developed area. The valuation thereof may be determined at 50% of the developed land, that is, at Rs. 125/- per sq. mtr.

B GROUP-Ill

84Copy pinpoint84. In this batch of cases, notification under Section 4 of the Act was issued in the daily newspaper on 2.2.1990 and was published in the Gazette on 15.3.1990. They were said to have been affixed at or near the lands in question on 1.8.1990. On C the lands under acquisition, indisputably godowns were also constructed. A declaration under Section 6 of the Act was issued on 18.6.1991 and published in the Official Gazette on

o 85. The details of the cases falling in Group-Ill are as under:

Group Total C.A. No. FA. No. Notification Date of No. mat- Section 4 Judgment ters dated

86Copy pinpoint86. An award was made by the Land Acquisition Collector r ~ on 23.7.1993. Respondents herein being aggrieved by and dissatisfied with the quantum of compensation made in the said awards filed applications for reference before the Collector to the District Court. Amreli claiming a sum of Rs.500/- per G square meter for agricultural lands and Rs.600/- to Rs. 750/- for non-agricultural lands as also additional amount of compensation, the details thereof are as under:

DY. COLLECTOR, LAND ACQUISITION, GUJARAT & 577 ANR. v. MADHUBAI GOOARBHAI &ANR. (S.B. SINHA, J.]

F.A. Survey Type of Arec. Comp. Comp. Comp. Comp. A No. No. Land in awar- claim- decreed Decreed Sqm. ded ed in by by Guj. by Lower Lower High LAO. Court Court Court Rs. Rs. Rs. Rs. sqm Sq./ Sqm Sqm Sqm B 1 2 3 4 5 6 7 8

410/98 44/1 Agri 57445 50 500 160 160 ' 411/98 43/5A-1 Agri. 21 Godown f c ' 412/98 43/5A-1 Non- 541 150 500 240 240 Agri.

413/98 38/2 Agri 4992 150 500 160 160 D 414/98 40/4A Non- 4994 150 600 240 240 Agri • 415/98 43/2 Non- 9407 150 500 240 240 Agri

416/98 43/2 Non- E Agri 236 150 500 240 240

417198 43/3 Non- Agri 632 150 500 240 240 2073/98 42/1p Agri -32104 50 600 160 160 43/1p F 2074/98 43/2 Non- 5407 150 600. 240 240 Agri

2075/98 38/1 Agri 13717 50 600 160 160

2076/98 43/5A-1 Non- G Agri. 307 150 600 240 240 2077/98 43/5A-1 Non- 216 150 600 240 240 Agri. 2078/98 43/5A-1 Non- 216 150 600 240 240 Agri. H

578 SUPREME COURT REPORTS (2009] 11 S.C.R.

87Copy pinpoint87. One Mahendrakumar Nathalal Adatiya said to be the power of attorney holder of the claimants deposed twice before the Reference Judge. His depositions was marked as Exhibit 20 and Exhibit 31. In his deposition, he inter alia stated that the lands under acquisition are on Amreli-Rajkot Highway B known as Chaital Road. In the said town, there is a Railway Station, Civil Hospital, S.T. Depot. Airdrome, Colleges, and market yard, etc. According to him, there was a possibility of further development. The said lands were on the eastern side of the river and the area in question had further been , c developing. According to the said witness, moreover apart from a large number of houses constructed by various societies; there is an Eye Hospital, High School and other Hospitals situated near the lands in question. It was furthermore stated that on the other side of the land in question, one Survey No D 43/5 was converted into non-agricultural tenancy and in the years 1983-1984, commercial complexes were constructed for conversion from agricultural land to non-agricultural land. The Collector fixed premium at the rate of Rs.300/- per square meter • in respect of lands which was adjoining Survey No. 43/5 and Survey No.44. According to him, the prevailing market.rate at E the relevant time was Rs.600/- to 8001- per square meter.

88Copy pinpoint88. Apart from the claimants, some tenants of the godowns examined themselves being witness No.3 and witness No.4. Several other witnesses including an expert Jivanbhai Pragjibhai F Savliya (Witness No.7) was also examined.

89Copy pinpoint89. On behalf of the State, Shri Kaushik Maganlal (D.W.1) Deputy Collector who passed the award was examined.

90Copy pinpoint90. One Balubhai V. Savliya (D.W.2), a vendor proved a G deed of sale which was marked as Exhibit 83, whereby. and whereunder he had sold 5 bighas of land in 1985 for a consideration of Rs.¹⁰,000/-. The State furthermore examined • one Nandlai Trikamjibhai (D.W.3). He had purchased some land near the dam site at a price of Rs.150/- per square meter. H

DY. COLLECTOR, LAND ACQUISITION, GUJARAT & 579 ANR. v. MADHUBAI GOBARBHAI & ANR. [S.S. SINHA, J.] . ,+

91Copy pinpoint91. The High Court on the basis of the materials brought A on record awarded compensation at the rate of Rs.160/- to Rs.240/- per square meter.

92Copy pinpoint92. So far as the value of the godowns are concerned, the yearly rent was found to be Rs.1,04,000/- whereas the B Reference Court applied the multiplier of 20, the High Court by reason of its impugned judgment has applied the multiplier of 10. J.

93Copy pinpoint93. Both parties have preferred appeals thereagainst. c

94Copy pinpoint94. Separate appeals have been preferred by the parties hereto before this Court also.

95Copy pinpoint95. Mr. Shelati, the learned Senior Counsel appearing on behalf of the appellant, would submit: D ,., " i. That the Reference Court wrongly proceeded on the premise that all acquired lands are situated by the side of Amreli - Rajkot Highway despite the fact that Exhibit 39 (map) clearly shows that Survey Nos. 43/ E. 5A-1, 38/2, 40/4A did not abut it .

ii. The market rate fixed by the Collector at Rs.300/- per square meter for converting agricultural land to non-agricultural land in respect of Survey No. 39 • ' could not have been taken into consideration for the F purpose of determining the market value of the land as by reason thereof the restrictions imposed in a covenant had been removed by enlarging the ambit of the property right over the land.

iii. No reliance could .have been placed on the deeds G

7 of sale dated 20.9.1990, 16.1.1991and16.1.1991 in respect of Survey Nos. 34 and 40/9 comprising of an area of 240 square meter, 143 square meter and 143 square meter respectively and sold for a H

580 SUPREME COURT REPORTS [2009) 11 S.C.R.

A sum of Rs.1,20,000/-, i.e., at the rate of Rs.487.80 per square meter, a sum of Rs.57,200/-, i.e., at the rate of Rs.400/- per square meter and Rs. 55,000/ -, i.e., at the rate of Rs.400/- per square meter respectively as the sale instances being Exhibit 58, B 60 and 61 were not comparable, as

(1) the lands under sale were small pieces of land;

(2) they were situated in highly developed area of Amreli City; c (3) they were within the territorial limit of municipality;

(4) the lands were situated 1.5 to 2.5 kilometers away from the acquired lands; and D (5) the deeds of sale having been executed after .. ~

'• the issuance of notification, no reliance could have been placed thereupon.

E iv. The deeds of sale dated 21.5.1985 and 26.¹⁰.1988 in respect of Survey No. 991 measuring 1-30-51 square meter and 323 .12 square meter respectively which were sold for a sum of Rs 10,000, i.e., at the rate of Rs 0.77 per square meter and Rs 45,000, i.e., at the rate of Rs.139.26 per square meter respectively is demonstrative of the fact that there is a huge disparity.

v. Godowns having been constructed for the purpose of avoiding payment of octroi duty itself goes to show that the value of the land within.the municipal area would be higher. .' vi. The evidence of Dr. Bharat Kantilal Mehta who had purchased the lands having stated that he had H

DY. COLLECTOR, LAND ACQUISITION, GUJARAT & 581 ANR. v. MADHUBAI GOBARBHAI & ANR. [S.8. SINHA, J.) ... ~ purchased the lands for professional and A residential purpose and having taken a firm decision to purchase the land only in that area and, thus, the same being of some personal value to him could not be a comparable instance. B vii. The potentiality of the land in a munidpal areca must be held to be higher than the potentiality of the land in a rural area and, thus, the Reference Court as ' also the High Court committed a serious error in relying upon the sale instances which were in respect of the lands situate within the illunicipal c area.

viii. The High Court and the Reference Court committed a serious error insofar as they failed to take into consideration that the sale instances whereupon D "'• reliance had been placed by the State, viz. Exhibit 83 and Exhibit 85, namely, the deeds of sale dated 21.5.1985 and 26.¹⁰.1988 wherefrom it would appear that whereas in the year 1985 the market value was Rs.0.77 per Are, in the year 1988 the E rate was Rs.139.26 ps. per Are. Both the deeds of sale involving small plots of land and being situated at a distance of 0. 75 kilometer from the ... ... acquired land and, thus, should have been taken into consideration. F

ix. As it was categorically stated by Mahendrakumar, the power of attorney holder, "we could not earn such type of rental income if the godowns were situated within the municipality area because the G godowns were being constructed outside the octroi 1 naka", and similarly H.N. Chandarana having stated that the godowns being situated outside octroi naka, he had hired the same to save octroi duty; and the godowns having bee~ constructed to H

582 SUPREME COURT REPORTS [2009) 11 S.C.R.

A evade payment of levy of octroi, it did not reflect the true market value thereof.

x. In any event, the cost of the construction of the godowns should have been considered for B determining the market value. Provision for expenses incurred like taxes, labour charges, maintenance of the godown and salary payable to the watchman having not been taken into ' consideration while determining the actual rental income derived by the claimants, the impugned c judgment should be suitably modified.

xi. In any view of the matter, once the market value was determined on the basis of the income thereof, no separate compensation could have been granted D towards the value of the land. •

96Copy pinpoint96. Mr. Sunil Kr. Gupta and Mr. Dinesh Dwivedi, learned Senior Counsel appearing on behalf of the claimants - respondents, on the other hand, urged: E i. The last publication of notification having been made on 1.8.1990, the deeds of sale which were executed in September 1990 and a few months thereafter had rightly been relied upon by the courts ~ ' below being contemporaneous documents. F ii. Market value of the land in terms of Section 23 of the Land Acquisition Act being required to be determined as on date of issuance of the notification, the same would connote nearness and G not a date prior to issuance of the notification. ,.. iii. The lands acquired being situated on the eastern ' side of the river and just outside the Amreli town, the Reference Court as also the High Court H committed a serious error in deducting 50% from

DY. COLLECTOR, LAND ACQUISITION, GUJARAT & 583 ANR. v. MADHUBAI GOBARBHAI & ANR. [S.B. SINHA, J.]

the market value of the land situated in a municipal A area.

iv. The map on which reliance has been placed by the State of Gujarat would itself show that the area in question is a highly developed one and the same 8 were situated near the Aerodrome, School, Hotel, a large number of housing societies, and in that view of the matter, there was absolutely no reason as to why the sale instances whereupon reliance has been placed by the claimants should not have been considered to be the determinative factor for C fixation of the amount of compensation.

v. Godowns having been constructed on non- agricultural lands and for the purpose of proving the rental income therefrom not only Mahendrakumar D was examined in two reference cases as P.W. 1 and P.W.3 but also two tenants, namely, Harshad Nathalal Chanarana (P .W .3) and Paresh Dinkarbhai Davda (P.W. 4) who proved the advantages of such godowns, there was no reason as to why the multiplier of ten should have been used although ordinarily a multiplier of 25 is applied.

vi. The value of the godowns was required to be determined keeping in view the loss of earning therefrom in terms of the 'fourthly' appended to Section 23 of the Act.

vii. P.W. 6 - Navnitbhai Kakubhai Ganatra, who was the vendor in respect of Exhibits 60 and 61, relating to. Survey Nos. 34 and 40/9 having been proved, the sale deed which was executed within a period .. ( of six months from the date of publication of the notification under Section 4(1) of the Act, there was no reason as to why the same could not have H

584 SUPREME COURT REPORTS [2009] 11 S.C.R.

A formed the basis for determining the market value. ... viii. Even Jivanbhai Pragjibhai Savliya (P.W. 7) has proved the assessment report and map to show that Survey No. 43/5A was adjacent to the godown. The lands under acquisition being small plots, the B contention of the State of Gujarat that the deeds of sale being Exhibits 58, 60 and 61 could not have been relied upon must be held to be incorrect. ,. ix. The Reference Court as also the High Court having c arrived at a categorical finding that most of the contemporaneous sale-deeds relied upon by the respondents were in the vicinity of the acquired lands, there is no reason as to why a different view should be taken by this Court. D

97Copy pinpoint97. Notification for acquisition of the said lands was issued on 15.3.1990. The lands under acquisition appertain to Survey • Nos. 44/1, 43/5A-1, 38/2, 40/4A, 43/2, 43/3, 42/1p, 43/1p, 38/ 1, 38/2. Whereas Survey Nos. 44/1, 38/2, 42/1p, 43/1p and 38/ "E 1 are agricultural lands; other Survey Nos. including Survey No. 43/5A-1 are non-agricultural lands.

98Copy pinpoint98. On a part of Survey No. 43/5A-1, 21 godowns have been constructed wherefor separate amount of compensation has been awarded. The claimants in support of their claim had F relied upon the deeds of sale dated 20.9.1990 marked as I . Exhibit 58. The deeds of sale which were executed on behalf of the State are dated 21.5.1985 and 26.¹⁰.1988.

99Copy pinpoint99. The Reference Court as also the High Court G determined the amount of compensation at the rate of Rs.240/ - per square meter for non-agricultural lands and deducted one- thi rd therefrom, i.e., Rs.160/- towards compensation for .' agricultural lands. In arriving at the said figure, the Reference Court proceeded on the basis that the market value of the land H

DY. COLLECTOR, LAND ACQUISITION, GUJARAT & 585 ANR. v. MADHUBAI GOBARBHAI &ANR. [S.B. SINHA, J.] situated in the municipal area was Rs.485/- per square meter A at the time of acquisition, and, thus, the lands in question being outside the municipal area, the market value thereof should be deducted by -50%, i.e., Rs.240/- per square meter. As indicated hereinbefore,. for determining the value of agricultural land further one-third has been deducted. B

100Copy pinpoint100. We may place on record that even before the High Court, the claimants had preferred cross objections, which '~ were rejected on the premise that requisite amount of court fee had not been paid. c

101Copy pinpoint101. In Administrator General of West Bengal v. Collector, Varanasi [AIR 1988 SC 943], this Court held:

''The determination of market-value of a piece land with potentialities for urban use is an intricate exercise which calls for collection and collation of diverse economic '• criteria. The market-value of a piece of property, for purposes of Section 23 of the Act, is stated to be the price at which the property changes hands from a willing seller to a willing, but not too anxious a buyer, dealing at arms length. The determination of market-value, as one author put it, is the prediction of an economic event, viz, the price- outcome of a hypothetical sale, expressed in terms of probabilities. Prices fetched for similar lands with similar ... advantages and potentialities under bonafide transactions • of sale at or about the time of the preliminary notification are the usual; and indeed the best, evidences of market- value. Other methods of valuation are resorted to if the evidence of sale of similar lands is not available."

In 'State of Punjab and Anr. vs. Hans Raj (Dead), by Lrs. G Sohari Singh and Ors., this Court held: '·

"As the method of averaging the prices fetched by sales of different lands of different kinds at different times, for H

586 SUPREME COURT REPORTS [2009] 11 S.C.R.

A fixing the market value of the acquired land, if followed, ... ·~

could bring about a figure of price which may not at all be regarded as the price to be fetched by sale of acquired land. One should not have, ordinarily recourse to such method. It is well settled that genuine and bona fide sale B transactions in respect of the land under acquisition or in its absence the bona fide sale transactions proximate to the point of acquisition of the lands situated in the neighbourhood of the acquired lands possessing similar , ; value or utility taken place between a willing vendee and c the willing vendor which could be expected to reflect the true value, as agreed between reasonable prudent persons acting in the normal market conditions are the real basis to determine the market value."

102Copy pinpoint102. Keeping in view the ratio laid down in the aforementioned decisions as also the materials placed on record, we are of the opinion that the amount of compensation •' for the lands acquired in this matter arrived at by the High Court, that is, Rs.240/- per sq. mtr. for non-agricultural land and Rs.160/- sq. mtr for agricultural land does not warrant any interference on our part. The High Court, in this regard, has adopted the correct approach particularly in view of the fact that the lands in question are not only situated within a developed area but being situated near Aerodrome, Schools, Hospitals, etc. the market value thereof could not have been determined at a lesser rate.

103Copy pinpoint103. Now we shall deal with the question of the amount payable for acquisition of 21 godowns and the land on which they stand in Survey No. 43/SA-1. Out of the total area of 4250 G mtrs of land, 2972 sq. mtrs. is agricultural land and 1278 sq. mtrs. is non-agricultural land on which the godowns have been constructed. Commercial complexes were constructed on it in .. ;

the year 1984.

104Copy pinpoint104. Respondents have constructed 6 big god owns and H ,__

DY. COLLECTOR, LAND ACQUISITION, GUJARAT & 587 ANR. v. MADHUBAI GOBARBHAI & ANR. [S.B. SINHA, 'J.]

15 small godowns. The amount of rent of the godowns has been A brought on record. Respondents have claimed compensation under various Heads, namely, price of the land, loss suffered due to recovery of rent for 2 years of godowns, loss for construction for deep-well, watchman quarter, etc. B

105Copy pinpoint105. One of the principal questions, as indicated hereinbefore, raised on behalf of the State is that the valuation of the land cannot be determined indirectly twice over, one on \ the basis of the value of the land and the other on the basis of the rental income. Matter would, however, be different where c only there is a construction on a land which is used for residential or other purposes.

106Copy pinpoint106. In Ratan Kumar Tandon & Ors. vs. State of UP. [(1997) 2 SCC 161], this Court held: D "It is well-settled law that when land and building are acquired by a notification, the claimant is not entitled to separate valuation of the building and the land. They are entitled to compensation on either of the two methods but not both. If the building is assessed, it is settled law that E ~ the measure of assessment be based on either the rent received from the property with suitable multiplier or the value of the building is the proper method of valuation." ...; 107. We are in agreement with the view that for extent of land on which the godowns stand, separate compensation need not be paid when compensation with respect to rental incom? is being paid for the godowns.

The High Court by reason of the impugned judgment has granted compensation inter alia applying the multiplier of 10 G over the annual income. The approach of the Hrgh Court is '? correct.

108Copy pinpoint108. In Airpotts Authority of India v. Satyagopal Roy and Ors. [(2002)3SCC527], it was .held that: H ~

588 SUPREME COURT REPORTS [2009] 11 S.C.R.

A "8. It is settled law that in evaluating the market value of ..... ~-

the acquired property, namely, land and building or the land with fruit-bearing trees standing thereon, value of both is to be determined not as separate units but as one unit. Therefore, it would be open to the Land Acquisition Officer 8 01 the Court either to assess the land with all its advantages and fix the market value thereof on the basis of comparable sale instances. In case where comparable sah~ instances are not available and where there is reliable and acceptable evidence on record of the annual income, f c market value could be assessed and determined on the basis of net annual income multiplied by appropriate multiplier for its capitalization."

109Copy pinpoint109. In Assistant Commissioner-cum-Land Acquisition Officer, Bellary vs. S. T. Pompanna Setty [(2005) 9 SCC 662], D this Court has held:

"15. From the above cases, it is clear that normally in the cases where compensation is awarded on yield basis, multiplier of 10 is considered proper and appropriate. In E the case on hand, multiplier of 15 has been applied which is on the higher side ... ."

110Copy pinpoint110. It was an agricultural land.

{See also Addi. Special Land Acquisition Officer vs. F j " Yamanappa Basalingappa Cha/wadi [(1994) 3 SCC 323]}

111Copy pinpoint111. In State of Kera/a vs. P.P. Hassan Koya [AIR 1968 SC 1201], the method which was generally resorted to in determining the value of the land with buildings especially those used for business purposes, was the method of capitalization of return actually received or which might reasonably be received from the land and the buildings. Whereas the •' Reference Judge had multiplied the annual income by 35 times, the High Court had reduced it to 33 1/3 times. The view of the H High Court was upheld.

DY. COLLECTOR, LAND ACQUISITION, GUJARAT & 589 ANR. v. MADHUBAI GOBARBHAI & ANR. [S.B. SINHA, J.) yr 112. In Special Land Acquisition Officer, Kalinadai A (Hydro-Electric) Project, Dandali, Uttra Kannada District v. Vasant Gundu Bale [1995 Supp (4) SCC 649] it was held that:

" 2. Sri Veerappa, the learned Counsel for the State, has contended that the High Court committed grave error of B law in recording a finding that lands were possessed of potential value for building purposes. We find no force in the contention. It is seen that when 7,800 lineaments were 4 constructed in the project area, it would be clear that a township had come into existence. It is an admitted fact that the land under acquisition is about the township. It is c also an admitted fact that in Ext. A-12 sanction was obtained on September 13, 1973 for conversion of agricultural lands into urban lands of the layout and sale of plots which could not take place due to the fact that mud was dumped on this land. Consequently, the sanction came to be cancelled By the Assistant Commissioner. Be that as it may, the High Court on the basis of the rental value had determined compensation at the rale of Rs. 1200 per acre applying the multiplier of 15 and arrived at the net income at Rs. 18,000 per acre. It is now settled law that the uniform rate of multiplier of 10 is being applied for the lands acquired even in the State of Karnataka. Even acceding the multiplier of 12 as held by this Court in Special Land Acquisition Officer, Davangree v. P. " F " Veerabhadarappa and Ors. ( 1984 ) 2 SCC 120, the claimant cannot get more than Rs. 14,000 per acre."

113Copy pinpoint113. Hence, keeping in view the ratio of the above mentioned decisions and the facts of the present case, we modify the decision of the High Court to the extent of excluding G the payment of separate amount of compensation for the 1278 ...,. sq. mtrs. of non-agricultural land in which the 21 Godowns have been constructed would be calculated on the rental value. In other words, whereas the market value of the land would be determined at Rs.240/- per square feet, the lands on which the H

590 SUPREME COURT REPORTS (2009) 11 S.C.R.

A godowns have been constructed, the amount of compensation '- shall be calculated at the rental value thereof by following the method adopted by the High Court. For the said purpose, the matter is remitted to the Land Acquisition Officer.

114Copy pinpoint114. These appeals are disposed of with the 8 aforementioned observations and directions. In the facts and circumstances of the case, there shall be no order as to costs.

R.P. Appeals disposed Of.