STATE OF MAHARASHTRA & ORS. v. RELIANCE INDUSTRIES LTD. & ORS.

43Copy pinpoint43. In view of the authoritative pronouncement made by this Court F in Special Land Acquisition Officer and Rehabilitation Office1; Sagar v. MS. Seshagiri Rao & Anr: (supra), Collector of Bombay v. Nusserwanji Ratt(//?ii Mistri and Ors. (supra), the decision in Raja Shyam Chunder Mardraj v. Secretary of State for India Council (supra) of Calcutta High Court, Dasarath Sahu v. Secy. ofState (supra) G by Patna High Court (supra), Mak/um Lal v. Secy of State (supra) of Allahabad High Comt which was followed in Dasarath Sahu (supra) and also the decision of Secretary of State v. Allahabad Bank Ltd. (supra) of the same High Comt following Dasarath Sahu (supra) can no longer be said to be laying down a good law and are hereby overruled.

STATE OF MAHARASHTRA & ORS. v. RELIANCE 373 INDUSTRIES LTD. & ORS. (ARUN MISHRA, J.]

VIII. In Re : Acquisition of part of building without land under section 49 of the Act.

44Copy pinpoint44. It was further submitted that Section 49 of the Act does not empower the acquisition of any building or part thereorde hors the underlying land. The submission to that effect to be accepted would require ownership of the land with owner of the building and owner has required by expressing desire that the whole of the building with land be acquired is not the factual scenario in the instant ease. The land upon which the building is standing need not be acquired and there is no necessity to acquire it. There can be acquisition of part of the building or the house or manufactory as the owners have not exercised their option to insist for acquisition for whole of the building as such only the rights which they have in the particular floors are being acquired. No doubt about it that under proviso to Section 49(1) there can be acquisition ofland beside the part of the building, house or manufactory and when the land is proposed to be taken, the dispute as to whether it does or does not form part of the house, manufactory or building, the Collector D shall refer the determination of such question to the Court.

45Copy pinpoint45. In State ofBihar & Am: v. Kundan Singh & Anr. AIR 1964 SC 350, this Court had considered the provision of section 49 and has observed thus; "10 ....... The provisions of s. 49( l) prescribe, inter alia, a definite prohibition against putting in force any of the provisions of the Act for the purpose of acquiring a part only of any house, if the owner desires that the whole of such house shall be acquired. This prohibition unambiguously indicates that if the owner expresses his desire that the whole 6f the house should be acquired, no action can be taken in respect ofa part ofthc house under any provision of the Act, and this suggests that where a part of the house is proposed to be acquired and a notification is issued in that behalf, the owner must make up his mind as to whether he wants to allow the acquisition of a part of his house or not. Ifhc wants to allow the partial acquisition, proceedings would be taken under the relevant provisions of the Act and an award directing the payment of adequate compensation would be made and would be followed by the taking of possession of the property acquired. If, on the other hand, the owner desires H

374 SUPREME COURT REPORTS [2017] 10 S.C.R.

A that the whole of the house should be acquired, he should indicate his desire to the Land Acquisition officer and all further proceedings under the relevant provisions of the Act must stop. This provision thus seems to suggest that ifan objection is intended to be raised to the acquisition of a part of the house, it must be made before an award is made under s. 11. In fact, it should be B made soon after the initial notification is published under s. 4; otherwise, if the proceedings under the relevant provisions of the Act arc allowed to be taken and an award is made, it would create unnecessary confusion and complications if the owner at that stage indicates that he objects to the acquisition of a part of c his house; at that stage, it would no doubt be open to him to claim adequate compensation in the light of the material provisions of s. 23 of the Act, but that is another matter." This Court has further laid down in Kundan Singh (supra) that the reference to be made under the second proviso to section 49( 1) D cannot be mixed up with a claim which can be made in reference proceedings sent to the court under section 18 by the Collector thus; "11. The first proviso to s. 49( l) also leads to the same conclusion. If the owner has made his objection to the acquisition of a pa1t of his house, it is open to him to withdraw or modify his objection E before an award is made under s. 11; and if he withdraws his objection, fu1ther proceedings will follow and ifhe modifies his objection, steps will have to be taken as indicated in the other provisions of s. 49. This proviso therefore, suggests that the objection of the owner to acquisition of a part of his house has to be considered and dealt with before an award is made under s. F I I.

12. It would be noticed that ifan objection is made by the owner under s. 49(1), the Collector may decide to accept the objection and accede to the desire of the owner to acquire the whole of the house. In that case, further proceedings will be taken on the G basis that the whole of the house is being acquired. In some cases, the Collector may decide to withdraw acquisition proceedings altogether, because it may be thought not worthwhile to acquire the whole of the house; in that case again, nothing further remains to be done and the notification issued has merely H

STATE OF MAHARASHTRA & ORS. v. RELIANCE 375 INDUSTRIES LTD. & ORS. [ARUN MISHRA, J.]

to be withdrawn or cancelled. But cases may arise where the A Collector may not accept the claim of the owner that what is being acquired is a pmi of the house; in that case, the matter in dispute has to be judicially determined, and that is provided for by the second proviso to s. 49(1). Under this proviso, the Collector is under an obligation to refer the matter to the Court and he B shall not take possession of the land under acquisition until the question is determined by the Court. In dealing with this matter, the Comi has to have regard to the question as to whether the land proposed to be taken is reasonably required for the full and unimpaired use of the house.

13. Sub-s. (2) of s. 49 seems to contemplate that where land is c acquired and it is shown to form part of a house, it would be open to award to the owner of the house additional compensation under the third clause of s. 23, and so, this sub-section deals with cases where the claim made by the owner of the house under the third clause of s. 23 is excessive or unreasonable, and provides that the appropriate Government may decide to acquire the whole of the land of which the land first sought to be acquired forms a . part_~a.t.h;.r than agree to pay-an unreasonable or excessive amount of compensation as claimed by the owner. This provision also emphasises the fact that where land is acquired and it results in the acquisition of a part of the house connected with the land, the owner can make a claim for additional compensation under s. 23, or he may require, before the acquisition has taken place, that the whole of the house should be acquired. These are two alternative remedies available to the owner; ifhe wants to avail himself of the first remedy unders. 23, he may make a claim for additional compensation in that behalf and such a claim would form the subject-matter of an enquiry under s. 18; if, on the other hand, he claims the other alternative remedy provided by s. 49(1 ), that must form the subject-matter ofanother proceeding which has to be dealt with under s. 49 itself. It is true that in cases of dispute, this matter also goes to the same Court for its decision on a reference by the Collector; but though the Court is the same the proceedings taken are different and separate and must be adopted as such. A claim under s. 49 which can be properly tried by the Court on a reference made to it by the H

376 SUPREME COURT REPORTS [2017] 10 S.C.R.

A Collector under the second proviso to s. 49(1 ), cannot be mixed up with a claim which can be made in reference proceedings sent to the Court under s. 18 by the Collector.

14. Section 49(3) merely dispenses with the necessity of issuing a further fresh declaration or adopting other proceedings under B sections 6 to I0 in regard to cases falling und~r s. 49(2).

15. Thus, it would be seen that the scheme of s. 49 is that the owner has to express his desire that the whole of his house should be acquired before the award is made, and once such a desire is expressed, the procedure prescribed bys. 49 has to be followed. c This procedure is distinct and separate from the procedure which has to be followed in making a reference under s. 18 of the Act. In the present case, the respondents have taken no steps to express their desire that the whole of their house should be acq~ired, and so, it was not open to the High Co mi to allow them to raise this point in appeal which arose from the order passed D by the District Judge on a reference under s. 18. That being our view, we do not think necessary to consider the respondents' contention that what is acquired in the present proceedings attracts the provisions of s. 49(1 )."

46Copy pinpoint46. In Jagannath Ganeshram Agrawal & Anr. v. State of E Maharashtra & Anr. AIR 1986 Born. 241, it was observed that the requisition cannot continue for long. The authority must make up their mind to acquire the property. It was held that a part of the building can also be acquired and there is no restrictiori that such part cannot be acquired under the Act. The only embargo is that when it initiates proceedings to acquire a part of the building, the owner may insist upon the entire building to be acquired. The High Court has taken note of the shortage of accommodation at Jalgaon and in many towns ofMaharashtra, it observed; "4. .. .... Section 49(1) postulates that the land acquisition authority can acquire a part of the building that the only embargo is that when it initiates proceedings to acquire a part of the building, the owner of that building may insist upon the entire building being acquired. Under sub-s. (2) such owner is given the further option to go back upon his instance under sub-sec. (i) to acquire the entire building and allow the authorities to acquire H

STATE OF MAHARASHTRA & ORS. v. RELIANCE 377 INDUSTRIES LTD. & ORS. [ARUN MISHRA, J.]

a part of the building. S. 49 far from declaring that a part of the A building cannot be acquired, clearly postulates that such power vests in the land acquisition authority. There is, therefore no impediment in the Government acquiring block No. 10 or any portion of the said building. In view of shortage of accommodation at Jalgaon and in many towns in Maharashtra, B judical notice could be taken of the fact that buildings requisitioned for public purpose to accommodate public servants posted at ' such places for discharging their official duties is a continuing necessity. With the present allocation of funds for construction of buildings, it is doubtful whether this need would ever be fully met in the foreseeable future in the State of Maharashtra. the need to requisition accommodation is a continuing need. But then, if the need is perpetual or of a permanent character, even as laid down in both the decisions of the Supreme Court referred to above, power to requisition cannot be resorted to. The authorities must make up their mind to acquire the building or a portion of the building, as the case may be. In the case of Collector of Ako/a v. Ramchandra, AIR 1968 SC 244 under the amended S. 49( I) of the West Bengal Premises Requisition and Control (Temporary Provision) Act, the Court granted three years' time to the Government to acquire the property as the government wanted that property. So too .in this case, we find that the government undoubtedly requisitioned the property for a valid public purpose to wit, to accommodate the employees of the State of Maharashtra. There is no gainsaying that acute dearth of accommodation continues to persist. Providing accommodation for the officers is urgently necessary in the public interest. As F the initial requisition of the premises was in public interest, that order is unassailable inasmuch as that need continued to exist all these 30 years and even now. But nothing apparently has been done to meet the need. The requirement of the government appears to be of a permanent character, and consequently the requisition which as observed by the Supreme Court, can only G be to satisfy a temporary need cannot be reso11ed to or having been resorted to continue indefinitely. That practically amounts to acquiring the property without following the procedure laid down under the Land Acquisition Act and paying the full market value of the property. However under the Land Acquisition Act H

378 SUPREME COURT REPORTS [2017] IO S.C.R.

A the Government undoubtedly has power to acquire. As the need appears to be of a permanent nature, while the requisition cannot be continued for any length of time because the Government would be very well within its right to acquire it, any order quashing the requisition would not be in the interests of justice provided the government considers the question of acquiring this property B within a reasonable time. In the circumstances of the present case, we think, the government should be able to make up its mind in this regard within a period of 18 months from today. Already the petitioners have been deprived of this property for the last almost 30 years and these writ petitions have been pending c now for over I 0 months. We are, therefore, not inclined to accede to the submission of the learned Government Pleader that further three years time should be given to the government in these petitions, as was done by the Supreme Court in the case of Jiwani Kumar Paraki v. First Land Acquisition Collector, Calcutta, AIR 1984 SC 1707 for deciding upon acquiring the property." D (Emphasis supplied)

We approve the interpretation made by the High Court of Bombay in view of decision in S.P. Jain v. Krishna Mohan Gupta & Ors. (1987) E l SCC 191, in which this Court has held that law to take a pragmatic view and also take cognizance of the current capabilities of technology and lifestyle of the community, this Court has laid down thus: "18. We are of the opinion that law should take pragmatic view of the matter and respond to the pw·pose for which it was made and also take cognizance of the current capabilities of technology and life style of the community. It is well settled that the purpose oflaw provides a good guide to the interpretation of the meaning of the j\ct. We agree with the views of Justice Krishna Iyer in Busching Schmitz Private Ltd. case (1977) 2 SCC 835 that legislative futility is to be ruled out so long as interpretative possibility permits. Rcsidcntiality depends for its sense on the context and purpose of the statute of the project promoted."

47Copy pinpoint47. The respondents have relied on Harsook Das Bal Kishan Das v First Land Acquisition Collector (1975) 2 SCC 256 in which this Court has observed: H

STATE OF MAHARASHTRA & ORS. v. RELIANCE 379 INDUSTRIES LTD. & ORS. [ARUN MISHRA, J.]

"6. "Land is defined in Section 3(a) ofthc Act to include benefits to arise out of the land and things attached to the earth or permanently fastened to anything attached to the earth. Therefore, land contemplated in Section 49(2) of the Act may be land or land including building or part of a building." The decision in Harsook Das Bal Krishan Das (supra) does not at all help the respondents. In the said ease it has been laid down that there can be acquisition ofland or part of building, In our opinion, when State is the owner then it is not necessary to acquire such an interest in the land.

48Copy pinpoint48. Reliance has also been placed on Saramma Ittichen)'a v. c State of Kera/a & Ors., AIR 2008 Ker 72 wherein interpretation of Section 49 ( 1) of the Act has been made. The High Court has held that Section 49 (1) gives power to the owner who expresses his desire to acquire the entire building. The owner has a right to withdraw the option exercised before the award is passed. The words "whole of such house or manufactory or building" includes land in which it is situated. It was not a case of owner not having title in land or that of dual ownership. The State was not the owner of the land. Ownership of the land was not in issue in the said case. So the decision is of no help to the cause espoused by the respondents. In said case it was observed: "7. Next question is what is meant by acquisition of the whole of such house or manufactory or building as mentioned under Section 49(1 ). When the Collector accepts the option to acquire the entire building, not only the building materials are to be acquired, but the entire building including the land where the building is situated need be acquired. In Shaji C. Varkey's case (supra), the Division F Bench rightly held that the landlord cannot exercise an option to acquire the bl1ilding materials alone. His right is to exercise the option to acquire the entire building. 'Entire building' means the land where the building is situated. There is no provision under Section 49( I) enabling the land owner to compel the Collector to acquire the building materials alone and return the land where G the building is situated. When landlord exercises the option w1der Section 49(1 ), State can acquire the entire building and decide either to demolish that part of the building or use it with or without necessary modifications. The decision of Harsook Das Bal Kishan Das's case (supra) is also that the land including the H

380 SUPREME COURT REPORTS [2017] 10 S.C.R.

A building has to be acquired once the landlord expresses desire to acquire the whole building in Rajalak.~hmy v. Assistant Engineer AIR l 980 Kcrala 68 (FB ), majority of the J udgcs held that when building alone is acquired, an order can be passed by the Court for urgent removal of the building makrials by the Government. But, in that case, Government acquired only the building materials B and the building was demolished. But, building materials were not removed and owner of the building approached the Court for a direction to remove the building materials. The question when the building is acquired, whether the land on which building is situated also to be acquired was not considered.... .A constitution c Bench of the Supreme Court in D.G. Gose and Co. Pvt. Ltd. v. State ofKerala, (1980) 2 SCC 410 considered the meaning of the word 'building' in the context ofKcrala Building Tax Act. Before considering the definition of 'building' under that Act natural and ordinary meaning was considered as follows: D "21. The word 'building' has been defined in the Oxford English Dictionary as follows: 'That which is built; a structure. edifice: now a structure of the nature of a house built where it is to stand.' Entiy 49 therefore inc.ludes the site of the building as its component pait. That, if we may say so, inheres in the concept or the ordinary meaning of the expression building'.

22. A somewhat similar point arose for consideration in Corporation of the Ci~v of Victoria v. Bishop of Vimcouver island (AIR 1921 PC 240) with reference to the meaning of the word 'building' occurring in Section 197( 1) of the Statutes of British Columbia, 1914. It was held that the word must receive its natural and ordinary meaning as' including the fabric of which it is composed, the ground upon which its walls stand and the ground embraced within those walls'. That appears to us to be the con-cct meaning of 'building'." G The above decision was followed by the Apex Court in T Lakshmipathi i: P. Nithyananda Reddy (2003) 5 SCC 150: AIR 2003 SC 2427 it was observed as follows at paragraph 23: "23. In D.G Gose Co. (Agents) (L) Ltd v. State (~f' Kera/a H ( 1980) 2 SCC 410: AIR 1980 SC 271 while dealing with Entiy

STATE OF MAHARASHTRA & ORS. v. RELIANCE 381 INDUSTRIES LTD. & ORS. [ARUN MISHRA, J.]

49 of List II of the Seventh Schedule of the Constitution, making A a reforence to Oxford English Dictiomuy, this Cow't has held that the site of the building is a component pa11 of the building and therefore inheres in it the concept or ordinary meaning of the expression 'building'. Referring to Corpn. of the City <d' Victoria v. Bishop of Vancouver Island (AIR 1921 PC 240) B it was held (at sec p. 425, para 22) that the word 'building' must receive its natural and ordinary meaning as 'including the fabric of which it is composed, the ground upon which its walls stand and the ground embraced within those walls." The meaning of Section 49( 1) is made very clear by the decision of the Supreme Court in Deep Chand v. Land Acquisition C Officer (AIR 1994 SC 1901 ). The Apex Court after quoting the section held as follows: "A reading of the above section shows that a right has been given to the owner of the land to object to the putting of the Act into force when only a part of any house, manufactory or other building is sought to be acquired and call upon the State to acquire whole of such house, manufaetory or building. Therefore, what has been given is a right to object only to acquisition of part of the building, etc. without acquiring the whole of the house, manufactofy building. In determining the question whether the land proposed to be taken was reasonably required for the full and unimpaired use of the house, manufactory or building left out of acquisition all that the Court has to examine is whether the objection is sustainable requiring the whole of the prope11y, including the house, manufactory or other building, should be acquired or portion of the property. F proposed for acquisition should be left out of acquisition for full and unimpaired use of the house, manufactory or building, of the property proposed. for acquisition. It is one of determination of the convenient use and enjoyment of the unacquired portion of the land or a building, manufacto1y or G the other house. If the answer is in favour of the land owneF· · the only choice left to the Government is either to acquire the whole property or drop the proposed acquisition: It brings about no other consequence. In other words the law says --- acquire the whole prope.rty or leave it. But for the acquisition the owner H

382 SUPREME COURT REPORTS [2017] IO S.C.R.

A is entitled to use the property in any manner he intends to make use or enjoy it. Obviously the decision by the Civil Court only hinges upon the convenient or unimpaired use and enjoyment of the house, manufactory or building with the residue of the land lefr over after acquiring the other property." B Therefore, the landlord has to express his desire to acquire the whole of the building. Once such a desire is expressed before award is passed, the Land Acquisition Officer has no option, but to acquire the entire building including the land in which the building is situated or withdraw from the acquisition and the building includes the property in which the building is situated c and if there is any dispute as to whL·ther any land proposed to be taken docs or does not form part of a house or building within the meaning of the section, the Collector has to refer the matter to the civil Court and await the decision of the civil Court for taking possession of the land. D From the foregoing discussion, we hold as follows:

(8) The words 'whole of such house or manufactory or building' includes land in which it is situated. In other words, when entire ·E building is acquired the land in which the building is situated also has to be acquired by the Government; (9) If the owner, expresses his opinion only to acquire the building materials excluding the land in which it is situated, it is not an option exercised under Section 49( l ): F We answer the reference accordingly."

49Copy pinpoint49. There is no dispute with aforesaid proposition but where part of building that too a multi-storied building is being acquired, the land need not be acquired more so when the owner of building is not the owner of land and his entire interest in part of building can be acquired. IX. Violation of Article 300A by acquisition in part

50Copy pinpoint50. It was further submitted that without acquisition of the underlying land, the acquisition ofbnilding or portion thereof amount to overreach of the State's power to eminent domain. Reliance has been

STATE OF MAHARASHTRA & ORS. v. RELIANCE 383 INDUSTRIES LTD. & ORS. [ARUN MISHRA, J.]

placed on State ofBihar v. Kameshwar Prasad 1952 SCR 889 in which this Court observed: "It is true. that under the common law of eminent domain as recognized in the jurisprudence of all civilized countries, the State cannot take the property of its subject unless such property is required for a public purpose and without compensating the owner for its loss."·

51Copy pinpoint51. Reliance has also been placed by this Court in Trisha/a Jain & Am: v. State of Uttaranchal & Anr. ·Civil Appeal No.7496-7497 of · 2005, decided on 5.5.2011, in which this Court observed: "26. Acquisition ofland is an act falling in the purview of eminent domain of the State. It is essentially relates to the eoneeprof eo1npulsory acquisition as opposed to voluntary sale. It is trite that no person can be deprived of his property save by authority ofiaw in terms ofArticle 300A of the Constitution ofindia. The provisions of the Act provide a complete mechanism for D 'deprivation of property in accordance with the law' as stated under the Act.Justifiability and fairness of such compensation is subject to judicial review within the confines of the four corners of the Act. Once the lands arc acquired under the Act, the persons interested therein arc entitled to compensation as per the provisions of the Act." -- E

52Copy pinpoint52. The aforesaid submission is simply to be rejected. In case the building or portion is acquired without acquiring the underlying land there. is no question of overreach of the State's power to the eminent doi;nain. Article 300A interdict taking of the property for a public purpose without compensating the owner ±:or its loss. In case entire ownership of the land does not lie with the owner only the right which is capable ofbeing acquired would be acquired not something which is non-existent. The building or part can be acquired and there is no question ofacquisition of the land in such cases. In adjudication of the compensation as per the provisions of Section 23, the State is not depriving the respondents of their property. There is acquisition ofland by fair procedure along with reasonable compensation. The action has been taken by the State in accordance with law. The action is legally justified. Thus, there is no question of eminent domain being misused or violation of provisions of Article 300A of the Constitution oflndia. H

384 SUPREME COURT REPORTS [2017] 10 S.C.R.

53Copy pinpoint53. It was also submitted that owner of the land is deprived of his ownership rights over the land when the State purports to acquire only a building or portion thereof standing on his land, without acquiring the underlying land. The submission cannot be accepted as the respondents are not the owner of the underlying land. Secondly, the acquisition of a particular floor as per the provision of section 49 of the act is permissible B and the entire interest of owner in a particular portion has been acquired for that he would be compensated. It is not the case of partial acquisition of the interest on a particular floor. When without selling the land, in a building, a particular floor can be sold why there could not be acquisition of particular floor for public purpose. c 54. With respect to concept of ownership, reliance has also been placed upon Salmond on Jurisprudence, (J 21h ed. 1966) at pp. 246-24 7, 413, and it was observed: "According to Sir John Salmond the owner ofa material object is he who owns a right to the aggregate of its use. Ownership D denotes the relation between a person and an object forming the subject-matter of his ownership. It consists in a complex of rights, all of which arc rights in rem, being good against all the world and not merely against specific persons. The normal case ofowncrship can be expected to exhibit the following im:idents: E a. The owner will have a right to possess the thing which he owns. b. The owner normally has the right to use and enjoy the thing owned: the right to manage it, i.e., the right to decide how it shall be used: and the right to the income from it. F c. The owner has the right to consume, destroy or alienate the thing. d. Ownership has the characteristic of being indeterminate in duration. G e. Ownership has a residuary character.. , There is no dispute that in the aforesaid proposition. The owner has the right to use and enjoy a particular portion but owner cannot set up a plea for acquisition of an interest when he does not have that particular right or interest or title. His right to manage it, right to decide, how it shall be used, right to income from it has to be in accordance with

STATE OF MAHARASHTRA & ORS. v. RELIANCE 385 INDUSTRIES LTD. & ORS. [ARUN MISHRA, J.]

the law. Right of individual has to give way to the public purpose on being duly compensated by way of fair procedure.

55Copy pinpoint55. It was also contended on behalf ofrcspondcnts that when the State acquires building or portion thereof without acquiring the underlying land, the State is depriving the owner not only of his property in the building but also its property in the underlying land. The owner of the land will not be able to exercise his right to use the land to the extent the building on which it is acquired. Further, if the building has been compulsorily acquired, the underlying land will be rendered valueless, as no person would want to buy the underlying land from the owner. Thus, the owner of the land will be deprived of his right to obtain a fair value or income from the land upon its alienation ortrnnsfer. Thus, upon acquisition of a building, the State also deprives the land owner of his rights in the land. However, by not acquiring the underlying land, the State is seeking to evade its obligation to compensate the owner ofland for his loss. The provisions would become confiscatory.

56Copy pinpoint56. We find no merit in the aforesaid submission. Firstly, it presupposes ownership ofland also is with owner of building, ifthat be so, the owner can exercise the option for acquisition of the entire building and land which is available under Section 49 of the Act and bes.ides that the owner can be compensated also in case he is having any interest in the land and in case his land is rendered of!ess utility obviously he can claim compensation under the provisions of the LandAcquisitionAct. If the land is rendered value less then also ·adequate compensation can be claimed under the provisions of Section 23 in accordance with law. In case right is affected in land which is not acquired by severance, for that also compensation can be claimed. Thus, the submission so placed is factually incorrect and legally unsustainable. F

IX. Whether valuation method of building mandates acquiring of 'land? ·

57Copy pinpoint57. It was also urged that land and building constitute a single unit and there cannot be a break-up in valuation of land and building separately G as such land is necessary to be acquired with building. Reliance has been placed on decision in State of Kerala v. P.P. Hassan Koya, AIR 1968 SC 120.1 in which this Court observed; "4. Two questions were urged in support of the appeal: (1) that the Receiver having accepted the award of the Land H

386 SUPREME COURT REPORTS [2017] 10 S.C.R.

A Acquisition Officer, the respondent could claim compensation only for the right which he had in the land and the buildings and the method adopted by the Land Acquisition Officer was in the circumstances the only appropriate method: and (2) that the rate of capitalization was unduly high. B In our judgment, there is no force in either of the contentions. When land which expression includes by Section 3(a) ofthcAct benefits to arise out of land and things attached to the earth or fastened to anything attached to the earth --- is notified for acquisition, it is notified as a single unit whatever may be the c interests which the owners thereof may have therein. The pwpose of acquisition is to acquire all interests which clog the right of the Government to full ownership of the land. i.e. when land is notified for acquisition the Government expresses its desire to acquire all outstanding interests collecfr1ely. That is clear from the scheme of the Land Acquisition Act.'' D (Emphasis supplied) In the aforesaid case there was notification under section 4 of the Act for acquisition of seven units of land with buildings. The buildings constructed on the land belonged to the respondent and were let out to tenants on rent. This Court has held that when notification is of a single unit whatever may be the interest of the owners thereof may have therein the purpose of acquisition is to acquire all interest which clog the right of the Government to full ownership of the land. In the instant eases, as the ownership of the land does not lie with the respondents, thus, it was not necessary to acquire the land. The fact in the said case does not help at all. It has been laid down that acquisition of entire interest in the part is required and there cannot be acquisition of the part of interest in part of the building, house or manufactory. The entire interest of the owner has to be acquired and that has been precisely done in the instant case.

58Copy pinpoint58. Reliance has also been placed on the decision of this Court in Kiran Tandon v. Allahabad Development Authority, (2004) I 0 SCC 74 thus: "I .I. A question which arises here is as to what method for determining the value of the property should be adopted when H

STATE OF MAHARASHTRA & ORS. v. RELIANCE 387 INDUSTRIES LTD. & ORS. [ARUN MISHRA, J.]

the land is comprised ofbuildings, trees or some other additions oflike nature. In Parks, J.A.: Principles & Practice (>/'Valuation (published by Eastern Law House, 1998 fain.) the following paragraph on p. 332 illustrates the different aspects of the problem: "Land with buildings is viewed in a different perspective than bare laiid as such. Land and buildings once married become one unit, and neither land nor building can thereafter be valued ·separately. A building once erected on or married to the site, as ·it is technicallv often termed takes unto itself a value which may be either greater or less than the cost of erection depending upon the market situation. If the building properly and. C economically develops the land, the total value ofthe complete entity may be worth more than the sum of the Individual valuer. In such cases, the excess of the composite value over the sum of the individual values is ascribable as the builder's profit. But there may also be inst_anccs to the contrary. It is generally D impossible to arrive at the tme value of the whole by addition of the parts." ·

12. In Abdullah Jan Mohd. Ganjee v. State ofBihar [(1967) I SCWR 214] it was observed that a-building standing on the frmd and the land on which it stands may not for the purposes of the E Land Acquisition Act ordinarily be regarded as separate units capable of being separately value(l and the Reference Court in the normal course should have valued the land and building as composite property by the evidence furnished by the value of similar and comparable properties in the neighborhood by capitalisation of rent or other income received out of the property. F

13. This principle was reiterated in State ofKerala v. P.P. Hassan Koya [AIR 1968 SC 1201] wherein it was held as under: (AIR p. 1202, para 5) "In determining compensation payable in respect of land with G buildings, compensation cannot be determined by ascertaining the value of the land and the 'break-up value' of the building separately. The land and the building constitute one unit, and tiie value ofthe entire unit must be determined with all its advantages and its potentialities." H

388 SUPREME COURT REPORTS [2017] 10 S.C.R.

A 14. In 0. Janardhan Reddy v. Spl. Dy. Collector [( 1994) 6 SCC 456] it was held that where there are irrigation wells in the land, estimated construction cost of the wells cannot be separately assessed apart from assessment of market value of the.land and the value of the land has to be assessed having regard to the availability of irrigation facility on the land as a prime factor. B This view has been reiterated in State of Bihar v, Madheshwar Prasad [(1996) 6 SCC 197] and State of Bihar v. Ratan Lal. Sahu [(1996) I 0 SCC 635]. But there is no hard-and-fast rule that land and building must be valued as one unit. They can be separately assessed if the large portion of the land is lying vacant c and is capable of better use as stated by Venkatachaliah J. as His Lordship then was in Administrntor General of W.B v. Collector, Varanasi [(1988) 2 SCC 150: AIR 1988 SC 943] and it will be useful to extract the relevant part of AIR para 8 of the Report: (SCC pp. 159-60, para 17) D "Usually. land and building thereon constitute one unit. Land is one kind of property; land and building together constitute an altogether different kind of property. They must be valued as one unit. But when: however the property comprises extensive land and the structures thereon do not indicate a realisation of the full developmental potential of the land it might not be E impermissible to value the prope1iy estimating separately the market value of the land with reference to the date of the preliminaty notification and to add to it the value of the structures as at that time. In this method, building value is estimated on the basis of the prime cost or replacement cost less depreciation. F The rate of depreciation is, generally, arrived at by dividing the cost of construction (less the salvage value at the end of the period ofutility) by the numberofyears ofutility of the building. The factors that prolong the life and utility of the building, such as good maintenance, necessarily influence and bring down the rate of depreciation." G (Emphasis supplied) The question in the above matter was as to the method for determining the value of prop~rty that has to be adopted in the facts of each case. No doubt about it when land and building once married becomes one unit, neither land nor building can thereafter be valued

STATE OF MAHARASHTRA & ORS. v. RELIANCE 389 INDUSTRIES LTD. & ORS. [ARUN MISHRA, J.]

separately. But this would not come in the way of determining the valuation of a particular floor, all the a~pects of the owners interest and the bundle of other rights can be taken into consideration including support provided by the land and value of the land in the locality etc. Value of the part of the building can also be accordingly assessed. X. Conclusion : B

59Copy pinpoint59. Thus, we find that the acquisition process to be legal and valid and the notifications in question are valid and let it be taken to a logical end. Since there was interim stay by the High Court and thereafter a status quo order by this Court we direct that the acquisition be completed as expeditiously as possible. There is no merit in the prayer to drop it. c

60Copy pinpoint60. Accordingly, the appeal is allowed and the impugned judgment and order passed by the High Court is set aside.

Kalpana K. Tripathy Appeal allowed.