10 December 2004
Supreme Court
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HANS RAJ SHARMA (DEAD) BY LRS. Vs COLLECTOR LAND ACQ.,TEH.&DISTT.DODA

Case number: C.A. No.-002504-002504 / 1999
Diary number: 2565 / 1998
Advocates: M. K. GARG Vs


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CASE NO.: Appeal (civil)  2504 of 1999

PETITIONER: Hans Raj Sharma (Dead) by Lrs.

RESPONDENT: Collector Land Acquisition,Tehsil & District Doda

DATE OF JUDGMENT: 10/12/2004

BENCH: Shivaraj V. Patil & (B.N. Srikrishna

JUDGMENT: J U D G M E N T

Srikrishna, J.

       The appellant whose land was acquired is aggrieved by the  dismissal of his claim for increased compensation by the Division  Bench of the High Court.         The appellant owned land measuring 137 Kanals and 19 marlas  in Khasra  No.804 (77 Kanals and 7 marlas) and Khasra  No.805 (60  Kanals and 12 marlas) situated in Barshalla Tehsil, Doda (Jammu) in  the State of Jammu & Kashmir. This land was acquired  by a  Notification under section 4 of the Land Acquisition Act, 1894  (hereinafter referred to as ’the Act’) issued by the State Government  for the purpose of establishing a base camp of Sheep Breeding Farm,  Thathri. The declaration under section 6 of the Act and a direction  under section 7 of the Act were issued on 10.12.1976 and possession  of the land was taken on 16.1.1977. The petitioner claimed  compensation at the rate of Rs.12,000/- per Kanal for the land and  compensation for trees separately.  The land acquisition collector  made an award in respect of the land bearing Khasra  nos. 804 and  805 and fixed compensation for the land at the rate of Rs.800 per  Kanal for land in Khasra  no. 804 and Rs.250/- per Kanal for land in  Khasra  no.805.  He also awarded certain compensation for trees on  the land. The petitioner accepted it under protest and sought a  reference for increase in the compensation.  On 27.4.1985 the  petitioner made a written application before the land acquisition  collector claiming  that the market value of the land was not less than  Rs.12,000/- per Kanal.  He also specifically claimed that there were  350 trees standing on that land and claimed increased compensation in  respect of the said trees also.   Upon a reference under Section 18, the reference court after  recording evidence came to the conclusion that the comparable  instances of sale cited by the appellant were in respect of very small  pieces of land while the acquired  land was a big chunk measuring  about 137 Kanals.  Consequently, the reference court was of the view  that the instances cited could not be taken as comparable instances of  sale of land. The reference court assessed the market value at Rs.800/-  per Kanal in respect of land in Khasra  no. 804 and increased the  compensation only in respect of Khasra  no.805 from Rs.250/- per  Kanal to Rs.720/- per Kanal.  The reference court also directed 4% per  annum interest to be paid.  

       Being aggrieved  by the decision of the reference court, the  petitioner moved an appeal under section 54 of the Act before the  High Court. The learned single Judge enhanced the compensation for  land in Khasra  no. 804 to Rs.1000/- per Kanal and the compensation  for land in Khasra  no.805 to Rs.900/- per Kanal.  The single Judge

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also increased the rate of interest to 6% per annum instead of 4% as  directed by the District Judge.  The appellant still being dissatisfied  moved a Letters Patent Appeal before the High Court claiming  compensation @ Rs.8000/- per Kanal in respect of land and  Rs.75000/- for trees. The appeal was dismissed by the High Court and  thus the appellant is in appeal before this Court.   

       The learned counsel for the appellant urged that the High Court  and the District Judge have completely ignored the evidence, and that  their judgments were perverse and liable to be interfered with.  He  contended that after the year 1971 there was no sale of land in the area  concerned because of the coming into operation of the Agrarian  Reforms Act, 1976.  Consequently, there were no instances of  registered sale deeds, though sales unofficially took place during the  said period. Some of such sale deeds were actually registered after  1981.   In respect of one such sale deed, it was claimed  by witness  Girdhari Lal that he had sold three marlas of land in the year 1975 at  the rate of Rs.500/- per marla, though the sale deed was registered in  1981 because of ban on sale of land in the interregnum. Another  witness  Tej  Ram stated that he had also purchased land @ Rs.500  per marla in the year 1975.  Witness Om Prakash, Assistant Engineer,  NHIS sub Division Thethri stated in his evidence that 1 Kanal 3  marlas was acquired from one Shukar Din for Rs.15,870/- and the  land was 1-1/4 kilometer away from Thathri on the National Highway.   This rate comes to Rs.14,000 per Kanal.  Patwari Ghandarb Singh has  stated that the average market rate was about Rs.500/- per marla but  was not able to cite an instance where any equivalent chunk of land  was sold.  Daya Krishan has stated that he had sold  land measuring 4- 1/2 marlas at the rate of Rs.12,000/- per Kanal.

       The learned District Judge was of the opinion that the instances  cited were of small pieces of land and it was not safe to rely on them  because the land acquired was a large chunk of land admeasuring  about 137 Kanals and 19 marlas.   The learned single judge took the view that it was not the fault  of the claimant that there was no sale of big chunk of land during the  relevant period. He further was of the view that Rs.800/- per Kanal  was an    unreasonably low amount of compensation as it would not  even fetch a quintal of wheat . According to the learned single Judge,  though comparable instances of sale of land were not available, the  Reference Court should have gone on the average yield, in which  event the market value of the land would have been fixed at a much  higher price.  Although the Reference Court had rejected an instance  of sale of land which is about 400 to 500 yards away from the land  acquired across the river @ Rs.1000/- per Kanal on the ground that it  was across the river and adjacent to the National Highway, the single  Judge was of the view that since the said piece of land had been  acquired by the State Government itself, and inasmuch as the acquired  land was hardly 400-500 yards away from the land for which  Rs.1000/- per Kanal has been paid as compensation, no compensation  less than Rs.1,000/- would be fair and just. The learned single Judge  took the view that there was no need to go into other evidence in the  light of the admission made by the State authorities that compensation  of Rs.1000 has been paid for the land which was only 400-500  yards  away from the land acquired.  Since some of the land was partially  earmarked and the other was not earmarked, the learned single Judge  was of the view that the land in Khasra  No.804 would have market  value of Rs.1000 per Kanal and the market value in respect of land in  Khasra  No.805 should be fixed at Rs.900/- per Kanal.  The learned  single Judge awarded interest @ 6% per annum but made no reference  whatsoever to the compensation in respect of the trees.          The Division Bench confirmed the judgment of the learned  single Judge in respect of the compensation and interest.  It also

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rejected  the claim in respect of compensation for trees on the ground  that the judgment of the single Judge did not mention anything about  compensation for trees which suggested that the said claim has not  been argued before the single Judge.  The Division Bench was of the  view that the appropriate course would have been to approach the  single Judge and draw his attention to the omission and it was not  open to the Division Bench in appeal to deal with the question for the  first time. In this view of the matter the Division Bench dismissed the  appeal.

       Though the learned counsel for the appellant cited a number of  judgments, it appears to us that it is unnecessary to burden the record  by reference to all the judgments.  It would suffice to refer to two  recent judgments which have taken notice of all the earlier judgments.  In Kasturi and others v. State of Haryana (2003) 1 SCC 354 a  Division Bench of this Court to which one of us (Shivaraj V. Patil,J.)  was a party, surveyed the authorities on the point and came to the  conclusion that generally instances of sale of small tracks of land  could not form acceptable basis for determining the market value of  large tracks of land, unless suitable deduction was made in respect of  the  developmental charges and land to be set apart.  However, it was  pointed out that the nature of the land acquired would be  determinative of the issue as to how much of deductions are to be  made in respect of developmental charges and other related expenses.   This would of course depend on the nature of the land, its topography  and special features, if any, and the state of its development so as to  make it suitable for being adapted for immediate use.                  In Ravinder Narain and another v. Union of India (2003) 4 SCC  481 it was held  that where a large chunk of land is the subject-matter  of acquisition, the  rate at which small plots are sold cannot be said to  be a safe criterion. Nevertheless, the Court was of the view "it cannot,  however, be laid down as an absolute proposition that the rates fixed  for the small plots cannot be the basis for fixation of the rate. For  example, where there is no other material, it may, in appropriate  cases, be open to the adjudicating court to make comparison of the  prices paid for small plots of land. However, in such cases necessary  deductions/adjustments have to be made while determining the  prices".        It was recognized that although fixing of the market  value involves a certain amount of intelligent guess work on the part  of the court, the element of speculation could be reduced to minimum  if the following principles are kept in mind with reference to  comparable sales: (i)     The sale is within a reasonable time of the date of  notification under Section 4(1);

(ii)    It should be a bona fide transaction ;

(iii)  It should be of the land acquired or of the land adjacent  to the land acquired; and

(iv)    it should possess similar advantages.

       The Division Bench of the High Court was of the view that although  instances of sale of smaller chunks of land could not be always relied upon,  there was no reason why the instance of acquisition by the State  Government within a distance of about 500 yards from the present land for  the purpose of  setting up Sheep Breeding Farm could not be considered.    In the instant case the land was situated across the river on Thethri on the  right side and its market value was fixed at Rs.1000 per kanal. The High  Court was, therefore, justified in taking this as reasonable comparable  instance of sale and fixing the market value of the acquired land based  thereupon.         Turning to the other question as to the valuation of trees, it appears  that there has been an omission on the part of the Reference Court in

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rejecting the claim on the ground that there was no specific reference  made. It must be remembered that the Reference made under Section 18  was for determination of the amount of compensation payable to the  appellant for the "land" acquired.  The expression ’land’ as defined in  Section 3(a) of the Act is inclusive of benefits to arise out of the land and  things attached to the earth or permanently fastened to anything attached to  the earth.  As a matter of fact, the land acquisition officer had worked out  the compensation for 261 trees in Khasra  No.804  determined as  Rs.17,315/- and the cost of 96 trees in Khasra  No.805 determined as  Rs.6207/-.         Issue no.2 raised by the Reference Court was "whether the value of  trees worth Rs.300/- per tree, has not been included in the award".  While  answering this issue, the Reference Court has taken the view that the  Reference Court has no jurisdiction to determine the controversy as it has  not been referred by the Collector.  This, in our view, is erroneous.  The  Reference Court ought to have adjudicated the claim of the appellant for  higher compensation in respect of trees. On account of the unduly  restrictive view taken of its own jurisdiction, the Reference Court fell into  error.   The single Judge and the Division Bench also fell into the same  error in totally rejecting this claim as beyond jurisdiction. In our opinion, the appellant is entitled to have his claim in respect  of the trees on the land acquired adjudicated by the Reference Court.         In the result, we uphold the determination of market value of land in  Khasra  No.804 at Rs.1000/- per Kanal and in respect of land falling in  Khasra  No.805 at Rs.900/- per Kanal, as determined by the High Court.   The Reference is remitted to the District Judge, Doda only for the purpose  of adjudicating the claim for higher compensation in respect of trees  standing on the acquired land.  

       The appeal is accordingly partly allowed with no order as to costs.