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PETITIONER: PERIYAR AND PAREEKANNI RUBBERS LTD.

       Vs.

RESPONDENT: STATE OF KERALA

DATE OF JUDGMENT06/09/1990

BENCH: RAMASWAMY, K. BENCH: RAMASWAMY, K. SHARMA, L.M. (J)

CITATION:  1990 AIR 2192            1990 SCR  Supl. (1) 362  JT 1991 (1)   450        1990 SCALE  (2)525  CITATOR INFO :  RF         1992 SC 666  (1)  RF         1992 SC1406  (14)

ACT:     Kerala  Land  Acquisition  Regulation,  1089:   Sections 22(1), 22(2) and 25(3)/Land Acquisition Act, 1894:  Sections 23(1),  23(2) & 28: Compulsory acquisition of  Land--Payment of compensation--Market value--Determination  of--Principles to be followed--Interest on solatium--Entitlement to.

HEADNOTE:     The respondent State had acquired a large extent of land out of the appellant’s estate under the Kerala Land Acquisi- tion  Regulation, 1089 for river valley  irrigation  project and  to  establish an industrial project.  The  notification under Section 4(1) of the Regulation was published on  Octo- ber  31,  1961. This was followed by the  declaration  under Section 6(1) published on February 22, 1962.     The Collector by his awards dated March 29, 1962  deter- mined the market value under Section 22(1) of the Regulation at Re.O.04 per cent for certain lands, Re.O.12 per cent  for certain other lands, and Rs.30 per cent for the wet lands as against the claim of Rs.40 and 50 per cent. Compensation for the trees at timber value was also given. The total  compen- sation fixed was Rs.4.84 lakhs.     Dissatisfied  therewith the appellant  sought  reference under Section 18 of the Regulation. They also claimed  sepa- rate  value for fruit bearing trees on potential  value  and charges for severence and injurious effects on the remaining lands. In support of the claim they relied on Ex. P. 7 dated March 9, 1951 and Ex. P. 9 dated April 4, 1957 which  worked out at Rs.52.50 and Rs.43.50 per cent respectively, and  the acquisition  forming subject matter of Ex. P. 10  pertaining to the land in the vicinity of the industrial project award- ed  at the rate of Rs.80 per cent for paddy lands and  Rs.43 for dry land. The Government pleader stated before the civil court that Ex. P. 9 could form the basis for determining the market value. The court enhanced the market value @ Rs.40-50 per cent as claimed in addition to a sum of Rs.30 to 38  per cent. It awarded in all Rs.20.20 lakhs on all counts includ- ing  severence and injurious effects, 15 per  cent  solatium and also 6 per cent interest on additional compensation from

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the date of taking possession till date of payment. 363     The High Court found that the lands covered by Ex. P.  7 and  Ex.  P.  9 were paddy lands  cultivated  by  irrigation sources and situated about four miles away from the acquired lands which were not irrigated and therefore held that these could  not  form  the basis for  determining  market  value. Similarly,  it found Ex. P. 10 could not form a base to  fix the market value. The High Court did not accept the evidence adduced by the State, which was rejected by the civil  court as  well. The statement made by the State  Advocate  General across  the bar that the market value could be fixed at  Rs. 18  per cent was also not taken into account.  Consequently, it  reversed  the  awards and decrees of  the  civil  court.     In  these appeals by special leave it was contended  for the appellant that having rejected the documents produced by the  State  the  High Court ought to have  relied  upon  the documents produced by the appellant as comparable sales  and consumed  the compensation awarded by the civil court,  that Ex.  P.  7, 9 and 10 furnished the best material,  that  the Government pleader had conceded before the trial court  that Ex.  P.  9 could form the basis for determining  the  market value,  that  they had incurred huge  expenditure  on  civil works for protection of the rest of the estate from  injuri- ous effects for which they should be recompensated, that the potential value of the trees had to be taken into account in determining  the  market value, that they were  entitled  to compensation  for severence due to submersion of  the  lands and  that they were also entitled to payment of interest  on solatium. Allowing the appeals partly, the Court,     HELD:  1.1  When the Courts are called upon to  fix  the market value of the land in compulsory acquisition, the best evidence  of  the value of property is the sale of  the  ac- quired land to which the claimant himself is a party, in its absence  the  sales of the neighbouring lands  possessed  of similar  potentiality  or fertility  or  other  advantageous features made within a reasonable time of the date of  noti- fication  in bona fide transactions on the hypothesis  of  a willing seller and a willing purchaser but not too anxious a buyer,  dealing at arms length nor facade of sale or  ficti- tious and unreal transactions of speculative nature  brought into  existence in quick succession or otherwise to  inflate the market value. This, however, does not preclude the Court from taking any other special circumstances into  considera- tion, the requirement being always to arrive at as nearly as possible an estimate of the market value judged by an objec- tive standard. [181C-182D] 364     Gajapati Raju v. Revenue Divisional Officer, A.I.R. 1939 P.C.  98;  Special Land Acquisition Officer  v.  Adinarayana Setty,  [1959] Suppl. 1 S.C.R. 404; Tribeni Devi &  Ors.  v. Collector of Ranchi, [1972] 3 S.C.R. 208; Dollor Co.  Madras v.  Collector of Madras, [1975] Suppl. S.C.R.  403;  Chandra Bansi Singh & Ors. etc v. State of Bihar & Ors. etc., [1985] 1  S.C.R. 579; Tahsildar, Land Acquisition Visakhapatnam  v. P.  Narasingh Rao & Ors., [1985] 1 A.P.L.J.  99;  Collector, Raigarh  v. Hari Singh Thakur & Anr., [1979] 2  S.C.R.  183; Administrator General of West Bengal v. Collector, Varanasi, [1988] 2 S.C.R. 1025; Mehta Ravindrarai Ajitrai v. State  of Gujarat, A.I.R. 1989 S.C. 2051 and Hindustan Oil Co. Ltd. v. Special  Duty Collector (Land Acquisition), [1990] 1  S.C.R. 59, referred to.     1.2  The  prices fetched for smaller plots  cannot  form basis  for valuation of large tracts of land as the two  are

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not  comparable properties. Smaller plots always would  have special  features  like the urgent need of  the  buyer,  the advantageous situation, the like of the buyer etc.  Similar- ly, the land situated on the frontage have special advantage and the land situated in the interior undeveloped area  will not  have the value at par since the latter will have  lower value then the former. So is the case with orchard land  and agricultural  land, the former being superior in quality  as compared  to the latter. If such sales are relied upon  rea- sonable reduction should be given. [182B-C]     Smt. Kaushalva Devi Bogra & Ors. etc. v. The Land Acqui- sition  Officer,  Aurangabad & Anr., [1984]  2  S.C.R.  900; Pridviraj  v. State of Madhya Pradesh, [1977] 2 S.C.R.  633; Padma Uppal etc. v. State of Punjab & Ors., [1977] 1  S.C.R. 329;  Chimanlal  Hargovinddas v.  Special  Land  Acquisition Officer,  Poona  & Anr., [1988] 3 S.C.C.  751  and  Mantaben Manibhai v. Special Land Acquisition Officer, Baroda, A.I.R. 1990 S.C. 103, referred to.     1.3  In some cases for lack of comparable sales  it  may not be possible to adduce evidence of sale of the neighbour- ing lands possessed of same or similar quality. So,  insist- ence  on abduction of precise or scientific  evidence  would cause disadvantage to claimants in not getting the  reasona- ble  and  proper market value. The courts of  facts  should, therefore, keep before them always the even scales to  adopt pragmatic approach without indulging in facts of imagination and  assess the market value which is capable to fetch  rea- sonable  compensation.  They may in that  process  sometimes trench  on the border of the guess work but  mechanical  as- sessment  should be eschewed. Misplaced sympathies or  undue emphasis  solely  on the claimants’  right  to  compensation would 365 place heavy burden on the public exchequer to which everyone contributes by direct or indirect taxes. [185D-G; 184F-G]     1.4  In the instant case, the High Court found that  Ex. P. 7 and P. 9 relied on by the civil court were not applica- ble as the lands covered by them were paddy fields cultivat- ed  by irrigation sources and situated four miles away  from the  acquired  unirrigated lands. Similarly, it  also  found that  Ex.  P.  10 could not be relied on.  The  High  Court, therefore, could not be said to be unjustified in  reversing the awards and decrees of the civil court. [186B-D]     2. The amount awarded by the Land Acquisition  Collector forms  an offer. It is for the claimants to adduce  relevant and  material evidence to establish that the acquired  lands were capable of fetching higher market value and the  amount offered by the Land Acquisition Collector was inadequate and he proceeded on a wrong premise or principle. It is also the duty of the State to adduce evidence in rebuttal. [183B, G]     Ezra v. Secretary of State for India, I.L.R. 32 Cal. 605 (P.C.); Raja Harish Chandra v. Dy. Land Acquisition Officer, [1962]  2 S.C.R. 676; Khorshed Shapoor Chenai, etc.  v.  As- sistant Controller of Estate Duty, [1980] 2 S.C.R. 315;  Dr. G.H.  Grant v. State of Bihar, [1965] 3 S.C.R.  576;  Asstt. Development  Officer v. Tayaballi, AIR 1933 Bomb. 361;  Tah- sildar, Land Acquisition, Visakhapatnam v. P. Narasingh  Rao JUDGMENT: Secretary of State, AIR 1919 Cal. 1008; Naresh Chandra  Bose v.  State  of West Bengal & Ors., AIR 1955  Cal.  398;  Smt. Kusumgauri Ramray Munshi & Ors. v. The Special Land Acquisi- tion  Officer, Ahmedabad, AIR 1963 Gujarat 92; Maharao  Shri Madansinhji  v. State of Gujarat, AIR 1969 Gujarat  270  and Chaturbhuj  Panda  & Ors. v. Collector,  Raigarh,  [1969]  1 S.C.R. 412, referred to.

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   2.2  In  the instant case the evidence produced  by  the appellant was found untrustworthy by the High Court. It also did not accept the evidence adduced by the State. [186E-F]     3.1 The Appellate Court after rejecting the evidence may have  to find whether there are any circumstantial or  other material evidence on record to fix reasonable market  value. The  State Advocate General having stated across the bar  in the  High Court that the market value can be fixed at  Rs.18 per  cent, a concession made by him with all  responsibility on behalf of the State, the High Court was not justified in 366 not taking into account this submission. [186G-I87B]     3.2 Any concession made by the Government pleader in the trial  court  cannot  bind the Government as  it  is  always unsafe  to rely on the wrong or erroneous or wanton  conces- sion  made by the counsel appearing for the State unless  it is in writing on instructions from the responsible  officer. Otherwise it would place undue and needless heavy burden  on the public exchequer. [187C]     3.3 The claimants are, therefore, entitled to the market value  @  Rs.18 per cent to the lands other  than  those  to which the Collector awarded @ Rs.30 per cent, as the  refer- ence  court shall not reduce the market value to  less  than that awarded by the Collector as enjoined under the statute. From the very nature of compulsory acquisition, 15 per  cent solatium  as additional compensation was statutorily  fixed. Therefore,  determination  of  additional  market  value  is unwarranted. [187E]     3.4 Section 25(3) of the Regulation contemplates payment of  interest  on solatium to recompensate the owner  of  the land  for loss of user of the land from the date  of  taking possession  tilldate  of payment into court.  The  claimants are,  therefore,  entitled to interest on  solatium.  It  is fixed  at 6 per cent on the excess market  value  determined under  the  judgment  including solatium from  the  date  of taking  possession  till the date of payment. In  other  re- spects judgment of the High Court is confirmed. [189G-190B]     Union of India v. Shri Ram Mehar & Anr., [1973] 2 S.C.R. 720, referred to.     4.  The Commissioner who collected the evidence  in  re- spect of the injurious effects on the remaining lands of the claimants admitted in the cross examination that the  appel- lant  did not expend any money on civil works.  Though  from the  date of the acquisition till the date of evidence  more than six years had passed by the appellant had not  produced any  material  or account books of the estate  to  establish that  they have expended any money in this regard. Both  the engineers  examined on behalf of the State and  also  appel- lant’s witnesses admitted that the road passing through  the lands  was being used by the appellant to carry  its  forest produce etc. Though during rainy season that too for a short period, at some places the water gets stagnated on the roads at  lower levels but that stand no impediment for  the  car- riage of the goods. This phenomena was prevalent even before acquisition. The value of the land of the appellant had  not been injuriously effected due to acquisition. No 367 damage  due  to severence was caused.  Under  these  circum- stances,  the appellant was not entitled to compensation  in this regard. [187F-188D]     5.  The  Sub-Judge appears to be too  anxious  to  award whatever  is  asked for on mechanical  appreciation  without subjecting  the evidence to legal and critical scrutiny  and analysis.  In such a case, even if the assessment of  valua- tion  is modified or affirmed in an appeal as apart  of  the

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judicial  process,  the  conduct of  the  judicial  officer, drawable from an overall picture of the matter would yet  be available to be looked into. In appropriate cases it may  be opened  to  draw inferences even from judicial acts  of  the misconduct.  The  person  concerned  shall  not,  therefore, camouflage  the  official  act to a hidden  conduct  in  the function of fixing arbitrary or unreasonable compensation to the acquired land.     V.R. Katarki v. State of Karnataka & Ors., Civil  Appeal No. 4392 of 1986 decided on March 22, 1990, referred to.

&     CIVIL  APPELLATE JURISDICTION: Civil Appeal Nos. 543  to 570 of 1974.     From  the  Judgment  and Order dated  22.1.1973  of  the Kerala  High  Court  in  A.S.  Nos.  487,  488,  489,   490, 491,492,493,495,497,   498,  499,  500,  501,502,   503,504, 505,506, 507, 509, 510, 511, 512, 5 13, 5 14, 5 15, 521  and 523 of 1969. G.L. Sanghi and Ms. Lily Thomas for the Appellant.     A.S. Nambiar, K.R. Nambiar and T.T. Kunhikannan for  the Respondent. The Judgment of the Court was delivered by     K. RAMASWAMY, J. 1. This batch of 28 Appeals are against the common judgment and decrees of the Kerala High Court  in A.S.  No. 487 of 1969 etc. dated January 22, 1973 and  leave under Art. 136 was granted by this Court on March 14,  1974. The  High  Court  reversed the awards and  decrees  of  land acquisition, Sub-Court, Ernakulam and confirmed the separate awards of the Collector dated March 29, 1962. The  notifica- tion under section 4(1) of the Kerala Land Acquisition  1089 for short "the Regulation" was published on October 31, 1961 and the declarations which are the relevant dates for deter- mining  the market value by operation of Section  22(1)  was published  on  October 31, 1961 and February 22,  1962.  The land acquired was 190.37 acres 368 and  15.48 acres for Periyar Valley Irrigation  Project  and Phyto  Chemicals  Project both being  public  purposes.  The Collector  determined the market value at Re.O.04  per  cent for  certain lands and Re.O. 12 per cent for  certain  other lands, Rs.30 per cent to the wet lands as against the  claim of  Rs.40 and 50 per cent and Compensation to the  trees  as timber  value  was given. The total Compensation  fixed  was Rs.4.84  lakhs. Dissatisfied therewith the appellant  sought reference under section 18 thereof. They also claimed  sepa- rate  value as fruit bearing trees on potential value.  They also claimed charges for severence and injurious effects  on the  remaining  land.  The Civil Court  after  adduction  of evidence  and on consideration thereof enhanced  the  market value  to the lands @ Rs.40-50 as claimed in addition  to  a sum  of  Rs.30 to 38 per cent. It awarded  in  all  Rs.20.20 lakhs  on all counts including severence and  injurious  ef- fects and 15 per cent solatium and also 6 per cent  interest on  additional compensation from the date of taking  posses- sion till date of payment vide page 3 of short notes of  the appellant. On appeals by the State, by common judgment dated January  22, 1973, the High Court reversed the award of  the Civil  Court  and  confirmed that of  the  Land  Acquisition Collector.     Mr  Sanghi, learned Sr. counsel for the appellants  with his usual vehemence contended that the High Court  committed manifest error of law in reversing the awards and decrees of

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the  Civil Court which had the advantage of seeing  the  de- meanor of the witnesses and extensively considered the  evi- dence in particular the unimpeachable documents Ex. p.7, p.9 and p. 10. The appellant, on account of the acquisition, had to  incur huge expenditure to construct Kayallas,  Pathways, culverts etc. for protection of the rest of the Estate.  The amount  expended  was to prevent injurious  effects  to  the Estate  and is to be recompensated. It is further  contended that the potential value of the trees have to be taken  into account in determining the market value. The appellant  also is entitled to compensation for severence due to  submersion of  the  lands  when the Periyar Canal  passes  through  the rubber estate of the appellant. Therefore, the appellant  is entitled  to the compensation in full measure with  interest on solatium. The High Court was unjustified in reversing the awards and the decrees of the Civil Court.     2.  The first question, therefore, is whether  the  High Court  is justified in reversing the awards and  decrees  of the  Civil Court. Admittedly 190.37 and 15.48 cents of  land is  part  of the extensive Periyar Estate  of  879.37  acres stretching over seven miles long on the banks of the Periyar River. It had a road of 14 feet width by name 369 Alwaye Munnar Highway running through middle of the  Estate. The lands were acquired for submersion due to Periyar  River Valley  Irrigation Project and to  establish  Phyto-Chemical Project.  Shri Sanghi, repeatedly reiterated that in  deter- mining  the  market value an element of  some  guesswork  is involved. But in determining the market value the Court  has to  eschew  arbitrary fixation keeping in view  the  settled principles  of law in evaluating market value in  compulsory acquisition  on  the hypothesis of a willing  vendor  and  a willing vendee. Therefore, let us glance through the settled principles of law in this regard.     3.  In  Galapati  Raju v.  Revenue  Divisional  Officer, A.I.R.  1939  P.C. 98 popularly known as Vijji’s  case,  the judicial committee of the Privy Council held that  compensa- tion for compulsory acquisition governed by Section 23(1) of the  Land Acquisition Act, 1894 is the market value  of  the land  at  the date of the publication  of  the  notification under  sub-sec.  (1)  of the Section 4 of the  Act  "what  a willing vendor might reasonably except to obtain from  will- ing  purchaser". The function of the Court in awarding  com- pensation under the Act is to ascertain the market value  of the  land at the date of notification under section 4(1)  of the Act (in this case under section 6(1) of the  Regulation) and  the evaluation may be as pointed out by this  Court  in Special  Land  Acquisition  Officer  v.  Adinarayana  Setty, [1959]  Suppl. 1 S.C.R. 404 at 412 (1) Opinion  of  experts; (2)  The  price paid within a reasonable time in  bona  fide transactions  of purchase of the land acquired or  the  land adjacent to the acquired land and possessing similar  advan- tages;  (3)  Number of years of purchase of  the  actual  or immediately  perspective  profits of the land  acquired.  In that  case while adopting the second method the  High  Court arrived at average price of four transactions excluding  two sales  and  separate average was arrived  fixed  the  market value  of Rs. 13.80. This Court calculating the  average  of six sale transactions fixed the market rate at Rs. 11.     In Tribeni Devi & Ors. v. Collector of Ranchi, [1972]  3 S.C.R.  208  at 2 12 this Court held  that  for  determining compensation  payable to the owner of the land,  the  market value  is to be determined by reference to the  price  which may  reasonably to obtain from willing purchasers but  since it may not be possible to ascertain this with any amount  of

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precision  the  authority  charged with the  duty  to  award compensation  is  bound  to make an estimate  judged  by  an objective  standard. While reiterating the three tests  laid down  in  S.L.A. Officer’s case, it was  further  emphasised that these methods, however, do not preclude the Court  from taking  any other special circumstances into  consideration, the requirement being always to arrive at as nearly 370 as possible at an estimate of the market value. In  arriving at a reasonable correct market value it may be necessary  to take even two or all these methods into account inasmuch  as the exact evaluation is not always possible as no two  lands may  be the same either in respect of the situation  or  the extent  or potentiality nor is it possible in all  cases  to have  reliable  material  from which the  valuation  can  be accurately determined. This Court rejected the sale deeds of the lands situated farther away from the lands acquired  and also  disallowed  10 per cent additional  compensation  over market rate fixed.     In  Dollor  Co., Madras v. Collector of  Madras,  [1975] Suppl.  SCR. 403 this Court held that "we may even say  that the best evidence of the value of the property is the  value of the sale in the very property to which the claimants  are the  party. If the sale is of recent date and all that  need normally  be proved is that the sale was between  a  willing purchaser  and willing seller, that there has not  been  any appreciable  rise or falls since and that nothing  has  been done on the land during the interval to raise the value. But if  the  sale was long ago, may be the court  would  examine more  recent  sales of comparable lands as  throwing  better light  on current land value. This Court further  emphasised the  fact  that because the appellant therein  himself  pur- chased  the  land which is 10 months prior to  the  date  of notification  under  section  4, at a price  of  Rs.410  per ground,  that  would  be the measure  of  prevailing  market value. The High Court enhanced the market value to Rs.  1800 per ground and on appeal was filed by the State. Though  the appellant  still claimed higher value, this Court  negatived further enhancement.     4. In Smt. Kaushalya Devi Bogra & Ors. etc. v. The  Land Acquisition  Officer, Aurangabad & Anr., [1984] 2  SCR.  900 the transaction in respect of small properties do not  offer proper guidelines and, therefore, the price fetched  therein cannot  be taken as real basis for determining  compensation for  large  tracts of property. This was also  the  view  in Pridviraj  v. State of Madhya Pradesh, [1977] 2 SCR 633  and Padrna  Uppal Etc. v. State of Punjab & Ors., [1977]  1  SCR 329. If they are relied upon reasonable reduction should  be given. Accordingly, this Court has fixed the market value in the  light of the development of the land in the  neighbour- hood of the township etc.     In  Chandra Bansi singh & Ors. etc. v. State of Bihar  & Ors. etc., [1985] 1 SCR 579 notification under section  4(1) was  issued  for acquiring 1034 acres of  land  for  housing construction  by  the Housing Board. This  Court  held  that compensation  should  be paid as per the value of  the  land prevailing as on the date of the notification but not on the date of taking over possession. 371     5.  In Tahsildar, Land Acquisition, Visakhapatnam v.  P. Narasingh  Rao  and Ors., [1985] 1 A.P.L.J.  99  a  Division Bench  of the Andhra Pradesh High Court to which one  of  us (K. Ramaswamy, J) was a member while reiterating the princi- ples  referred to above held that the object of  determining the  compensation with reference to comparable sales of  the

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land adjacent to the land acquired is to find the fertility, quality,  the probable price of the land  under  acquisition is’ likely to fetch and the actual price paid by the  vendee to  the vendor under those transactions as a prudent  vendee and is not actuated with any other speculative features.  It is to ascertain these facts, the sale deeds are insisted  to be  produced. The market value fixed must be reasonable  and fair  to the owner as well as to avoid undue burden  to  the exchequer.  Therefore, the transaction relating to  the  ac- quired  land of recent dates or in the neighbour-hood  lands that possessed of similar potentiality or fertility or other advantageous features are relevant pieces of evidence.  When the  Courts are called upon to fix the market value  of  the land  in  compulsory acquisition. the best evidence  of  the value of property is the sale of the acquired land to  which the claimant himself is a party, in its absence the sales of the  neighbouring lands. In proof of the  sale  transaction, the  relationship  of the parties to  the  transaction,  the market conditions, the terms of the sale and the date of the sale  are to be looked into. These features would be  estab- lished by examining either the vendor or vendee and if  they are not available, the attesting witnesses who have personal knowledge of the transaction etc. The original sale deed  or certified  copy thereof should be tendered as evidence.  The underlying principles to fix a fair market value with refer- ence to comparable sales is to reduce the element of  specu- lation. In a comparable sales the features are: (1) it  must be within a reasonable time of the date of the notification; (2) it should be a bona fide transaction; (3) it should be a sale  of  the  land acquired or land adjacent  to  the  land acquired and (4) it should possess similar advantages. These should  be established by adduction of material evidence  by examining as stated above the parties to the sale or persons having  personal  knowledge of the  sale  transactions.  The proof also would focus on the fact whether the  transactions are  genuine  and bona fide transactions. As  held  by  this Court  in  Collector, Raigarh v. Hari Singh Thakur  &  Anr., [1979] 2 SCR 183 that fictitious and unreal transactions  of speculative  nature brought into existence in quick  succes- sion should be rejected. In that case it was found by major- ity that these sale deeds are brought up sales. In  Adminis- trator General of West-Bengal v. Collector, Varanasi, [1988] 2  SCR  1025 that the price at which  the  property  fetches would be by a willing seller to a willing purchaser but  not too anxious a buyer, dealing at aim’s length. The 372 prices fetched for similar lands with similar advantages and potentialities and the bona fide transactions of the sale at time  of preliminary notification are the usual, and  indeed the  best,  evidence of the market value. Other  methods  of valuation are resorted to if the evidence of sale of similar land is not available. The prices fetched for smaller  plots cannot  form basis for valuation of large tracts of land  as the two are not comparable properties. Smaller plots  always would  have  special features like the urgent  need  of  the buyer,  the  advantageous situation, the like of  the  buyer etc.     6. In Chimanlal Hargovinddas v. Special Land Acquisition Officer, Poona & Anr., [1988] 3 SCC 751 this Court held that the land situated on the frontage have special advantage and the land situated in the interior undeveloped area will  not have the value at par since the latter will have lower value than  land situated near developed area. Some  guesswork  is permissible in determining the value and on this basis  this Court did not interfere with fixation of market value by the

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High Court.     In  Mehta Ravindrarai Ajitrai  v. State of Gujarat,  AIR 1989 SC 2051 this Court reiterated the ratio in West  Bengal Administrator  General’s case that the persons to prove  the fair transaction are either the vendor and the vendee or the person conversant with the sale and they are to be examined. The  original  sale deed or the certified copy of  the  sale deed  are to be produced. The same is the view in  Dr.  Hari Singh  Thakur’s case. This was also the view of  the  Andhra Pradesh High Court in Narasingh Rao’s case.     7.  In  Mantaben Manibhai v.  Special  Land  Acquisition Officer,  Baroda, AIR 1990 SC 103 to which one of  us  (L.M. Sharma,  J)  was  a member, this Court held  that  when  the quality of the lands are different (bagayat land and  jiryat land).  Bagayat  land  is superior in quality  and  to  what percentage of superiority was not established by the  claim- ants.  This Court held that addition of 25 per cent  of  the value of the Jiryat land was held to be proper valuation.     In  Hindustan  Oil Co. Ltd. v.  Special  Duty  Collector (Land  Acquisition),  [1990] 1 SCR 59 this Court  held  that cumulative effect of all the facts and circumstances  should be taken into consideration in arriving at a reasonable  and fair market value.     8.’  In the light of these principles, the further  con- tention  that having rejected the documents produced by  the State, the High Court 373 ought  to  have relied upon the documents  produced  by  the appellant  as comparable sale and would have  confirmed  the compensation awarded’ by the Civil Court does not impress us as  well  founded. It is well settled law  that  the  amount awarded by the Land Acquisition Collector form an offer  and that it is for the claimants to adduce relevant and material evidence to establish that the acquired land are capable  of fetching  higher market value and the amount offered by  the [,and AcqUisition Collector was inadequate and he  proceeded on  a  wrong premise or principle. In Ezra v.  Secretary  of State for India, I.L.R. 32 Cal. 605 (P.C.) it was held  that the  amount awarded by the Collector forms an offer. It  was reiterated by this Court in Raja Harish Chandra v. Dy.  Land Acquisition  Officer,  [1962] 2 SCR  676;  Khorshed  Shapoor Chenai, etc. v. Assistant Controller of Estate Duty,  [1980] 2  SCR 3 15 and Dr. G.H. Grant v. State of Bihar,  [1965]  3 SCR 576. In Hari Singh’s case, A.P. Sen, J. held (and major- ity did not disagree) at p. 191 C to E that: "In a reference under s. 18 of the Act, the burden of  prov- ing that the amount of compensation awarded by the Collector is  in-adequate  lies upon the claimant, and  he  must  show affirmatively that the Collector had proceeded upon a  wrong basis. The nature and the burden of establishing that he was wrong,  depend  on  the  nature  of  the  enquiry  held   by him  ...... It is equally well-settled that where the claimant leads  no evidence  to show that the conclusions reached in the  award were inadequate, or, that it offered unsatisfactory  compen- sation. the award has to be confirmed." In  that  ease it was held that the  evidence  produced  was untrustworthy.  Same  is the view of Bombay  High  Court  in Asstt.  Development Officer v. Tavaballi, AIR’  1933  Bombay 361 at 361 D.B. and of A.P. High Court in Narsing Rao’s case and  T.W. Higgins-claimant v. Secretary of State, AIR 19  19 Cal.  1008;  Naresh Chandra Bose v. State of West  Bengal  & Ors..  AIR  1955  Cal. 398 at 399;  Smt.  Kusumgauri  Ramray Munshi  &  Ors.  v. The Special  Land  Acquisition  Officer, Ahmedabad,  AIR 1963 Gujarat 92 at 94, 95 and  Maharao  Shri

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Madansinhji v. State of Gujarat, AIR 1969 Gujarat 270. It is also the duty of the State to adduce evidence in rebuttal.     This  Court  in Chaturbhuj Panda &  Ors.  v.  Collector, Raigarh,  [1969]  1 SCR412 at 414 has  rightly  pointed  out that: 374 "It  is  true that the witnesses examined on behalf  of  the appellants  have not been effectively cross-examined. It  is also true that the Collector had not adduced any evidence in rebuttal; but that does not mean that the court is bound  to accept  their  evidence. The Judges are  not  computers.  In assessing  the value to be attached to oral  evidence,  they are  bound  to call into aid their experience  of  life.  As Judges of fact, it was open to the appellate Judges to  test the  evidence placed before them on the basis of  probabili- ties."     In Narasingh Rao’s case. 1 have dealt with in  paragraph 8 thus: "The object of the inquiry is to bring on record the price fetched or capable of fetching, the relative situation of  the land acquired and the subject of the  sale  transac- tion,  their  fertility, suitability, nature of the  use  to which  they are put to. income derive or other special  dis- tinctive  features  possessed  of by  the  respective  lands either single of some or all relevant to the facts in issue. In this process the courts are not mere umpires but to  take intelligent participation and to see whether the counsel  on either  side  are directing towards this goal or  the  court itself  to intervene in this regard." Therefore, it  is  the paramount  duty of the courts of facts to subject  the  evi- dence  to  close scrutiny, objectively assess  the  evidence tendered  by the parties on proper consideration thereof  in correct  perspective to arrive at reasonable  market  value. The  attending  facts and circumstances in each  case  would furnish  guidance to arrive at the market value of  the  ac- quired lands. The neighbour-hood lands possessed of  similar potentialities or same advantageous features or any advanta- geous special circumstances available in each case also  are to be taken into account. Thus, the object of the assessment of the evidence is to arrive at a fair and reasonable market value  of the lands and in that process sometimes trench  on the border of the guesswork but mechanical assessment has to be  eschewed. The Judges are to draw from  their  experience and  the  normal human conduct of parties  in  bonafide  and genuine sale transactions is the guiding star in  evaluating evidence. Misplaced sympathies or undue emphasises solely on the  claimants’  right  to compensation  would  place  heavy burden on the public exchequer to which everyone contributes by direct or indirect taxes.     In  V.R. Katarki v. State of Karnataka & Ors., C.A.  No. 4392/86 dated March 22, 1990 decided by Bench of this  Court to  which  one  of us (K. Ramaswamy, J.) is  a  member,  the appellant apart from other charges, was imputed with miscon- duct of fixing, in his capacity as Civil Judge at  Bagalkot, "higher valuation than was legitimate of the 375 lands."  After  conducting  enquiry he  was  dismissed  from service and when he challenged it, the High Court upheld  it on  the judicial side. On further appeal, since the  appeals against  higher  valuation were pending in the  High  Court, without  going  into  that question,  while  confirming  the dismissal  laid  the  rule thus: "We would like  to  make  a special mention of the position that even if the  assessment of valuation is modified or affirmed in an appeal as a  part of the judicial process, the conduct of the judicial officer drawable from an overall picture of the matter would yet  be

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available to be looked into. In appropriate cases it may  be opened  to draw inferences even from judicial acts"  of  the misconduct.  The  rule  of conduct  spurned  by  this  Court squarely put the nail on the official act as a refuge to fix arbitrary  and  unreasonable  market value  and  the  person concerned shall not camaflouge the official act to a  hidden conduct in the function of fixing arbitrary or  unreasonable compensation to the acquired land. Equally it is salutory to note  that the claimant has legal and legitimate right to  a fair and reasonable compensation to the land he is  deprived of  by legal process. The claimant has to  be  recompensated for  rehabilitation or to purchase similar lands  elsewhere. In  some  cases for lack of comparable sales it may  not  be possible  to  adduce evidence of sale  transactions  of  the neighbouring lands possessed of same or similar quality.  So insistence  of adduction of precise or  scientific  evidence would cause disadvantage to the claimants in not getting the reasonable and proper market value prevailing on the date of notification  under  section 4( 1 ). Therefore,  it  is  the paramount  duty of the Land Acquisition Judge  authority  to keep  before him always the even scales to  adopt  pragmatic approach  without  indulging in "facts of  imagination"  and assess the market value which is reasonably capable to fetch reasonable market value. What is fair and reasonable  market value  is always a question of fact depending on the  nature of  the  evidence, circumstances and probabilities  in  each case. The guiding star would be the conduct of a  hypotheti- cal  willing  vendor  would offer the lands  and  a  willing purchaser in normal human conduct would be willing to buy as a  prudent man in normal market condition as on the date  of the notification under section 4(1) but not an anxious buyer dealing  at  arm’s length nor facade of sale  or  fictitious sales  brought  about in quick succession  of  otherwise  to inflate the market value.     9. Let us consider the evidence on record from the above perspective  and evaluate the circumstances on record.  Shri Sanghi  repeatedly stressed that an element of guesswork  is inescapable and Ex. P. 7, 8, 9 & 10 furnish the best materi- al.  Though he relied on Ex. P. 1 to P. 3, in  fairness,  he did not press for consideration in our view quite 376 rightly  as  they are very small extents of 2-1/2; 4  and  3 cents  respectively.  They are situated in  residential  and commercial  areas.  So  they cannot be  relied  on.  But  he strongly relied on Ex. P. 7 dated March 9, 195 1. The extent is  Ac. 3-4 cents for Rs. 19,000. It worked out at  Rs.52.50 per cent. The High Court held that the lands covered by  Ex. P.  7  are situated by the side of  irrigation  channel  and paddy cultivation was carried on. Under those circumstances, the  evidence of P.W. 6, the vendor was not accepted and  in our  opinion  quite  rightly and Ex. P. 7  was  rightly  not relied as lands in  question are not irrigated lands whereas the  lands  under  Ex. P. 7 are paddy  lands  cultivated  by irrigation sources and is situated four miles away from  the acquired  lands. Similarly Ex. P. 9 is dated April 4.  1957. The  extent  is Ac. 1.38 cents for Rs.6,000. PW.  5  is  the vendor. It worked out at Rs.43.50 per cent. It is also  four miles  away from the acquired lands. It is also not  of  any assistance  to  the appellant as this land also is  a  paddy land  irrigated by irrigation sources. It is undoubted  that in  Ex. P. Ii). the judgment of the Sub Court. Ernakulam  in Land  Acquisition  Case No. 298 of 1963 etc. relate  to  the land in the vicinity of Phyto-Chemical Project and the  Land Acquisition  Court awarded (C) Rs.80 per cent for the  paddy lands  and Rs.43 per cent for dry land. The’ High Court  has

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pointed  out  that on the basis of the evidence  adduced  in that  case. namely, comparable sales, the  determination  of the market value is correct. It was held that it cannot form the  basis for determining the market value of the lands  in this  case. We have been taken through the  entire  judgment under  Ex. P. 10 and after carefully scanning the  evidence, we  are not persuaded to take a different view from that  of the  High  Court. Which has correctly appreciated  the  evi- dence.  Accordingly Ex. P. 10 also would not form a base  to fix  the market value. It is undoubtedly true that the  High Court  did not accept the evidence adduced by the State.  It was rejected both by the Civil Court as well as by the  High Court.  The  Sub Judge appears to be too  anxious  to  award whatever  is  asked for on mechanical  appreciation  without subjecting  the evidence to legal and critical scrutiny  and analysis.  The appellate Court after rejecting the  evidence may  have  to find whether there are any  circumstantial  or other  material evidence on record to fix reasonable  market value. We are relieved to undertake that exercise in view of fair  stand taken by the Learned Advocate  General.  Kerala, who  appeared in the High Court. It is clear from the  judg- ment  that  the Learned Advocate General while  arguing  the case had stated across the bar. obviously on instructions or in fairness from record, that the market value can be  fixed at Rs. 18 per cent. This is. therefore. a concession made by the  Learned  Advocate General on behalf of the  State.  The High Court, therefore, was not justified in not 377 taking into account this submission of the Advocate General. It  is  undoubted that the High Court  having  rejected  the evidence  of the claimants has to confirm the offer made  by the  Collector  in the award provided if there is  no  other evidence  on record. But in view of the concession  made  by the  Learned Advocate General, we are of the  definite  view that the claimants are entitled to the market value  Rs.  18 per cent to the lands other than those to which the  Collec- tor  awarded @ Rs.30 per cent as the reference  court  shall not  reduce  the market value to less than  awarded  by  the Collector  as enjoined under the statute. As a limb  of  the argument  Shri Sanghi has placed reliance on the  concession made  by the government pleader in the Trial Court that  Ex. P.  9 would form the basis for determination of  the  market value which worked out @ Rs.43.50 per cent. We are unable to accept the submission of the learned counsel. Any concession made  by  the government pleader in the Trial  Court  cannot bind  the Government as it is obviously, always,  unsafe  to rely on the wrong or erroneous or wanton concession made  by the counsel appearing for the State unless it is in  writing on  instructions from the responsible officer. Otherwise  it would  place tindue and needless heavy burden on the  public exchequer. But the same yardstick cannot be applied when the Advocate  General has made a statement across the bar  since the Advocate General makes the statement with all  responsi- bility.  In  those circumstances we have  no  hesitation  to accept  the statement of Learned Advocate General  and  hold that the market value of the lands would be fixed at Rs.  18 per cent. From the very nature of compulsory acquisition  15 per cent solatium as additional compensation was statutorily fixed.  Therefore,  determination of additional market value is unwarranted.     10. It is next contended that the claimants are entitled to  the severence charges and injurious effects on  the  re- maining lands of the claimant. From the evidence it is clear that  the  Commissioner who collected the evidence  in  this regard has admitted in the crossexamination that the  appel-

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lant  did not expend any money in erecting  boundary  walls, bridges,  projects etc. It is an admitted fact  that  though from the date of the acquisition till date of evidence  more than  six years have passed by, the appellant has  not  pro- duced any material or account books of the Estate to  estab- lish that they have expended any money in this regard. It is also  admitted by both the engineers examined on  behalf  of the  State  and  also appellant’s witnesses  that  the  road passing through the lands is being used by the appellant  to carry  his goods i.e. his forest produce etc. Though  during rainy season that too for a short period at some places  the water get stagnated on the 378 roads  at lower levels but that stand no impediment for  the carriage  of  the goods as admitted by the  witnesses.  This phenomena  was prevalent even before acquisition.  In  these circumstances  we entirely agree with the High Court in  its finding  that  the appellant has not established  that  they have  expended  any money for erection of  retaining  walls. culverts.  bridges etc. There is no damage. due to  acquisi- tion of the land of the appellant and. therefore. the  award of  severence charges is unwarranted. Both the counsel  have taken  us  through the material evidence of PW. 7,  8  &  9. C.P.W.  1 and C.P.W. 2 examined on behalf of the  State.  We have  once again carefully scanned the evidence and  we  are satisfied that the High Court has thoroughly considered  the evidence of all the witnesses and reports of the Commission- ers.  The  High Court is well justified in arriving  at  the finding  that the appellant has not expended any  money  for either constructing any boundary walls. culverts. bridges or roads  etc. The value of the land of the appellant  has  not been injuriously effected due to acquisition. No damage  due to  severence  was  caused. Under  these  circumstances  the appellant  is not entitled to compensation in  this  regard. When we have pointed out that the appellant is not  entitled separately to the value of the land and the trees as  poten- tial  value  as fruit bearing one. The  counsel  agreed.  on instructions, that they would confine to fix market value of the lands.     11. The only question then remains is whether the appel- lant  is  entitled to payment of interest on  solatium.  The High  Court  relied on Union of India v. Shri  Ram  Mehar  & Anr., [1973] 2 SCR 720 and rejected the claim for interest. Section 25(3) of the Regulation reads thus:     "If  the sum in the opinion of the court,  the  Division Peishkar ought to have awarded as compensation is in  excess of  the  sum which the Division Peishkar did  not  award  as compensation,  the  award of the court may direct  that  the government  shall  pay interest on such excess  @  Rs.6  per centum per annum from the date on which the Division  Peish- kar  took possession of the land to the date of  payment  of such excess in Court " A reading thereof does postulate that in  the  opinion of the Court the Land  Acquisition  Officer ought to have awarded compensation in excess as found by the court.  then the court may direct that the government  shall pay  interest @ 6 per centum per annum on the excess  amount so  found  as compensation. The payment should be  from  the date, the land was taken possession by the Division Peishkar till  the  date  of the payment of the  excess  amount  into court. 379 The  question, therefore, is whether "interest" is an  inte- gral  part of the word "compensation" under sub-section  (3) of Section 25 of the Regulation.     12.  In Shri Ram Mehar’s case, the question came up  for

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consideration  was  whether the words  "interest  on  market value"  in Section 4(3) of the Land  Acquisition  (Amendment and Validation Act, 1967) would include payment of  interest on  solatium. Additional 15 per cent  solatium  undersection (2)  of Section 23 certainly forms part of  compensation  as under section 23 the market value of the land would  include solatium.  But  market value and compensation  are  distinct expressions and have been used as such in the Land  Acquisi- tion Act. The key to the meaning of the word  "compensation" is  to  be found in Section 23(1) which consists  of  market value and solatium on the market value which is stated to be compensation.  Therefore,  this  Court held  that  the  term market value has acquired a definite connotation in judicial decision.  If  the word market value and  compensation  were intended by the legislature to have the same meaning, it  is difficult  to  comprehend why the word compensation  in  ss. 28(a) and 34 and nor market value was used. So market  value cannot  be  equated to compensation. The  market  value  is, therefore,  only one of the components in the  determination of  the amount of compensation, if the legislature has  used the word "market value" in Section 4(3) of the Amending Act, it  must be held that it was done deliberately and what  was intended  was that interest should be payable on the  market value  of  the land and not on the amount  of  compensation. Otherwise, there is no reason why the Parliament should  not have employed the word compensation in the aforesaid  provi- sion  of the amended Act. Webster Comparative Dictionary  at p. 267, the word compensation defined (I) the act of compen- sating or (2) that which compensates payment.     In   Stroud’s  Judicial  Dictionary,   Fourth   Edition, Volume-I  at p. 523 compensation defined (Defence  Act  1842 (c.  94),  s. 19) includes not only the value  of  the  land taken but also damage for severence or injuriously effecting other  lands belonging to the owner of the land  taken,  al- though  the  Act contained no such clause  as  Land  Clauses Consolidation  Act, 1845. The word compensation is  used  to recompensate  or reparation to the loss caused to the  owner of  the land. Therefore, we have no hesitation to hold  that Section 25(3) contemplates payment of interests on  solatium to  recompensate the owner of the land for loss of  user  of the  land  from the date of taking possession till  date  of payment into court. The word compensation has been advisedly used by the legislature. Accordingly we hold that the appel- 380 lant is entitled to interest on solatium.     13. We allow the appeals to the extent indicated  above. The market value is fixed at Rs. 18 per cent and confirm the market value at Rs.30 per cent for wet lands awarded by  the Collector. Solatium at Rs. 15 per cent and interest at 6 per cent  on the excess market value determined under the  judg- ment  including solatium from the date of taking  possession till the date of payment. In other respects the judgment  of the  High Court is confirmed and in the  circumstances,  the parties are directed to bear their own costs throughout. P.S.S.                          Appeals allowed. 381