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PETITIONER: SPECIAL DEPUTY COLLECTOR & ANR. ETC.

       Vs.

RESPONDENT: KURRA SAMBASIVA RAO & ORS. ETC.

DATE OF JUDGMENT:       29/04/1997

BENCH: K. RAMASWAMY, S. SAGHIRAHMAD, G.B. PATTANAIK

ACT:

HEADNOTE:

JUDGMENT:     WITH     CIVIL APPEAL NOS. 3795-3814OF 1997 [Arising out  os SLP  (C) No.15841/95 and SLP (C) No. 11355- 373/96 (CC-702)  O R D E R      Delay condoned.      Substitution ordered.      Leave granted.      This batchof appeals relates to the acquisition of the lands of 97 acres 42 cents of land situated in the outskirts of the Tenali town of Guntur District in the State of Andhra Pradesh. The  lands were acquired for the development of the colony for  theweakersections-middleincome group persons etc.  The  notification underSection 4(1)  of  theland Acquisition Act was publishedon December 9,1980. TheLand Acquisition officer  awarded compensation  Rs. 22,940/- per acre for  levelled up  land and Rs. 21,700/-per acre for unlevelled land. On reference, the Subordinate judge, Tenali by hisaward  and  decree,  dated  February  26,1991  award uniformcompensation atthe rate of Rs.1,00,000/- per acre. On appeal  by  the  appellantsas  well  as  the  claimants respondents, the  High court  by judgment  and decree  dated March 23,1994,furtherenhanced  the  compensation  to Rs. 23.50 per  sq. yard;  thus it  allowed the  appeals  of the respondent-claimants and  dismissed those of the appellants. Thus, these  appeals by special leaveand cross appeals by the  respondent-claimants   for  further   enhancement  of compensation. They are disposedof by common order.      The High  Court, after  rejecting the  entire  evidence adducedby  theclaimants relied only on a saledeed, Ex. A- 12 dated  May 19,1978  relatingto  a piece  ofland  of  an extent of  250 sq. yardwith a thatchedhouse. It worked out compensation at the rate  of Rs. 48/- per sq. yard; onthat basis, it  gavemarginof deduction  of 50%  of the awarded compensation, namely,  at the rate of Rs. 23.50per sq.yrd. The question  for consideration is; whether  the  principle laid down  by the  HighCourt  is correct  in law?  Theland Acquisition  officer  in  his  award  had  referred  to the topographical features of the land thus.      "The landsunder acquisition form a

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    compact  block  surrounded on  the      north  by Tenali-Guntur Railway      Track, onthe east  by lands owned      bySouth  Central Railways.  On the      south  by landswhich  abut  the      Tenali-Guntur highway roadand also      built up area in T.S. No.22 (in the      case for  T.S. No.27)  and on  the      west by  Agril lands.  T.S. No.  26      and 29  which fall in the compact      block have already been  acquired.      The beneficiaries have raised a few      huts here and there. R.S. No. A-250      also formspart ofthe block and it      is under acquisition  for  house      sites    for     weakersections      separatelyunder aseparate scheme.   All the  lands  in  the  block      under acquisitionbarringa  few I      velled  up  fields   are similar      because ofthe following reasons      (1)  All the landsare more or less      equally   inaccessible   from   the      township.      (2)  All the  lands (excepting  few      levelled up fields) are read as wet      paddy  fields   similar   in   soil      fortility and productivity.      (3)  Excepting the few levelled on      plots to  level each  of the  under      acquisition, similar  levelling  up      cost is  requiredto  beincurred      which works  out  to  approximately      Rs. 60,000/-per  acre in  the  most      conservative  estimate.   All   the      lands under  acquisition have equal      potentiality or  otherwiseof being      used as house sites.   In between  the blockof lands      under acquisition,there is channel      running  in  North-south  direction      and it touches theGuntur Narakodur      Tenali Road. The channel is now not      inuse.   A metal  roadhas  been formed      along with the channel bythe side      ofTS. 15 to make across from truck      road to  the built up area in T.S.      Nos. 23 and 22.   T.S. No. 142 and T.S.Nos. 12,      13, 14  and 16  which are not under      acquisition fieldin  between  the      lands  under  acquisitionand  the      Guntur-Narakodur Tenali   Road.      Unless these  fields are  developed      into Township, there is noprospect      of the   lands  under  acquisition      features of a township.   Onlya   few  fields   stand      classifiedin  accounts as semidry      and all  others stand classified as      wet. Notwithstanding  the variation      inclassification, all  the  lands      under acquisitionexecuting a  few      levelled up  plots are  wet  paddy

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    fields onground. The  few  lands      which were not  grown  with  paddy      were cultivated with dry crops like      banana, sugar and chillies. To make      the   lands    under    acquisition      suitable  for   house  sites,   the      levels have to be raised by about 2      to3  feetto  make  themfit  for      building purposes. There can be no      two opinions  about the  difficulty      that is presently being experienced      by    personswhopurchase      Agricultural lands in Tenali  Town      ingetting earth rooted  to  those      lands forlevelling themup. From      the experience of the  Municipality      which understood levellingwork for      provisionof   houses  to  weaker      sections of  the society, it can be      said withcertainty thatthe cost      involved  in   levelling  up  these      lands  to makethem   fit   for      residential purposes  would be  not      less than Rs. 60,000/- peracre.’      Onthe  basis of  the above factual material collected, the land  Acquisition officer passed his award.The question arises:whether the acquired  lands possessedof potential value for  being used  as building sites? The High Court has found, as pointed out by Shri Sudhir Chandra, learned senior counselfor  the claimants,  that the lands arepossessed of potential value for being  used for building purpose. It is well settled  legal position that the claimantsstand in the position of  plaintiffs. Burden of proof  is always  on the claimants to  prove byadduction of  cogent and  acceptable evidence that  the lands  are  capableof  fetching  higher compensation than what is determined bythe land Acquisition officer, whichis only an offer.  If the award is accepted withoutprotest,  it binds  theparties.  It is the bounden duty of the court  to evaluatethe evidence onthe basis of the human  conduct, even if no rebuttalevidence is produced by theLand Acquisition Officer, to assess themarket value applying the  relevant tests laid down by this Court inbead role of decisions. InPeriyarand  PareekanniRubbersltd. V/s.  State  of Kerala [(1991)  4  SCC  195], this  Court considered theentire case  law as  onthat  date,  on the principle of  determination of market value andthe relevant test laid  in that  behalf. The burdenof  proof  that the amount awardedby the land AcquisitionOfficer/Collector is not adequate  is always on the claimant. Theburden is to adduce relevant and material evidence to establish that the acquired landsare capable  offetching highermarket value than  the   amount   awarded   by   the  land Acquisition officer/Collector   or  that  the land Acquisition Officer/Collector proceeded  ona wrongpremiseor applied a wrong principle of law.  The object  of the  enquiry  in  a reference under Section 18 of the Act is to bring on record the price  which the  land under  acquisition was capable of fetching  in   the  open  market  as  on  the  date  of the notification. The  relative situation  of the  acquiredland which is  the subject of the sale transaction, the nature of the land,  its suitability,  nature ofthe useto which the lands are  put to  on the  dateof  thenotification, income derivedor  derivable from  or any other special distinctive feature whichthe  land  is  possessed  of  and  thesale transactions  in  respect  of  lands  covered  by  thesame

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notification, are  all relevant factors to  be takeninto consideration  in  determiningthe  market  value.  It is, therefore, theparamount dutyof thecourts of  facts  to subjectthe  evidence to  very close  scrutiny, objectively assess the  evidence  tenderedby  the parties  on  proper consideration thereof  in correct  perspective to  arrive at adequate and  reasonable market value.The  attending facts and circumstances  in each  case wouldfurnishguidance  to arrive at  the market  value of the acquired  lands. it  is equallyrelevant  to consider the neighbourhoodlands as are possessed  ofsimilar potentiality  or  anyadvantageous features or  any special  circumstances available  ineach case. The  Court is  required to  take into  account all the relevant considerations.  The Court  isrequired  to Keep at the back  of its  mind that  the object of assessment is to arrive at reasonable and adequate market value of the lands. In thatprocess, thoughsome guess workis involve, feats of imagination should  be eschewedand mechanical assessment of the evidence  should beavoided. Even in the absence oforal evidence adduced  by the  land Acquisition  officer  or the beneficiaries the  judges are  to draw from their experience the normal  human conduct  of the  parties and bona fide and genuinesale transactions are guiding star in evaluating the evidence. Misplaced  sympathiesor  undue emphasis solely on the claimants’right to compensation would place very heavy burden on  the public  exchequer  to  which  other  everyone contributes by direct or indirect taxes.      Whether fair  and reasonable  and adequatemarket value is always  a question  of   fact  depends  on  the  evidence adduced, circumstantial evidence, and probabilities arising in each case. The  guiding star  or the  acid test would be whethera  hypotheticalwillingvendor would offer the lands and a  willing purchaser  in normal  human conduct  would be willingto  buyas  a prudent  man in  normal human  conduct would be  willing to  buy as  aprudentman in normal market conditions prevailing  in the open market in the locality in which the  acquired lands are situated as on the date of the notification under  Section 4  (1) of  the Act; but not  an anxiousbuyer dealing at arm’s length with throw away price, nor facade  of sale  orfictitious  sales brought  about  in quick succession  or otherwiseto inflate the market value. The judge  should sit  in the  arm chair of thesaid willing buyer and  seekan  answer to  the question  whether in the given set of circumstances as aprudentbuyer he would offer the same  market valuewhich the  court proposed to fix for the acquired  lands inthe available market conditions. The court is therefore, enjoined with the bounden duty of public function and  judicial dispensation  indetermination of the marketvalueof  the  acquired   land   and  compulsory acquisition.      The best evidence of the value of propertyare thesale transaction inrespectof  theacquired  land to  which the claimant himself  is a party; the time at whichthe property comes to be sold; nature of theconsideration and the manner in which  the transaction  cameto  be brought out. They are all relevant  factors. In  the absenceof such a saledeed relating  to   the  acquired  land,  the  saletransactions relating to  the neighbouring  lands in the vicinity of the acquired land.In that case, the  features required  to be presentare  ; it  mustbe  within a  reasonable time of the date  of   thenotification;it  must   be  a  bonafide transaction; itshould be a sale of land similar to theland acquired or  land adjacent  to the  land  acquired;  and  it should possesssimilar advantageous  features.  These are relevant features  to be  takeninto  consideration to prove

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the market  value of the acquired land as on the date of the notification publishedunder Section 4(1) of the Act.This would be  established by  examining either the vendor or the vendee.If  it is  proved thatthey are  not available, the scribe of  the documentmay also be examined inthat behalf. Sect 51-A  of the  act only dispenses with the production of the original sale deed and directs to receive certifiedcopy for thereason that parties to the saletransaction would be reluctant  topart  with  the original  sale deed  since acquisition proceedingswould take longtime before award of the compensation  attains finality  andin the meanwhile the owner of  the sale deedis precluded from usingthe same for other purposesvis-a-vis thisland.  The  marking  of the certified copyis perse is  not  admissiblein  evidence unless it is duly proved and the witnesses, viz., the vendor or  the vendee,  are  examined.  Thisprinciple  hasbeen repeated in a catena ofsubsequent decisions ofthis Court.      InBasant Kumar & Ors. V/s. Union of India& Ors. [1996 (11) SCC  542],  this Court  pointed out  thatdoctrine  of equality  in   determination  of   the payment   ofsame compensation  to   allclaimants   covered  by  thesame notification, is  not a good principle. Treating the entire villageas  oneunit  and uniformly determiningcompensation that basis is not sustainable in law.  The Court must always determine  market   value  prevailing  as  on  the  date  of notification under Section 4 (1) of theAct andnot what was claimedby  theparties.  Even estimate of claimant  is not decisive. The  status of  the claimant is irrelevant. It was reiterated that while determining  the compensation  under section23  (1), the  Court should sit in the arm chairof a prudentwilling purchase in the open market and see whether he would  be willing  to offer the sameprice as is proposed to be  fixed bythe Land Acquisition Officer asmarket value for  the   same or  similar  lands  possessedof  all the advantageous features.This test  should always  be kept in mind in analysing theevidence and the Court should answer affirmatively taking  into consideration  all  the  relevant factors. If  feats of  imagination are allowed the sway, the land Acquisition  Officer/collector would  overstep judicial decisions/quasi-judicial ordersand would land in misconduct amenable to disciplinary law. In that case, thecompensation as fixed  by the  Land Acquisition  officer was reduced. In Special landAcquisition  Officer,Dharwad V/s.  Tajar Hanifabi (Smt.)[(1996)10 SCC 627], the question related to determination of  the market  value in respect of 6 acres of land. When  theland  in  factwas  used  foragricultural purpose, no prudent andwiling vendee would offer the market value  on   square  foot   basis.    Thus  determination  of compensation on the basis  of square foot basis on thefoot of a small saletransaction washeld tobe a wrong principal of lawand  according the determination of compensation was reducedfrom Rs. 1,96,20\- per acre to 45,000/-per acre.      InAgricultural  Produce  Market  Committee  V/s.Land Acquisition   officer and Asstt. Commissioner &Anr. [(1996) 10 SCC 629], same view was reiterated. It was held thatwhen a total7 acresand oddof landwas sought to be acquired no prudentpurchaser in the open market would offer to purchase the open  land on square foot basis that too onthe basis of a few  small sale  transactions. This court pointed outthat such  fixation of  the   market  value   wasillegal and accordingly reduced themarket value.      Itwould  thus b  be settled  lawthat  the  court  is enjoined to  determine the  market value  on an   objective assessment of  the conditions prevailing in theopen market; the nature of the user of the land to which theland was put

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on  the  dateof  the notification,the  income  derived therefrom and  all other  relevant attending  circumstances. The market  value so determinedshould be just,adequate and reasonable. Inother words,  it must  be just equivalent to what the land is capable of fetching inthe open marketfrom a  willing  and prudent  buyer,  Therefore,  the  court  is required to  sit in thearm chair of a bona fide willing and prudentpurchaser  in the  openmarket and seekan answer to the question  whether in  the conditions  prevailing in the market he  would offerthe same  market value as  the court has proposed.      The HighCourt  has relied  upon the  oral  evidence adducedby  theclaimants in support ofthe Claim. It is not in dispute,  aseven  pointed out  by the  Land Acquisition Officer, that there is colony and railway shed etc. near the acquired lands. But the question is: whether on the date of the notification, the lands possessed of potential value and were fit   foruse asbuilding site?On thebasis of the evidence adduced beforethe land Acquisition officer and the contents of theaward which is always part of the record and material evidence,  it is difficult to accept the contention of ShriSudhir Chandra that thelands possessedof potential value for  being used  for building  purpose. Except a small fraction of land, the elands are agricultural lands. Tomake them  fit   for construction, evenaccording   to the conservative estimate,an amount  of Rs.  23.50 per acre to level up  the same.  Itwould  be figment  of imagination to believethat  aprudent builder woulddo  that.  TheHigh Court, therefore,  is clearly in error in treating the lands as fitfor building  purpose and  on that basis determining the compensation after giving the deduction.      The question,  therefore, arises:what is the  market value the  lands were capable to fetch?In a reference under Section18,  asheld  earlier, the burden of proof always is on theclaimants to  establishthat the lands are possessed of advantageous features and  are,  therefore, capable  of fetching higher marketvalue than whatis determined by the Land Acquisition  Officer in  his awardunder Section 11. In view ofthe fact that the High Court itself hasrejected all the sale  deedsexcept Ex. A-12which we are now constrained to reject,  andas no other evidence isavailable, we cannot allow the  appeals anddismissthe  reference. The  Court, insteadof  indulging into  feats of imagination, should sit in thearm chair  of a prudent willing  purchaser  in the normal conditions  of the  market and  seek  answer  to the question whether  he would  be willingto offer  the amount proposed by  the court, after taking into consideration all the features  of the  land existing  ason  thedate  of the notification . In view of the material collected by theland Acquisition officer  himself as referred in  the award,  we think that  after taking into consideration allthe relevant factors, the  reasonable compensation should beRs. 50.000/- per acre. The compensation is accordingly awarded.      The question  thenis:  whether the  claimants arealso entitled to  additionalamountunder Section  23(1-A)? The notification under  Section 4(1)  of the  Act was  issued on December 9,  1980. The possession was taken on June 20,1981. The Amendment  Act 68 of 1984 was introduced onthe floor of the  House  onApril  30,  1982.  Thus it  is clearthat possession wastaken prior to the introductionof Amendment Act. However,  award under  Section  11 was  made  onJune 19,1982,  i.e., after the  introduction of  the bill but before the  Actcame  into force.  It would be beneficial to refer to  the transitional  provisions contained  in Section 30(1) (a) of the Amendment Act which reads as under:

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    "30. Transitional Provisions. - (1)      The provisions of sub-section (1-A)      ofSection 23 ofthe    principal      Act, as  inserted by  clause (a) of      Section  15   of  this  Act,  shall      apply, and shall be deemed to have      applied, also  to,and  inrelation      to,-   (a)  every proceeding for the        acquisition of  any  land        under the  principal  Act        pending on  the 30th  day        of April,  1982 (the date        of  introduction of  the        Land     Acquisition        (Amendment)  Bill,  1982,        in  the Houseof   the        People, in whichno award        has  been   made by  the        Collector   before   that        date;"      InK.S. Paripoornan V/s. state of Kerala &Ors. [(1994) 5 SCC  593]  the Constitution Bench considered the effect of the transitional provisions in section 30 (1) (a). The right to additional  amount 12  per cent  per annumon  enhanced compensation was  heldto  bepart  of  the  component  of determination  of  compensation.  If  the  proceedingswere pendingas  on the  date the notification underSection4(1) came into  force, the  provisions of the Amendment Act 68 of 1984 would apply. By operation of the transitional provision in  Sections   30(1)  (a),   the  claimant  isentitled  to additional amount @12 per cent per annum to be paid from the date ofthe notification under Section 4(1) till the date of depositinto  court and where the  possessionwas  already taken, from  the date  of the  notification till  taking  of possession. Similar view was reiteratedin special Tahsildar (LA) P.W.D.  Schemes, Vijaywada V/s. M.A.  Jabbar [(1995) 2 SCC 142]  and Khanna Improvement Trust V/s. Land Acquisition Tribunal  &  Ors.  [(1995)  2  SCC  142].  Accordingly, the respondent-claimants are  entitled to  payment of additional amount@12  per  centper  annum  from  the  date  of the notification till date of the taking possessionas mentioned hereinabove.      Payment ofadditional amount underSection23(1-A)is a substantive right.  Under those circumstances,by operation of thetransitional provisions in Section  30(1)(a), the claimants are  entitledto  theadditional amount at 12% per annum under  Section 23 (1-A) from thedate ofnotification under Section  4(1) till  that date  of taking possession. Insteadof  Rs.1,00,000/-  peracre,  they are entitled to compensation atthe rate of Rs.50,000/- per acre in respect of allacquired landswith solatium at 30% onthe enhanced compensation and  interest @  9% for  one year from June 20, 1981 and  on expiry thereof, @ 15% tilldate ofdepositinto the court;  andadditional  amount. Consequently,  the award and decree  ofthe  referenceCourt  stand  modified. The judgment of theHigh court Stands set aside.      The appeals  are accordingly  allowed. As a result, the cross appeals  of the  respondent-claimants stand dismissed. No costs.