Dismissed

The State of Maharashtra v. Dnyaneshwar K. Phadtare

Bombay HC8 Oct 2008FA/486/2000

Case brief

AI extract

What is this about?

The High Court dismissed the State's First Appeals against LowerReferences enhancing land acquisition compensation. Upholding the Lower Reference Court's award, the Court held that the principle of averaging relevant sale instances and applying limited guesswork is legal. The Court found no fault in determining fair market value based on evidence and declined to apply deductions as the State faile

What did the court decide?

All First Appeals filed by the State are dismissed. Civil Application No. 7162 of 2006 is disposed of as infructuous. Costs to each party.

The State of Maharashtra Vs Dnyaneshwar K. Phadtare — Land Acquisition | Bombay HC (2008)

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY

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CIVIL APPELLATE JURISDICTION

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FIRST APPEAL NO. 486 OF 2000 ALONG WITH

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FIRST APPEAL NOS. 487, 488, 489, 490, 491, 492, 493, 494 AND

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495 OF 2000

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AND

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CIVIL APPLICATION NO.3131 OF 2004

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FIRST APPEAL NO.488 OF 2000 AND

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CIVIL APPLICATION NO. 7162 OF 2000 IN

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FIRST APPEAL NO. 492 OF 2000

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FIRST APPEAL NO. 486 OF 2000 IN

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L. A. R. NO. 431 OF 1993

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The State of Maharashtra ) (Through the Special Land Acquisition ) Officer, No. 22, Pune.) ).. APPELLANT

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Versus

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Dnyaneshwar Disanrao Phadtare ) Age 38 yrs., Occ.: Agriculture ) R/o Koregaon Bhima, Tal. Shirur ) District Pune ).. RESPONDENT

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ALONG WITH

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FIRST APPEAL NO. 487 OF 2000 IN

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L. A. R. NO. 424 OF 1993

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The State of Maharashtra ) (Through the Special Land Acquisition ) Officer, No. 22, Pune.) ).. APPELLANT

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Versus

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Namdeo Mahipati Salunke Age Major, Occ.: Agriculture 2) Amrute Mahipati Salunke Age Major, Occ.: Agriculture

)

)

)

)

Both R/o Koregaon Bhima, Tal. : Shirur District : Pune.

)

).. RESPONDENTS

WITH

FIRST APPEAL NO. 488 OF 2000 IN L. A. R. NO. 425 OF 1993 WITH CIVIL APPLICATION NO. 3131 OF 2004

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The State of Maharashtra ) (Through the Special Land Acquisition ) Officer, No. 22, Pune.)

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).. APPELLANT

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Versus

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Bapurao Khanoji Gavhane ) Age 55 years, Occu.: Agriculture )

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R/o Koregaon Bhima, Tal.: Shirur Dist. : Pune.

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)

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).. RESPONDENT

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WITH FIRST APPEAL NO. 489 OF 2000 IN L. A. R. NO. 427 OF 1993

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The State of Maharashtra ) (Through the Special Land Acquisition ) Officer, No. 22, Pune.) ).. APPELLANT

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Versus

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Devram Raghunath Dherange Age Major, Occu. : Agril. R/o Koregaon Bhima, Tal. Shirur District : Pune.

)

) ) ).. RESPONDENT

WITH

FIRST APPEAL NO. 490 OF 2000 IN L. A. R. NO. 428 OF 1993

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The State of Maharashtra ) (Through the Special Land Acquisition ) Officer, No. 22, Pune.) ).. APPELLANT

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Versus

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Sopan Vithu Dharange (Deceased through his legal heirs) 1) Kacharu Sopan Dharange

) )

)

Suman Kisan Taware ) 3) Mrs Vimal Sakharam Abhale ) R/o Koregaon Bhima, Tal. Shirur ) District : Pune.

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).. RESPONDENTS

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WITH FIRST APPEAL NO. 491 OF 2000 IN L. A. R. NO. 429 OF 1993

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The State of Maharashtra ) (Through the Special Land Acquisition ) Officer, No. 22, Pune.) ).. APPELLANT

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Versus

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Vithoba Sadashiv Gavhane ) Age Major, Occu. : Agril. ) R/o Koregaon Bhima, Tal. Shirur ) District : Pune. ).. RESPONDENT

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WITH FIRST APPEAL NO. 492 OF 2000 IN L. A. R. NO. 432 OF 1993 WITH CIVIL APPLICATION NO. 7162 OF 2000

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The State of Maharashtra ) (Through the Special Land Acquisition ) Officer, No. 22, Pune.) ).. APPELLANT

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Versus

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Daulata Jayanwanta Gavhane )

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Age 60 Yrs., Occ.: Agriculture ) R/o Koregaon Bhima, Tal. Shirur ) District : Pune. ).. RESPONDENT

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WITH

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FIRST APPEAL NO. 493 OF 2000 IN L. A. R. NO. 433 OF 1993

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The State of Maharashtra ) (Through the Special Land Acquisition ) Officer, No. 22, Pune.) ).. APPELLANT

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Versus

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Maruti Baban Dharange Age 65 Yrs., Occ.: Agril. R/o Koregaon Bhima, Tal. Shirur District : Pune.

)

)

)

).. RESPONDENT

WITH

FIRST APPEAL NO. 494 OF 2000 IN L. A. R. NO. 434 OF 1993

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The State of Maharashtra ) (Through the Special Land Acquisition ) Officer, No. 22, Pune.) ).. APPELLANT

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Versus

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Popat Baburao Kashid Age 45 years, Occ.: Agri. 2) Jagannath Baburao Kashid Age 42 years, Occ.: Agri. R/o Koregaon Bhima, Tal. Shirur District : Pune.

)

) ) )

)

).. RESPONDENTS

WITH

FIRST APPEAL NO. 495 OF 2000 IN

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L. A. R. NO. 436 OF 1993

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The State of Maharashtra ) (Through the Special Land Acquisition ) Officer, No. 22, Pune.) ).. APPELLANT

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Versus

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Shankar Ganu Dharange ) Age Major, Occu. : Agri., ) R/o Koregaon Bhima, Tal. Shirur ) District : Pune. ).. RESPONDENT

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Mr A R Patil, Assistant Government Pleader, for the Appellants.

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Mr P N Joshi for the Respondents.

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CORAM : SWATANTER KUMAR, C.J. AND A.P. DESHPANDE, J.

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JUDGMENT RESERVED ON : 9TH SEPTEMBER 2008 JUDGMENT PRONOUNCED ON : 8TH OCTOBER 2008

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JUDGMENT (PER SWATANTER KUMAR, C.J.)

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By this judgment, we are disposing of ten First Appeals

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filed by the State of Maharashtra against the Judgment and Award

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dated 9th August 1999 passed by the 4^th Joint Civil Judge, Senior Division, Pune, in Land Reference Nos.431 of 1993. By the said Judgment, the Reference Court had disposed of nine Land References, namely, Land Acquisiution Reference Nos.434 of 1993, 425 of 1993, 427 of 1993, 428 of 1993, 429 of 1993, 432 of 1993, 433 of 1993, 434 of 1993 and 436 of 1993.

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Civil Application No. 3131 of 2004 is filed in First Appeal No. 488 of 2000 for bringing on record the legal heirs of Claimant. There is no opposition. Hence, Civil Application allowed. Necessary steps be taken for bringing the legal heirs on record. Civil Application is disposed of accordingly.

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The Appropriate Government issued a Notification under Section 4 of the Land Acquisition Act, 1894 (hereinafter referred to as “the Act”) on 27^th July 1988 declaring its intent to acquire nearly 182 Hectares and 98 Ares of land falling in the revenue estate of the village Koregaon Bhima, Taluka Shirur, District Pune. The land was

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sought to be acquired for a public purpose, namely, “Rehabilitation of Chasakman Project Affected Persons”. Last of the Notification was published on 10^th October 1988, while the same was published in the newspaper on 3^rd October 1988. However, Corrigendum to the Notification was issued on 8^th /9^th September 1989, which Corrigendum was published in official Gazette on 5^th October 1989. After issuance of declaration under Section 6 of the Act and following the prescribed procedure of law, the Special Land Acquisition Officer (SLAO) made his Award under Section 11 of the Act on 28^th February 1991. While categorizing the land into different groups, the said Officer awarded following compensation :

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------------ Group ------------	--------------------------- Jirayat ---------------------------	--------------------------- Bagayat ---------------------------
I	Rs.14,500/- p.h.	Rs.21,750/- p.h.
II	Rs.19,000/- p.h.	Rs.28,500/- p.h.
III	Rs.25,000/- p.h.	-
IV	Rs.30,000/- p.h.	Rs.45,000/- p.h.

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Notices under Section 12(2) of the Act is stated to have been served upon the Claimants on 14^th March 1991. Dissatisfied

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with the extent of compensation awarded to the Claimants by the Collector, they filed References under Section 18 of the Act claiming compensation at the rate of Rs.2,50,000/- per hectare. These Reference were referred to the Reference Court. These References were tried in accordance with law and the Reference Court vide its Award dated 9^th August 1999 enhanced the compensation payable to

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the Claimants and granted the following relief to the Claimants :

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“1. Reference is allowed with costs.

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Opponent do pay Rs.4,30,000/- to the claimant for the land acquired 2 Hec. Gat No. 211 situated at Village Koregaon Bheema Tal. Shirur District Pune. The amount awarded by the court Rs.50,000/- amount paid by S. L. O. is Rs.50,000/-. Hence the amount payable Rs.4,50,000/- @ Rs.2,50,000/- per hect.

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Opponent do pay solatium @ 30% of the market value and 12% component from the date of notification till the date of award.

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Opponent do pay interest @ 9% p.a., from the date of possession for the period of 1 year and 15% p.a. From the date of expiry of 1 year till the amount paid by S. L. O. and court of the L. A. Act.

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Award be drawn accordingly after depositing the deficit court fees. “

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Before the Reference Court, to substantiate their claim for

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awarding of higher compensation, the Claimants had stated that their lands are included in D-Zone (which is called as Industrial Zone) and were so covered even in the year 1983 at the time of issuance of the Notification under Section 4 of the Act. The land thus should have been treated as non-agricultural land and compensation should have been awarded to them on such basis. The Claimants had led oral and documentary evidence. Some of the Claimants examined themselves as their witness and had averred with regard to the location and potential of the land. PW-1 Dnyoba Kisanrao Phadatare, whose statement was recorded at Exhibit 8, stated with regard to various matters which had a direct bearing on enhancement of the compensation. The Claimants had produced various sale instances to substantiate their claim for higher compensation. State hardly led any evidence to refute the claim of the Claimants. The Reference Court in its judgment had framed four issues which were answered in the affirmative and on the basis that the Claimants had proved that compensation awarded by the Collector was improper and inadequate keeping in view the prevalent market value of the land. The Reference Court considered the following sale instances adduced by

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the Claimants :

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--Sr. Document Area of Price as Date Rate Price Total rate No. at Exh. Land per Sale of per Incre- per Hec. Deed Deed Hec. -sing Relevant Rate

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22 13.75 R 66600 484800 19.11.87 12% 542416/2. 23 80 R 170000 212500 30.5.86 24% 263500/3. 24 41 R 96000 234146 21.7.89 234146/4. 26 19 R 32500 171052 21.8.85 233630/5. 27 19 R 32500 171051 21.8.85 232630/------------------Total average price of 5 Hec. Land Rs.1503322/------------------So price per hectare is Rs.3,01,064/-

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Taking an average of the above sale instances and granting 12% increase per year in the market price, while following some of the judgments of this and another High Courts, the Reference Court proceeded to record that the market value of the land would be Rs.2,50,000/- per hectare and granted other statutory benefits to the Claimants.

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The correctness and legality of the findings recorded by the Reference Court are questioned before us primarily on the ground that the findings are not supported by any evidence and the Reference Court has applied the “principle of average” which could hardly be applied to the facts and circumstances of the present case and that the sale instances relate to small pieces of land and, therefore, there ought to have been deduction made on account of development and large acquisition.

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As already noticed, according to the Claimants, their lands are non-agricultural lands and they are owners of small pieces of land and the land was being acquired for resettlement scheme. There was hardly any occasion for applying the principle of deduction to the amount of compensation determined by the Court. Further, it is the stand of the Claimants that various lands which had been taken into consideration in determining the average price of the land are the ones which are similarly situated and are at somewhat similar location and have same potential. We are unable to accept the contention on behalf of the State that the findings of the Reference Court are based

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on no evidence or can be held to be perverse finding on appreciation of evidence. It is more than evident from the record that the Claimants had led documentary and oral evidence to prove their case for enhancement. It is the strange stand of the State that these findings are based on no evidence in face of the fact that they chose not to produce any evidence, documentary or oral. The Claimants examined themselves to give proper description of their lands.

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The learned Counsel appearing for the State places reliance upon the judgment of the Supreme Court in the case Printers House Pvt. Ltd. vs Mst. Saiyadan (Deceased) by Lrs. and others. (1994) 2 SCC 133 , to contend that the sale instances have to be genuine and only comparable sale instances can be relied upon. This judgment hardly supports the case of the State. The principle stated in this judgment is clear that market value of the land has to be based upon comparable sale instance or award. In fact, in this very judgment, the Court clearly stated the principle that the value of the land can be determined by adding or deducting the price on reasonable basis. Furthermore, it is a settled principle of law that the Court has to apply

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some kind of guess work while determining the market value of the land.

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In the case of The State of Maharashtra vs Trimbak Joma Thakur and others, 2007 (5) Mh. L. J. 187 , it has been stated that the Court has to apply certain guesswork within its reasonable limits to determine the fair market value of the acquired land. The Court in

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the said case held as under:

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“The court would have to apply the principle of guess work which is permissible in law, particularly keeping in mind the fact that there are no direct sale instances available on record of the acquired lands or adjacent villages. Thus, the Court would have to essentially apply some guess work to determine the fair market value of the lands. In the case of Risal Singh and ors. (Sh) vs Union of India and anr. reported in 2006(VII) AD(Delhi) 665, the Court has taken a view on the above principle and held as under:

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"In so far as the rejection of sale deeds Ex PW1/1 & Ex.PW2/1(Ex PW1/3) by the learned Reference Court is concerned, we can hardly find any fault in the impugned judgment. But there could be no reason before the reference court for not relying upon Ex. PW1/2 which related to a sale transaction of village Bamnoli and was sale

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of a reasonably large piece of land admeasuring about 3 bigas 15 biswas. The reasoning given by the learned reference court for rejecting this evidence is not sustainable in law. The best method of computing the compensation payable to the claimants is the sale instances relating to the land in question. A willing buyer and a willing seller would offer what price of the land at the time of acquisition or immediately thereto would be a definite guide for determining the fair market value of the land on the date of the notification. Once such an evidence is available on record, there is hardly any need for the court to advert itself to any other method of computation. This principle was clearly stated by the Supreme court in case of ONGC Ltd vs Sendhabhai Vastram Patel and others 2005(VII)AD (SC) 126 = (2005) 6 SCC 454. The Supreme Court ... also clearly stated that the court has to apply some kind of guess work in computing the compensation payable to the claimants for acquisition of their respective lands. It may not be always possible to grant compensation arithmetically correct to the decimals. The counsel appearing for the claimants referred to various judgments of this court wherein for acquisition of land in village Bamnoli or other surrounding villages during the year 1982-86, compensation was awarded by the court for acquisition of the agricultural land @ Rs.21,000 per bigha to Rs.47,000 per bigha and even more and submitted that in the present case, they would be entitled to get compensation @ Rs 70,000 per bigha

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at least. They claim enhancement even on Ex.PW1/2 as it is stated to be a sale deed more than six months prior to the date of acquisition. We have already noticed that the reference court could not have outrightly rejected Ex PW1/2 as it was a sale instance of a reasonably large piece of land and the sale transaction had been executed more than six months prior to the date of notification. There was no reason for the court and in fact no evidence had been led that the transaction Ex PW1/2 was a sham transaction and its genuineness was doubted for any reason whatsoever. The judgments of this court in RFA 565/99 and 481/99 are a merely guiding factor and cannot be taken as a determinative basis in regard to fixation of compensation payable to the claimants. These awards and judgments relate to different villages which may be adjacent but once the sale deed of the same village is available, we find that it would be unnecessary to travel into this controversy".

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(emphasis supplied)

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Reference can also be made to the case in Jas Rath vs Union of India, 2006(VII) A.D. Delhi 284, in this regard.

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As already noticed, the Claimants examined as many as

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five witnesses. Some of them were the claimants, while others were

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the witnesses who had been produced to proving the sale instances Exhibit 22 to Exhibit 24 and Exhibits 26 and 27. The Witness

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Katawallia Keshavan while proving Exhibit 22 referred to the sale instance which was registered on 19^th November, 1987 wherein the land admeasuring 1375 sq. metres ( i.e. 13.75 R) in the village Koregaon Bhima was sold for a consideration of Rs.66,600/-.

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Cumulative effect of the entire evidence is to be appreciated by the Court. The Court in the present case took the average of various sale instances which admittedly relate to the same village and after giving the increase on the respective transactions determined the price. Thus, it cannot be said that the findings are perverse.

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Equally true is the principle that it is not always necessary for the Court to apply certain deductions to the compensation awarded to the Claimants of the land. It is undisputed that all the Claimants are owners of small pieces of land and they are to be compensated on the basis of the price of their land and the mere fact

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that the State Government has chosen to acquire larger chunk of land be per se would not diminish the value of the respective lands.

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It is a matter of common knowledge that there are hardly money transactions relating to sell of larger piece of land at villages. Normally, the lands bought and sold are of comparatively small sizes. The rights of the Claimants have to be determined vis-à-vis the lands that they own and possess. In the absence of evidence to the contrary, the claim put forward by the Claimants appear to be reasonable and it may not be necessary to apply deductions to the price indicated in the sale instances. A reference can be also be made to a judgment of the Division Bench of this Court in the case of The State of Maharashtra vs Santaram Mahadu Pingle and others, 2008

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(3) Bom. C.R. 715, where the Court observed :

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“The Supreme Court has consistently held that the Court should apply principle of deduction on the basis of the sale instances of small piece of lands. Reference can be made to the judgment of the Supreme Court in the cases of (i) Krishi Utpadan Mandi Samiti Sahaswan, District Badaun vs Bipin Kumar and another, (2004) 2 SCC 283 , and (ii)

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Lucknow Development Authority vs Krishna Gopal Lahoti and others , 2007 (12) SCALE 685 . Element of discretion has been vested in the Courts while determining the extent of deduction that could be applied in such cases. In the case of Atma Singh vs State of Haryana , (2008) (2)SCC 568 , the Supreme Court held that it is not mandatory to apply deduction on the ground of sale instances being of small plots but it will have to be determined on the facts of each case.”

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Equally without merit is the objection of the State that the Reference court could not have determined the price by applying the principle of averages. Though to some extent, it may be correct that in the present case as the sale instance of the current year and times which was quiet near to the date of notification were available, thus the Reference Court will have to rely simplicitor on those sale instances and could have come to the appropriate market value of the acquired land, applying the principles of averages by itself would not render the judgment of the Reference Court bad. There cannot be a straight-jacket formula which will be uniformly applicable to all cases. There is no prohibition in law that the Reference Court cannot apply the principle of averages while determining the fair market value of the land. Reference can be made to a recent judgment of a Division

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Bench of this Court in the case of . Santaram Mahadu Pingle' s case

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(supra) , where the Court held as under:

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“13. ….. It is a settled principle of law that principle of average can be applied by the Court in determining the fair market value of the land where the sale consideration are varied in different sale instances duly proved by the parties on record and there is no challenge to the bona fide of such sale consideration. The Supreme Court in the case of (H.P. Housing Board Vs. Bharat S. Negi and others), 2004 DGLS 50 (soft) : 2004(2) S.C. C. 184: A.I. R. 2004 S.C. 1800 took the view that it not necessary to take into consideration the average of the relevant sale instances and arrive at a fair market value of the acquired land. Various High Courts have also taken the view that the principle of average can be applied safely to determine the market value. Reference can also be made to the judgment in the case of ( Shanti Devi Vs. State of Harayana ), 1992(2) P.L. R. 640. The Court held as under:

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“In fact, in the recent time, the Hon’ble Supreme Court has approved the principle of average for determining the fair market value of the land than any other principle concerning the fixation of fair market value of the land. In this regard, reference can be made to the case titled { Baldev Singh Vs. State of haryana and another), R.F. A. No. 965 of 1992, decided on 14.1.1999, wherein the Court held as under:

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“In a very recent judgment the Hon’ble Supreme Court of India in the case of

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(Kanwar Singh and others Vs. Union of India ), 1998 DGLS 1010 (soft): J.T. 1998 (7) S.C. 397 : 1998(8) S.C. C. 136: A.I.R. 1999 S.C. 317 observed that Courts while applying the market value of the land in the adjacent villages or revenue estates must cautiously follow the same as it is not necessary that compensation granted in adjacent villages would itself be a deciding factor for other lands. The Supreme Court also applied the principle of averages/ mean to get the correct market value of the acquired land with some element of conjectures or guess in the case of (Krishna Yachendra Bahadurvaru Vs. Special Land Acquisition Officer, City Improvement Trust Board, Bangalore and others), 1979 DGLS 38 (soft) : A.I. R. 1979 SC. 869 : 1979(4) S.C. C. 356.”

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15. As we have already indicated that the learned Reference

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Court took the average of price of sale instances right from the years 1985 to 1987 from sale deeds Exhibits 22 to 24 and Exhibits 26 and 27 and has determined the market price at Rs.3,01,064/-. However, thereafter, the Reference Court reduced the same to Rs.2,50,000/- as that was the maximum amount claimed by the Claimants. Thus, the Court has already granted to the Claimants an amount lesser than what in fact had been determined in the judgment under appeal.

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Now we will proceed to discuss the argument that learned Reference Court could not have taken recourse of the principle of

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averages. Even it is assumed to be valid argument, we can hardly find any fault in the valuation arrived at by the Learned Reference Court. Exhibit-24 would be the most appropriate and relevant sale instance and which is an admissible piece of evidence, which could be taken into consideration by the Learned Reference Court while determining the issue in relation to the valuation of the market value of the acquired land. Exhibit-24 is the sale instance vide which the land admeasuring 0.41 R was sold for a sum of Rs.96,000/- on 21^st July, 1988 giving a value of Rs.2,34,146/- Per Hectare. Section 4 Notification had been issued on 27^th July, 1988. This sale instance is just few day's earlier to the issuance of the said Notification which is the relevant date for deciding the compensation payable to the Claimants.

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On the other hand, vide Exhibit-22, the land admeasuring about 13.75 Ares was sold for a consideration of Rs.66,000/- on 19^th November, 1987 giving a value of Rs.5,42,416/- Per Hectare. Both

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these Exhibits are relevant and comparable piece of evidence. The Court cannot ignore either of them and the sale instances which reflect a higher valuation would normally be taken into consideration by the Court as it is the case of compulsive acquisition. Unless and until the sale instance was bogus, the genuineness of the said consideration could not be questioned. Vide Exhibit 22, Bombay Industrial Enterprises has sold the land to M/s. Sunsuvi Cable Pvt. Ltd. These are the transactions between the two limited companies and no suggestion was made in regard to the genuineness of the said transactions. While under Exhibit-24, it was an agricultural land, there under Exhibit-22 it was non-agricultural land. While Exhibit 22 reflects the value of developed plot (non-agricultural plot) but at the same time indicate the location and potential of the land. Exhibit 24 could be the right guide for determining the market value of the land. The Claimants would certainly be entitled to some advantage of higher value reflected in Exhibit 24. Taking Exhibit 22 as the basis, the valuation fixed by the learned Reference Court by taking average can hardly be faulted with and the said compensation would even be otherwise justified. We have already held that certain guesswork

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would have to be applied by the Court and deduction in the present is not justified on any ground as the Respondents did not bring any evidence on record to show that the deduction was called for either on account of development and for that matter on any other ground. Thus, we find no reason to interfere in the market value assessed by the Learned Reference Court in the judgment challenged in the present appeal. Resultantly, all the First Appeals filed by the State are dismissed, however, leaving the parties to bear their own costs.

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In view of the dismissal of First Appeal No.492 of 2000, Civil Application No.7162 of 2006 does not survive and the same is disposed of being infructuous.

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CHIEF JUSTICE

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A. P. DESHPANDE, J.

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July08/judgment/fa486-00.sxw

The State of Maharashtra v. Dnyaneshwar K. Phadtare

Case brief

What is this about?

What did the court decide?

The State of Maharashtra v. Dnyaneshwar K. Phadtare

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

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