Remanded

Communidade of Chicalim v. the Acquiring Department (Bharat Sanchar Nigam Ltd) and Anr.

Bombay HC29 Nov 2011XOB/5/2007

Case brief

AI extract

What is this about?

The High Court held the Reference Court's award inadequate as it failed to scrutinize if sale instances were comparable to the acquired land or apply the Comparable Sales Method properly, ordering a fresh determination of compensation.

What did the court decide?

The appeal and cross objection partly allowed; impugned award quashed; reference remanded to Reference Court for fresh determination of market value.

Communidade of Chicalim Vs the Acquiring Department (Bharat… — Land Acquisition | Bombay HC (2011)

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IN THE HIGH COURT OF BOMBAY AT GOA

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FIRST APPEAL NO. 273 OF 2006 WITH CROSS OBJECTION NO. 5 OF 2007

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FIRST APPEAL NO. 273 OF 2006
The Acquiring Department, (Bharat Sanchar Nigam Ltd.,) Plot No.3, EDC Patto Panaji Goa. … Appellant
*V e r s u s*
1. Communidade of Chicalim, St. Francis Xavier Church Bldg., Chicalim
2. Dy. Collector/S.D.O. Mormugao, Vasco-da-Gama. … Respondents
Shri J. Vaz, Advocate for the appellant.
Shri G. Teles, Advocate for respondent no.1.
WITH
CROSS OBJECTION NO. 5 OF 2007
Communidade of Chicalim, St. Francis Xavier Church Building, Chicalim. …Cross Objectioner
V e r s u s
1. The Acquiring Department, ( Bharat Sanchar Nigam Ltd.,) Plot No.3, EDC Patto, Panaji Goa.

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Dy. Collector/SDO, Mormugao, Vasco-da-Gama. … Respondents

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Shri G. Teles, Advocate for the Cross objectioner/original respondent no.1.

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Shri J. Vaz, Advocate for respondent no.1/original appellant.

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CORAM : F. M. REIS, J

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DATE : 29 th NOVEMBER, 2011 .

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ORAL JUDGMENT

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Heard Shri J. Vaz, learned Counsel appearing for

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the appellant and Shri G. Teles, learned Counsel appearing for the respondent No.1. The above appeal challenges the judgment and award dated 27.06.2006 passed by the learned Additional District Judge, Fast Track Court-I, South Goa, Margao, in Land Acquisition Case No. 79/2003 whereby the reference filed by the respondent was partly allowed and the compensation for the land acquired was fixed at the rate of Rs.200/- per square metre.

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By a notification under Section 4 of the Land Acquisition Act, 1894 ( hereinafter referred to as “the said Act”), land was acquired at Bogmalo by the appellant for

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setting up of telephone exchange pursuant to a notification dated 04.04.2001 published in the Official Gazette dated 19.04.2001. The land acquired belonging to the respondent was admeasuring an area of 1700 square metres from the property surveyed under No. 49/1( part ) of Chicalim Village of Mormugao Taluka. The Land Acquisition Officer whilst passing an award under Section 11 of the said Act offered compensation for the land acquired at the rate of Rs.54/- per square metre. Being dissatisfied with the said amount, the respondent preferred a reference under Section 18 of the said Act for enhancement of compensation and claimed compensation for the land acquired at the rate of Rs.1500/per square metre. By the impugned judgment and award dated 27.06.2006, the learned Reference Court partly allowed the said reference and enhanced the compensation for the land acquired at the rate of Rs.200/- per square metre. Being aggrieved by the said judgment, the appellant preferred the present appeal. After being duly served, the respondents have filed their cross objection and claimed enhancement of compensation to the tune of Rs.1500/- per square metre.

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Shri J. Vaz, learned Counsel appearing for the appellant has assailed the impugned judgment and pointed

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out that the reference Court has not at all applied its mind to the material on record to come to the conclusion that the respondents are entitled for enhancement of compensation. The learned Counsel further took me through the impugned judgment and pointed out that the Reference Court has referred to sale instances produced by the respondents but however the said documents have not been scrutinized to ascertain as to whether the land acquired and the sale instances are comparable and whether the nature thereof are similar or not. The learned Counsel has pointed out that it was incumbent upon the learned Judge to scrutinize the evidence adduced by the parties and come to the conclusion as to whether the sale instances produced by the respondents are comparable to the land acquired and whether the respondents have discharged their burden to establish that the compensation offered by the Land Acquisition Officer was inadequate. The learned Counsel further pointed out that the sale instances produced by the respondents are not comparable to the land acquired and as such the learned Judge was not justified to enhance the compensation on the basis of such sale instances. The learned Counsel has taken me through the evidence on record as well as the material produced by the respondents and pointed out that the

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respondents have failed to discharge the burden that the amount offered by the Land Acquisition Officer is inadequate and as such the impugned judgment passed by the Reference Court deserves to be quashed and set aside.

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On the other hand, Shri G. Teles learned Counsel appearing for the respondents has pointed out that the respondents are entitled to much higher compensation than the one awarded by the learned Reference Court. The learned Counsel further pointed out that the respondents have produced the sale instances disclosing that the market value of the land in the vicinity of the land acquired was much more than Rs.1500/- per square metre. The learned Counsel has further pointed out that the learned Judge has not at all considered the date of the sale instances as well as the escalation to be awarded in order to arrive at a just and proper market value for the land acquired. The learned Counsel has taken me through the evidence adduced by the respondents and pointed out that the respondents have duly discharged the burden cast on them to establish that the amount offered by the Land Acquisition Officer was inadequate and no evidence has been adduced by the appellant to show that the amount offered by the Land

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Acquisition Officer was prevailing market value of the land at the relevant time. The learned Counsel as such submitted that the respondents are entitled for the compensation for the land acquired at the rate of Rs.1500/- per square metre.

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Having heard the learned Counsel and on perusal of records, the following point for determination arises in the present case :

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POINT FOR DETERMIANTIION

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Whether the Reference Court was justified to fix the compensation for the land acquired at the rate of Rs.200/- per square metre ?

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On perusal of the impugned judgment and material on record, I find that though the respondents have produced sale instances claiming to be in the vicinity of the land acquired to establish that the amount of compensation offered by the Land Acquisition Officer is inadequate, the learned Judge whilst scrutinizing the evidence on record has not given any reason to the effect that the land of the sale instances are comparable to the land acquired. When the comparable sale instances are relied for fixing the market value, it is incumbent upon the Reference Court to ascertain

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whether the land acquired is comparable to the sale instances land and thereafter consider any merits and demerits between the two lands so as to fix the market value of the land acquired at the relevant time. On perusal of the impugned judgment, I find that the learned Judge has not at all carried out such exercise while determining the market value of the acquired land and as such, I find that the impugned judgment stands vitiated on that count. This Court in a judgment passed in First Appeal No. 205 of 2004 dated 01.10.2010 relying upon the judgment of the Apex Court has held at paras 13, 14 and 15 thus :

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“ 13 . The Reference Court whilst determining the market value of the land has found that the sale deeds produced by the Applicants suggest that the price prevailing at the relevant time is between Rs.109/- to Rs.162/- per square metre. The Reference court has not found on the basis of material on record as to which sale instance is more comparable to the land acquired for the purpose of effecting necessary escalation and/or deduction to work out the market value of the acquired land. The Apex Court in the judgment reported in (1994) 2 SCC 133 has held at paras 14, 16, 17, 21 and 22 thus :

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“ 14. This point relates to making the

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choice of sales when market value of the acquired land has to be determined by ‘Comparable Sales Method’. If a land sold under a sale deed is comparable with the acquired land, then the courts will have, ordinarily, recourse to ‘Comparable Sales Method of valuation’ to determine the market value of the acquired land, cannot be doubted. What is done under the ‘Comparable Sales Method’ of valuation of land is to find out the price fetched for sale of land under the sale deed claimed to be comparable sale and take that price as that which the acquired land would have fetched, if its sale had been effected in the open market and determine the market value of the acquired land accordingly. The ‘Comparable Sales Method of Valuation’ of land is preferred to other known methods of valuation of land since the variety of factors appertaining to the land, which require adjustment by the court (valuer) in determining the market value of the acquired land, would be the least. Where, however, certain factors appertaining to the land in a comparable sale have to be adjusted, it is done by varying the price

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of the land covered by the sale, i.e., by adding certain amount to the price fetched for the land sold or by deducting a certain amount in such price, depending on the nature of the factor concerned being a plus factor or a minus factor. Whatever it be, the genuineness or authenticity of the sale is a factor which permits no adjustment in price.

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16. If the comparable sales or previous awards are more than one, whether the average price fetched by all the comparable sales should form the ‘price basis’ for determination of the market value of the acquired land or the price fetched by the nearest or closest of the comparable sales should alone form the ‘price basis’ for determination of the market value of the acquired land, being the real point requiring our consideration here, we shall deal with it. When several sale-deeds or previous awards are produced in court as evidence of comparable sales, court has to necessarily examine every sale or award to find out as to what is the land which is the subject of sale or award and as to what is the price fetched by its sale or by the award made therefor.

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17. …........ The position cannot be different if the comparable sales or awards when relate to different lands. Therefore, when there are several comparable sales or awards pertaining to different lands, what is required of the court is to choose that sale or award relating to a land which closely or nearly compares with the plot of land the market value of which it has to determine, and to take the price of land of such sale or award as the basis for determining the market value of the land under consideration.

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21. The determination of market value of the acquired plots of lands made by the High Court on average price basis, therefore, is incorrect, in that, it overlooks the important principle of valuation that the market value of the acquired land when is determined by adoption of the ‘Comparable Sales Method’ the same has to be done with reference to the price fetched in a sale or market value given in an award, as the case may be, of a land which is closest or nearest to the acquired land and not with reference to average price fetched by several comparable sale

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deeds or awards, of different types of lands.

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22. …..............This situation, should have, in the normal course, led us to make an order setting aside the judgments under appeals and remitting the cases to the High Court for their fresh disposal by application of the appropriate principles of valuation relating to valuation of dissimilar plots of lands, although such plots adjoining each other were acquired pursuant to a common preliminary notification and for a common purpose. But the period of 32 years during which the parties are in litigation has made us feel that we should ourselves decide the matter finally and save the parties from the agony of further litigation.”

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14. Different criteria and norms are required to be adopted for the purpose of determining the market value of the acquired land. A holistic view is required to be taken and the Reference Court will have to ascertain the positive and negative factors as has been laid down by the Apex Court. No single factor would be decisive for the purpose of arriving at the market value of the land. The determination of

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the market value depends upon a large number of factors and the circumstances of each case are different. Potentiality for development and nature of land whether agricultural or homestead are some of the aspects which will have to be ascertained.

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15 . From the impugned judgment and award passed by the Reference Court, I find that the Reference Court has not done the exercise in the manner as is well established and enunciated herein above. The Reference Court after considering the sale instances produced by the Applicants and finding that the price fixed therein ranges from Rs.109/- to Rs.162/- per square metre has chosen to fix the compensation on the assumption that the market value of the land in the vicinity is Rs.110/- per square metre and effected deductions thereon without giving any adequate reason as to why the other sale instances were not considered and in fact as stated above one of the basis of the Reference Court for effecting deduction is not borne out from the records of the case. As such in the interest of justice, I find that the Reference Court shall have to decide the reference afresh in the light of the observations made herein above to

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determine the market value of the acquired land of the Applicants. The learned Additional Government Advocate was as such justified to contend that the Reference Court has not given adequate reason for the purpose of determining the market value of the acquired land at the rate of Rs.68/- per square metre. As far as the cross objections are concerned, for the reasons stated herein above, the learned Counsel appearing for the Applicants as such is justified to contend that no adequate reason has been given as to why the Reference Court has arrived at the market value of the land on the assumption that the price prevailing in the vicinity of the acquired land is at the rate of Rs.110/- per square metre when some of the sale instances produced by the Respondents suggest that the market value was even ranging to the extent of Rs.162/- per square metre. In view of the above, I find that the matter deserves to be remanded for deciding the reference afresh in the light of the observations made herein above. The Applicants can also be permitted to produce the award dated 13^th March, 1995 as no prejudice shall be caused to the Respondents.”

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Considering the judgment of this Court, I find that in the interest of justice, it would be appropriate that the Reference Court be directed to decide the reference after considering the well settled principles of law in fixing the compensation for the land acquired. No doubt the respondents would also be entitled to pursue their claim for enhancement put up by them in the counter claim. The point is therefore answered accordingly.

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8. In view of the above, I pass the following :

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O R D E R

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(i) The appeal and the cross objection are partly allowed.

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(ii) The impugned judgment and award dated 27.06.2006 is quashed and set aside.

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(iii) The Land Acquisition Case No. 79/2003 is restored to the file of the Additional District Judge, FTC-I, South Goa, Margao.

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(iv) The Additional District Judge, Margao is directed to decide the said reference afresh

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after hearing both the parties in the light of the observations made herein above in accordance with law.

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(v) All the contentions of both the parties on merits are left open.

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(vi) The parties are directed to appear before the Reference Court on 16.01.2012 at 10.00 a.m.

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F. M. REIS, J

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at*

Communidade of Chicalim v. the Acquiring Department (Bharat Sanchar Nigam Ltd) and Anr.

Case brief

What is this about?

What did the court decide?

Communidade of Chicalim v. the Acquiring Department (Bharat Sanchar Nigam Ltd) and Anr.

Case brief

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What did the court decide?

What the court decided

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