Partly allowed

Office on Special Duty v. Heirs of Nagjibhai Kalidas

Gujarat HC23 Dec 1998FA/175/1990

Case brief

AI extract

What is this about?

This judgment determines the market value of agricultural lands acquired for industrial purposes. The court fixed the relevant date as the first notification, calculated value based on nearby agricultural awards with adjustments for potentiality, and held that interest on enhanced compensation is not permissible under the Act.

What did the court decide?

Market value fixed at Rs. 685/- per Are; interest on additional compensation set aside; entitlement to additional compensation from first notification date modified; interest on compensation and posse

Office on Special Duty Vs Heirs of Nagjibhai Kalidas — Land Acquisition | Gujarat HC (1998)

¶1

 IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

¶2

 FIRST APPEALS No. 170 to 193 of 1990

¶3

 with

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 FIRST APPEALS NO. 2527 to 2551 of 1992

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 For Approval and Signature:

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 Hon'ble MR.JUSTICE J.M.PANCHAL
 ��and

¶7

 MR.JUSTICE M.H.KADRI

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 ============================================================
 1. Whether Reporters of Local Papers may be allowed
 to see the judgements?

¶9

 2. To be referred to the Reporter or not?
 3. Whether Their Lordships wish to see the fair copy
 of the judgement?

¶10

 4. Whether this case involves a substantial question
 of law as to the interpretation of the Constitution
 of India, 1950 of any Order made thereunder?

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 5. Whether it is to be circulated to the Civil Judge?

¶12

 --------------------------------------------------------------

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 OFFICER ON SPL. DUTY (LAND ACQUISITION)

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Versus

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 BAI KHADIJA D/O MOHMED DAVJI THROUGH HEIRS

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 --------------------------------------------------------------

¶17

 Appearance:

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 FIRST APPEALS NO. 170 to 193 of 1990

¶19

 Mr. P.G.Desai, Government Pleader for appellant

¶20

Mr. R.N.Shah for the claimants

¶21

Mr. S.N.Shelat, Addl. A.G. with Mr. M.G.Nagarkar for G.I.D.C.

¶22

 FIRST APPEALS NO. 2527 to 2739 of 1992

¶23

Mr. R.N.Shah for the appellants-claimants

¶24

Mr. U.A.Trivedi, A.G.P. for respondent no.1-State

¶25

Mr. S.N.Shelat, Addl.A.G. with Mr. M.G.Nagarkar for

¶26

 respondent no.2 - G.I.D.C.

¶27

 FIRST APPEALS NO. 2740 to 2751 of 1992

¶28

 Mr. R.N.Shah for the appellants-claimants

¶29

 Mr. B.D.Desai, A.G.P. for respondent no.1-State

¶30

Mr. S.N.Shelat, Addl.A.G. with Mr. M.G.Nagarkar for respondent no.2- G.I.D.C.

¶31

 --------------------------------------------------------------

¶32

 CORAM : MR.JUSTICE J.M.PANCHAL and
 �� MR.JUSTICE M.H.KADRI
 Date of decision: 23/12/98

¶33

ORAL COMMON JUDGEMENT

¶34

 (Per : Kadri, J.)

¶35

 �First Appeals no.170 to 193 of 1990 are filed by

¶36

 the Officer on Special Duty (Land Acquisition) No.1 and
 First Appeals No. 2527 to 2551 of 1992 are filed by the
 appellants-original claimants (to be referred to as "the
 claimants") under section 54 of the Land Acquisition Act,
 1894 ("the Act" for short) read with section 96 of the
 Code of Civil Procedure, 1908 challenging the common
 judgment and order dated January 3, 1989 passed by the
 learned 2nd Extra Assistant Judge, Bharuch, in Land
 Acquisition Reference Cases No. 39/84, 148/84 to 151/84,
 153/84, 154/84, 157/84 158/84 and 161/84 to 176/84.

¶37

 �As all these First Appeals arise out of the
 common judgment and award rendered in the above-mentioned
 group of Land Acquisition Reference Cases and as common
 questions of facts and law arise in these appeals, we
 propose to dispose of them by this common judgment.

¶38

 2.�The Mines and Industries Department of Gujarat
 State proposed to acquire the lands of villages Gadkhol
 and Piraman of Ankleshwar Taluka for the purpose of
 extension of Ankleshwar Industrial Estate. The said
 proposal was approved by the State Government and
 notification under section 4(1) of the Act was published
 in the Government Gazette on October 20, 1977. An
 erratum or amended notification under section 4(1) of the
 Act was published in the Government Gazette on January
 26, 1978. The owners of the acquired lands filed
 objections before the Land Acquisition Officer and after
 considering the objections, report under section 5(A)(2)

¶39

 of the Act was made and thereafter notification under
 section 6 of the Act was published in the Government

¶40

 Gazette. On October 27, 1979, amended notifications
 under section 6 of the Act were published on 16.4.1980
 and 16.10.1981. All the interested persons of the
 acquired lands of both the villages were served with
 notices under section 9(3)(4) of the Act. The claimants
 claimed compensation at Rs. 85,000/- per Acre before the
 Land Acquisition Officer in response to the notices. The
 Land Acquisition Officer, after taking into consideration
 the material placed before him made award on 26.4.1983
 and awarded compensation at the rate of Rs. 30,000/- per
 Hectare i.e. Rs. 300/- per Are for the acquired lands
 of villages Gadkhol and Rs.25,000/- per Hectare i.e. Rs.
 250/- per Are for the lands of village Piraman.

¶41

 3.�The claimants were of the opinion that
 compensation offered by the Land Acquisition Officer was
 inadequate and, therefore, they filed applications under
 section 18 of the Act requiring the Land Acquisition
 Officer to refer the applications to the District Court.
 Those applications were referred to the District Court,
 Bharuch by the Land Acquisition Officer, which were
 numbered as Land Acquisition Reference Cases No.39/84,
 148/84 to 151/84, 153/84, 154/84, 157/84, 158/84 and
 161/84 to 176/84 in the District Court, Bharuch. The
 claimants averred in the applications filed under section
 18 of the Act that the Land Acquisition Officer had not
 considered the sale instances of nearby lands of the same
 villages while determining market value of the acquired
 lands as on the date of publication of notification under
 section 4(1) of the Act. It was claimed that the market
 value of the lands acquired ought to have been fixed
 taking into consideration the potentiality of the lands.
 It was stressed that the acquired lands were situated in
 a developed industrial area and the lands would fetch
 more price than offered by the Land Acquisition Officer.
 The claimants in all the applications claimed
 compensation before the Reference Court at the rate of
 Rs. 85,000/per Acre for their acquired lands of villages
 Gadkhol and Piraman. The State Government filed reply at
 Exh.5, inter-alia, contending that the applications filed
 by the claimants were misconceived and the references
 were barred by period of limitation. It was further
 averred that before the Land Acquisition Officer, the
 claimants had not produced reliable evidence in form of
 sale instances in support of their claim of compensation.
 It was highlighted that the claimants having failed to
 submit their claim before the Land Acquisition Officer in
 pursuance of issuance of notices under section 9 of the
 Act, the References for additional compensatioin were not
 maintainable in view of the provisions of section 25 of
 the Act. Lastly,it was averred that compensation offered

¶42

 by the Land Acquisition Officer was adequate in view of
 the sale instances produced before him and as the
 claimants were not entitled to additional compensation,
 the References should be dismissed.

¶43

 4.�The acquiring body viz. Gujarat Industrial
 Development Corporation filed its reply in all the
 references at Exh.12, inter-alia, contending that the
 compensation offered by the Land Acquisition Officer was
 reasonable and proper looking to the situation of lands
 and market price of lands prevailing on the date of the
 notification issued under section 4(1) of the Act. It
 was contended that the amount of additional compensation
 claimed by the claimants was excessive and exhorbitant.
 It was further contended by the acquiring body that the
 acquired lands had no facilities such as road,
 electricity and water and the lands were agricultural
 Jirayat lands and there was no development surrounding
 the villages of Gadkhol and Piraman. It was also
 contended that the acquired lands were far away from
 Ankleshwar Railway Station and Bus Stand and, therefore,
 compensation offered by the Land Acquisition Officer was
 adequate and reasonable and the references be dismissed.

¶44

 5.�On the basis of the above averments made by the
 claimants, the acquiring body and the Land Acquisition
 Officer, the Reference Court raised issues for
 determination at Exh.6. The claimants in support of
 their claim, examined one Balubhai Desaibhai Patel
 claimant of Land Acquisition Reference Case No. 184/84
 at Exh.21. To substantiate their claim for additional
 compensation, the claimants produced sale instances and
 previous award of the Reference Court at Exh.20 rendered
 in Land Acquisition Reference Cases No. 229, 230 & 231
 of 1978. On behalf of the appellant, no oral or
 documentary evidence was led before the Reference Court.
 The Reference Court after taking into consideration the
 situation of the acquired lands of villages Gadkhol and
 Piraman and the market value determined by previous award
 Exh.20, came to the conclusion that in award Exh.20 the
 market value of the agricultural lands of Ankleshwar town
 in the year 1976 was determined at the rate of Rs.
 400/per Are, but the notification under section 4(1) of
 the Act in the present case was published in the year
 1978 and, therefore, 15% rise in price of lands should be
 given for two years, as the notification in the present
 case was published after two years of publication of
 notification under section 4(1) of the Act, which was
 considered in the award Exh.20. Therefore, the Reference
 Court came to the conclusion that in the year 1978 market
 value of the acquired agricultural lands was Rs. 460/per

¶45

 Are. The Reference Court further held that the acquired
 lands were having industrial potentiality for
 non-agricultural lands as well as building potentiality
 and they were situated in the vicinity of well developed
 industrial area and also were abutting on the National
 Highway. The Reference Court, therefore, awarded 40%
 price rise on the amount of Rs. 460/- per Are. After
 adding 40% price rise, the Reference Court came to the
 conclusion that the price of the acquired lands would be
 Rs. 604/per Are. Considering the speedy development of
 industrial area surrounding Ankleshwar Town, the
 Reference Court further added 5% more on the price of
 Rs.604/- and arrived at a figure of Rs. 630/- per Are by
 the impugned award. The Reference Court also extended
 statutory benefits to the claimants under sections
 23(1-A), 23(2) & 28 of the Act as amended by the
 Amendment Act of 1984.

¶46

 6.�The claimants filed an application Exh.39 under
 Order-47 Rule-1 of the Code of Civil Procedure, 1908
 before the Reference Court for review of the common
 judgment and award dated 3rd January, 1989 passed in the
 above-mentioned group of Land Reference Cases. The
 claimants contended in their application for review that
 the Reference Court had committed an error in determining
 market value of the lands acquired at Rs. 630/- per Are.
 They contended that the Reference Court had given price
 rise at the rate of 15% per annum and considering the
 period of two years, the market value of lands acquired
 would come to Rs. 520/- per Are. It was further
 contended that if 40% rise for industrial area is added
 to the amount of Rs. 520/-, it would come to Rs.
 728/per Are. It was further pointed out by the claimants
 that on the amount of Rs. 728/- per Are, the Reference
 Court should have added 5% more because of speedy
 development in the surrounding area of the acquired lands
 and the total amount would come to Rs. 765/- per Are and
 not Rs. 630/- per Are as per the award drawn by the
 Reference Court. The said applications was heard by the
 learned 2nd Extra Assistant Judge and after hearing the
 learned Advocates for the parties, the Reference Court
 passed following order on January 10, 1989 :-

¶47

 �"Heard the learned Advocates on the point
 in the judgment para-16.

¶48

 �The notification u/s.4 in the Ex.20 is of

¶49

 the year 1976 whereas the amended notification
 u/s 4 in the proceedings is of the year 1978. 15
 percent increase per year on the market value at
 Ex.20 i.e. Rs.400/- per Are has been considered.

¶50

 So increase @ 15 percent per year for two years
 i.e. 1976 to 1978 per Are is added it comes to
 Rs. 520/- instead of Rs. 460/- which is
 calculation as well as typed mistake. It should,
 therefore, be read as Rs. 520/- instead of Rs.
 460/-. Now, if 40% price rise for the reasonable
 assessment is calculated on the said price of Rs.
 520/-, it would come to Rs. 208/- so the total
 amount would be Rs. 728/- while it has been
 calculated and typed Rs. 604/-, so Rs.728/-
 would be read instead of Rs. 604/- and 5% more
 increase is added over the said amount would come
 to Rs. 765/-. So, Rs. 765/- be read in place
 of Rs. 765/- per Are in paras 16 and 18 of the
 judgment instead of Rs. 630/- and the
 calculation be made on the basis of Rs. 765/-
 per Are in the schedule."

¶51

 7.�Thus, the Reference Court after hearing review
 applications, allowed the same and determined the market
 value of the acquired lands of villages Gadkhol and
 Piraman at Rs. 765/- per Are. The above determination
 of market value of the acquired lands of villages Gadkhol
 and Piraman has been challenged by the appellants in this
 group of appeals and the claimants by filing
 cross-appeals, have challenged the above impugned common
 judgment and award and have claimed that the market value
 of the acquired lands should have been determined at the
 rate of Rs. 1000/- per Are.

¶52

 8.�The learned Government Pleader Mr. P.G.Desai

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 assisted by learned Assistant Government Pleaders M/s.
 U.A.Trivedi and B.D.Desai appearing on behalf of the
 appellants State of Gujarat submitted that the Reference
 Court has erred in enhancing compensation while
 determining the market value of villages Gadkhol and
 Piraman at the rate of Rs. 765/- per Are. It is claimed
 by the learned Counsel for the appellants that villages
 Gadkhol and Piraman were far away from Ankleshwar Town
 and the Reference Court has not considered that there was
 no industrial development surrounding the lands of the
 two villages. It is further highlighted by the learned
 Counsel for the appellants that the award Exh.20 on which
 reliance was placed by the Reference Court related to
 non-agricultural lands and the acquired lands which were
 subject matter of award Exh.20, were situated in
 Ankleshwar town itself and, therefore, award Exh.20 was
 not comparable to the acquired lands of villages Gadkhol
 and Piraman. It is stressed by the learned Counsel for
 the appellants that the lands which were subject matter

¶54

 of award Exh.20 were not having same fertility and were
 not comparable to the lands of villages Gadkhol and
 Piraman. It is further contended by the learned Counsel
 for the appellant that the Reference Court erred in
 treating the amended notification under section 4(1) of
 the Act as relevant date for determination of market
 value of the acquired lands. In this connection, the
 learned Counsel for the appellant invited our attention
 to the decisions rendered in (i) State of Gujarat through
 the Assistant Collector, Baroda v. Pirojsha P.
 Contractor and another, I.L.R. 1972, Gujarat 45, and
 (ii) Radhey Shyam v. Haryana State, AIR 1981 Punjab and
 Haryana 57. The learned Counsel for the appellant also
 contended that the Reference Court erred in awarding
 interest on the additional amount and the amount of
 solatium under section 28 of the Act. It is asserted by
 the learned Counsel for the appellant that the Reference
 Court in the schedule attached to the common judgment and
 award in Column 6 had awarded 12% increase under section
 23(1-A) of the Act for the period from 26.1.1978 to
 26.4.1983 i.e. for 5 years and 3 months, which is
 erroneous. The learned Counsel further contended that
 the claimants were only entitled to additional amount
 under section 23(1-A) of the Act at the rate of 12% from
 the date of notification under section 4(1) of the Act
 i.e. October 20, 1977 to the date of taking over
 possession of the lands acquired and not till the date of
 making of the award by the Land Acquisition Officer.
 Lastly, it was submitted by the learned Counsel for the
 appellant that the compensation offered by the Land
 Acquisition Officer was just, adequate and reasonable
 and, therefore, the appeals should be allowed and the
 cross-appeals filed by the claimants should be dismissed.

¶55

 8.�Learned Counsel for the acquiring body Mr.
 M.G.Nagarkar has adopted the arguments advanced on behalf
 of the appellant and has further contended that the award
 Exh.20 was not at all comparable to the lands under
 acquisition, as the lands under acquisition were situated
 far away from Ankleshwar Town and no industrial
 development has taken place in villages Gadkhol and
 Piraman. It is contended by the learned Counsel for the
 acquiring body that the Reference Court erred in giving
 rise in price of lands for two years at the rate of 15%
 per annum. The learned Counsel for the acquiring body
 also submitted that the Reference Court erred in giving
 rise of 40% on the ground of potentiality and industrial
 development surrounding the area of acquired lands and
 further erred in giving 5% rise because of speedy
 development. The learned Counsel for the acquiring body
 lastly submitted that the compensation awarded by the

¶56

 Land ACquisition Officer was adequate and the appeals
 filed by the State of Gujarat should be allowed and the
 appeals filed by the claimants for enhancement of
 compensation be dismissed.

¶57

 9.�Learned Advocate Mr. M.R.Shah, who appeared for
 Mr. R.N.Shah learned Counsel for the claimants has
 vehemently submitted that the award at Exh.20, which was
 relied on by the Reference Court for determination of
 market value of the acquired lands was comparable and as
 the High Court in First Appeal No. 372/80 had determined
 market value of the non-agricultural lands of Town
 Ankleshwar, which were subject matter of award Exh.20 at
 the rate of 25/- per sq.mt., the market value of the
 acquired lands of village Gadkhol and Piraman should be
 determined at Rs. 1000/- per Are. Learned Counsel for
 the claimants highlighted that because of industrial
 development which had taken place surrounding Ankleshwar
 Township, there was heavy pressure on the lands of nearby
 villages Gadkhol and Piraman and therefore, prices of
 lands of both the villages had increased and the
 Reference Court had not taken into consideration those
 distinctive features and not determined the market value
 of the acquired lands at Rs.1000/- per Are. It is
 submitted by the learned Counsel for the claimants that
 the lands which were subject matter of award Exh.20 were
 most comparable lands with the acquired lands of village
 Gadkhol and Piraman and, therefore, the Reference Court
 has committed no error in placing reliance on the award
 Exh.20 for determination of market value of the acquired
 lands. The learned Counsel for the claimants stressed
 that the acquiring body and the Land Acquisition Officer
 had failed to lead any evidence before the Reference
 Court and, therefore, the Reference Court was justified
 in placing reliance on the evidence produced by the
 claimants in support of their case for enhancement of
 compensation. Lastly, it was submitted by the learned
 Counsel for the claimants that enhancement of
 compensation claimed by the claimants in cross-appeals at
 the rate of Rs. 1000/- per Are is reasonable and,
 therefore, the appeals filed by the claimants should be
 allowed and the appeals filed by the appellants should be
 dismissed.

¶58

 10.�Learned Counsel for the appellants and the

¶59

 claimants have taken us through the entire evidence on
 record including the oral evidence of one of the
 claimants, namely, Balubhai Desaibhai Patel, who was
 examined at Exh.21. This wintess in his oral testimony
 before the Reference Court has described the situation of
 the acquired lands. From his evidence, it becomes clear

¶60

 that the old and new national highways towards Mumbai and
 Ahmedabad pass through lands of villages Gadkhol and
 Piraman. The railway track also passes through the
 acquired lands. As per the oral testimoney of the
 witness Exh.21, Ankleshwar - Rajpipala road also passes
 through lands of villages Gadkhol and Ankleshwar-Andada
 and the road towards Valia - Dediapada from Ankleshwar
 also passes through the lands of village Piraman.
 Therefore, from the oral testimony of the witness
 Exh.21,it becomes evident that villages Gadkhol and
 Piraman are connected by a road with Ankleshwar and other
 surrounding villages. Railway facility is also available
 to the residents of both the villages. The evidence of
 this witness also shows that prior to publication of
 notification under section 4(1) of the Act, private
 industries had been established near the acquired lands.
 O.N.G.C. residential colony was situated in the lands of
 village Gadkhol since 1962. Near village Gadkhol, there
 were factories of Indian Pipe and Pre-cone Pipe, Nalanda
 Housing Society, D.G.Nagar Central School and over-bridge
 to Ankleshwar. The witness asserted that factory of
 Gujarat Cable was constructed in the lands of village
 Gadkhol in the year 1970. With regard to the situation
 of village Piraman, witness Balubhai Patel Exh.21 deposed
 that the factories like Bright Bar, Ranchhodrai Pulse
 Mill, Carboard factory, Sugar factory and Dinesh Mill had
 established their industries prior to issuance of
 notification under section 4(1) of the Act in the lands
 of village Piraman. On the northern side of village
 Piraman, construction activities had started and Mission
 School and Church were also there. The witness has
 stated that village Piraman was situated at a distance of
 one Kilometer from Ankleshwar Highway. The witness
 claimed that due to development on the northern side,
 octroi limits of Ankleshwar Town are extended and octroi
 naka was placed on the lands of village Piraman. It was
 claimed by this witness that the lands of villages
 Piraman and Gadkhol had building potentiality prior to
 issuance of notification under section 4(1) of the Act.
 It is further claimed by the witness that the lands of
 villages Gadkhol and Piraman are similarly situated and
 also having same fertility.

¶61

 11.�During the oral testimony of this wintess, award
 Exh.20 was produced before the Court. The witness
 described the situation of the acquired lands which were
 subject matter of award Exh.20 and gave comparison of the
 acquired lands of award Exh.20 and the present lands
 which are the subject matter of the appeals. During the
 cross-examination, the witness stated that he had not
 maintained any accounts of agricultural income. During

¶62

 the searching cross-examination of the wintess by the
 appellant, no material was brought to dislodge his
 testimony in examination-in-chief. From the evidence of
 this witness, it becomes apparent that industrial
 development had taken place prior to publication of
 notification under section 4(1) of the Act and the limits
 of Ankleshwar Town were extended near the villages of
 Godkhal and Piraman. It is also borne out from the
 evidence of this witness that prior to issuance of
 notification under section 4(1) of the Act, many
 industries were established near the acquired lands and,
 therefore, the acquired lands were having building
 potentiality.

¶63

 12.�It is well settled legal principle that previous
 judgments and awards of the Reference Court, if they
 relate to similarly situated adjacent lands and which
 have become final provide good guidance in determining
 the market value of the lands acquired subsequently.
 There is no doubt that, a judgment of a court in a land
 acquisition case determining the market value of a land
 in the vicinity of the acquired lands even though not
 inter partes, could be admitted in evidence either as an
 instance or one from which the market value of the
 acquired land could be deduced or inferred. For a
 judgment relating to value of land to be admitted in
 evidence either as an instance or as one from which the
 market value of the acquired land could be inferred or
 deduced, it must have been a previous judgment of court
 and as an instance, it must have been provided by the
 person relying upon such judgment by adducing evidence
 alliunde that due regard being given to all attendant
 facts and circumstances it could furnish the basis for
 determining the market value of the acquired land. The
 basis of the valuation as found by a competent court with
 regard to the neighbouring land which has become final
 has to be taken into consideration for determining the
 just compensation for lands acquired subsequently. The
 award passed by the Land Aquisition Officer may serve as
 a basis to determine the compensation, but the order
 passed by the civil court on reference under section 18
 of the Act which has become final definitely binds both
 parties with regard to the price that was prevailing in
 that area.

¶64

 13.�Bearing in mind the principles laid down as
 stated above by catena of decisions of Apex Court, we
 propose to examine whether the award Exh.20 provides good
 guidance for determining the market price of the acquired
 lands. By award Exh.20, the lands of Ankleshwar Town
 came to be acquired for the public purpose for providing

¶65

 100p road for construction of an overbridge. The
 notification under section 4(1) of the Act was published
 in the Government Gazette on July 8. 1976. The Land
 Acquisition Officer by his award dated July 12, 1978
 offered compensation for non-agricultural land of Survey
 No. 446 at the rate of Rs. 230/- per Are and for
 agricultural land bearing survey no. 451 at the rate of
 Rs. 210/- per Are. The claimants of the acquired lands
 of award Exh.20 filed references under section 18 before
 the District Court at Bharuch being Land Acquisition
 Reference Cases No. 229, 230 & 231 of 1970. The learned
 District Judge by his common judgment and award dated
 July 31, 1979 had determined the market value of the
 acquired lands of Town Ankleshwar at the rate of Rs.
 1000/- per Are with regard to non-agricultural lands and
 Rs. 400/- per Are for agricultural lands. It must be
 borne in mind that acquired lands were outside the
 municipal limits. The claimants of Land Acquisition
 Reference Case No.229/78 had filed First Appeal No.
 372/80 in the High Court for enhancement of compensation,
 as they were of the opinion that the market value of
 their non-agricultural lands should have been determined
 at the rate of Rs. 2700/- per Are. The High Court
 (Coram : S.M.Soni, as he then was and K.R.Vyas,JJ.) by
 judgment and order dated November 20, 1991 allowed the
 appeal partly by determining the market value of the
 acquired non-agricultural land of survey no. 446 of
 Ankleshwar at the rate of Rs. 25/- per sq.mt. i.e.
 Rs.2500/- per Are. It must be stated that the claimants
 of Land Reference Cases No. 230/78 and 231/78 whose
 agricultural lands were acquired situated at Ankleshwar,
 had not filed appeals challenging the determination of
 market value of their agricultural lands at the rate of
 Rs. 400/- per Are by notification under section 4(1) of
 the Act issued on July 8, 1976. Therefore, determination
 of market value of the acquired lands which were
 agricultural lands of village Ankleshwars had become
 final.

¶66

 14.�In the present appeals, lands which are subject
 matter of acquisition for expansion of Ankleshwar
 Industrial Estate came to be acquired by notification
 under section 4(1) of the Act dated October 20, 1977. In
 the notification dated October 20, 1977, area of survey
 no.461 of village Piraman was mentioned as 43 Ares and 52
 sq.mts. An erratum was issued and the notification dated
 October 20, 1977 was amended by a subsequent notification
 which was published on January 1, 1978 and the acquired
 area of survey no.461 was corrected as 43 Ares and 50
 sq.mts. By issuing the amended notification, no
 substantial changes in the earlier notification were

¶67

 made. The amended notification was issued just to
 mention correct measurement of the acquired land bearing
 survey no.461 of village Piraman. In State of Gujarat
 vs. Pirojsha P.Contractor (Supra) a contention was
 raised by the learned Counsel for the claimants that the
 date of publication of the acquisition notification under
 section 4(1) of the Act for the purpose of ascertaining
 the market value of the acquired land should be taken to
 be the date of publication of the erratum. The Division
 Bench of this Court rejected the contention and ruled
 that, "in our opinion, when the area covered by the first
 notification was, the entire area under lease-deed
 exhibit 31 and when an erratum was necessary to clarify
 the error, the date of publication of the erratum cannot
 be taken to be the date of the publication of the
 acquisitioin notification for the purpose of determining
 the market value of the land". In our opinion, the
 erratum in the present acquisition proceeding was issued
 to clarify the measurement of Survey No. 461 of village
 Piraman. By the publication of erratum, on the contrary,
 some less area viz. two sq.meters, was acquired.
 Therefore, in view of the settled legal position, we are
 of the opinion that the Reference Court erred in taking
 relevant date for determination of the market value of
 the acquired lands to be the date on which the amended
 notification was published. Therefore, the finding of
 the Reference Court that the relevant date for
 determination of the market value of the acquired lands
 was 26.1.1978, requires to be set aside and it is held
 that the relevant date for determination of market value
 would be the date of publication of first notification
 under section 4(1) of the Act which is October 20, 1977.

¶68

 15.�The submission of the learned Counsel for the
 claimants that the award Exh.20 was challenged in the
 High Court in First Appeal No. 372 of 1980 and the High
 Court had determined the market value of the acquired
 non-agricultural land of Ankleshwar at the rate of Rs.
 2500/- per Are i.e. Rs. 25/- per sq.mt. and,
 therefore, the claimants should be awarded compensation
 at the rate of Rs. 10/per sq.mt. deserves to be
 rejected. The lands which were subject matter of First
 Appeal No. 372 of 1980 were non-agricultural lands
 situated in developed area of Ankleshwar Town itself;
 whereas the acquired lands of present appeals are
 situated in the villages of Gadkhol and Piraman. In
 determining the market value of agricultural lands,the
 sale instances or previous awards of non-agricultural
 lands which are situated in an urban area will not
 furnish the correct market value of agricultural lands.
 In the present acquisition, large area of lands

¶69

 comprising 61 Hectares 22 Ares and 13 sq.mts. was
 acquired for the expansion of G.I.D.C. Ankleshwar;
 whereas the lands which were subject matter of First
 Appeal No.372 of 1980 were of small area i.e. 10 Ares
 and 57 sq.mts. It is settled legal principle that for
 the determination of market value of large area of land,
 reliance cannot be placed on the sale instances or awards
 relating to small area of land. Therefore, in our view,
 the determination of market value of non-agricultural
 lands of First Appeal No. 372 of 1980 cannot be compared
 or relied on for the purpose of ascertainment of market
 value of the acquired agricultural lands which are the
 subject matter of the present appeals. The determination
 of the market value of the agricultural lands of award
 Exh.20 which had become final, in our view, provides good
 guidance for the ascertainment of market value of the
 agricultural lands of the present appeals.

¶70

 16.�It is evident from the oral testimony adduced in
 the Reference Court that due to heavy industrialisation
 and acquisition of lands of surrounding villages, the
 importance on the lands of villages Gadkhol and Piraman
 had increased. Therefore, in our opinion, the market
 value of the agricultural lands of village Gadkhol and
 Piraman can be safely determined at the rate of Rs.
 450/- per Are in the year 1976. We should not lose sight
 of the fact that determination of market value of
 non-agricultural land by award Exh.20 was arrived at
 Rs.1000/- per Are in the year 1976. Therefore, the
 market value of agricultural lands of villages Gadkhol
 and Piraman can be ascertained at the rate of Rs.
 450/per Are.

¶71

 17.�As noted earlier, notification under section 4(1)
 of the Act in award Exh.20 was published on July 8, 1976
 and the notification under section 4(1) of the Act was
 published on October 20,1977 in the present appeals and,
 therefore, there was a gap of one year and three months
 between publication of the two notifications. The
 Reference Court had given price rise of 15% for two years
 but, in view of the above decision rendered in State of
 Gujarat v. Pirojsha P.Contractor (supra) that the
 relevant date for determination of compensation is the
 date of publication of the first notification, we hold
 that price rise of 20% should be given to the market
 value which was determined for agricultural lands by
 award Exh.20 taking into consideration the gap of one
 year and three months between the two notifications.
 Therefore, the price rise of one year and three months
 would come to Rs. 90/- per sq.Are. The market value of
 agricultural lands would thus come to Rs. 540/-, as on

¶72

 the date of publication of notification under section
 4(1) of the Act.

¶73

 18.�Witness Balubhai Desaibhai Patel Exh.21 had
 deposed that many industries in villages Gadkhol and
 Piraman had started prior to publication of notification
 under section 4(1) of the Act. The evidence of this
 witness was not challanged during the cross-examination
 by the appellant. Therefore, it becomes evident that the
 industrial activities had already started in both the
 villages prior to publication of notification under
 section 4(1) of the Act. It is a settled legal principle
 that in ascertaining market value of the acquired land,
 potentiality is to be taken into consideration. There is
 ample evidence on record of this case that prior to
 issuance of notification under section 4(1) of the Act,
 various industries were already established in the
 villages and G.I.D.C. had acquired vast tracts of lands
 of different villages in the surrounding area of
 Ankleshwar town. Therefore, looking to the potentiality
 of the acquired lands, in our opinion, 40% rise deserves
 to be given to the amount of Rs. 540/-. Adding 40% rise
 of potentiality of the acquired lands, the total amount
 would come to Rs. 540 + 216 i.e. Rs. 756/-. As we
 have given rise of potentiality at 40%, some amount will
 have to be deducted towards the development of the lands,
 which would normally be 1/3rd of the amount of 40%. We
 have given rise of Rs. 216/towards potentiality and,
 therefore, an amount of Rs. 72/- will have to be
 deducted towards development charge of the land in
 question. Deducting the amount of 1/3rd i.e. Rs.756 -72
 in our view = Rs. 684/- would be the market value of the
 acquired lands of villages Gadkhol and Piraman can be
 ascertained at Rs.684/-, which is rounded-up at the
 figure of Rs.685/per Are i.e. Rs. 6.85 ps. per sq.mt.
 Therefore, ascertainment of market value of the acquired
 lands by the Reference Court at Rs.765/- per Are deserves
 to be modified and we hold that the market value of the
 acquired lands on the date of publication of notification
 under section 4(1) of the Act i.e. 20th October, 1977,
 was Rs. 685/- per Are.

¶74

 18.�The submission of the learned Counsel for the
 appellant that the Reference Court errd in awarding rise
 of 12% on the additional amount from the date of
 publication of notification under section 4(1) of the Act
 i.e. 26.1.1978 till 26.3.1984, deserves to be accepted.
 We have noticed that in the schedule attached to the
 common judgment and award, the Reference Court has
 awarded additional compensation at the rate of 12% on the
 market value from 26.1.1978 to 26.4.1983. We have

¶75

 already held earlier that the relevant date of
 ascertainment of market value is the date of first
 notification under section 4(1) of the Act which is
 October 20, 1977. Therefore, the claimants would be
 entitled to 12% as provided under section 23(1-A) of the
 Act from the date of first notification i.e. October 20,
 1977 to the date of taking over possession of the lands
 acquired. Therefore, the common judgment and award and
 the schedule attached to it deserves to be modified to
 that extent.

¶76

 19.�The learned Counsel for the appellant also
 submitted that the Reference Court has awarded interest
 on the amount of solatium,which is erroneous. The
 submission of learned Counsel for the appellant deserves
 to be accepted. This is not permissible in view of the
 decision of the Supreme Court rendered in the case of
 State of Maharashtra v. Maharau Srawan Hatkar, JT.
 1995(2) SC 583. The pertinent observations made by the
 Supreme Court in Para-7 of the reported decision are as
 under :-

¶77

 "It would thus be seen that the additional

¶78

 amounts envisaged under sub-ss.(1-A) and (2) of
 S.23 are not part of the component of the
 compensation awarded under sub-s.(1) of s.23 of
 the Act. They are only in addition to the market
 value of the land. The payment of interest also
 is only consequential to the enhancement of the
 compensation. In a case where the Court has not
 enhanced the compensation on reference, the Court
 is devoid of power to award any interest under
 s.28 or the spreading of payment of interest for
 one year from the date of taking possession at 9%
 and 15% thereafter till date of payment into the
 court as envisaged under the proviso."

¶79

 �In view of the above-referred to enunciation of

¶80

 law by the Supreme Court, operative part of the order in
 so far as it directs the appellants to pay interest on
 the amount envisaged under sections 23(1-A) & 23(2) of
 the Act will have to be set aside.

¶81

 �For the foregoing reasons, the appeals filed by
 the State of Gujarat are partly allowed. It is held that
 the market value of the acquired lands on the date of
 publication of the notification under section 4(1) of the
 Act i.e. October 20, 1977 is determined at Rs. 685/per
 Are of the acquired lands of villages Gadkhol and
 Piraman. The appeals filed by the claimants for enhanced

¶82

 compensation are dismissed; whereas the appeals filed by
 the State of Gujarat at partly allowed. The direction
 given by the Reference Court to pay interest on the
 amounts envisaged under sections 23(1-A) and 23(2) of the
 Act is set aside. The direction with regard to the
 amount calculated at the rate of 12% per annum under
 section 23(1-A) is also modified and the claimants shall
 be entitled to the additional amount under section
 23(1-A) from 20th October, 1977 till the date of taking
 over possession of the acquired lands. The claimants
 shall be entitled to interest under section 28 of the Act
 from the date of taking over possession of the lands
 acquired at rate of 9% for the first year and on expiry
 of first year, at the rate of 15% per annum till the
 realisation or till deposit of the enhanced compensation
 in the Court. There shall be no order of costs in both
 the groups of appeals. Office is directed to draw decree
 in terms of this judgment.

¶83

 *******

¶84

 (patel)

Office on Special Duty v. Heirs of Nagjibhai Kalidas

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Office on Special Duty v. Heirs of Nagjibhai Kalidas

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