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Thursday, 26 June 2014

How to determine market value of bagayat land?



IN THE HIGH COURT OF BOMBAY (AURANGABAD BENCH)
First Appeal No. 38 of 1995 with Civil Application No. 1178 of 1998
Decided On: 12.03.2009
Appellants: The State of Maharashtra and The S.L.A.O. (III)
Vs.
Respondent: Chandrashekhar Tanaji Deshmukh
[Alongwith First Appeal Nos. 35, 37, 39, 40, 41, 42 and 43 of 1995 and 36 of 1998 with Civil Application Nos. 1172, 1185, 1223, 1233, 2917, 2918 and 5470 of 1998]
Hon'ble Judges/Coram:
K.K. Tated, J.


Citation: 2009(3)BomCR785, 2009(6)MhLj33
Property - Acquisition - Compensation - Section 54 of the Land Acquisition Act - Present appeal under Section 54 of Act has been filed by State against order by which reference Court enhanced compensation, as also awarded benefits to claimants under amended provisions of Act - Held, respondents/claimants failed to adduce any evidence to show that they were taking bagayat crops whole year in their fields - They failed to produce documentary evidence to show that their lands were perennially irrigated lands and they were taking crops throughout year - Claimants in their evidence just made a statement that their lands were bagayat and they used to take bagayat crops - Nowhere, claimants have stated in their evidence that market value of their bagayat land should be double market value of jirayat land being superior bagayat - Considering this state of evidence on record, find that, in any case, claimants are not entitled to market value of bagayat land double value of dry/jirayat land as held by Reference Court - Considering evidence on record and considering 7/12 extracts produced by claimants in support of their contention about bagayat land, hold that claimants are entitled to compensation in respect of bagayat land @ Rs. 75,000/- per Hector i.e.50% more than jirayat land as held by Reference Court - In view of above, partly allow appeals preferred by State, holding that claimants are entitled to compensation in respect of acquired bagayat land @ Rs. 75,000/- per Hector instead of Rs. 1,00,000/- per Hector, as held by Reference Court


1. These appeals are filed by State of Maharashtra under Section 54 of the Land Acquisition Act challenging the common judgment and award of the learned trial Court passed on 29-04-1994 in various Land Acquisition References. The trial Judge by the impugned judgment enhanced compensation, as also awarded benefits to the claimants under the amended provisions of the Land Acquisition Act. The appellants are challenging the said findings of the trial Judge in these appeals.
2. The impugned judgment of all these nine appeals as stated is a common. The award of the S.L.A.O. is also common. The Notification for acquisition is common. The evidence adduced by the parties and relied upon by the Reference Court is also common. The issues raised are also common in all these appeals, so also, the principle of law. Hence, all these appeals are being disposed of with a common judgment.
3. Few facts in the present matters are that the S.L.A.O. issued notification under Section 4 of the Land Acquisition Act on 25-08-1983 for acquiring respondent - claimant's land for Water Minors of Hatnur Dam Canal at village Advad. After following due process of law, the S.L.A.O. declared award dated 04-06-1987 and awarded compensation in respect of acquired lands as under.
4. Being aggrieved by the said award passed by the S.L.A.O., the respondent - original claimants preferred Reference under Section 18 of the Land Acquisition Act and said Reference was decided by the Reference Court by judgment and award dated 29-04-1994 and awarded enhanced compensation in respect of the acquired land @ Rs. 1,00,000/- Per Hector for bagayat land, Rs. 50,000/- per Hector for jirayat land and @ Rs. 70,000/- per Hector for higher potentiality land.
5. Being aggrieved by the said judgment and award dated 29-09-1994, the appellants preferred the above mentioned appeals in this Court challenging the same on the ground that the Court below erred in placing reliance on solitary piece of evidence in the form of Exhibit - 27 a sale deed dated 31-12-1982. The appellants further submitted that the Court below ought to have held that the respondents - original claimants have utterly failed to establish their claim for enhancement of compensation and therefore, ought to have confirmed the award passed by the S.L.A.O. by rejecting the References.
6. Learned A.G.P. for the appellants submitted that the Reference Court erred in coming to the conclusion that the claimants are entitled to compensation in respect of acquired land @ Rs. 1,00,000/- per Hector for bagayat land, Rs. 50,000/- per Hector for jirayat land and Rs. 70,000/- per Hector for higher potentiality land i.e. Gat No. 648 in L.A.R. No. 153/92 i.e. F.A. No. 35/1995. Learned A.G.P. further submitted that the lower Court erred in coming to the conclusion that overall valuation of bagayat land to be treated double the jirayat land. Learned A.G.P. further pointed out that the claimants in their evidence failed to point out on what basis claimants are entitled to market value of the acquired bagayat land double the jirayat land.
7. Learned Counsel appearing on behalf of the respondents supported the judgment and award passed by the Reference Court dated 29-04-1994. He submitted that the Reference Court rightly held that the claimants are entitled to compensation in respect of bagayat land @ Rs. 1,00,000/- per Hector, @ Rs. 50,000/- per Hector for jirayat land, and @ Rs. 70,000/- per Hector for higher potentiality land. Learned Counsel for the respondents - original claimants pointed out that the Reference Court at the time of deciding market value of the bagayat land relied on the judgment in the matter of State of Maharashtra v. Vithal Rodbaji Shinde reported in 1993 B.C.J. 230. It is further submitted by the learned Counsel for the respondents that the claimants in their evidence specifically stated that they were cultivating bagayat crops in their lands. In view of these facts, learned Counsel appearing on behalf of the respondents - original claimants submitted that the appeals preferred by the State of Maharashtra are liable to be dismissed with compensatory costs.
8. In the above mentioned matters, for determining quality of the acquired land, Reference Court relied on 7/12 extracts produced by the claimants respectively in their L.A.Rs. Considering the evidence adduced by the claimants and 7/12 extracts, I find that the lands which the claimants claims to be bagayat lands are not perennially irrigated lands and it is not proved that the claimants take crops from them throughout the year. The perennially irrigated lands wherein the crops are raised throughout the year and the seasonally irrigated lands wherein the irrigated crops are taken seasonally cannot be treated on par for the market value thereof. The market value of the former lands are bound to be higher than of the latter. Therefore the classification of bagayat land has to be taken with this rider.
9. Reference Court mainly relied on sale deed dated 31-12-1982 at Exhibit - 27 from village Advad of Gat No. 508/1. By this sale deed, transaction took place in respect of 1 H 44 R land for Rs. 1,00,000/- with half share in mango tree. The trial Court came to the conclusion that the rate in respect of Exhibit - 27 comes to Rs. 52,778/- per Hector. In the present matter, notification issued under Section 4 of the Land Acquisition Act is 25-08-1982. Considering the gap between sale deed at Exhibit - 27 and notification under Section 4 of the Land Acquisition Act, Reference Court rightly decided that the market value in respect of the jirayat land on the date of notification under Section 4 of the Land Acquisition Act should be Rs. 50,000/- per Hector. Not only that, the Reference Court rightly held that the land involved in Gat No. 648 in L.A.R. No. 153/1992 in F.A. No. 35/1995 market value should be Rs. 70,000/- per Hector because the land was next to village Advad and have residential potentiality. Considering the residential potentiality of land from Gat No. 648, Reference Court decided market value @ Rs. 70,000/- per Hector. I do not find any infirmity in the said decision of the Reference Court.
10. Reference Court at the time of deciding market value of the bagayat land hold that the claimants are entitled to market value of bagayat land double the jirayat land on the basis of judgment in the matter of State of Maharashtra v. Vithal Rodbaji Shinde reported in 1993 B.C.J. 230. Reference Court held that the value of the bagayat land is double the value of the dry/jirayat land. It is necessary to consider whether Reference Court correctly decided the market value of the bagayat land double the value of the dry/jirayat land. The decision in the matter of Vithal Rodbaji Shinde (supra) considered by our High Court in the matter of State of Maharashtra v. Parashram Jagannath Aute reported in MANU/MH/0693/2007 : AIR2007Bom167 . It is held by this Court that the Court has to determine the amount of compensation/market value of the land at the time of publication of the notification under Section 4 considering the provisions of Section 23 and 24 alongwith various judicial pronouncement arriving at market value in each case. It is not permissible nor proper for the Court to lay down any strait-jacket formula universally applicable to all land acquisition cases at any level of proceedings.
11. The question for consideration is what should be the market value of bagayat land in the present case. The respondents - claimants failed to adduce any evidence to show that they were taking bagayat crops whole year in their fields. They failed to produce documentary evidence to show that their lands were perennially irrigated lands and they were taking crops throughout the year. The claimants in their evidence just made a statement that their lands were bagayat and they used to take bagayat crops. Nowhere, the claimants have stated in their evidence that the market value of their bagayat land should be double the market value of jirayat land being superior bagayat. Considering this state of evidence on record, I find that, in any case, the claimants are not entitled to market value of bagayat land double the value of dry/jirayat land as held by the Reference Court. Considering the evidence on record and considering 7/12 extracts produced by the claimants in support of their contention about bagayat land, I hold that the claimants are entitled to compensation in respect of bagayat land @ Rs. 75,000/- per Hector i.e.50% more than jirayat land as held by the Reference Court. Recently our High Court in the matter of State of Maharashtra v. Fulyabai Kisan Govardhane and Ors. reported in, MANU/MH/0642/2007 : (2007)109BOMLR2043 held that considering the facts in that case, bagayat land would be calculated by giving increase of 25% of market value of jirayat land. Para. 20 of the said judgment reads as under:
20. We are also of the considered view that it was not necessary for the Court to always grant a fixed percentage of increase or decrease. There cannot be a definite formula of this kind to compute the fair market value of the land. Each case has to be determined on its own facts and circumstances. The statutory guidelines contained under Section 23 and the various judgments on the subject would guide determination of question of compensation. A Full Bench of this Court in the case of The State of Maharashtra v. Parashram Jagannath Aute First Appeal No. 1098 of 2003 decided on 19th July 2007 since reported inMANU/MH/0693/2007: AIR2007Bom167 held that the analytical examination of the principles of law would lead to no other conclusion but that determination of market value of the acquired land has to be done on facts of each case, existing statutory guidelines stated in Section 23 and 24 of the Act and in the backdrop of judicial pronouncements controlling exercise of jurisdiction under Section 18 of the Act. It was also held that it was not always true that the bagayat land would get double the compensation in comparison to jirayat land. The enunciated principles of law de hors the evidence on record cannot be applied uniformly to every case. The Court has to determine the market value of the land on the date of publication of the notification under Section 4of the Act on the basis of evidence on record. It is permissible for a Court to apply some amount of guess work if the direct evidence relating to the relevant period is not available on record. Of course, the guess work cannot be exceed its permissible limits and thus reasonable percentage of increase and/or decrease should be provided to arrive at market value to award a reasonable and fair amount of compensation to the claimants. Even if we were to add 10 per cent increase annually as applied by the Reference Court, still certain amount of deduction would have to be made and in the facts and circumstances of the present case we are of the view that 25 per cent deduction on different counts can appropriately be made. There is direct evidence on record to show that the acquired land forms part of different classes of land i.e. Bagayat, jirayat and pot kharab lands. The award made by the Collector itself divides the acquired lands into different classes which has not been questioned by any of the parties before the Reference Court. In this Court there is no challenge to such classification even during the course of arguments. Thus, we would proceed on the basis that the entire land acquired from the revenue estate of village Sajegaon falls into the three aforesaid categories which obviously are to be valued differently. Entire irrigated land cultivated through regular source of water like well water etc. essentially must receive higher rate of compensation than jirayat land which in turn would receive higher compensation than the pot kharab land. Again, applying certain amount of guess work, we hold that the market value of jirayat land being the basic factor for determining compensation, market value of bagayat land would be calculated by giving increase of 25 per cent on market value of jirayat land, while pot kharab land would be given a decrease of 15 per cent from the market value of jirayat land.
12. It is no doubt true that the Courts to adopt comparable sales method of valuation of land while fixing market value of the acquired land. While fixing market value of the acquired land, comparable sales method of valuation is preferred than other methods of valuation of land such as capitalisation of net income method or expert opinion method. Comparable sales method of valuation is preferred because it furnishes the evidence for determination of the market value of the acquired land at which a willing purchaser would pay for the acquired land if it had been sold in the open market at the time of issue of notification under Section 4 of the Act. In any case, at the time of fixing market value of the acquired land, some guess work has to be done on the basis of material available on record. For this purpose, a reference can be made to the judgment of Apex Court in the matter of ONGC Ltd. v. Sendhabhai Vastram Patel and Ors. reported in (2005) 6 SCC 454 particularly Para. 11, 12 and 13 which read as under :
"11. While determining the amount of compensation payable in respect of the lands acquired by the State, indisputably, the market value therefore has to be ascertained. Although, there exist different modes for arriving at the market value for the land acquired; the best method, however, as is well known would the amount which a willing purchaser of the land would pay to the owner of the land as may be evidenced by the deeds of sale. In the absence of any direct evidence on the said point, the court may take recourse to other methods viz. judgments and awards passed in respect of acquisition of lands made in the same village and/or neighbouring villages. Such a judgment and award in the absence of any other evidence like deed of sale, report of expert and other relevant evidence, however, would have only evidentiary value.
12. The Reference Court, it is trite, has to apply the comparable sales method as also the situation of the land which is to be appreciated upon considering the question as to whether the acquired land is similar to any land sold in the vicinity.
13. In Shaji Kuriakose v. Indian Oil Corporation Ltd. this Court observed: (SCC pp 652-53, para 3)
3. It is no doubt true that courts adopt comparable sales method of valuation of land while fixing the market value of the acquired land. While fixing the market value of the acquired land, comparable sales method of valuation is preferred than other methods of valuation of land such as capitalisation of net income method or expert opinion method. Comparable sales method of valuation is preferred because it furnishes the evidence for determination of the market value of the acquired land at which a willing purchaser would pay for the acquired land if it had been sold in the open market at the time of issue of notification under Section 4 of the Act. However, comparable sales method of valuation of land for fixing the market value of the acquired land is not always conclusive. There are certain factors which are required to be fulfilled and on fulfilment of those factors the compensation can be awarded, according to the value of the land reflected in the sales. The factors laid down inter alia are: (1) the sale must be a genuine transaction, (2) that the sale deed must have been executed at the time proximate to the date of issue of notification under Section 4 of the Act, (3) that the land covered by the sale must be in the vicinity of the acquired land, (4) that the land covered by the sales must be similar to the acquired land, and (5) that the size of plot of the land covered by the sales be comparable to the land acquired. If all these factors are satisfied, then there is no reason why the sale value of the land covered by the sales be not given for the acquired land. However, if there is a dissimilarity in regard to locality, shape, site or nature of land between land covered by sales and land acquired, it is open to the court to proportionately reduce the compensation for acquired land than what is reflected in the sales depending upon the disadvantages attached with the acquired land." (See also P. Ram Reddy v. Land Acquisition Officer and Panna Lal Ghosh v. Land Acquisition Collector.)
14. In view of the above mentioned facts and circumstances, I partly allow the appeals preferred by the State of Maharashtra, holding that the claimants are entitled to compensation in respect of the acquired bagayat land @ Rs. 75,000/- per Hector instead of Rs. 1,00,000/- per Hector, as held by the Reference Court. Hence I pass the following order.
ORDER
(A). The appeals preferred by the State of Maharashtra are partly allowed, holding that the respondents - original claimants are entitled to compensation in respect of bagayat land @ Rs. 75,000/- per Hector instead of Rs. 1,00,000/- per Hector, as held by the Reference Court.
(B). The judgment and award passed by the Reference Court is modified to the extent that respondents - original claimants are entitled to compensation in respect of bagayat land @ Rs. 75,000/- per Hector in stead of Rs. 1,00,000/- per Hector.
(C). No order as to costs.
Civil Applications are preferred by the State of Maharashtra for stay of the impugned judgment and award passed by Reference Court. In view of the final disposal of First Appeals, nothing survives in these Civil Applications and same are disposed of as rejected.


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