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Saturday, 22 August 2015

How to prove loss of business or profit?

He has provided for loss of business for which he has
shown the value of the business, but he had not taken any
steps to ascertain what business the claimant was carrying
on on the acquired land.  He would need the figures of the
income of the last 3 years prior to the acquisition.  Since in
his opinion no other details to assess the compensation for
loss   of   business   was   necessary,   he   did   not   verify   any
documents showing the business of the claimant to compute
its loss.  He did not know that the claimant had claimed an
income   of   Rs.9000/­   p.a   from   fire   wood   business   and
Rs.15,000/­ p.a as rent from the residential premises.   He
computed the profits of the business of the claimant only
from the information given by the claimant. 
{28}

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
LAND ACQUISITION REFERENCE NO.5 OF 2006
The Special Land Acquisition Officer (7)
And
Pundalik Raghunath Mahulkar  ...Claimant
And
The Commissioner of Gr. Mumbai, 
Municipal Corporation, Mumbai 
CORAM : MRS. ROSHAN DALVI, J.    
           
    Citation: 2015(2)ABR730, 2015(4)ALLMR795, 2015(2)BomCR497, 2015(4)MhLj778
              Date of Pronouncing the Judgment: 2nd March,2015



1. This   land   acquisition   reference   is   taken   out   under
Section   18   of   the   Land   Acquisition   Act   1882   (LAR)   for
enhancement of compensation.   The acquisition of land is
not in dispute.  It has been acquired for a Municipal retail
market and for municipal housing.  The compensation paid
has been claimed to be inadequate by the claimant.   The
claimant would have to prove the inadequacy.  The claimant
has  not  led   evidence  of  any  sale  instance  in  the  vicinity
during   the   period   of   acquisition.    The   claimant   has   led

evidence on the inadequacy   of the compensation granted.
He would also contend that the land acquired on CTS No.
151 admeasuring  572.50 m² has been acquired of which is
the   owner   and   the   entire   land   has   not   been   taken   into
consideration   for   the   payment   of   compensation.   The
acquiring body which is a municipality has also led evidence
on   the   precise   position   of   the   land   to   show   that   the
compensation   which   has   been   granted   by   the   SLAO   is
adequate   and   sufficient.     The   case   is   entirely   dependent
upon oral evidence in view of the admitted position of the
land,   its   situation,   and   the   position   of   the   facilities   and
amenities around the land.   It would therefore have to be
determined, taking into account the oral evidence led by the
parties as to whether additional compensation is required to
be granted.
2. The material issues between the parties are : 
1. Whether the compensation fixed by the SLAO is
adequate and sufficient.
2. Whether   the   claimant   is   entitled   to   any
additional compensation.
3. What relief, if any, is the claimant entitled to ?

3. The  claimant  has  led  evidence  and  has  been  crossexamined.
The claimant has also led evidence of an expert
witness to show the value of the acquired land.  The officer
of the acquiring body has also led evidence on behalf of the
acquiring body.   These witnesses are cross­examined with
regard to the exact position of the suit land alongside the
other lands in the vicinity.  
4. The issues shall have to be decided upon such oral
evidence. Issue numbers 1 and 2 shall be decided together. 
5. Issue Nos.1 and 2:  The claimant has claimed that the
entire   land   is   572.50   m².     He   has   claimed   that   the   3
instances cited by the SLAO are not comparable with his
land. 
6. With regard to the features of his land, he has deposed
that   it   is   in   the   heart   of   Mahul   village.     The   entire
surrounding area is developed.  There are market facilities,
school facilities, and transport facilities in and surrounding
his  plot.    All the  other facilities  are  available  at  a  short
distance.     The   market   rate   in   the   ready   reckoner   was
Rs.5400   per   square   metre   at   the   relevant   time.     He,
therefore,   claims   that   the   SLAO   wrongly   awarded
compensation at the rate of 2970 per sq.mtr., though his


land is developed with structures, fencing and trees.  He has
made   grievance   that   the   SLAO   has   not   considered   the
valuation report which he submitted to him for calculating
the market value.   He has challenged the valuation of the
trees in the acquired land. 
7. He   claims   that   he   has   fruit   bearing   trees   and   fuel
bearing   trees.     He   has   disputed   the   valuation   of   the
structures on the acquired land at Rs.1.31 lakhs fixed by the
SLAO   without   reasons.     He   claims   that   the   executive
engineer, PWD valued the structures at Rs.3.82 lakhs which
was   not   considered   by   the   SLAO.     He   claims   that   the
structures are prior to 1960 and have been assessed by the
BMC.  He is aggrieved that he used the acquired land for his
residence and had to shift along with his household articles
and materials.  He also had a Wakhar on the suit land from
which he earned an income of Rs.1.50.  He had 20 tenanted
structures on the suit land from which he received a rental
income of Rs. 2 lakhs.  He relied upon his income tax returns
for the relevant years.  He had put up a compound with 47
iron bars and iron rope, had pumps and water storage tank
on the acquired land.  
8. He claims that his land was slightly encroached upon
by the occupant of the adjoining land. That encroachment is
3.75   m²   which   took   place   whilst   the   land   was   in   the

possession of the respondents.  He, therefore, claims that the
land of which possession was taken was 572.50m².  He has
taken exception to the SLAO reducing the compensation to
the extent of Rs.18761 on account of the encroachment on
3.75 m²  of land.  
9. He,   therefore,   claims   the   market   price   of   6480   per
square metre taking into account the cost of the structures,
trees,   and   expenses   for   change   of   his   residence,   loss   of
income, rental income for 10 years and the compound wall. 
10. He   has   been   cross­examined   by   the   acquiring
body.   His   cross­examination   reveals   that   there   are
government lands on the east and south of the acquired
land.  The land on CTS No.150 which is adjoining his land is
half encroached.   The land on CTS No. 152, which is also
adjoining his land, is fully encroached.   He claims that the
structures   on   CTS   No.150   are   temporary   structures   and
structures   on   CTS   No.152   are   temporary   but   pucca
structures.   He says that those structures are not regular
ground +1 storey structures, but an extension of ground
storey having access from the outside (which would show
the construction of the first floor).   He has admitted that
there is an unathorised wall on the North of the acquired
land and the property to the south and west of his property
are   in   “no   development”   zone.     On   the   East   there   is   a

refinery. There is only one approach road to Mehul village
from Chambur which is a 60 feet wide road and allows only
one vehicle each way.  Chembur is 4 miles from the acquired
land.  In the entire area there are no high – rise structures;
the structures are of 2 or 3 storeys.   There are no hospital
facilites   in   Mehul   village,   but   there   are   clinics   and
dispensaries.   There are no reputed schools.   His land is 5
miles   from   Kurla   Railway   Station.     There   is   a   Marathi
College and Chumbur High School which a reputed school,
close to the acquired land.  He has also admitted that he has
not approached the BMC for development of the acquired
land.  He has admitted the encroachments on the acquired
land. The plan produced by him is an admitted plan showing
the boundaries of the acquired land.  There are 2 structures
which are chawls on it.  He has given the measurements of
the chawls.   There is a strip of land for passing and repassing
on the East side boundary line of the acquired land.
11. The claimant admits that the structures on the
acquired land are prior to 1962.  He has not produced any
assessment  of   the  Municipality.    He   has  refuted  that  the
depreciated value of the structures would be zero and that
the SLAO has taken possession of the acquired land along
with the occupants on “as is where is” basis.   Though the
claimant claims that the occupants had vacated, he has not
produced the letter of surrender from the occupants. The

structures on the acquired land must be taken to be fully
occupied.  The possession receipt does not speak of vacant
possession   of   the   structures.     Hence   the   fact   that   the
possession has been taken as claimed by the respondent has
to be accepted.  The total area of the land of the claimant is
572.50 m². Upon encroachment being seen on the acquired
land, the valuation of 368.25m² has been done by the SLAO
deducting   3.75m²  from   the   land.   The   possession   of   the
acquired land was not taken or by the acquired body before
the   award   was   passed.   The   claimant   does   not   have
documentary evidence to show otherwise.  The possession of
the acquired land was given to the acquiring body after an
inventory.   Hence the encroachment is not shown by the
claimant to be after possession was taken. 
12. The   joint   inventory   taken   by   the   parties   has
shown 29 fruit trees and 11 fuel trees on the acquired land.
The crop of the fruit and a fuel entries was not disclosed by
the claimant to the SLAO.   The value of the fruit bearing
trees is more than the fuel trees yet the demand is admitted
by the complainant to be the same.  Consequently it is also
admitted that the yield of the trees vary. 
13. Though the claimant claims that he handed over the
vacant   possession   after   taking   possession   from   the
occupants, the names of the occupants were neither given by

the   claimant   nor   remembered   by   him   in   the   crossexamination.
 No letter of surrender or any such document is
produced by the claimant.   The acquired land remained in
the   possession   of   the   claimant   until   2001   –   2002.     The
claimant shows rent received from the acquired land as also
the acquired land to be valued at only Rs.1.52 lakhs in his
income tax returns. 
14. Considering the evidence of the claimant it is seen that
the  acquired   land  has no  access  from   Chembur  or Kurla
Railway station except through adjoining lands to the East
and South which are fully encroached.  The encroachments
are also of structures of the first floor having entry from
outside and showing independent occupation.  There are no
specific   facilities   in   or   around   the   encroached   land   for
education, health, market, etc.  The access road is narrow. 
15. The   fact   that   there   is   further   encroachment   before
possession  was   taken  is   also  seen   to   be  admitted  to   the
claimant.  The land is seen to be having structures which are
not   vacated,   no   evidence   having   been   produced   by   the
claimant showing the tenants having vacated the structures,
the claimant being the only person who could produce such
evidence.     Consequently   the   claimant's   land   could   be
acquired only on “as is where is” basis and it would lie upon
the acquiring body to expend further amounts for and on

account   of   the   occupants   on   the   acquired   land   in   the
admitted structures which are on the acquired land. In fact,
the acquiring body has got the tenants vacated from the
land. 
16. The   claimant   has   not   led   evidence   of   any   positive
valuation.  He has not produced any instance of sale in the
vicinity at the time of acquisition.  Upon such evidence of the
claimant his case that the land is clear and valuable cannot
be accepted. 
17. In   view   of   the   above   evidence   the   claim   that   the
compensation granted by the SLAO which is less than the
amount shown in the ready reckoner and for 568.5m²  of
land is seen to be adequate and reasonable though if any
positive evidence was led the valuation of the land would
have been seen from such evidence and the valuation of the
SLAO   based   upon   3   instances   may   itself   not   have   been
considered. 
18. The claimant has led evidence of an expert witness.
Though   the   integrity   of   the   expert   witness   cannot   be
questioned,   his   report   leaves   much   to   be   desired.     His
evidence   shows   that   for   his   valuation   he   considered   the
value of the land plus the depreciated cost of construction.
He enumerated the methods of calculation of the valuation

of the land by viz., comparable sale instances, development
method and capitalisation method.  
19. He had taken search in the office of the sub registrar in
respect of the acquired land, which was indispensable.  He
deposed that he himself did not carry out the search.   His
assistant did. He knows that a fee is to be paid and a receipt
is given for such search.  He could not produce it.  He did
not know how many sub registrar's offices are concerned
with   the   property.     He   did   not   remember   whether   his
assistant   was   sent   to   the   place   where   the   property   was
situated.  He did not know where his assistant was directed
to attend.  He did not know the sub registrar's jurisdiction.
He   did   not   know   whether   the   sub   registrar's   offices   at
Chembur would have jurisdiction in respect of the acquired
land or whether that office had started at the relevant time. 
20. He agreed that the valuation of the property depends
upon its location, size and condition and those details would
be required to be ascertained.  His evidence shows that he
had visited the property at the time of making his report and
had not seen the structures.  He failed to obtain details about
the   use   of   the   structures   and   the   encumbrance   by   the
tenants.   He did not know that the plans of the property
would be available with the TLR's office.  What he knew was
that the occupants were not permanent tenants.   He was

informed   by   the   owner  that   it   was   something   like   guest
house.   Though he knew that the information about the
tenants could be available from the municipal assessment
department, he did not obtain it.  He admitted that he would
require to value the property not upon what he saw at the
time   of   his   visit,   but   at   the   time   of   the   notification   for
acquisition.  Yet he had not verified the documents.  
21. His observations were on the basis of what he saw
when   he   visited   the   suit   property   to   prepare   his   report.
Accordingly   he   observed   that   the   plot   was   levelled,   that
there were no structures and he did not know the precise
measurement.  His entire report is based only on information
given by the client which he had not verified though it was
verifiable from the municipal records.  His entire valuation
report without accounting for the size, type and extent of the
structures is, therefore, completely flawed.  He admitted and
accepted that the valuation of a structure would be different
if   it   was   authorised   or   not   authorised   and   that   the
authorisation could be seen from the plan of the structures
or   of   the   suit   property.     Though   being   a   professional
architect, he did not demand the documentation, but relied
upon  the information of  his  client alone.   He,  therefore,
could not account for the fact whether the occupants were
“temporary or permanent”.   Though admitting that the cost
of construction varies with the nature of construction, he has

not accounted for the construction.   He only accepted the
information of the claimant with regard to the structures and
consequently he did not know the age of the structures or its
valuation   with   regard   to   the   materials   used   for   the
construction.
22. Though there were no trees when he visited the suit
property on the acquired land he has given valuation of the
trees.   Despite admitting that the age and the yield of the
trees is important he has not taken any steps to ascertain
either.  He has made the valuation on the basis of his own
judgment and without accounting for the age, size or the
yield of the trees.  He has admitted that since there were no
trees on the acquired land when he inspected it, he only
relied upon the information of the claimant without even
verifying the report of the joint inspection. 
23. He has mentioned about the movables on the acquired
land being the tank, fencing, pump etc.  He has not verified
any documentary evidence with regard to these items.   He
took no steps to collect those details.  He knew that when an
electric meter is installed, it belongs to the electric company
and that the deposit would be refunded when the meter is
surrendered.  He claimed for the meter without verifying the
refund obtained by his client.   He disputed that it was the
property of the electric company.  He claimed compensation

for   2   water   tanks   also   on   the   oral   information   of   the
claimant without verification of the nature and size of the
tank, the material used for its construction or the date of its
purchase.
24. He   claimed   for   the   fencing   on   the   basis   of   the
information given by the claimant alone. 
25. He claimed an area of 572.50 m² without physically
measuring the same and from the property register.
26. He   admitted   the   concept   of   developed   land.     He
deposed that the acquired land is almost in the centre of the
developed area in the development plan. He was not shown
the joint inventory though he was aware that joint survey
was carried out.   He did not verify the report of the joint
survey which is a public document and could be applied for
by him.  Because at the time of his inspection there were no
structures on the land he concluded that the land was not
encroached upon.  
27. He   did not call for the income tax returns, the rent
received, the assessment bills, the plan of the land or any
such documentary evidence which would be easily available
with   the   claimant   or   which   could   be   obtained   from   the
public authorities. 

28. He has provided for loss of business for which he has
shown the value of the business, but he had not taken any
steps to ascertain what business the claimant was carrying
on on the acquired land.  He would need the figures of the
income of the last 3 years prior to the acquisition.  Since in
his opinion no other details to assess the compensation for
loss   of   business   was   necessary,   he   did   not   verify   any
documents showing the business of the claimant to compute
its loss.  He did not know that the claimant had claimed an
income   of   Rs.9000/­   p.a   from   fire   wood   business   and
Rs.15,000/­ p.a as rent from the residential premises.   He
computed the profits of the business of the claimant only
from the information given by the claimant. 
29. He   has   admitted   that   he   could   not   find   any   new
development around the acquired land at the time of his visit
also or the fact of no access to the land which is admitted by
the claimant as also the encroachments along the east side of
the land also admitted by the claimant.  Consequently these
are the aspects not accounted for by him in his report. 
30. He admitted that the Mahul village road was not fully
developed, and was to be widened in the revised sanctioned
development plan.

31. He claimed 30% advantage in respect of the acquired
land.   For that purpose he has not compared the acquired
land with any other land to verify the physical condition.  He
relied upon only his visit to the suit land at the time of the
report. 
32. Upon   seeing   the   evidence   of   the   claimant   and   the
expert witness no case for interfering with the valuation put
by the SLAO is made out.  
33. The acquiring body has also examined its witness.  It is
for   the   claimant   to   prove   his   case.   The   evidence   of   the
acquiring body is immaterial.  
34. The witness on behalf of the acquiring body has set out
the procedure that has been adopted for acquisition which is
not disputed.  He has shown from the plan of the acquired
land the extent of the land that would go into road.  He has
also produced a list of occupants / tenants on the acquired
land and 2 assessment bills – cum – receipts of 1950 – 1955
of the acquiring body.  The acquired land had a number of
occupants a list of 21 occupants is signed by both the parties.
The acquiring body has had to get the occupants vacated.
They would have incurred expenses for that purpose because
it is an admitted fact that the chawls /structures on the

acquired   land   were   there   prior  to   1962   and   were   hence
tolerable and accordingly compensation would have to be
paid to those occupants for getting the land vacated.   It is
the   land   thus   vacated   that   has   been   seen   by   the   valuer
without reference to those documents.
35. Miss. Nichani only sought to read through the
cross examination of that witness. She has not shown any
particular   aspect   in   such   evidence   which   would   show   or
prove   the   case   of   the   claimant   in   the   face   of   the   above
admissions of the claimant meticulously elicited in the cross
examination of the claimant and his expert witness.   The
cursory reading of the cross examination of the witness of
the acquiring body shows no aspect worth detailing.   The
cross examination of the witness of the acquiring body shows
the admission of the 3 chawls with 20 rooms as also 2 firewood
depots on the acquired land.  The witness also admits
that there was a water tank but he does not know that the
water   was   supplied   to   the   chawls   from   that   tank.     The
witness admits that there was rental income of the claimant
but makes a reference to the remarks given by the Executive
Engineer.  The witness admits that there was farming around
the land and that the acquiring body has not obtained any
independent value as report.   He has also not personally
ascertained the nature and position of the comparable lands
though instances of sale of 2002­2005 have been given.  The

witness has, however, denied the income of the claimant
from rent or from the wood business or the fact that the land
is in the heart of Mahul village or the case about comparable
instances. 
36. The   entire   cross   examination   with   regard   to   the
structures, the income, the access to the land, the adjoining
lands, facilities, if any, the occupation in the chawls is wholly
irrelevant   since   the   witness   of   the   acquiring   body   is   an
officer and would not have personal knowledge of the fact of
the   land   of   the   claimant.     In   fact   his   cross   examination
proceeds initially on that basis.
37. The claimant must make out the case of enhancement.
The above evidence shows that no such case is made out.  
38. In the case of  Chimanlal Hargovinddas Vs. Special
Land Acquisition Officer, Poona & Anr. AIR 1998 SC 1652
the principals for acquisition are set out and which have
been followed in a number of cases since.  The factors which
are required to be kept in mind are :
1. The   award   is   not   a   judgment   which   can   be
considered as in appeal – The above facts which have
emanated from the cross examination would show why
this Court cannot sit an   appeal as the claimant would

want.
2. The Court has to determine the market value on the
basis   of   material   produced   before   it   –   No   separate
material is produced to verify any market value in this
case. 
3. The claimant has to show that the price offered for
his land is inadequate – this the claimant has completely
failed to do. 
4. The   market   value   would   be   what   a   hypothetical
purchaser would pay in an open market as a reasonable
price – such reasonable price has been offered by the
SLAO.
5. Only   genuine   comparable   instances   may   be
considered   –   these   would   have   to   be   shown   by   the
claimant;  none is shown. 
6. The   proximity   from   the   time   and   the   situation
would   be   considered   –   the   acquired   land   shows   no
proximity   to   railway   stations   or   other   facilities   for
education and / or the health.
7. The deduction of the market value would be upon

making adjustment for the plus and minus factors – which
has been amply done.  The balance­sheet of such plus and
minus factor would show that the suit land would fetch
less than the base value reflected in a ready­reckoner,
which also is not to be accepted as correct. (see  P. Ram
Reddy & Ors. Vs. Land Acquisition Officer, Hyderabad
Urban Development Authority, Hyderabad & ors. 1995
(2)   SCC   305  and  Krishi   Utpadan   Mandi   Samiti
Sahaswan   District   Badaun   Vs.   Bipin   Kumar   &   Anr.
2004(2) SCC 283.
8. There   is   no   particular   characteristic   of   the   land
shown by the claimant which can demand or merit higher
compensation. 
9. In   the   case   of  Special   Deputy   Collector   and
another etc. Vs. Kurra Sambasiva Rao and others etc.
AIR   1997   SC   2625  it   has   been   held   that   a   fair   and
reasonable and adequate market value is a question of
fact depending upon the evidence adduced, circumstantial
evidence and the probabilities arising in each case.  The
guiding   star   or   the   acid   test   would   be   whether   a
hypothetical willing vendor would offer the lands and a
willing   purchaser   in   normal  human   conduct  would   be
willing   to   buy   as   a   prudent   man   in   normal   market
conditions.   The Judge should sit in the arm chair and

seek an answer to the question relating to the market
value. 
The best evidence of the value of the property are
the sale transaction in respect of the acquired land at the
time of which it is sold, the purpose for which it is sold,
the nature of the consideration and the manner in which
the transaction came to be brought out.  A bonafide sale
transaction   relating   to   the   neighbouring   lands   in   the
vicinity would be of help.  Such land should be similar to
the acquired land and possess similar features of the land
acquired or land adjacent to the land acquired.   In this
case   the   claimant   has   led   no   evidence   of   any   sale
transaction, the proximity in point of time or proximity to
the land itself.  
It is further observed that treating the entire village
as one unit and uniformly determining compensation on
that basis not sustainable in law. This is precisely what the
SLAO has not done as he has verified the value taking
into account the plus and minus factors of the acquired
land more specially the fact that it is away from Chembur
and   Kurla   Railway   stations   and   has   no   particular
amenities and facilities around it.  
The ultimate test laid down in the judgment is that
the market value should be just, adequate and reasonable,
which in this case is apparent.  
Consequently, it is held in the judgment that the

burden of proof always is on the claimant to establish that
the land is possessed of advantageous features and are
therefore, capable of fetching higher market value.
39. Considering the facts of this case alongside the settled
law it is seen that the SLAO has given a reasonable market
value   by   way   of   compensation.   The   claimant   has   not
discharged   the   onus   which   lies   upon   him   to   show   any
advantageous   factors   of   his   land   to   merit   any   higher
compensation.     The   claimant   has   not   roduced   a   single
instance of the sale of land in the vicinity at the relevant
time.     The   compensation   is   indeed   a   reasonable   market
value.  
40. Though the claimant claims compensation for 3.75m²
of land deducted upon encroachment, the claimant has also
not proved that the acquired land was not encroached upon
at the time the possession was handed over to the extent of
3.75 m²  and that there was encroachment after possession
was taken.  Hence he cannot obtain any value for such land
also.   Hence the  Issue No.1 is answered in the affirmative
and Issue No.2 is answered in the negative .  
41.     Issue No. 3: Consequently the claimant is not entitled
to any enhancement.  

42. Hence the following order: 
1. The   claim   for   higher   compensation   is
dismissed.   The   Reference   is   answered
accordingly.
                                                                       (ROSHAN DALVI, J.)



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