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CASE NO.:

Appeal (civil) 6276 of 1999

PETITIONER:

M/s. Ahad Brothers

RESPONDENT:

State of M.P. & Anr.

DATE OF JUDGMENT: 19/11/2004

BENCH:

SHIVARAJ V. PATIL & B.N. SRIKRISHNA

JUDGMENT:

J U D G M E N T

Shivaraj V. Patil J.

Pursuant to the Notification issued under Section 4(1)

of the Land Acquisition Act, 1894 (for short 'the Act') an

extent of 16.81 acres of land comprised in Khasra Nos. 870,

871, 872, 973 and 1623/873 was acquired. The Land

Acquisition Officer, considering the appellant as the owner,

passed Award fixing the market value of the land acquired

at the rate of Rs.450/- per acre and awarded a sum of

Rs.15,307.58 paise as compensation. Not being satisfied

with the amount of compensation, so awarded, the

appellant sought for reference under Section 18 of the Act

for enhancement of compensation claiming a sum of

Rs.32,91,771.50. The Reference Court accepted the Award

made by the Land Acquisition Officer holding that the

compensation awarded was adequate. Consequently, it

rejected the reference. Aggrieved by the order of the

Reference Court the appellant filed First Appeal No. 82 of

1969 in the High Court. The High Court allowed the appeal,

set aside the order of Reference Court and remanded the

matter to it to decide the reference afresh. The learned

District Judge (Reference Court) framed an additional issue

as to what was the market value of the land acquired on

the date of Notification issued under Section 4(1) of the

Act. On the basis of the evidence recorded learned District

Judge recorded a finding that the market value of the land

was Rs.2/- per square foot and awarded a sum of

Rs.14,64,480 as compensation for the land and Rs.6,600/-

as compensation for the trees standing thereon with

solatium and interest. The State, aggrieved by the order of

the Reference Court, filed First Appeal No. 141 of 1980 in

the High Court. The appellant also filed cross objections

seeking further enhancement of the compensation as per

the claim. During the pendency of the appeal State

Government made application for amendment in the written

statement to the effect that the appellant was not the

owner of the land and was a licensee or a lessee. The State

Government also made an application seeking permission to

file additional evidence. The High Court allowed the

applications made for amendment as well as for taking the

additional evidence. The High Court after allowing the said

applications set aside the Award made by the District Court

and remitted the matter again to the Additional District

Judge for determining the right of the appellant in the land

and to determine the market value of those rights on the

date of Notification issued under Section 4(1) of the Act.

However, after the remand the State Government did not

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amend its written statement as directed by the High Court.

But the learned District Judge in compliance of the order of

the High Court framed additional issues and took additional

evidence. On the basis of the material available on record

the learned District Judge recorded findings that the

appellant was having ownership rights in the acquired land.

He determined the market value of the land acquired at

Rs.16,64,480/- and Rs.6,600/- as compensation for the

trees and solatium at the rate of 15% as also interest at the

rate of 3% per year from the date of taking possession of

the land. The State Government for the second time filed

appeal in the High Court questioning the validity and

correctness of the order made by the learned District Judge.

The appellant also filed cross objections claiming

enhancement of the compensation for the land acquired at

the rate of Rs.5/- per square foot. The High Court partly

allowed the appeal filed by the State and dismissed the

cross objections filed by the appellant by the impugned

judgment. In the impugned judgment the High Court fixed

market value of the land acquired at the rate of Rs.2/- per

square yard as against the market value fixed by the

Reference Court at the rate of Rs.2/- per square foot.

Further, the High Court held that the appellant was entitled

for compensation only to the extent of lease hold interest in

the acquired land and that they were not owners of the

land. Hence the appellant is before this Court aggrieved by

the impugned judgment and order passed by the High

Court.

The learned counsel for the appellant strongly

contended that (1) the jurisdiction of the civil court in

deciding reference under Section 18 of the Act is limited

and is of special nature; reference proceedings could not be

converted into a suit for adjudication for title over the land

acquired; the High Court committed an error in deciding the

question of title and holding that the appellant had only

lease hold interest in the land acquired. (2) The High Court

should have appreciated the fact that the respondent-State

had throughout acknowledged the title of ownership of the

appellant over the land right from the date of issuance of

Notification under Section 4(1) of the Act; respondent-State

was bound by their conduct and they were estopped from

claiming otherwise at later stage, i.e., after the whole

acquisition proceedings were completed, Award had been

passed and that too in the second round before the High

Court. (3) The High Court committed a serious error in

interfering with the well-reasoned and justified findings

recorded by the District Judge on proper appreciation of

both oral and documentary evidence; the High Court did

not dislodge the reasons recorded by the District Court in

recording findings. (4) No material was placed on record to

establish that the appellant was only a lessee and not the

owner; the State had accepted the appellant as the owner

of the land and it was bound by the same; even otherwise

the State failed to establish by placing any material on

record to show that the appellant was only a lessee. In

support of his submissions the learned counsel placed

reliance on few decisions of this Court.

Per contra, the learned counsel for the respondents

made submissions supporting the impugned judgment

adopting the very reasons recorded in favour of the State in

the impugned judgment.

The learned counsel further submitted that when on

an earlier occasion the High Court had permitted the State

Government to file written statement to raise a plea as

regards the right of the appellant only as a lessee or a

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licensee over the property in question and that having not

been challenged by the appellant any further, it was not

open to the appellant to contend that the Reference Court

could not consider the question of title over the land

acquired.

In the light of the rival contentions advanced and the

submissions made on behalf of the parties, the two

questions arise for consideration - (1) whether the High

Court was right in going into the question of title over the

property acquired by the State and in recording a finding

that the appellant had only leasehold interest in the said

land; (2) whether the High Court was right in interfering

with the market value of the land determined by the

Reference Court.

The IVth Addl. District Judge, Bhopal (Reference

Court) on proper consideration and appreciation of both

documentary as well as oral evidence recorded a finding

that the respondent-State could not prove that the

appellant was only the licensee on the acquired land. One

Aadh Narayan (DW1) examined on behalf of the

respondent-State in his evidence stated that he was

employed in the office of the Director of Land Records. He

was not able to support the case of the respondent that the

appellant was a lessee or licensee. He admitted in his

evidence that there was no lease deed executed between

the parties as per the records available in the office. There

was also no record to show that the appellant was a

licensee. In his cross-examination, he admitted that he

could not tell whether the acquired land belonged to the

State or it was acquired by State later on. Abdul Rahuf

Khan (PW3) examined in support of the case of the

appellant in his evidence stated that no lease deed was

executed by State and that no lease amount was paid to

the State and his firm was the owner of the land acquired.

He further stated that he had obtained this land in 1950

from the State for the purpose of establishing bone mill; the

appellant-firm is recorded as owner in revenue records of

the State; the Land Acquisition Officer also treated the

appellant as owner and made the award showing the

appellant as the owner in the notification issued to acquire

the land. The learned Addl. District Judge, referring to

various documents in para 9 of the judgment in the light of

the oral evidence concluded that the respondent-State

failed to establish that the appellant is only a

lessee/licensee when all along the appellant was shown as

the owner and even the Land Acquisition Officer treated the

appellant as owner. The State contending otherwise had to

establish its case that the appellant was only

lessee/licensee, failed to do so. The High Court, in our

view, committed a serious error in reversing this finding of

the Reference Court without dislodging the reasons

recorded by the Reference Court in support of its conclusion

on this point.

The contention that it was not open to the appellant to

urge that the Reference Court could not consider the

question of title over the land having not challenged the

order made by the High Court earlier permitting the

amendment of the written statement, has no force. Merely

because permission was granted to amend the written

statement did not mean that the appellant could not resist

the claim of the respondent-State as regards its right as

owner over the land acquired. The respondent-State itself

has treated the appellant all along as the owner of the land.

Not only in the notification acquiring the land, name of the

appellant is shown as owner, even the revenue records also

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show the appellant as owner. Further the Land Acquisition

Officer passed award in respect of this land treating the

appellant as owner entitled to receive compensation. If the

State was owner of the land in question, there was no

reason for it to acquire its own land. The State cannot said

to be a person interested to agitate any claim either under

Section 18 or under Section 30 of the Act. The court

exercising jurisdiction under Section 18 could not decide the

question of the title of the State over the acquired land.

The position of law is clear in this regard by recent

judgment of this Court in Sharda Devi vs. State of Bihar

& Anr. [(2003) 3 SCC 128]. The sole question that arose

for consideration in that case was \026 when the State

proceeds to acquire land on an assumption that it belongs

to a particular person, can the award be called into question

by the State seeking a reference under Section 30 of the

Act on the premise that the land did not belong to the

person from whom it was purportedly acquired and was a

land owned by the State having vested in it. In para 36 of

the said judgment, having considered various aspects and

the scheme of the Act, this Court has concluded thus:-

"36. To sum up, the State is not a "person

interested" as defined in Section 3(b) of the Act.

It is not a party to the proceedings before the

Collector in the sense, which the expression

"parties to the litigation" carries. The Collector

holds the proceedings and makes an award as a

representative of the State Government. Land

or an interest in land pre-owned by the State

cannot be the subject matter of acquisition by

the State. The Question of deciding the

ownership of the State or holding of any interest

by the State Government in proceedings before

the Collector cannot arise in the proceedings

before the Collector [as defined in Section 3(c)

of the Act]. If it was government land there was

no question of initiating the proceedings for

acquisition at all. The Government would not

acquire the land, which already vests in it. A

dispute as to the pre-existing right or interest of

the State Government in the property sought to

be acquired is not a dispute capable of being

adjudicated upon or referred to the civil court for

determination either under Section 18 or Section

30 of the Act. The reference made by the

Collector to the court was wholly without

jurisdiction and the civil court ought to have

refused to entertain the reference and ought to

have rejected the same. All the proceedings

under Section 30 of the Act beginning from the

reference and adjudication thereon by the civil

court suffer from lack of inherent jurisdiction and

are therefore a nullity liable to be declared so."

In the present appeal, it is not the case of the

respondent-State that the title of the appellant had come to

an end on happening of any event or change taking place

after making of the award by the Collector. As stated in

para 37 in the case of Sharda Devi (supra), the decision in

this appeal does not preclude the State from pursuing such

other legal remedy before any other forum, if available in

law and if such a claim is maintainable in law. In the light

of the judgment of this Court afore-mentioned, in our view,

the High Court committed an error in taking a view that the

question of title could be decided in the proceedings arising

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under Section 18 of the Act. Hence, the finding recorded by

the High Court in the impugned judgment that the appellant

had only leasehold interest in the land cannot be sustained.

The Reference Court after due consideration of oral

and documentary evidence determined the market value of

the land acquired @Rs.2 per sq.ft. as on the date of issuing

notification under Section 4(1) dated 23.12.1962. The

Land Acquisition Officer had awarded compensation @450/-

per acre and also awarded a sum of Rs. 6600/- as

compensation for the trees that existed in the land. The

Reference Court being conscious that the market value of

the land had to be determined as on the date of 4(1)

notification i.e. 23.12.1962 took into consideration sale

deeds of the year 1954, 1955, 1960 and 1963 and also one

sale deed of 1962. In para 22 of the judgment of the

Reference Court, it is stated thus:-

"Therefore, it is proved from the statements

given by claimant and his witnesses that

Balawant Singh had sold the land attached to

disputed land @ Rs. 2-5 per squire foot to

Shyamlal in 1963 and Shyamlal purchased the

land in New Market @ 2.20 per squire foot in

1960. There is a difference in threats of land in

Bhopal Mahanagar in 1960 and 1962,

therefore, I am of the view that the rate of the

disputed land was Rs. 2.5 per squire foot on

the date of Notification u/s 4(1) of Land

Acquisition Act got issued in the official

Gazette."

It is also noticed that the land acquired is situated on

the State Highway of Bhopal-Jabalpur; it is one and half

mile away from Hamidiya bus stand; BHEL factory is two

and half miles away from this land; facilities like electricity,

water and phone are available to this land; transportation is

also available for passengers and goods and that the land in

question is surrounded by other industrial establishments.

It was not used as agricultural land at the time of

acquisition. The Reference Court in its order having noticed

above facts as observed thus:-

"In these circumstances, the reasoning of land

acquisition Officer that disputed land should be

valued by treating the agriculture is baseless.

The disputed land is situated within the limits of

Nagar Nigam of Bhopal Mahanagar and situated

at bank of the Public Road which is in between

Mahanagar and BHEL. It is in the interest of

justice to find out that what would an ordinary

purchaser have paid for the disputed land on

2.12.1962."

Thus, on a proper appreciation of evidence, as already

stated above, the Reference Court determined the market

value of the land acquired @Rs. 2 per sq. ft. The High

Court in the impugned judgment without considering the

material on record in order to determine the proper market

value and even without considering the reasons recorded by

the reference Court as to the market value has simply

stated: -

"Thus, we are of the considered view that the

price fixed by the Reference Court at the rate of

Rs. 2/- per sq. ft. does not deserve to be

upheld."

Thereafter the High Court held that "admittedly it had

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the potentiality on the date of publication of the notification

under Section 4(1) of the Act, considering the proximity to

the urban areas, its potentiality for development and its

character, we think it appropriate to fix the price on the

basis of square yard. Considering the entire gamut of facts,

we think Rs. 2/- should be the just price per square yard

and accordingly, we so hold."

The reference Court as well the High Court both have

concurrently held that the land acquired, though was an

agricultural land, was not being used for agricultural

purpose as on the date of issuing 4(1) notification and it

had potentialities for purpose of creating building sites. The

Reference Court was right in determining the market value

of the land acquired @Rs. 2/- per sq. ft. but it committed

an error in not giving any deduction towards developmental

charges. In our view, having regard to the location and

surroundings of the acquired land, as already indicated

above, it would be just and appropriate to deduct 30%

towards developmental charges out of the amount of

compensation payable to the appellant @Rs. 2/- per sq. ft.

In view of what is stated above, the impugned

judgment and order cannot be sustained. Hence, the

appeal is allowed. The impugned judgment is modified

awarding the compensation to the appellant as owner of the

land acquired @ Rs. 2/- per sq. ft. after deducting 30% of

the market value of the land calculated on the basis of Rs.

2/- per sq. ft. The appellant is also entitled for all the

statutory benefits on the amount of compensation so

determined. The appeal is disposed of accordingly. No

costs.