Land Acquisition:
Acquisition of land – Comprising of cultivable as well as non-agricultural land used for running sugar mill – Determination of compensation – Reference court enhanced the compensation amount treating the entire land as land meant for non-agricultural use and deducting 10% towards development costs – High Court in appeal reduced the compensation amount deducting 40% towards development costs – Appeal to Supreme Court – Held: The value arrived at by Reference Court is fair and reasonable – Rule of one-third deduction towards development is general rule – But deduction for development may vary from 20% to 75% depending upon purpose of acquisition etc. — In the present case, in view of purpose of acquisition, 20% deduction for development cost would be reasonable – Valuation of the damages of Civil work and foundation as assessed by the High Court is affirmed – Award of amount towards depreciated market value of electrical installation by Reference Court is affirmed – Award of amount towards depreciated market value of machinery and mechanical installation as awarded by High court is affirmed – The concurrent finding for awarding compensation for loss of business is also affirmed – compensation amount accordingly modified.
Partly allowing the appeals, the Court
HELD: 1.1 The High Court has taken Exh. 23 dated 03.06.1976 as exemplar which is the sale deed for plot admeasuring 30x32ft. (960 sq.ft.) for Rs. 3,000/- i.e. at the rate of Rs. 3.12 per sq.ft. The appellants have also placed further reliance on the sale deed dated 03.02.1982 Exh. 35 wherein, the plot of admeasuring 5023 sq.ft. was sold for Rs. 35,000/- i.e. Rs.
6.90 per sq.ft. The High Court has taken Exh. 23 sale deed dated 03.06.1976 and had taken 10% increase for every year and arrived at the value at Rs.6 per sq.ft. Even going by Exh. 35 sale deed (03.02.1982) under which Rs.5023 sq.ft. was sold for Rs. 35,000/- i.e. Rs. 6.90 per sq.ft., Exh. 35 sale deed (03.02.1982) is after possession of the land was taken by the State Government (21.11.1981) and Section 4 Notification dated 10.02.1982. Since Exh. 35 sale deed dated 03.02.1982 is between two dates - date of taking possession of the land and the date of Section 4 Notification, it is necessary to adopt a reasonable valuation. Considering Exh. 23 and Exh. 35, the value adopted by the Reference Court at Rs.6.90 per sq.ft., fixation of valuation at Rs.6.90 per sq.ft., the value adopted is fair and reasonable and the same is affirmed. [Para 14] [938-C-F]
1.2 Rule of one-third deduction towards development is the general rule. But depending upon the purpose of acquisition and taking note of well planned layouts, if any, the deduction for development cost may vary from 20% to 75%. In the present case, since the land was acquired for Dam project, much of the development like in the case of a layout for housing colony is not required. 40% deduction made by the High Court appears to be on the higher side. Considering the purpose of the acquisition and the facts and circumstances of the case, 20% deduction for development cost would be reasonable. Taking the entire land 2,61,300 sq.ft. as non-agricultural and making 20% deduction for the development cost, the value of the land is calculated at Rs.12,54,530/- [Paras 16 and 17] [939-D; 940-AB] Lal Chand v. Union of India and Another (2009) 15 SCC 769 : [2009] 13 SCR 622 – relied on.
Major General Kapil Mehra and Others v. Union of India and Another (2015) 2 SCC 262 : [2014] 10 SCR 1153 – referred to.
2. After referring to the valuation of the civil work, the evidence of PW-2 and witness No.3 for the State-Sub-Divisional Engineer, the High Court has assessed the valuation of the dismantling costs and damages of civil work and foundation to the tune of Rs.4,09,565/- and Rs.17,325/- for transportation costs of good materials and arrived at the total amounting to Rs. 4,26,890/-. There is no reason to take a different view and the amount of Rs. 4,26,890/- towards damages of civil work and foundation and transportation of good materials is affirmed. [Para 18] [940-H; 941-A-B]
3. As against the amount of Rs. 3,86,867/- awarded by the Reference Court, the High Court has awarded Rs.2,39,000/towards depreciated market value of the electrical installation. As per the project report that was initially prepared for the year 1976, cost of factory installation was given at Rs. 6,93,677/- and as per award, it has been given Rs. 5,78,100/-. Referring to Exh.21 report and evidence of PW-2, the Reference Court has awarded Rs. 3,86,867/- towards dismantling charges in respect of electrical, mechanical and re-installation. During the course of dismantling and re-installation, there is every possibility of the electrical installation being damaged. Considering the findings of the Reference Court, the High Court was not justified in reducing the amount of Rs. 3,86,867/- to Rs. 2,39,000/- on the ground of depreciated market value of electrical installation. Therefore, the amount of Rs.3,86,867/- awarded by the Reference Court is affirmed. [Para 19] [941-C-E]
4. Based on the report Exh.21 and the evidence of PW-2, the High Court has awarded depreciated market value of the machinery and mechanical installation to the tune of Rs. 6,62,000/- and the same is affirmed. [Para 20] [941-F]
5. A perusal of the evidence of PW-2 examined on behalf of the appellants shows that in the year 1978-79, when the witness visited the factory of the appellants, he noticed that the production of the sugar had stopped. As pointed out by the Reference Court as well as by the High Court, as regards income, no statement of income had been produced. During the period 1981 till 1986, the sugar mill was idle. The balance sheet for the years 1975-76 as per Exh.33 shows that the factory was running in loss initially during the year 1975-76. Though the appellants have claimed that they were making profit of Rs. 2,00,000/- per year, no statement had been filed to show that the sugar factory was making profit of Rs. 2,00,000/-. The courts below have recorded the concurrent findings for awarding the compensation of Rs. 5,00,000/- for loss of business from the year 1981, the time of taking possession of the property and compensation paid in the year 1986. The compensation amount of Rs.5,00,000/- paid towards the loss of business is also affirmed. [Para 21] [941-G-H; 942-A-C]
6. The balance amount as per the modified amount of compensation be paid to the appellants/claimants with all statutory benefits as awarded by the Reference Court. [Para 23] [943-C]
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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