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Supreme Court of India
Ramesh Kumar vs Bhatinda Integarated … on 13 September, 2021Author: M.R. Shah
Bench: M.R. Shah, A.S. Bopanna
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REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICITON
CIVIL APPEAL NOS. 38753876 OF 2009
Ramesh Kumar .. Appellant(s)
Versus
Bhatinda Integrated Cooperative
Cotton Spinning Mill and Ors. .. Respondent(s)
With
CIVIL APPEAL NO. 5669 OF 2021
(Arising out of Special Leave Petition (C) No.9470 of 2010)
Bant Singh and Ors. .. Appellant(s)
Versus
The State of Punjab & Ors. .. Respondent(s)
With
CIVIL APPEAL NO. 5670 OF 2021
(Arising out of Special Leave Petition (C)No.15117 of 2010)
Gurbachan Singh (D) By LRs and Anr. ..Appellant(s)
Signature Not Verified Versus
Digitally signed by R
Natarajan
Date: 2021.09.13
The State of Punjab and Ors. ..Respondent(s)
16:48:24 IST
Reason:
With
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CIVIL APPEAL NOS.91859196 of 2017
Gurjant Singh & Anr. etc. etc. ..Appellant(s)
Versus
The State of Punjab through Chief Secretary,
Department of Cooperation and Ors. ..Respondent(s)
JUDGMENT
M. R. Shah, J.
Civil Appeal Nos. 38753876 OF 2009
1. Arising out of the impugned common judgment and order
dated 19.09.2008 passed by the High Court in RFA No.3476 of
1999 filed by the original claimants for enhancement and RFA
No.1507 of 1999 filed by the Bhatinda Integrated Cooperative
Cotton Spinning & Ginning Mills Ltd.
Special Leave Petition No.9470 of 2010
Leave granted.
Arising out of RFAs No.2648 of 1999 (Bant Singh and
Ors. vs. State of Punjab and Ors.), the appeal which was filed
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by the original claimants for enhancement of the
compensation. However, it is required to be noted that RFA
No.1505 of 1999 filed by the Bhatinda Integrated CoOperative
Cotton Spinning & Ginning Mills Ltd. vs. Bant Singh and
others is not under challenge.
Special Leave Petition No.15117 of 2010
Leave granted.
Arising out of RFA No.2645 of 1999 which was filed by
the original claimants Gurbachan Singh and others for
enhancement of compensation. It is required to be noted that
no appeal has been preferred by the original claimants
(Gurbachan Singh and others) challenging the order passed in
RFA No.1505 of 2019 which was filed by the Bhatinda
Integrated CoOperative Cotton Spinning & Ginning Mills Ltd.
which has been allowed by the High Court and the amount of
compensation has been reduced.
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CIVIL APPEAL NOS.91859196 of 2017
Civil Appeal Nos.98959897 of 2017 arising out of RFA
Nos.2642, 2643, 2644, 2645, 2646, 2648 of 1999 and RFA
Nos. 1505, 1508, 1509, 1510, 1515 and 1516 of 1999.
2. As common question of law and facts arise in this group
of appeals, all these appeals are decided and disposed of
together by this common Judgment and Order.
2.1 Vide notification dated 06.06.1988 issued under Section
4 of the Land Acquisition Act, 1894 (for short, ‘the Act’), the
lands owned by the original claimants admeasuring 297
Kanals and 1 Marla situated in the revenue estate of Jassi Pau
Wali, Distt. Bhatinda, Punjab came to be acquired for public
purpose, namely, establishment of Bhatinda Integrated
Cooperative Cotton Spinning and Ginning Mills Ltd. (for short,
‘the Spinning Mill’). The same was followed by a notification
under Section 6 of the Act on 08.06.1988. The Land
Acquisition Officer vide Award dated 05.10.1989 determined
the value of the land at Rs.25,000/ per acre and awarded the
compensation accordingly. At the instance of the land owners
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the references were made to the Reference Court. Vide
common Judgment and Award dated 27.02.1999, the
Reference Court determined the market value of the land at
Rs.1,12,000/ per acre. Before the Reference Court it was the
case on behalf of the land owners that the acquired land is
situated just on the main Bhatinda Mansa Road and has a
very potential value of being used for commercial and
residential purposes as well as the industrial purposes. Before
the Reference Court the land owners heavily relied upon the
registered Sale Deeds Ex.A.W.6/C to Ex. A.W.6/H executed on
or about 24.05.1979 at the rate of Rs.50,000/ per acre. The
Reference Court took into account the aforesaid sale deed
Ex.A.W.6/C to determine the market value of the lands
acquired and considering the time gap of about 9 years
between the date of the execution of the aforesaid sale deeds
and Section 4 Notification thereby granted the increase of 12%
in the price of the land per year and applied the cut of 25%
and finally determined the value of the land at Rs.1,12,000/
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per acre and accordingly enhanced the award of compensation
by common Judgment and Order dated 27.02.1999.
2.2 Feeling aggrieved and dissatisfied with the common
Judgment and Award passed by the Learned Reference Court
whereby it enhanced the amount of compensation considering
the market value of the land at Rs.1,12,000/ per acre, both,
the original claimants as well as the Spinning Mill preferred
the appeals before the High Court. The land owners preferred
the appeals for enhancement of the compensation. By
impugned common Judgment and Order the High Court has
allowed the appeals preferred by the Spinning Mill reducing
the amount of compensation and determining the value of
acquired land at Rs.88,400/ per acre. The High Court also
considered the Sale Deed Ex.AW6/C as a base for determining
the value of the acquired land and also added 12% annual
increase. However, the High Court imposed the cut of 15%
instead of 25% as adopted by Learned Reference Court. Thus,
the appeals preferred by the Spinning Mill came to be partly
allowed. Consequently, the appeals preferred by the original
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land owners which were filed for the enhancement of the
compensation came to be dismissed by the High Court.
2.3 Feeling aggrieved and dissatisfied with the common
impugned Judgment passed by the High Court partly allowing
the appeals preferred by the Spinning Mill and dismissing the
appeals preferred by the land owners for enhancement of
compensation and determining the value of the acquired land
at Rs.88,400/ per acre, the land owners have preferred the
present appeals.
3. Shri Vinay Mathew, Shri Yadav Narender Singh and Shri
Sridhar Potaraju, Learned Advocates appearing on behalf of
the appellants – original land owners and Shri Puneet Kansal,
Learned Advocate appearing on behalf of the Respondent –
Spinning Mill. At this stage, it is required to be noted that so
far as the Bhatinda Integrated Cooperative Cotton Spinning &
Ginning Mills Ltd. is concerned, it has been ordered to be
wound up and the Liquidator has been appointed and Shri
Puneet Kansal, Learned Advocate has appeared on behalf of
Liquidator of the Spinning Mill.
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4. Learned Counsel appearing on behalf of the land owners
have made the following submissions:
(i) that both, the Learned Reference Court as well as
the High Court have failed to consider the exemplar
being the sale deed dated 04.05.1981 by which the
land admeasuring 70 meters away from the
acquired land was sold at Rs.1,17,600/ per acre.
It is submitted that as held by this Court in the case
of Mehrawal Khewaji Trust, Faridkot and Ors.
Vs. State of Punjab and Ors., (2012) 5 SCC 432
the highest of the exemplars which is a bona fide
transaction has to be considered. It is submitted
that the said sale deed was executed in the year
1981 and considering the time given of 7 years the
annual increase of 7 years was required to be taken;
(ii) that the High Court has erred in taking annual
increase at the rate of 12% at the flat rate which
would lead to anomalous results as opposed to
cumulative rate;
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(iii) it is submitted that exemplar sale deed that was
accepted by the courts below is dated 24.05.1979
which is more than 9 years before the notification of
acquisition was made and thus 9 years of
cumulative increase has to be applied to the value
of the land at Rs.50,000/ per acre. Heavy reliance
is placed on the decision of this Court in ONGC Ltd.
vs. Rameshbhai Jivanbhai Patel & Anr., (2008)
14 SCC 745.
In the aforesaid decision, it is categorically held by
this Court that it is logical, practical and
appropriate to apply cumulative rate as opposed to
flat rate. It is submitted that aforesaid decision has
been subsequently followed and/or applied in the
case of Ashok Kumar and Ors. vs. State of
Haryana and Ors., (2015) 15 SCC 200;
(iv) that Reference Court as well as the High Court both
have erred in adopting cut of 25%/15% of the value
towards development. It is submitted that while the
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Reference Court has adopted cut of 25% of the
market price, the High Court deducted 15%. It is
submitted that considering the location and nature
of the land that was acquired as well as the purpose
for which it was acquired (for commercial purpose
for spinning mill) no cut from the market price
should have been made and the land owners were
entitled to the market price without any cut. It is
further submitted that the acquired land is only 30
acres and the nature of the land is semi urban and
the same was adjoining the municipal limits of
Bhatinda and it was further found that the area
surrounding the acquired land consisted of
factories, godowns, residential houses and the
cantonment areas thus no deduction on account of
any development charges should have been made;
(v) that the land was acquired for setting up profit
making enterprise i.e. cotton spinning mill and
therefore, also no deduction should have been made
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in the price of the exemplar. Reliance is placed on
the decision of this Court in the case of Atma
Singh vs. State of Haryana, (2008) 2 SCC 568.
4.1 Making the above submissions and further relying the
decisions of this Court in the cases of Anjani Molu Dessai vs.
State of Goa and Anr., (2010) 13 SCC 710 and Trishala
Jain and Anr. Vs. State of Uttaranchal and Anr., (2011) 6
SCC 47, it is prayed to allow the present appeals and enhance
the amount of compensation considering the value of the land
of Rs.1,50,000/ per acre.
5. All the appeals are opposed by Learned Counsel
appearing on behalf of the Liquidator of Spinning Mill. It is
submitted on behalf of the Learned Counsel for Liquidator
Spinning Mill that the mill was a Cooperative Society and
became operational only in 1992. The mill went into huge
losses because of various factors which resulted in complete
erosion of the capital on account of which the mill was
brought into winding up vide orders dated 09.05.2003. All the
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land owners have been paid in full as per the High Court
Judgment.
5.1 Now so far as reliance placed upon the decision in the
case of Rameshbhai Jivanbhai Patel (Supra) by the land
owners to apply the rate of 12% increase cumulatively; it is
submitted that the said decision is distinguishable on facts. It
is submitted that in the subsequent decision in the case of Lal
Chand vs. Union of India, (2009) 15 SCC 769, this Court has
held that the Court should, before adopting a standard
escalation, satisfy itself that there were no adverse
circumstances. It is submitted in the present case that the
State of Punjab was engulfed in militancy from 1979 onwards
till 1992. There was large scale exodus of families belonging to
one particular community from the State on account of which
there were practically no buyers for the land. It is submitted
that as such on account of militancy prices had crashed to
around Rs.25,000/ per acre.
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5.2 It is submitted that therefore, even the compensation
granted to the land owners is already on the higher side. It is
submitted therefore in the facts and circumstances of the case
the submission on behalf of the land owners that there should
not be any deduction at all may not be accepted.
5.3 Now so far as the reliance placed upon the Sale Deed
dated 04.05.1981, it is submitted that the sale deed was for
small portion of land being 1 Kanal 14 Marlas against 297
Kanal 1 Marla of land and therefore, the same has not been
rightly accepted by the Reference Court as well as the High
Court.
5.4 It is further submitted that even otherwise the cut of 15%
towards development charges does not require any
interference as the land was agricultural (soft soil) acquired for
industrial purpose.
5.5 It is submitted that therefore, considering the oral facts
and circumstances of the case no interference of this Court is
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called for. Therefore, it is prayed to dismiss the present
appeals.
6. Heard Learned Counsel for the parties respectively at
length.
6.1 In the present case the Notification under Section 4 of
the Act has been issued on 06.06.1988. The land in question
was acquired for the public purpose for establishing Bhatinda
Integrated Cooperative Cotton Spinning and Ginning Mills Ltd.
The Land Acquisition Officer, Bhatinda awarded the
compensation considering the value of the land at the rate of
Rs.25,000/ per acre. The Reference Court relying upon the
sale deed dated 24.05.1979 as Ex. AW6/C by which the land
admeasuring 43 kanals 13 marlas out of the acquired land
was purchased by Shri Sudarshan Kumar and Mrs. Surinder
Anand at the rate of Rs.50,000/ per acre and thereafter
adding 12% per acre and thereafter adopting the cut of 25%
determined the compensation at Rs.1,12,000/ per acre.
Thereafter the High Court by the impugned common
Judgment and Order has allowed the appeals preferred by the
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spinning mills and dismissed the appeals preferred by the land
owners, by determining the value at Rs.88,400/ per acre after
adopting cut of 15%.
6.2 Having heard the Learned Counsel for the respective
parties the questions which are posed for consideration of this
Court are:
(i) Whether in the facts and circumstances of the
case the Courts below have erred in taking
annual increase at the rate of 12% at the flat
rate and not applying the cumulative rate?
(ii) Whether in the facts and circumstances of the
case the High Court has erred in adopting the
cut/deduction of 15%, while determining the
value of the land acquired?
6.3 Now so far as the submission on behalf of the land
owners that while considering the annual increase at the rate
of 12%, the High Court ought to have applied the cumulative
rate and reliance placed upon the decision of this Court in
Rameshbhai Jivanbhai Patel (Supra) and in the case of
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Ashok Kumar (Supra) are concerned, it is true that as held by
this Court in aforesaid two decisions increase in the market
value should be at a cumulative rate and not at a flat rate. In
the case of Rameshbhai Jivanbhai Patel (Supra) in
paragraph 18, it is specifically observed and held that when
market value is sought to be ascertained with reference to
transactions which took place before the acquisition, the law
adopted is to collect the year to year increase. It is further
observed and held that as the percentage of increase is always
with reference to the previous year’s market value, the
appropriate method is to adopt the increase cumulatively and
not applying a flat rate. However, at the same time it is also
observed and held in the said decision that it is reasonably
safe to determine the market value by providing appropriate
escalation over the approved market value of nearby lands in
the previous years, when relied on sale
transactions/acquisitions precede the subject acquisition by
only a few years, i.e., upto 45 years. It is further observed in
the said decision in para 15 that beyond that it may be unsafe,
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even if it relates to a neighbouring land. In para 15 it is
observed and held as under:
“ Normally, recourse is taken to the mode of
determining the market value by providing
appropriate escalation over the proved market
value of nearby lands in previous years (as
evidenced by sale transactions or acquisition),
where there is no evidence of any
contemporaneous sale transactions or
acquisitions of comparable lands in the
neighbourhood. The said method is reasonably
safe where the reliedonsale
transactions/acquisitions precedes the subject
acquisition by only a few years, that is upto four
to five years. Beyond that it may be unsafe, even
if it relates to a neighbouring land. What may be
a reliable standard if the gap is only a few years,
may become unsafe and unreliable standard
where the gap is larger. For example, for
determining the market value of a land acquired
in 1992, adopting the annual increase method
with reference to a sale or acquisition in 1970 or
1980 may have many pitfalls. This is because,
over the course of years, the `rate’ of annual
increase may itself undergo drastic change apart
from the likelihood of occurrence of varying
periods of stagnation in prices or sudden spurts
in prices affecting the very standard of increase.
In the present case both, the Reference Court as well as
the High Court, have determined the value of the land
considering the Sale Deed dated 24.05.1979 which is more
than 9 years before the notification of the acquisition.
Therefore, considering the observations made by this Court in
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para 15 in the case of Rameshbhai Jivanbhai Patel (Supra)
reproduced hereinabove and considering the fact that time gap
between the sale deed relied upon and the date of notification
of acquisition is more than 9 years, the courts below ought to
have been very cautious in relying upon the Sale Deed dated
24.05.1979. Be that it may and assuming that the Sale Deed
dated 24.05.1979 was the best evidence available to determine
the value of land acquired in that case also taking annual
increase at the rate of 12% is not justified. We are of the
opinion that, in the facts and circumstances of the case the
annual increase/escalation ought to have been at the rate of
10% maximum. Even otherwise, it is required to be noted that
State of Punjab suffered due to militancy from 1979 onwards
till 1992 and because of that the prices would have crashed.
Therefore, to grant the escalation/price rise at the rate of 12%
would not be justified at all. After considering the case of
Rameshbhai Jivanbhai Patel (Supra), it is observed and held
by this Court in the case of Lal Chand (Supra) that even if the
transaction is 2 to 3 years prior to the acquisition, the Court
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should, before adopting a standard escalation satisfy itself
that there were no adverse circumstances. It is further
observed and held that the question is therefore, necessary
before increasing the price with reference to the old
transactions. Therefore, assuming that the appellants are
right in submitting that the increase in land value should have
been adopted on cumulative basis, in the peculiar facts and
circumstances of the case noted hereinabove, we see no
reason to interfere with the impugned judgment and order
passed by the High Court.
6.4 Now so far as the submission on behalf of the appellants
of not taking into consideration the other sale deeds, it is
required to be noted that those sale deeds are with respect to
small portions of land and thereafter rightly discarded.
6.5 Now so far as the deduction at the rate of 15% towards
the development charges, it also does not call for any
interference of this Court considering the fact that the land in
question at the relevant time was an agricultural land.
However, taking into consideration the fact that the sale
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instance dated 24.07.1979 relied upon was a quite big chunk
of land and the location of the acquired land and the land was
acquired for spinning mill, the High Court has rightly adopted
15% cut, which in the facts and circumstances of the case is
not required to be interfered with.
7. At this stage, it is also required to be noted that though
the land was acquired in the year 1988, the same was made
operational only in the year 1992 and therefore, has gone into
liquidation in the year 2003. The entire amount of
compensation as determined by the High Court has been paid.
We see no reason to interfere with the common Judgment
and Order passed by the High Court. In view of the reasons
stated hereinabove all these appeals fail and deserve to be
dismissed. The appeals are dismissed accordingly.
However, no order as to costs.
…………………………………J.
(M. R. SHAH)
…………………………………J.
New Delhi, (ANIRUDDHA BOSE)
September 13, 2021
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