GUJARAT INDUSTRIAL DEVELOPMENT CORPORATION v. CHEETUBHAI GORDHANBHAI PATEL & 3

Judgment

1. The challenge in the instant batch of six First Appeals filed under Section 96 of the Code of Civil Procedure read with Section 54 of the Land Acquisition Act, 1894 ('the Act' for short) and also in the four Cross-Objections filed in respective First Appeals is to the correctness of the judgment and award dated 30.4.2004 rendered in a group of Land Reference Case Nos.1216/96, 1217/96, 1219//96, 1220/96, 1299/96 and 1300/96 by the learned 3rd Joint Civil Judge (SD), Vadodara, by which the market value of the land belonged to the respective claimants which was acquired for public purpose of construction of GIDC Industrial Colony at village Manjusar, Taluka Savli, District Vadodara, has been determined at Rs.108.78 paise per sq.mt. and accordingly it has been held that the claimants are entitled to get market value of their lands at the rate of Rs.108.78 (Rupees one hundred eight and paise seventy eight only) per sq.mt. after deducting the amount awarded in Compensation Case No.15 of 1995. The reference Court has also held that the claimants are also FA/2392/2004 JUDGMENT entitled to get market price of the Babul tree at Rs.700 per tree. The amount of Rs.15/- per Babul tree awarded to the claimants to be deducted from Rs.700/- (Rs.700/- minus Rs.15/-) and awarded Rs.685/- per Babul tree. The claimants are also held entitled to additional compensation under Section 23 (1A) of the Act and solatium at the rate of 30% under Section 23 (2) of the Act on the amount of market price of the acquired land with interest at the rate of 9% from the date of taking over possession i.e., 30.6.1994 for 12 months and thereafter 15% till realization. The reference Court has also held that the claimants are entitled to interest under Section 28 of the Act on the aggregate amount as per Schedule at the rate of 9% from the date of taking over possession till one year and thereafter at the rate of 15% till the date of payment in the Court.

2. The factual background in nutshell is as follows: FA/2392/2004 JUDGMENT

2.1. Gujarat Industrial Development Corporation ('GIDC' for short) proposed to the State Government to acquire the lands of village Manjusar, Taluka Savli, District Vadodara, as mentioned in the proposal, for the purpose of construction of GIDC Industrial Colony. On perusal of the proposal, the State Government was satisfied that the lands mentioned therein were likely to be needed for the said public purpose and, therefore, notification under section 4 (1) of the Act was issued which was published in the official gazette on 8.4.1992. The said notification was subsequently corrected and again published in the official gazette on 8.10.1992. The owners whose lands were proposed to be acquired, the description of which is given in the schedule annexed with the impugned judgment and award, were served with a notice under section 4 of the Act and inquiry was conducted. On conclusion of the inquiry, a report as contemplated by Section 5A (2) of the Act was forwarded by the Special Land Acquisition Officer FA/2392/2004 JUDGMENT to the State Government. On consideration of the same, the State Government was satisfied that the lands specified in the notification under Section 4 of the Act were needed for construction of GIDC Industrial Colony and, therefore, the declaration under Section 6 of the Act was made which was published in the official gazette on 19.4.1993. The said notification was corrected and again published in the official gazette on 24.6.1993. Thereafter the interested persons were served with notices for compensation payable to them. The claimants appeared before the Special Land Acquisition Officer and claimed compensation at the rate of Rs.300 per sq.mt. The Special Land Acquisition Officer awarded compensation at Rs.9/- and Rs.11/- per sq.mt., in Compensation Case No.15 of 1995 by award dated 4.5.1995. The claimants found that the offer of compensation made by the Special Land Acquisition Officer was totally inadequate and, therefore, they submitted an application under Section 18 of the Act to refer their cases to the Court for the purpose of determination of just amount of compensation FA/2392/2004 JUDGMENT (market value) payable to them. Accordingly the Special Land Acquisition Officer referred their cases to the District Court of Vadodara where they were registered as stated earlier.

2.2. The following witnesses have been examined on behalf of the claimants: (i) Cheettubhai G. Patel, claimant of Land Acquisition Reference No.1299 of 1996 and respondent of FA No.2392 of 1996 – Ex.24. (ii) Rasheshbhai B. Patel, President of Amarnath Labour Construction Cooperative Society – Ex.163. (iii) Dinesh Tadvi, Range Forest Officer of Forest Department, Ex.171.

2.3. On behalf of the Special Land Acquisition Officer, the following witnesses are examined: (i) Becharji S Pandor, Assistant Manger, GIDC, Ex.184, FA/2392/2004 JUDGMENT (ii) Shabbirhusain Mahmedhussain Saiyed, Special and Acquisition Officer/OSD – Ex.163.

2.4. For determination of the market value of the lands acquired, on behalf of the claimants, reliance is placed on the sale instances produced at Ex.174 and 175. They are the documents in respect of N.A. lands which were at a distance of 1.5 km. from the acquired lands. The said lands were sold on 2.6.1992 and 2.4.1992 in consideration of Rs.83/- and Rs.134.56 per sq.mt. On behalf of the Special Land Acquisition Officer reliance was placed upon the documents which were considered by him at the time of passing the award.

2.5. On appraisal of the evidence adduced by the parties, the reference court opined that Exs.174 and 175 which are of the sale instances of N.A. lands of the nearby vicinity of the land acquired and also proximate in time of the issuance of the notification under Section 4 of the Act are the relevant documents which can be FA/2392/2004 JUDGMENT relied upon for determination of the market value of the acquired agricultural lands. Out of the above mentioned two documents, Ex.174 is a sale instance in respect of the land bearing S.No.75/P and the sale was effected on 2.6.1992 wherein the price of the land was fixed at Rs.83/- per sq.mt. Ex.175 is a sale instance in respect of the land bearing S.Nos.696/987 and the sale was effected on 2.4.1992 wherein the price of the land was fixed at Rs.135.56 paise per sq.mt. The reference Court, therefore, took the average price of the above mentioned two sale instances and has come to the conclusion that the market value of the land in the immediate vicinity at the relevant time was Rs.108.78 per sq.mt. and accordingly determined the market value of the acquired land at Rs.108.78 per sq.mt. On the basis of the above referred to evidence, the reference court has come to the conclusion that the claimants are entitled to the market value of Rs.108.78 per sq.mt. after deducting the amount of compensation awarded and paid to them by the Special Land Acquisition Officer. The reference Court also FA/2392/2004 JUDGMENT held that the claimants are entitled to get market price of Rs.700 per Babul tree and after deducting the amount of Rs.15/- per Babul tree awarded and paid by the Special Land Acquisition Officer, the claimants are entitled to Rs.685/- per Babul tree. Besides this, it is also held by the Reference Court that the claimants are also entitled to statutory benefits and additional compensation under Section 23 (1A) of the Act as well as solatium under Section 23 (2) of the Act and interest under Section 28 of the Act.

2.6. It is this judgment and award which has

given rise to instant batch of six First Appeals at the instance of the appellant, the acquiring body-GIDC and four cross-objections at the instance of the original claimants.

2.7. For ready reference, the details as to the names of the claimants, First Appeals Nos., Land Reference Cases, Block Nos. and measurement of the land acquired from each claimant as well as the total measurement of the lands acquired FA/2392/2004 JUDGMENT from all the claimants/respondents, are as per the following chart: Name of the claimant First Appeal No. L.A.R. No. Cheettubhai G Patel 2392/04 1299/96 Cross- Objecti on No Block No. Land Acquired Sq. Mt. 1514 1,08,053 Dhirendrabhai Patel 2393/04 1216/96 1786 47,550 Chhotabhai J Patel 2394/04 1217/96 Prafulbhai M Patel 2395/04 1219/96 Motibhai J Patel 2396/04 1220/96 1815 1,44,873 1794A&B 7,892 1814 30,756 Rajeshbhai M 2397/04 1300/96 78,408 Total lands acquired 2,87,532 =================================================== 1539

3. Mr. S.N. Shelat, learned Senior advocate with Mr. Mitul Shelat, learned advocate for the appellant- GIDC, in support of the appeals, has raised the following contentions: (A) The notification under Section 4 of the Act was for acquisition of 32 lakhs sq.mt. of land of village Manjusar. Out of these 32 lakhs sq.mt. of lands, owners of 29,12,468 sq.mt. of different types of lands have consented to take Rs.10.75 and Rs.17.30 per sq.mt. as well as other FA/2392/2004 JUDGMENT statutory benefits under Section 23 (1A) and 23 (2) and interest by way of consent award and accordingly a consent award was made in favour of those land owners whereas the claimants whose lands in all admeasuring 2,87,532 sq.mt. did not accept the consent award and sought for the reference. Mr. Shelat has further contended that the reference court while passing the impugned award ought to have considered the consent award made in favour of several other owners of the land and ought not to have awarded any amount more than what was awarded to the owners of those lands in whose favour consent award was made. It is a settled legal position that consent award can be looked into as it is an award under Section 11 (4) of the Act. In support of the aforesaid contention, he has relied upon the following two decisions: (i) Major Pakhar Singh Atwal v. State of Punjab, AIR 1995 SC 2185; and (ii) ONGC v. Sendhabhai Vastram Patel, 2005 (7) JT

465. FA/2392/2004 JUDGMENT (B) According to Mr. Shelat, Block No.1786 and 1794 were purchased by the claimants vide sale deeds dated 3.8.1991 and 21.10.1991 for consideration of Rs.9.50 per sq.mt. and Rs.9.79 per sq.mt. respectively. The notification under Section 4 of the Act for acquisition of the lands was issued on 8.10.1992. Since both these documents have been admitted by this Court by way of additional evidence, for the purpose of determination of the market value of the acquired lands, this Court can look into these two documents. According to him, if this Court considers these two documents then the claimants cannot be awarded any amount more than the amount mentioned in these two sale instances. In the said sale instances dated 3.8.1991 and 21.10.1991 there is no reference with regard to the agreement dated 16.6.1980 as claimed by the claimants. The lands covered by the said sale deeds were situated in agricultural zone and they were, therefore, the most relevant documents for determining the market value of the acquired FA/2392/2004 JUDGMENT lands. To buttress the aforesaid submission, he placed reliance on the following decisions: (i) Shakuntalabai v. State of Maharashtra (1996) 2 SCC 152; (ii) Special Deputy Collector v. Kurra Sambasiva Rao, (1997) 6 SCC 41; (iii)Land Acquisition Officer, Revenue Divisional Officer, Nalgonda (Andhra Pradesh) v. Morisetty Satyanarayana, (2002) 10 SCC 570; (iv) Union of India v. Pramod Gupta, (2005) 12 SCC 1; (v) V. Subrahmanya Rao v. Land Acquisition Zone Officer, (2004) 10 SCC 640; (vi) Ranvir Singh v. Union of India, (2005) 12 SCC 59; and (vii) Krishi Utpadan Mandi Samiti, Sahaswan v. Bipin Kumar, AIR 2004 SC 2895. (C) Mr. Shelat has further submitted that the reference court has committed a grave error of law and facts in relying upon the two sale deeds Ex.174 and 175 for determining the market value of the acquired agricultural lands of the FA/2392/2004 JUDGMENT claimants. The sale deed, Ex.174, was effected on 2.6.1992 in respect of the land bearing S. No.75/P admeasuring 6400 sq. mt. in consideration of Rs.83 per sq.mt. whereas the sale deed, Ex.175, was effected on 2.4.1992 in respect of the land bearing S.Nos.696/987 admeasuring 1821 sq.mt. in consideration of Rs.134.56 per sq.mt. According to him, these two sale instances could not have been relied upon by the reference court for determination of the market value of the acquired agricultural lands of the claimants for the following reasons: (i) They are sale deeds in respect of non- agricultural lands by a commercial company in favour of another commercial company; (ii) The determination of compensation in instant case is admittedly for agricultural land; (iii)There is no evidence to show that the acquired lands were developed or there was any application for non-agricultural permission made when the Section 4 notification was issued; (v) The acquired lands were not proximate to the FA/2392/2004 JUDGMENT lands covered by the sale instances relied upon by the reference court. The acquired lands are situated at a distance of 1.5 km. from the lands covered under the two sale instances relied upon by the reference court and that too leaving the road. In support of the aforesaid contention, he has relied upon the following decisions: (i) ONGC v. Sendhabhai Vastram Patel, 2005 (7) Judgment Today, 465; (ii) Viluben v. State of Gujarat, (2005) 2 GLH 779; (iii) Land Acquisition Officer v. Jasti Rohini (Smt.) (1995) 1 SCC 717; (iv) Basantkumar v.Union of India, (1993) 11 SCC 542; (v) Printers House Ltd v. Saiyadan (1994) 2 SCC 133; (vi) Shaji Kuriakose v. Indian Oil Corporation Limited, AIR 2001 SC 3341; (vii) Ranvir Singh v. Union of India, AIR 2005 SC 3467; and (viii) Gafar v. Moradabad Development Authority, (2007) 7 SCC 614. FA/2392/2004 JUDGMENT (D) Mr. Shelat has further submitted that the agreement to sell, i.e., Banakhat relied upon by the claimants which is on record at Ex.48 is a xerox copy and it cannot be called as a comparable sale instance because it was with the promoter of a Company Rajiv Suraiya. The agreement to sell i.e., banakhat, was dated

30.1.1992 after the process of land acquisition was initiated because the notification under Section 4 of the Act was published on 8.10.1992. It cannot be relied upon for the following reasons: (i) That the agreement is void; (ii) Agreement is in favour of non- agriculturist; (iii) It is old tenure land; (iv) Para 4 recite that he is non- agriculturist and use is for industrial purpose; (v) Under Section 63 of the Bombay Tenancy and Agricultural Lands, 1948, the agreement is void and no reliance can be placed on a void document; FA/2392/2004 JUDGMENT (vi) The appellant does not object xerox copy being taken on record.

3.1. On the aforesaid premises, according to Mr. Shelat, determination of the market value of the acquired land at Rs.108.78 per sq.mt. Is absolutely on higher side and without any evidence on record. Therefore, according to him, the impugned judgment and award deserves to be modified and the claimants may be awarded only Rs.17.30 per sq.mt., for their acquired agricultural lands as it is the amount which is awarded by consent award to the owners of the lands whose lands also came to be acquired by the same notification under section 4 of the Act. He, therefore, urged to allow the First Appeals and thereby to modify the award by reducing the amount of market value to Rs.17.30 per sq.mt., together with other statutory benefits available under the Act.

3.2. So far as cross objections filed by the claimants in respective appeals are concerned, FA/2392/2004 JUDGMENT according to him, there is no substance in the cross objections and since they are merit less deserve to be dismissed. He, therefore, urged to dismiss the cross-objections.

4. Mr. Sunit Shah, learned GP, Ms. Archana Rawal, learned AGP and Mr. RC Kodekar, learned AGP for the respondent – Special Land Acquisition Officer, have adopted and supported the submissions advanced by Mr. S.N. Shelat, learned Senior advocate for the appellant - GIDC and contended that the reference court has committed a serious error in relying upon Exs.174 and 175 which are sale instances in respect of non- agricultural lands and they cannot be compared with while determining the market value of agricultural lands, for the following reasons: (i) The lands sold by the sale instances relied upon by the reference court were not agricultural lands. They were NA lands and the transaction was between two commercial companies. (ii) The lands sold by the sale instances relied FA/2392/2004 JUDGMENT upon by the reference court were not neighbouring lands as they were situated on the other side of the road which was an industrial area. There was no proximity of sale instances and the acquired land. (iii) The area of the lands covered under the sale instances was very small in comparison to the lands acquired. It was a small portion of land admeasuring 6400 sq.mt. and 1821 sq.mt. (iv) When the sale instances of agricultural lands are available for the same period, the sale instances of NA land should not have been taken into consideration for determination of the market price of the acquired agricultural lands of the claimants. 22 sale instances in respect of agricultural lands were available and they were relied upon by the Special Land Acquisition Officer for determining the price of the acquired land. (v) Market value of fully developed land cannot be compared with wholly undeveloped land although they may be adjoining or situated at a little distance. For determining the market value the FA/2392/2004 JUDGMENT nature of the land plays an important role. (vii) Sale instance of a small parcel of land will not form the basis to determine market value of large tract of land. In the case of large tract of land, proper deduction should be made. (viii) Banakhat produced at Ex.48 is wrongly relied upon by the reference court. The said banakhat dated 30.1.1992 is entered into with the promoter of the company Mr. Rajiv Suraiya. The said document has been prepared after the process of acquisition started. The proposal for acquisition of land for the appellant GIDC was approved by the State Government on 11.4.1991. Thereafter joint measurement was carried out before issuing notification under Section 4 of the Act on 8.10.1992.

4.1. On the aforesaid premises, it is submitted by them that the impugned judgment and award of the reference court determining market value of the acquired land at Rs.108.78 per sq.mt. cannot be sustained as it is absolutely exorbitant and on higher side. Therefore, FA/2392/2004 JUDGMENT according to them, the impugned judgment and award deserves to be modified to the extent of awarding Rs.17.30 per sq.mt., which was the amount awarded to the owners of the lands whose lands also came to be acquired by the same notification under section 4 of the Act, by consent award entered between them the GIDC. They, therefore, urged to allow the appeals by modifying the award accordingly.

4.2. So far as the cross objections are concerned, according to them, they are absolutely meritless and no evidence is produced to sustain the claims and, therefore, the same may be dismissed.

5. Mr. S.B. Vakil, learned Senior advocate and Mr. A.J. Patel, learned advocate with Ms. Archana Acharya, learned advocate who appear for the respective claimants, have raised the following contentions: (A) The lands acquired were old tenure agricultural lands. Only two parcels of the FA/2392/2004 JUDGMENT acquired lands, that is, Block Nos.1786 and 1794/A and 1794/B, were new tenure lands. They were located in the midst of areas developed or under industrial development as evidenced inter alia by the purpose of land acquisition itself. They had great potentiality for non-agricultural use even on the date of issuance of notification under Section 4 of the Act. (B) The reference court has arrived at the market value of Rs.108.78 per sq.mt. by taking the average rate of the sale prices of two sale instances, namely (i) the sale deed dated

2.6.1992 of the land bearing Block No.75/P admeasuring 6400 sq.mt. at Rs.83/- per sq.mt. of village Manjusar i.e., the same village in which acquired lands are situated (Ex.174) and (ii) the sale deed dated 2.4.1992 of the land bearing Block No.696 of village Manjusar admeasuring 1821 sq.mt. at Rs.134.56 per sq.mt. (Ex.175). The land owners of of the lands covered by these two sale instances obtained NA use permission for these lands only shortly before the sale deeds were FA/2392/2004 JUDGMENT executed in 1992. The lands were undeveloped at the time of sale. With respect to the contention of the appellant that the sale instances being of relatively smaller area than the lands acquired and the acquired lands being agricultural, the reference court erred in awarding compensation on the basis of these sale instances, Mr. AJ Patel has submitted that merely because the vendors of the lands covered by the sale instances had just before executing the sale deeds obtained NA permission has no significance or impact on the fixation of the sale price of agricultural lands. The market value would depend on the location, nature and quality of land. The lands acquired and the lands covered by the sale instances are all located in developing area of the same village - Manjusar and had similar building potentialities. The lands covered by the sale instances were subject matter of sale between private parties and the lands under acquisition were notified for compulsory acquisition for building a township for a public body. Since the lands under the acquisition are subject to the FA/2392/2004 JUDGMENT proceedings of compulsory acquisition of land, no question of the land owners obtaining NA permission arose. However, that made no difference to the equal potentiality of the lands under acquisition and the lands covered by the sale instances. Mr. Patel has asserted that obtaining of NA permission for the lands covered by the sale instances is a distinction sought to be made by the appellant without any difference vis-a-vis determination of market price. According to him, there is no hard and fast rule that in ascertaining the market value of an agricultural land on the basis of a comparable sale instance of a non-agricultural land, there should be a flat reduction of 40% from the sale price of the comparable sale instance of a non- agricultural land. According to him, this 40% reduction is the highest when the agricultural land to be valued is purely agricultural land and has no building potentiality at all. However, the rule has no application when the land to be valued has high building potentiality and the same is explicit from the very purpose of FA/2392/2004 JUDGMENT acquisition. In this case the lands acquired and the lands covered by sale instances relied upon by the reference court had similar building potentialities and the fact that in one case NA permission was granted made no difference. In valuation of market price, lands cannot be divided in two mutually exclusive spheres of agricultural land and non-agricultural land but the two classes of lands fall in two intersecting circles having a common area in which agricultural lands having building potentiality of varying nature and extent and lands for which NA permission is obtained would fall and/or nearly the same value. It is also emphasised by Mr. Patel that the building potentiality of the acquired lands must be taken into consideration. Building potentiality is the possibility of user of acquired lands for building purposes in the immediate or near future. Price fetched by sale of similar land with building potentiality is relevant and in absence thereof prices fetched by same building plots laid down in similar land can be taken into consideration. It is also FA/2392/2004 JUDGMENT emphasized by the learned advocates for the claimants that the building potentiality is required to be considered while determining the market value. According to them, the building potentiality of the lands acquired is to be taken into consideration and the future building potential on account of its location cannot be ignored while determining the market value of the acquired lands. It is also asserted by them that the sale instance of a small plot cannot be rejected as a non-comparable sale instance only on the ground of difference in size. Question involved is only of suitable deduction. No hard and fast rule can be laid down with regard to the quantum of deduction. In support of the aforesaid contentions, they relied upon the following decisions: (i) P. Ram Reddy and others v. Land Acquisition Officer, Hyderabad (1995) 2 SCC 305; (ii) Hasanali Walimchand (dead) by Lrs. v. State of Maharashtra (1998) 2 SCC 388; (iii) Fabrics Private Limited v. The Spl. Land Acquisition Officer, Kaira, 1971 (12) GLR 319; FA/2392/2004 JUDGMENT (iv) Thakarsibhai Devjibai and others v. Executive Engineer, Gujarat and another, 2001 (2) GLH 583; (v) Special Land Acquisition Officer, Kheda and another v. Shantibhai Jivabhai Patel, 1993 (2) GLR 1289. (C) It is further submitted by the learned advocates for the claimants that the instance of agreement to sell dated 30.1.1992 (Ex.48) which was of nine months prior to the date of issuance of notification under Section 4 of the Act in respect of the lands bearing Block Nos.1814 and 1815 admeasuring 3 H 7 are and 56 sq.mt. i.e., 30756 sq.mt. at the rate of Rs.7 per sq.ft. i.e., Rs.73.56 per sq.mt. was very relevant for determination of the market value of the acquired lands. There was no reason to discard this piece of evidence. (D) So far as the documents produced by way of additional evidence i.e., consent awards as well as sale deeds which are in respect of Block Nos.1786 and 1794 purchased by the claimants are FA/2392/2004 JUDGMENT concerned, it is submitted by the learned advocates for the claimants that the consent award is not binding to the claimants and as they found that the offer made by the Special Land Acquisition Officer is very lower than the market price of their acquired lands, they sought for the reference under Section 18 of the Act and when the reference is sought for, the reference court is bound to determine the just and reasonable market value of the acquired lands on the basis of the recognized methods for determination of market value. Similarly two other documents by which the claimants have purchased the new tenure land, i.e., Block No. 1786 and 1794/A and 1794/B on 3.8.1991 and

31.10.1991 respectively cannot be considered for determination of market value of the acquired lands because the price of those lands purchased by those sale deeds was of the price of the year 1980 and they were new tenure lands and located in the midst of the lands of the claimants which were ancestral property and they had great potentiality for non-agricultural use even on the FA/2392/2004 JUDGMENT date of issuance of notification under Section 4 of the Act.

5.1. On the aforesaid premises, according to them, the reference court has after considering the evidence on record and after considering the two sale deeds Exs.174 and 175, correctly determined the market value of the acquired lands and the award does not call for interference of this court. Therefore instant batch of first appeals deserves to be dismissed by confirming the award under challenge. They, therefore, urged to dismiss the appeals.

5.2. So far as the cross objections filed by the claimants are concerned, it is contended by Ms. Archana Acharya, learned advocate for the claimants/objectionists that the reference court has erred in not awarding Rs.150/- per sq.mt. for the acquired lands of the claimants. The reference court has also wrongly determined the market value of the Babul trees which requires upward rise. She also contended that the FA/2392/2004 JUDGMENT reference court has committed an error in not awarding compensation for water pipe and also for construction on the acquired lands. She, therefore, urged that the market value of Babul trees may be raised suitably and appropriate compensation for the water pipe and construction on the acquired lands may be awarded and accordingly the cross-objections may be allowed.

6. This Court has considered the oral submissions advanced as well as the exhaustive and detailed written submissions tendered by the learned advocates appearing for the parties, perused the impugned judgment and award and the testimonial collections comprising oral as well as documentary evidence supplied by the learned advocates appearing for the parties during the course of their submissions and the judgments cited at the bar.

7. Before we deal with the rival contentions raised by the learned advocates appearing for the respective parties, it would be FA/2392/2004 JUDGMENT advantageous and also relevant to make a brief survey of some of the important decisions of the Supreme Court interpreting the concept of market value and laying down the principles for determination of market value. (i) In the case of Prithvi Raj Taneja v. State of MP (1977) 1 SCC 684, the Supreme Court has explicitly and succinctly explained the concept of market value in the following language: “The market value means the price that a willing purchaser would pay to a willing seller for the property, having due regard to its existing condition with all its existing advantages and its potential possibilities when laid out in the most advantageous manner excluding any advantage due to the carrying out of the scheme for which the property is compulsorily acquired. In considering market value the disinclination of the vendor to part with his land and the urgent necessity of the purchaser to buy should be FA/2392/2004 JUDGMENT disregarded. There is an element of guess work inherent in most cases involving determination of the market value of the acquired land. But this in the very nature of things cannot be helped. The essential thing is to keep in view the relevant factors prescribed by the Act.” (ii) In the case of Special Tahsildar, L.A. v. Mangala Gauri, AIR 1992 SC 666, the Supreme Court has said that it is now settled law in India that the market value postulated in sec. 23 (1) of the Act is designed to award just and fair compensation for the lands acquired. The apex court in the country has repeatedly laid down the acid test that for determining the market value of the land, the price which a willing vendor might reasonably expect to obtain from a willing purchaser would form the basis of fixing the market value. For ascertaining the market value the court can rely upon such transaction which would offer on reasonable basis to fix the price. FA/2392/2004 JUDGMENT The price paid in sale or purchase of the land acquired within a reasonable time of the date of notification under sec. 4 (1) of the Act would be the best piece of evidence. In its absence the price paid for land possessing similar advantages to the land in the neighbourhood of the acquired land in or about the time of notification would supply the data to assess the market value. (iii) In the case of Printers House (P) Ltd. v. Saiyadan, AIR 1994 SC 1160, the Supreme Court has again made it clear that the market value means the price that a willing purchaser would pay to the willing seller for a property having due regard to its existing condition, with all its existing advantages and its potential possibilities when laid out in the most advantageous manner excluding any advantage due to the carrying out of the scheme for which the property is compulsorily acquired. In the said decision the Supreme Court has further held that when parties desired that the FA/2392/2004 JUDGMENT court should assess market value on the basis of comparable sales method it would do so accordingly. (iv) In the case of Land Acquisition Officer v. Jasti Rohini, (1995) 1 SCC 717, the Supreme Court while interpreting both the provisions of sections 23 and 24 of the Act observed as follows: “The question of fixation of market value is a paradox which lies in the heart of the land of compulsory purchase of land. The paradox lies in the fact that the market value concept is purely a phenomenon evolved by the courts to fix the price of land arrived between hypothetical willing buyer and willing seller bargaining as prudent persons without a modicum of constraints or without any extraordinary circumstances. But the condition of free market is the very opposite of the condition of the compulsory purchase which is ex hypothesi, a situation of FA/2392/2004 JUDGMENT constraints. Therefore, to say, that for compulsory purchase, compensation is to be assessed and market value is to be determined in that state of affairs has to be visualized in terms by its direct opposite. To solve the riddle the courts have consistently evolved the principle that the present value as on the date of the compulsory acquisition comprised of all utility reached in a competitive field as on the date of notification and the price on which a prudent and willing purchaser would agree. The value of the land shall be taken to be the amount that the land if sold in the open market by a willing seller might be expected to realize from a willing purchaser. A willing seller is a person who is a free agent to offer his land for sale with all its existing advantages and potentialities as on the date of the sale and willing purchaser taking all factors into consideration would offer to purchase the land as on the date of the sale. The compensation must, therefore, be FA/2392/2004 JUDGMENT determined by reference to the price which a willing vendor might reasonably expect to obtain from a wiling purchaser as on the date of the notification published under section 4 (1) of the Act. The disinclination of the seller to part with the land and the urgent necessity of the vendee to purchase the land must, alike, be disregarded and neither of them must be considered as acting under compulsion.” (v) In the case of Special Dy. Collector v. Kurra Sambasiva Rao, AIR 1997 SC 2625, the Supreme Court has observed as under: “What shall be fair and reasonable and adequate market value is always a question of fact depending upon the evidence adduced, circumstantial evidence and probabilities arising in each case. The guiding star or the acid test would be whether a hypothetical vendor would offer the land and a willing purchaser in normal human conduct would be FA/2392/2004 JUDGMENT willing to buy as a prudent man in normal market condition prevailing in the open market in the locality in which the acquired lands are situated; but not an anxious buyer at arm's length with throw away price, nor facade of sale or fictitious sales brought about in quick succession or otherwise to inflate the market value. The Judge should sit in the arm chair of the said willing buyer and seek an answer to the question whether in the given set of circumstances as a prudent buyer he would offer the same market value which the court proposed to fix for the acquired lands in the available market conditions. The court is, therefore, enjoined with the bounden duty of public functions and judicial dispensation in determination of the market value of the acquired land and compulsory acquisition. The court is enjoined to determine the market value as an objective assessment of the conditions prevailing in the market, nature of user of the land to which the land was put FA/2392/2004 JUDGMENT on the date of notification, situation of the land, the income derived therefrom and all other relevant attending circumstances. The market value so determined should be just, adequate and reasonable. In other words, it must be just equivalent to what is land capable of fetching in the open market from a willing and prudent buyer. Therefore the court is required in the arm chair of a bona fide willing and prudent purchaser in the open market and seek an answer to the question whether in the conditions prevailing in the market he would offer the same market value as the court has proposed.” (vi) In the case of Union of India v. Mangatu Ram, AIR 1997 SC 2704, the Supreme Court has said that it is also the settled law that though determination involves some guess work, it must have a reasonable basis and feats of imagination should be eschewed. It is the salutary duty of the court to award reasonable and adequate compensation. FA/2392/2004 JUDGMENT (vii) In the case of Meharban v. State of UP, AIR 1997 SC 2664, the Supreme Court has reiterated that the court while determining the compensation must sit in the arm chair of a willing and prudent vendor and put question whether the market value sought to be determined would be capable of fetching that hypothetical price and should determine a just and adequate compensation. Even in case where sale deeds were held to be inadmissible in evidence for determination of market value, the Supreme Court has observed that the court would have to take all relevant factors into account before determining the compensation. Applying the acid test in view of the paucity of evidence instead of remitting the case to reference court the Supreme Court decided to assess the compensation on the basis of the award of the reference court which had become final. However, in view of the pressure of lands for developmental activities, the Supreme Court took into consideration reasonable rise in prices to determining the FA/2392/2004 JUDGMENT market value. (viii) In the case of Hasanali Khanbhai & Sons v. State of Gujarat, (1995) 5 SCC 422, the Supreme Court has observed that it would not be safe guide to adopt the same price offered by the purchasers as purchaser hazarded to purchase lands in the neighbouring survey numbers and have taken grave risk. In the said judgment, the Supreme Court has further held that when the lands are sought to be used for building purposes, admittedly the entire land cannot be used for building purposes without providing roads, drainage, electricity and other civic amenities for which necessary deduction of 1/3rd should also be made. (ix) In a recent decision in the case of Lucknow Development Authority v, Krishna Gopal Lahori and others, 2007 AIR SCW 7144, the Supreme Court has deducted 1/3rd amount of compensation towards development charges from the amount of FA/2392/2004 JUDGMENT compensation while determining the market value of agricultural and undeveloped land which has potential value for housing or commercial purposes from the value of the developed or adjacent to a developed area. In the said decision, the Supreme Court has also held that it cannot, however, be laid down as an absolute proposition that when the large area is subject matter of acquisition, the rate at which small plots are sold cannot be the basis for fixation of the rate.

8. Keeping in forefront the principles enunciated by the Supreme Court in the above referred to judgments, we may now advert to the evidence adduced by the parties to find out as to whether the market value of the acquired agricultural lands of the claimants has been correctly determined by the reference court and the award is justified or the reference court has determined the market value on higher side or the reference court has erred in not awarding the claims of the claimants as mentioned in the cross FA/2392/2004 JUDGMENT objections, requiring interference of this court in instant batch of First Appeals and cross- objections.

9. Now we shall deal with the first contention advanced by Mr. Shelat, learned advocate for the appellant - GIDC that the reference court should not have ignored the consent award passed by the Special Land Acquisition Officer in respect of the lands acquired under the same notification while determining the market value of the lands of the claimants. According to him, the notification under Section 4 of the Act was issued on 8.10.1992 for acquisition of 32 lakhs sq.mt. of lands situated at village Manjusar for the purpose of construction of GIDC Industrial Colony. Thereafter notification under Section 6 of the Act was issued on 24.6.1993. Other land owners, except the claimants in this group of appeals, whose lands admeasuring 29,12,468 sq.mt., have accepted the consent award determining Rs.10.75 per sq.mt. and Rs.17.30 per sq.mt. to different types of lands. Therefore, the claimants, whose lands admeasuring 2,87,532 FA/2392/2004 JUDGMENT sq.mt. came to be acquired, are not entitled to any amount exceeding the said amount awarded by the Special Land Acquisition Officer to the owners of the land admeasuring 29,12,468 sq.mt. by way of consent award. By awarding more amount to the claimants, without relying upon the consent award, the reference court has committed a grave error in determining the market value of the 2,87,532 sq.mt., of lands owned by the claimants. To buttress this submission, he has placed reliance on the decisions of the Supreme Court in the case of Major Pakhar Singh Atwal v. State of Punjab(supra) and ONGC v. Sendhabhai Vastram Patel(supra).

10. The aforesaid submission of Mr. Shelat is strenuously countered by Mr. AJ Patel and Mr. SB Vakil, learned advocates for the claimants. According to them, it is true that other land owners whose lands also came to be acquired under the same notification have accepted the consent award but that fact itself is not a decisive factor for determination of market value of the FA/2392/2004 JUDGMENT acquired lands of the claimants.

11. According to us, if this proposition of Mr. Shelat is accepted then Section 18 of the Act would become nugatory because Section 18 of the Act postulates the right of land owners to seek reference for determination of correct market value. For determination of market value, there are recognized methods, such as, (i) yielding of the crop method, (ii) comparable sale method and (iii) previous award of similar land or land in the immediate vicinity. In the instant case, when the claimants desired that the court should determine the market value by comparable sale instance, the court is duty bound to do so (See Printer House (P) Limited v. Saiyadan)(supra). By no stretch of imagination it can be held that the consent award in respect of the land acquired under the same notification is the sole criteria for determination of market value of the lands acquired under the same notification for which the claimants have sought for the reference, which is their right under the statute. On FA/2392/2004 JUDGMENT perusal of the judgments in the case of Major Pakhar Singh Atwal (supra) and ONGC v. Sendhabhai Vastram Patel (supra), relied upon by Mr. Shelat, learned Senior advocate for canvassing the proposition that consent award is binding to other land owners, the Supreme Court has nowhere laid down the proposition that the consent award for the land acquired under the same notification is binding to other land owners who sought reference. Therefore, the first contention of Mr. Shelat that the reference court has erred in not relying upon the consent award while determining the market value of the acquired lands of the claimants and thereby committed a grave error has no substance and hence it is rejected.

12. The next contention of Mr. Shelat, learned advocate for the appellant, is that the sale deeds dated 3.8.1991 and 21.10.1991 are by the claimants themselves for the very same land which came to be acquired. By virtue of the sale deeds, one of the claimants has purchased the very land from Bhogilal Jethalal Shah and FA/2392/2004 JUDGMENT Rasiklal Jethalal Shah in consideration of Rs.9.50 per sq.mt., and 9.79 per sq.mt. This sale was just prior to the issuance of the notification under Section 4 of the Act and, therefore, by way of reference, the claimants cannot claim any amount more than the price mentioned in the sale deeds dated 3.8.1991 and

21.10.1991.

12.1. It is true that by virtue of sale deeds dated 3.8.1991 and 21.10.1991, one of the claimants, Prafulbhai M Patel has purchased Block Nos.1786 and 1794 in consideration of Rs.9.50 per sq.mt., and Rs.9.79 per sq.mt., respectively from Bhogilal Jethalal Shah and Rasiklal Jethalal Shah who wanted to dispose of the land as they were panicky sale. They were not genuine sale between a willing buyer and a willing seller. This would become evident on perusal of the order passed by the Deputy Collector on

15.7.1991. In column 5 of the said order, the Deputy Collector has considered the previous order dated 3.9.1982 passed by the Collector FA/2392/2004 JUDGMENT under Yadi No.Tenancy/4475/82 and exemption was granted in respect of the said land. This was a new tenure land and a new tenure land has a lot of limitations and restrictions. A new tenure land has two kinds of restrictions, that is, a new tenure land sought to be sold by an agriculturist to an agriculturist in villages will have a limited compensation to be paid. Therefore, one will have to pay different premium than one who sells the land for non-agricultural purpose. If a person, who is an agriculturist, wants to sell his land to another agriculturist then standards applied by the Revenue Authorities are different. Difference is that an agriculturist is permitted to sell the land to another agriculturist knowing fully well that the land is given to be utilized for the agriculture purpose alone. But while passing an order permitting the limited conversion of the land from agriculture to agriculture, a condition is imposed that the purchaser who purchases the land will have to pay 80% of the market price when he wants to convert the land from agricultural to FA/2392/2004 JUDGMENT non-agricultural purpose. Order in this connection that was passed by the Deputy Collector was dated 15.7.1991 which is produced on record. The said order is self eloquent. The order permits the seller to sell the land to an agriculturist with conditions. If the order is perused, first condition that is imposed is in respect of conversion of land for non- agricultural use in future. The condition eloquently speaks about the payment of premium fixed by the State Government for conversion of land from agricultural to non-agricultural purpose. In the State of Gujarat there are standards. The standard that is applied is to determine the market price of the land on the date when an application is made and then the person concerned is asked to pay 80% of the market price that would be fixed by the Revenue Authorities. In the fixation of market price of such land, a citizen has no right whatsoever. The fixation is done by a District Valuation Committee and/or by a State Valuation Committee. If the amount of premium that is determined by FA/2392/2004 JUDGMENT the State Valuation Committee is more than 50 lakhs of rupees then approval of the Cabinet is a must. Therefore, the land that was purchased by the claimants was heavily encumbered land in the hands of the claimants. Therefore the sale that was made by the needy seller, who wanted to dispose of his lands, on account of probably burdensome land, can never be taken into consideration as the one which is made between the willing buyer and willing seller. This fact would be borne out from the order dated 15.7.1991 passed by the Deputy Collector. The said order further indicates that the application for the purpose of conversion was made on 3.9.1982 and, therefore, there is every reason to believe that there was an agreement to sell the lands in question between the claimants and the needy seller in 1980. That the order itself refers to an application that was made on 3.9.1982.

12.2. That the lands of Block No.1794/A and 1794/B were also agreed to be purchased along with other lands in 1980 and that sale was also FA/2392/2004 JUDGMENT by a needy seller who wanted to dispose of his lands as he could not cultivate the lands. The cultivation by somebody else would invite the proceedings under the provisions of the Bombay Tenancy and Agriculture Lands Act, 1948 and if somebody is inducted on the land then he would claim tenancy right and automatic right of purchase for a throw away price to be fixed by the Mamlatdar. The owner of the lands was one Rasiklal J Shah who was of village Manjusar and cultivation by himself was impossible. Therefore, there was no other alternative but to sell the lands. In the context of the provisions of the Bombay Tenancy and Agriculture Lands Act, 1948, if he inducted someone then there was every chance of his losing the land. On the other hand, if he did not cultivate the land and was not in a position to cultivate the land, some body else might enter upon the land or even a servant engaged would claim right of tenancy. Once the provisions of the Bombay Tenancy and Agriculture Lands Act, 1948 intervene, a person who loses his tenancy would be entitled to get the land for FA/2392/2004 JUDGMENT less than Rs.1000 under the provisions of the Bombay Tenancy and Agriculture Lands Act, 1948. Therefore, he entered into an agreement with the claimants who were agriculturists and capable to cultivate the lands. Therefore sale by him of his lands could not be taken into consideration as comparable sale instance between a willing buyer and a willing seller.

12.3. The aforesaid aspect is fortified by the evidence of one of the claimants, Cheettubhai, whose evidence was recorded at Ex.24. He has, inter alia, given full explanation about the purchase of land by Prafulbhai. The aforesaid aspect is also borne out from the affidavit filed by Prafulbhai before this Court, in C.A. No.11535 of 2005 with C.A. No.11536 of 2005 in First Appeal No.2395 of 2004, the contents of which are not countered by the appellant. Therefore, the aforesaid two sale instances cannot be considered for determination of market value of the acquired lands of the claimants. FA/2392/2004 JUDGMENT

12.4. Similar question arose before the Supreme Court in Hasanali Khanbhai's case (supra). In the said case, the neighbouring land was sold at the rate of Rs.960 per acre in 1960 as against the price which was paid in 1956 was Rs.251 per acre. In 1956, the claimant himself valued and assessed the land that it has potentiality at the rate of Rs.251 per acre. In that situation, the Supreme Court has observed that it is true that the purchasers hazarded to purchase lands in the neighbouring survey numbers and have taken grave risk but it would not be a safe guide to adopt the same price offered by them (emphasis supplied) and, therefore, the Supreme Court confirmed the determination of market value of Rs.4 per sq.yd., by the High Court. In the above referred to judgment, the claimant has purchased lands in the year 1956 at Rs.251 per acre. However, the High Court has determined the market value at Rs.4 per sq.yd.

12.5. Applying the principle laid down by the FA/2392/2004 JUDGMENT Supreme Court in the above referred to judgment to the facts of instant case, though it is true that one of the claimants has purchased two blocks of lands prior to issuance of notification under section 4 of the Act at Rs.9.50 per sq.mt., and 9.79 per sq.mt., those sale instances cannot be taken into consideration for determination of market value of the acquired lands of the claimants. Apart from these there were other six Survey Numbers which were ancestral properties, of other claimants who also sought reference. Therefore these sale instances cannot be called comparable for determination of market value of the acquired lands of the claimants. In view of this undisputed factual position, the judgment in the case of Union of India v. Pramod Gupta (supra) relied upon by Mr. Shelat, to canvass the proposition that if the owner himself has purchased the same land, the sale instance should be taken into consideration having regard to the admission of the market value of the acquired land, cannot be made applicable to the facts of the instant case. FA/2392/2004 JUDGMENT

12.6. In view of the aforesaid discussion, though we have permitted the appellant to produce three documents i.e., consent award for the land acquired under the same notification under Section 4 of the Act as well as two sale instances of the period immediately prior to issuance of notification under section 4 of the Act by which two block Nos.1786 and 1794 came to be purchased by one of the claimants i.e., Prafulbhai M Patel, by way of additional evidence they cannot be relied upon for the purpose of determination of market value of the acquired lands of the claimants as they are not relevant documents. Therefore this contention of Mr. Shelat is devoid of any merit and has to be repelled and accordingly it is repelled.

13. The last contention of Mr. Shelat is that the reference court has committed a grave error on facts as well as in law by relying upon the sale instances Exs.174 and 175 which are in respect of NA lands for determination of market FA/2392/2004 JUDGMENT value of the acquired agricultural lands of the claimants. According to Mr. Shelat, for determination of market value of agricultural lands, sale instances of NA lands can never be looked into.

13.1. So far as Ex.174 is concerned, it is a sale instance in respect of sale of S.No.75/P and the sale deed was effected on 2.6.1992 in respect of the land admeasuring 6400 sq.mt., in consideration of Rs.83/- per sq.mt., whereas Ex.175 is a sale instance in respect of sale of S.Nos.696/987 and the sale deed was effected on

2.4.1992 in respect of the land admeasuring 1821 sq.mt., in consideration of Rs.134.56 per sq.mt. The notification under section 4 of the Act by which the land came to be acquired was issued on

8.10.1992. Therefore, admittedly these transactions had taken place prior to the issuance of the notification under section 4 of the Act.

13.2. It has also come in evidence that the FA/2392/2004 JUDGMENT owners of these lands have obtained NA permission in the year 1992 shortly before the sale deeds were executed. The lands were undeveloped at the time of sale. There is no rule of law that sale instances being of relatively smaller area than the lands acquired and the acquired lands being agricultural, they are not comparable for determination of market value because it depends upon variety of factors.

13.3. It cannot be laid down as an absolute proposition of law that for determination of market value of agricultural lands sale instances of NA lands can never be looked into. According to this court, sale instances of NA lands can be looked into for determination of market value of agricultural lands if both the lands are in the nearby vicinity and the date of notification for acquisition of the agricultural lands and the date of sale of the NA lands are proximate in time as well as the land is having potential value of housing or commercial purpose. In instant case, it has also come in evidence that FA/2392/2004 JUDGMENT the lands of the claimants acquired have the potential value for housing or commercial purpose and the distance the distance between the acquired lands of the claimants and the NA lands sold vide the sale instances relied upon by the reference court is hardly 1.5 km and now-a-days in this fast developing age, 1.5 km cannot not be termed as a far distance. It is true that Exs.174 and 175 are in respect of sale of NA lands by a commercial company in favour of another commercial company whereas the determination of compensation by the reference court is admittedly for agricultural land. Both the sale instances of NA lands relied upon by the reference court are prior to issuance of notification under Section 4 of the Act and, therefore, according to this Court, both the sale instances in respect of NA lands can certainly be looked into for determination of market value of the acquired agricultural lands of the claimants. Of course, while determining the market value of the agricultural lands on the basis of the sale instances of NA lands, certain deduction in the FA/2392/2004 JUDGMENT price should be made as some portion of the lands would be used for roads, electricity, drainage and other civic amenities.

13.4. Therefore, the contention of Mr. Shelat is that the reference court has committed a grave error on facts as well as in law by relying upon the sale instances Exs.174 and 175 which are in respect of NA lands for determination of market value of the acquired agricultural lands of the claimants, has no substance and it deserves to be rejected and accordingly it is rejected.

13.5. In the case of Fabrics Private Limited v. The Spl. Land Acquisition Officer, Kaira, 1971 (12) GLR 319, a Division Bench of this Court has held that sale instance of smaller area can be taken into consideration after giving suitable deduction and no hard and fast rule can be laid down with regard to the quantum of deduction.

13.6. In the case of Thakarsibhai Devjibhai & others v. Executive Engineer, Gujarat and FA/2392/2004 JUDGMENT another, 2001 (2) GLH 583, the Supreme court has held that the area of sale instances being 2 hectares could not be said to be a small piece of land.

13.7. In the case of Special Land Acquisition Officer, Kheda v. Shantibhai Jivabhai Patel, 34 (2) GLR 1289 this Court has held that it cannot be gainsaid that the principle of valuation of lands not to value large areas of lands on the basis of sales of small areas without making suitable deductions from sale price of small plots of land on account of the largeness of the size of the lot or area has been settled. This principle is very well explored and established. This Court in the case of Fabrics Private Limited (supra) has held that it would not be proper to adopt a dogmatic or doctrinaire approach in the matter of determination of the amount of compensation for the lands under acquisition. It is further held in the said decision that while evaluating a large plot of land by reference to the sale instance of a small plot of land, FA/2392/2004 JUDGMENT several factors must enter into account and no definite rule can be laid down as to the exact extent of deduction to be made. The principle enunciated in the said case is also followed by this Court in the case of State of Gujarat v. Devji Bechar (1991) 32 (2) GLR 736, wherein it has been held that the deduction, if any, required to be made for determining the rate of compensation for acquired land on the basis of sale instances of larger area depends upon the facts of each case. The rationale for deduction is that when the area is much larger, before putting the same to use it would be required to be plotted and considerable land may go in roads, as a result of which the rate of the usable smaller plots would rise. If the land covered by the sale instances is itself also large and when put to use would involve considerable area going in roads, the reason for reducing the rate to be awarded for lands acquired from the rate of the lands covered by sale instances hardly survives. Moreover, the question would depend upon the nature of development taking place in the FA/2392/2004 JUDGMENT locality of acquired lands and whether such development creates a demand for small plots or large plots. Industrial development creates demand for large plots and such demand raises heir market price vis-a-vis small plots, the demand for which would be lower.

13.8. In view of the foregoing reasons, sale instances Exs.174 and 175 though cannot be considered for larger area of land which is hardly 1.5 km away from the acquired land which now-a-days cannot be termed at a far place, according to us, the reference court has rightly placed reliance on these two documents as comparable sale instances for determination of market value. The reference court has taken out the average price of these two sale instances and worked out the figure of Rs.108.78 per sq.mt., as the market price of the acquired lands of the claimants.

13.9. However, according to us, the reference court has committed a serious and grave error in FA/2392/2004 JUDGMENT not deducing any amount in view of the fact that the acquired land was agricultural land whereas the two sale instances relied upon were in respect of NA lands.

13.10. It has been held by catena of decisions that when lands are sought to be used for building purposes, admittedly the entire land cannot be used for building purposes without providing roads, drainage, electricity and other civic amenities for which necessary deduction of 1/3rd should be made (see Hasanali Khanbhai's case (supra)). Similarly, in the recent decision in the case of Lucknow development Authority v. Krishna Gopal Lahori (supra), the Supreme Court has after referring to its previous decisions deducted 1/3rd amount of compensation from other comparable instances of developed and NA lands while determining market value of the agricultural land or undeveloped land which has the potential value for housing or commercial purpose and has observed in paragraphs 21, 22 and 25 as under: FA/2392/2004 JUDGMENT “21. The deduction to be made towards development charges cannot be proved in any strait-jacket formula. It would depend upon the facts of each case.

22. It is well settled that in respect of agricultural land or undeveloped land which has potential value for housing or commercial purposes, normally 1/3rd amount of compensation has to be deducted out of the amount of compensation payable on the acquired land subject to certain variations depending on its nature, location, extent of expenditure involved for development and the area required for roads and other civic amenities to develop the land so as to make the plots for residential or commercial purposes. A land may be plain or uneven, the soil of the land may be soft or hard bearing on the foundation for the purpose of making construction; may be the land is situated in the midst of a developed area all around but FA/2392/2004 JUDGMENT that land may have a hillock or may be low- lying or may be having deep ditches. So the amount of expenses that may be incurred in developing the area also varies. A claimant who claims that his land is fully developed and nothing more is required to be done for developmental purposes, must show on the basis of evidence that it is such a land and it is so located. In the absence of such evidence, merely saying that the area adjoining his land is a developed area, is not enough particularly when the extent of the acquired land is large and even if a small portion of the land is abutting the main road in the developed area, does not give the land the character of a developed area. In 84 acres of land acquired even if one portion on one side abuts the main road, the remaining large area where planned development is required, needs laying of internal roads, drainage, water, electricity lines, providing civic amenities, etc. However, in case of some land where there are FA/2392/2004 JUDGMENT certain advantages by virtue of the developed area around, it may help in reducing the percentage of cut to be applied, as the developmental charges required may be less on that account. There may be various actual factors which may have to be taken into consideration while applying the cut in payment of compensation towards developmental charges, may be in some cases it is more than 1/3rd and in some cases less than 1/3rd. It must be remembered that there is difference between a developed area and an area having potential value, which is yet to be developed. The fact that an area is developed or adjacent to a developed area will not ipso facto make every land situated in the area also developed to be valued as a building site or plot, particularly, when vast tracts are acquired, as in this case, for development purpose. “25. Keeping in view the general principles FA/2392/2004 JUDGMENT and the factual scenario as evident from the materials brought on record, we sustain the market value fixed (i.e., Rs.8/- sq.ft.) but instead of 25% development charges one-third has to be deducted. The entitlements shall be worked out on that basis.”

13.11. Applying the principles laid down by the Supreme Court in the above referred to judgments to the facts of instance case, admittedly the lands acquired were agricultural land on the date of issuance of notification under section 4 of the Act and has potential value for housing or commercial purpose which is evident from the very fact that the land acquired by GIDC was for the public purpose of construction of Industrial Colony whereas the lands involved in the two sale instances on which reliance was placed by the reference court were NA lands. The lands acquired were admittedly for the purpose of construction of GIDC Industrial Colony and therefore obviously the entire land cannot be used for building purposes without providing FA/2392/2004 JUDGMENT roads, drainage, electricity and other civic amenities. We are, therefore, of the opinion that on this count 40% is required to be deducted from the market price fixed by the reference court at Rs.108.78 per sq.mt., taking into account the average price of the two sale instances Ex.174 and 175 and in doing so the net figure works out Rs.65/- per sq.mt., (40% of Rs.108.78 = Rs.65.25 (Rs.65/- rounded off)). Therefore, according to us, Rs.65/- per sq.mt., is the correct market value to which the claimants are entitled to in respect of their acquired lands as well as statutory benefits under section 23 (1A) and 23 (2) as well as 28 of the Act.

14. The determination of market value of the acquired lands at Rs.65/- per sq.mt. by us is also fortified by one more document Ex.48, which is an agreement to sell dated 30.1.1992 which was executed by one of the claimants nine months prior to issuance of notification under Section 4 of the Act and it was in respect of Block Nos.1814 and 1815 admeasuring 30,756 sq.mt., of FA/2392/2004 JUDGMENT land at the rate of Rs.7 per sq.ft., i.e., Rs.73.56 paise per sq.mt. It is true that the said agreement to sell is an unregistered document but neither the seller nor the buyer have raised any objection about it. Rs.2 lakhs as bana was paid to one of the claimants. Therefore the buyer made claim before the Special Land Acquisition Officer for return of that Rs.2 lakhs from the seller and the Special Land Acquisition Officer has returned the said bana amount to the buyer by recognizing the said document. This fact itself is sufficient to establish that there was a genuine agreement to sell transaction between one of the claimants and the buyer for purchasing the lands bearing Block Nos.1814 and 1815. Therefore, according to us, determination of market value of the acquired lands of the claimants by this Court at Rs.65/- per sq.mt., is justified.

15. Further more, the determination of market value of the acquired land at Rs.65/- per sq.mt. is justified by one more document Ex.49, which is FA/2392/2004 JUDGMENT a note prepared by the office of GIDC to work out the value of the lands acquired and the compensation to be paid to the claimants. In the said note it has been mentioned that considering various factors and more particularly the market value at Rs.76.20 per sq.mt., fixed by the Court in respect of the lands acquired for IOC, the market value of the acquired lands of the claimants comes to Rs.73.90 per sq.mt. (Rs.74/- rounded off). The notification in respect to the acquisition of the lands for IOC under S.4 of the Act was published in the year 1995. The lands acquired for IOC is situated 1.75 km. away from the lands of the claimants in the instant case. That means, the lands acquired for IOC is situated in the near vicinity of the lands of the claimants. In the instant case, the notification under S.4 of the Act was issued in the year 1992. Therefore, considering the fact that three years after acquisition of the lands of the claimants, lands for the use of IOC were acquired in the year 1995 and considering all the relevant factors, office of the Land Acquisition Officer FA/2392/2004 JUDGMENT has fixed the value of the acquired land at Rs.73.90 paise per sq.mt. (rounded off Rs.74/-). Therefore, according to us, when the office of the Land Acquisition Officer itself has valued the lands acquired for IOC at Rs.73.90 per sq.mt., (Rs.74/- rounded off) this note is a best piece of evidence for determination of market value of the acquired lands of the claimants. Therefore also, according to us, the market value of the acquired lands of the claimants fixed by this Court at Rs.65/- per sq.mt., is reasonable and is justified.

16. In view of the above discussion, all the First Appeals filed by GIDC deserve to be allowed partly by modifying the award of the reference court which is under challenge in the appeals as indicated above.

17. This takes us to examine the four cross- objections filed by the claimants in the respective appeals. In the cross objections they have claimed that the market value of the FA/2392/2004 JUDGMENT acquired land at Rs.150 per sq.mt., with statutory benefits and interest should be awarded to the claimants. The reference court has disallowed the claim of the claimants in respect of pipe lines on the ground that it would get rusted. The claimants claimed that on this count suitable compensation may be awarded to them. It is also claimed by them that the cost of construction on the acquired land for which evidence has been led by the claimants has not been awarded. They claimed that suitable amount on this count also may be awarded.

18. According to this Court, in the entire length and breadth of the evidence adduced by the claimants, there is no sale instance showing that the land in the immediate vicinity or proximate in time with the issuance of notice under Section 4 of the Act fetched the market value of Rs.150 per sq.mt. So far as disallowing of the claims for the pipe line and construction are concerned, there is no documentary evidence worth the name adduced by the claimants which could FA/2392/2004 JUDGMENT justify awarding of compensation on those counts. In view of the aforesaid facts, the cross objections filed by the claimants in respective appeals are without any merit and deserve to be dismissed.

19. For the foregoing reasons, all the First Appeals filed by GIDC succeed in part and accordingly they are partly allowed. Resultantly, the impugned judgment and award dated 30.4.2004 rendered in a group of Land Reference Case Nos. 1216/96, 1217/96, 1219/96, 1220/96, 1299/96 and 1300/96 determining the market value of the acquired lands of the claimants at Rs.108.78 per sq.mt., is modified and after deducting 40%, we fix Rs.65/- per sq. mt., as the market value of the acquired lands of the claimants and award the market value of the acquired land at Rs.65/- per sq.mt., instead of Rs.108.78 per sq.mt., as awarded by the reference court. Rest of the directions contained in the impugned judgment and award of the reference court with regard to the market price of Babul trees, additional FA/2392/2004 JUDGMENT compensation in terms of statutory benefits under Section 23 (1A) and 23 (2) and also interest under section 28 of the Act are confirmed and maintained.

19.1. All the cross-objections are dismissed.

19.2. Entitlement shall be worked out on the basis of this judgment and award.

19.3. The parties shall bear their own costs of the appeals and cross-objections.

19.4. The Registry is directed to draw the award in terms of this judgment forthwith.

20. It is required to be noted that a Division Bench of this Court vide order dated 4.10.2004 rendered in Civil Application Nos.7985 of 2004 to 7990 of 2004 in the above mentioned First Appeals issued Rule and ad- interim-relief in terms of para 8 (A) was granted on the condition that the appellant-GIDC shall deposit the entire amount FA/2392/2004 JUDGMENT payable under the award in the lower court within six weeks from that day. The question as to permitting withdrawal of any amount from the said deposit was to be decided thereafter. Thereafter the aforementioned Civil Applications came up for confirmation of ad-interim-stay before the Division Bench of this Court on 30.12.2004. At that time, Mr. S.B. Vakil, learned senior advocate for the claimants, made a grievance that GIDC has deposited only the principal compensation amount but the amount of interest and costs is not deposited. Mr. S.N. Shelat, learned senior advocate for GIDC stated that the amount deposited would cover the principal compensation amount with solatium and statutory increase and that in the facts and circumstances of the case, the amount of costs and interest may not be required to be deposited as the reference court has awarded additional compensation at a very exorbitant rate. In those circumstances, the Division Bench, after hearing the learned advocates for the parties, held that the interests of justice would be served if the FA/2392/2004 JUDGMENT claimants are permitted to withdraw 25% of the additional compensation awarded by the reference court together with proportionate solatium, statutory increase and interest at the rate of 9% for the first year after the date of taking over possession and at the rate of 12% for the subsequent period and proportionate costs. The Division Bench has also observed that all these amounts shall be paid to the claimants without obtaining security from them from out of the amounts deposited so far by GIDC. It was also observed that GIDC shall not have to deposit any further amount if the amounts so far deposited by GIDC are sufficient to cover the amounts permitted to be withdrawn by the said order. Thus, it is clear that the Division Bench while confirming the ad-interim-stay has permitted the claimants to withdraw 25% of the additional compensation awarded by the Reference Court (i.e., Rs.27/- per sq.mt. (rounded off) being 25% of Rs.108.78) together with proportionate solatium, statutory increase and interest at the rate of 9% for the first year after the date of FA/2392/2004 JUDGMENT taking over possession and at the rate of 12% for the subsequent period and proportionate costs. It is also required to be noted that the entire amount deposited by GIDC is not permitted to be withdrawn but only 25% of the additional compensation and the proportionate statutory monetary benefits inclusive of interest at the rate of 12% as indicated in the order and proportionate costs are permitted to be withdrawn. The remaining amount was directed to be invested in fixed deposit in the name of the Registrar of the District Court, Vadodara with a nationalized bank for a period of one year in cumulative interest scheme.

20.1. Mr. S.N. Shelat, learned senior advocate for the appellant – GIDC has stated that pursuant to the directions issued by the Division Bench of this Court in the afore- mentioned Civil Applications, GIDC has deposited Rs.5,78,87,078.84 on 2.11.2004 with the reference court. Mr. AJ Patel, learned advocate for the claimants, has submitted that pursuant to the FA/2392/2004 JUDGMENT orders passed by the Division Bench of this Court in the above mentioned Civil Applications, the reference court has permitted the claimants to withdraw Rs.3,18,33,442.44 being 25% of the additional compensation and the proportionate statutory monetary benefits inclusive of interest at the rate of 12% as indicated in the orders and proportionate costs and the remaining amount of Rs.2,60,53,636.40 is lying with the nationalized bank in fixed deposit in the name of the Registrar of the District Court, Vadodara.

20.2. Since this Court has determined the market value of the acquired land at Rs.65/- per sq.mt., and also statutory benefits and interest under the Act together with statutory benefits and interest on that amount, the reference court is directed to permit the claimants to withdraw remaining amount at the rate of Rs.38/- per sq.mt., (Rs.65/- per sq. mt., determined by this Court minus Rs.27/- per sq.mt., paid to the claimants pursuant to the interim orders of this Court) as also the statutory benefits and FA/2392/2004 JUDGMENT interest on that amount from the amount which is deposited in the nationalized bank in the name of the Registrar of District Court, Vadodara and accordingly the reference court shall pay the said amount forthwith after encashing the fixed deposit receipts together with interest accrued thereon. If any amount comes in excess after satisfying the claims of the claimants pursuant to the modified award drawn as per this judgment, the same shall be refunded to the appellant – GIDC. If the amount deposited in the nationalized bank in the name of the Registrar of District Court, Vadodara is not sufficient to satisfy the modified award as per this judgment, GIDC shall deposit the shortfall within a period of twelve weeks hereof, with the reference court and the reference court shall disburse the same in favour of the claimants immediately. (A.M. Kapadia, J.) (R.H. Shukla, J.) ... FA/2392/2004 JUDGMENT (karan)