THE SPECIAL LAND ACQUISITION OFFICER UKP, BILAGI, TQ : BILAGI. v. THE STATE OF KARNATAKA

#9 . SRI. BASAWARAJA W/O.SANGAPPA MAREGUDDI ALL ARE MAJOR, OCC. RETIRED FROM SERVICE AND HOUSEHOLD WORK, MFA No.101492/2020 2 R/O. BAGALKOT. …RESPONDENTS (BY SRI. JAGADISH PATIL FOR SRI. BASAVARAJ C. BYAKOD, ADVOCATES FOR R1 TO R6 & R9, NOTICE TO R7 & R8 ARE SERVED) THIS MFA IS FILED U/SEC.54(1) OF LAND ACQUISITION ACT, 1894, AGAINST THE JUDGMENT AND AWARD DTD.03.11.2018 PASSED IN LAC.NO.7/2018 ON THE FILE OF THE II ADDITIONAL SENIOR CIVIL JUDGE, BAGALKOT, AWARDING COMPENSATION OF RS.126/- PER SQ.FT. THIS APPEAL HAVING BEEN HEARD AND RESERVED ON 13.02.2024 COMING ON FOR PRONOUNCEMENT OF JUDGMENT, THIS DAY, S.G. PANDIT, J., DELIVERED THE FOLLOWING: JUDGMENT The Special Land Acquisition Officer, UKP, Bagalkot (for short, ‘the SLAO’) is in appeal under Section 54(1) of the Land Acquisition Act, 1894 (for short, ‘the Act’) questioning the correctness and legality of the judgment and award dated

03.11.2018 passed in L.A.C. No.7/2018 by the II Additional Senior Civil Judge, Bagalkot (for short, ‘the Reference Court’).

#2. Heard the learned Additional Advocate General, Sri. Keshava Reddy for the appellant-SLAO and the learned counsel Sri. Jagadish Patil for Sri. Basavaraj C Byakod, learned counsel for the respondents-claimants. Perused the appeal papers as well as the Reference Court records.

#3. Brief facts leading to filing of this appeal are that, MFA No.101492/2020 3 a) the appellant-SLAO issued a preliminary Notification under Section 4(1) of the Act on 07.10.1999 including the lands of the respondents-claimants in R.S. No.96/2A to an extent of 3 acres 37 guntas situated at Sigikeri village of Bagalkot Taluk for acquisition for the purpose of rehabilitation to the villages affected by Upper Krishna Project. The SLAO passed an award on 21.09.2000 fixing the market value of the land at Rs.23,200/- per acre. Not being satisfied with the market value fixed by the SLAO, respondents-claimants sought reference under Section 18(2) of the Act. The Reference Court under the judgement and award under appeal enhanced the market value of the land in question at Rs.126/- per sq. ft. b) While enhancing the market value of the acquired lands in question at Shigikeri village, the Reference Court re-determined the market value at Rs.126/- per square feet relying on Ex.P.8, the judgment dated 06.02.2016 passed in L.A.C. No.83/2009 and Ex.P.9, the judgment of this Court in M.F.A. No.100574/2016 c/w M.F.A. No.101345/2016, MFA No.101492/2020 4 decided on 20.10.2016. Ex.P.8 is the judgment passed in L.A.C. No.83/2009 which relates to acquisition of land bearing R.S.No.127/2 of Sigikeri village under Section 4(1) notification dated

25.05.2006 for the purpose of establishment of power grid. The market value of the acquired land in respect of L.A.C. No.83/2009 was fixed at Rs.162/- per square feet, and in appeal, this Court in M.F.A No.100574/2016 and connected matter, enhanced the market value to Rs.192.89 per sq.ft. The said judgement in M.F.A. No.100574/2016 was taken up the Hon’ble Apex Court in SLP No.2202- 2203/2017 and the Hon’ble Apex Court was pleased to dismiss the SLP affirming the order passed by the Reference Court as well as this Court. c) The Reference Court taking the market value of the land at Rs.192.89/- per sq. ft. for acquisition of the year 2006 de-escalated at the rate of 5% per annum for seven years since Section 4(1) Notification involved in the present appeal is of the year 1999 and re-determined the market value at Rs.126/- per sq.ft. MFA No.101492/2020 5

#4. Aggrieved by the same, the Special Land Acquisition Officer is before this Court in this appeal.

#5. Learned Additional Advocate General Sri. Keshava Reddy for the appellant/SLAO would submit that the market value determined by the Reference Court at Rs.126/- per sq. ft. for the lands acquired under Notification of the year 1999 is on the higher side and further submits that determination of the market value is opposed to material on record. Learned Additional Advocate General would submit that the respondents- claimants have failed to establish the market value and further submits that the market value determined by the SLAO is proper and correct, and in the absence of any sale exemplars and any cogent material, the Reference Court ought not to have taken the market value determined in respect of land acquired more than seven years subsequent the notification dated

07.10.1999.

#6. Learned Additional Advocate General would submit that the Reference Court committed a grave error in placing reliance on Ex.P.8 and Ex.P.9 and in determining the market value at Rs.126/- per sq. ft. The market value determined under Ex.P.8 and Ex.P.9 are for the lands acquired under the MFA No.101492/2020 6 notification issued in the year 2006 and the lands acquired in the present case pertain to the notification issued on 07.10.999. The Reference Court ought to have determined the market value of the acquired land on the materials made available as on the date of acquisition and not the market value determined in a future acquisition. Learned Additional Advocate General would submit that while determining the market value, the Reference Court shall have to take into consideration several factors such as potentiality of the land, development in and around the area, it's connectivity etc. Further, the learned Additional Advocate General would submit that initial burden to establish or prove the market value is on the claimants, which they have failed to do. Learned Additional Advocate General would submit that the method adopted by the Reference Court i.e., de-escalation is not proper. Further, he submits that without there being any basis, the Reference Court ought not to have determined the market value by adopting de-escalation method.

#7. Learned Additional Advocate General would also submit that the Reference Court committed a grave error in awarding interest from the date of the award and further submits that interest would always be awarded from the date of taking MFA No.101492/2020 7 possession of the land. Thus, he prays for allowing the appeal and for setting aside the judgment and award under appeal.

#8. Per contra, learned counsel Sri. Jagadish Patil for Sri. Basavaraj C Byakod, learned counsel for the respondents- claimants would support the judgment and award passed by the Reference Court determining the market value of the land at Rs.126/- per sq. ft. It is submitted that the Reference Court placing reliance on Ex.P.8 and Ex.P.9 has rightly determined the market value. It is submitted that some of the lands of the same village were acquired for the purpose of establishing power grid under notification issued in the year 2006. The Reference Court in L.A.C. No.83/2009 determined the market value of the land acquired at Rs.162/- per sq. ft., which on appeal was enhanced to Rs.192.89/- per sq. ft. by this Court and the same is approved by the Hon’ble Apex Court by dismissing the SLP preferred by the SLAO.

#9. Further, the learned counsel for the respondents- claimants would submit that the Reference Court is justified in applying de-escalation at the rate of 5% per annum and determining the market value at Rs.126/- per sq. ft. Learned counsel would submit that when the lands are acquired by the same authority, though for a different purpose, the claimants will MFA No.101492/2020 8 have to be awarded compensation determining the market value on the same lines. Further, the learned counsel would submit that the land in question has non-agricultural potentiality and in respect of the land in question, the Town Planning authorities had notified in the year 1976 itself for development. He submits that, moreover, the land in question is adjacent to municipal area and is by the side of Raichur-Belgaum State Highway. So also, it is stated by P.W.1 that in and around the land in question, developments have taken place and Banks, schools, hotels and hospitals have come up. Therefore, it is submitted that the Reference Court is justified in determining the market value at Rs.126/- sq. ft. Thus, he prays for dismissal of the appeal.

#10. On hearing learned counsels for the parties and on perusal of the appeal papers and the Reference Court records, the only point which falls for consideration in this appeal is, Whether the market value determined by the Reference Court for the acquired land is proper and correct?

#11. The answer to the above point would be in the Negative and the matter needs reconsideration for the following reasons: MFA No.101492/2020 9

#12. Determination of market value of the acquired land would depend upon evidence adduced case. Determination of compensation in each case depends upon nature of the land, what is the evidence adduced in each case, what is required to be assessed or determined and potentiality of the land as on the date of acquisition. Onus to prove the entitlement to receive higher compensation is upon the claimants. The claimants are expected to lead cogent and proper evidence in support of their claim. Onus primarily on the claimants, which they can discharge while placing and proving on record sale instances or such other evidences as they deem proper, keeping in mind the method of computation for awarding compensation which they rely on.

#13. The Hon’ble Apex Court in the case of Special Land Acquisition Officer Vs. Karigowda & Others1, at paragraphs- 28, 71 and 72 has laid down procedure or method that could be adopted for determination of fair market value of the land acquired. The said paragraphs read as under: “28. We may notice that Part III provides for procedure and rights of the claimants to receive compensation for acquisition of their land and also states various legal remedies which are available to them under the scheme of the Act. Under Section 18 of the Act, the Reference Court determines the quantum of compensation payable to the claimants. Section 23 provides guidelines, which would be taken into consideration by the court 1 (2010) 5 SCC 708 MFA No.101492/2020 10 of competent jurisdiction while determining the compensation to be awarded for the acquired land. Section 24 of the Act is a negative provision and states what should not be considered by the court while determining the compensation. In other words, Sections 23 and 24 of the Act provide a complete scheme which can safely be termed as statutory guidelines and factors which are to be considered or not to be considered by the court while determining the market value of the acquired land. These provisions provide a limitation within which the court has to exercise its judicial discretion while ensuring that the claimants get a fair market value of the acquired land with statutory and permissible benefits. Keeping in view the scheme of the Act and the interpretation which these provisions have received in the past, it is difficult even to comprehend that there is possibility of providing any straitjacket formula which can be treated as panacea to resolve all controversies uniformly, in relation to determination of the value of the acquired land. This essentially must depend upon the facts and circumstances of each case.

#71. Sections 23 and 24 of the Act spell out the have and have- nots, applicable to the scheme of awarding compensation by the Collector but do not describe the methodology which should be adopted by the courts in determining the fair market value of the land at the relevant time. By development of law, the courts have adopted different methods for computing the compensation payable to the landowners depending upon the facts and circumstances of the case. The courts have been exercising their discretion by adopting different methods, inter alia the following methods have a larger acceptance in law: (a) Sales statistics method.—In applying this method, it has been stated that, sales must be genuine and bona fide, should have been executed at the time proximate to the date of notification under Section 4 of the Act, the land covered by the sale must be in the vicinity of the acquired land and the land should be comparable to the acquired land. The land covered under the sale instance should have similar potential and occasion as that of the acquired land (Faridabad Gas Power Project, NTPC Ltd. v. Om Prakash12, Shaji Kuriakose v. Indian Oil Corpn. Ltd.13 and Ravinder Narain v. Union of India14). (b) Capitalisation of net income method.—This method has also been applied by the courts. In this method of determination of market value, capitalisation of net income method or expert opinion method has been applied (Union of India v. Shanti Devi15 , Executive Director v. Sarat Chandra Bisoi16 and Nelson Fernandes v. Land Acquisition Officer8). MFA No.101492/2020 11 (c) Agricultural yield basis method.—Agricultural yield of the acquired land with reference to revenue records and keeping in mind the potential and nature of the land—wet (irrigated), dry and barren (banjar).

#72. Normally, where the compensation is awarded on agricultural yield or capitalisation method basis, the principle of multiplier is also applied for final determination. These are broadly the methods which are applied by the courts with further reduction on account of development charges. In some cases, depending upon the peculiar facts, this Court has accepted the principle of granting compound increase at the rate of 10% to 15% of the fair market value determined in accordance with law to avoid any unfair loss to the claimants suffering from compulsive acquisition. However, this consideration should squarely fall within the parameters of Section 23 while taking care that the negative mandate contained in Section 24 of the Act is not offended. How one or any of the principles aforestated is to be applied by the courts, would depend on the facts and circumstances of a given case.”

#14. The Hon’ble Apex Court in the above decision has held that no straightjacket formula to determine the value of the acquired land and the Court in its discretion could adopt any one of the methods such as, (a) sales statistics method, (b) capitalization of net income method and (c) agricultural yield basis method, depending upon the facts and circumstances of each case.

#15. In the instant case, Section 4(1) Notification was issued on 07.10.1999 for acquiring the lands situated in Sigikeri Village of Bagalkot Taluk, including the lands of the respondents- claimants bearing R.S. No.96/2A measuring 3 acres 37 guntas for the purpose of rehabilitation to the villages affected by the MFA No.101492/2020 12 Upper Krishna Project. Subsequent to acquisition of the lands involved in the present appeal, Section 4(1) notification dated

25.05.2005 was issued for acquiring the lands in Sigikekri Village for the purpose of establishment of power grid. For the lands acquired under the Notification dated 25.05.2006, on reference seeking enhancement, the Reference Court in L.A.C. No.83/2009 (Ex.P8), re-determined the marked value at Rs.162/- per sq. ft. and the said market value was enhanced to Rs.192.89/- per sq. ft in M.F.A. No.100574/2016 (Ex.P9) and connected matter which is affirmed by the Hon’ble Apex Court in S.L.P. No.2202- 2203/2017.

#16. The reference Court in order to determine the fair and proper market value, ought to have followed the guidelines or procedure laid down by the Hon’ble Apex Court in the above referred Karigowda’s case. But the reference Court proceeded to determine the market value by taking the market value of the land determined under Ex.P8 and P9 and de-escalated the same by 5% for seven years to arrive at the market value at Rs.126 per sq.ft. The said procedure adopted by the reference Court is wholly erroneous and opposed to the settled procedure for determining the market value of the acquired land. Under Ex.P8 and P9, the market value of the acquired land was determined at Rs.126 per sq.ft. for the acquisition of the land under notification MFA No.101492/2020 13 dated 25.05.2006 and 8.6.2007. The market value of the land determined in a future acquisition cannot be the basis for determination of market value for much higher acquisition i.e., 7 to 8 years prior.

#17. No doubt, uniform rate of compensation for all the acquired lands are to be awarded, but the same shall be on cogent and acceptable evidence. In the instant case, the reference Court without there being any sale exemplar placed on record by the claimants, only based on Ex.P8 and P9 determined the market value of the land by de-escalation. De-escalation is normally not adopted, since the Court would not be in a position to foresee the development that would be taken place more than after 7 to 10 years. Therefore, the market value shall have to be determined based on the method as stated in Karigowda’s case supra, by placing reliance on the documents like sale exemplar of the year in and around date of notification for the acquisition. More over, Ex.P16, endorsement dated 18.3.2011, issued by the Senior Sub-Registrar, Bagalkot indicates the Sub-Registrar Value at Sigikeri village for residential and commercial plots during the period 4.5.2002 to 31.03.2003 is Rs.25 per sq.ft. Normally, the market value of the immovable property would be more than SR value, but it cannot be as determined by the reference Court in the present case. MFA No.101492/2020 14

#18. Apart from the sale exemplar of relevant period, the reference Court shall have to take note of the potentiality of the land, connectivity, its utilization, if it is agricultural land, nature of crop grown, development which is taken place in and around land and also its non-agricultural potentiality. Though Ex.P4, notification dated 16.06.1975 issued by the Town Planning Department is produced to indicate that Sigikeri village is included within the Town Planning area, no transaction of sale in and around year of 2000, the date on which the land in question was notified, are placed on record. Mere producing notification, including the village in Town Planning area would not be sufficient to determine the market value. It would be one of the factor along with other factors to determine the market value of the land in question.

#19. On scrutiny of the entire material on record, we are of the view that there is no material to determine the market value of the land acquired at Rs.126 per sq.ft. The method adopted by the reference Court i.e., de-escalation for seven years at the rate of 5% per annum to arrive at Rs.126 per sq.ft. is wholly erroneous, which needs reconsideration. The reference Court misdirected itself in placing reliance on Ex.P9, the judgment dated 20.10.2010 in MFA No.100574/2016, since it is a case of escalation. This Court in the said MFA by following MFA No.101492/2020 15 method of escalation at the rate of 10% per annum for 9 years, arrived at market value at Rs.192.89 per sq.ft. Based on the said judgment, the reference Court could not have adopted de- escalation method to arrive at Rs.126 per sq.ft. for the lands acquired under notification dated 7.10.1999.

#20. For the reasons recorded above, we proceed to pass the following: ORDER a) The above appeal stands allowed. b) The judgment and award dated 03.11.2018 passed in L.A.C. No.7/2018 by the II Additional Senior Civil Judge at Bagalkot, is hereby set- aside. c) The matter is remitted back to the reference Court for fresh determination of market value of the acquired land. d) The reference Court shall afford an opportunity to both the parties to adduce their fresh evidence and thereafter, determine the market value of the acquired land. e) Since the acquisition is of the year 1999 and LAC is of the year 2018, we deem it appropriate to direct the reference Court to dispose off the case within a period of six months from the date of receipt of original records. f) Without expecting further notice, both the parties shall appear before the reference Court on 20.03.2024. MFA No.101492/2020 16 g) The registry is directed to transmit the original records to the reference Court forthwith. Sd/- JUDGE Sd/- JUDGE KMS/JTR