Om Parkash and others v. State of Haryana

Ex.P8/A to Ex.P8/D, learned counsel for the appellants has submitted that boundaries of village Devi Nagar adjoin to village Mahesh Nagar, Judian, Majri and Kharak Mangoli i.e,. the villages whose land was acquired for development of various sectors and, thus, the various awards passed by the Reference Courts in these villages adjoining to the acquired land which were passed were relevant. In the end learned counsel for the appellants by RFA No.1879 of 1997 5 referring to a decision of this Court passed in the case of Parkash Rani v. The State of Haryana, RFA No. 41 of 1997 decided on 29.10.1999 for acquired land of Kharak Mangoli and Majri tehsil Kalka District Panchkula, which was acquired vide notification issued under section 4 of the Act dated 2.7.1985, wherein the market value has been determined at the rate of Rs. 250/- per square yard along with all other statutory benefits for the land and has submitted that the compensation be enhanced giving suitably yearly increase on the said rate of Rs.250/- per square yard for the land acquired in the year 1985. On the other hand, learned State counsel has argued that the value assessed by the Collector is just and fair which has been done after taking into consideration all the facts and circumstances. It was further submitted that vide Annexure R1 i.e. the award dated 23.3.1993 land of village Devi Nagar which was also acquired vide same notification dated

31.3.1987 issued under section 4 of the Act for the same purpose along with the acquired land in question, was assessed at Rs.1,50,000/- per acre and therefore, the appeals should be dismissed. I have heard the learned counsel for the parties and perused the impugned award and the documents/evidence on record with the help of learned counsel for the parties. Section 23 of the Act governs determination of compensation payable on the basis of market value of the land: whereas Section 24 of the Act provides about certain matters which are to be excluded while determining the market value. However, Act does not define “market value”. The matter, however, has not been left to the vagaries of mere RFA No.1879 of 1997 6 opinion and absolute discretion of the Tribunal/courts and has rather been settled by Hon'ble Supreme Court in various pronouncements. In Atma Ram Vs. State of Haryana reported in 2008 (1) Law Herald 1=2008(2) SCC 568, Hon'ble Supreme Court explained about the expression “market value” in the following words: “ In order to determine the compensation which the tenure-holders are entitled to get for their land which has been acquired, the main question to be considered is what is the market value of the land. Section 23(1) of the Act lays down what the courthas to take into consideration while Section 24 lays down what the Courtshall take into consideration and have to be neglected. The main object of the enquiry before the court is to determine the market value of the land acquired. The expression `market value has been subject matter of consideration by this court in several cases. The market value is the price that 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 led out in the most advantageous manner excluding any advantage due to the carrying out of the scheme for which the property is compulsory acquired. In considering market value the disclination of the vendor to part with his land and the urgent necessity of the purchaser to buy should be disregarded. The guiding start would the conduct of hypothetical willing vendor who would offer the land and a purchaser in normal human conduct would be willing to buy as a prudent man in normal market conditions but not an anxious dealing at arms length nor facade of sale nor fictitious sale brought about in quick succession or otherwise to inflate the market value. The determination of market value is the prediction of an economic event viz, a price outcome of hypothetical sale expressed in terms of probabilities.” RFA No.1879 of 1997 7 Hon'ble Supreme Court relied on previous rulings rendered in Thakur Kanta Prsasad Singh (dead by LRs) V. State of Bihar, AIR 1976 SC 2219: Pirthvi Raj Taneja (dead) by LRs V. State of M.P,AIR 1977 SC 1560: Administrator General of West Bengal vs. Collector, Varansi, AIR 1988 SC 943 (1); and Periyar and Pareekanni Rubbers Ltd. V. State of Kerala AIR 1990, SC 2192. Thus, the phrase “ market value of the land” as used in Section 23(1) of the Act means ordinarily “value to the owner”. The value of the land to the owner, therefore, must be the basis for determination of the compensation. But the standard must be not a subjective standard but an objective one. Ordinarily, the objective standard would be the price that an owner willing and not obliged to sell, might reasonably expect to obtain from a willing purchaser with whom he has bargaining for the sale of the property. In fixing the market value of the land, the court has to take into account the potential value of the land at the time of its acquisition. The assessment of the potential value on the basis of its expected use in the near future for such profitable purposes can be shown only when the expected user for such purpose is almost a certainty or a proximate possibility and is so obvious that its value can be ascertained with reasonable consideration of the realities of a situation. In Atma Ram vs. State of Haryana reported in 2008 (1) LAW HERALD 1 (cited supra), Hon'ble Supreme Court held as under:- “ For ascertaining the market value of the land, the potentiality of the acquired land should also be taken into consideration. Potentiality means capacity or possibility for changing or RFA No.1879 of 1997 8 developing into state of actuality. It is well settled that market value of a property has to be determined having due regard to it existing condition with all its existing advantages and its potential possibility when led out in its most advantageous manner. The question whether a land has potential value or not, is primarily one of fact depending upon its condition, situation, user to which it is put or is reasonably capable of being put and proximity to residential, commercial or industrial areas or institutions. The existing amenities like, water, electricity, possibility of their further extension, whether near about Town is developing or has prospect of development have to be taken into consideration. See The Collector Raigarh V. Dr. Hari Singh Thakur and another, AIR 1979 SC 472, Raghubans Narain Singh V. State of U.P. Govt. through Collector of Bijnor AIR 1967 SC 465 and Administrator General,W.B. V. Collector Varansi, AIR 1988 SC 943. It has been held in Smt. Kaushalya Devi Bogra and others Vs. L.A.O.Aurangabad and another AIR 1984 SC 892 and Suresh Kumar V. T.I.Trust, Bhopal, AIR 1989 SC 1222 that failing to consider potential value of the acquired land is anerror of principle”. In the case in hand, with regard to the surrounding of the acquired land there is no dispute between the parties. In fact, potential value of the land could not be disputed by the respondents. Having noticed the potentiality of the suit land, the next question is that what method of valuation should be adopted for ascertaining the market value of the suit land. In this regard, it has been observed by Hon'ble Supreme Court in Koyappathodi M.Ayisha Umma Vs. State of Kerala AIR 1991 S.C.2027, regarding the method of valuation to be adopted for ascertaining the market value of the land, as follows:- RFA No.1879 of 1997 9 “It is settled law that the methods of valuation to be adopted in ascertaining the market vlaue of the land as on the date of notification are (1) opinion of experts (ii) the price paid within a reasonable time in bonafide transaction of the purchase or sale of the lands acquired or the lands adjacent to the lands acquired and possessing similar advantage and (iii) a number of years purchase of the actual or immediately prospective profits of the lands acquired. These method, however do not preclude the Court from taking any other special circumstances obtained in an appropriate case into consideration. As the object being always to arrive as near as possible in an estimate of the market value in arriving at the reasonable correct market value. It may be necessary to take even two or all those matters into account inasmuch as the exact valuation is not always possible as no two lands may be the same either in respect of the situation or the extent or the potentiality nor is it possible in all cases to have reliable material from which that valuation can be accurately determined”. Similar view was also taken by the Hon'ble Punjab and Haryana High Court in Gurpreet Singh and another Vs. State of Punjab and othes 2005(4) RCR(civil) 807. It will be clear from the aforesaid observations of Hon'ble Supreme Court that no hard and fast rule can be laid down regarding method to be adopted for assessing compensation to be paid and that each case must be considered in view of its own special factors as market value RFA No.1879 of 1997 10 can not be calculated with mathematical precision. It is, in fact, duty of the Court to closely scrutinize evidence and apply the test of a prudent person who is willing to purchase and then determine just and adequate compensation. Further, the comparable sales method of valuation of land is one of the methods, which is normally adopted by the courts to determine the market value of the acquired land. Regarding the applicability of this method and what facts should be kept in consideration while applying this method, it has observed by Hon'ble supreme Court in Shaji Kuriakose Vs. Indian Oil Corp.Ltd & Ors. 2001 (2)LAC 334 =2001 AIR (SC)3341, as follows:- “It is no doubt true that courts adopt Comparable Sales Method of valuation of land while fixing the market value of the acquired land comparable Sales Method of valuation is preferred than other methods of valuation of land such as capitalization of Net Income Method or expert Opinion method. Comparable Sales Method of valuation is preferred because it furnishes the evidence for determination of the market value of the acquired land at which a willing purchaser would pay for the acquired land if it has been sold in open market at the time of issue of notification under Section 4 of the Act. However, comparable Sales Method of valuation of land for fixing the market value of the aqcuired land is not always conclusive. There are certain factors which are required to be fulfilled and on fulfillment of those factors the compensation can be RFA No.1879 of 1997 11 awarded, according to the value of the land reflected in the sales. The factors laid down inter alia are : (1) the sale must be a genuine transaction, that (2) the sale deed must have been executed at the time proximate to the date of issue of notification under section 4 of the Act , that (3) the land covered by the sale must be in the vicinity of the acuired land, that (4) the land covered by the sales must be similar to the acuired land and that (5) the size of the plot of the land covered by the sales be comparable to the land acquired. If all these factors are satisfied, then there is no reason why the sale value of the land covered by the sales be not given for the acquired land. However, if there is a dissimilarity in regard to locality, shape, size or nature of land between land covered by sales and land acquired, it is open to court to proportionately reduce the compensation for the acquired land than what is reflected in the sales depending upon the disadvantages attached with the acquired land...........................” In ONGC Ltd versus Sendhabhai Vastram Patel and Ors.2006(1) LACC 388=2005(6)SCC 454, it has been held by Hon'ble Supreme Court that for determining market value of acquired land, the best method would be amount as may be evidenced by sale deeds; and that in the absence of this method, court can take into consideration other method: like judicial precedents, awards etc. In Administrator General of West Bengal Vs. Collector Varansi,AIR 1988 SC 943, it was held by Hon'ble Supreme Court that prices fetched for lands similar to acquired land with RFA No.1879 of 1997 12 similar advantages and potentialities at or about time of preliminary notification constitute best evidence. In the present case, broadly speaking evidence produced by the petitioners, in order to assess the market value of the suit land, can be divided into following categories : (a) HUDA rates, (b) Sale instances, ( c ) Awards of courts and (d) Collector's rates; whereas, respondents have relied upon the sale instances only. As far as the rates at which HUDA offers its plots, the rates of HUDA cannot be looked into. If after development of the land by HUDA, its value has enhanced, no benefit can be given to the appellants. It cannot be disputed that plots are offered for sale by the HUDA after large percentage of the land is left for the development of parks and roads etc. and a huge amount is incurred on the infra-structure like construction of road, sewerage, water supply, electrification, treatment plant, drainage system and various common amenities. In these circumstances, the HUDA rates cannot be made the basis for determining the market value of the acquired land. Moreover, there is no documentary evidence to establish even the HUDA rates in the instant case. Reliance can be made to Tara Devi Vs. State of Haryana 2005(3) PLR 606, wherein it has been observed by this Court that sale price of the plots of HUDA cannot be taken to be reflecting the market value of the acquired land at the time of notification inasmuch as the aforesaid plots were sold by HUDA after developing the same externally as well as internally. It was further observed that in huge acquisition and mass development, only normal compensation should be payable, irrespective of some distance for the location of the land, unless the RFA No.1879 of 1997 13 location of the land is having a total definite distinct advantageous and potential. Similarly Collector's rates for the purpose of registration for the lands for the lands for residential and commercial use has no statutory base and cannot form any base to determine the market value of the acquired land. Reliance can be placed in this regard on a judgment of the Hon'ble Supreme Court in Jawajee Naganathan v. Revenue Divisional Officer, Adalatbad (AP) etc. 1994 LACC 496=1994(2) JT 204. It may also be noticed that in the instant case no sale instances have been relied upon by the parties and the appellants have relied upon a judgment of this Court in Parkash Rani's case (supra) for enhancement of the compensation. However, it may be relevant to mention at the outset that no comparable sale instance of the land in the vicinity are available on the record. Both the parties have failed to produce on record any relevant sale instance of the area. It is well settled that the valuation for the purpose of registration fixed by the government cannot be a indicator of the market value of the land and cannot be relied upon. Thus, the Reference Court rightly ignored the letters Ex.PX and PW10/A fixing the value of residential and commercial areas of Panchkula for the purpose of registration. Though in the oral testimony of witnesses it has come on record that the land was being sold in the adjoining areas after development by the respondents at a very high rate and thus it had a great potential but no reference could be made to any documentary evidence on record. Even otherwise, it is well settled that sale price of land after development cannot be relied upon. In fact, it is the admitted case of the appellants that no relevant evidence is available and the value of the land has to be assessed taking judicial notice of the judgment RFA No.1879 of 1997 14 in Parkash Rani's case (supra) and the principle of increase as settled by the Apex Court. Now the only question to be determined in this case is whether the judgment in Parkash Rani's case (supra) can be relied upon in the present case safely as the true indicator of market value of the land in the vicinity as on 2.7.1985 i.e. the date of notification under section 4 of the Act in this appeal. Shri Shailendra Jain,Advocate, appearing on behalf of the appellants has made strenuous efforts to bring home his submission to the effect that judicial notice of the judgment in Parkash Rani's case (supra) can be taken by this Court for making the basis for determination of compensation in the case in hand and has argued that the documents Ex.PW8/A to Ex.PW8/D and statement of PW9 to the effect that the boundaries adjoining villages of Mahesh Nagar, Judian and ,Kharak Mangoli adjoins the acquired land by referring the statements of PW8 and PW9 and therefore, the judgment of this Court in the aforesaid RFA No. 41 of 1997 which pertains to village Kharak Mangoli and Majri for the land which was acquired on 2.7.1985 is relevant and comparable. Shri Shailendra Jain, has further relied upon the judgment of the Supreme Court in the case of Udho Dass v.State of Haryana 2010 (94)AIC 58 and The General Manager, Oil and Natural Gas Corporation Ltd. v. Rameshbhai Jivanbhai Patel and another, 2008(4)R.C.R. (Civil) 487, wherein the principles for giving increase on yearly basis have been explained. On the basis of the aforesaid judgments, learned counsel for the appellants has submitted that the appellants are entitled to the market value at Rs.250/- per square yards plus the annual increase at the rate of 12% per annum as RFA No.1879 of 1997 15 escalation price between the two dates of notifications under section 4 of the Act. No doubt, the land under acquisition in this appeal pertains to village Kharak Mangoli and Majri Tehsil Panchkula. It is not in dispute that the boundaries of village Kharak Mangoli and Majri Tehsil Kalka adjoins the boundaries of village Devi Nagar i.e. the acquired land. However, there is no connecting evidence to demonstrate that the acquired land as well as the land under acquisition in Parkash Rani's case (supra), has the similar potential value. Even the location of the land under reference and the land in Parkash Rani's case could not be identified. There is no site plan/map of the area to demonstrate that lands in both the cases are having the same potential value. A perusal of the judgment in Parkash Rani's case (supra) would show that the land under acquisition of village Kharak Mangoli and Majri was just opposite a fully developed Sctor-1,Panchkula which was just opposite the acquired land and in fact the whole of the area was already a business center whereas the land in question is admittedly on the banks of Ghaggar river and on the other side some jhuggis are in existence. May be today it can be said that Sector-3 Panchkula is at a prime location having Golf Club, Gymkhana Club and five-star hotel and places having recreational activities such as Tau Devi Lal Stadium but no such buildings were in existence at the time of acquisition and all developments have taken place after the acquisition. It is well settled that the compensation is to be awarded only on the basis of situation, location and actual condition at the time of acquisition. Even a perusal of the judgment in Parkash Rani's case (supra) would show that there were no sale instances of the vicinity on the basis of RFA No.1879 of 1997 16 which market rate at Rs.250/- square yard was given. In fact, this Court had relied upon an award dated 14.10.1992 passed in the case of Abhey Ram v. State of Haryana of District Judge,Ambala, determining the market value of the land of village Judian at Rs.250/- per square yard irrespective of the fact that in the said award land of village Judian was falling in the vicinity of Manimajra forming part of Chandigarh the land of village Judian which was under acquisition in the said award was near the Motor Market and on the Chandigarh-Simla Highway near Dhillon theatre and also abutting a side for five star hotel. Thus, the land of village Judian under the award dated

14.10.1992 which has been relied upon by the learned Single Judge in Parkash Rani's case (supra) has no compatibility with the acquired land of Devi Nagar. While discussing the applicability of the award dated

14.10.1992, the Reference Court while deciding the award dated 23.3.1993 in the case of Jainender Gurukul v. State of Haryana in LAC No.114 and the land of which was also acquired along with the land in question has clearly observed that the said instance of award dated 14.10.1992 in Abhey Ram's case supra can be of no help to the claimants. There is no evidence on the file to show that land of village Judian has any connectivity with the acquired land. The acquired land falls in village Devi Nagar which is at a distance of five and half kilometers which adjoins village Judian has find mentioned in the above said award. Moreover, land in Abhey Ram's case (supra) which belongs to village Judian abuts on the main Panchkula-Chandigarh High way. Thus, it may not be very safe to rely upon the aforesaid award for granting compensation to the landowners. RFA No.1879 of 1997 17 It may also be relevant to mention at this stage that there is no dispute that in the case of Rameshbhai (supra) the Hon'ble Apex Court has observed that recourse is taken to the mode of determining the market value by providing appropriate escalation over the proved market value of nearby lands in the previous years where there is no evidence of any contemporaneous sale transactions or acquisitions of comparable lands in the neighbourhood but it is also relevant to refer to para 11 of the judgment in Rameshbhai's case (supra), which reads as under:- “Normally, recourse is taken to the mode of determining the market value by providing appropriate escalation over the proved market value of nearby lands in previous years (as evidenced by sale transactions or acquisition), where there is no evidence of any contemporaneous sale transactions or acquisitions of comparable lands in the neighbourhood. The said method is reasonably safe where the relied-on-sale transactions/acquisitions precedes the subject acquisition by only a few years, that is upto four to five years. Beyond that it may be unsafe, even if it relates to a neighbouring land. What may be a reliable standard if the gap is only a few years, may become unsafe and unreliable standard where the gap is larger. For example, for determining the market value of a land acquired in 1992, adopting the annual increase method with reference to a sale or acquisition in 1970 or 1980 may have many pitfalls. This is because, over the course of years, the `rate' of annual increase may itself undergo drastic change apart from the likelihood of occurrence of varying periods of stagnation in prices or sudden spurts in prices effecting the very standard of increase”. Thus, in the absence of any evidence relating to sale transactions or acquisitions relating to the vicinity of the acquired land and RFA No.1879 of 1997 18 also in the absence of any evidence to show that there was a rising trend in the market, it may not be safe to apply a rule of thumb. However, in view of the aforesaid discussion having taken place and finding that there is no evidence on record which can be relied upon for enhancement of compensation, the question of giving increase on the basis of yearly escalation does not arise at all as there is no other Base Market Value determined. Thus, the present appeals which have been filed on behalf of the owners have no merit and are dismissed. No order as to costs. August 2, 2011 (Rakesh Kumar Garg) Judge RFA No.1879 of 1997 19 IN THE HIGH COURTOF PUNJAB AND HARYANA, CHANDIGARH. RFA No.2236 of 1993 Date of decision: 2.8.2011 Shri Jainendra Gurukul,Panchkula State of Haryana vs. .....Appellant ....Respondent CORAM: HON'BLE MR.JUSTICE RAKESH KUMAR GARG. Present: Mr.Adarsh Jain Advocate, for the petitioner. --- Mr.D.D.Gupta, Addl.A.G.Haryana, for the State. Rakesh Kumar Garg,J. For orders, see R.F.A.No.1879 of 1997. (Rakesh Kumar Garg) Judge August 2, 2011 RFA No.1879 of 1997 20 RFA No.1879 of 1997 21 IN THE HIGH COURTOF PUNJAB AND HARYANA, CHANDIGARH. RFA No.1470 of 1997 Date of decision: 2.8.2011 Som Nath and others State of Haryana vs. .....Appellants ....Respondent CORAM: HON'BLE MR.JUSTICE RAKESH KUMAR GARG. Present: Mr. M.L.Sharma, Advocate, for the appellants. --- Mr.D.D.Gupta, Addl.A.G.Haryana, for the State. Rakesh Kumar Garg,J. For orders, see R.F.A.No.1879 of 1997. (Rakesh Kumar Garg) Judge August 2, 2011 RFA No.1879 of 1997 22 IN THE HIGH COURTOF PUNJAB AND HARYANA, CHANDIGARH. RFA No.1471 of 1997 Date of decision: 2.8.2011 Kanhaiya Lal @ Ghanhaiya Lal and others State of Haryana vs. .....Appellants ....Respondent CORAM: HON'BLE MR.JUSTICE RAKESH KUMAR GARG. Present: Ms.Mohinder Kaur,Advocate, for Mr.S.S.Salar, Advocate, for the appellants. --- Mr.D.D.Gupta, Addl.A.G.Haryana, for the State. Rakesh Kumar Garg,J. For orders, see R.F.A.No.1879 of 1997. (Rakesh Kumar Garg) Judge August 2, 2011 RFA No.1879 of 1997 23 IN THE HIGH COURTOF PUNJAB AND HARYANA, CHANDIGARH. RFA No.1472 of 1997 Date of decision: 2.8.2011 Jaswant Rai State of Haryana vs. .....Appellant ....Respondent CORAM: HON'BLE MR.JUSTICE RAKESH KUMAR GARG. Present: Ms.Mohinder Kaur,Advocate, for Mr.S.S.Salar, Advocate, for the appellants. --- Mr.D.D.Gupta, Addl.A.G.Haryana, for the State. Rakesh Kumar Garg,J. For orders, see R.F.A.No.1879 of 1997. (Rakesh Kumar Garg) Judge August 2, 2011 RFA No.1879 of 1997 24 IN THE HIGH COURTOF PUNJAB AND HARYANA, CHANDIGARH. RFA No.1385 of 1997 Date of decision: 2.8.2011 M/s Guru Teg Bahadur Stone Crushers State of Haryana vs. .....Appellant ....Respondent CORAM: HON'BLE MR.JUSTICE RAKESH KUMAR GARG. Present: Ms.Mohinder Kaur,Advocate, for Mr.S.S.Salar, Advocate, for the appellants. --- Mr.D.D.Gupta, Addl.A.G.Haryana, for the State. Rakesh Kumar Garg,J. For orders, see R.F.A.No.1879 of 1997. (Rakesh Kumar Garg) Judge August 2, 2011 RFA No.1879 of 1997 25 IN THE HIGH COURTOF PUNJAB AND HARYANA, CHANDIGARH. RFA No.1473 of 1997 Date of decision: 2.8.2011 Pardeep Chaudhary and others State of Haryana vs. .....Appellants ....Respondent CORAM: HON'BLE MR.JUSTICE RAKESH KUMAR GARG. Present: Mr.Shailendra Jain, Advocate, for the appellants. --- Mr.D.D.Gupta, Addl.A.G.Haryana, for the State. Rakesh Kumar Garg,J. For orders, see R.F.A.No.1879 of 1997. (Rakesh Kumar Garg) Judge August 2, 2011 RFA No.1879 of 1997 26 IN THE HIGH COURTOF PUNJAB AND HARYANA, CHANDIGARH. RFA No.1469 of 1997 Date of decision: 2.8.2011 Om Parkash and others State of Haryana vs. .....Appellants ....Respondent CORAM: HON'BLE MR.JUSTICE RAKESH KUMAR GARG. Present: Mr.Shailendra Jain, Advocate, for the appellants. --- Mr.D.D.Gupta, Addl.A.G.Haryana, for the State. Rakesh Kumar Garg,J. For orders, see R.F.A.No.1879 of 1997. (Rakesh Kumar Garg) Judge August 2, 2011 RFA No.1879 of 1997 27 IN THE HIGH COURTOF PUNJAB AND HARYANA, CHANDIGARH. RFA No.1918 of 1997 Date of decision: 2.8.2011 Malvinder Singh and others State of Haryana vs. .....Appellants ....Respondent CORAM: HON'BLE MR.JUSTICE RAKESH KUMAR GARG. Present: Mr.Shailendra Jain, Advocate, for the appellants. --- Mr.D.D.Gupta, Addl.A.G.Haryana, for the State. Rakesh Kumar Garg,J. For orders, see R.F.A.No.1879 of 1997. (Rakesh Kumar Garg) Judge August 2, 2011