LA App. No. 485 of 2012 (against LAR No.6/2009, Sub Court Thodupuzha)

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE & THE HONOURABLE MR. JUSTICE K.P.JYOTHINDRANATH TUESDAY, THE 24TH DAY OF OCTOBER 2017/2ND KARTHIKA, 1939 LA.App..No. 485 of 2012 () --------------------------- AGAINST THE ORDER/JUDGMENT IN LAR 6/2009 of SUB COURT,THODUPUZHA DATED 15/3/2012 APPELLANTS/CLAIMANTS IN LAR NO.6/2009 OF SUB COURT THODUPUZHA.: ---------------------------------------------------------------- 1. DR.K.SUDHEENDRAN S/O. KOCHUKRISHNAN, KANJRAKKATTU HOSUE, ADIMALI.P.O., IDUKKI-685561. 2. MAYA SUDHEENDRAN D/O. K. SUDHEENDRAN, ADIMALI.P.O., IDUKKI DISTRICT. BY ADVS.SRI.C.S.AJITH PRAKASH SRI.C.S.YESUDAS SRI.PAUL C THOMAS RESPONDENT(S)/RESPONDENTS IN LAR NO. 6/2009 OF SUB COURT THODUPUZHA: --------------------------------------------------------------------- 1. STATE OF KERALA REP. BY DISTRICT COLLECTOR, IDUKKI. CIVIL STATION, KUYILIMALA, IDUKKI DISTRICT. 2. THE DIRECTOR OF TECHNICAL EDUCATION DIRECTORATE OF TECHINCAL EDUCATION, THIRUVANANTHAPURAM. BY SR GOVERNMENT PLEADER SMT.AMMINIKUTTY K. THIS LAND ACQUISITION APPEAL HAVING BEEN FINALLY HEARD ON 8/8/2017, THE COURT ON 24-10-2017 DELIVERED THE FOLLOWING: ## **A.M. SHAFFIQUE & K.P.JYOTHINDRANATH, JJ.** ============================== LAA No.485 of 2012 ============= Dated this, the 24[th] day of October, 2017 ## **J U D G M E N T** ## _**Shaffique, J.**_ This appeal is filed by the claimants in LAR No.6/2009 challenging judgment dated 15/3/2012. An extent of 202.50 Ares of land belonging to the claimants and situated in Mannamkandam Village of Devikulam Taluk was acquired by the State for the purpose of Technical High School, Adimaly pursuant to Section 4 (1) notification under the Land Acquisition Act, 1894 (hereinafter referred to as the LA Act) published in the Gazette on 4/12/2001. Land Acquisition Officer awarded land value at `16,055/- per Are. 2. The claimants objected to the Award and the matter was referred to the Sub Court, Thodupuzha under Section 18 of the LA Act. 3. Before the Sub Court, 3 witnesses were examined as LAA No.485/2012 -:2:- AW1 to AW3. Claimants relied upon Exts.A1 to A5. Respondents examined RW1 and RW2 and placed reliance on Exts.R1 to R16. Exts.X1, X2 and X2(a) were marked as Court exhibits. The Sub Court fixed the land value at `8,591/- per Cent corresponding to `21,229/- per Are and directed payment of enhanced compensation with all statutory benefits. 4. Learned counsel for the appellants submitted that the Court below having placed reliance upon Exts.A1 and A3 documents completely erred in giving a deduction of 70% of its value and thereby fixing the land value in the present case. 5. Counsel also placed reliance upon judgment of the Apex Court in _**Lal Chand v. Union of India**_ [(2009) 15 SCC 769] which lays down the principle of valuing lands. It is held that the market value of small plots can also be the basis for valuing large tracts of lands and the only factor is that appropriate deduction towards development should be made which need only be 40% as held in the said judgment instead of higher standard percentage of 60% to 70%. 6. In _**Mehrawal Khewaji Trust v. State of Punjab**_ [2012 (2) KLT 542 (SC)], the Apex Court held that when there are LAA No.485/2012 ## -:3:- several exemplars with reference to similar lands, the highest of the exemplars has to be taken, provided it is a _bona fide_ transaction and could be accepted. 7. Reference is also placed to the judgment in _**Nirmal Singh v. State of Haryana**_ [(2015) 2 SCC 160] where the Court had laid certain principles regarding valuation of large tracts of land. It is held that when exemplars of small portion of land is made, deduction towards development cost can be made after considering various factors such as size of land, nearness to developed area etc. When large tracts of land is acquired which requires higher development cost, 60% cost towards development expenses was reasonable. 8. The crux of the argument of the learned counsel was that the court ought to have taken the highest value of property in the locality and a reasonable deduction should have been made when valuing a large extent of land which principle ought to have been adopted in the case. In the appeal, they claimed land value at `15,000/- per cent which corresponds to `37,065/- per Are. 9. On the other hand, the learned Government Pleader LAA No.485/2012 -:4:- appearing on behalf of the State supported the judgment of the lower court. It is stated that the Sub Court had evaluated the facts and circumstances of the case and had arrived at a finding which is not improper or illegal and therefore, no interference is warranted to the judgment. 10. Ext.A1 is a sale deed dated 11/4/1997 by which 18 cents of property was conveyed for a consideration of `4,50,000 i.e., at the rate of `25,000/- per cent. The property is situated in Mannamkandam Village and on the southern side of the property is NH 49. Ext.A1 would show that the assignment was with reference to land and building. The building in the property was not separately valued. 11. Ext.A2 is a sale deed dated 14/5/1999 by which property having an extent of 8.17 Ares (20.186 cents) in Mannamkandam Village is sold for a consideration of `27,25,110/- and the centage value will come to `1,35,000/-. The property was purchased by Life Insurance Corporation of India. 12. Ext.A3 is a document executed on 27/5/2000 by which an extent of 6.07 Ares (15 cents) has been assigned for a total consideration of `4,95,000/-. The value therefore would come to LAA No.485/2012 ## -:5:- `33,000/- per cent. 13. Ext.A4 is the sale deed dated 23/4/2001 by which an extent of 0.81 Ares (2 cents) is sold for a consideration of `2,50,000/-. The value per cent would come to `1,25,000/-. 14. Ext.A5 is another document dated 25/3/2002 by which an extent of 14.25 Ares (35.212 cent) was sold for `3,07,350/- per Are which is equivalent to `1,24,383/- per cent. The property was purchased by Indian Oil Corporation. 15. The court below found that as per the evidence in the case, Exts.A2, A4 and A5 properties are situated in the heart of Adimali town and commercial establishments are functioning in the buildings constructed in the property. Further, there is no evidence for the value of the property situated in the said buildings. Court below further found that the acquired property is situated on the side of Adimali Munnar road at a distance of 2 kms from Adimali town whereas the documents which had been relied on, i.e., Exts.A1 to A5 are situated in the heart of Adimali town. The court below therefore having taken note of the judgments of the Apex Court in _**Administrator General of West Bengal v. Collector**_ (AIR 1988 SC 943) and _**Lal Chand**_ (supra) observed LAA No.485/2012 -:6:- that the average of Exts.A1 and A3 sale deed would be `28,683/per cent and after giving a deduction of 70% towards the difference in nature, location, potentiality of the properties, cost of development etc., the value could be fixed at `8,591/- per cent. 16. Exts. X1 and X2 are the Commission reports. Ext.X1 was prepared after conducting an inspection on 3/7/2010. In Ext.X1 it is stated that the acquired property is situated 2 kms on the eastern side of Adimali Town by the side of Kochi Madhurai National Highway (NH 49). The property has road frontage from the east and south. From the acquired property towards 700 metres towards east, there is a furniture workshop. Church, Fathima Matha Girls High School, Convent etc., are situated 800 metres towards east. There is a water fall 750 metres towards east. He further reported that document no.1353/2000, (Ext.A3) is situated 50 meters on the western side and according to him the said document is comparable with the acquired land. Document No.1161/97 (Ext.A1) is situated about 750 metres on the southern side of the acquired land. It is also reported that several institutions are situated about 500 metres on the southern LAA No.485/2012 -:7:- side and within 500 metres of Adimali town. He further deposes that acquired property and balance property is situated at a height of 5 feet from the National Highway and the property lies in an elevated position. Ext.X2 is another commission report. He is asked to verify Exts.A2, A4 and A5 documents. Document No.404/2002 (Ext.A5) is situated 1 km on the western side of Adimali Central Junction. It is reported that the said property has more importance than the acquired land. Still it could be utilized for similar activities. He has also explained the number of institutions near the property and that in the said property, retail outlet in petroleum product by Indian Oil Corporation is functioning. With reference to document no.1033/2001 (Ext.A4), it is stated that shop rooms had been constructed in the said property and a hotel and bakery are functioning. The property is in Adimali Central Junction and is more important than the acquired property. With reference to document No.1346/99 (Ext.A2), it is reported that the property is situated between Adimali Junction and the Indian Oil Corporation Retail outlet (Ext.A5). It is 100 metres from the National Highway and an office of LIC is functioning. It has more commercial importance LAA No.485/2012 -:8:- than the acquired property. 17. On the request of the officials of the State, Advocate Commissioner also did a comparison of document No.1161/97 (Ext.A1) and document no.1353/2000 (Ext.A3). He stated that document no.1353/2000 (Ext.A3) is a residential plot whereas acquired property can be utilized for commercial purpose also and may get a better value. As far as document No.1161/97 (Ext.A1) is concerned, it is stated that property is situated 500 metres from Adimali central junction towards west on the northern side of National Highway and the building is having two shutters wherein TVS motor company is functioning. It has more commercial importance than the acquired land and the acquired land as well can also be utilized for commercial activity. 18. An objection has been filed to the Advocate Commissioner's report along with a rough sketch showing the acquired property and the property covered by Exts.A1 and A3. It is stated that the property covered by document No.1353/2000 (Ext.A3) is 3 kms away from the acquired property, near to Adimali Town and property in sale deed No.1161/97 (Ext.A1) is situated very near to the private bus stand Adimali. Both these LAA No.485/2012 -:9:- properties have more commercial importance and therefore the value was very high. 19. AW1 is one of the claimants. A question was asked as to whether the property was situated 10 feet above the main road level, and his answer was that vehicle can be taken to his property. He does not know whether the property was slanting from north to south. 20. AW2 is the Commissioner who had visited the site on 16/11/2011 and he had prepared a sketch. The report is marked as Ext.X2 and sketch is marked as Ext.X2(a). With reference to acquired property, he stated that acquired property is lying in an elevated slanting position and on the top of it, it is rock. He further opined that at the time of his visit, there were no improvements in the property. There were only grass and shrubs. He deposed that he had mentioned that the property can have commercial importance since it was lying by the side of highway. 21. AW3 is a witness to the mahazar prepared by the Government. Ext.R16 is the mahazar. 22. RW1 is the Senior Superintendent of Sub Divisional Magistrate's Office. He filed chief affidavit stating the manner in LAA No.485/2012 -:10:- which the acquisition has been completed and he had produced various documents relating to acquisition which were marked as Exts.R1 to R15 out of which Exts.R4 to 15 were marked subject to proof. 23. RW2 is a photographer who had taken Exts.R1 to R3 and R4 series photographs. He had also proved the CD Ext.R5 and Ext.R6 series of bills which he had issued. 24. A perusal of the Notes to Award would indicate that the Land Acquisition Officer did not adopt the normal comparable sale deed. However, having verified various documents in the locality, he observed that the value can be fixed based on the fair value of the locality where acquisition is made. As per the fair value suggested by the Village Officer, Mannamkandam, the land comprised in Re.Sy.No.810 is `1,000/- to `2,000/- per Are and for land in Re.Sy.No.811, the value is `20,000/- per Are for property having road frontage. Since the property acquired is in Sy.Nos.810 and 811, the land value was fixed at `16,055/- per Are. Ext.R9 is the notification dated 1/9/2003 wherein the value of property in Sy.No.810 of Mannamkandam Village which is lying as purayidam (garden land) is between `1,000/- to `2,000/- per Are. LAA No.485/2012 -:11:- Ext.R10 is with reference to property in Sy.No.811 of the same village and the value is shown as between `1,000/- to `20,000/per Are. 25. Apparently, when sale deeds showing the market value of the land in the locality are available, the Court has to take into consideration such materials and arrive at a reasonable compensation if the transactions are genuine and bonafide. The fair value is fixed under the Kerala Stamp (Fixation of Fair Value of Land) Rules, 1995 for the purpose of computing stamp duty at the time of registration of a document. It need not be the market value of land involved in the sale. It is a minimum value which has to be shown for the purpose of payment of stamp duty and has no bearing to the market value at all. Of course in a case where no documents are available, the fair value as shown in the rules might be a guideline. But, in this case, the Court below has also relied upon Exts. A1 and A3 sale deeds to arrive at the value of land. 26. As already indicated, Ext.A1 was a sale deed in which the property was sold along with a building and the building was not separately valued and therefore, Ext.A1 cannot be relied upon LAA No.485/2012 -:12:- to assess the value of land under acquisition. Ext.A3 is a sale deed where the value of property would come to `33,000/- per cent. Definitely, as held by the Apex Court, the value shown in the document having a higher value in the locality has to be considered. As far as Ext.A3 document No.1353/2000 property is concerned, in an objection filed by the State, it is stated that the said property is 3 kms away. But the exact distance is not evident from the records. It is not in front of the highway. But it has frontage of another road, which is not tarred. Apparently, it is a residential plot. As far as the acquired land is concerned, evidence indicates that it is 2 kms away from Adimali town. The disadvantage for the acquired property is that it is situated as a hillock. AW1 does not deny that it is 10 feet above the main road. The property seems to be at higher level than the main road and it is in an upward slanting position. Therefore, assuming that there could be some commercial importance for the property, it could only be for a smaller extent and that too after making a lot of developments in the property. The property apparently was an agricultural land at the time of acquisition as evident from the mahazar Ext.R16 and also the valuation statement, which would LAA No.485/2012 -:13:- show that there were several trees and other cultivations in the property at the relevant time. However, at the time when the Advocate Commissioner visited the property, it was lying as barren land with grass and other shrubs. Of course, any agricultural property could be utilized for commercial purpose and also for residential purpose. But this is an instance where the total extent of land is 202.50 Ares and the entire property cannot be used for commercial activity. Similarly, if at all the entire property is to be utilized as a residential property, which potentiality is not at all proved in that area, most of the lands only could be utilized for agricultural purpose. Adimali is not a town where large extent of land can be utilized for commercial activity. Such a commercial activity cannot be contemplated in that part of the area nor could it be converted to such a big residential area and there is no evidence of such residential activities being carried on in and around the locality. 27. As already noticed, the property is situated 2 kms away from Adimali town and the commerciality centered around the town cannot be attributed to the acquired land. Further disadvantage is that the property was lying as a hillock above the LAA No.485/2012 -:14:- road level. Even if any construction is possible, it could only be done after making substantial deductions. Most of the properties could be utilized only for agricultural activities and not for any commercial venture as claimed. There is no evidence to suggest that there is a substantial residential activity in the area in order to arrive at a conclusion that there is an increase in the residential activity and the potentiality of the land being utilized for residential purposes. Therefore, one can only imagine that, a portion of the land, may be about 20 or 30 cents, having frontage could be utilized for any commercial venture and that too after making substantial developments in the land. The property apparently has several deficiencies or disadvantages in comparison with a residential plot of 15 cents covered by Ext.A3. Therefore, under normal circumstances, Ext.A3 can never be taken as the basis for fixing the land value in the case. But the Court below having accepted Ext.A3 as a genuine and bonafide transaction ought to have valued the property on the value shown in the said document. Ext.A1 as already stated was not comparable and therefore there was no reason to take the average of value shown in Exts.A1 and A3. We are of the view LAA No.485/2012 -:15:- that the value of Ext.A3 by itself could have been a guideline. 28. In _**Atma Singh**_ **v.** _**State of Haryana** [_ (2008) 2 SCC 568], the Apex Court held that, 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 developing into state of actuality. 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 a town which is developing or has prospect of development have to be taken into consideration. In this case, there is no evidence to prove that there was a substantial building activity either for residential purpose or for commercial purpose in the nearby area. 29. In this case, though the Advocate Commissioners are of the view that the property was situated by the side of National Highway and therefore it has commercial importance, there is no proof of commercial or residential activity in the locality to arrive LAA No.485/2012 -:16:- at a conclusion that the entire land can be utilized for such purposes. 30. Though Ext.A3 document is dated 27/5/2000 and Section 4(1) notification is published on 4/12/2001, having already found that the value covered by the document cannot be the basis, but in the absence of any other material the value of Ext.A3 is taken as a guideline, we do not think that any further enhancement is to be given with reference to the value as shown in Ext.A3. 31. In _**Lal Chand**_ (supra), while considering a question relating to a percentage of deduction for development, in order to arrive market value of large tracts of undeveloped agricultural land which has potential for development, the Apex Court held that with reference to the sale price of small developed plots, the deduction could vary between 20% to 75% of the price of such developed plots. It is held as under:- _“ … The percentage of ‘deduction for development’ to be made to arrive at the market value of large tracts of undeveloped agricultural land (with potential for development), with reference to the sale price of small developed plots, varies between 20% to 75% of the price of such developed plots,_ LAA No.485/2012 ## -:17:- _the percentage depending upon the nature of development of the layout in which the exemplar plots are situated. The ‘deduction for development’ consists of two components. The first is with reference to the area required to be utilised for developmental works and the second is the cost of the development works. …”_ _* * *_ _“Therefore the deduction for the ‘development factor’ to be made with reference to the price of a small plot in a developed layout, to arrive at the cost of undeveloped land, will be for more than the deduction with reference to the price of a small plot in an unauthorised private layout or an industrial layout. It is also well known that the development cost incurred by statutory agencies is much higher than the cost incurred by private developers, having regard to higher overheads and expenditure._ _Even among the layouts formed by DDA, the percentage of land utilised for roads, civic amenities, parks and playgrounds may vary with reference to the nature of layout—whether it is residential, residential-cum-commercial or industrial; and even among residential layouts, the percentage will differ having regard to the size of the plots, width of the roads, extent of community facilities, parks and playgrounds provided._ _22. Some of the layouts formed by the statutory development authorities may have large areas earmarked for water/sewage treatment plants,_ LAA No.485/2012 ## -:18:- _water tanks, electrical substations, etc. in addition to the usual areas earmarked for roads, drains, parks, playgrounds and community/civic amenities. The purpose of the aforesaid examples is only to show that the ‘deduction for development’ factor is a variable percentage and the range of percentage itself being very wide from 20% to 75%.”_ _**Lal Chand**_ (supra) has been followed by the Apex Court in _**A.P.Housing Board v. K.Manohar Reddy**_ [(2010) 12 SCC 707]. 32. Taking into account the disadvantages the property was having as mentioned above, we do not think it necessary to interfere with the deduction given by the court below at 70%. Therefore, reducing 70% from `33,000/-, the value per cent will come to `9,900/- per cent corresponding to `24,463/- per Are. In the result, this appeal is allowed as under:- (i) The decree and judgment of the court below shall stand modified by refixing the land value at `24,463/- (Rupees Twenty four thousand four hundred and sixty three only) per Are i.e. @`9,900/- (Rupees Nine thousand nine hundred only) per cent. LAA No.485/2012 -:19:- (ii) The claimants shall be entitled for the aforesaid value after deducting the amount already awarded by the Land Acquisition Officer along with the statutory benefits and interest as decreed by the Court below. Sd/- ## **A.M. SHAFFIQUE, JUDGE** Sd/- ## **K.P.JYOTHINDRANATH, JUDGE** Rp //True Copy// PS to Judge