Managing Director, Kerala Industrial Infrastructure Development Corporation (KINFRA) v. K. Chenthamarakshan and Special Tahsildar (LA), KINFRA

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE & THE HONOURABLE MR. JUSTICE K.P.JYOTHINDRANATH MONDAY, THE 21ST DAY OF AUGUST 2017/30TH SRAVANA, 1939 LA.App..No. 432 of 2011 ( ) ---------------------------- AGAINST THE ORDER/JUDGMENT IN LAR 28/2009 of ADDL.SUB COURT, PALAKKAD DATED 15/10/2010 APPELLANT/2ND RESPONDENT: ------------------------ MANAGING DIRECTOR, KERALA INDUSTRIAL INFRASTRUCTURE DEVELOPMENT, CORPORATION, KINFRA HOUSE, ANNEXE, TC NO.9/2585, ELANKOM, VELLAYAMBALAM, THIRUVANANTHAPURAM. BY ADV. SRI.G.S.REGHUNATH RESPONDENTS/CLAIMANT & 1ST RESPONDENT: ------------------------------------- 1. K.CHENTHAMARAKSHAN, S/O.LATE KITTA PUZHAMEDU VEEDU, N.V.CHALLA, DUPPUKULAM,, ELAPULLY, PALAKKAD-679 001. 2. THE SPECIAL TAHSILDAR, (L.A.), KINFRA, PALAKKAD-679 001. R2 BY SR.GOVERNMENT PLEADER SMT.AMMINIKUTTY.K THIS LAND ACQUISITION APPEAL HAVING BEEN FINALLY HEARD ON 17/08/2017, THE COURT ON 21-08-2017 DELIVERED THE FOLLOWING: ## **A.M.SHAFFIQUE, J & K.P.JYOTHINDRANATH, J** *** * * * * * * * * * * * * * * *** L.A.Appeal No.432 of 2011 ---------------------------------------Dated this the 21[st] day of August 2017 ## **J U D G M E N T** ## **Shaffique, J** This appeal is filed by the Requisitioning Authority, who is the 2[nd] respondent in LAR No.28/2009 of the Sub Court, Palakkad. An extent of 7.250 cents of land belonging to the 1[st] respondent was acquired pursuant to a notification issued under Sec.4(1) of the Land Acquisition Act, 1894 (hereinafter referred to as 'LA Act'). The publication was made in the gazette on 20/5/2006 and in the locality on 07/11/2006. 2. In fact, a total extent of 24.76 Acres of land situated in Elappully-I village of Palakkad Taluk, Palakkad District is the subject matter of acquisition for the development of Integrated Industrial township. The Land Acquisition Officer categorized the land into two categories, dry and wet land. In respect of dry land land value was fixed at Rs.3000/- per cent and Rs.1,750/- per cent for wet land. 3. The claimant objected to the award and accordingly, the matter was referred to the Sub Court under Section 18 of the L.A.Appeal No.432/2011 2 LA Act. Before the sub Court, the claimant was examined as AW1 and he relied upon Exts.A1 and A2 documents. The respondent relied upon the oral evidence of RW1 and produced Ext.R1, the document on the basis of which the land value has been fixed by the Land Acquisition Officer. 4. Reference Court, having found that the land value in Ext.A1 cannot be compared to the value of the acquired land, observed that the acquired land is comparable to the land covered by Ext.A2. Ext.A2 is a sale deed dated 24/11/2006 by which 5 cents of property was sold for Rs.50,000/-. The said property was very near to the acquired land. The Reference Court observed that the description in Ext.A2 sale deed shows that the eastern boundary of the property is a Panchayat road and same road is the eastern boundary of the acquired land also. In so far as the lands are similarly situated, being a genuine transaction, the said value can be adopted for the purpose of fixing the land value in this case and accordingly the land value was fixed at Rs.72,600/- per Are. 5. Though notice was served on the 1[st] respondent, there is no appearance on his behalf. L.A.Appeal No.432/2011 3 6. Heard the learned counsel for the appellant. The main argument raised by the learned counsel for the appellant is that the court below committed serious error in placing reliance upon Ext.A2 for the purpose of valuing the land under acquisition, as Ext.A2 is not a genuine document. The evidence in this case clearly suggests that the said document has been created for the purpose of claiming a higher value for the lands under acquisition. It is stated that the objection to the award had been filed by three claimants. The 1[st] respondent is one of the claimants and the extent of the land belonging to him is only 7.250 cents. M/s.Gem Enterprises is having an extent of 4.09 Acres and M/s.Land Mark Realtors (P) Ltd is having 19.95 Acres. It is brought to the notice of this Court that Ext.A2 has been executed on 24/11/2006, a few days after the notification under Section 4(1) was published in the locality. Further, the assignor of the document is one Rukmini and the assignee is J.V.Dharma Raj. The 1[st] respondent/claimant is the 1[st] witness to the document. It is argued that the assignee and the assignor are interested in the larger extent of property acquired from M/s.Gem Enterprises and M/s.Land Mark Realtors. This aspect of the matter had been completely lost sight of by the L.A.Appeal No.432/2011 4 Reference Court, while considering the genuineness of the transaction. Further, the basic document property is situated by the side of a main road whereas the acquired property was only by the side of a Panchayat road. Despite the fact that the property in the basic document have a better advantage than the acquired property, the Land Acquisition Officer placed reliance upon the said document, since there were no other documents in the locality. It is argued that even the amount awarded was on the higher side which should have been taken note of. The property in the basic document site is situated by the side of a tarred road which has a bus route, whereas the acquired property, though by the side of a tarred road for a limited stretch, no buses are plying along the said road. 7. Learned Government Pleader supported the stand taken by the appellant. 8. The short question to be considered is whether the court below is justified in placing reliance upon Ext.A2 in comparison to the basic document. 9. Before proceeding further, it would be useful to refer to the judgments relied upon by the learned counsel for the L.A.Appeal No.432/2011 5 ## appellant. In **Kolkata Metropolitan Development Authority** **v. Gobinda Chandra Makal** _[2011 (4) KLT SN 1]_ , the Apex Court considered as to what would be the relevant date for determining compensation. It was held at paragraphs 21 to 24 as under: _“21. The notification under section 4(1) of the Act is dated 13.9.2000. It was published in the gazette dated 13.9.2000. Thereafter it was published in two newspapers. Lastly, the Collector caused public notice of the substance of such notification to be given at convenient places in the locality on 16.11.2000. The reference court and the High Court have proceeded on the basis that the relevant date for determining the market value is 16.11.2000. They have also relied upon the expert valuer's report which assessed the market value as on 16.11.2000. We have noticed above that the Expert Valuer determined the market value with reference to a sale deed dated 10.3.2000, by adding 8% as the increase in prices for the period of eight months between 10.3.2000 and 16.11.2000 (at the rate of 1% per month). The question is whether the relevant date for determination of compensation is 13.9.2000 or 16.11.2000._ L.A.Appeal No.432/2011 6 _22. Sub-section (1) of Section 23 provides the compensation to be awarded shall be determined by the Reference Court, based upon the market value of the acquired land at the time of publication of the notification under section 4 sub-section (1). The first respondent contends that the `date of publication of notification under section 4(1)' is statutorily defined in section 4(1) (that is the last of the dates, out of the dates of publication of the notification in the official gazette, publication of the notification in two daily newspapers circulating in that locality of which at least one shall be in regional language, and public notice of the substance of such notification being given at convenient places in the locality), and therefore the said words refer to 16.11.2000 as the date of publication of notification under section 4(1) of the LA Act._ _23. Section 6 was amended in 1984 providing that no declaration under section 6 in respect of any land covered by a notification under section 4(1) shall be made after the expiry of one year from the date of publication of the notification under section 4(1). In that context, to avoid any confusion as to what would be the date of publication of the notification under section 4(1), section 4(1) was also amended to clarify the_ L.A.Appeal No.432/2011 7 _position and it was provided that “the last of the dates of such publication and giving of such public notice being herein referred to as the date of publication of the notification”. But the words `publication of the notification under section 4(1)' occurring in the first clause of section 23(1) have different meaning and connotation from the use of the said words in sections 4(1) and 6 of the LA Act. Prior to the 1984 amendment of section 4, the words “publication of notification under section 4(1)” in section 23(1) referred to the date of publication of the notification in the official Gazette. Even after the amendment of section 4(1), the said words in section 23(1) continue to have the same earlier meaning. We may briefly indicate the reasons for our said conclusion._ _24. One of the principles in regard to determination of market value under section 23 (1) is that the rise in market value after the publication of the notification under section 4(1) of the Act should not be taken into account for the purpose of determination of market value. If the deeming definition of `publication of the notification' in the amended section 4(1) is imported as the meaning of the said words in the first clause of section 23(1), it will lead to anomalous results. Owners of the lands which_ L.A.Appeal No.432/2011 8 _are the subject matter of the notification and neighbouring lands will come to know about the proposed acquisition, on the date of publication in the gazette or in the newspapers. If the giving of public notice of the substance of the notification is delayed by two or three months, there may be several sale transactions in regard to nearby lands in that period, showing a spurt or hike in value in view of the development contemplated on account of the acquisition itself. If the words `publication of the notification' in section 23(1) (clause firstly) should be construed as referring to the last of the dates of publication and public notice, and the date of public notice in the locality is to be considered as the date of publication, the landowners can legitimately claim that the sales which took place till the date of public notice should be taken into account for the purpose of determination of compensation, leading to disastrous results. Let us give two illustrations :_ _Illlustration A : The market value of the acquired land on 13.9.2000 is Rs.1,00,000 per acre. A notification under section 4(1) is published in the gazette on 13.9.2000 and in two newspapers on 14.9.2000. But the public notice in the locality is given only two months later on 16.11.2000. As_ L.A.Appeal No.432/2011 9 _the land owners in the area come to know about the proposed acquisition and consequential expectations of development in the area, developers and speculators enter the arena and start buying neighbouring lands leading to steep increase in prices. Consequently several sales takes place in October 2000 at rates ranging from Rs.1.5 lakhs to Rs.2 lakhs per acre. If 16.11.2000 should be taken as the date of publication of the notification under section 4(1), the land owners can legitimately contend that the sale deeds executed in October 2000, being prior to the `date of publication of the preliminary notification' should be taken note of for the purpose of determining the compensation. That would result in compensation being determined between Rs.1,50,000 to Rs.2 lakhs per acre even though the market rate as on 13.9.2000 which is the date of publication of the notification was only Rs.1,00,000._ _Illustration B : When large tracts of lands are acquired and the preliminary notification dated 13.9.2000 is published in the Gazette on 13.9.2000 and in the newspapers on 14.9.2000, but public notice of the substance is delayed by more than two months and is given on 16.11.2000, there will be ample time for_ L.A.Appeal No.432/2011 10 _unscrupulous land owners of acquired lands to create evidence of higher market value by managing nominal sale/s in regard to some neighbouring land which is not the subject of acquisition at a price of Rs.2,00,000/- as against the market price of Rs.1,00,000/- and thereby cause a huge loss to the state.”_ 10. He also relied upon **Kummari Veeraiah and Others v. State of A.P** _[(1995) 4 SCC 136]_ wherein the Apex Court held at paragraphs 6 and 7 as under: _“_ _**6.** It is common knowledge and experience that the proposal for acquisition takes long time for arriving at a decision. In the meantime, it would be an open card and known to everyone, in particular, to the owners of the land and persons in the neighbourhood. Therefore, it is not uncommon to have sale deeds executed and registered in the interregnum so as to boost the value of the acquired lands. The High Court had, therefore, rightly excluded the documents. It is true that Ex. A-4 was executed as early as 19-12-1982 for an extent of nearly 700 sq. yds. which consideration worked out at Rs 40 per sq. yd., but neither vendor nor vendee was examined. The lands are situated at a distance of 1 k.m._ L.A.Appeal No.432/2011 11 _Whether a willing buyer would offer the same price when a large extent of land is offered for sale in an open market on a free bargain, either in one lot or different lots, in comparison with small piece or pieces of land? The answer obviously is no._ _**7.** It is then contended that suitable deduction may be made to the value determined on the basis of Ex. A-4 and compensation be determined on that basis. We find the application of that principle also would be fraught with injustice and needless burden on the State Exchequer. First, it is to be ascertained whether the document is a genuine document. If it is found to be so it is required to be examined under what circumstances the document came to be executed and the special advantageous feature for which the sale came to be made. Whether the land under acquisition possesses the same special advantages? In case it is found that the documents are genuine and the acquired land possessed of the same or similar special advantageous features, then reasonable price is required to be determined by giving suitable deduction depending upon the extent of land covered by the sale transaction and the acquired land. When a large extent of land is available for house sites and commands market_ L.A.Appeal No.432/2011 12 _for sale in bits, then a prudent owner as a part of normal human conduct, would get a layout prepared and sanction obtained from the competent authority and would offer the plots for sale. Similarly, it must be shown that land is situated in a developing area etc. When such evidence is adduced, it is required to be considered on the touchstone of potentiality of the land, human conduct and probabilities. If the court finds that the land possessed those potentialities and could be purchased as house site, then only suitable deduction need to be made considering the relative extent of the land covered by the sale/sales and the land under acquisition. True market value is required to be determined, then it must not be on feats of imagination. Since such evidence was not brought on record, the evidence of sale transactions render little assistance to determine market value of the acquired lands. Moreover, the two colonies are in slum area. So, but for the acquisition, there would be no scope for development.”_ 11. In **Land Acquisition Officer & Assistant Commissioner, Mangalore** _[(1996) 10 SCC 39]_ held at paragraph 3 as under: L.A.Appeal No.432/2011 13 _**“3.** The question is whether the High Court was right in placing reliance on Exh. P-9, sale deed? It was suggested to the witness in the crossexamination that he was aware of the acquisition and having had knowledge he got the sale deed executed to inflate the market value. He admitted that he was aware of the proposed acquisition and that thereafter the sale deed came to be executed. The High Court has interpreted this admission as the ‘not’ was not omitted in recording the evidence and that, therefore, ‘not’ was to be added. Adding the word ‘not’, the High Court held that he denied the knowledge of acquisition. The Civil Judge has rightly considered this aspect of the matter and recorded the finding that sale under Exh. P- 9 is not a bona fide transaction and was pressed in to serve to inflate the market value. The reasoning of the Civil Judge is correct. The High Court read something which was not recorded. The witness had admitted that he was aware of impending acquisition and got the sale deed executed; yet the High Court held that the Civil Judge would not have omitted the word ‘not’. If really the witness had denied and yet the Judges wanted to, then the witness would have objected at the time of recording or signing the evidence of the witness which was not done._ L.A.Appeal No.432/2011 14 _The counsel who appeared before the civil court has also not contested it to be a mistake. Therefore, it was not open to the learned Judges of the High Court to read something which would defuse the effect of the admission made by the witness. Even otherwise, it would be common knowledge that the acquisition would take a long time. It would be known to the people in the locality, when documents proximate to the time of acquisition were set up for inflating the compensation. The court has to look into the attending circumstances whether documents are brought into existence with the intention to inflate the market value or are true and genuine documents; consideration is a device to know whether the vendor and the vendee are genuine parties or privy to pass off sale process. The Civil Judge has rightly gone into all these questions and disbelieved Exh. P-9 as a genuine one. The Division Bench was, therefore, not at all justified in reversing that finding of the Civil Judge on strange reasoning and came to its own conclusion. It is settled law that the Civil Judge had advantage to observe the demeanour of the witness in the witness-box and he formed his own opinion about the witness which the appellate court did not have.”_ L.A.Appeal No.432/2011 15 12. After hearing the learned counsel for the appellant, we are of the view that Ext.A2 could not have been the basis for valuing the land as there is no proof regarding the genuineness of the said document. Ext.R1, which is a document of the year 2005, wherein land having PWD road frontage and a bus route has been acquired for Rs.3,000/- per cent almost one year back and it cannot be believed that a less important land which does not have same or similar features or advantages will have a price hike more than three times within a short period. It is well known that when land is being acquired in the locality, attempts will be made to create documents showing a higher land value. In the case on hand, the gazette notification for acquisition of land was made on 20/05/2006, in the local daily on 21/06/2006 and 22/6/2006 and in the locality on 07/11/2006. When a document is created between interested parties for a property by the side of the acquired property, in which the claimant itself is a witness, it has to be held that it does not reflect a genuine transaction. Only genuine incidents of sale can be considered for fixing the market value. 13. In such an event, the Court below ought to have relied L.A.Appeal No.432/2011 16 upon the basic document to fix the land value. Though there is a time gap of one year between the date of section 4(1) notification and the basic document property, taking into account the advantages, the said property has in comparison with the acquired land, fixing the same value appears to be reasonable. Under such circumstances, we are of the view that the appeal requires to be allowed. In the result, The judgment in LAR No.28/2009 is set aside. The land value is confirmed at Rs.3,000/- per cent as fixed by the Land Acquisition Officer. The claimant is not entitled for any enhancement towards land value. Parties shall bear their own costs. (sd/-) ## **(A.M.SHAFFIQUE, JUDGE)** (sd/-) ## **(K.P.JYOTHINDRANATH, JUDGE)** jsr True Copy P.S to Judge