M/S Palu Brothers Kalamassery, Aluva v. State of Kerala and National Highway Authority of India (LA.App. Nos. 38/2020, 37/2020, 107/2020; LAR 411/2008, 412/2008, 414/2008)

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** # **PRESENT** **THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN** ## **&** **THE HONOURABLE MR. JUSTICE T.R.RAVI** **TUESDAY, THE 17TH DAY OF NOVEMBER 2020 / 26TH KARTHIKA, 1942** **LA.App..No.38 OF 2020 AGAINST THE ORDER/JUDGMENT IN LAR 411/2008 OF III ADDITIONAL SUB** **COURT, ERNAKULAM** ## **APPELLANT:** **M/S. PALU BROTHERS KALAMASSERY, ALUVA - 683 104.** **BY ADVS. SRI.P.B.KRISHNAN SRI.P.B.SUBRAMANYAN SRI.SABU GEORGE SRI.MANU VYASAN PETER SMT.B.ANUSREE** ## **RESPONDENTS:** **1 STATE OF KERALA REPRESENTED BY THE SPECIAL TAHSILDAR (L.A.), ICTT, VALLARPADAM, ELOOR - 683 501.** **2 THE PROJECT MANAGER NATIONAL HIGH WAY AUTHORITY OF INDIA, 2B RAK TOWER, EDAPPALLY, KOCHI - 24.** ## **R2 BY ADV. SRI.MATHEWS K.PHILIP** ## **OTHER PRESENT:** ## **SENIOR GOVERNMENT PLEADER SRI.T.K.SHAJAHAN** **THIS LAND ACQUISITION APPEAL HAVING BEEN FINALLY HEARD ON 1711-2020, ALONG WITH LA.App..37/2020, LA.App..107/2020, THE COURT ON 17-11-2020 DELIVERED THE FOLLOWING:** **L.A.A Nos.38 of 2020 and connected cases - 2 -** **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT** **THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN** ## **&** **THE HONOURABLE MR. JUSTICE T.R.RAVI** **TUESDAY, THE 17TH DAY OF NOVEMBER 2020 / 26TH KARTHIKA, 1942 LA.App..No.37 OF 2020** **AGAINST THE ORDER/JUDGMENT IN LAR 412/2008 DATED 22-08-2016 OF III ADDITIONAL SUB COURT, ERNAKULAM** ## **APPELLANT:** **CHAKKOLAS SPINNING AND WEAVING MILLS LTD., KALAMASSERY-683104, REPRESENTED BY ITS DIRECTOR.** **BY ADVS. SRI.P.B.KRISHNAN SRI.P.B.SUBRAMANYAN SRI.SABU GEORGE SRI.MANU VYASAN PETER** ## **RESPONDENTS:** |**1**|**STATE OF KERALA,**| |---|---| ||**REPRESENTED BY THE SPECIAL TAHASILDAR (LA), ICT,**| ||**VALLARPADAM, ELOOR-682504.**| |**2**|**THE PROJECT DIRECTOR,**| ||**NATIONAL HIGHWAY AUTHORITY OF INDIA, 2B RAK**| ||**TOWER, EDAPPALLY, KOCHI-24.**| |**3**|**THE BRANCH MANAGER,**| ||**BANK OF BARODA, KALAMASSERY-683104.**| |**4**|**THE SPECIAL TAHASILDAR (RR),**| ||**KANAYANNUR TALUK OFFICE, ERNAKULAM-682011.**| ||**R1 BY SENIOR GOVERNMENT PLEADER SRI.T.K.SHAJAHAN**| ||**R2 BY ADV. SHRI.MATHEWS K.PHILIP, SC, NHAI**| **THIS LAND ACQUISITION APPEAL HAVING BEEN FINALLY HEARD ON 17-11-2020, ALONG WITH LA.App..38/2020, LA.App..107/2020, THE COURT ON 17-11-2020 DELIVERED THE FOLLOWING:** **L.A.A Nos.38 of 2020 and connected cases - 3 -** **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT** **THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN** **&** **THE HONOURABLE MR. JUSTICE T.R.RAVI** **TUESDAY, THE 17TH DAY OF NOVEMBER 2020 / 26TH KARTHIKA, 1942 LA.App..No.107 OF 2020** **AGAINST THE ORDER/JUDGMENT IN LAR 414/2008 DATED 22-08-2017 OF III ADDITIONAL SUB COURT, ERNAKULAM** ## **APPELLANT:** **M/S PALU BROTHERS, KALAMASSERY, ALUVA-680 104.** **BY ADVS. SRI.P.B.KRISHNAN SRI.P.M.NEELAKANDAN SRI.P.B.SUBRAMANYAN SRI.SABU GEORGE SRI.MANU VYASAN PETER** ## **RESPONDENTS:** **1 STATE OF KERALA REPRESENTED BY THE SPECIAL TAHSILDAR (LA), ICTT, VALLARPADAM, ELOOR-683 501. 2 THE PROJECT MANAGER, NATIONAL HIGH WAY AUTHORITY OF INDIA, 2B RAK TOWER EDAPALLY KOCHI-24.** **R1 BY SENIOR GOVERNMENT PLEADER SRI.T.K.SHAJAHAN R2 BY ADV. SRI.MATHEWS K.PHILIP** **THIS LAND ACQUISITION APPEAL HAVING BEEN FINALLY HEARD ON 17-11-2020, ALONG WITH LA.App..37/2020, LA.App..38/2020, THE COURT ON 17-11-2020 DELIVERED THE FOLLOWING:** **L.A.A Nos.38 of 2020 and connected cases - 4 -** **K. Vinod Chandran & T.R.Ravi, JJ. ------------------------------------L.A.A Nos.38 of 2020, 37 of 2020 and 107 of 2020 -----------------------------------Dated, this the 17[th] day of November, 2020** ## **JUDGMENT** ## **Vinod Chandran, J.** **The appeals are filed from the common judgment passed in four references under Section 18 of the Land Acquisition Act. Only three appeals have been filed; ie: from LAR's 411, 412 and 414 of 2008, the appellant in two of such appeals being identical. The extent is respectively 9.81, 5.54 and 0.80 Ares situated in Thrikkakkara North Village. Section 4(1) notification was on 28.12.2006 and the award and date of possession was respectively on 10.09.2008, 09.07.2008 and 10.09.2008. The rate per Are in the first two references was Rs.4,44,444/and in the last of such reference, Rs.4,22,222/-. The appellants claim Rs.15,00,000/- per Are. Initially the judgment passed was set aside and remanded in appeal, since the National Highway** **L.A.A Nos.38 of 2020 and connected cases - 5 -** **Authority of India [NHAI], the requisitioning Authority was not impleaded. On remand, in the first two references the award was enhanced to Rs.10,71,975/- per Are and in the last of such reference Rs.10,18,376/- per Are.** **2. We heard the learned Senior Counsel Sri.S.V.Balakrishna Iyer for the appellants, Sri.Shajahan T.K, learned GP and Sri.Mathews K Philip learned Standing Counsel for the NHAI.** **3. The learned Senior Counsel argues that the enhancement is not adequate since the fair value fixed by the Government with respect to identical plots in the notified commercial area, also in the very same survey number, is at a much higher rate of Rs.30,00,000/- per Are. It is pointed out that Ext.A12 and A13 documents pertain to land in Edappally which have a much higher value when the fair value for that area was lesser. It is also pointed out that Exts. A12 and A13 are with respect to properties which did not have road frontage. It is argued that the properties which are the subject** **L.A.A Nos.38 of 2020 and connected cases - 6 -** **matter of the above appeals are small extents of properties which would fetch much more than that awarded by the reference Court. The reference Court also committed a grave error insofar as ignoring Exts A16 and A17 valuation reports with respect to the compound wall demolished on acquisition. Learned Senior Counsel seeks enhancement on both counts; land value as also the value for improvements.** **4. Learned Government Pleader and the learned Standing Counsel would specifically refer to Ext. A7 which is a negotiated settlement with one of the appellants. The amounts accepted therein take in the 30% solatium and interest due under the Act. The said property has a larger extent but there is sufficient enhancement granted by the reference Court. The respondents argue that there is no scope for any enhancement.** **5. The learned Senior Counsel relies on the decisions of the Hon'ble Supreme Court reported in** _**2014(10) SCC 422**_ **(** _**Union of India v. Raj Kumar Baghal**_ **L.A.A Nos.38 of 2020 and connected cases - 7 -** _**Singh)**_ **and** _**2018(8)SCC 485 (Union of India v. Byagala Devamma)**_ **.** **6. The properties which are the subject matter of the appeals lie in the same locality and that in LAR 414/2008 is at a certain disadvantage than the other properties. The appellants though different are also sister concerns as is evidenced from Ext. A7 wherein both the appellants have joined together to convey a total extent of 130.66 Ares in Re-Survey No.354/1-8, to the NHAI. Ext. A2 is the fair value fixed by the Government in the year 2008 and with respect to two properties in Re-survey No.354 Rs.30,00,000/- is shown as value per Are. However there are other properties wherein a lesser value is indicated. It is pertinent that the appellant did not seek for the Commissioner to identify the said properties and compare it with the properties acquired. It is also relevant that the value fixed by the Government as per the documents is after two years from the date of notification and the widening of the road as also the diversion** **L.A.A Nos.38 of 2020 and connected cases - 8 -** **provided to bypass the city traffic to reach Ernakulam would definitely have enhanced the value of the property; which is the direct consequence of the acquisition. The acquired properties cannot be assessed on that basis, since without such acquisition there would not have been enhancement in value.** **7. The contention with respect to Ext. A12 and A13 have been correctly answered by the reference Court in Paragraph 17. It was found that the said properties were sold to Lulu International Mall (P)Ltd. The properties obviously were purchased for the purpose of the mega project and the adjacent land owners obviously were in the sellers market. The properties also had road frontage as is seen from the schedules to Exts. A12 and A13. There is also no comparison between the two properties since the properties in Exts. A12 and A13 and that acquired are at a distance of 2.5kms. We are in perfect agreement with the reference Court that there could be no enhancement granted on the basis** **L.A.A Nos.38 of 2020 and connected cases - 9 -** **of Exts. A12 and A13.** **8. Ext. A7 is the negotiated settlement between the appellants and the NHAI. The contention of the appellants are that the negotiated settlement was with respect to larger extent of property and that they were forced to accept the price for reason of financial difficulties. Reliance is also placed on the cited decisions to contend that at least 50% enhancement has been granted.** _**Raj Kumar Baghal Singh**_ **referred to yet another decision of the Hon'ble Supreme Court wherein land value was assessed after deduction of 53% for the purpose of development. A corollary has to be applied even in the case of considering enhancement with respect to valuable properties; is the contention. Therein on a reference to comparable properties of smaller extent; the property acquired was valued after allowing deduction for development activity. It was held that when the value disclosed in transactions of small extents are relied on; that value could be adopted even with respect to larger extents if** **L.A.A Nos.38 of 2020 and connected cases - 10 -** **appropriate deductions are made for development of the land, providing space for roads, sewers, drains, expenses for lay out and so on and so forth. The same cannot be the consideration when value of large extents is relied on to seek enhancement with respect to acquisition of smaller extents.** **9. Both the decisions cited and qoted from the authoritative pronouncement in** _**(1988) 3 Supreme Court Cases 751 (1988) 3 SCC 751 Chimanlal Hargovinddas v. Special Land Acquisition Officer**_ **. We make the following extract from the said judgment which lays down broad principles for determination of value of acquired properties for the purpose of computing compensation.** **4. The following factors must be etched on the mental screen:** **(1) A reference under Section 18 of the Land Acquisition Act is not an appeal against the award and the court cannot take into account the material relied upon by the Land Acquisition Officer in his award unless the same material is produced and proved before the court.** **(2) So also the award of the Land Acquisition Officer is not to be treated as a judgment of the trial court open or exposed to challenge before the court hearing the reference. It is merely an offer made by the Land Acquisition Officer and the material utilised by him for making his valuation cannot be utilised by the court unless produced and proved before it. It is not the function of the court to sit in appeal against the** **L.A.A Nos.38 of 2020 and connected cases - 11 -** **award, approve or disapprove its reasoning, or correct its error or affirm, modify or reverse the conclusion reached by the Land Acquisition Officer, as if it were an appellate court.** **(3) The court has to treat the reference as an original proceeding before it and determine the market value afresh on the basis of the material produced before it.** **(4) The claimant is in the position of a plaintiff who has to show that the price offered for his land in the award is inadequate on the basis of the materials produced in the court. Of course the materials placed and proved by the other side can also be taken into account for this purpose.** **(5) The market value of land under acquisition has to be determined as on the crucial date of publication of the notification under Section 4 of the Land Acquisition Act (dates of notifications under Sections 6 and 9 are irrelevant).** **(6) The determination has to be made standing on the date line of valuation (date of publication of notification under Section 4) as if the valuer is a hypothetical purchaser willing to purchase land from the open market and is prepared to pay a reasonable price as on that day. It has also to be assumed that the vendor is willing to sell the land at a reasonable price.** **(7) In doing so by the instances method, the court has to correlate the market value reflected in the most comparable instance which provides the index of market value.** **(8) Only genuine instances have to be taken into account. (Sometimes instances are rigged up in anticipation of acquisition of land.)** **(9) Even post-notification instances can be taken into account (1) if they are very proximate, (2) genuine and (3) the acquisition itself has not motivated the purchaser to pay a higher price on account of the resultant improvement in development prospects.** **(10) The most comparable instances out of the genuine instances have to be identified on the following considerations:** **(** _**i**_ **) proximity from time angle,** **(** _**ii**_ **) proximity from situation angle.** **(11) Having identified the instances which provide the index of market value the price reflected therein may be taken as the norm and the market value of the land** **L.A.A Nos.38 of 2020 and connected cases** **- 12 -** **under acquisition may be deduced by making suitable adjustments for the plus and minus factors vis-à-vis land under acquisition by placing the two in juxtaposition.** **(12) A balance-sheet of plus and minus factors may be drawn for this purpose and the relevant factors may be evaluated in terms of price variation as a prudent purchaser would do.** **(13) The market value of the land under acquisition has thereafter to be deduced by loading the price reflected in the instance taken as norm for plus factors and unloading it for minus factors.** **(14) The exercise indicated in clauses (11) to (13) has to be undertaken in a common sense manner as a prudent man of the world of business would do. We may illustrate some such illustrative (not exhaustive) factors:** _**Plus factors Minus factors**_ - 1 **smallness of size** 1 **largeness of area** 2 **proximity to a road** 2 **situation in the interior at a distance from theroad** - 3 **frontage on a road** 3 **narrow strip of land with very small frontage compared to depth** - 4 **nearness to developed area** 4 **lower level requiring the depressed portion to be filled up** - 5 **regular shape** - 6 **level vis-à-vis land under acquisition** - 5 **remoteness from developed locality** - 6 **some special disadvantageous factor which would deter a purchaser** - 7 **special value for an owner of an adjoining property to whom it may have some very special advantage** - **(15) The evaluation of these factors of course depends on the facts of each case. There cannot be any hard and fast or rigid rule. Common sense is the best and most reliable guide. For instance, take the factor regarding the size. A building plot of land say 500 to 1000 sq.** **L.A.A Nos.38 of 2020 and connected cases - 13 -** **yds. cannot be compared with a large tract or block of land of say 10,000 sq. yds. or more. Firstly while a smaller plot is within the reach of many, a large block of land will have to be developed by preparing a lay out, carving out roads, leaving open space, plotting out smaller plots, waiting for purchasers (meanwhile the invested money will be blocked up) and the hazards of an entrepreneur. The factor can be discounted by making a deduction by way of an allowance at an appropriate rate ranging approximately between 20 per cent to 50 per cent to account for land required to be set apart for carving out lands and plotting out small plots. The discounting will to some extent also depend on whether it is a rural area or urban area, whether building activity is picking up, and whether waiting period during which the capital of the entrepreneur would be locked up, will be longer or shorter and the attendant hazards.** **(16) Every case must be dealt with on its own fact pattern bearing in mind all these factors as a prudent purchaser of land in which position the judge must place himself.** **(17) These are general guidelines to be applied with understanding informed with common sense.** ## **10. As has been held by the Hon'ble Supreme** **Court there is no hard and fast rule and the factors** **leading to fixation of value to determine enhancement from that granted by the Land Acquisition Officer would depend on the facts of each case. We specifically refer to paragraph 10 of the above extract which speaks of the most comparable instances out of the genuine instances having to be identified; from its proximity both in** **L.A.A Nos.38 of 2020 and connected cases - 14 -** **the angle of time and situation. Ext. A7 is such a document which satisfies both the situational and time angle. It also is with respect to the very same acquisition and is the negotiated settlement entered into by the very same appellants. The negotiated price includes the interest payable under the Act as also 30% solatium. We accept the argument of the learned Senior Counsel that the interest would be nominal insofar as the notification having come in 2006 and the negotiated settlement having been arrived at in 2007. Even then the 30% solatium has to be reckoned.** **11. As has been found by the reference Court the price per Are under the negotiated settlement would be Rs.10,71,975/- per Are. The per Are price adopted in LAR 411 and 412 is identical. Hence the reference Court has adopted 30% more from that of the negotiated settlement, for the purpose of enhancement, on which the land owner would be further entitled to 30% solatium. We notice the above extract wherein the Hon'ble Supreme Court has** **L.A.A Nos.38 of 2020 and connected cases - 15 -** **in paragraph 15 again with reference to deductions to be made spoke of an allowance at an appropriate rate ranging between 20 to 50%. Here for enhancement 30% has been adopted and it is also to be specifically noticed that the land acquired from the appellants though lying in different survey numbers the nature of the properties are more or less identical. It also has to be emphasized that they were situated as part of a large tract owned by the appellants lying almost contiguously and within the very same boundaries. If we look at the caution expressed by the Hon'ble Supreme Court in making the determination as a hypothetical purchaser there would never have been a situation of the small extents being sold as such. The plan and lie of the road is such that from the very same survey number larger tracts of land lying as one plot and smaller separate extents from the whole, were required to complete the project. Considering the entire context, we are of the opinion that the enhancement granted by the reference Court is adequate and is in** **L.A.A Nos.38 of 2020 and connected cases - 16 -** **consonance with the evidence led before that Court.** **12. The further contention raised is with respect to the demolition of compound wall relying on Ext. A16 and A17 which were prepared by AW3. AW3 was engaged by the appellants without any notice to the respondent State. Neither was he a valuer appointed by the Court nor was the valuation carried out in the presence of the officers of the respondent State. The valuer also was not able to establish his credentials before Court which was seriously challenged by the State and the requisitioning authority in cross examination. We do not see any reason to place reliance on A16 and A17. On the above reasoning our conclusion is that the appeals are to be rejected. We do so leaving the parties to suffer their respective costs.** **Sd/K.VINOD CHANDRAN, JUDGE** **Sd/T.R. RAVI, JUDGE** **jma**