First Appeal No.158 of 1990

10th June, 2005

Petitioner Counsel: Shri. A. S. BAJAJ,Shri. W. C. JAIN
Respondent Counsel: Shri. P. M. SHINDE,Shri. P. V. MANDLIK

Cases Cited:
Shantaram Shirgaonkar Vs. Land Acquisition Officer, 1990(2) Mah.L.R. 280 [Para 11]

JUDGMENT

JUDGMENT :- This first appeal is directed against the judgment and order dated 19-09-1989 passed by the Reference Court (IInd Additional District Judge), Aurangabad in Land Acquisition Reference No.64/1986, whereby the learned Reference Court rejected the Reference of the present appellants/claimants.

2. The appellants/claimants were the owners of property bearing City Survey Nos.17848 and 17850 situated in an area of Aurangabad city known as Pensionpura. The respondents, by issuing notification under section 126(4) of the Maharashtra Regional Town Planning Act, acquired 2805 sq. mtrs. area out of the two city survey nos. belonging to the claimants. The Special Land Acquisition Officer, Aurangabad granted compensation @ Rs.40/- per sq. mtr. for the land acquired out of city survey No.17848 and for the land out of city survey No.17850 @ Rs.19.60 per sq. mtr. Dis-satisfied with the compensation granted by the Special Land Acquisition Officer, the claimants preferred Reference claiming compensation @ Rs.120 per sq. mtr. and in addition, they have claimed an amount of Rs.30,000/- towards loss due to severance of the property for the remaining land after acquisition remained with the claimants. They have made out a case that the land is located in a commercial area. The Special Land Acquisition Officer while determining the compensation, did not consider the potential value of the property and by some hypothesis determined the market price which is grossly inadequate. According to them, they are entitled to enhance compensation to the tune of Rs.2,76,293/- by enhanced rate and Rs.30,000/- towards the loss due to severance of property.

3. In the Reference Court, the respondents contested the claim on the contentions raised in written statement (Exh.33). It has been contended that the Special Land Acquisition Officer, after taking into consideration further developments and potential value of the property, fixed the compensation. So, the market rate by which the compensation was granted by the Special Land Acquisition Officer cannot be said to be grossly inadequate. It has been contended that on the date of issuance of notification of acquisition, the acquired property had no commercial value and they prayed for dismissal of the Reference.

4. The claimants did examine himself before the Reference Court and also produced on record the sale-deeds to show the market price of similarly situated properties. The Reference Court, considering the evidence and admission of the petitioners that because of dispute, nobody used to purchase plots, recorded a finding that the compensation granted is adequate. As regards the sale instances, it has been held that the sale instances placed on record are not relating to the property situated in the same area and they cannot be accepted to be an evidence as those sales were not of similar property. As regards the additional compensation claimed for the remaining land because of the severance of the property, the learned Judge observed that the claimants did not adduce evidence to show that there was wastage to their property because of severance and the claim petition has been rejected, by judgment dated 19-09-1989.

5. Being aggrieved by the said judgment, the claimants preferred the present appeal. This court admitted the appeal by order dated 03-07-1990.

6. The arguments advanced on behalf of the appellant and respondents were heard. Learned advocate Shri. Bajaj, appearing on behalf of the appellant made a submission that both city survey numbers belonging to these claimants, have been acquired by the same award. Both the properties are adjacent to each other and also abutting to the roads, but ignoring these facts, the Special Land Acquisition Officer granted compensation of one property at the rate of Rs.40/- per sq. mtr. and for other property, at the rate of Rs.30/- per sq. mtr. without any reasons. So, the compensation granted can not be said to be adequate on this count. He has also made submission that the evidence about the sale instances of similar properties was led before the Reference Court, but that evidence is not properly considered. So, considering that evidence, the compensation granted by the Special Land Acquisition Officer cannot be said to be just and adequate, but this aspect is not at all considered by the Reference Court. So, the judgment of the Reference Court suffers from infirmities. As regards the additional compensation claimed because of loss to the remaining property due to severance, he has pointed out that a small strip of 10 to 15 sq. feet width has remained with the owner abutting to the road and he can not use it for any purpose. So, there is a loss to him because of severance of the property. Hence, the claimants were entitled to compensation because of severance, but the Reference Court rejected that claim without any reasons. As such, he submitted that the order of Reference Court rejecting the claim petition needs to be set aside by allowing the present appeal.

7. Learned advocates Shri. Mandlik, appearing on behalf of respondent No.2 - Municipal Corporation and Shri. P. M. Shinde, learned AGP appearing for respondent No.1 - the State of Maharashtra supported the judgment and order of the Reference Court. According to them, there was no evidence at all to show that market price of the land was more than what determined by the Special Land Acquisition Officer. The sale instances were rightly disbelieved as those were not of the property similarly situated. Loss because of the severance of the property is also not proved. As such, the judgment of the Reference Court does not suffer from any infirmities. It is based on legal evidence and the same needs no interference, but the appeal of the appellants being without merit needs to be dismissed.

8. It is not disputed that the properties belonging to the claimants have been acquired for the purpose of road widening. Admittedly, when the notification for acquisition of the land was issued, the land was an agricultural land and the claimant admitted that some dispute was pending in relation to the title and he could not obtain non-agricultural (N.A.) permission. As regards the area of the land acquired, also there is no dispute. The Special Land Acquisition Officer granted compensation for the land city survey No.17848 at the rate of Rs.40/- per sq. mtr. and at the same time, granted compensation to another property at the rate of Rs.19.61 per sq. mtr. This method of determination of different compensation to two different properties adjacent to each other was challenged. The learned Reference Court in the judgment has not discussed this aspect, though in para No.3 of its judgment, it is mentioned that the compensation has been granted by the Special Land Acquisition Officer by two different rates. Learned Advocate Shri. Bajaj, appearing on behalf of the claimants made submission that when both the properties are adjacent to each other and abutting to the road, there was no reason for the Special Land Acquisition Officer to determine compensation of the two properties by different rates. As regards the location of the lands, the claimants on oath stated that the acquired land is at a distance of one and half furlong away from Paithan Gate and it is at a distance of four furlong from Kranti Chowk. Another public road was passing through the lands acquired. So, by that statement, he tried to show the potential value of this property. However, at the same time, he admits that in 1970, there were no commercial complexes in that locality. He has produced on record the sale-deeds of other properties. In the cross-examination, he admits that he has purchased this property for Rs.6,000/- and there was no change in the nature of the property as he has not carried out any development. He admits in clear terms in the cross that the sale instances on which he wants to place reliance are of properties located in the city and are not relating to the adjacent properties. According to him the development of the property started after 1980-1981. He admits that at the time of acquisition, it was an agricultural land. As he himself admitted that the sale instances on which he tried to place reliance, are in respect of the properties situated in different areas, the Reference Court has rightly held that those instances are not any way helpful to determine the real market price of the property, and as such, there was no evidence from the claimant to show that the compensation awarded by the Special Land Acquisition Officer was inadequate.

9. The argument advanced on behalf of the claimants that there was no reason for awarding different compensations to two different properties of the claimants when both are abutting to road, needs to be considered. Admittedly, both the lands city survey No.17848 and 17850 are adjacent to each other. For awarding compensation to these two survey numbers by two different rates, the Special Land Acquisition Officer recorded reasons in his award. It has been mentioned that the land survey No.83 is having no direct frontage on any road. City Survey No.17850 is a large portion out of survey No.83 and some portion out of survey No.91. The Special Land Acquisition Officer also makes a mention that survey No.91 is having frontage of six mtrs. on the road leading to Central Building. As regards City Survey No.17684, he has specifically mentioned that this property is having a frontage of 49 mtrs. on the road leading from Paithan Gate to Kranti Chowk, and because of these reasons, he had determined the compensation by two different rates for two properties. This position is also clear from the map of joint measurement. So, the Special Land Acquisition Officer was justified in determining the compensation by two different rates in relation to different properties. Though both the properties are adjacent to a main road of the city having frontage abutting to that road but one had frontage of six mtrs. only and large area is having no access from any other road. So, he was justified in awarding compensation by two different rates.

10. Admittedly, when the notification was issued, the land was an agricultural land, located in the city. It has potential value. So, the Special Land Acquisition Officer has granted compensation considering that potentiality. While determining the compensation, he has estimated the market rate as Rs.30/- per sq. mtr. for city survey No.17850. He has specifically mentioned in the award that he has considered the location of various lands under acquisition and grouping the land in separate zones and considering its potentiality, determined different rates. As regards city survey No.17850, the market rate was determined to Rs.30/- per sq. mtr. While determining the actual compensation, he had deducted 20% of the portion of the land which will go under the roads in case the land is converted into non-agricultural and developed into the plots. After deducting that area, he has determined the compensation and 15% amount is deducted by way of developer's profit. After the said deductions, he has determined the market rate of Rs.19.61 per sq. mtr. Shri. Bajaj, learned advocate raised objection for this method adopted by the Special Land Acquisition Officer. According to him, when 20% of the land is reduced on the ground that it will be required to be reserved for roads, the Special Land Acquisition Officer was not justified in deducting the amount as developer's profit. No doubt, the developer's profit cannot be considered while determining the rates, but on perusal of this method adopted by the Special Land Acquisition Officer, it is clear that the rate of the property as determined by him was Rs.30/- per sq. mtr. and while calculating the amount of compensation, he has deducted 1/3rd amount by way of development charges. That deduction to the extent of 1/3rd cannot be said to be unreasonable. 30% deduction for development of the land is accepted by the courts in various judgments. In the present case also, by making deductions under different heads, compensation is granted at the rate which is less by 1/3rd than the market price. So, approximately the deduction comes to 30% and the same cannot be said to be illegal. As such, the compensation granted by the Special Land Acquisition Officer cannot be said to be inadequate and the Reference Court was justified in recording finding that the claimants are not entitled for enhanced compensation.

11. The last contention which needs to be considered is about the compensation claimed on account of loss due to severance of property. Admittedly, because of the proposed road for which this land was acquired, the land is divided into two parts. Major portion is acquired for the purpose of road. Appellants on oath have stated that a strip of a width of 10 to 15 sq. feet and about 200 sq. feet in length remained with him after acquisition of the land. In the Reference, it has been specifically stated that the said land cannot be used and an amount of Rs.30,000/- was claimed by way of loss due to severance of the property. In the witness box also, the appellants deposed to that effect. However, that claim is rejected by the Reference Court stating that the claimants have not established wastage of the property, so they cannot claim any compensation because of the severance of the property. The claimants, in the witness box, made a positive statement that because of this road, the land is divided in two parts and the part remained with him is a strip of a width of 10 to 20 sq. feet and length of 200 sq. feet So, it has become useless. Question remains as to whether this statement can be said to be sufficient for awarding compensation because of loss due to severance of the property. The Division Bench of this court in the case of Shantaram Shirgaonkar (deceased) through L.Rs. Vs. Land Acquisition Officer and another, reported in 1990(2) Mah.L.R. 280, considered this aspect. In that case also, the claimants had not led any evidence in order to establish that they had suffered damage as a result of the acquisition of the land. However, it is observed that this circumstance in no manner justifies the non-payment of any amount of compensation to the appellant on account of severance of the land. In that case also, there was only evidence that after acquisition, the non-acquired portion a small strip remained with the owner. Considering the situation, the Division Bench held that on account of severance, the non-acquired part of the property had lost considerably its utility. On that count, compensation was granted to the extent of 25% of the value of entire property acquired. This judgment squarely covers the point in dispute. In the instant case, a strip of width of 10 to 15 sq. feet and length of 200 sq. feet abutting to this new road remained with the owner. As per Building and Development Rules, he can not raise construction without leaving a open space adjacent to road. After deduction of such open space, out of the width of remaining portion which is 10 to 15 sq. feet in width, a smaller strip of width of 5 to 10 feet remains with the owner and because of this severance, utility of the remaining portion is diminished, and in fact, he can not utilise that strip for any purpose. So, compensation needs to be granted in respect of the remaining property which cannot be utilised for any purpose. The appellants claimed Rs.30,000/- by way of damages on account of severance of the property. The approximate area of the strip remained with the owner as stated by the claimants is about 3000 sq. feet (i.e. 300 sq. mtr.). This entire plot cannot be utilised for building purpose. Hence, the compensation of the said strip needs to be granted at the rate of Rs.19.61 per sq. mtr. The approximate area is 300 sq. mtr. and the compensation at the rate of Rs.19.61 per sq. mtr. comes to Rs.5883/-. So, the Reference Court ought to have granted that relief to the extent of compensation to the extent of strip of 300 sq. mtrs. at the rate of Rs.19.61 per sq. mtrs., though the Reference Court was justified in rejecting the claim for enhanced compensation. So, to that extent, this appeal needs to be allowed and grant compensation of Rs.5883/- on account of loss due to severance of the property.

12. In the result, the appeal is partly allowed. The appellants' claim for compensation on account of loss due to severance of the property of Rs.5883/- is allowed. The respondents are directed to pay Rs.5883/- to the appellants. The decree rejecting the appellants' claim for enhanced compensation passed by the Reference Court, (excluding the compensation of Rs.5883/- towards compensation for loss due to severance of the Property), is confirmed. The parties to bear their own costs.

Appeal partly allowed.