First Appeal No.283 of 2002,First Appeal No.103 of 2003

24th June, 2010

Petitioner Counsel: Mr. V. A. LAWANDE
Respondent Counsel: Mr. M. SALKAR,Mr. M. S. SONAK

Cases Cited:
Communidade of Candolim Vs. Deputy Collector (North), Panaji, Goa, 2005(2) ALL MR 258=(2005)1 Goa Law Reporter 25 [Para 7,11,12]
Communidade of Kerim Vs. Land Acquisition Officer, F.A. No.5/2004 Dt.21-12-2004 [Para 7,11]
Communidade of Sancolae Vs. Government of Goa, F.A. No.158/2003 Dt.08-08- 2008 [Para 7,12]
Viluben Jhalejar Contractor Vs. State of Gujarat, 2005(5) ALL MR 449 (S.C.)=(2005)4 SCC 789 [Para 14]
Krishna Yachendra Bahadurvaru Vs. The Special Land Acquisition Officer, AIR 1979 SC 869 [Para 15]

JUDGMENT

A. S. OKA, J. :- These two first appeals are being disposed of by a common judgment as these two appeals were ordered to be heard together by the earlier bench.

FACTS AND SUBMISSIONS IN F.A.No.283 Of 2002

2. By First Appeal No.283/2002, the appellants have taken exception to the judgment and award dated 11th February, 2002 passed by the learned District Judge, North Goa at Panaji in Land Acquisition Case No.111/1994. The appellants are the claimants, who applied under section 18 of the Land Acquisition Act, 1894 (hereinafter referred to as 'the said Act of 1894'). The acquisition relates to land bearing Survey No.418 situated at Marcaim village of Taluka Ponda admeasuring 40,425 square meters. The notification under Section 4(1) of the said Act of 1894 was published on 27th January, 1992. An award was made under Section 11 of the said Act of 1894 on 15th February, 1994. By the said award, market value of the acquired land was offered at the rate of Rs.5/- per square meter. In the application under section 18 of the said Act of 1894, market value at the rate of Rs.75/- per square meter was claimed by the appellants. The appellants also claimed compensation of Rs.2,00,000/- on account of teak wood trees on the acquired land. They claimed compensation of Rs.5,000/- on account of 25 cashew trees. On account of 3 Jambhul trees, compensation of Rs.9,000/- was prayed for. Compensation was also claimed on account of Kauchi trees worth about Rs.25,000/-. The learned District Judge by the impugned judgment and award held that the appellants have not discharged the burden of showing that the market value offered by the award under section 11 was inadequate. Hence, the reference was rejected.

3. The learned Counsel appearing for the appellants has taken us through the notes of evidence and documents placed on record. He submitted that on the relevant date, the acquired land had potential for non-agricultural use. He submitted that the basic facilities such as water, electricity, road, hospital, panchayat office, veterinary hospital, school etc. were available around the acquired land. He invited attention of the Court to the valuation report of Ramesh Vernekar, Chartered Civil Engineer and approved valuer. He also invited our attention to the evidence of the third appellant one Mr. Lakshman B. Naik and one Ajit Mardolkar. He submitted that the sale deeds dated 27th March, 1992 (Exh.AW2/A) and 30th November, 1990 (Exh.40) produced and proved by the appellants, were in respect of comparable lands. He submitted that the lands subject matter of the sale deeds were situated in close proximity of the acquired land and the same were comparable in all respects. He submitted that even assuming that the said sale deeds were in respect of developed lands, the market value of the acquired land can be arrived at on the basis of the said sale deeds and appropriate deduction on account of cost of development can be made. He submitted that the sale deed at Exh.40 was dated 30th November, 1990 in respect of the comparable land and the market value reflected from the said document is Rs.45/- per square meter in respect of the land admeasuring 460 square meters. He submitted that as the relevant date in the present case is 27th January, 1992, 15% escalation per year will have to be granted while computing the market value on the basis of the land subject matter of document at Exh.40. He also relied upon the opinion of the expert showing that the market value of the acquired land on the date of notification under section 4(1) of the act of 1894 was Rs.60/- per square meter. He submitted that the appellants had discharged their burden by showing that the market value offered by the Land Acquisition Officer was inadequate and no evidence was adduced by the respondents. He pointed out that the acquired land was notified for the acquisition for public purpose of setting up an industrial estate.

4. The learned Counsel appearing for the second respondent (acquiring body) submitted that admittedly appellants are deemed purchasers under the provisions of Goa, Daman and Diu Agricultural Tenancy Act, 1964 (hereinafter referred to as 'the said Act of 1964'). He, therefore, submitted that in view of Section 2 of Goa Land Use (Regulation) Act, 1991 (hereinafter referred to as 'the said Act of 1991'), the land held by the appellants cannot be used for any purpose except for agriculture. He, therefore, submitted that the acquired land had no potential for non-agricultural use and, therefore, the sale instances of the two lands, which were admittedly developed lands, were not at all comparable. He submitted that in the circumstances, the appellants had not adduced any evidence to show as to what was the market value of comparable agricultural land on the relevant date. He, therefore, submitted that no interference is called for. The learned Additional Government Advocate supported the submissions made by the learned Counsel for the second respondent.

5. In reply, the learned Counsel appearing for the appellants submitted that the appellants have not stated in their evidence that they have become deemed purchasers or that they were the tenants of the acquired land. He submitted that there is not even a suggestion given to the third appellant in his cross-examination that he was a tenant or deemed purchaser. He submitted that there is no finding recorded by the Trial Court that the appellants were deemed purchasers under the said Act of 1964. He submitted that, therefore, the submission made by the learned Advocate appearing for the second respondent cannot be accepted and that the sale instances of developed lands will have to be considered.

FACTS AND SUBMISSIONS IN F.A.No.103Of 2003

6. In First Appeal No.103 of 2003, exception has been taken to the judgment and award dated 4th March, 2002 passed by the learned District Judge, North Goa at Panaji in Land Acquisition Case No.112 of 1994. The first respondent (Communidade of Marcaim) is the claimant in a reference under Section 18 of the said Act of 1894 and the appellant is acquiring body at whose instance, the land has been acquired. The acquisition relates to lands surveyed under survey Nos.420(part), 391(part), 392(part), 393(part), 427, 428(part), 511(part), 472(part) situated at Marcaim village of Taluka Ponda admeasuring 3,48,025 square meters. The notification under Section 4(1) of the said Act, 1894 was published on 27th January, 1992. Award under Section 11 of the said Act of 1894 was made on 15th February, 1994 by which the compensation calculated @ Rs.5/- per square meter was offered to the first respondent. The first respondent made an application under Section 18 of the said Act of 1894 claiming market value @ Rs.30/- per square meter. By the impugned judgment and award, market value at the rate of Rs.15/-square meter was fixed by the reference Court. The statutory benefits under Sections 23(1-A), 23(2) and 28 of the said Act of 1894 were also granted to the respondents.

7. The learned Counsel appearing for the appellant submitted that this Court has repeatedly held that the land vesting in a Communidade is not a freehold land in as much as there were restrictions on the transferability of the land. He relied upon a decision of this Court in the case of Communidade of Candolim Vs. Deputy Collector (North), Panaji, Goa; (2005)1 Goa Law Reporter 25 : [2005(2) ALL MR 258]. He submitted that this Court has held that the lands belonging the Communidade can be sold only in liquidation proceedings when the assets of Communidade are found to be inadequate. He submitted that it was held by the said decision that the land belonging to the Communidade cannot be utilised for a purpose, which will enhance its market value and considering that such land suffers from statutory restrictions, it cannot be compared with any sale instance in respect of a freehold land. He submitted that such lands cannot be compared with the sale instances of a freehold land. He has fairly pointed out two subsequent decisions of this Court. First decision is dated 21st December, 2004 in F.A. No.5/2004 (Communidade of Kerim Vs. Land Acquisition Officer and another) and the second one is judgment dated 8th August, 2008 in the F.A. No.158/2003 in the case of Communidade of Sancolae Vs. Government of Goa and another. He submitted that in view of the decisions of this Court, various sale instances in the form of sale deeds relied upon by the first respondent, cannot be said to be sale deeds relating to comparable lands. He submitted that in any event, the sale deeds relate to very small plots having area ranging between 75 square meters to 625 square meters and, therefore, the same cannot be taken into consideration. He submitted that the award at Exh.20 relied upon by the first respondent cannot be taken into consideration in as much as it is in respect of a land having an area of 4000 square meters and the same was much superior to the acquired land. He pointed out various negative factors in respect of the acquired land and urged that the award was not in respect of a comparable land.

8. The learned Counsel appearing for the first respondent submitted that it cannot be said that the land vesting in Communidade cannot be transferred. He submitted that after obtaining requisite permission, land vesting in Communidade can be transferred. He submitted that there are no restrictions on the nature of user of Communidade land and, therefore, the market value of Communidade land can be always determined on the basis of the market value of a comparable developed plot by making appropriate deductions on account of development charges. He submitted that there is no embargo on development of the Communidade land and in fact evidence on record shows that on a part of the land held by the first respondent, industrial plots were demarcated and necessary sanction was granted. He submitted that various sale instances in the form of sale deeds relied upon by the first respondent will have to be considered as there is no bar against comparing a sale instance of a smaller plot with acquired land having larger area. He submitted that appropriate deduction can be always made on account of large area of the acquired land while determining the market value. He submitted that in any case Exh.20 is an award in respect of adjoining land held by the first respondent where market value of Rs.15/- per square meter was fixed. He submitted that as the sale instance is in respect of a land vesting in the first respondent Communidade, the learned Trial Judge has rightly taken it as a basis for determining of market value of the acquired land. He submitted that no interference is called for.

CONSIDERATION OF SUBMISSIONS AND CONCLUSIONS

IN F.A No.103 OF 2003

9. We have carefully considered the submissions. The area of the acquired land is 3,48,025 square meters. The market value of the land as on 27th January, 1992 will have to be determined.

10. Firstly, we are dealing with the submissions based on restrictions on transfer of a land vesting in Communidade. A reference will have to be made to relevant provisions of Code of Communidade (Legislative Diploma No.2070). Article 30 thereof lays down the powers of the Communidade. Sub-clause (f) of clause (4) of Article 30 gives power to Communidade to decide over long leases, sale or exchange of lands. Article 31 provides that the decision taken by a Communidade as per the said sub-clause (f) of creation of long leases or sale or exchange of lands is to be implemented only after the sanction of the Governor General. Thus, what is provided is that the land owned by the Communidade can be sold or exchanged by Communidade after obtaining sanction. Even long leases can be created after obtaining sanction as aforesaid. Article 317 of the Code of Communidade provides that the Communidade can lease for long term the uncultivated properties. It is provided that the area of each lease shall not be more than 20 Hectares and the period of lease will be from 9 to 18 years. Article 324 confers powers on Communidade to give a permanent lease of uncultivated land subject to exceptions provided by Article 325 in case of land of common usage, land indispensable for cattle grazing, land used as coast of neighbour etc. Article 334 provides that the lease will be auctioned publicly. Article 334-A provides that subject to guidelines issued by the Government, without holding auction, a Communidade can grant lease of area not exceeding 10000 square meters of land to educational societies for construction of playgrounds. The said Article provides that without holding auction , a Communidade can grant lease of land admeasuring not more than 400 square meters for construction of houses or buildings for the purposes specified thereunder. Essentially, Article 30 read with Article 31 provide that a Communidade has power to lease, sale or exchange lands vesting in it after obtaining prior sanction.

11. In the case of Communidade of Candolim [2005(2) ALL MR 258] (supra), this Court held that the restrictions imposed on the land held by the Code of Communidade show that its free use is not permissible and considering the statutory restrictions, said land cannot be compared with sale instance of freehold land. This Court considered Articles 179 and 180 of the Code of Communidade. It must be stated here that an attention of this Court was not invited to Articles 30 and 31 as well as Articles 317 and 334 of the said Code. Articles 30 and 31 lay down that the Communidade has power to sale its land subject to obtaining sanction. A decision of the Division Bench in the case of Communidade of Candolim (supra) was considered by the same bench in the case of Communidade of Kerim (supra). In the said decision, it is held that a sale instance of a land, which was not held by a Communidade can provide some guideline for fixing reasonable compensation of a land, which was held by a Communidade. This Court took a view that while fixing market value of the Communidade land, a deduction of 25 % from the market value fetched by freehold land will have to be made.

12. The decision of this Court in the case of Communidade of Candolim [2005(2) ALL MR 258] (supra) was again considered by another Division Bench in the case of Communidade of Sancoale (supra). In paragraph 6 of the said decision, this Court held thus :

"There can be no doubt about the proposition that Communidade land could not be equated with a freehold land. The observations in the said case of Communidade of Candolim have to be understood only as laying down that the Communidade lands cannot be equated with other freehold lands for the purpose of arriving at a market price from such sale instances. The proposition cannot be extended to conclude that there can be no comparison. A comparison would bring out positive and negative factors which would then warrant adjustment of price with reference to such sale instances. Otherwise, if the Court were to insist on evidence of sale of an exactly similar piece of land to be tendered, it would be impossible to get an instance and fix appropriate compensation."

This Court proceeded to hold that the market value of the land held by a Communidade can be arrived at on the basis of market value of a land, which is freehold land having no restrictions on transfer. In the facts of the case before Division bench, for fixing the market value of land held by a Communidade on the basis of a sale instance of a freehold land, a deduction of 50% was made by the Division Bench from the market value of freehold land.

13. When a land is described as a freehold land, it has reference to the tenure of the land. The characteristic of a freehold tenure is that there is inheritability and transferability as a matter of right. In case of a land held by a Communidade, there is no defect in the title or ownership of the Communidade, but the restriction is on transferring the land held by the Communidade by way of sale, lease or exchange. Restriction is that such a transfer by way of sale cannot be made without prior sanction. There is no complete prohibition against effecting such transfer. In case of an insolvency of Communidade, there is a power to sell land of Communidade. However, there is a general power vesting in a Communidade by virtue of Article 30 of the Code to transfer its land by sale, lease or exchange with the sanction.

14. While assessing the market value for the purpose of Section 23 of the said Act of 1894 by comparison method, the test adopted is what a prudent and genuine buyer will offer as a price of the acquired land. In case of a land, which is not freehold in the sense that a transfer thereof cannot be effected without sanction of the authorities, a willing bona fide buyer may not offer the same price, which he may offer in respect of a comparable freehold land as the buyer will be conscious of the fact that there are restrictions on transferability or that the authority empowered to sanction sale may impose some conditions. Therefore, he may offer to some extent a lesser price to the land having such restrictions. However, it cannot be said that the sale instance of a freehold land which is otherwise comparable to the acquired land cannot afford a basis to determine the market value of a land, which is having restrictions on transfer. The Apex Court in the case of Viluben Jhalejar Contractor Vs. State of Gujarat; [(2005)4 SCC 789 : [2005(5) ALL MR 449 (S.C.)]] has discussed various factors relating to fixing market value on the basis of comparison method. Para 19 and 20 of the said decision read thus:

"19. Market value is ordinarily the price the property may fetch in the open market if sold by a willing seller unaffected by the special needs of a particular purchase. Where definite material is not forthcoming either in the shape of sales of similar lands in the neighbourhood at or about the date of notification under Section 4(1) or otherwise, other sale instances as well as other evidences have to be considered.

20. The amount of compensation cannot be ascertained with mathematical accuracy. A comparable instance has to be identified having regard to the proximity from time angle as well as proximity from situation angle. For determining the market value of the land under acquisition, suitable adjustment has to be made having regard to various positive and negative factors vis-a-vis the land under acquisition by placing the two in juxtaposition. The positive and negative factors are as under:

Positive factors	Negative factors
(i) smallness of size	(i) largeness of area
(ii) proximity to a road	(ii) situation in the interior at a distance from the road
(iii) frontage on a road	(iii) narrow strip of land with very smallfrontage compared to depth
(iv) nearness to developed area	(iv) lower level requiring the depressed portion to be filled up
(v) regular shape	(v) remoteness from developed locality
(vi) level vis-à-vis land under acquisition	(vi) some special disadvantageous factors which would deter a purchaser
(vii) special value for an owner of an adjoining property to whom it may have some very special advantage.”

15. The aforesaid decision does not contain exhaustive list of negative factors. In case of a land held by a Communidade, the restriction on transfer will be one of the negative factors, which will have to be considered while fixing the market value. Taking into consideration the said negative factor, some deduction will have to be made depending upon the facts of a particular case while fixing the market value on the basis of a comparable sale instance of a freehold land. In the case of Krishna Yachendra Bahadurvaru Vs. The Special Land Acquisition Officer; AIR 1979 SC 869, the Apex Court held that the process of determination of the market value invariably involves the evaluation of many imponderables and hence it must necessarily be to some extent a matter of conjecture or guess. Therefore, we find that the submission that the market value of the land vesting in Communidade cannot be determined on the basis of sale instance of a comparable freehold land, will have to be rejected by holding that the market value of a land vesting in Communidade can be determined on the basis of comparable sale instance of a freehold land by making appropriate deductions considering the peculiar facts of the case on account of restrictions on transferability of the acquired land vesting in Communidade.

16. Now turning to the facts of the case in F.A. No.103 of 2003, reliance was placed by the first respondent on certified copies of 10 sale deeds executed within the time span from 10th October, 1990 upto 29th August, 1994. The market value reflected from the said sale deed ranges from Rs.21.73 per square meter to 75.29 per square meter. However, the area of the lands covered by the said sale deed is in between 75 square meters to maximum 625 square meters. The said sale instances are of developed plots of lands. As against this, the area of the acquired land is huge i.e. 3,48,025 square meters. In the circumstances, the learned Trial Judge was justified in discarding the sale instance of the said sale deeds.

17. Exhibit 20 is an award made by the Land Acquisition Officer in respect of a plot of land owned by the first respondent admeasuring 4000 square meters. The land subject matter of the award was notified for acquisition by publication of notification under Section 4(1) of the said Act of 1894 on 7th May, 1992. The acquisition relates to the land bearing Survey No.391(part) of the same village. It must be noted here that another part of same survey No.391 is the subject matter of acquired land in the present case. Thus, as the subject matter of Exh.20 is a land held by the first respondent - Communidade, which was having the same negative factor of the restriction on transfer. Therefore, in the present case, no deduction is required to be made on account of restriction of transfer, while determining market value of a land of Communidade on the basis of market value of a comparable land . The land bearing Survey No.391 was the subject matter of the said award at Exh.20 . A part of the same survey number is the subject matter of acquisition in the present case. Therefore, there is no difficulty in holding that the land subject matter of award at Exh.20 is comparable to the land subject matter of the appeal. However, existence of other negative factors relating to the acquired land will have to be considered. The appellant No.3 in the cross-examination admitted that the land subject matter of award at Exh.20 was a rectangular plot, which was touching the main road, which proceeds to Tonca. As against this, the shape of the acquired land was not rectangular and it is having a slope. He admitted that a part of the acquired land was a rocky land. He admitted that there was existing kachcha road for approaching the acquired land and it was not a tar road before the acquisition. Apart from these minus factors the area of the acquired land is 80 times more than the area of the land subject matter of Exh.20. Moreover, there was no direct access to main road from the acquired land, which was available to land subject matter of Exh.20. The land subject matter of Exh.20 was having a rectangular shape, which advantage the acquired land does not have. This minus factor will have to be taken into consideration and on account of said minus factor, certain deduction will have to be made. Considering these minus factors, we are of the view that the deduction of 20 % will have to be made from the market value reflected from the award at exhibit 20 and, therefore, the market value will have to be reduced to Rs.12/- per square meter and to that extent, the F.A. No.103/2003 must succeed partly.

CONSIDERATION OF SUBMISSIONS AND CONCLUSIONS

IN F.A No.283 Of 2002

18. Now that takes us to the issue of determination of market value of the land subject matter of F.A. No.283/2002. Perusal of the application under Section 18 of the said Act of 1894 shows that in paragraph No.5 thereof, the appellants have clearly stated that in view of the provisions of the said Act of 1964, they had become deemed owners of the acquired land. In paragraph 6 of the application, they have stated that they have acquired tenancy rights in respect of the acquired land by inheritance. Admittedly, the appellant No.9 had filled in the form at Exhibit 24, which is addressed to the Deputy Collector. The appellant No.9 stated therein that he was the legal tenant of the acquired land bearing Survey No.418. It is true that neither in the examination-in-chief of the appellant No.3 nor in his cross-examination, there is any reference to the appellants becoming deemed purchasers of the acquired land. However the facts which are admitted need not be proved. Paragraph Nos.4 and 5 of the application made by the appellants under Section 18 of the said Act of 1894 read thus:

"4. The Petitioners states that the petitioners were cultivating the said paddy field as per their respective shares.

5. The Petitioners submit that in view of Agricultural Tenancy Act, all the petitioners had become deemed owners of the said acquired land."

Moreover, in the survey form at Exhibit 24, one of the appellants has clearly stated that he was the legal tenant in respect of the acquired land.

19. Section 2 of the said Act of 1991 provides that the land, which is vested in a tenant under the said Act of 1964 cannot be used or allowed to be used for any purpose other than agriculture. Therefore, under no circumstances, the appellants could have used the acquired land for any purpose other than agriculture. Both the sale instances relied upon by the appellants, which are at Exh.AW2/A and Exh.40 admittedly relate to the developed lands. The alleged potential for non-agriculture use of the acquired land cannot be considered in view of Section 2 of the said Act of 1991. Therefore, the market value of the acquired land could have been proved by comparison method by adducing evidence of market value of only a comparable agricultural land. In the circumstances, the Reference Court was justified in rejecting the evidence in the form of the said two sale instances.

20. As far as the claim of the appellants on account of loss of fruit bearing trees is concerned, we find that there are two factors which come in the way of the appellants. In Exhibit 24 one of the appellants has stated that the acquired land was being used for cultivation of paddy and groundnut. There is not even a reference to any fruit bearing tree in Exhibit 24. Moreover, even in the valuation report at Exhibit 36 relied upon by the appellants, there is no reference whatsoever to any fruit bearing trees on the acquired land. Therefore, the Reference Court was justified in rejecting the claim made on account of loss of alleged fruit bearing trees. We find that no case for interference is made out in F.A. No.283/2002.

21. Hence, we pass the following order:

(i) F.A. No.283/2002 is dismissed with no orders as to costs.

(ii) F.A. No.103/2003 is partly allowed. The market value of the acquired land is reduced to Rs.12/- per square meter. Rest of the award made by the Reference Court is confirmed. There shall be no order as to costs.

(iii) The exercise of determining the amount of compensation payable to the respondents in F.A. No.103 of 2003 shall be made by registrar of this Court. The determination shall be made after hearing both the parties. After the amount payable to the respondents is determined, the registrar will permit the respondents to withdraw the said amount with interest accrued thereon. The balance amount together with interest accrued thereon shall be paid over to the appellants.

Ordered accordingly.