(Surya Kant and J.B. Pardiwala, JJ.)
Bharat Petroleum Corpn. Ltd. _________________________ Appellant;
v.
Phoolvati Dharambir Agarwal (D) Thr. Lrs. __________ Respondent(s).
Civil Appeal Nos. 9369-9372/2013, decided on May 10, 2023
The Order of the court was delivered by
Order
1. Bharat Petroleum Corporation Limited (in short, ‘BPCL’) – the beneficiary of the acquisition is in appeal before us against the Judgment dated 22-12-2009 passed by a Division Bench of the High Court of Judicature at Madras as well as the order dated 27-06-2011 whereby the appellant’s review petition against the above-stated Judgment came to be dismissed. Vide the impugned Judgment, the High Court has enhanced the compensation for the acquired land from Rs. 2,25,000/- per ground to Rs. 4,00,000/- per ground and, after imposing certain deductions, eventually awarded the compensation @ Rs. 3,00,000/- per ground along with other statutory benefits.
2. The subject – land measuring 221.15 grounds, equivalent to 12.184 acres, was bought by the respondents on 15-03-1973 from Burmah Shell Oil Storage and Distributing Company of India Limited. The land falls within the village of Fort – Tondiarpet Taluk, Chennai City.
3. The appellant – B.P.C.L. already had its installation on the north of the subject – land. The appellant, therefore, sent a proposal to the Government of Tamil Nadu for acquisition of the land in question for extension of its existing installations. The Industries Department, Government of Tamil Nadu approved the acquisition proposal and pursuant thereto, a Notification under Section 4 of the Land Acquisition Act, 1894 (“the Act”) was published on 27-05-1987. It was followed by a declaration under Section 6 of the Act on 24-11-1988.
4. The Land Acquisition Officer passed an Award on 23-11-1990 for a consolidated amount of Rs. 3,62,01,455/-. The respondent – land owners then moved a Reference under Section 18 of the Act seeking compensation @ Rs. 4,00,000/- per ground.
5. The Reference Court vide Award dated 29-04-1994 granted compensation @ Rs. 2,25,000/- per ground multiplied by 221.15 grounds i.e. equivalent to Rs. 5,11,08,750/- along with other statutory benefits. The Reference Court did not award any additional compensation towards the construction and the electrical fixtures though it held the respondents entitled to solatium @ 30% of the total compensation, besides 12% compensation towards additional market value. There were some other minor claims of the land-owners which were also accepted by the Reference Court, in addition to the statutory interest as per Section 34 of the Act.
6. The claimants, the State of Tamil Nadu as well as the beneficiary, went in appeals before the High Court. All the three appeals were decided by the High Court vide common impugned Judgment dated 22-12-2009, whereby the appeals by the State and the appellant were dismissed, whereas that of the respondent – claimants’ was allowed in part, holding that the market value of the acquired land was Rs. 4,00,000/- per ground. However, after deducting 15% towards largeness of the area and 10% towards development charges, the respondent – claimants were granted net compensation @ Rs. 3,00,000/- per ground.
7. The High Court has opined that while fixing the market price of the acquired land, the following factors are to be kept in mind:—
a) Location and situation of the property;
b) Facilities of two important roads;
c) Railway sidings;
d) 700 feet frontage;
e) availability of civic facilities like Electricity, Water, Drainage etc.,
f) close accessibility to Madras harbour and Madras Refinery etc., and
(g) specially laid roads to take heavy loads, culverts, bridges, joint electrical lights to facilitate the movements of vehicles in both day and night, pipe lines to connect harbour oil refinery and all such developments made at huge cost in addition to necessary infrastructural facilities for any oil company xx xx xx xx.
8. As regard to the exemplars considered by the High Court for determining the fair and just market value of the land, there is no quarrel between the parties that as many as 10 sale instances were relied upon by the respondent-claimants before the Reference Court. The appellant – BPCL also produced two sale deeds, out of which Exhibit ‘R2’ had been produced by the claimants also as Exhibit ‘C10’. It will be beneficial to give the brief description of the sale instances relied upon by both the parties in the following tabulated form:—
| Sl. No. | Exhibit No. | Date of Sale Deed | Area of land sold | Location of the land | Sale considerati on per ground |
| 1. | Ex.C10 (Ex.R2 same document) | -/08/1986 | 3 grounds and 1870 square feet (9071 square feet) with a right of way along the 31 feet road and 20 feet road. | RS No. 3696/1 part of Tondiarpet Division, Block No. 71, Ellaya Mudali Street, Tondiar pet. | Rs. 37,500/3.77 = Rs. 9946.9 |
| 2. | Ex.C11 | 07/09/1988 | 210.8 square mtr of land (2266 sq ft) along with super structure available on the site | Plot No. B measuring in extent of 210.00 sq mtr (2266 square feet) in part of RS No. 3849 opposite to BPCL installatio n abutting vaithianath Mudali street, Tondiar pet. | 102000/0.94= Rs. 108510 |
| 3. | Ex. C28 | 13/04/1987 | 1872 sqare feet of land (wrongly mentioned as 3744 in Jt of HC in Para 18) | New Door No. 109 (Old Door No. 15A) Mannar Swamy Koil Street, Royapuram, Madras 13. | 375000/0.77 = Rs. 4,87,012 |
| 4. | Ex.C.29 | __/04/1987 | 1771 square feet of land | New Door No. 108 (Old Door No. 15) Mannar Swamy Koil Street, Royapuram, Madras 13. | Rs. 375000/0.77 = Rs. 513698 |
| 5. | Ex C.30 | 22.12.1986 | 704 square feet (as per revenue Doc 715 square feet) | RS No. 3632, New No. 10 (old No. 27) New street Tandavaray Gramani Street, Tondiarpet, Madras 81 | Rs. 65000/0.29 = Rs. 2,24,137 |
| 6. | Ex.C.31 | 12.11.1986 | 1295 Square feet of land along with the building thereon. | House ground and premises bearing Old No. 15 New No. 27, Thandavaray Gramani street, tondiarpet, Madras 81. | 117000/0.53 = Rs. 2,20,754 |
| 7. | Ex. C. 32 | 30.04.1986 | 1802 square feet of land along with superstructure | Land and superstruct ures bearing door No. 39/2 old RS No. 3672, 3673, 3677 and 3668 New RS No. 3667/3 CC No. 1520 Thandavaray a Garamani Street, Washerman pet Madras 21. | 195000/0.75 = Rs. 2,60,000 |
| 8. | Ex. C. 33 | 18.06.1986 | 720 square feet of land | Front portion of the house ground and premises bearing old door No. 17, new Door No. 55, Thandavaray a Mudali Street, Old Washerman pet, Madras 21 | 75000/0.3 = Rs. 2,50,000 |
| 9. | Ex. C. 34 | 23.06.1986 | About 720 square feet of land | Part house ground and premises bearing door No. 17, new no 35, Thandavaray a Mudali Street, Madras 21. | 80000/0.3 = Rs. 2,66,666 |
| 10. | Ex. C 37 | 11.02.1987 | 6000 square feet of land | Part of Old RS No. 3934/5 and present RS No 3934/8, Senniamman Koil Street, Tondiarpet, Madras 81. | 300000/2.5 = 120000 |
| 11. | Ex. R. 1 | 29.08.1986 | 3 grounds and 24 square feet (7225 square feet) | Land in Door No 16, Ellaya Mudali Street, in RS No 3896/B old RS No 3896/1 in Block 71, Tondiarpet | 163000/3.009 = 54170 |
| 12. | Ex. R 2 | __.08.1986 | 3 grounds and 1870 square feet (9071 square feet) with a right of way along the 31 feet road and 20 feet road | RS No. 3696/1 part of Tonidarpet Division, Block No 71, Ellaya Mudali Street, Tondiarpet | 37,500/3.77 = Rs. 9946.9 |
9. In addition to these sale deeds, the respondent – claimants also produced a Valuation Report (Exhibit ‘C35’). The High Court apparently did not rely upon the said report for determining the market value of the acquired land, though it has been briefly referred to and discussed in Para 19 of the impugned Judgment which reads as follows:—
“19. Since, the learned counsel appearing for the BPCL had objected not to take up the document on the ground that there was no such schedule given in the sale deed the same could not be properly relied upon. When a valuation report Ex.C.35 had been marked by the land owners, the learned counsel appearing for the BPCL objected not to rely upon the same as there was no schedule of the property given therein. Therefore, the same was also not relied upon.”
10. The High Court finally shortlisted the sale deeds (Exhibits ‘C28’ and ‘C29’) these being the most relevant for the purpose of evaluating the market value, besides the lease money said to have been paid to the appellant – BPCL by Oil and Natural Gas Corporation for a part of the acquired land measuring 2,70,610 square feet. The High Court has, thus, concluded:
“21. As rightly submitted by the learned counsel for appellant the property acquired by the respondents are situated in the heart of the city. Further, as on date of section 4(1) notification there was no piece of land available either for the Madras Port Trust or Oil Refinery for their expansion. The lands acquired by the respondents are no doubt prime land. During the relevant period of time, the lands adjacent to the lands under acquisition was sold for nearly Rs. 4,00,000/- is evident from the documents filed by the claimants. Therefore, the market value fixed by the reference court at the rate of Rs. 2,25,000/- per ground may not be a correct fixation of the market value of the property.”
11. Thereafter, the High Court in the penultimate paragraph has viewed that the compensation as claimed by the land owners @ Rs. 4,00,000/- per ground appears to be reasonably acceptable. Nonetheless, they were held entitled to Rs. 3,00,000/- per ground after deducting 15% towards largeness of the area and 10% towards development charges. The appellant thereafter, filed a review petition before the High Court which was dismissed by the High Court vide order dated 27-06-2011.
12. Being aggrieved, the appellant – BPCL is before this Court.
13. We have heard learned Senior Counsel for the parties at a considerable length and have gone through the material placed on record.
14. The short question that falls for consideration is whether the High Court was justified in determining the market value of the acquired land @ Rs. 4,00,000/- per ground?
15. It is hardly in dispute that the acquired property is situated at a prime location in the heart of the city. It is a fully developed area surrounded by major roads, railway sidings and has 700 feet frontage, equipped with all modern amenities and is in close proximity of Madras Harbour, Madras Refinery and other significant locations. In order to substantiate their claim of Rs. 4,00,000/- per ground, the respondent – claimants produced ten sale deeds executed before and after the subject acquisition, the brief description of which are given in para 8 of this Order. All the examplars are within the radius of 3 Kms. or so from the acquired land. These sale instances of course pertain to small pieces of land and are stated to be located in fully developed areas. Since these sale instances were executed in the close proximity of time vis-a-vis the acquisition under consideration, all of them appear to be relevant.
16. It may be seen that out of these sale deeds, Exhibit ‘C29’ depicts the highest sale consideration @ Rs. 5,13,698/- per ground. Although the subject land and Exhibit ‘C29’ are similar in terms of proximity, there’s a major difference in the area of the lands. While the subject land is equivalent to 12.184 acres, Exhibit ‘C29’ pertains to a small piece measuring 0.4 acre only. This Court in Bhagwathula Samanna v. Tahsildar & Land Acquisition Officer [(1991) 4 SCC 506], has held it permissible to take into account exemplars of even small developed plots for determining the value of a large tract of land acquired, if the latter is also fully developed with all the facilities requiring little or no further development. It has also been ruled that while determining the market value of a large chunk of land, the value of smaller piece of land can be taken into consideration after making proper deduction in the value of such instances more so when sale deeds of larger parcel of land are not available. In light of these principles, we deem it appropriate to deduct 50% of the market value of Exhibit ‘C29’ on account of the fact that it is a small commercial/residential site and the acquired land cannot be put to such a use unless multiple plots are carved out by utilizing a substantial part of it for development of internal roads, parks, sewage links and other public amenities etc.
17. We may also hasten to add that though the general practice is of considering the highest sale Exemplar, but, many a time, Courts take an average of relevant sale instances to arrive at the nearest possible market value of the acquired land. Averaging of sale instances, as per judicial precedents, is not wholly impermissible. Applying that criteria in the case in hand, the estimated market value would be slightly more than half of the sale consideration reflected in the Exhibit ‘C29’.
18. At this stage, we may also consider the Valuation Report (Exhibit ‘C35’) produced by the respondent – claimants. The said Valuation Report dated 23-11-1991 was submitted by a private valuer, a photostat copy of which has been produced before us during the course of hearing. The registered Valuer has opined that about 221.15 grounds of the respondent-claimants’ land at Ellaya Mudali Street, Tondiarpet could be valued at a minimum rate of Rs. 2,50,000/- per ground in the year 1987 (date of take over by Government) as per the details illustrated in the body of the Report. It may thus be seen that the market value of the acquired land even as per the opinion of the expert valuer, was also about Rs. 2,50,000/- per ground.
19. A different route for assessing the price of subject land can thus be on the basis of valuation report as well. A three Judge Bench of this Court in SLAO v. Sidappa Omanna Tumari, 1995 Supp. (2) SCC 168 first observed that “when the valuation report of an acquired land is made by an expert on the basis of prices fetched or to be fetched by sale deeds or agreements to sell relating to the very acquired lands or the lands in the vicinity, need arises for the court to examine and be satisfied about the authenticity of such documents and the truth of their contents and the normal circumstances in which they had come into existences and further the correct method adopted in preparation of that report, before acting on such report for determining the market value of the acquired land.” It then went on to hold that “when a report of an expert is got produced by a claimant before the court giving market value of the acquired lands, the court may Choose to act upon such report for determination of the amount of compensation payable for the acquired lands, if the data or the material on the basis of which such report is based is produced before the Court and the authenticity of the same is made good and the method of valuation adopted therein is correct.”
20. Adverting to the observations made by the High Court in Para 21 of the impugned Judgment or the conclusion drawn in Para 23 thereof regarding the market value of Rs. 4,00,000/- per ground, it appears to us that there is no credible evidence led by the respondent – claimants to establish the said market value of the appropriated land. True it is that where multiple exemplars are relied upon, and such exemplars relate to adjoining or nearby areas having similar potentiality, the highest bona fide exemplar ought to be the benchmark for estimation of the fair and just value. It is equally true that the Courts do not possess a magic wand to determine the exact and the definitive value of the land and in the process of guess work, the Court would rely upon every possible material brought on record by the parties. Applying the principle of guesstimate for fixation of fair and just market value of the acquired land, we thus deem it appropriate to rely upon (i) the sale instance(s) of highest consideration with appropriate deduction; (ii) the valuation report (Exhibit “C35”) which stipulates the fair market value of the land @ Rs. 2,50,000/- per ground; and (iii) the average of all the examplars relied upon by the respondent-claimants. Hence, we are of the firm opinion that the fair and just market value of the acquired land at the relevant time was about Rs. 2,50,000/- per ground. Having held so, we set aside the deductions of 15% towards largeness of the area or 10% as development charges as made by the High Court. Once it has been found as a matter of fact that the entire piece of land is developed and is being already used for industrial or commercial purposes, it is illogical to impose any further cut towards development charges. Suffice to say that, it is not the case of the appellant-BPCL that any part of the land has gone into waste or is not capable to utilization. Rather, the location of the land clearly establishes its potentiality to be utilized for the purpose for which it has been acquired.
21. Thus, the respondent – claimants are found entitled to compensation @ Rs. 2,50,000/- per ground along with all statutory benefits under the 1894 Act. The conclusion drawn by the High Court that the market value of the subject land was Rs. 4,00,000/- per ground or that the respondent-claimants are entitled to compensation @ Rs. 3,00,000/- per ground is not supported by any cogent material on record and is accordingly set aside.
22. For the reasons afore-stated, the appeals are allowed in part; the impugned Judgment and orders dated 22-12-2009 and 27-06-2011 passed by the High Court are modified to the afore-stated extent.
23. Ordered accordingly.
24. If the requisite amount of compensation has been deposited by the appellant-BPCL before the High Court, the said amount is directed to be transferred to the Reference Court within ten weeks and the same shall be immediately disbursed to the respondent- claimants. However, if the full amount of compensation has not been deposited by the appellant – BPCL, the needful shall be done within ten weeks and it shall thereafter be disbursed to the respondent – claimants along with interest as per Section 34 of the Act within a period of eight weeks. In the event of any shortfall in compensation amount, the appellant – BPCL is directed to deposit it within eight weeks.
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