Delve into the critical legal analysis of a recent case where the court reexamined land compensation. The court’s thorough evaluation of suitable development charges, sale instances, and deductions sheds light on the complexities of determining fair compensation rates in land acquisition cases.
Facts
- The High Court redetermined the compensation for the large area of 9000 square meters by deducting suitable development charges as sale instances pertained to a smaller area.
- The High Court dismissed the appeal of the landowners for enhancement but reduced the compensation to Rs.317/- per square meter (29 per square feet) in further appeals filed by the State and the landowners.
- The present appeals are against the order dated 22.03.2016 by the High Court in Aurangabad in the First Appeals filed by the landowners and the State, determining compensation at Rs.317/- per square meter (29 per square feet), thus reducing the compensation awarded by the Reference Court on 13.08.2003 at the rate of Rs. 70 per square feet.
- The land of the appellants measuring 40R was taken into possession by the State through private negotiations on 14.09.1984.
- The High Court noted that the sale instances related to land with houses constructed on it, therefore the cost of construction included in the sale deed needed to be reduced.
- Land in question is rocky and moorum soil
- Two separate awards announced for the land
- Market value determined based on two sale instances
- Dissatisfaction with compensation amount led to reference under Section 18 of the Act
- The land is situated in Bhoom Municipal Council
- Compensation rates awarded by the Special Land Acquisition Collector
- Population of Bhoom Municipal Council and description of land in revenue record
- Compensation amounts awarded for different portions of land based on the awards
- Sale deeds relied upon by the land owners for determining compensation
- Deduction of development charges from compensation amount
- Details of possession and dates of sale deeds provided by the land owners
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Arguments
- Land owners argue that as per Exhibit 30, a plot was sold at Rs.137.76 per square feet, and Exhibit 31 should be used as the basis for compensation.
- Counsel relies on a judgment for a 33% deduction on large lands when the exemplar is for a smaller area.
- Using Exhibit 31 at Rs.232 per square feet with a 33% deduction, the rate comes to Rs.160 per square feet, supporting the land owners’ claim of Rs.150 per square feet.
- Interest on compensation from the date of possession is requested citing relevant court judgments.
- Sale instances provided are of open land, not houses, and the proximity of these instances to the acquired land is highlighted.
- Mr. Sachin Patil, representing the State, argues that houses were built on the land in question as per the Tax Assessment Register from 1983-84 until 1.1.97.
- Evidence provided shows that the land was assigned a House Property number and sale deed refers to Municipal Council Property No. 1186/1 (New No. 1481/1).
- Permission to construct was granted on 28.1.1997 to the vendor, even though the land was sold to the appellant on 4.9.1996.
- The sale exemplars Exhibit 30 and 31 provided are deemed irrelevant as they are not part of the land being acquired.
- Arguments state that the land subject to sale exemplars is significantly smaller compared to the 2-acre acquired land.
- The sale exemplars presented by appellants are for smaller areas than the land acquired, suggesting a need for a 50% deduction for development works and for the value of the houses constructed.
- The sale exemplars considered by the Reference Court are specifically for the acquired land.
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Analysis
- Possession of the land acquired was taken in the years 1984 and 1992 by the State.
- The land in question was rocky with moorum soil and had already been sold in 1996.
- Exhibit 30, an isolated sale instance, showed land sold at Rs.137.76 per square feet, not part of a developed layout.
- Exhibit 31 excluded from consideration, deemed non-bonafide and based on false representation.
- Appellant entitled to compensation at Rs.70 per square feet from the date of award by Land Acquisition Collector.
- Deduction of 50% towards development cost warranted, as per the facts of the case.
- Compensation based on the market value assessed by Reference Court at Rs.70 per square feet.
- Possession of land taken for government quarters and road construction purposes.
- Reduction of compensation without reasonable basis by High Court, justified in the Reference Court’s order.
- Compensation determined in consideration of development activity post-possession by the State.
- Permission granted in 1997 for construction on Plot No. 1480/1 to Govind Rajaram Bhagwat.
- Land owners claimed interest from 1984/1992 when possession was taken, although acquisition occurred in 1999.
- Deduction for development cost is necessary to determine the market value of large tracts of undeveloped agricultural land with development potential.
- The deduction typically ranges from 20% to 75% of the price of developed plots.
- Various factual factors must be considered when applying deductions for development charges, potentially exceeding or falling below 1/3rd of the price in different cases.
- The precedent set in the case of Lal Chand v. Union of India and Anr. established the importance of making deductions for development costs.
- The case of Chimanlal Hargovinddas v. Special Land Acquisition Officer, Poona and Anr. dealt with deductions concerning a smaller plot compared to a larger area under acquisition.
- Possession of land has been taken without payment of compensation, depriving landowners of the right to use the land.
- Instead of remitting the matter to the Land Acquisition Collector, the issue of compensation for use and occupation by the State will be decided in the present appeal.
- There is no evidence that the land was being used by the landowners prior to the State taking possession.
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Decision
- Land owners entitled to interest at the rate of 9% per annum from date of possession to date of notification under Section 4 of the Act
- Interest to be calculated on the compensation amount of Rs.70/- per square feet
- Appellant entitled to other statutory benefits on the compensation amount of Rs.70/- per square feet from date of award till realization
Case Title: SHANKARRAO BHAGWANTRAO PATIL Vs. THE STATE OF MAHARASHTRA (2021 INSC 501)
Case Number: C.A. No.-005712-005713 / 2021
