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TMI Blog2013 (7) TMI 1137X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 12104 of 2012), Civil Appeal No. 4998 of 2013 (Arising out of SLP (C) No. 32826 of 2011), Civil Appeal No. 4999 of 2013 (Arising out of SLP (C) No. 32827 of 2011), Civil Appeal No. 5000 of 2013 (Arising out of SLP (C) No. 33587 of 2011), Civil Appeal No. 5001 of 2013 (Arising out of SLP (C) No. 33589 of 2011), Civil Appeal No. 5002 of 2013 (Arising out of SLP (C) No. 33591 of 2011), Civil Appeal No. 5003 of 2013 (Arising out of SLP (C) No. 33592 of 2011), Civil Appeal No. 5004 of 2013 (Arising out of SLP (C) No. 33593 of 2011), Civil Appeal No. 5005 of 2013 (Arising out of SLP (C) No. 33594 of 2011), Civil Appeal No. 5006 of 2013 (Arising out of SLP (C) No. 33600 of 2011), Civil Appeal Nos. 5007-17 of 2013 (Arising out of SLP (C) Nos. 4149-4159 of 2012), Civil Appeal No. 5018 of 2013 (Arising out of SLP (C) No. 4325 of 2012), Civil Appeal Nos. 5019-30 of 2013 (Arising out of SLP (C) Nos. 17422-17433 of 2012), Civil Appeal No. 5031 of 2013 (Arising out of SLP (C) No. 15794 of 2012), Civil Appeal Nos. 5032-33 of 2013 (Arising out of SLP (C) No. 24678-24679 of 2012), Civil Appeal Nos. 5034-39 of 2013 (Arising out of SLP (C) No. 29009-29014 of 2012), Civil Appeal No. 5040 of 2013 (A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17.9.2004 issued under Section 4 of the Act. 6. Since the issue arising in these appeals relates to the quantum of compensation payable in lieu of the acquisitions made for Phases-II and III of IMT, Manesar, we do not consider it necessary to take cognizance of the facts relating to other acquisitions but would make a reference to the events leading to the judgment of this Court in Haryana State Industrial Development Corporation v. Pran Sukh and Ors. (2010) 11 SCC 175, and the orders passed in the review applications filed by HSIIDC. 7. For the acquisition made vide notification dated 30.4.1994, the Land Acquisition Collector passed award dated 28.3.1997 whereby he fixed market value of the acquired land at the rate of ₹ 3,67,400 per acre. On a reference made at the instance of the landowners, the Reference Court divided the acquired land into two blocks, i.e., A and B. For the land falling in Block A, i.e., land situated 500 yards from National Highway 8, the Reference Court determined the compensation at the rate of ₹ 6,51,994.13 per acre. For the remaining land categorized as Block B, market value was fixed at the rate of ₹ 3,91,196.97 per acre. 8. For the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dge to rely upon other sale transactions in which sale price of the land was shown as ₹ 7 lakhs per acre also does not suffer from any legal infirmity because it is well known that transactions involving transfer of properties are usually undervalued with a view to avoid payment of the requisite stamp duty and registration charges. 23. However, we agree with the learned Counsel for the landowners that the High Court should not have imposed cut of 1/4th in one batch of appeals and 20% cut in the other batch of appeals qua the average sale price reflected by Ext. P-1 only on the ground that the area of the land acquired by the State Government was too large as compared to 12 acres of land for which sale deed, Ext. P-1 was executed. 24. In a matter like the present one, it cannot be ignored that the land was acquired for setting up an industrial model township at Manesar and after developing the land, the Corporation was bound to sell the plots at a much higher price to the existing or prospective industrial entrepreneurs. In this scenario, the learned Single Judges committed an error by applying 1/4th or 20% cut on market value determined for the purpose of payment of compe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e second batch of the review petitions was dismissed vide order dated 13.1.2011 titled Haryana State Industrial Development Corporation Limited v. Pran Sukh and Ors. (2012) 7 SCC 721. While dismissing the first batch of review petitions, the Court took cognizance of the following averments contained in the reply affidavits filed on behalf of the landowners: Paras 4 to 9 of the reply affidavit filed in Review Petition No. 239 of 2011. 4. I state that vide five sale deeds all dated 6-7-1992 land measuring 49 kanals 2 marlas situated in Village Kherki Daula, District Gurgaon was sold by some of the co-owners to one Shri D.C. Rastogi, s/o Shri L.P. Rastogi at the sale price of ₹ 1,35,000 per acre. The said village is at a distance of about 2 km from the land in question. Copies of five sale deeds all dated 6-7-1992 are collectively Annexure R-1 hereto. Thereafter the vendee Shri D.C. Rastogi sold the said land in terms of agreement to sell dated 6-12-1993 vide sale deed dated 16-3-1994 at the rate of about ₹ 15,73,289 per acre. This shows that there was a jump in the price of the land in that area equal to almost 11 times of the original price. It is also common knowledg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hri Saroj Kumar Poddar and Ms. Jyotsana Poddar were appointed as Directors of this company on 9-6-1994 whereas Shri Gurbunder Singh Gill was appointed as its Director on 9-2-1997. Thus all the three alleged common Directors of the vendor and vendee companies were not on the Board of Directors of M/s. Duracell (India) (P) Ltd. On or before 31-5-1994 on which date the agreement to sell the land in question was executed and the sale price was fixed. The said three Directors had no interest in M/s. Duracell (India) (P) Ltd. (vendee) as on 31-5-1994 when the sale price of the land was fixed. 8. I further state that except for making a bald allegation that the sale price of the said land was inflated intentionally so that the vendee company would increase its share holding in a joint venture it was going to enter into with one Duracell Inc. USA, this assertion has not been substantiated by placing any cogent evidence on record. So much so that even it has not been pleaded in the review petition as to whether joint venture between M/s. Duracell (India) (P) Ltd. And M/s. Duracell Inc. USA did take place or not. To the knowledge of the deponent there was no joint venture between M/s. Dura ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... behalf of the landowners who were Respondents in Civil Appeal No. 6561 of 2009 5. That the present review petition is being filed only on the ground that Ext. P-1, which has been relied upon by the Hon'ble High Court as well as upheld by this Hon'ble Court was entered into by the corporates which were under the control and management of common Board of Directors and hence it is not the correct market value. In reply thereto the Respondents humbly submits that: (a) This fact for the first time is brought into notice at the level of this Hon'ble Court, therefore, the review Petitioner's are estopped by their own conduct. (b) That merely both the corporates have a common Board of Directors does not prove that the sale in between the corporates was at escalated rates, rather it should be on other side i.e. A common Board would have tried to get the sale as possible as on lower rate. Therefore the ground for review is not legally justifiable. (c) It is submitted that later on corporate Gillette India Ltd. Made a sale deed (land in issue of Ext. P-1) dated 28-4-2004 to another corporate, namely, Lattu Finance & Investments Ltd. For a sum of ₹ 13,62,00,000 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s case whereby market value was assessed as ₹ 15,00,000 per acre, applied an increase of 12% for the time gap of 7 years 3 months and 21 days and held that the landowners are entitled to compensation at the rate of ₹ 28,15,356 per acre with all statutory benefits. The Reference Court also held that its judgment would be subject to the outcome of the cases pending before this Court. 14. For the land acquired for Phase-III of IMT, Manesar, the Land Acquisition Collector passed award dated 24.12.2003 and assessed the market value of the acquired land as under: 15. The Reference Court relied upon the judgment rendered in relation to the acquisition made vide notification dated 6.3.2002 and held that the landowners are entitled to compensation at the rate of ₹ 28,15,849 per acre with all statutory benefits. 16. In the appeals filed by them under Section 54 of the Act, the landowners prayed for further enhancement in the amount of compensation. HSIIDC also challenged the judgments of the Reference Court and prayed that the amount of compensation awarded to the landowners be reduced. In some of the matters cross objections were also filed by the parties. 17. When the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich had already been acquired in the year 1994 and located quite close to National Highway No. 8. Reference had also been made to allotment letter dated 2.2.2000 (Ex.P38) pertaining to plots No. 13, 14 and 15, Sector 5, IMT, Manesar, whereby 30,000 square meters of land was allotted for ₹ 4,50,00,000/- at an average price of ₹ 1,254.72 per square yard. The aforesaid allotment was two years prior to the acquisition in question. However, the fact remains that even the aforesaid plots were also carved out of the land acquired in the year 1994. 20. The learned Single Judge then noted that the State and HSIIDC did not adduce any documentary evidence to support the award made by the Collector and observed: 28. As against the evidence led by the landowners, the State or even HSIIDC did not lead any documentary evidence to justify the award of the Collector by showing any sale transaction pertaining to agricultural land in the area. This is not a case in isolation of the type. A lot of hue and cry is raised by the agencies of the State for whose benefit the land is acquired that they should be heard before assessment of compensation at every stage, but the experience is th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Limited on National Highway 8 with frontage of two acres and the existence of a five star hotel and a resort on the adjoining land. The learned Single Judge relied upon allotment of 30,000 square meters land made by HSIIDC vide Exhibit P38 to M/s. Orient Craft Limited (sister concern of M/s. Kohli Holdings Private Limited) at the rate of ₹ 1,254 per square yard, granted an annual increase of 15% on that price and awarded compensation at the rate of ₹ 2119 per square yard (₹ 1,02,55,960 per acre). Paragraphs 31, 33 and 34 of the impugned judgment which exclusively deal with the case of M/s. Kohli Holdings Private Limited are as under: 31. As far as value of the land owned by M/s. Kohli Holdings Private Limited (R.F.A. No. 4646 of 2010) is concerned, the same has to be determined separately. This fact was not even disputed by learned Counsel for HSIIDC and rightly so for the reason that the aforesaid portion of 69 kanals and 15 marlas is located on National Highway No. 8 with frontage of two acres. Even from the back side also, it has connection from a link road. It was also not disputed that adjoining thereto is a five star hotel and a resort. The other area adj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsonance with the law laid down by this Court. He relied upon the judgment of this Court in Oil and Natural Gas Corporation Limited v. Rameshbhai Jivanbhai Patel and Anr. (2008) 14 SCC 745 and argued that while assessing market value of a large chunk of land, the Court cannot award more than 7.5% escalation in the market value determined in respect of similar parcels of land. Learned senior counsel emphasized that HSIIDC had to spend a substantial amount on carrying out development and argued that this factor should have been taken into consideration by the learned Single Judge while fixing market value of the acquired land. Shri Tripathi also criticized the impugned judgment insofar as it relates to the award of compensation at the rate of ₹ 1,02,55,960 per acre in the case of M/s. Kohli Holdings Private Limited by arguing that in view of several statutory restrictions on the development of land along National Highway 8, the landowners could not have been awarded higher compensation. 24. Shri V.K. Bali, learned senior counsel, and other learned Counsel appearing for the landowners, who are the Appellants in various appeals except the appeals arising out of SLP(C) No. 18044 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs, the rate at which the land was sold should be taken into consideration for the purpose of fixation of market value because no other tangible evidence was available for that purpose. He relied upon the judgment in Executive Engineer, Karnataka Housing Board v. Land Acquisition Officer, Gadag and Ors. (2011) 2 SCC 246 and submitted that in the absence of private sale transactions, auction sale conducted by the beneficiary of acquisition can be relied upon for the purpose of fixing market value. 26. Shri P.S. Patwalia and Dr. Abhishek Manu Singhvi, learned senior counsel appearing for Maruti Suzuki India Limited (for short, 'Maruti Udyog Limited') opposed the landowners' claim for further enhancement in the amount of compensation by arguing that this would place unbearable burden on the company. They pointed out that out of 771 acres land acquired for Phases-II and III of IMT, Manesar, 600 acres land was allotted to Maruti Udyog Limited at the rate of ₹ 19,00,000 per acre in 2008 and if further enhancement is granted, the financial health of the company will be seriously impaired. Learned senior counsel pointed out that vide letter dated 1.10.2012 HSIIDC has al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... warding higher compensation to the landowners. 28. We have considered the respective submissions and carefully scrutinized the records including the additional affidavits filed on behalf of the parties and their written arguments. 29. A careful scrutiny of the impugned judgment shows that while determining the amount of compensation payable to the landowners other than M/s. Kohli Holdings Private Limited, the learned Single Judge did make a reference to Exhibit P38 (paragraph 30) but did not rely upon the same for the purpose of determination of the amount of compensation. Instead of adopting a holistic approach and examining the documents produced before the Reference Court, the learned Single Judge simply referred to the judgment of this Court in Pran Sukh's case, granted a flat increase of 12% for the time gap of about 7 years and 3 months between the two acquisitions, i.e., 1994 and 2002 and determined market value at the rate of ₹ 37,40,000 per acre. In the case of M/s. Kohli Holdings Private Limited, the learned Single Judge squarely relied upon Exhibit P38 for the purpose of fixing market value of the acquired land, granted an increase at a flat rate of 15% per a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e pockets in big cities, due to rapid development and high demand for land, the escalations in prices have touched even 30% to 50% or more per year, during the nineties. 14. On the other extreme, in remote rural areas where there was no chance of any development and hardly any buyers, the prices stagnated for years or rose marginally at a nominal rate of 1% or 2% per annum. There is thus a significant difference in increases in market value of lands in urban/semi-urban areas and increases in market value of lands in the rural areas. Therefore, if the increase in market value in urban/semi-urban areas is about 10% to 15% per annum, the corresponding increases in rural areas would at best be only around half of it, that is, about 5% to 7.5% per annum. This rule of thumb refers to the general trend in the nineties, to be adopted in the absence of clear and specific evidence relating to increase in prices. Where there are special reasons for applying a higher rate of increase, or any specific evidence relating to the actual increase in prices, then the increase to be applied would depend upon the same. 15. Normally, recourse is taken to the mode of determining the market value by p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the years 1990, 1991 and 1992. If the price increase is determined with reference to a sale transaction of the year 1990 when the price was ₹ 13 per square metre, then the flat rate increase will be ₹ 1.30 per annum for the years 1991 and 1992. It will thus be seen that even if the percentage of increase is constant, the application of a flat rate leads to different amounts being added depending upon the market value in the base year. On the other hand, the cumulative rate method will lead to consistency and more realistic results. Whether the base price is ₹ 10 or ₹ 12.10 or ₹ 13.31, the increase will lead to the same result. The logical, practical and appropriate method is therefore to apply the increase cumulatively and not at a flat rate. 32. The same view was reiterated in Valliyammal v. Special Tahsildar (Land Acquisition) (2011) 8 SCC 91. Of course, in that case annual increase of 10% was allowed to the landowners. 33. We also find merit in the argument of the learned Counsel for the landowners that while fixing market value of the acquired land the learned Single Judge committed serious error by not considering an important piece of evid ..... X X X X Extracts X X X X X X X X Extracts X X X X
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