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Synopsis

The Supreme Court recently emphasised that the grant of cumulative increase in the market value of the land acquired is not an absolute rule and that it is optional and may be granted in a given case only.

A bench of Justices Pankaj Mithal and R Mahadevan dismissed an appeal filed by Manik Panjabrao Kalmegh against the High Court's order of 2021, which had allowed an appeal by the respondent Executive Engineer, Bembla Project Division, Yavatmal, with regard to the determination of fair and adequate compensation for the acquired land, the fruit trees existing thereon, and the borewell.

The appellant was the owner of the lands bearing Survey No 14, admeasuring 4.32 hectares, Survey No 15, admeasuring 1.40 hectares, and Survey No 17, admeasuring 5.87 hectares, situated in village Barad, taluka Babhulgaon, District Yavatmal, Maharashtra.

The land was acquired for the benefit of Vidarbha Irrigation Development Corporation by the State of Maharashtra by issuing a notification in 2003 under Section 4 of the Land Acquisition Act, 1894.

The Land Acquisition Officer passed an award in 2005 offering compensation for the land to the appellant.

He accepted the compensation amounting to Rs 17,13,445 under protest and preferred a reference under Section 18 of the Act for the enhancement of compensation, claiming an additional amount of Rs 2,06,88,000. The Civil Judge Sr Division allowed the reference in part and granted additional compensation by judgment and order in 2015.

The appellant, still not satisfied, applied for a review of the judgment and order, alleging that in respect of land bearing Survey No 17, he had not been granted any compensation for the 1824 fruit-bearing awala trees existing thereon, as well as the borewell. The review application was allowed, and the compensation in respect of the awala trees and the borewell was also determined and awarded in 2015.

The respondents, however, preferred an appeal under Section 54 of the Act before the High Court. The appeal was admitted only on the limited aspect of whether the award of compensation for the trees and the borewell is permissible in a review. However, subsequently, the order admitting the appeal on the limited ground was modified, and the appeal was ordered to be heard on merits without any restrictions.

In the said appeal, cross objections were filed by the appellant claiming further enhancement.

The High Court, by the impugned order, dismissed the cross objections of the appellant and partly allowed the appeal, holding that the award of compensation for the awala trees and the borewell existing on land bearing Survey No 17 is per se illegal, and thus, the award was accordingly directed to be modified.

Before the apex court, the appellant placed reliance upon an exemplar sale deed of the year 1994, in awarding the compensation for the land. He said since the present acquisition was of the year 2003, a 10% rise per year was allowed in awarding the compensation, but this 10% rise per year ought to have been with cumulative effect.

He also said that on lands bearing Survey Nos 14 and 15, there existed 600 orange trees, but compensation in respect of only 500 orange trees had been granted. This apart, there existed 1824 awala trees and the borewell on land bearing Survey No 17. However, in respect thereof, compensation granted by the reference court, while considering the review application, has been set aside illegally by the High Court.

The respondents, on the opposite side, said the High Court, in passing the impugned order, was satisfied that no admissible evidence was adduced to establish the existence of the awala trees and the borewell on the land bearing Survey No 17 on or before the acquisition.

The grant of compensation for the land by allowing a 10% increase per year on the basis of the exemplar sale deed of 1994 is perfectly justified, and it is not in every case that the court is obliged to allow the said increase cumulatively, their counsel said.

In the event, the court has exercised its discretion not to grant cumulative increase in the market value, it cannot be said that the court has acted arbitrarily and has committed any error of law in determining the fair market value of the land for the purpose of awarding compensation, the counsel added.

Examining the matter, the bench noted the reference court, in the review application, granted Rs 1,000 each for 1824 awala trees and a sum of Rs 40,000 for the borewell situated on land bearing Survey No 17.

The court also said a perusal of the award of the reference court dated 2015 clearly revealed that it had rejected the claim for compensation for the awala trees as the same were newly planted and were not fruit-bearing at the relevant time. The plantation was reported to be from the year 2003-2004, which was subsequent to the proposal to acquire the land.

The court also recorded that no substantial evidence was brought on record to prove the existence of those trees or that they were fruit-bearing trees, the bench noted.

"Moreover, the review application has been allowed in a manner as if the court considering it, was sitting in appeal or was deciding the reference afresh. The manner in which it has been decided was not within the scope of the review jurisdiction and could not have been allowed, that too on the basis of inadmissible evidence. Therefore, in our opinion, the High Court very rightly set aside the grant of compensation for the alleged awala trees said to be existing on land bearing Survey No 17," the bench said.

The court also opined that since the court in review jurisdiction could not have allowed any additional compensation, as the evidence produced during review was inadmissible, the grant of compensation for the borewell was also unsustainable.

"Accordingly, no illegality has been committed by the High Court in passing the impugned order insofar as the relief granted in a review application was ordered to be set aside," the bench said.

With regard to compensation for the orange and tamarind trees, the bench said the argument, not raised and pressed before the High Court, could not be permitted to be raised for the first time in the present appeal, more particularly when there was no evidence to even substantiate it except for the second joint measurement report, which had been held to be inadmissible.

The court also noted that the reference court granted an increment of 10% per year as per the market value determined on the basis of the exemplar sale deed of the year 1994.

"The judgment and order are final and conclusive, and no evidence or material has been brought on record to establish that the same was in any manner modified so as to grant cumulative increase of 10% in the market value. Therefore, it would not be a prudent exercise to award cumulative increase as claimed by the appellant in the case at hand," the bench said.

Referring to Ramrao Shankar Tapase Vs Maharashtra Industrial Development Corporation and Others (2022), the bench said, it has been observed that a cumulative increase of 10-15% per year in the market value of the land may be accepted in the facts and circumstances of the case. A plain reading of paragraph 28 of the decision itself would make it clear that the grant of cumulative increase in the market value of the land is not an absolute rule and that it is optional and may be granted in a given case only, it highlighted.

"In the instant case, it has rightly not been granted for the simple reason that the Exh 68, which is a relied-upon judgment pertaining to the same acquisition, did not permit such cumulative increase. The said exhibit has to be accepted wholly and not in part. Thus, there is no arbitrary exercise of power in simply permitting 10% increase in the market value as determined on the basis of the exemplar sale deed of the year 1994, as relied upon in the judgment, i.e., Exh 68," the bench said.

The court thus dismissed the appeal, finding no merit in the matter.

Case Title: Manik Panjabroa Kalmegh Vs Executive Engineer Bembla Project Division Yavatmal & Ors