HASANALI WALIMCHAND (DEAD) BY L.RS.versusSTATE OF MAHARASHTRA

            HASANALI W ALIM CHAND (DEAD) BY L.RS.                             A
                             v.
                  STATE OF MAHARASHTRA

                            JANUARY 6, 1998

         [DR. A.S. ANAND ANDS. RAJENDRA BABU, JJ.]                            B


      Land Acquisition Act, 1894 :

      Compensation-Determination of -Land situated at a distance of one
and a half miles from city-Urban character and future potential of land to C
be taken into account-Award of reference court restored with modification
that out of the amount fued by reference court deduction @ 50 paise per
square foot would be made towards development charges.

     State of Orissa v. Brij Lal Misra & Ors., (19951 5 SCC 203 and P. Ram    D
Reddy & Ors. v. Land Acquisition Officer, Hyderabad Urban Development
Authority, Hyderabad & Ors., (19951 2 SCC 305, cited.

      CIVIL APPELLATE JURISDICTION: Civil Appeal No. 8911of1983.

      From the Judgment and Order dated 1.12.81 of the Bombay High Court       E
in First Appeal No. 19of1974.

      Krishan Mahajan, Amit Dhingra and P.H. Parekh for the Appellants.

      G.B. Sathe and D.M. Nargolkar for the Respondents.

     The following Order of the Court was delivered :                          F

       This order will dispose of both appeals as they arise out of the same
judgment and order of the High Court of Bombay, dated 26.9.1979. Land
measuring 14 acres and 9 Gunthas, which is subject matter of these appeals,
situate in village Kedgaon, Taluka Nagar, District Ahmednagar, Maharashtra
was acquired by the State. Notification under Section 4 of the Land Acquisition G
Act (hereinafter the Act) was issued on 1.3.1969. Notification under section
6 of the Act was published in the gazette on 26.6.1969. The land was acquired
for public purpose for extension of living place for the population as also for •
construction of government godowns. The Land Acquisition Collector, vide
Award dated 29.9.1970 determined the market value of the land at Rs. 3,000 H
                                      I
    2                      SUPREME COURT REPORTS                     [1998] 1 S.C.R.

A per acre and Rs. 3200 per acre. Compensation amounting to Rs. 49,301 was
  awarded. Aggrieved by the Award of the Land Acquisition Collector, the                    . ,o,.
  claimants sought a reference under Section 18 of the Act. The learned joint
  Civil judge, vide his Award dated 28th August, 1971, determined the market
  value @,Rs. 1 per square foot, inter-alia after taking into account rates fixed
  by a Cooperative Housing Society for sale of plots by it to its members and
B outsiders in the vicinity of the acquired land. The reference court awarded a
  total compensation of Rs. 6, 16, 118.60 ps. The respondent - State approached
  the High Court against the award of the reference court. On 26.9.1979, the
  High Court set aside the award of the reference court made under Section 18
  of the Act and restored that of the Land Acquisition Collector, dated 29th
C September, 1970. Hence, these appeals by special leave by the claimants.

            Mr. Krishan Mahajan, learned counsel appearing for the appellants has
    assailed the judgment and order of the High Court principally on the ground
    th.at the High Court failed to take into account future potentiality and instead
    based itself only on the realized possibility and thus committed an error.
D   Learned counsel has, in support of his contention, relied on State of Orissa
    v. Brij fol Misra & Ors., (1995] 5 SCC 203 and P. Ram Reddy & Ors. v. Land
    Acquisition Officer, Hyderabad Urban Development Authority, Hyderabad &
    Ors., [1995] 2 SCC 305. Both the judgments do support the submission of Mr.
    Mahajan.
E
          Mr. Sathe, learned counsel appearing for the State has supported the
    judgment and order of the High Court and submitted that the land was
    agricultural land, the High Court rightly took into account that fact and
    disapproved the approach of the reference court which, according to the
    learned counsel, was influenced by the rates fixed by the Ambika Cooperative
F   Housing Society which consideration \Vas not a relevant consideration since
    the land of the Ambika Cooperative Housing Society was developed land and
    had been sold in plots to its various members and outsiders.

          We have given our thoughtful consideration to the submissions made
    at the bar.
G
           The High Court has noticed .in the impugned judgment and order that
    the 'location' of the land indicates that it has building potential but fell into
    an error in ignoring that factor by observing:                                      1



H           "There is no record of any income being received by any of the land
                   HASAN ALI W ALIMCllAND v. STA TE                            3

        owners. These lands must, therefore, be valued as agricultural land         _t\
        with no potentiality whatsoever in the foreseeable future."

        We are unable to find any justification for such observation and finding.
The above finding of the High Court is contradictory to the earlier finding
based on the location of the land. It is nodoubt correct that the reference
court was influenced by sale transactions in respect of developed land and          B
it failed to make any deduction for development of land while enhancing the
compensation, but the High Court fell in error in ignoring the future potential
of the land in question and instead resting its finding as realized potential
only. The evidence 011 the record clearly establishes that the acquired land
did have future potential on account of its location. It is not denied that the     C
area around the city of Ahmednagar is fast developing and the land in
question was located only at a short distance of about one and a half miles
form Ahmednagar town. The finding recorded by the High Court to the effect
that there ,was no demand of any urban character in respect of the land in
question is belied by the evidence on record. Indeed the land unlike the
Housing Society Land was not developed and, therefore, proper course for            D
the High Court would have been that it should have taken note of development
charges and made some suitable deduction·for the same. The reference court
had made the Award based on the material on the record but had failed to
notice that the acquired land was still undeveloped. It, therefore, appears
appropriate to us to set aside the impugned judgment and order of the High          E
Court and restore the award made by the reference court with the modification
that out of the amount fixed by the reference court @ Rs. I per square foot,
deduction to the extent of 50 paisa per square foot, towards development
charges, shall be made and compensation calculated on that .basis and shall
paid to the claimants in accordance with their holdings, along with the
statutory benefits of solatium and interest.                                        F
     . The impugned judgment and order of the High Court is set aside. With
the aforesaid modification of the award of the reference court, the appeals are
disposed of. There shall, however, be no/order as to costs.

RP.                                                      Appeals disposed of.       G


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