Andhra Pradesh High Court – Amravati
The Special Deputy Collector vs M. Kambaiah on 3 January, 2025
Author: Ninala Jayasurya
Bench: Ninala Jayasurya
APHC010798272013
IN THE HIGH COURT OF ANDHRA PRADESH
AT AMARAVATI [3495]
(Special Original Jurisdiction)
FRIDAY,, THE THIRD DAY OF JANUARY
TWO THOUSAND AND TWENTY
TWENTY-FIVE
PRESENT
THE HONOURABLE SRI JUSTICE NINALA JAYASURYA
AND
THE HONOURABLE SRI JUSTICE T
T. MALLIKARJUNA RAO
LAND ACQUISITION APPEAL SUIT NOs: 226, 225 (X-Obj No.15469/2013)
15469/2013) 227
(X-Obj No.15463/2013)
No.15463/2013), 239, 240 (X-Obj No.15470/2013), 241(X (X-Obj
No.15478/2013), 242, 246, 419, 438, 439, 440 (X-Obj
Obj No.15467/2013)
No.15467/2013), 441,
442, 443(X-Obj
Obj No.15477/2013),
No.15477/2013) 444, 445 (X-Obj No.15460/2013),, 447
447(X-Obj
No.1189/2014),, 448, 449(X-Obj No.15466/2013), 450, 451(X--Obj
No.15459/2013), 452 (X-Obj
Obj No.15458/2013)
No.15458/2013), 453, 454 (X-Obj
Obj No.15457/2013)
No.15457/2013),
456(X-Obj No.15461/2013)
15461/2013), 457(X-Obj No.15473/2013), 458(X(X-Obj
No.15456/2013), 459, 460 (X
(X-Obj No.15462/2013), 461, 462, 463, 464 (X-Obj
No.15464/2013), 465, 467 (X-Obj
(X No.15471/2013), 539 (X-Obj
Obj No.10730/2015)
No.10730/2015),
555(X-Obj No.1190/2014),, 556 (X-Obj No.15468/2013), 559, 566, 584, 586 (X-
Obj No.15455/2013), 587, 594 OF 2013 AND L.A.A.S.Nos.43(X (X-Obj
No.2556/2014), 45(X-Obj
Obj No.2557/2014),
No.2557/2014) 48(X-Obj
Obj No.2558/2014)
No.2558/2014), 77, 225,
226, 227, 228, 232 OF 2014 (X-Obj No.10745/2014) AND L.A.A.S.No.
L.A.A.S.No.305 OF
2015 (X-Obj No.9002/2016)
Between:
The Special Deputy Collector ...APPELLANT
AND
S Chandrasekhar Reddy ...RESPONDENT
Counsel for the Appellant:
1. GP FOR APPEALS (AP)
Counsel for the Respondent:
1. K RATHANGA PANI REDDY
2
COMMON JUDGMENT (per the Hon'ble Sri Justice T. Mallikarjuna Rao):
1. These Land Acquisition Appeal Suits arise out of the Common Order,
dated 29.02.2012, passed in LAOP.No.1 of 2008 and batch on the file of
Senior Civil Judge, Allagadda (hereinafter referred to as "Reference Court")
whereby the compensation for the land acquired was enhanced from
Rs.45,000/- to Rs.1,13,000/- per Acre for dry land and Rs.65,000/- to
Rs.1,33,000/- per Acre for I.D. land.
2. This batch of Appeals and Cross Objections arise from the same land
acquisition Notification dated 28.02.2006 for the land of village Perusomula
Village, Sanjamala Mandal, Kurnool District and involve common facts and
questions; therefore, with the consent of the learned counsels for the parties,
all these first Appeals have been heard together treating the LAAS No.226 of
2013 as the leading first Appeal.
3. For the sake of convenience, the Parties will be hereinafter referred to
as per their ranking in the Reference Court.
4. The Government has issued a Notification under Section 4(1) of the
Land Acquisition Act, 1894 (hereinafter referred to as 'the Act') dated
28.02.2006. The Land Acquisition Officer fixed the market value of the lands
at the rate of Rs.45,000/- per Acre for dry land and for Rs.65,000/- per Acre
for I.D. land with bore wells vide Award No.4/2006-07 dated 28.07.2006.
5. Dissatisfied with the compensation awarded in Award No.4/2006-07
dated 28.07.2006, passed by the Land Acquisition Officer (hereinafter referred
to as 'LAO'), several Land Owners submitted references under Section 18 of
the Act. These references were adjudicated by the Common Order dated
29.02.2012 in leading LAOP.No.1 of 2008 and batch before the learned
Senior Civil Judge, Allagadda. The Reference Court enhanced the market
value of the acquired land from Rs.45,000/- to Rs.1,13,000/- per Acre for dry
land and Rs.65,000/- to Rs.1,33,000/- per Acre for I.D. land with bore wells.
3
6. Aggrieved by this common order, the Appellant/Referring Officer filed
the present batch of First Appeals. Some of the Claimants also preferred
Cross Objections.
7. Briefly stated facts of the present Appeals for referring to matters by the
Special Deputy Collector (L.A.) GNSS, Unit-I, Nandyal, to the Civil Court
under Section 18 of the Act are as follows:
(a) The Special Deputy Collector (LA) (FAC) GNSS Unit-I, Nandyal, and
the Executive Engineer, GNSS Division No.5, Jammalamadugu, submitted
requisitions dated 19.08.2005 and 27.12.2005 for the acquisition of 152.24
acres of land in Perusomula Village, Sanjamala Mandal, Kurnool District, for
the excavation of the GNSS Flood Flow Canal. Under Section 17(4) of the
L.A. Act, urgency was invoked, and the enquiry under Section 5(A) was
dispensed with. Some lands were under the control of the Endowment
Department, with compensation directed to be paid to the Assistant
Commissioner. The lands were classified as dry land, and the D.N. proposal
for 149.03 acres was approved on 15.02.2006. The Section 4(1) notification
was published in the Kurnool District Gazette on 28.02.2006, and the draft
declaration was published in relevant local offices on 13.04.2006.
(b) To determine the market value, the LAO considered sale
transactions from the three years before the Notification under Section 18 of
the Act. However, all transactions from the Sub-Registrar, Owk, were
discarded. The market value was fixed at Rs.45,000/- per Acre for dry land
and Rs.65,000/- per Acre for irrigated land with bore wells. The Claimants,
however, were not satisfied with the assessed market value.
8. In their respective OPs, the Claimants argued that the compensation
granted by the LAO was insufficient, lacking justification and failing to follow
the principles outlined under Section 23 of the Act. They contended that the
LAO did not account for the potential of the acquired lands, comparable sales,
or exercise individual discretion. The Claimants, who depend on the acquired
4
land for agricultural purposes, also highlighted that they earn Rs.10,000/- to
Rs.15,000/- from Bengal gram cultivation on dry land with B.G. soil, which the
LAO did not consider. Additionally, they pointed out that the Court has
enhanced the compensation of Rs.2,51,000/- for dry lands with mines in OP
No.479/2003 (Award No.74/01-02, dated 02.02.2002) and noted that Prism
Cement Limited purchased lands nearby at Rs.3,00,000/- per Acre in 2007-
2008. The Claimants thus sought an enhancement of Rs.5,00,000/- per Acre
with all statutory benefits.
9. Based on the above pleadings, the Reference Court framed the
following points:
(1) Whether the market value fixed by the LAO is proper or not?
(2) Whether the LAO has improper categorised the lands of the claimants
as dry lands instead of deposit Kadapa Slabs and lime stone?
(3) Whether the claimants is entitled for more compensation the
compensation fixed by the LAO?
(4) To what relief?
10. During the common enquiry to substantiate the Claimants' claim, the
Claimants were examined as P.Ws.1 to 6 and marked Exs.A1 to A11. The
Land Acquisition Officer/Referring Officer is examined as R.W.1 and got
marked Ex.B1.
11. After the completion of the trial and hearing the arguments of both
sides, the Reference Court enhanced the compensation amount from
Rs.45,000/- to Rs.1,13,000/- per Acre for dry land and from Rs.65,000/- to
Rs.1,33,000/- per Acre for I.D. land with bore wells. Consequently, awarded
30% solatium on the enhanced market value fixed as provided under Section
23(2) of the Act; additional market value @ 12% per annum on such market
value from the date of Sec.4(1) Notification of the Act till the date of Award;
also awarded interest at 9% per annum for one year from the date of taking
possession thereafter at 15% per annum till the date of payment on enhanced
5
market value and also entitled to interest on additional market value and
solatium.
12. Sri T. Srinivasa Rayalu, Learned Government Pleader for Appeals,
representing the Appellants, argues that the Reference Court's enhancement
of the compensation was without basis or evidence; it failed to consider the
oral and documentary evidence presented in the case; the lands covered
under Ex.A7 (LAO award) and Ex.A9 (certified copy of the order in OP
No.250/2000) pertain to a different village, not the one under the current
acquisition; it wrongly applied a 10% escalation on the value of lands in
Reddypalli Village for the present acquisition; it should not have applied
escalation without evidence of a continuous increase in land prices, and that
the enhancement made by the learned Judge was excessive and exorbitant.
13. The Respondents/Claimants, in their Cross-Objections, contend that the
Reference court erred by not considering Exs.A5 and A11, which detail
previous awards for lands with the same potential and classification of napa
slab deposits. In those awards, compensation was set at Rs.2,51,000/- per
Acre in OP No.479 of 2003 and the batch (Award No.74 of 2001 and 2002).
By relying on these, the respondents assert that they should be entitled to
more than Rs.3,00,000/- per Acre. Furthermore, they contend that the
Reference court overlooked Ex.A2 (Sale Deed), which shows land nearby was
purchased for Rs.3,00,000/- per Acre by Prism Cements Ltd., clearly
indicating the potential and value of the acquired land. Additionally, they point
out the Reference court's failure to consider Ex.C3, the Commissioner's
Report by the Royalty Inspector of Mines and Geology, which confirmed that
the acquired land and the lands under Exs.A5 and A11 have identical potential
for napa slabs. The respondents argue that the Reference court wrongly
focused on categorising dry and irrigable dry land without recognising the
significant mining potential of both categories, as evidenced by the awards in
Exs.A5 and A11.
6
14. Having regard to the pleadings in the Original Petitions, the findings
recorded by the Reference Court and in light of the rival contentions and
submissions made on either side before this Court, the following points would
arise for determination:
1) Is the market value of the acquired land determined by the
Reference Court lawful and adequate?
2) Whether the cross objections raised by Respondents/
Claimants are sustainable?
3) Does the Orders of the Reference Court need any interference?
POINT NOs.1 to 3:
15. Upon hearing both parties, the primary issue to be determined by this
Court is whether the Land Acquisition Officer (LAO) has wrongly classified the
Claimants' lands as dry lands despite the presence of Kadapa's slabs and
limestone.
16. It is apparent from the record that the then Land Acquisition Officer
(LAO) acquired the lands to form the Galeru Nagari Sujala Sravanthi Flood
Flow Canal. The LAO issued the 4(1) Notification on 28.02.2006 and the 6(2)
Notification on 31.03.2006 for the acquisition of the lands, as part of Award
No.4/2006-07, dated 28.07.2006, following an enquiry conducted with the
assistance of the Revenue Department and its officials, including the Tahsildar
of Sanjamala and his staff. The Special Deputy Collector and the Executive
Engineer of the GNSS Division No.5, Deputy Inspector of Survey, Special
Surveyor, and Special Deputy Tahsildar visited the acquired land and
determined its market value. Subsequently, the LAO disbursed compensation
to the Claimants. After receiving the compensation, some of the awardees
filed Protest Petitions before the LAO, Galeru Nagari Sujala Sravanthi, Unit-I,
Nandyal, which were subsequently referred to the Court under Section 18 of
the Land Acquisition Act.
7
17. As reflected in Ex.B.1, the Award dated 28.07.2006, the Land
Acquisition Officer classified the acquired lands into two categories: dry land
and irrigated dry land with bore wells. RW.1, A. Malola, Special Deputy
Collector, Nandyal, testified that the GNSS canal originates from the Gorkulu
Reservoir and extends to the Gandikota Reservoir. The OWK Reservoir is
also formed through Ramapuram, B.Singavaram, Sunkesula, Peddaventhurla,
and Dhanwada, ultimately reaching the Gandikota Reservoir.
18. As per Ex.B.1, the Award, the Special Collector noted that the primary
crop cultivated on the acquired land was paddy. The paddy yield was
assessed at 20 quintals per Acre, with a market price of Rs.6,000/- per quintal,
resulting in a gross income of Rs.13,200/- per Acre. After deducting the
expenditure, the net value was estimated to be between Rs.6,000/- and
Rs.6,500/- per Acre. By applying the multiplier '10', the land's value was
determined to be between Rs.60,000/- and Rs.65,000/- for irrigated dry (I.D.)
land. Consequently, the Special Deputy Collector fixed the market value at
Rs.42,000/- to Rs.45,000/- for dry land.
19. The Reference Court correctly observed that the LAO failed to provide a
clear basis for assessing the yield from irrigated dry (I.D.) lands and the
associated expenditure. The LAO did not gather relevant information from the
Agricultural Officer or the Market Committee. In the absence of such critical
data, the Reference Court concluded that the market value fixed by the LAO
was improper and inadequate.
20. Before the Reference Court, the Claimants strongly asserted that the
acquired lands contained deposits of Kadapa slabs and limestone, but the
LAO improperly classified these lands as dry lands. The Reference Court,
after considering the arguments, rejected this contention, providing detailed
reasons for its decision. While some of the Claimants challenged these
findings through cross-objections, we now turn to evaluate the validity and
sustainability of the contentions raised by the Claimants in this regard.
8
21. In the Ex.B.1 Award proceedings, the LAO did not mention that the
acquired lands contained Kadapa slabs and limestone. Had such deposits
been present on the Claimants' lands, the LAO would undoubtedly have
acknowledged them in the Award. The Reference Court also referenced the
testimony of PW.1, who stated that the lands were agricultural and some were
equipped with bore wells. However, no evidence was presented to
demonstrate that agricultural cultivation could still be carried out on lands
containing deposits of Kadapa slabs and limestone.
22. The 1st Claimant in OP No.1 of 2008, as PW.1, testified that the
acquired lands are black cotton soil suitable for cultivating various commercial
crops. He further claimed that the lands contain minerals such as Kadapa
slabs and limestone. However, the claim statement explicitly stated that all the
acquired lands were classified as dry lands with black cotton soil and that the
Claimants depended solely on these agricultural lands for their livelihood. The
Claimants also mentioned growing Bengal gram on the acquired lands, but the
claim statement did not mention Kadapa slabs or limestone deposits.
23. The Claimant in OP No.13 of 2008, as PW.6, testified that although the
lands acquired by the LAO under this Award were being cultivated as
agricultural lands, they also contained minerals.
24. The learned counsel for the Claimants argues that the mere omission to
mention the presence of mineral deposits in the acquired lands should not be
a reason to reject the Claimants' contention. He contends that this omission
cannot be treated as a fatal flaw akin to a defect in a plant.
25. In this regard, learned counsel for the Respondents relied on the
decision in Rajamani V. Collector, Raipur1, wherein the Hon'ble Supreme
Court held that
4. ................... It is settled law that the statement under Section 19 in terms
of the objection under Section 18 of the Act is not treated as a plaint. Upon
1
(1996) 5 SCC 701
9
service of the notice on the claimant or interested person, he is treated to be
a plaintiff and Land Acquisition Collector to be a defendant for the purpose of
conducting the proceedings as envisaged under Section 22 of the Act. They
are entitled to be represented by counsel. On receipt of the application, it is
the duty of the claimant. The burden is always upon him, who seeks higher
compensation to adduce evidence and prove in the Court that the
compensation awarded by the Collector was inadequate and that the
acquired lands were possessed of higher value for the Award of the
compensation to be just and adequate compensation. The Land Acquisition
Officer is to rebut the evidence the claimant/interested person adduced. The
burden is always on the claimant. Ultimately, it is the duty and power of the
Court to determine just and adequate compensation on relevant facts and
law sitting in the armchair of a prudent purchaser in an open market.
...................
26. In civil cases, the preponderance of probability constitutes a sufficient
ground for decision if the facts and circumstances are such that no reasonable
man would draw a particular inference from them or if the degree of probability
in the case is such that as to include any hypothesis besides the one to be
proved then the party who relies on a particular theory cannot be said to have
discharged the onus of proof of establishing that theory. But, if the evidence
strongly preponders in favour of any of the two theories set up, the Court is
entitled to act on it. Trite, the proposition of law is that witnesses might lie, but
the circumstances would not do so.
27. In R.Puthunainar Alhithan V. P.H.Pandian 2 , the Hon’ble Supreme
Court held that an inference from the proved facts must be so probable that if
the Court believes, from the proved facts, that the facts do exist, it must be
held that the fact has been proved. The inference of proof of that fact could be
drawn from the given objective, direct or circumstantial.
28. The learned counsel for the Claimants argued that, despite their
testimony in chief regarding the presence of minerals on their lands, the
learned Assistant Government Pleader chose not to cross-examine the
2
(1996) 3 SCC 624
10
witnesses on that aspect. Consequently, he contends that the unchallenged
testimony should be considered as establishing the Claimants’ case.
29. In Special Deputy Collector, (L.A.O), Anakapalli V. Padala Venkata
Ramana3, the Division Bench of the composite High Court of Andhra Pradesh
held that:
7. It is relevant to mention that in all the claim statements filed before the
reference Court, it was stated that compensation at the rate of Rs.2 lakhs per
Acre was claimed before the LAO. The market value, determined under the
impugned Award, is thus much more than what the respondents allegedly
claimed before the LAO, even on their own admission. We are not saying for
a moment that there is a legal bar against awarding more compensation.
However, the admission only indicates that the claimants were content with
receiving compensation of Rs.2 lakhs per Acre (Rs.2,000/- per cent). But,
they laid a speculative claim before the reference Court, which found its
ready acceptance by the Court.
22. The learned Subordinate Judge should have taken elementary care to
scrutinise the oral evidence and evaluate its intrinsic worth instead of
commenting that the Government advocate did not cross-examine PW2 or
that rebuttal evidence was not let in. The claimants themselves did not deem
it fit to claim as much as the Court estimated. The learned Judge should have
thought over twice before unreservedly accepting the interested version of
PW2 and arriving at the yield and income at such a high figure. Even if there
was no cross-examination by the Government Pleader, the Court is not
helpless in eliciting the truth. The Court need not glibly swallow whatever is
stated by the claimant in his own interest without subjecting the evidence to
critical scrutiny and testing the same from the standpoint of common
knowledge and probabilities.
30. In light of the observations, this Court views that though the claim
statement cannot be treated as a plaint, it cannot be concluded that the
version put forth by the Claimants in the earlier statement cannot be
considered and must be ignored.
31. However, had the Claimants’ assertion regarding the presence of
Kadapa slabs and limestone deposits been true, they would have undoubtedly
included this vital information in their claim statement. The omission of such a
crucial detail, which could have a significant bearing on the determination of
3
MANU/AP/0163/1999
11
compensation in the land acquisition case, raises doubts about the credibility
of their claims. Moreover, the Claimants have failed to explain why this crucial
factor was not mentioned in their initial claim statement despite its potential to
influence the outcome of the proceedings.
32. The Claimants relied on Ex.C.3, the Commissioner’s report, which
states that the Royalty Inspector of Mines and Geology visited the acquired
lands, located 1½ km from Sunkesula village, and discovered significant
excavation of Napa slabs across all lands covered by Award Nos. 16/1992-93
and 74/01-02, as well as in the acquired lands. However, the Reference Court
did not consider this report. According to the Ex.C.3 report, the Commissioner
visited the lands on 14.12.2011, accompanied by some Claimants and their
advocates. Notably, this visit occurred five years after the issuance of the
notification. This raises the possibility that the evidence might have been
introduced at a later stage to secure higher compensation.
33. Furthermore, the Claimants referred to the Award in case 16/1992-93,
where a reference was made to the Senior Civil Judge’s Court, Nandyal, in
OP No.167 of 1996 and batch. The learned Senior Civil Judge had enhanced
the market value from Rs.80,000/- to Rs.1,49,000/-, as shown in Ex.A.5
(Award in OP No.167 of 1996). This Court subsequently modified the Award in
LAAS No.1748 of 2005, as evidenced in Ex.A.10, reducing the amount by
Rs.1,000/-, but confirming a final compensation of Rs.1,48,000.
34. To establish the nature of the lands covered under Ex.A.5, the
Claimants examined PW.3, P. Gopal, who stated that the land acquired in
Award No.16/1992-93 had the same potential as the currently acquired land.
However, the Reference Court specifically noted in its appreciation of PW.3’s
evidence that PW.1 had admitted that the acquired lands are rain-fed, with
some lands having bore wells. PW.1 further testified that if there is no rainfall,
the water supply would be diminished. Based on this reasoning, the
12
Reference Court chose not to consider Ex.A.3 (a certified copy of Award
No.16/1992-93), Ex.A.5, and Ex.A.10 Awards, as previously referenced.
35. Before the Reference Court, the Claimants relied on Ex.A.4, a certified
copy of Award No.74/01-02, dated 18.02.2002, which pertains to the
acquisition of lands measuring 39.52 cents in Sunkesula village for the
excavation of significant and minor block XVI of the SRBC. The lands were
classified into three categories, with the market values fixed as follows:
Rs.36,000/- per acre for dry lands, Rs.43,000 per Acre for irrigated dry (I.D.)
lands, and Rs.40,000/- per Acre for lands with limestone deposits.
36. The Claimants also relied on Ex.A.11, a certified copy of the order in OP
No.479 of 2003, dated 29.12.2008, which pertains to Ex.A.4 Award. In this
order, the learned Senior Civil Judge enhanced the market value to
Rs.2,51,600/- for the lands acquired in the said Award, which were found to
contain deposits of Napa slab stones. In OP No.479 of 2003, Lakshmana
Reddy, the Claimant, testified as PW.4 and stated in his affidavit that his land
was categorized as dry land with deposits of Napa slabs. However, the
Reference Court rejected Ex.A.4 and Ex.A.11, providing the same reasons it
had recorded to discard Ex.A.10 Award. Similarly, the Reference Court also
discarded Ex.A.6, a certified copy of the Award in LAOP No.1022 of 2003,
which pertains to lands located in Sunkesula village, classified as dry lands
(BC) with deposits of slab stone. Upon reviewing the Awards cited by the
Claimants, it is evident that there is an explicit mention that the lands covered
by these Awards consist of massive flaggy limestone, yielding Napa slabs with
a thickness of 1½” to 2″, which are suitable for polishing and used for flooring
purposes. Additionally, it was noted that no quarry leases or permits had been
granted for the extraction of Napa slabs, and as a result, penalties for
unlicensed quarrying had to be deducted from the compensation.
37. The LAO could have mentioned in the Ex.B.1 Award if there were
deposits of Kadapa slabs and limestone, as seen in other awards. However,
13
nothing in the Award attributes this omission to the LAO concerning the
deposits of Kadapa slabs and limestone. There appears to be no valid reason
for such an omission by the LAO. Furthermore, the Claimants could have
included this crucial fact in their claim statements. The version regarding
mineral deposits was introduced after noticing compensation awards in other
cases. Consequently, the Reference Court rightly chose not to consider the
Claimants’ contentions in this regard. We find no justification to disregard the
observations made by the LAO regarding the nature of the land.
38. In M. Narsinga Rao V. State of Andhra Pradesh 4 , the Hon’ble
Supreme Court held that:
15. The word “proof” needs to be understood in the sense it is defined in the
Evidence Act because proof depends upon the admissibility of evidence. A
fact is said to be proved when, after considering the matters before it, the
Court either believes it to exist or considers its existence so probable that a
prudent man ought, under the circumstances of the particular case, to act
upon the supposition that it exists. This is the definition given for the word
“proved” in the Evidence Act. What is required is the production of such
materials on which the Court can reasonably act to reach the supposition that
a fact exists. Proof of the fact depends upon the degree of probability of its
having existed. The standard required for reaching the supposition is that of a
prudent man acting in any important matter concerning him. Fletcher Moulton
L.J. in Hawkins v. Powells Tillery Steam Coal Company, Ltd., observed this :
“Proof does not mean proof to rigid mathematical demonstration, because
that is impossible; it must mean such evidence as would induce a reasonable
man to come to a particular conclusion.”
16. The said observation has stood the test of time and can now be followed
as the standard of proof. In reaching a conclusion, the Court can use the
process of inferences to be drawn from facts produced or proved. Such
inferences are akin to presumptions in law. The law gives absolute discretion
to the Court to presume the existence of any fact that it thinks likely to have
happened. In that process, the Court may have regard to the common course
of natural events, human conduct, and public or private business vis-a-vis the
facts of the particular case. The discretion is envisaged in Section 114 of the
Evidence Act.
4
(2001) 1 SCC 691
14
39. For the reasons stated above and based on the observations made, we
are of the opinion that the Reference Court, after a thorough and proper
appreciation of the evidence on record, rightly concluded that the Claimants’
lands could not be classified as drylands containing deposits of Kadapa slabs
and limestone. The Claimants have failed to produce any revenue records or
other official documents that would substantiate the nature of the lands as
being rich in such mineral deposits. In the absence of such crucial evidence,
the Reference Court’s decision stands well-founded. Without appropriate
records or credible proof of the alleged deposits, the Claimants’ assertion
regarding the mineral content of their lands cannot be accepted as valid.
40. Furthermore, the Claimants have failed to provide any evidence to show
that, before the acquisition, they were engaged in quarrying operations on the
acquired lands or that they had obtained the necessary permits from the
relevant authorities to conduct such activities. In the absence of such crucial
evidence, it is neither desirable nor permissible to give weight to the
exaggerated claims made by the Claimants. The burden of proof lies squarely
on the Claimants, and they have not produced any material before the Court
to substantiate their assertions regarding the presence of minerals on the
lands. Notably, the Claimants have consistently maintained that the acquired
lands were used solely for agricultural purposes, with their livelihood
depending entirely on farming activities. Given this consistent position and the
lack of supporting evidence for their mineral claims, the Reference Court’s
conclusion that the lands should not be classified as containing Kadapa slabs
and limestone deposits is fully justified and should stand.
41. The Claimants relied on Ex.A.2, the certified copy of the registered sale
deed dated 04.06.2008, to support their claim. To establish the validity of this
transaction, PW.2, Venkateswara Reddy, the attestor of the sale deed, was
examined. His evidence indicated that Prism Cement Limited purchased the
land from Venkata Siva Reddy and his sons for Rs.3,00,000/- per Acre. While
the Reference Court acknowledged that Ex.A.2 is admissible in evidence
15
under Section 51(A) of the Land Acquisition Act, it noted that this sale was a
post-notification transaction. Consequently, the Reference Court did not
assign significant weight to the document, considering it was not reflective of
the market value at the time of the land acquisition.
42. The learned counsel for the Respondents/Claimants contends that the
Reference Court erred by ignoring the post-notification sale transactions. The
counsel argues that, in the absence of any sale transactions before the
notification, the Reference Court should have given due consideration to the
post-notification sales as an indicator of the land’s market value. In support of
his contention, he relied on the decision in The Sub-Collector and Land
Acquisition Officer V. N. Mahaboob Saheb and others5, the Composite
High Court of Andhra Pradesh held that:
“7.xxx In recent years, as observed by this Court in several decisions, as the
public are aware of the decisions of this Court and the provisions of the Act
certain persons, with a view to get higher compensation are bringing out sale
deeds for small extents of lands with higher consideration. Any sale deed for
a small extent with higher consideration which has been brought into
existence in between the period from the date of initiation of the acquisition
proceedings till the date of publication Section 4(1) Notification has to be
considered with great care and caution and normally if the Court comes to the
conclusion, taking into consideration the disparity of prices mentioned therein
when compared with the previous sales in the locality, it is always desirable to
eschew those sale deeds as they cannot afford reasonable basis for fixing the
value of the land acquired as the law enjoins that comparable sales alone
have to be taken into consideration. In this case, as post-notification sales
also have been filed, they cannot be ignored altogether. The Supreme Court
in Prithvi Raj Taneja v. State, AIR 1977 SC 1560 observed that post-
Notification sales need not be ignored altogether in deciding the market value
of the land acquired. Post-Notification sales are bona fide sales which have
nothing to do with the acquisition and are not effected by the acquisition
proceedings. In this case, the post-notification sales will be of use to arrive at
a conclusion whether there was any steep increase of prices or whether the
prices in the area are steady and the prices of the road side lands and interior
lands are uniform or at variance or the same rates are being continued. It is
only after the Land Ceiling Act has come into force, the prices of the lands
started increasing. In urban areas it is after the Urban Land Ceiling Act came
into force and particularly after 1980 the prices are started increasing rapidly.”
5
AIR 1993 AP 173
16
43. It is the evidence of PW.1 that the land purchased by Prism Cement
Limited is adjacent to the acquired lands and that Prism Cement Limited,
along with other branded cement companies in India, acquired lands for
mining leases. Furthermore, as seen from the record, the notification for
acquisition in this case was issued on 28.02.2006, and the sale transaction
under Ex.A.2 occurred on 04.06.2008, which is more than two years after the
notification. This time gap affects the relevance of Ex.A.2 in determining the
market value of the acquired land, as market conditions may have changed
during this period.
44. In Bhupal Singh V. State of Haryana 6, the Hon’ble Supreme Court
specifically considered a similar question of determination of market value
under Section 23 of the Act and held that the fair market value of the acquired
land is required to be determined on the basis of the market rate of the
adjacent lands similarly situated to the acquired lands prevailing on the date of
acquisition or/and prior to acquisition but not subsequent to the date of
acquisition.
45. In view of the law laid down by the Hon’ble Supreme Court in the case
of Chamanlal Hargovind Das V. S.L.A.O.7, Manoj Kumar and others V.
State of Haryana and others8, Union of India V. Dyagala Devamma and
others9, and Bhupal Singh (supra), we have no difficulty to hold that the
market value of the acquired land is required to be determined on the basis of
the market rate of the adjacent land similarly situated to the acquired lands
prevailing on the date of acquisition or/and prior to the acquisition but not
subsequent to the date of acquisition.
6
MANU/SC/0383/2015
7
MANU/SC/0071/1988
8
MANU/SC/1349/2017
9
MANU/SC/0772/2018
17
46. In this regard, it is profitable to refer to the decision of the Hon’ble
Supreme Court in Bhag Singh and ORs. V. Union of India (UOI) and Ors.10,
wherein it held that:
15. The question now is whether the determination of market value
subsequent to the notification would be relevant to determining the market
value of the land acquired more than two years earlier. We find that though
appreciation in price can be presumed, the market value cannot be assessed
by applying a suitable deduction in the market value of the land acquired by a
subsequent notification. When the later notification is issued, the
development activities have already taken place in view of the earlier two
notifications. Therefore, it is not the percentage of increase in the market
value but the increase due to the development which has taken place on
account of earlier notifications. Therefore, the market value of the land
cannot be based upon the land acquired vide notification dated 11.11.1993,
i.e., more than two years after the notification in question and when other
notifications were intervening on 26.10.1990 and 25.7.1991.
47. Evidently, in the present case, development activities also occurred due
to the earlier notification. In light of this, we find that the Reference Court
rightly disregarded the Ex.A.2 sale transaction. The sale, being post-
notification, was influenced by the subsequent development activities, making
it an unreliable indicator of the land’s market value at the time of acquisition.
Therefore, the Reference Court’s decision to ignore this transaction is justified.
Furthermore, there is no evidence on record to prove that the nature of the
said land was similar to that of the acquired land. In the absence of evidence
to prove the similarity regarding locality, potentiality, or the nature of the said
land vis-à-vis the subject land, post-sale transactions cannot be relied upon to
determine the market rate of the acquired land.
48. The learned Government Pleader submitted that the Reference Court
failed to appreciate the previous Award relied upon by the Claimants in the
correct perspective and that the Reference Court should not have enhanced
the compensation at a rate of 10% per annum.
10
MANU/SC/0589/2022
18
49. In Land Acquisition Officer-cum-M.R.O. V. Gouramma11, the Division
Bench of the composite High Court of Andhra Pradesh held that:
11………………… The potentiality of the land and the increase in price also
depend on the lie of the land, the situation of the land and the demand for land in
that particular area. Generally, as inflation is on the high side, particularly when
the rupee is losing its value, the courts, in the absence of any guidelines for
increase, take into account a 5 to 10 per cent increase every year. Even that 5 to
10 per cent, as we take into consideration, is the discretion left to the Court
taking into account the potentiality of the land, increasing value of that particular
land, strategic position of the land and the increase in prices of the land covered
by other sale deeds or other statistics that have been brought to the notice of the
Courts concerned. So, in this case, if we take the maximum rate that the
Government can pay for this acquisition for providing house sites and the
increase even if we calculate at the rate of 10 per cent increase every year for 10
year period as the notification is dated August 28, 1989, at best, we feel
reasonable that the increase should be 10 x 10, i.e., 100 per cent, and
accordingly, we are granting that 100% than the value that has been fixed by the
Court under Ex.A-2………………………… Even in the case on hand, we want to
make it clear that the Award has become final on account of the judgment of the
Court, but still, either the Land Acquisition Officer or the claimant can prove the
rate of increase or decrease based on the sale deeds that are available and
where no other document is available, these final judgments can be taken into
consideration When the other sale deeds are available those sale deeds also
can be taken into consideration, but the value fixed in these cases can be settled
as the variance will be either on the increase or on the decrease. If some
comparable sale deeds are available, based on the values only, the market
value has to be determined, and it is completely left open to the discretion of the
Officer to decide the reasonable compensation based on the documents and the
awards that have been passed by this Court.
50. In Acquainted Realtors LLP and ORs. V. State of Haryana and
Ors12., the Hon’ble Supreme Court referenced the decision in ONGC Ltd.13 ,
wherein it is observed that:
15. Normally, recourse is taken to the mode of determining the market value
by providing appropriate escalation over the proved market value of nearby
lands in previous years (as evidenced by sale transactions or acquisitions)
where there is no evidence of any contemporaneous sale transactions or
acquisitions of comparable lands in the neighbourhood. The said method is
reasonably safe where the relied-on sale transactions/acquisitions precede the
subject acquisition by only a few years, that is, up to four to five yeaRs.Beyond
that, it may be unsafe, even if it is related to neighbouring land. What may be a11
MANU/AP/0226/1993
12
MANU/SC/0248/2021
13
(2008) 14 SCC 745
19reliable standard if the gap is only a few years old may become an unsafe and
unreliable standard where the gap is larger. For example, for determining the
market value of land acquired in 1992, adopting the annual increase method with
reference to a sale or acquisition in 1970 or 1980 may have many pitfalls. This is
because, over the course of years, the “rate” of annual increase may itself
undergo drastic change apart from the likelihood of occurrence of varying
periods of stagnation in prices or sudden spurts in prices affecting the very
standard of increase.
51. The Reference Court relied on Exs.A7 and A9 awards to determine the
market value of the property, and we refer to some of its observations to
address the Government Pleader’s contention as follows:
(i) Ex.A7, a copy of Award No.58/98-99 dated 30.3.1999, pertains to
the acquisition of lands in Reddipalli village. The LAO set the market value
at Rs.28,000/- per Acre for Category No.1 and Rs.30,000/- per Acre for
Category II, as of the draft notification on 7.7.1993. After referencing this
Court, the market value was enhanced to Rs.50,000/- per Acre in OP
250/2000, consolidating both categories into one for drylands, as per
Ex.A9. The Government appealed against this order in LAAS 1677/2003,
but the Hon’ble High Court upheld the enhancement on 18.11.2006, as
shown in Ex.A8. For example, Ex.B1, the Award classifying the Claimants’
lands as BC soil dry lands and I.D lands with bore wells, indicates that the
lands in both awards are comparable.
(ii) In Valluri Veerabhadra Rao and Others V. Land Acquisition
Officer14, this Court ruled that a 10% annual increase should be applied to
calculate the market value of lands acquired under a subsequent
notification, provided the lands are similar in fertility, value, and purpose.
Applying this to the time lag between Ex.A7’s notification on 7.7.1993 and
Ex.B1’s Award on 3.4.2006 (12 years, 8 months, and 26 days), the market
value increase of Rs.50,000/- results in Rs.63,694/-. Adding this to the
original Rs.50,000/-, the total market value is Rs.1,13,694/- (rounded to
14
1993 ALD D.B. page 129
20
Rs.1,13,000/- for dry land and Rs.1,33,000/- for irrigated land with bore
wells as of the 3-4-2006 notification).
52. In The Special Deputy Collector V. M. Pedda Subbarayudu (LAAS
No.80 of 2014), the Division Bench of the composite High Court of Andhra
Pradesh held that:
8. It is almost a settled and recognised principle of law to allow 10%
appreciation per year for the value of immovable properties. The lands of
the respondents were acquired 8 years after the land in the same village
was acquired for the purpose of the main canal. Though they were entitled
to 80% appreciation over the market value extracted in Ex.B.2, the
reference Court took the appreciation at 70%. We do not find any basis to
interfere with the order passed by the Court of the Senior Civil Judge,
Nandyal.
53. After carefully reviewing the precedents cited, we firmly believe that the
Reference Court has appropriately determined the market value in
accordance with the judgments rendered by both the Supreme Court and this
Court. The argument put forth by the Government Pleader questioning
increasing the compensation amount by 10% per annum, as per the Awards
under Exs.A.7 and A.9, is not sustainable.
54. The learned counsel for the Claimants/cross-objectors argues that the
Reference Court failed to award compensation for severance charges.
However, at this juncture, it is not permissible to introduce a claim beyond the
scope of the pleadings, as contemplated under Section 54 of the Land
Acquisition Act. Moreover, in light of the principles outlined in Section 53 of the
Act, which governs the applicability of the Civil Procedure Code to
proceedings under the Land Acquisition Act, this Court finds no basis to
entertain the cross-objection on this point. Consequently, this contention is
respectfully rejected.
55. We believe that the reasoning and basis adopted by the Reference
Court in awarding compensation are sound and appropriate. Despite
challenging the impugned orders by the LAO and some of the Claimants on
21
various grounds, they failed to substantiate their contentions. We find that the
Reference Court approached the matter correctly, and after thorough
consideration, we agree with the Reference Court’s assessment of the
evidence. The findings of the Reference Court are sound, and no valid
grounds have been presented by the Claimants/Cross Objectors or the Land
Acquisition Officer to alter the compensation amount awarded. Based on the
preceding discussion, we see no reason to depart from the Reference Court’s
perspective. Accordingly, the Points are answered.
56. As a result, these Appeals and Cross Objections fail and are dismissed
without costs. The Decree and Order passed by the Reference Court are
affirmed.
Miscellaneous pending applications, if any, shall stand closed.
__________________________
JUSTICE NINALA JAYASURYA
_____________________________
JUSTICE T. MALLIKARJUNA RAO
Date: 03.01.2025
MS / SAK
22
THE HON’BLE SRI JUSTICE NINALA JAYASURYA
AND
THE HON’BLE SRI JUSTICE T.MALLIKARJUNA RAO
LAAS Nos.226 of 2013 & Batch
Date: 03.01.2025
SAK