TMI Blog2013 (7) TMI 1137X X X X Extracts X X X X X X X X Extracts X X X X ..... vil 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 (Arising out of SLP (C) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... land was acquired vide notification dated 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tification to discard or ignore sale deed, Ext. P-1. The refusal of the learned Single Judge 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 committ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IIDC was dismissed by detailed order dated 2.7.2012 titled Haryana State Industrial Development Corporation Limited v. Mawasi (2012) 7 SCC 200. The 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bovesaid three persons were common Directors of both the companies. However, from the said search report of M/s. Duracell (India) (P) Ltd. It is clear that the two Directors, namely, Shri 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urchased different pieces of land at the same rate vide 15 different sale deeds and the total land purchased was 18 kanals 5 marlas i.e. More than 2.25 acres. Para 5 of the reply-affidavit filed on 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12. For the land acquired for Phase-II of IMT, Manesar, the Land Acquisition Collector passed award dated 22.7.2003 and determined market value of the acquired land as under: 13. The landowners did not feel satisfied with the award of the Land Acquisition Collector and filed applications under Section 18 of the Act. The Reference Court relied upon the judgment of the High Court in Pran Sukh'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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... racted below: 25. In addition to that, reference was made to four allotment letters, namely, Ex. P4 to Ex. P7, the details of which are as under: 26. The aforesaid plots were big chunks of land. The average sale consideration paid therein was stated to be ₹ 1,25,608.67 per square yard. However, the fact is that these plots were sold in open auction for commercial purpose and more than 4 years after the issuance of notification under Section 4 of the Act and that too carved out of the land, which 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 ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue will be quite close if we consider the valuation of land from different angle, i.e., considering the allotment of 30,000 square meters of land vide allotment letter (Ex.P38) @ ₹ 1254/- per square yard on 2.2.2000, granting increase thereon @ 12% per annum and reducing 50% therefrom on account of various factors. 22. The learned Single Judge separately considered the claim of M/s. Kohli Holdings Private Limited which had filed R.F.A. No. 4646 of 2010. He took cognizance of the location of 69 kanals 15 marlas land belonging to M/s. Kohli Holdings Private 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 Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs Pvt. Ltd. (R.F.A. No. 4646 of 2010) is assessed at ₹ 2,119/- per square yard. The land owner shall also be entitled to the statutory benefits available under the Act. 23. Although in the special leave petitions filed by HSIIDC several grounds have been taken for challenging the judgment of the learned Single Judge, the only point urged by Shri Parag P. Tripathi, learned senior counsel appearing on its behalf is that the escalation of 12% granted by the learned Single Judge in the amount of compensation determined by this Court in Pran Sukh's case is excessive and is not in consonance 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 fixi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duction is made towards development cost, as was done in Sanath Kumar v. Special Tahsildar and Anr. (2011) 12 SCC 404 and cumulative increase of 15% is given, the landowners will be entitled to compensation at a much higher rate. 25. Shri Dushyant Dave, learned senior counsel appearing for M/s. Kohli Holdings Private Limited vehemently argued that the learned Single Judge of the High Court committed an error by not awarding higher compensation to his client in the light of the auction sale conducted by HSIIDC in 2006. He submitted that even though these auctions were conducted about four years after finalization of the acquisition proceedings, 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. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Government should have resorted to the provisions contained in Part VII of the Act and its failure to do so should be treated as sufficient for quashing the acquisition proceedings in their entirety. In support of this argument, learned Counsel relied upon the judgment of this Court in Royal Orchid Hotels Limited v. G. Jayarama Reddy (2011) 10 SCC 608. Learned Counsel also pointed out that as per Exhibit P11 which was filed in L.A.C. No. 34/2008, 7875 square meters of land was allotted to M/s. Krishna Maruti Limited (subsidiary of Maruti Udyog Limited) at the rate of ₹ 73,38,795 per acre and argued that this by itself should be treated as sufficient for awarding 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ruction activity was going on all around the acquired lands. 13. Primarily, the increase in land prices depends on four factors: situation of the land, nature of development in surrounding area, availability of land for development in the area, and the demand for land in the area. In rural areas, unless there is any prospect of development in the vicinity, increase in prices would be slow, steady and gradual, without any sudden spurts or jumps. On the other hand, in urban or semi-urban areas, where the development is faster, where the demand for land is high and where there is construction activity all around, the escalation in market price is at a much higher rate, as compared to rural areas. In some 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... following illustration (with reference to a 10% increase over a basic price of ₹ 10 per square metre): 19. We may also point out that application of a flat rate will lead to anomalous results. This may be demonstrated with further reference to the above illustration. In regard to the sale transaction in 1987, where the price was ₹ 10 per square metre, if the annual increase to be applied is a flat rate of 10%, the increase will be ₹ 1 per annum during each of the five years 1988, 1989, 1990, 1991 and 1992. If the price increase is to be determined with reference to sale transaction of the year 1989 when the price was ₹ 12 per square metre, the flat rate increase will be ₹ 1.20 per annum, 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 ye ..... X X X X Extracts X X X X X X X X Extracts X X X X
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