Court’s Decision
The Bombay High Court (Aurangabad Bench), presided by Justice R.M. Joshi, enhanced the compensation payable to farmers whose lands were compulsorily acquired for a percolation tank project at village Takli (Bombli), District Latur. The Court held that once the Reference Court had accepted a sale instance of jirayat (dry) land as the comparable instance, the compensation for irrigated land must be calculated at double the rate of that jirayat land, in accordance with established precedents.
The Court also accepted the claim for valuation of trees and superstructure, which had been wrongly rejected by the Reference Court, observing that the expert witness’s report could not be discarded in the absence of evidence discrediting his expertise. Justice Joshi emphasized that “once the Reference Court accepts a sale instance of jirayat land as comparable, the valuation of irrigated land cannot be less than double.”
Facts
The Maharashtra Government issued a Notification under Section 4 of the Land Acquisition Act, 1894, on 27 August 2000, for the acquisition of lands situated at Takli (Bombli), Taluka Deoni, District Latur, to construct a percolation tank. The claimants, whose irrigated lands were acquired, submitted claims before the Special Land Acquisition Officer (SLAO), contending that the compensation awarded was grossly inadequate and did not reflect the true market value of the property.
The SLAO had based the compensation on certain sale instances without giving due weightage to the fertility, irrigation potential, and market conditions of the acquired land. Dissatisfied with the award, the claimants sought references before the Reference Court, claiming that the market value was ₹2,00,000 per acre at the time of notification.
Before the Reference Court, the claimants relied on two sale instances (Exhibits 17 and 18), of which Exhibit 18 was accepted as comparable. The Reference Court determined the rate at ₹2,500 per R (100 square meters) for jirayat land, granted an additional 50% for irrigated land, and fixed the compensation at ₹3,375 per R, but rejected the valuation of trees and structures.
Issues
- Whether the market value of the acquired irrigated land should be calculated at double the rate of comparable jirayat land?
- Whether the Reference Court erred in rejecting the valuer’s report on trees and structures despite no evidence disputing his expertise?
- Whether the claimants were entitled to additional benefits such as solatium, interest, and enhanced compensation based on sale instance escalation?
Petitioners’ Arguments
The appellants contended that once the Reference Court accepted the sale instance (Exhibit 18) of jirayat land dated 20 April 2000 as comparable, it was bound to compute the compensation for their irrigated land at twice that rate. They relied on the decisions of the Bombay High Court in State of Maharashtra v. Baliram Girdhar Patil (2006 (6) Mh.L.J. 82) and Special Land Acquisition Officer, Jalgaon v. Bhagwat Vithal Sonawane (2009 (4) Mh.L.J. 308), which recognized the principle that irrigated lands fetch twice the value of jirayat lands in absence of contrary evidence.
It was also argued that since the SLAO had himself considered a 12% annual increase on the sale instance, the same escalation should apply to the Reference Court’s computation.
Regarding the rejection of valuation of trees, it was submitted that the expert valuer’s report was improperly discarded. The valuer, Mr. Mahadev Parchure (Exhibit 22), had inspected the site and assessed the trees. The respondents never challenged his expertise; their only objection was the absence of a prior notice before inspection, which, as per Pandhari s/o Dhondiba Nukulwad v. State of Maharashtra (2019 SCC OnLine Bom 2045), is not mandatory.
Respondents’ Arguments
The State defended the SLAO’s and Reference Court’s findings, arguing that the Reference Court had already enhanced compensation reasonably based on available evidence. It maintained that the valuer’s report lacked credibility, as the witness was not proven to be an expert. The State further contended that the 12% escalation was already factored into the SLAO’s computation and required no further increase.
Analysis of the Law
Justice R.M. Joshi observed that the Land Acquisition Act, 1894, ensures that persons whose lands are compulsorily acquired must be granted just and fair compensation, considering all relevant factors including fertility, irrigation, market conditions, and sale instances.
Since the sale instance dated 20 April 2000 was accepted by the Reference Court as comparable and no contrary evidence was led by the State, it was binding to assess compensation for irrigated land at double the rate of jirayat land. The Court relied on precedents establishing this principle and further held that 12% escalation on sale consideration is warranted when the sale instance precedes the notification by more than a year.
Accordingly, taking ₹2,500 per R as the base rate for jirayat land, doubling it to ₹5,000 per R for irrigated land, and applying a 12% increment, the Court determined the final market value at ₹6,346.66 per R.
Precedent Analysis
- State of Maharashtra v. Baliram Girdhar Patil (2006 (6) Mh.L.J. 82) – Established that irrigated lands must be valued at twice the rate of jirayat lands when the latter is taken as the comparable sale instance.
- Special Land Acquisition Officer, Jalgaon v. Bhagwat Vithal Sonawane (2009 (4) Mh.L.J. 308) – Reaffirmed the principle that in the absence of direct sale evidence of irrigated lands, doubling the rate of jirayat land is justified.
- Pandhari s/o Dhondiba Nukulwad v. State of Maharashtra (2019 SCC OnLine Bom 2045) – Held that the absence of prior notice by a valuer before inspection does not invalidate his report.
The Court applied these precedents to conclude that the Reference Court’s computation and rejection of the valuer’s report were legally unsustainable.
Court’s Reasoning
The Court found that the Reference Court erred in undervaluing irrigated lands despite accepting a sale instance of jirayat land. It emphasized that the principle of parity demands that irrigated land be valued higher due to its productive capacity.
On the issue of tree valuation, the Court criticized the Reference Court for dismissing the expert report without any proof disputing the valuer’s qualifications. Justice Joshi held that “in the absence of contrary evidence, the valuer’s expertise must be presumed valid” and that procedural objections such as lack of prior notice cannot override substantive fairness.
The Court reiterated that the object of the Land Acquisition Act is not merely acquisition but to compensate fully and fairly, particularly when acquisition is compulsory.
Conclusion
The Bombay High Court partly allowed the appeals, enhancing compensation for the acquired lands and restoring compensation for trees and structures. The operative directions were as follows:
- Compensation for irrigated land fixed at ₹6,346.66 per R.
- 30% solatium under Section 23(2) of the Land Acquisition Act.
- Additional compensation for trees and structures:
- ₹3,84,000 and ₹63,900 for trees, respectively.
- ₹1,29,803 and ₹24,450 for superstructures.
- Interest awarded at 9% per annum for the first year and 15% thereafter until realization.
The judgment ensures enhanced compensation for the claimants, recognizing both agricultural productivity and ancillary losses.
Implications
This decision reinforces the principle that irrigated lands must be valued at twice the rate of jirayat lands where direct sale evidence is absent. It underscores that valuation of trees and structures must not be dismissed mechanically and that expert reports deserve due weight unless disproven.
The ruling is significant for rural landowners affected by public projects, ensuring they receive realistic and fair compensation based on the true potential of their holdings rather than arbitrary valuation.