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Saturday, July 20, 2013

Land Acquisition Act = The reference court like an appellant authority enhanced the compensation basing on the award of land acquisition officer even though the claimants not adduced any evidence and passed separate awards . High court set aside the award of lower court , Apex court granted an opportunity to adduce evidence to the claimants with conditions and remanded the matter to the trail court = The failure or the omission to lead evidence to prove the claim appears in the above context to be a case of some kind of misconception about the legal requirement as to evidence needed to prove cases of enhancement of compensation. We do not in that view see any reason to deny another opportunity to the landowners to prove their cases by adducing evidence in support of their claim for enhancement. Since, however, this opportunity is being granted ex debito justitiae, we deem it fit to direct that if the Reference Court eventually comes to the conclusion that a higher amount was due and payable to the appellant-owners, such higher amount including solatium due thereon would not earn interest for the period between the date of the judgment of the Reference Court and the date of this order. These appeals are with that direction allowed, the judgments and orders impugned in the same modified to the extent that while the enhancement order by the Reference Court shall stand set aside, the matters shall stand remanded to the Reference Court for a fresh disposal in accordance with law after giving to the landowners opportunity to lead evidence in support of their claims for higher compensation. No costs.

              published in                   


                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                        CIVIL APPEAL NO.5160  OF 2013
                 (Arising out of S.L.P. (C) No.354 of 2012)

Ramanlal Deochand Shah                  …Appellant


The State of Maharashtra & Anr.              …Respondents


                        CIVIL APPEAL NO.5161  OF 2013
                 (Arising out of S.L.P. (C) No.395 of 2012)

Kantilal Manikchand Shah                     …Appellant
(since deceased by his L.Rs.)


The State of Maharashtra & Anr.              …Respondents

                               J U D G M E N T


1.    Leave granted.

2.    These appeals arise out of two separate but similar orders dated  14th
June, 2011 and 16th March, 2011 passed by the High Court  of  Judicature  at
Bombay whereby First Appeal Nos.179 of 1992 and 751 of  1992  filed  by  the
respondent-State of Maharashtra have  been  allowed  and  the  judgment  and
order passed by the Reference Court enhancing  the  amount  of  compensation
payable to the appellants-land  owners  to  Rs.85/-  per  square  meter  set

3.    In SLP (C) No.354 of 2012 the appellants  prayed  for  enhancement  of
compensation payable towards compulsory acquisition of plots no.33,  34,  45
and 46 measuring 1366 square meters  each,  situated  at  village  Saidapur,
Taluq-Karad, District Satara, Maharashtra.  The  public  purpose  underlying
the acquisition was the setting up of a Polytechnic Engineering  College  at
Karad. The appellant-land owners claimed compensation @ Rs.25/- per sq.  ft.
The Special Land Acquisition Officer, Satara, however, made an  Award  dated
14th March, 1988 determining the compensation @ Rs.26.25 per sq. mtr.  only.
Dissatisfied with the award made by the Collector the appellant-land  owners
got the matter referred to the Civil Court for determination of  the  market
value of the land under Section 18  of  the  Land  Acquisition  Act  besides
solatium and interest payable on the same.  A  similar  reference  was  also
made in SLP (C) No.395 of 2012 for plot no. 47 admeasuring  1366  sq.  mtrs.
of the same village.

4.    The claim made by the  appellant-land  owners  was  contested  by  the
respondent-State giving rise to the following issues in Reference  No.12  of
1988 relevant to SLP (C) No.354 of 2012:

(i)   Is the claimant entitled to Rs.9,27,064/- in addition to Rs.2,31,716/-
       from the opponent-referee by way of compensation as claimed?

(ii)  Is the claimant entitled for interest at the rate of 15% p.a.  on  the
      amount of compensation as claimed?

(iii) Is the claimant entitled to solatium as claimed?

(iv)  What order?

5.    Similar issues were framed in the connected  Reference  No.4  of  1988
relevant to SLP (C) No.395 of 2012, save and except that  the  total  amount
claimed in the same was lower having regard to the lesser  number  of  plots
acquired in that case.

6.    The Reference Court answered the issues in favour  of  the  appellants
and enhanced the compensation payable  to  them  to  Rs.85/-  per  sq.  mtr.
besides interest at the stipulated rates  by  similar  but  separate  Awards
both dated 31st January, 1991.
While doing so, the  Reference  Court  relied
entirely upon certain observations made by Special Land Acquisition  Officer
and the Draft Award prepared by him. 
The Reference Court held that from  the
discussion contained in the Draft Award it was  not  clear  as  to  how  the
Special Land Acquisition Officer had awarded  compensation  @  Rs.26.25  per
sq. mtr.
Relying  upon  the  discussion  in  the  Draft  Award  and  taking
advantage of an apparent conflict between the discussion  contained  therein
and the amount actually awarded by the Special Land Acquisition Officer  the Reference Court enhanced  the  compensation  to  Rs.85/-  per  sq.  mtr.  as already noticed above.  
The High Court has, in  the  appeals  filed  by  the
State Government against the enhancement of compensation, reversed the  view
taken by the Reference Court on the ground  that  the  enhancement  was  not
justified in the absence of any evidence to show that the  market  value  of
the property in question was higher than what was  awarded  by  the  Special
Land Acquisition Officer.
The High Court declared  that  claimants  were  in
the position of plaintiffs and the  burden  to  prove  that  the  amount  of
compensation awarded  by  the  Special  Land  Acquisition  Officer  was  not
adequate lay upon them.
It  was  only  if  that  burden  was  satisfactorily
discharged by cogent and reliable evidence that the  Reference  Court  could
direct enhancement.
No such evidence having been adduced by the  landowners,
the High Court set aside  the  order  passed  by  the  Reference  Court  and
answered the reference in the negative thereby dismissing the claim made  by
the landowners.

7.    We have heard learned counsel for the parties at some  length.
 It  is
trite that in a reference under Section 18 of the Land  Acquisition  Act  on
the question of adequacy of compensation determined by  the  collector,  the
burden to prove that the collector’s award does not correctly determine  the
amount  of  compensation  payable  to  the  landowner  is  upon  the   owner
concerned.  It is for the claimant to prove that the amount awarded  by  the
Collector needs enhancement, and if so, to what extent.
The claimant can  do
so by adducing evidence, whether oral or  documentary  which  the  Reference
Court would evaluate having regard to the provisions of Sections 23  and  24
of the Land Acquisition Act while determining the  compensation  payable  to
the owners.
To that extent the claimant is in the position  of  a  plaintiff
before the Court.  
In the absence of any evidence to prove that  the  amount
of award by the Collector does not represent the true market  value  of  the
property as on the date  of  the  preliminary  notification,  the  Reference
Court  will  be  helpless  and  will  not  be  justified  in  granting   any
The  Court  cannot  go  by  surmises  and  conjectures   while
answering the reference nor can it assume the role  of  an  Appellate  Court
and enhance the  amount  awarded  by  reappraising  the  material  that  was
collected and considered by the Collector.
What is  important  to  remember
is that a reference to a Civil Court is not in the nature of an appeal  from
one forum to the other where the appellate forum takes a view based  on  the
evidence before the forum below.
The  legal  position  is  settled  by  the
decisions of this Court to which we may at this stage refer.
 In  Chimanlal
Hargovinddas v. Spcl. Land Acquisition Officer & Anr. (1988) 3 SCC 751,  the
controversy related to a correct valuation of  a  piece  of  land  that  was
under acquisition.
This Court found that the Reference Court had  virtually
treated the award to be a judgment under appeal hence  fallen  in  error  on
the fundamental question of the approach to be  adopted  while  answering  a
The Court observed:

        1) A reference under Section 18 of the Land Acquisition Act is  not
           an appeal against the award  and  the  court  cannot  take  into
           account the material relied upon by the Land Acquisition Officer
           in his award unless the same material  is  produced  and  proved
           before the court.

        2) So also the award of the Land Acquisition Officer is not  to  be
           treated as a judgment of the trial  Court  open  or  exposed  to
           challenge before the court hearing the reference. It  is  merely
           an offer made by the Land Acquisition Officer and  the  material
           utilised by him for making his valuation cannot be  utilised  by
           the court unless produced and proved before it. It  is  not  the
           function of the court  to  sit  in  appeal  against  the  award,
           approve or disapprove its reasoning, or  correct  its  error  or
           affirm, modify or reverse the conclusion  reached  by  the  Land
           Acquisition Officer, as if it were an appellate court.

        3) The court has to treat the reference as an  original  proceeding
           before it and determine the market value afresh on the basis  of
           the material produced before it.

        4) The claimant is in the position of a plaintiff who has  to  show
           that the price offered for his land in the award  is  inadequate
           on the basis of the materials produced in court. Of  course  the
           materials placed and proved by the other side can also be  taken
           into account for this purpose.”

                                             (emphasis supplied)

8.    In the Spcl. Land Acquisition Officer & Anr.  etc.  etc.  v.  Siddappa
Omanna Tumari & Ors. etc., 1995 Supp (2) SCC 168, a three  Judge  Bench  was
dealing with a case where the  question  that  fell  for  determination  was
whether it was open  to  a  Reference  Court  to  determine  the  amount  of
compensation exceeding the amount of compensation determined  in  the  award
without recording a  finding  on  consideration  of  the  relevant  material
therein, that the amount of  compensation  determined  in  the  award  under
Section 11 was inadequate.  Answering the  question  this  Court  considered
the entire legislative scheme  underlying  the  Act  and  clarified  that  a
claimant was in the position of a  plaintiff  on  whom  lay  the  burden  of
proving his  case  that  the  compensation  awarded  by  the  Collector  was
inadequate. The following passage in this regard is apposite:

           “When the Collector makes the reference  to  the  Court,  he  is
           enjoined by Section 19 to state the  grounds  on  which  he  had
           determined the amount of compensation if the objection raised as
           to the acceptance of award of the Collector under  Section 11 by
           the claimant was as regards the amount of  compensation  awarded
           for the land thereunder. The Collector has to state the  grounds
           on which he had determined the amount of compensation where  the
           objection  raised  by  the  claimant  in  his  application   for
           reference under Section 18 was as to inadequacy of  compensation
           allowed by the award  under  Section 11,  as  required  by  Sub-
           section (2) of  Section 18 itself.  Therefore,  the  legislative
           scheme contained in Sections 12, 18 and 19 while on the one hand
           entitles the  claimant  not  to  accept  the  award  made  under
           Section 11 as  to  the  amount  of  compensation  determined  as
           payable for his acquired land and seek a reference to the  court
           for determination of the amount of compensation payable for  his
           land, on the other hand requires him to  make  good  before  the
           Court the objection raised by him as regards the  inadequacy  of
           the amount of compensation allowed for his land under the  award
           made under Section 11, with  a  view  to  enable  the  Court  to
           determine the amount of compensation  exceeding  the  amount  of
           compensation allowed by the award under  Section 11,  be  it  by
           reference to the improbabilities inherent in the award itself or
           on the evidence aliunde adduced by him to that effect.  That  is
           why, the position of a claimant in a reference before the Court,
           is considered to be that of the +plaintiff in a  suit  requiring
           him to discharge the initial burden of proving that  the  amount
           of compensation determined in  the  award  under  Section 11 was
           inadequate, the same having not been determined on the basis  of
           relevant material and by application of  correct  principles  of
           valuation, either with reference to the contents  of  the  award
           itself or with  reference  to  other  evidence  aliunde  adduced
           before the Court. Therefore, if the initial  burden  of  proving
           the amount of compensation allowed in the award of the Collector
           was inadequate, is not discharged, the award  of  the  Collector
           which is made final and conclusive evidence under Section 12, as
           regards matters contained therein will stand unaffected. But  if
           the claimant succeeds in  proving  that  the  amount  determined
           under the award of the Collector was inadequate, the  burden  of
           proving the correctness of the award shifts on to the  Collector
           who has to adduce sufficient evidence in that behalf to  sustain
           such award. Hence, the Court which is  required  to  decide  the
           reference  made  to  it  under  Section 18 of  the  Act,  cannot
           determine the amount of compensation payable to the claimant for
           his land exceeding the amount determined in  the  award  of  the
           Collector made under Section 11 for the  same  land,  unless  it
           gets  over  the  finality  and  conclusive   evidentiary   value
           attributed to it under Section 12, by  recording  a  finding  on
           consideration of relevant material therein that  the  amount  of
           compensation determined under the award was inadequate  for  the
           reasons that weighed with it.”

                                                       (emphasis supplied)

9.    In Major Pakhar Singh Atwal and Ors. v. State of   Punjab  and   Ors.,
1995 Supp (2) SCC 401  also  this  Court  reiterated  the  position  that  a
reference under section 18 of the Land Acquisition  Act  is  not  an  appeal
against the award of the LAO. It merely is an offer. The  proceeding  before
the Reference Court is of such nature that it places  the  claimant  in  the
position of a plaintiff and the Reference  Court  is  akin  to  a  court  of
original jurisdiction. The Court observed:

           “… … It is now settled law  that  the  award  is  an  offer  and
           whatever amount was determined by the Collector is an offer  and
           binds the Improvement Trust.  However,  the  Collector  also  is
           required to collect the relevant material and award compensation
           on the basis of  settled  principles  of  determination  of  the
           market  value  of  an  acquired  land.  The  Improvement  Trust,
           therefore, cannot go behind the award  made  by  the  Collector.
           Reference is not an appeal. It is an original proceeding. It  is
           for  the  claimants  to  seek  the   determination   of   proper
           compensation by producing sale deeds and examining  the  vendors
           or the vendees as to passing of consideration  among  them,  the
           nearness of the lands sold to the acquired lands,  similarly  of
           the lands sold and acquired  and  also  by  adduction  of  other
           relevant and acceptable evidence. In this case,  for  the  Court
           under Section  18 of  the  Act,  the  Tribunal  is  constituted.
           Therefore, if the claimants intend to seek  higher  compensation
           to the acquired land, the burden is  on  them  to  establish  by
           proof that the compensation  granted  by  the  Land  Acquisition
           Officer  is  inadequate  and  they  are   entitled   to   higher
           compensation. That could be established  only  by  adduction  of
           evidence  of  the  comparable  sale  transactions  of  the  land
           acquired or the lands in the neighbourhood possessed of  similar
           potentiality or advantages. … … … No doubt, in the award itself,
           the Land Acquisition Officer referred to the sale  transactions.
           Since the Land Acquisition Officer is  an  authority  under  the
           Act, he collected the evidence to determine the compensation  as
           an offer. Though that award may be a  material  evidence  to  be
           looked into, but  the  sale  transactions  referred  to  therein
           cannot  be  relied  upon  implicitly,  if  the   party   seeking
           enhancement resists the claim by adducing evidence independently
           before the Court or the Tribunal. In this case, since  no  steps
           were taken to place the sale transaction referred in the  award,
           they cannot be evidence. So they can neither be relied upon  nor
           can be looked into as evidence.”

                                                    (emphasis supplied)

10.   It is not in dispute that the landowners, appellants  before  us,  did
not lead any evidence in support of their claim before the  Reference  Court
to prove that the market value of the land acquired from the  ownership  was
more than what was awarded as compensation by  the  Collector.  Neither  the
order passed by the Reference Court nor that passed by the High  Court  make
any  reference  to  such  evidence.  Absence  of  any  such  evidence   was,
therefore, bound to go against the appellants.  So long  as  the  appellants
failed to discharge the burden cast on them, there was no  question  of  the
Reference Court granting any enhancement. The High Court was, in that  view,
justified in holding that the enhancement granted  in  the  absence  of  any
evidence was unjustified.

11.   It was argued by learned counsel for the appellants that  although  no
evidence was adduced by the claimants to prove that the market value of  the
acquired land was higher than what  was  awarded  by  the  Land  Acquisition
Collector, the claimants  could  rely  on  the  documents  produced  by  the
respondent-State before the Collector. If that be  so,  the  Sale  Deeds  to
which the Draft Award made a reference, could  be  referred  to  and  relied
upon. There is, in our opinion, no merit in that  contention.  While  it  is
true that the claimant can always place reliance upon the evidence that  may
be adduced by a defendant in a  suit  to  the  extent  the  same  helps  the
plaintiff, but the documents that have  not  been  relied  upon  before  the
Court by the defendants  cannot  be  referred  to  or  treated  as  evidence
without proper proof of the  contents  thereof.  In  the  present  case  the
defendants-respondents did not produce any documents  before  the  Reference
Court in support of its case.  There was indeed no occasion for them  to  do
so  in  the  absence  of  affirmative  evidence  from  the   claimants.   We
specifically asked learned counsel for the  respondents  whether  copies  of
any Sale Deeds had been produced by  the  defendants  before  the  Reference
Court. The answer was in the negative. That being so,  it  is  difficult  to
appreciate how  the  appellants  could  have  referred  to  a  document  not
produced or relied upon by the defendants before the Reference  Court.  Even
if the documents had been produced by the defendants, unless the  same  were
either admitted by the plaintiff or properly proved  and  exhibited  at  the
trial, the same could not by themselves  constitute  evidence  except  where
such documents were public documents  admissible  by  themselves  under  any
provision. Sale Deeds executed between third  parties  do  not  qualify  for
such admission. The same had, therefore, to be formally  proved  unless  the
opposite party admitted the execution and contents, thereby, in which  event
no proof may have been necessary for what is admitted, need not  be  proved.

12.   Suffice it to say that in the facts and circumstances of  the  present
case no evidence having been adduced by the defendants-respondents,
documentary or otherwise, there was no question  of  the  appellant  relying
upon  such  non-existent  evidence.
Merely  because  some  documents   were
referred to in the Draft Award by the  Collector,  did  not  make  the  said
documents admissible by them to enable the plaintiffs to refer  to  or  rely
upon the same in support of a  possible  enhancement.  
If  a  document  upon
which the plaintiffs placed reliance was available, there was no reason  why
the same should not have been produced or relied upon. 
Inasmuch as  no  such
attempt was made by the plaintiffs, they were  not  entitled  to  claim  any

13.   The next question then is
whether the appellants-  landowners  can  be
given another opportunity to adduce evidence at this  stage  and  if  so  on
what terms.
The Reference Court, it is noteworthy, was of the  opinion  that
the Special Land Acquisition Officer had in the cases at  hand  relied  upon
two sale deeds to record a finding that the true market price  of  the  land
under acquisition was  Rs.85/-  per  square  meter.
Having  said  that  the S.L.A.O had for no reason awarded an amount of  Rs.26.25  per  square  meter
This  was  according  to  the  Reference  Court  inexplicable.
Reference Court observed:

           “According to the S.L.A.O. the said rate is fair and  reasonable
           but actually he has not awarded  the  compensation  accordingly.
           He has awarded it at the rate of  Rs.26.25  ps.  per  sq.  mtrs.
           This abstruse to understand as to how the  S.L.A.O  has  awarded
           the compensation accordingly, when he had already arrived at the
           conclusion in respect of reasonable rate  of  the  compensation.
           Considering all these things, I hold that the compensation ought
           to have been awarded at least at the rate  of  Rs.85/-  per  sq.
           mtrs. for the lands under acquisition.  For the same  reason,  I
           also hold that the claimant is entitled for compensation at  the
           rate of Rs.85/- per sq. mtrs. for the lands under acquisition.”

14.   The failure or the omission  to  lead  evidence  to  prove  the  claim
appears in the above context to be a case  of  some  kind  of  misconception
about the legal  requirement  as  to  evidence  needed  to  prove  cases  of
enhancement of compensation. 
We do not in that view see any reason  to  deny
another opportunity to the landowners  to  prove  their  cases  by  adducing
evidence in support of their claim for  enhancement.  
Since,  however,  this
opportunity is being granted ex debito justitiae, we deem it fit  to  direct that if the Reference Court  eventually  comes  to  the  conclusion  that  a higher amount was due and  payable  to  the  appellant-owners,  such  higher amount including solatium due  thereon  would  not  earn  interest  for  the period between the date of the judgment of the Reference Court and the  date
of this order. 
These appeals are with that direction allowed, the  judgments
and orders impugned in the same  modified  to  the  extent  that  while  the enhancement order by the Reference Court shall stand set aside, the  matters shall stand remanded  to  the  Reference  Court  for  a  fresh  disposal  in accordance with law after giving  to  the  landowners  opportunity  to  lead evidence in support of their claims for higher compensation. No costs.

                                        (T.S. THAKUR)

New Delhi                               (GYAN SUDHA MISRA)
July 5, 2013

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