Union Of India vs Savjiram - 2003 Supreme(SC) 1286

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2003 Supreme(SC) 1286

2003(8) Supreme 721
SUPREME COURT OF INDIA
(From Madhya Pradesh High Court)
Doraiswamy Raju & Arijit Pasayat, JJ.
Union of India -Appellant
versus
Savjiram and Anr. -Respondents
Civil Appeal No. 9937 of 2003
(Arising out of SLP(C) No. 9771/2000)
With
Civil Appeal Nos. 10062-64 of 2003
(Arising out of SLP (C) No. 13692-94/2000)
With
Civil Appeal No. 10061 of 2003
(Arising out of SLP(C) No. 11709/2000)
With
Civil Appeal Nos. 10025-10060 of 2003
(Arising out of SLP (C) No. 16975-17010/2000)
With
Civil Appeal Nos. 9938-10024 of 2003
(Arising out of SLP(C) Nos. 16836-16922/2000)
With
Civil Appeal Nos. 10065-10073 of 2003
(Arising out of SLP (C) Nos. 5966-5974/2001)
Decided on 17-12-2003
Counsel for the Parties :
For the Appellant : N.N. Goswami, Sr. Advocate, Ms. Indira Sawhney, Advocate for Ms. Sushma Suri, Mrs. Anil Katiyar, Advocate (N.P.)/Advocates.
For the Respondents : A.K. Chitale, Sr. Advocate, M.D. Arya, Jai Mangalwadi, Advocate for Niraj Sharma, Advocate, B.S. Banthia and Naveen Sharma, Advocates.

Headnote:Land Acquisition Act, 1894-Section 23-Land Acquisition Manual of Madhya Pradesh-Paras 43 and 44-Valuation of lands acquired-Acquired land had houses and structures-Valuation of houses/structures-LAO determined compensation of house after deducting 5% towards depreciation-Reference Court set aside deduction towards depreciation-High Court declined to interfere-Appeal-Calculation was to be made on basis of the present value or present rates and there was no scope for making any further deduction-Stand of appellant with regard to depreciation was unsustainable-Question whether material was removed in terms of option given by appellant to individual owners, as contemplated in paras 43 and 44 was in dispute-Reference Court and High Court appeared not to have taken note of documents relied upon by appellant that option was given-Fact required to be decided by Reference Court.
       Held : A bare reading of para 44 shows that it is a method of calculation indicated relating to the computation of the compensation. The compensation for houses and buildings are required to be calculated on (a) the present value of materials (b) in addition to the cost of construction at present rates. Both the components for working out the compensation relate to present value of the materials and cost of construction at present rates less the value of any materials made over to the proprietor. Obviously, the calculation has to be done on the basis of the present value or the present rates, as the case may be. The expression present means in existence at the time at which something is spoken or written, being in a specified place, thing. Grammatically, it means denoting a tense of verbs used when the action or event described is occurring at the time of utterance or when the speaker does not wish to make any explicit temporal reference. It also means the time being, now. Commonly, it denotes existence of a particular thing or a matter at the time of consideration. Obviously therefore after arriving at the cost of construction at the prevalent rate at the time of fixing the compensation or working out the value of the materials there is no scope for making any further deduction. (Para 9)
       Whether the option of removal was given to the owner of the land is a question which has to be factually decided. The appellant has placed on record a letter issued by the concerned authorities showing that such option of removal was given. On affidavit it has further been stated that the materials were in fact removed. This assertion, as noted above, is seriously disputed by learned counsel for the claimants. Both the Reference Court and the High Court do not appear to have taken note of the documents on which reliance is placed by the Union and objectively considered the claims, in detail. In the fitness of things therefore, the Reference Court should decide as to whether there was any removal of the materials as claimed by the appellants or there was no removal as asserted by the claimants-respondents. Since the matter is pending for a long time, it would be proper if the Reference Court decides this question alone permitting the parties to place materials and/or evidence in support of their respective stands as to the removal of the materials alone. After giving proper opportunities a fresh decision shall be taken by the Reference Court. We make it clear that we have not expressed any opinion on the merits of the case so far as that issue is concerned. The appeals are allowed to the aforesaid extent and the matter is remitted back to the Reference Court for adjudicating the limited question as indicated by us (supra) as expeditiously as possible, without delay. (Para 17)

JUDGMENT

Arijit Pasayat, J.-Leave granted.

2. In these appeals, two interesting questions of primal importance arise for consideration. They relate to paras 43 and 44 of the Land Acquisition Manual of Madhya Pradesh (in short the Manual ) applicable to valuable of lands acquired in the State of Madhya Pradesh.

3. Background facts sans unnecessary details are as follows:

In exercise of powers under Sections 4 and 6 of the Land Acquisition Act, 1894 (in short the Act ), the State of Madhya Pradesh acquired certain land for the benefit of Union of India in the town of Mhow. On these acquired land, land owners had also constructed their houses or structures. In the proceedings for determination of compensation before the Land Acquisition Officer (in short the LAO) in respect of land and the houses/structures standing on the land, one of the question that arose was as to how the valuation of houses/structures was to be made. The LAO determined the compensation of house after deducting 5% towards depreciation. According to LAO, the houses are also subject to depreciation and accordingly he deducted 5% from the total valuation of house and compensation in so far as it related to house was determined .

4. At the instance of landowners, the matter was referred to the civil court under Section 18 of the Act. Before the civil Court, the land owners contention was that LAO erred in deducting 5% by way of depreciation from value of the house. According to them, there was no need to deduct 5% by way of depreciation. The learned reference Judge accepted the aforesaid contention of land owners. In his opinion, there was no question of any deduction of depreciation while calculating the valuation of house. Accordingly, the direction to deduct 5% by way of depreciated value of house was held to be bad and it was directed that the land owners will get the full valuation of house without deduction of 5% as determined by the LAO. This is what the learned reference Court held in favour of land owners in para 13 of its award:

"Therefore he has right to get the amount on account of 5% depreciation which has been deducted from the amount of award."

5. Against the award of the LAO, the Union of India filed appeal before the Madhya Pradesh High Court under Section 54 of the Act. Essentially two points were raised before the High Court. The first question related to the question regarding grant of depreciation. The other related to the question about the deductions, if any, to be made for the value of the materials made over to the original proprietor of the land acquired. The High Court found that there was no scope for any determination for depreciation and also for making any deduction for the value of materials made over. Accordingly, the appeal filed by the Union of India was dismissed.

6. In the present appeals, the two points urged before the High Court were re-iterated with reference to paragraphs 43 and 44 of the Manual. It was submitted that while making the valuation, the age of the building has necessarily to be taken note of and, therefore, depreciation has to be granted per force. So far as the value of materials made over to the proprietors is concerned, it is submitted that in terms of para 43, option is given to the owner to remove any house, building or trees standing on the land to be acquired and the value of such materials as determined in the award has to be deducted from the compensation. In the instant case option was given to the land owners who had removed the materials. Reference is made to a letter of the LAO, Mhow, Distt. Indore in this regard. In essence, therefore, the stand is that the valuation as done by the Reference Court is unsustainable.

7. Per contra, learned counsel for the claimants-land owners submitted that there is no scope for any depreciation when the present market value is to be determined in terms of para 44. It is the valuation of the land along with infrastructure standing thereon which has to be valued. The

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2003 Supreme(SC) 1286

Cases Referred (1)