Saturday 10 August 2013

Judicial notice can and should be taken of fact of continuous rising inflation and rising land values

The Civil Court thus awarded compensation on the basis of a transaction which took place five years prior to the date of notification. Learned Government Pleader should not have had any grievance, therefore, in respect of the compensation awarded to the claimants for the vacant lands. It is reasonable to assume that land values must have gone up in June, 1962 as compared to values in 1957. Judicial notice can and should be taken of the fact of continuous rising inflation and rising land values.

Patna High Court
State Of Bihar vs S.K. Thacker And Ors. Etc. on 24 July, 1980
Equivalent citations: AIR 1981 Pat 81
Bench: U Sinha, S Roy



1. This is a batch of six first appeals by State of Bihar against awards made by Special Land Acquisition Judge, Dhanbad in land reference cases under Sections 18 and 30 of the Land Acquisition Act (hereinafter referred to as 'the Act'). In F. A. Nos. 438, 439, 441 and 442 the only question which falls for consideration is the value of compensation awarded for buildings on the acquired lands. In F. A. Nos. 437 and 440 we are concerned only with value of lands.
2. It appears that land measuring 36 acres in Naya Bazar, Dhanbad was acquired for construction of over-bridge over railway tracks. Part of the lands acquired was vacant and parts had buildings over them. In this batch of first appeals, the total area of lands covered was 23 acres. The vacant lands were awarded compensation on the basis of their market value on the date of issuance of notification under Section 4 of the Act. The Collector awarded compensation for the buildings on the basis of the value assessed by the Public Works Department Engineers.
It will be relevant to state that the Public Works Department values buildings on the basis of plinth area. The respondents (hereinafter called 'claimants') being aggrieved by the award of the Collector filed objections under Section 18 (in some cases under Section 30) of the Act to the Colletcor. Objections having been raised, the Collector referred the matter to the Civil Court. Reference cases were accordingly instituted. They were heard and disposed of by Special Land Acquisition Judge. The Special Land Acquisition Judge enhanced the compensation for vacant lands on the basis of their market value. The compensation for buildings was awarded by the Civil Court on the basis of their capital value assessed on the basis of 20 years annual income.
3. F. A. Nos. 437 and 440 of 1969.
In regard to the vacant lands the Collector had awarded compensation at the rate of Rs. 53,525 per acre. This would work out roughly at Rs. 960 per katha. The Civil Court enhanced the compensation to Rs. 3,000 per decimal, i.e. .01 acres. It would be relevant to state here that in the district of Dhanbad .015 acres is roughly equal to one Katha. Learned Government Pleader vehemently assailed the reasons advanced by the Civil Court for enhancing the compensation nine times. The Civil Court took Ext. 9 which was a sale deed dated 17-5-1957 as the yardstick for assessing the market value of the lands under acquisition. Ext. 9 was a sale deed executed by Banarsi Lall Agrawal in favour of Md. Salim. It was in respect of lands measuring 3 Kathas 3 Chhataks 25 Sq. feet in Naya Bazar Dhanbad for Rs. 23,533. The value per katha, (.015 acres) would, therefore, come to about Rs. 4,000 roughly. If Ext. 9 is to be accepted as a correct guide for assessing the market value of the lands as it should be, in our opinion, the claimants would be entitled to about Rs. 2,700 per decimal (.01 acre). The Civil Court thus awarded compensation on the basis of a transaction which took place five years prior to the date of notification. Learned Government Pleader should not have had any grievance, therefore, in respect of the compensation awarded to the claimants for the vacant lands. It is reasonable to assume that land values must have gone up in June, 1962 as compared to values in 1957. Judicial notice can and should be taken of the fact of continuous rising inflation and rising land values.
4. Learned Government Pleader submitted with his usual eloquence that in the matter of assessing market value of the lands under acquisition the transactions entered into by the claimants in 1961 should have been preferred over the transaction of 1957 represented by Ext. 9. Learned Government Pleader also drew our attention to two transactions of sales effected on 11-4-1961 and 24-7-1961 which showed that the value of lands was much less than what claimed by the claimants. After giving our deepest consideration, we regret, we do not find much substance in this submission. The transactions to which the claimants were parties need not necessarily represent the exact market value, as they were transactions between father and daughter or father and son. There may be various considerations for putting a lower value upon the sale deeds executed in favour of C.S. Thacker or in favour of daughters of S.K. Thacker. They, therefore, could not provide adequate guideline in the matter of assessment of valuation. The rate report shows that there were two transactions in regard (to lands on) Bhuli road effected on 11-7-1961 and 4-7-1961. Learned Government Pleader submitted that as the lands in those transactions were on Bhuli Road line as the lands under acquisition, the values shown in those transactions were better guide than the transaction in 1957. There are several difficulties in accepting this submission and accepting the two transactions of 1961 as a better guide. The first difficulty is that there is no evidence on the record to show that the land acquisitions were on Bhuli road. The second difficulty is that we have no idea on the basis of the record, the length of Bhuli road. It is therefore, difficult to predicate the distance between the lands acquired and the lands covered by the two transactions on which the Land Acquisition Officer placed reliance. There being no common denominator between the transactions of 1957 and 1961, it will be difficult to hold that the sales shown in the rate report were better guide in regard to assessment of compensation. For those reasons also we are inclined in agreement with the Learned Special Land Acquisition Judge to accept Ext. 9 as the best indicator of the value of the lands under acquisition. The above appeals with regard to the value of lands by State are, therefore, devoid of any merit and must be rejected.
5. The claimants have filed cross-objection to the award of the Special Land Acquisition Judge. According to Ext. 9 the value per decimal comes to Rs. 2,700. Keeping in view the inflationary tread and keeping in view the real value of lands to an extent estimate of value has got to be done by the rule of thumb, it is, difficult to hold that the value would he Rs. 3,000 per decimal and not mere. In our view, Rs. 3,500 per decimal, would be adequate compensation for the lands. The cross-objection is, therefore, allowed accordingly. The statutory compensation and interest must he increased accordingly.
6. F. A Nos. 438 and 441 of 1969.
The above appeals arise out of compensation awarded to the claimants in respect of buildings standing over the lands acquired. The respondent C.S. Thacker has claimed the entire compensation awarded for the buildings. The respondents other than C.S. Thacker have not entered appearance nor have they filed any appeal against the award under Section 30 of the Act. It has, therefore, to be held that C.S. Thacker alone is entitled to the compensation for the buildings covered in these two appeals.
7. Learned Government Pleader submitted that there was no material before the learned Judge to come to any conclusion in regard to the income which the claimant was getting from these buildings. Learned Government Pleader did not dispute the principle that in regard to buildings in commercial areas compensation may be awarded on the basis of capital value of the structures which would mean the annual income multiplied twenty times. Thus the principle is accepted on all hands and in our view it is a just principle. The controversy between the parties, however, is in regard to the quantum of annual income of the claimant. Learned Government Pleader in support of his appeals submitted that although some witnesses have been examined, who have given out the income from the shops, yet no rent receipt or counterfoil thereof having been produced before the Land Acquisition Judge, the learned Judge should have held that it was difficult to assess the annual income of the shops.
8. The claimant C.S. Thacker in his claim under Section 18 of the Act stated that there were five tenants in his shops on the date of the notification. The rent which they were paying has also been mentioned in the objection. Question for consideration is how far the claimant has proved that the amounts shown as rent payable by the tenants have been established as such. The claimant C.S. Thacker has examined himself as claimant witness No. 9. He stated in his evidence that he had got the shops as gift from his father. The tenants in the shops were Pratap Singh Mahammad Quayum, Chain Stores, and Mahammad Quddus. In para 2 he has given out the rents that the individual tenants were paying, the total of which would be Rs. 460 per month. The claimant witness No. 8 Jawahar Lal Majumdar corroborated C.S. Thacker in all material particulars. He deposed in pars 5 that C.S. Thacker had six to seven tenants. In 1962 at the time of notification, according to him, C.S. Thacker had five tenants and he was getting Rs. 460 per month as rent. Mahammad Quayum claimant witness No. 1, is one of the persons, who was a tenant in the shop of C.S. Thacker. He deposed that he was a tenant and that he was paying Rs. 70 per month as rent. Trilok Singh (C. W._ 6) was another tenant of C.S. Thacker. hE was proprietor of Bihar Tile Trading Company. He deposed that he was a tenant of C.S. Thacker in respect of three rooms. For two of them he was paying Rs. 50 per month each and for the third room he was paying Rs. 100 per month. Trilok and Mahammad Quayum have thus fully corrobarated C.S. Thacker in his claim in regard to the income as rent from them. The claimant has produced before this Court the counter-foil of receipts granted to tenants. The counter-foil has been marked as Ext. 5 (b). This counter-foil book contains, the receipts in regard to grant of receipts for rent paid by tenants. The counter-foil book fully supports the claim of C.S. Thacker in regard to receipt of rent for the shop let out by him. The submission of learned Government Pleader that counter-foil rent receipts had not been filed springs from some misconception. Learned Government Pleader submitted that only receipt No. 241 had been marked as exhibit and not the whole book and therefore, there was no counter-foil to corroborate the oral evidence of C.S. Thacker. We regret, we are unable to accede to this submission. The entire book had been marked as exhibit at the trial. Besides the counter-foil of the rent receipts, the document of State itself shows that the five tenants mentioned in the objection under Section 13 of the Act were tenants holding shops in Thacker market. The Land Acquisition Officer himself has deposed that he had received a list of tenants from the owners of the shops and that the list contained the rent which was being paid by the tenants. No such document has been produced by the State. It is obvious, therefore, that a relevant material has been withheld by the State from the Court. The inference must be that if that document had been produced, the conclusion would have been against the State. Taking all the evidence, oral and documentary as well as the withholding of rent roll filed by the claimant, we are of the view that the claimants have successfully established that there were five tenants in five shops and they were receiving the rent. The Civil Court took the view that shortly before the acquisition in 1960 S.K. Thacker, the predecessor-in-interest of the claimant C.S. Thacker till a year prior to the acquisitions was receiving only Rs. 280 per month. He, therefore, found that C.S. Thacker was receiving only Rs. 280 and not Rs. 460 per month as claimed by the claimant. The approach of the learned Judge is unexceptionable. In our view, there is no scope for grievance to either party. The finding in that regard is well merited and must be maintained. The appeals by the State in that behalf are without merit and must be dismissed.
9. F. A. Nos. 439 and 442 of 1969-
These two appeals are also in relation to value of buildings. In the buildings owned by Jyoti Finance Company there were twenty shops with twenty tenants. The Civil Court found that the monthly income from the shops was Rs. 925. These shops were owned by Jyoti Finance Company which was a partnership firm. The partners were all daughters of S.K. Thacker. The Civil Court drew up a chart of rent which was being received by S.K. Thacker, the predecessor-in-interest of Jyoti Finance Company and another chart of rent received by Jyoti Finance Company. The successor-in-interest came into possession of the shops in 1960. According to Jyoti Finance Company, they were receiving monthly rent totalling Rs. 1,605. These were sums admitted by claimants as having been received by them. Learned Government Pleader submitted that there was paucity of evidence for coming to the conclusion that the amounts showing in the chart had been received by S.K. Thacker and Jyoti Finance Company. Claimant witness No. 8 deposed that there were twenty-one tenants. The total income from the shops was Rs. 1,605 per month. He has proved some counter-foils in regard to the rents received from tenants. S.K. Thacker examined himself as claimant witness No. 10. He deposed that the Jyoti Finance Company was receiving Rs. 1,600 per month. It was submitted that S.K. Thacker was a witness in regard to his own claim and, therefore, he could not have deposed in regard to the income of Jyoti Finance Company. Since the partners of Jyoti Finance Company were no other than daughters of S.K. Thacker he was quite competent to depose with regard to the income which Jyoti Finance Company was receiving; Further, the fact that S.K. Thacker had made a gift of these shops to Jyoti Finance Company also made him competent to depose in regard to the income from the shops. Claimant witness No. 5 Ramnik Lal was one of the tenants in the shops of Jyoti Finance Company. He has deposed that he was a tenant and that he was paying Rs. 75 per month as rent. Mohan Lal another tenant deposed as claimant witness No. 2. He was proprietor of Vohra Motor Stores. He deposed that he was tenant in one of the shops and was paying Rs. 50 as rent which rent was increased to Rs. 75 per month. There is no reason not to accept his evidence that he was a tenant. The quantum of rent that he was paying is a different question, but he was certainly a tenant. An outstanding feature which should not be lost sight of is that claimant witness No. 8 Jawahar Lal Majumdar deposed in paragraph 14 that the rent which was being realised previously continued as such and that there was no increase in rent. This answer was elicited in cross-examination. There can, therefore, be no escape from the position that the tenants claimed by Jyoti Finance Company were their tenants who were in fact holding shops. The counter-foils of the rents paid by various tenants to Jyoti Finance Company have been filed and marked Exts. 5 and 5 (a) series. The submission that whole counter-foil book has not been marked has no substance. Since we are of the view that whole book has been marked as exhibit, the oral evidence and the claim of C.S. Thacker is supported by documentary evidence as well. Learned Government Pleader submitted that the counter-foil of the rent receipts granted by Jyoti Finance Company or of any of the claimants were in regard to the receipts granted in May, 1962 and not later and that no counter-foil has been produced for period prior thereto. The fact that most of the counter-foils are for receipts granted in May, 1962 is correct, but the inference which learned Government Pleader has persuaded us to hold is untenable. The Civil Court was concerned with the rent which the claimants were receiving prior to the notification. The claimants, therefore, may well have been under the impression that any receipt prior to the notification would serve the purpose and that there was no use multiplying documents and making the records bulky. In that view of the matter, we are unable to accept the submission urged on behalf of learned Government Pleader that the counter-foil books do not show that the tenants were paying the rent as claimed by Jyoti Finance Company. In these appeals also inference adverse to the State must be drawn from the fact that the Land Acquisition Officer had received a list of tenants and the rents paid by them which has been withheld by the State. The Land Acquisition Officer, having received a list of tenants and the rents paid by them, was obliged to produce it before the Court, In that view of the matter, the finding of the learned Judge that the claimant was receiving Rs. 925 as rent monthly, must be accepted as correct. The compensation awarded to the claimants in regard to the buildings, therefore, cannot be said to be excessive by the formula accepted by the learned Judge.
10. Cross-objections have been filed on behalf of the claimants in F. A. Nos. 438, 439, 441 and 442 of 1969. In regard to the annual income which C.S. Thacker was receiving, the claimants claimed that they were receiving Rs. 460 per month. The court below found that they were receiving only Rs. 280 per month. In regard to Jyoti Finance Company the claimants claimed to be receiving Rs. 1,605 per month as rent. The Special Land Acquisition Judge found that they were receiving only Rs. 925 per month as rent. It is not disputed by the respondents that S.K. Thacker was the owner of the shops till July, 1960. The rent received by S.K. Thacker, the predecessor-in-interest of the claimants is not disputed. The learned Judge was quite justified in holding that the rent received by S.K. Thacker was the rent which continued to be received by his successor-in-interest. It is well known that it is not easy to increase rent. Increase in rent does not follow necessarily with the change in ownership. The finding of the learned Judge in this regard is unassailable in view of the evidence of claimant's witness No. 8, who deposed in para 14 in unambiguous terms that the rent was never increased, but it continued as it was before. He deposed that after the construction of the shops the rents were never increased. In that view of the matter, the finding of the learned Judge in regard to the gross annual income of the claimants is unexceptionable. The cross-objections, therefore, are also devoid of any merit and must be rejected.
11. Learned Government Pleader raised a comprehensive objection applicable to all the appeals to the effect that the learned Judge had no jurisdiction to enhance the compensation which had been awarded by the Collector. He submitted that Section 25 (2) of the Act places a bar upon grant of compensation in excess of what had been claimed under Section 9 of the Act. It cannot be disputed that if a claimant has not filed objection under Section 9 after service of notice, any claim for increase in compensation will not be permitted, but it must not be lost sight of that Section 9 (3) of the Act enjoins upon the Collector to serve notice upon the occupier and on all such persons known or believed to be interested therein. Section 25 (1) of the Act lays down that when an applicant has made a claim to compensation, pursuant to any notice given under Section 9, the amount awarded shall not exceed the amount so claimed. The expression "pursuant to any notice given under Section 9" is rather significant and cannot be lost sight of. In order to non-suit a claimant for enhancing compensation on the ground of want of objection under Section 9, it is obligatory that notice under Section 9 must have been served upon the claimant. In the absence of any material to show that notice under Section 9 of the Act had been served, it will be difficult to apply the bar of Section 25 (1) of the Act. Learned Government Pleader failed to bring to our notice any material showing that no objection had been filed under Section 9 (3) of the Act. It was contended by him that it was impossible for the State to have proved in the negative that no objection was filed by the claimants. It is true that no one can be expected to prove the negative, but negative matters also assume positive aspect in certain situations. The Land Acquisition Officer could have very well said in his evidence that no objection was filed under Section 9 (3) of the Act. When the witnesses for the claimants were in the dock, no question was put to any of them which would go to show or at least challenge the assertion of filing of any claim under Section 9 of the Act. In Sushila Devi v. State of Bihar (AIR1963 Pat 469) which is a Bench decision of this Court Mr. Justice Kanhaiya Singh did not sustain a similar objection as raised by learned Government Pleader as in this case, although the State had produced some papers showing endorsements showing that notice had been issued. Mr. Justice Kanhaiya Singh observed that the mere fact that there is nothing in the reference under Section 18 that the notice under Section 9 had been received is not sufficient to prove the issue or service of notice under Section 9. His Lordship went on to observe that evidence of service, return of a notice or order-sheet of the Land Acquisition Officer or the Collector, to show that notices were issued or served on the occupier of the land acquired is necessary. In the instant case, it was known that there were tenants on the land and that C.S. Thacker was the owner. Section 9 (3) of the Act enjoins notice on occupier as well as owner. Merely serving notice on the occupier would not amount to satisfaction of the requirement of Section 9. Learned Government Pleader submitted that in terms of Section 114 of the Evidence Act there is presumption of regularity of official acts and as such it must be presumed that notices had been duly served on the claimants. We regret, there is no substance in this submission. Such a presumption is not available to the State specially without service of notice which is a pre-condition for applying the bar of Section 25 (1) of the Act. It was obligatory upon the State to prove it by positive evidence. The matter does not rest there. Mr. Mazumdar for the claimants draws our attention to certain statement in the rate report of the Land Acquisition Officer. The rate report clearly shows that objection under Section 9 had been filed. We can do no better than quote relevant portion of the report of the Land Acquisition Officer which runs thus-
"In response to the notice under Section 9 of the Act 22 applications regarding claims to compensation have been received and enquired into and orders have been passed on them separately. The land is situated on Dhanbad Jharia Road (near Ray Talkies). The land under acquisition has been classified as Bazar land. There are structures over the land under aquisition. The measurement and valuation of the structures have been done by Executive Engineer, P.W.D., Division No. 1".
We have not the least doubt that the claimants had filed objections under Section 9 of the Act. The above observation clearly shows that 22 objections had been filed. If the State wanted to take advantage of the bar of Section 25 (1), it was obligatory upon the State to state clearly who had filed objection and who had not filed That not having been done, it must be accepted that the claimants in these appeals had filed objections under Section 9 of the Act, more so, the submission of learned Government Pleader is based upon a question of fact. That question of fact should have been specifically urged before the Special Land Acquisition Judge. If the objections had been raised the claimants would have been in a position to show that they did object. Nat having raised objection there, it is not open to learned Government Pleader to urge the bar of Section 25 (1) of the Act.
12. Before closing this judgment, it is essential to take note of one more aspect which concerns the cross-objection of S.K. Thacker in F. A. No. 437 of 1969. The claim of S.K. Thacker was that of the entire lands constituted part of a petrol pump. The Burmah Shell was the tenant in regard to that part and Rs. 225 per month was being received as rent from Burmah Shell. The lands only having been acquired and the other properties having been left intact with the claimants, the claim for capital value on the basis of the rent is clearly untenable. We see no merit in this claim of the claimants as well.
13. No other point was raised either on behalf of the appellants or the respondents.
14. For the reasons, stated above, we find no merit in these appeals and they are dismissed accordingly. The cross-objection in F. A. Nos. 437 and 440 of 1969 is allowed in part as indicated earlier. The statutory compensation and the interest thereupon will be paid proportionately to the claimants from the date of dispossession. The cross-objections in other appeals being devoid of any merit are dismissed accordingly. The parties shall bear their own costs.
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