GOA HOUSING BOARD versus RAMESHCHANDRA GOVIND PAWASKAR & ANR.

15. In Subh Ram vs. State of Haryana [2010 (1) SCC 444), this court observed : "It is in ·this context, in some cases, to avoid the need to differentiate .the lands acquired under a common notification for a common purpose, and to extend· the benefit of a uniform compensation, courts have observed that the purpose of acquisition is also a relevant factor. The said observation may not apply in all cases and all circumstal'\ces as the general rule is that the land owner is being compensated for what he has lost and not with reference to the purpose of acquisition. The purpose of acquisition can never be a factor to increase the market value of the acquired land. We may give two examples. Where irrigated land belonging to 'A' and dry land of 'B' and waste land of 'C' are acquired for purpose of submergence in a dam project, neither 'B' nor 'C' can contend that they are entitled to the same higher compensation which was awarded for the irrigated land, on the ground that all the lands were acquired for the same purpose. Nor can the Land Acquisition Collector hold that in case of acquisition for submergence in a dam project. irrigated land should be awarded lesser compensation equal to the value of waste land, on the ground that purpose of acquisition is the same in regard to both. The pririciple is that the quality (class) of.land, the situation of the land, the access to the land are all relevant factors for determination of the market value."

16. While section 23 of the Land Acquisition Act H enumerates the matters to be considered in determining GOA HOUSING BOARD v. RAMESHCHANDRA GOVIND PAWASKAR [RV. RAVEENDRAN, J.] compensation, section 24 enumerates the matters to be neglected in determining compensation; It provides : "But the court shall not take into consideration-xx x xx fifthly, any increase to the value of the land acquired likely to accrue from the use to which it till be put when acquired; xx xx eighth/y, any increase to the value of the land on account of its being put to any use which is forbidden by. law or C opposed to public policy." It is thus clear that if there is a prohibition regarding use of the land for purposes other than agriculture, the value of such land on account of the same being put to commercial, residential or industrial use cannot form the basis of determining the market value.

17. Where an acquired land is subject to a statutory covenant that it can be used only for agriculture and cannot be used for any other purpose necessarily it will have to be sold as agricultural land as the land owner cannot sell it for any purpose other than agriculture and the purchaser cannot sell it for any purpose other than agriculture. As a consequence, the price fetched for such land will be low even if it is situated near any urban area. But if the same land is not subject to any prohibition or restrictive covenant regarding use and has the potential of being developed either as a residential layout or put to commercial or industrial use, the land will fetch a much higher price; and the market value of such other land with development potential can be determined with reference to the sale price of nearby residential plots by making appropriate deduction for development. On the other hand if the land is to be used only for agricultural purposes. it may not be possible to arrive at the market value thereof witli reference to the market value of nearby residential plots. Therefore we are of the considered view that in regard to the land in question, in A view of the permanent restriction regarding user, that is it should only be used for agricultural purposes, and the bar in regard to any non-agricultural use, it will have to be valued only as an agricultural land and cannot be valued with reference to sales statistics of other nearby lands which have the potential of being B used for urban development.

18. We may also look at the matter from a slightly different perspective. A vacant land has a particular value. If such land is in the occupation of a long term lessee, and the owner wants to sell it without possession, he will only get a far lesser price C that what he would get as price for the same land if vacant possession can be given to the purchaser. If such lar.id in the occupation of a long term lessee is acquired, as the lessee's rights are also taken over, the compensation awarded for the land will be the full value as awarded for any neighbouring D property which is not subject to any tenancy. But the entire compensation will not be received by the land owner/landlord. The landlord will have to share the compensation with the long term lessee. In other words, the landlord will not get the entire value as compensation but will only get a part of the market E value and the tenant will get the balance. In that sense even if the market value of the land without any restrictive covenants is considered to be Rs.110 per sq.m., having regard to the fact that the land is incapable of being used for purposes other than agriculture and the price of Rs.110 is arrived at with reference F to a land which can be used for all purposes, an appropriate percentage will pave to be deducted from the value of Rs.110 per sq.m. to arrive at the land subject to the statutory restriction regarding use.

19. On the facts and circumstances, having regard to the G prohibition regarding use of land for any purpose other than agriculture, the land will have to be treated and valued as . agriculture land without any development potential for being used as residential/commercial/industrial plots. We are of the view that at least 50% will have to be deducted from the market GOA HOUSING BOARD v. RAMESHCHANDRA GOVIND PAWASKAR [R.V. RAVEENDRAN, J.] value of freehold land with development potential to arrive at the marl<et value of such land which can be used only for agricultural purposes. As we have already determined the market value of neighbouring land (which is not subject to the prohibition under Land Use Act) as Rs.110/- per sq.m. We are of the view that an appropriate' compensation for the acquired land should be 50% thereof, that is Rs.55 per sq.m.

20. We may now deal with contentions of the respondent that the prohibition under section 2 of the Land Use Act is inapplicable to the acquired land.

21. The respondent relied on section 3 of the Land Use Act relating to exemption and provides that the provisions of c the Land Use Act shall not apply to acquisition of any land vested in a tenant under the Tenancy Act, by the State for a public purpose under the provisions of the Land Acquisition Act, 1894. He contended that once a notification is issued proposing to acquire the land under the Land Acquisition Act, the provisions of the Land Use Act, in particular, the prohibition contained in section 2 will not apply and the acquired land will have to be valued as a freehold land without any restrictions.

22. Though the said argument appears to be attractive at first blush, on a careful reading of the section, we find it to be without merit. The object of the Land Use Act is to ensure that agricultural land which vested in a tenant as a deemed purchaser on account of special provisions of the Tenancy Act subject to payment of a nominal price, (thereby denying the ownership and the market value to the original owner) is not sold or used for any non-agricultural purpose. If the land was non-agricultural land, the tenant would not have got the title to the land as a deemed purchaser ~nd the land would have continued under the ownership of the landlord. The tenant got the land under the statute, because it was agricultural land and he was the tenant thereof, that too at a very nominal price, by virtue of the special provisions of the Tenancy Act. Therefore • the object of the Act is that no tenant in whom a land had vested A under the provisions of the Tenancy Act shall use the land for any purpose other than agriculture. To see that he does not . easily defeat the said bar by transferring the property, a prohibition was attached to the land itself by providing that no land which vested in a tenant under the Tenancy Act shall be · B used or allowed to be used for any purpose other than agriculture. But for the exemption contained in section 3, when such a property is acquired under the Land Acquisition Act for public purpose, the prohibition under section 2 in· regard to use of the land for any purpose other than agriculture would have c continued to apply. Therefore it was necessary to make an exemption in regard to the lands acquired for public purpose. That is, even though a land which vested in a tenant under the Tenancy Act was subject to a covenant that it could not be used for any agricultural purpose in future, once it was acquired under 0 the Land Acquisition Act for a public purpose and vested in the government, the prohibition contained under section 2 would cease to operate, and the state government or the beneficiary of acquisition could use it for any purpose. Section 3 is therefore a provision which entitles the State Government or E beneficiary of acquisition to use it for any purpose other than agriculture. The said section will not enable the landowner to get the market value of the land as one with non-agricultural potential. In so far as the landowner is concerned, the compensation to which he is entitled would be what he would have got if he had sold it in open market to a willing purchaser F . who could have used it only for agricultural purpose.

23. The respond.mt referred to and relied upon the Preamble of the Act which provides that the object of the Act is to provide for regulation and use of agricultural land for non- G agricultural purposes. He contended that if on the date when th~ Land Use Act came into force, the land in question had . ceased to be agricultural land then the Land Use Act would be inapplicable. He submitted that by notification dated 9.11.1988 (gazetted on 24.11.1988} issued under section 13 of the Goa, H Daman and Diu Town & Country Planning Act, 1974 (for short GOA HOUSING BOARD v. RAMESHCHANDRA GOVIND PAWASKAR [RV. RAVEENDRAN, J.] 'Town Planning Act'), the said land (Sy. No.102/1) along with other lands in Colvale village were notified for proposed change of use from cultivable land to industrial land; and that by a notification dated 12.3.1990 (gazetted on 5.4.1990) issued under section 15 read with section 17 of the Town Planning Act, the Chief Town Planner notified the amended regional plan for Goa as approved by the government which showed that the said land was earmarked for industrial use. The respondent contended that on 5.4.1990, the land became an industrial land and consequently ceased to be agricultura! land before the Land Use Act came into force with retrospective effect from c 2.11.1990; and therefore the Land Use Act did not apply to the land in question (Sy. No.102/1 ).

24. Merely by notifying the regional plan showing certain agricultural lands as earmarked for industrial purpose, those lands will not cease to be agricultural lands. Section 15 notification is only an initial step in a long process under the Town Planning Act. Section 18 provided for declaration of planning area. Section 29 relates to preparation of an outline development plan. Section 31 provides for preparation of comprehensive development plan. Section 37 provides when the development plan will come into operation. Section 41 empowers the state to acquire any land reserved, required, or designated in a development plan as a land needed for a public purpose. Section 42 provides that on and from the date on which a public notice of the preparation of a development plan is published under- section 35(1), every land use covered by the development plan shall conform to the provisions of the Act. Publication of a regional plan under section 15 therefore only means that on and from the date of publication of the regional plan, any development programme or development work undertaken should conform to the provisions of the Regional plan and nothing more. As the land was not converted to non-agricultural industrial use under Sections 30 and 32 of the Goa, Daman and Diu Land Revenue Code, 1968 ('Land Revenue Code' for short) the land did not become industrial A land. Therefore the said contention based on section 15 of Town Planning Act has no merit. Once the Land Use Act came into force, notwithstanding anything contained in the Town Planning Act or in any plan or scheme made thereunder, a land vested in a tenant under the Tenancy Act could not be used or allowed B to be used for any purpose other than agriculture.

25. Section 18A of the Tenancy Act provides that on the Tiller's Day (that is, 8.10.1976, the date of introduction of Goa, Daman and Diu Agricultural Tenancy (Fifth Amendment) Act, C 1976 in the Legislative Assembly), every tenant shall subject to the other provisions of the Act, be deemed to have purchased from his landlord the land held by him as a tenant and such land shall vest in him free from such encumbrances on that day. Section 18E provides that on determination of the purchase price by the Mamlatdar under section 18C, the tenant shall D deposit the purchase price with the Mamlatdar as provided in section 18E. Section 18H provides that on deposit of the purchase price the Mamlatdar shall issue a certificate of purchase to the tenant-purchaser in respect of the land; and the purchase will be in effective on tenant-purchaser's failure to pay E the purchase· price. Section 18J provides that where purchase of any land by the tenant under section 18A becomes ineffective under section 18C or 18H or where the tenant fails to exercise the right to purchase the land held by him within the specified period under section 188, the Mamlatdar may direct the land F or part thereof, shall be disposed of in the manner provided therein. Section 18K of the Tenancy Act pro0des that no land purchased by a tenant under Chapter llA of the Tenancy Act shall be transferred by sale, gift, mortgage, lease or assignment, without the previous sanction of the Mamlatdar. In this case, in G terms of section 18E, the Mamlatdar required the respondent to deposit the purchase price of Rs.59,840/- and on such deposit, a cert11cate of purchase was issued to the respondent under section 18H only on 6.5.1993. It should be noted that until such a certificate was issued, there was a possibility of H resumption and disposal under section 18J. By the time, the GOA HOUSING BOARD v. RAMESHCHANDRA GOVIND PAWASKAR [R.V. RAVEENDRAN, J.] certificate of purchase in regard to the land was issued on 6.5.1993, Goa Land Use (Regulations) Act, 1991 had came into force on 2.11.1990. Further, under section 30 of the Land Revenue Code, no land used for agriculture shall be used for any non-agricultural purpose except with the permission of the Collector under section 32 of the Code. Section 32 _provides for the procedure for conversion of use of land from agricultural to non-agricultural use. It requires an application to be made by the land holder to the Collector and a permission being granted by Collector for conversion, subject to payment of the fees prescribed therein. It is not the case of the respondent that c the land has been converted to non-agricultural use under sections 30 and 32 of the Land Revenue Code. In fact, before the issue of a purchase certificate on 6.5.1993, it may not be possible for a tenant-purchaser to apply for conversion to non- agricultural use. It is, thus, clear that the land in question was agricultural land as on the date when the Land Use Act came into force and when the land was acquired under the Land Acquisition Act. Therefore, the contention that it was not agricultural land, is rejected.

26. Consequently we allow the appeal filed by the Board and reduce the compensation awarded for land from Rs.100/- per sq.m. to Rs.55 per sq.m. The respondent will be entitled to a!I statutory benefits as awarded by the High Court. As a consequence the appeal filed by the landowner for increase of compensation stands rejected. CA No. 8542 2011 [@ SLP (C) No.3723/20091

27. This appeal relates to acquisition of 9, 153 sq. m. of land in the said Sy. No.102/1 of Colvale village under preliminary notification dated 26.9.1991 belonging to the respondent. The facts are the same as in the first two appeals as this appeal relates to acquisition of the another portion of the same land belonging to the same respondent, the only difference being that this appeal relates to an acquisition initiated under preliminary notification dated 26.9.1991. In the other two A appeals, we had relied upon the decision of th1~; Court in Goa Housing Board vs. Panduranga V Samant [CA Nos.199'1-93 of 201 O decided on 19.2.201 OJ, wherein tt11s Court had determined compensation as Rs.110 per sq.m. in regard to acquisition of neighbouring land under preliminary notification g gazetted on 16.6.1994. Determination of market value in Pandurang V .. Samant was with reference to a sale transaction dated 23.3.~990. This Court had determined the market value as Rs.75 p~! sq.m. as on 23.3.1990 and mcreased 1t by Rs.35 to arrive at the vaiue as Rs.110/- after four years, ::is on c 16.6.1994. In this case, as the relevant date for purpose of determination of market value is 26.9.1991. about one and haif years after 23.3.1990 (the date of rhe relied tipon sale transaction). By applying the same principle, the market value of the land as on 26.9.1991 will be Rs.90 per sq.m. The said 0 value !s with reference to land with potential for development. As the land acquired was subject to a prohibition under the Land Use Act, for reasons stated in the first two appeals, a deduction of 50% is made for to arrive at the value of the land with agricultural potential only. Consequently, the market value E of the acquired land is determined as Rs.45/- per sq.m.

28. We accordingly allow this appeal in part and reduce the compensation from Rs.140 per sq.m to Rs.45 per sq.m. The respondent will be entitled to said compensation with all statutory benefits under section 23(1A), section 23(2) and F section 28 of the Land Acquisition Act 1894. D.G. Appeals disposed of.