# 14 (ADDL.) S.C.R.-735 GOA HOUSING BOARD v. RAMESHCHANDRA GOVIND PAWASKAR & ANR

- **Citation:** [2011] 14 S.C.R. 735
- **Court:** Supreme Court of India
- **Decided:** 2011-10-11
- **Case number:** Civil Appeal No. 8540 of 2011
- **Bench:** R.V. Raveendran, P. Sathasivam, A.K. Patnaik
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/14-addl-s-c-r-735-goa-housing-board-v-rameshchandra-govind-pawaskar-anr-27573
- **Pages:** 28

## Headnote

Goa Land Use (Regulation) Act, 1991:
Object of its enactment - Discussed. ·
ss.2, 13 -
Compensation -
Determination of -
A
B
c
Acquisition of 358730 sq.m. of land - LAO determined
compensation @ Rs. 18 per sq.m. which was affirmed by
reference court - High Court awarded Rs.100 per sq.m. as
D
compensation - On appeal, held: The acquired land vested
in the respondent who was the tenant under the provisions of
the Tenancy Act, therefore, the respondent could not have
used the land for any purpose other than agriculture or even
allow anyone else to use the same for any purpose other than
E
agriculture - In view of permanent restriction regarding user
and the bar in regard to any non-agricultural use, the acquired
land would have to be valued only as an agricultural land and ·
could not be valued with reference to sales statistics of other
nearby lands which had the potential of being used for urban
F
development - Merely by notifying the regional plan showing
certain agricultural lands as earmarked for industrial purpose,
those lands would not cease to be agricultural lands - At least
50% would have to be deducted from market value of freehold
land with development potential to arrive 13t market value of G
such land which could be used only for agricultural purposes
- Market value of neighbouring land being Rs.1101- per sq.m.,
appropriate compensation for acquired land would be 50%
735
H
736
SUPREME COURT REPORTS [2011) 14 (ADDL.) S.C.R.
A thereof, that is Rs.55 per sq.m. -
Goa, Daman and Diu
Agricultural Tenancy Act, 1964.
Land acquisition - Compensation - Determination of, in
respect of similarly situated land in the same area - Held:
Similarly situated land in the same area, having the same
8 advantages and acquired under the same notification should
be awarded the same compensation - But if 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
C land owner cannot sell it for any purpose other than
agriculture and the purchaser cannot sell it for any purpose
other than agriculture.
Land acquisition -
Vacant land vis-a-vis land in
D possession of long term lessee -
Compensation -
Determination of.
The Respondent was declared as the tenant of land
measuring 374,000 sq. mts. under the Goa, Daman and
E Diu Agricultural Tenancy Act, 1964. On payment of the
purchase price of Rs.59,980 determined under sections
18C and 180 of the Tenancy Act, a purchase certificate
was issued to him under section 18H of the Tenancy Act
confirming that he was deemed to be the purchaser of
the said land under the provisions of the Tenancy Act,
F subject to the condition that the said land shall not be
transferred without the previous sanction of the
Mamlatdar under section 18K of the Tenancy Act. An
extent of 358730 sq.m. of land belonging to the
respondent was acquired in pursuance of the preliminary
G notification.
The LAO made an award determining the
compensation payable as Rs.18 per sq.m. The reference
court declared the compensation awarded at Rs.18 per
H sq.m. to be reasonable and affirmed the award of the
GOA HOUSING BOARD v. RAMESHCHANDRA
737
GOVIND PAWASKAR
LAO. Aggrieved, the respondent filed an appeal before the
A
High Court seeking increase in compensation. The High
Court found that in regard to the adjoining land acquired
under the same notification, compensation was awarded
@ Rs.136.50 per sq.m. and as the land in Survey No.102/
1 belonging to the landholder was much larger, the'High
B
Court deducted Rs.36.50 per sq.m. and awarded Rs.100
per sq.m. as the compensation. Both the Board and the
landowners filed the appeals challenging the order of the
High Court.
Disposing of the appeals, the Court
c
HELD: 1.1. Having regard to section 2 of the Goa,
Daman and Diu Agricultural Tenancy Act, 1964, it is clear
that notwithstanding anything contained in the Town and
Country Planning Act or any scheme ther

## Text

_Characters 0–39,703 of 54,773. This is a partial read: ask again with offset=39703 for what follows._

[2011] 14 (ADDL.) S.C.R.-735
GOA HOUSING BOARD
v.
RAMESHCHANDRA GOVIND PAWASKAR & ANR.
(Civil Appeal No. 8540 of 2011)
OCTOBER 11, 2011
[R.V. RAVEENDRAN, P. SATHASIVAM AND A.K.
PATNAIK JJ.]
Goa Land Use (Regulation) Act, 1991:
Object of its enactment - Discussed. ·
ss.2, 13 -
Compensation -
Determination of -
A
B
c
Acquisition of 358730 sq.m. of land - LAO determined
compensation @ Rs. 18 per sq.m. which was affirmed by
reference court - High Court awarded Rs.100 per sq.m. as
D
compensation - On appeal, held: The acquired land vested
in the respondent who was the tenant under the provisions of
the Tenancy Act, therefore, the respondent could not have
used the land for any purpose other than agriculture or even
allow anyone else to use the same for any purpose other than
E
agriculture - In view of permanent restriction regarding user
and the bar in regard to any non-agricultural use, the acquired
land would have to be valued only as an agricultural land and ·
could not be valued with reference to sales statistics of other
nearby lands which had the potential of being used for urban
F
development - Merely by notifying the regional plan showing
certain agricultural lands as earmarked for industrial purpose,
those lands would not cease to be agricultural lands - At least
50% would have to be deducted from market value of freehold
land with development potential to arrive 13t market value of G
such land which could be used only for agricultural purposes
- Market value of neighbouring land being Rs.1101- per sq.m.,
appropriate compensation for acquired land would be 50%
735
H
736
SUPREME COURT REPORTS [2011) 14 (ADDL.) S.C.R.
A thereof, that is Rs.55 per sq.m. -
Goa, Daman and Diu
Agricultural Tenancy Act, 1964.
Land acquisition - Compensation - Determination of, in
respect of similarly situated land in the same area - Held:
Similarly situated land in the same area, having the same
8 advantages and acquired under the same notification should
be awarded the same compensation - But if 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
C land owner cannot sell it for any purpose other than
agriculture and the purchaser cannot sell it for any purpose
other than agriculture.
Land acquisition -
Vacant land vis-a-vis land in
D possession of long term lessee -
Compensation -
Determination of.
The Respondent was declared as the tenant of land
measuring 374,000 sq. mts. under the Goa, Daman and
E Diu Agricultural Tenancy Act, 1964. On payment of the
purchase price of Rs.59,980 determined under sections
18C and 180 of the Tenancy Act, a purchase certificate
was issued to him under section 18H of the Tenancy Act
confirming that he was deemed to be the purchaser of
the said land under the provisions of the Tenancy Act,
F subject to the condition that the said land shall not be
transferred without the previous sanction of the
Mamlatdar under section 18K of the Tenancy Act. An
extent of 358730 sq.m. of land belonging to the
respondent was acquired in pursuance of the preliminary
G notification.
The LAO made an award determining the
compensation payable as Rs.18 per sq.m. The reference
court declared the compensation awarded at Rs.18 per
H sq.m. to be reasonable and affirmed the award of the
GOA HOUSING BOARD v. RAMESHCHANDRA
737
GOVIND PAWASKAR
LAO. Aggrieved, the respondent filed an appeal before the
A
High Court seeking increase in compensation. The High
Court found that in regard to the adjoining land acquired
under the same notification, compensation was awarded
@ Rs.136.50 per sq.m. and as the land in Survey No.102/
1 belonging to the landholder was much larger, the'High
B
Court deducted Rs.36.50 per sq.m. and awarded Rs.100
per sq.m. as the compensation. Both the Board and the
landowners filed the appeals challenging the order of the
High Court.
Disposing of the appeals, the Court
c
HELD: 1.1. Having regard to section 2 of the Goa,
Daman and Diu Agricultural Tenancy Act, 1964, it is clear
that notwithstanding anything contained in the Town and
Country Planning Act or any scheme thereunder or the
D
Land Revenue Code, no land which is vested in a tenant
under the provisions of the Tenancy Act shall be used or
allowed to be used for any purpose other than
agriculture. In the instant case, the acquired land vested
in the respondent-land owner who was the tenant under
E
the provisions of the Tenancy Act. Therefore, the
respondent could not have used the land for any purpose
other than agriculture or even allow anyone else to use
the same for any purpose other than agriculture. The only
manner in which the land use could be changed was by
an acquisition for a public purpose. Thus, the prohibition
F
in regard to any use other than agriculture is not with
reference to any person or holder with reference to the
land itself. Any land which vested in a tenant under the
provisions of the Tenancy Act attracted the bar contained
G
in section 2 of the Land Use Act and there was a
·· permanent bar against the use of such land for purposes
other than agriculture either by the tenant in. whom the
land is vested or any of his transferees or successorsin-interest. [Para 11] [750-E-H; 751-A]
H .
738
SUPREME COURT REPORTS [2011] 14 (ADDL.) S.C.R.
A
1.2. There can be no doubt that similarly situated land
in the same area, having the same advantages and
acquired under the same notification should be awarded
the same compensation. But if an acquired land is
subject to a statutory covenant that it can be used only
B 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
c 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,
0 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
E only for agricultural purposes, it may not be possible to
arrive at the market value thereof with reference to the
market value of nearby residential plots. Therefore, in
regard to the land in question, in view of the permanent
restriction regarding user, that is it should only be used
for agricultural purposes, and the bar in regard to any
F 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
G potential of being used for urban development. [Paras 11,
12, 17) [751-C; 755-E-H; 756-A-B]
Administrator General of West Bengal v. Collector,
Varanasi 1988 (2) SCC 150: 1988 (2) SCR 1025; Chimanlal
Hargovinddas v. Special Land Acquisition Officer, Poona
H 1988 (3) SCC 751: 1988 (1) Suppl. SCR 531; Subh Ram
GOA HOUSING BOARD v. RAMESHCHANDRA
739
GOVIND PAWASKAR
v. State of Haryana 2010 (1) SCC 444: 2009 (15) SCR 287
A
- relied on.
K. Periasami v. Sub-Tehsildar (Land Acquisition) 1994
(4) SCC 180; Delhi Development Authority v .. Bali Ram
Sharma 2004 (6) SCC 533 - referred to.
2. The matter can be seen from a slightly different
perspective. A vacant land has a particular value. If such
land is in the occupation of a long term ldssee, and the
owner wants to sell it without possession, he will only get
B
a far lesser price that what he would get as price for the
C
same land if vacant posses·sion can be given to the
purchaser. If such land 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 property D
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
E
~
ut will only get a part of the market value and the tenant
ill get the balance. In that sense even if the market value
f the land without any restrictive covenants is
c_onsidered 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 to a land which can be used for all
purposes, an appropriate percentage will have to be
deducted from the value of Rs.110 per sq.m. to arrive at
F
the land subject to the statutory restriction regarding use.
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. At least 50% will have to be deducted
H
740
SUPREME COURT REPORTS [2011] 14 (ADDL.) S.C.R.
A from the market value of freehold land with development
potential to arrive at the market value of such land which
can be used only for agricultural purposes. The market
value of neighbouring land (which is not subject to the
prohibition under Land Use Act) is determined as Rs.110/
8 - per sq.m. An appropriate compensation for the acquired
land should be 50% thereof, that is Rs.55 per sq.m. [Paras
18, 19] [756-C-H; 757-A-B]
c
Prohibition under Section 2 of Goa Land Use (Regulation)
Act, 1991 - Inapplicability to the acquired land.
3.1. The object of the Goa Land Use (Regulation) Act,
1991 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
o 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 nonagricultural land, the tenant would not have got the title
to the land as a deemed purchaser and the land would
E have continued under the ownership of the landlord.
Therefore the object of the Act is that no tenant in whom
a land had vested 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
F attached to the land itself by providing that no land which
vested in a tenant under the Tenancy Act shall be 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
G 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 continued to apply.
Therefore it was necessary to make an exemption in
regard to the lands acquired for public purpose. That is,
H
GOA HOUSING BOARD v. RAMESHCHANDRA
741
GOVIND PAWASKAR
even though a land which vested in a tenant under the· A
Tenancy Act was subject to a covenant that it could not
be used for any agricultural purpose in future, once it
was acquired under the Land Acquisition Act for a public
purpose and .vested in the government, the prohibition
contained under section 2 would cease to operat~, and
B
the state government or the beneficiary of acquisitlofl
could use it for any purpose. Section 3 is therefore a
provision which entitles the State Government or
beneficiary of acquisition to use it for any purpose other
than agriculture. The said section will not enable the c
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 entit~d
would be what he would have got if he had sold it in open
market to a willing purchaser who could have used it only 0
for agricultural purpose. [Para 22] [757-F-H; 758~A-F]
3.2. The contention was raised on behalf of the
respondent that by notification issued under section 13
of the Goa, Daman and Diu Town & Country Planning
Act, 1974, the said land (Sy. No.102/1) along with other
E
lands in Colvale village were notified for proposed
change of use from cultivable land to industrial land; and
that by a notification 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
F
approved by the government which showed that the said
land was earmarked fof'. industrial use. The said
contention based on section 15 of Town Planning Act has ,
no merit. Merely by notifying the regional plan showing
certain agricultural lands as earmarked for industrial G
purpose, those lands will not cease to be agricultural
lands. 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
H
742
SUPREME COURT REPORTS [2011] 14 (ADDL.) S.C.R.
A conform to the provisions of the Regional plan and
nothing more. As the land was not converted to nonagricultural industrial use under Sections 30 and 32 of
the Goa, Daman and Diu Land Revenue Code, 1968, the
land did not become industrial land. Once the Land Use
B 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 to be used for any
purpose other than agriculture. [Paras 23, 24] [758-G-H;
c 759-A-D-G-H; 760-A-B]
4. 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, 1976 in the Legislative Assembly), every
D 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
provjdes that on determination of the purchase price by
E the Mamlatdar under section 18C, the tenant shall 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;
F and the purchase will be in effective on tenantpurchaser's failure to pay 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
G purchase the land held by him within the specified period
under section 188, the Mamlatdar may direct the land or
part thereof, shall be disposed of in the manner provided
therein. In this case, in terms of section 18E, the
Mamlatdar required the respondent to deposit the
H purchase price of Rs.59,840/- and on such deposit, a
GOA HOUSING BOARD v. RAMESHCHANDRA
GOVIND PAWASKAR
743 -
certificate of purchase was issued to the respondent
A
under section 18H only on 6.5.1993. Until such a
certificate was issued, the~e was a pos&ibility of
resumption and disposal under section 1 BJ. By the time,
the 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
B
32 of the Code. Section 32·provides for the procedure for C
conversion of use of land from agricultural to nonagricultural 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 0
respondent that the land has been converted to nonagricultural 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 tenantpurchaser to apply for conversion to non-agricultural use.
E
F
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. Consequently the appeal
filed by the Board is accepted and the compensation
awarded for land from Rs.100/- per sq.m. is reduced to
Rs.55 per sq.m. The respondent would be entitled to all
statutory benefits as awarded by the l:iigh Court. As a
consequence the appeal filed by· the landowner for
increase of compensation stands rejected. [Paras 25, 26]
G
[760-C-H; 761-A-F]
6. CA No.8542 of ,2011 is related 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
H.
744
SUPREME COURT REPORTS [2011] 14 (ADDL.) S.C.R.
A belonging to the respondent. This appeal related to an
acquisition initiated under preliminary notification dated
26.9.1991. In this case, the relevant date for purpose of
determination of market value is 26.9.1991, about one and
half years after 23.3.1990 (the date of the relied upon sale
8 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 value is with reference to land with potential for
development. As the land acquired was subject to a
prohibition under the Land Use Act, a deduction of 50%
C is made for to arrive at the. value of the land with
agricultural potential only. Consequently, the market
value of the acquired land is determined as Rs.45/- per
sq.m. [Para 27] [761-G-H; 762-C]
D
E
F
Case Law Reference:
1994 (4) sec 180
2004 (6) sec 533
1988 (2) SCR 1025
referred to
referred to
relied on
1988 (1) Suppl. SCR 531
relied on
2009 (15} SCR 287
relied on
Para 12
Para 12
Para 13
Para 14
Para 15
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
8540 of 2011.
From the Judgment & Order dated 26.9.2008 of the High
Court of Bombay in FA No. 216 of 2003.
WITH
G C.A. Nos. 8541 and 8542 of 2011.
H
S. Ganesh, L.N. Rao, Dhruv Mehta, Pratap Venugopal,
Surekha Raman, Dileep P., P.K. Jain, Varun Singh, Namrata
Sood, K.J. John & Co., Shriniwas R. Khalap, Wajeeh Shafiq,
Anupam Lal Das, A. Raghunath, Yashraj Singh Deora, Sriram
GOA HOUSING BOARD v. RAMESHCHANDRA
745
GOVIND PAWASKAR
Krishna, Sarv Mitter, Mitter & Mitter Co. Siddharth Bhatnagar,
A
Pawan Kumar Bansal and T. Mahipal for the appearing parties.
The Judgment of the Court was delivered by
R.V. RAVEENDRAN, J. 1. Leave granted.
CA Nos. 8540 and 8541 of 2011 [@ SLP(c) Nos.149 and
9591 of 20091
B
2. These two appeals arise out of the judgment dated
26.9.2008 in FA No.216/2003, the first by the Goa Housing c
Board and the second by the land owner. As the ranks of the
parties differ, the Goa Housing Board (appellant in the first
matter and second respondent in the second matter) for whose
benefit the acquisition was made will be referred to as the
'Board' or the appellant. Rameshchandra Govind Pawaskar
D
(first respondent in the first matter and appellant in the second
matter) whose land was acquired will be r~erred to as the
'respondent'. The Land Acquisition Officer (second respondent
in the first matter and first respondent in the second matter) will
be referred to as 'the LAO'.
E
3. By an order dated 31.1.1977 passed by the Mamlatdar,
Bardez, the respondent was declared as the tenant of Survey
No.102/1, Colvale village, Bardez, Goa measuring 374,000 sq.
mts. under the Goa, Daman and Diu~Agricultural Tenancy Act,
1964 ('Tenancy Act' for short). On payment of the purchase
F
price of Rs.59,980 determined under sections. 18C and 18D
of th·e Tenancy Act, a purchase certificate dated 6.5.1993 was
issued to-him under section 18H of the Tenancy Act confimfing
that he was deemed to be the purchaser of the said land under
the provisions of the Tenancy Act, subject to the condition that
G
the said lan.d shall not be transferred without the previous
sanction of the Mamlatdar under section 18K of the Tenancy
Act. An extent of 358730 sq.m. of land in the said Survey
,No.102/1 belonging to the respondent was acquired in
pursuance of the preliminary notification dated 9.6.1994
H
746
SUPREME COURT REPORTS [2011] 14 (ADDL.) S.C.R.
A (gazetted on 16.6.1994) corrected by corrigendum dated
26.9.1994 (gazetted on 27.9.1994).
4. The LAO made an award dated 28.2.2003 determining
the compensation payable as Rs.18 per sq.m. The respondent
sought reference to the civil court for claiming a higher
B compensation. The Reference court by its judgment and award
dated 28.2.2003 declared the compensation awarded at Rs.18
per sq.m. to be proper and reasonable and affirmed the award
of the LAO. Feeling aggrieved, the respondent filed an appeal
C before the High Court seeking increase in compensation.
5. Before the High Court, the Board contended that having
regard to the provisions of the Goa Land Use (Regulation) Act,
1991 ('Land Use Act' for short), a tenant in whom the land had
vested under the Tenancy Act could not use it or allow it to be
D used for any purpose other than agriculture; and therefore the
valuation of such land could not be with reference to its potential
for use for non-agricultural building purposes, but should be only
as agricultural land. In support of its contention, the Board relied
upon a decision of a division bench of the High Court in Janaki
E N. Morajkar vs. Special Land Acquisition Officer (First Appeal
No.221/2003 decided on 9.2.2005). It was therefore submitted
that the market value of agricultural land determined by the
reference court at Rs.18/- per sq.m. affirming the determination
by the LAO was correct and there was no need to increase the
F compensation.
6. The High Court found that in regard to the adjoining land
(Survey No.102/1A of Colvale) acquired under the same
notification, compensation was awarded at the rate of
Rs.136.50 per sq.m. As the land in Survey No.102/1 belonging
G to the landholder was much larger, the High Court deducted
Rs.36.50 per sq.m. and awarded Rs.1'00 per sq.m. as the
compensation. Though the High Court noticed the contention
of the Board with reference to the prohibition under the Land
Use Act, and the decision in Janaki N. Morajkar, it did not
H choose to follow the said decision. Nor did it hold that the
GOA HOUSING BOARD v. RAMESHCHANDRA
747
. GOVIND PAWASKAR [R.V. RAVEENDRAN, J.]
decision in Janaki N. Morajkar was wrongly decided or
A
inapplicable. The High Courtavoided the issue by observing
that it was not necessary to go into the larger controversy as
to whether Janaki N.Morajkar was rightly decided. The High
Court held that the Board cannot pick and choose only some
of the acquired. lands for applying the provisions of the Land
B
Use Act; that the contention based on the Land Use Act was
not taken in regard to other lands acquired under the same
notification, was evident from the decision in Goa Housing
Board vs. Pandurang V.Sawant - (FA N0.204/2003 dated
16.4.2008); that compensation should be on the same lines in c
regard to all lands acquired under the same notification and
therefore it was not necessary to examine the contention based
on Land Use Act, that the valuation should be only as the •
agricultural land.
7. Feeling aggrieved the Board has filed an appeal
D
contending as follows:
(a) In view of the bar contained in the Land Use Act in
regard to use of land vested in a tenant under the
provisions of the Tenancy Act for any purpose other than
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agriculture, compensation could not be determined with
reference to the sales statistics relating to residential plots
on the assumption that the agricultural land in question had
development potential for residential use.
(b) Having regard to clause 8 of section 24 of the Land
Acquisition Act which provides that "the court shall not take
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into consideration any increase to the value of the land on
account of it being put to any use which is forbidden by
any law or opposed to public policy" and the bar contained
in the Land Use Act in regard to any use other than
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agriculture, the High Court could not have taken note of the
development and building potential of the acquired land for
the purpose of determining compensation.
(c) The High Court ought to have followed the decision of
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748
SUPREME COURT REPORTS [2011] 14 (ADDL.) S.C.R.
A
another divisic;in bench of the High Court in Janaki N.
Morajkar, on an identical issue. If the High Court was not
in agreement with the view in Janaki N. Morajkar, it ought
to have either referred it to a larger bench, or distinguished
it or held that it was inapplicable. It could not have ignored
B
the decision.
8. The respondent has also filed an appeal contending that
compensation at Rs.110 per sq.m. was very low and claiming
higher compensation. On the contentions urged, the following
C questions arise :
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(i)
Having regard to section 2 of the Land Use Act,
whether th~ acquired land should be valued only as
agricultural land or whether it could be valued as
land with development potential for being used as
building sites?
(ii)
Whether the compensation awarded by the High
Court is excessive as contended by the Board or
inadequate as contended by the respondent and
what should be the compensation?
9. At the outs.et we may notice two subsequent events. The
first is that the special leave petition against the decision in
Janaki N. Morajkar was dismissed by this Court (Janaki N.
Morajkar 1. Sp/. LAO - SLP(C) No.13195/2003 decided on
F 19.7.2005). The second is that the appeal against the decision
in Pandurang VSawantwas allowed by this Court. The market
value of the acquired land, if it was not subject to any prohibition
regarding use under the Land Use Act, is now settled by the
decision of this court in regard to the neighbouring land, in Goa
G Housing Board v. Pandurang V. Sawant [CA Nos.1992-93/
2010 decided on 19.2.2010). The said decision relates to the
adjoining land (S'y. No.102/1A) which was the subject matter
of First Appeal No.204/2003 before the High Court. In that case
also the Land Acquisition Officer had awarded Rs.18 per sq.m.
H The reference court had increased the compensation to Rs.150
GOA HOUSING BOARD v. RAMESHCHANDRA
749
GOVIND PAWASKAR [R.V. RAVEENDRAN, J.]
per sq.m. and on appeal the High Court by judgment dated
A
16.4.2008 had reduced itto Rs.136.50. But subsequently by
order dated 29.1.2009 the judgment dated 16.4.2008 reducing
the compensation to Rs.136.50 was corrected and the
compensation was determined as Rs.147 per sq.m. This court
reduced the compensation to Rs.110 per sq.m. instead of
B
Rs.14 7 per sq.m. Thus the market value of freehold land which
is not subject to any restriction regarding use or otherwise as
on 16.6.1994 was Rs.110/- per sq.m. This would mean that if
the contention of the respondent is accepted and the Land Use
Act is found to be inapplicable the compensation will have to c
be increased from Rs.100 to Rs.110 per sq.m. However if the
contention of the Board that the prohibition in regard to the land
use applied to the land in question having regard to the
provisions of the Land Use Act is accepted, then the market
value will have to be determined taking note of such provision.
D
- 10. We may at this juncture refer to the provisions of the
Goa Land Use Regulation Act, 1991. As it is a short Act and
every provision thereof is relevant, we extract below the said
Act in entirety :
"An Act to provide for regulation of use of agricultural land
for non-agricultural purposes.
Be it enacted by the Legislative Assembly of Goa in the
Forty-second Year of the Republic of India as follows :-
1.
Short title, extent and commencement. - (1) This Act
may be called the Goa Land Use (Regulation) Act, 1991. _
(2) It extends to the whole of the State of Goa.
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(3) It shall be deemed to have come into force with effect ·
from the 2nd day of November, 1990.
_/
2. Regulation of use of land. - Notwithstanding anything
contained in the Goa, Daman and Diu Town and Country
Planning Act, 1974 (Act 21 of 1975), or in any plan or · H
A
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750
SUPREME COURT REPORTS [2011] 14 (ADDL.) S.CR.
scheme made thereunder, or in the Goa Land Revenue
Code, 1968 (Act 9 of 1969), no land which is vested in a
tenant under the provisions of the Goa, Daman and Diu
Agricultural Tenancy Act, 1964 (Act 7 of 1964) shall be
used or allowed to be used for any purpose 0ther than
agriculture.
Explanation:- The expression "agriculture", "land" and
"tenant" shall have the same meaning assigned to them
under the Goa, Daman and Diu Agricultural Tenancy Act,
1964 (Act 7 of 1964).
3. Exemption. - The provisions of this Act shall not apply
to acquisition of any land vested in a tenant under the Goa,
Daman and Diu Agricultural Tenancy Act, 1964 (Act 7 of
1964) by the State for a public purpose under the provision
of the Land Acquisition Act, 1894 (Central Act 1 of 1894 ). "
11. Having regard to section 2 of the said Act, it is clear
that notwithstanding anything contained in the Town & Country
Planning Act or any scheme thereunder or the Land Revenue
E Code, no land which is vested in a tenant under the provisions
of the Tenancy Act shall be used or allowed to be used for any
purpose other than agriculture. In this case it is not in dispute
that the acquired land in question vested in the land owner who
was the tenant under the provisions of the Tenancy Act.
F Therefore it cannot be disputed that the respondent could not
have used the land for any purpose other than agriculture or
even allow anyone else to use the same for any purpose other
than agriculture. The only manner in which the land use could
be changed was by an acquisition for a public purpose. Thus
the prohibition in regard to any use other than agriculture is not
G with reference to any person or holder with reference to the land
itself. Any land which vested in a tenant under th13 provisions
of the Tenancy Act attracted the bar contained in section 2 of
the Land Use Act and there was a permanent bar against the
use of such land for purposes other than agriculture either by
H
GOA HOUSING BOARD v. RAMESHCHANDRA
751
GOVIND PAWASKAR [R.V. RAVEENDRAN, J.]
the tenant in whom the land is vested or any of his transferees
A
or successors-in-interest.
12. The question is whether such prohibition will affect the
market value of the land. The respondent submitted that this
court had repeatedly held that all lands situated in the same
B
area and acquired by the same riotifJcation, should be awarded
the same compensation. He relied upon the judgment in K.
Periasami v. Sub-Tehsildar (Land Acquisition) [1994 (4) SCC
180] and Delhi Development Authority v. Bali Ram Sharma
[2004 (6) SCC 533]. There can be no doubt that similarly
situated land in the same area, having the same advantages
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and acquired under the same notification should be awarded
the same compensation. But the question is when one land is
a freehold land not subject to any restrictions in regard to user
and the adjoining land though similarly situated is subject to a
permanent restriction regarding user requiring it to be used only
D
for agricultural purposes, the question is whether the two lands
can be termed as comparable lands which should be subjected
to the same compensation. We may give a few examples to
illustrate the position:
{i) A person constructs two identical houses adjoining each
other. He lets out one of them and keeps the other vacant.
After some years he sells both the properties. The house
sold with vacant possession will fetch a better price than
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the adjoining premises which is in occupation of a tenant
F
and therefore sold without possession. The fact that both
properties are situated adjoining eac;:h other and have the
same area of construction and face the same road will not
mean that the price they will fetch will be the same.
{ii) There are two adjoining properties belonging to the
G
same owner. One falls under area earmarked as
commercial and the other falls under area earmarked as
residential. Though they are similarly sifuated, the land
which is capable of commercial use· is likely to fetch a
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A
B
c
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752. SUPREME C.OURT REPORTS (2011) 14 (ADDL.) S.C.R
higher price than a land earmarked for residential use.
(iii) An agricultural land with no development potential sold
to another agriculturalist for agricultural purposes will fetch
a price which will be lower than the price fetched by an
agricultural land with potential of development into
residential or commercial plots sold for development into
a layout of plots.
(iv) A small plot measures 10' x 20' and is suitable for
construction of a shop. If it is to be sold, it will fetch a good
price at par with prevailing market value. But if the s.aid
plot is subject to an easementary right of passage in favour
of the owner of the property to the rear of the said plot and
also subject to easementary rights of light and air in favour
of the owners of plots on either side, the plot cannot be
used for construction at all and will have to be kept as a
vacant plot. Necessarily its market value will be far less than
the value of such a plot which is not subject to such
easements.
E
13. In Administrator General of West Bengal vs. Collector,
Varanasi (1988 (2) SCC 150], this court observed thus in
regard to determination of market value.:
"The market-value of a piece of property, for purposes of
Section 23 of the Act, is stated to be the price at which
F
the property changes hands from a willing seller to a willing,
but not too anxious a buyer, dealing at arms length. The
determination of market-value, as one author put it, is the
prediction of an economic event, viz, the price-outcome of
a hypothetical sale, expressed in terms of probabilities.
G
Prices fetched for similar lands with similar advantages
and potentialities Ul)der bonafide transactions of sale at
or about the time of the preliminary notification are the
usual; and indeed the best, evidences of market-value.
Other methods of valuation are resorted to if the evidence
H •
of sale of similar lands is not available."
GOA HOUSING BOARD v. RAMESHCHAND.RA
753
GOVIND PAWASKAR [R.V. RAVEENDRAN, J.]
14. In Chimanlal Hargovinddas vs. Special Land
A
Acquisition Officer, Poona [1988 (3) SCC 751] this court set
out the principle regarding determination of market value. One
of the principles mentioned is as under :
'The determination has to be made standing on the date
8
line of valuation (date of publication of notification under
Section 4) as if the valuer is a hypothetical purchaser
willing to purchase land from the open market and is
prepared to pay a reasonable price as on that day. It has
also to be assumed that the vendor is willing to sell the land
C
at a reasonable price."
Thereafter, this court stated that the exercise of determining the
market value has to be taken in a commonsense manner as a
prudent man in a business world would do and gave some
illustrative facts which have a bearing on the value :
D
"
Plus factors
1. Smallness of size.
2. Proximity to a road.
3. Frontage on a road.
4. Nearness to developed
area.
Minus factors
1. Largeness of area.
2. Situation in the interior at a
distance from the road.
3. Narrow strip of land with
very
small
frontage
compared to depth
4. Lower level requiring the
depressed portion to bE;!
filled up.
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5. Regular shape.
5. Remoteness
from
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developed locality.•
6. Level vis-a-vis land under
6,. Some special disadvantacquisition
ageous factor which
would
deter
a
purchaser.
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754
SUPREME COURT REPORTS [2011] 14 (ADDL.) S.C.R.
A
7. Special value for an owner of
an adjoining property to whom
it may have some very
B
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special advantage."
(emphasis supplied)
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
755
GOVIND PAWASKAR [RV. RAVEENDRAN, J.]
compensation, section 24 enumerates the matters to be
A
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;
B
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
D
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
E
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
F
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
G
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.