BILKIS AND OTHERSversusSTATE OF MAHARASHTRA AND OTHERS

•                       [2011] 4 S.C.R. 733


                      BILKIS AND OTHERS                          A
                                 v.
            STATE OF MAHARASHTRA AND OTHERS
             (Civil Appeal No(s). 2706-2707 of 2004)
                          APRIL 5, 2011
                                                                 B
       [G.S. SINGHVI AND ASOK KUMAR GANGULY, JJ.)

        Land Acquisition Act, 1894:

         Acquisition of land - Compensation - Land·acquired for c
    development of tourism - Reference court enhancing
    compensation from Rs.3001- to Rs.6501- per 'Aar' holding that
    the land was permitted to be converted to non-agricultural use
    - High Court reducing the compensation to Rs.5001- per Aar
    - HELD: The potential to which the land is reasonably D
    capable of being used in future by the owner should be taken
    into account in assessing the compensation - In the instant
    case, the /arid has been converted to non-agricultural land and
    is a/so adjacent to the highway, only 6- 8 km. away from an
    internationally famous tourist destination - Judgment of High E
    Court set aside and the award of the reference court restored.
         The entire land of the predecessor-in-interest of the
    appellants was acquired pursuant to notification dated
    16.4.1990 issued u/s 4 of the Land Acquisition Act, 1894
    for the development of tourism. The award was made on        F
    22.7.1993 awarding the compensation@ Rs.300/- per Aar.
    The reference court held that the Land Acquisition Officer
    had wrongly ignored the fact that the land under
    acquisition had been converted into non-agricultural land
    in 1993. It enhanced the compensation for the land to        G
    Rs.650/ per Aar. The High Court dismissed the appeal of
    the claimants and partly allowed the appeal of the State
    holding that while permission for non-agricultural use
    had been given for the acquired land, it should not be the
                               733                               H
    734      SUPREME COURT REPORTS             [2011] 4 S.C.R.


A sole basis to treat the entire land as being non-agricultural
  or being used for commercial purpose. It, accordingly,
  reduced the compensation to Rs.500/· per Aar.
  Aggrieved, the claimants filed the instant appeals.

          Partly allowing the appeals, the Court
B
                                                             •
       HELD: 1.1. Though the claimant has been unable to
  prove the existence of a hotel, it has been found that
  some structures for the same existed. Therefore, there is
  some development on the acquired land. Further,
C admittedly, travellers would stop by and utilize the hotel
  services provided by the claimants. The land is also
  adjacent to the Aurangabad.Jalg~°in highway and is only
  6 to 8 km. away from the Ajantha caves, an internationally
  famous tourist destination. Thus, there is great future
D potential for development with respect to the acquired
  land. The potential to which the land is reasonably
  capable of being used in future by the owner should be
  taken into account in assessing the compensation. [Para
  13] [739-C·E]
E
        Smt. Kam/abai Jageshwar Joshi and others v. State of
    Maharashtra and others AIR 1996 SC 981 and State of
    Maharashtra and others v. Digamber Bhimashankar Tandale
    and others 1996 (2) sec 583 - distinguished

F      1.2. In the circumstances, the compensation awarded
  by the reference court appears to be just and reasonable,
  having been determined after correctly appreciating all
  the material evidence on record. There was no need for
  the High Court to reduce the same. Accordingly, the
G judgment of the High Court is set aside and the award of
  the reference court restored. [para 14] [739-F]
        CIVIL APPELLATE JURISIDICTION : Civil Appeal Nos.
    2706-2707 of 2004.
H
 BILKIS AND ORS. v. STATE OF MAHARASHTRA AND 735
                      ORS.
     From the Judgment & Order dated 3.4.2003 of the High           A
 Court of Judicature at Bombay bench at Aurangabad in F.A.
 No. 1127 of 2002 & F.A. No. 3260 of 2002.

      Vinay Navar for the Appellants.

    Anantbhushan Kanade, Asha Gopalan Nair, Prashant R.             B
 Dahat for the Respondents.                      ·

      The Judgment of the Court was delivered by

      GANGULY, J. 1. Heard learned counsel for the parties.
                                                                    c
      ·· 2.. The deceased Shaikh Rasheed Shaikh Latik was the '
  owner of the land gut no. 29 adms. 80 Aar situated at Thana
  Tq. Soyegaon. His entire land was acquired by the Land
  Acquisition •Officer (hereinafter 'LAO') for the development of
, tourism plan ofAjintha villages Fardapur and Thana, taluka D
  Soyegaon, district Al.Jrangabad. A notification was published
  under Section 4(1) of the Land Acquisition Act, 1894
  (hereinafter 'the Act') on 16.4.1990. It was followed by the
  notification under Section 6 published on .12.9.1991.
                                                                    E
      3. The LAO passed an award dated 22. 7.1993 wherein
 he classified the lands into two groups, and the group within
 which the land of the deceased was classified was given
 compensation at the rate of Rs.300/~ perAar and Rs.3, 79,498/
 - towards structures and Rs.6,300/- towards fruit-bearing trees.
                                                                    F
      4. Aggrieved, the claimants filed references before the
 Reference Court. The Reference Court, vide order dated
 27.6.2001, partly allowed the reference petitions. It found that
 the land under acquisition was converted into non-agricultural
 land in 1993 and the LAO was wrong to ignore the said fact         G
 while granting compensation and taking the acquired land to
 be agricultural land. Thus, it enhanced compensation to an
 amount of Rs.650/- per Aar as cost of land. The Reference
 Court also gave specific findings to the following effect:
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    736        SUPREME COURT REPORTS                [2011] 4 S.C.R.


A         1.     The claimant was unable to prove that he had
                 constructed a hotel of 2400 sq. ft. on the acquired
                 land. Thus, it concluded that the evidence of the
                 claimant was insufficient to prove that the value of
                 the structure was more than the compensation
B                awarded by the LAO.

          2.     The evidence of the claimant was also insufficient
                 to prove that bore or well existed on the land. Thus,
                 the claimant was held not entitled to enhanced
                 compensation towards well or bore.
c
          3.     The LAO had granted compensation for sitaphal,
                 bor, coconut, mango and jamun trees. The claimant
                 was unable to prove the existence of any more trees
                 or plants on his lands and therefore he was held not
D                entitled to enhanced compensation towards trees
                 and flower plants.

          4.     The claimant claimed to be earning annual income
                 of Rs.24,000/- from his hotel business. On perusal
                 of evidence, the Court concluded that there was
E
                 definitely no hotel in existence and an inference
                 could only be drawn that he was running a small
                 hotel like a tea stall, and that such business had no
                 future prospects. Thus, he was not entitled to any
                 compensation for loss of business.
F
         5. Being still aggrieved, the claimants filed appeals before
    the High Court for further enhancement of compensation. The
    State also appealed before the High Court for reduction of
    compensation awarded by the Reference Court.
G
       6. The High Court, vide its judgment dated 3.4.2003
  dismissed the appeal of the claimants and partly allowed the
  appeal of the State. It upheld all the findings of the Reference
  Court, except the computation with respect to market value of
H the land, which it reduced to Rs.500/- per Aar. The reasoning
•      BILKIS AND ORS. v. STATE OF MAHARASHTRA
          AND ORS. [ASOK KUMAR GANGULY, J.]
                                                                 737


    High Court gave for the same was that while non-agricultural         A
    permission had been given for the acquired land, it could not
    be the sole basis to treat the entire land as being non-
    agricultural or being used for commercial purposes. The non-
    agricultural permission had been based on certain conditions,
    one of which was that the grantee would commence non-                B
    agricultural use of land within one year from the date of such
    order unless the same was extended, failing which the
    permission would be cancelled. According to the High Court,
    the construction of the hotel for which compensation had been
    granted was located on an area of 2400 sq. ft. and this by itself    c
    would not make the entire remaining land as non agricultural
    or used for commercial purposes. The High Court relied on
    Smt. Kamlabai Jageshwar Joshi and others v. State of
    Maharashtra and others (AIR 1996 SC 981) and State of
    Maharashtra and others v. Digamber Bhimashankar Tanda/e              D
    and others [1996 (2) sec 583].

         7. Further, the High Court held that the permission granted
    by the village Panchayat revealed that there was a structure
    standing on the acquired land, and even if benefit of doubt was
    given in favour of the claimants, the structure did not exceed       E
    2400 sq. ft. The High Court also recorded a finding that village
    Thana was located on the Aurangabad-Jalgaon highway at a
    distance of 95 kms. from Aurangabad and about 50 kms. from
    Jalgaon. The Ajantha caves were located 6 to 8 kms. from the
    said village. The acquired land was adjacent to the State            F
    highway and in proximity of junction point on the approach road
    leading to the caves. On the land in front of it, i.e. Gut No. 28,
    there was another hotel by the name of Hotel Gazal. As per
    evidence, travellers on the said highway would stop and utilize
    the services of the restaurants either in Gut No. 28 or 29.          G
    However, there was nothing further to show that the land
    appurtenant to the lodging and boarding house was being used
    for any commercial purpose and it was by choice of the owners
    that it was not being used for agricultural purposes. Thus, the
    High Court took the view that the Reference Court erred in           H
                                                                 '
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   738      SUPREME COURT REPORTS                   [2011] 4 S.C.R.


A treating the entire land as commercial/non-agricultural.
  Accordingly, it held that compensation of Rs.420/~ per are for
  the agricultural land would be just and proper, however as the
  land was adjacent to the highway, market value of the land was
  fixed at Rs.500/- per are.
B
       8. Aggrieved, the claimants approached this Court by way
  of appeal for further enhancement of compensation.

       9. We have perused the material on record and heard the
  parties. We are of the opinion that the judgment of the
C Reference Court deserves to be restored and that of the High
  Court set aside.

        10. The High Court has reduced compensation on the
  'ground that the land, though was given non-agricultural
0 permission, it could not be treated as a basis for treating the
   entire land as non-agricl!1tural. We disagree with this view. The
   High Court has relied on the case of Kamlabai Jageshwar
   Joshi (supra) and Digamber Bhimashankar Tanda/e (supra).

        11. In the case of Kamlabai Jageshwar Joshi (supra), it
E was found that at the time of acquisition, as per the report of
  the Land Acquisition Officer in the award, there was no
  development, though the lands were situated within the
  municipal limits. Sanction had been obtained for converting the
  lands into non-agricultural lands. In view of these
F circumstances, a bench of this court concluded that permission
  for conversion was obtained by the appellant with a view to
  inflate the market value, after becoming aware of the proposal
  for acquisition. This Court ,also found that except obtaining
  sanction for conversion no further action to develop the lands
G was taken. Accordingly, this Court proceeded to award
  compensation taking the land to be agricultural land.

       12. In the case of Digamber Bhimashankar Tandale
  (supra), on the date of the notification the lands were agricultural
H lands though situated within the municipal limits. It is also in
•      BILKIS AND ORS. v. STATE OF MAHARASHTRA
           AND ORS. [ASOK KUMAR GANGULY, J.]
                                                                 739


    evidence that the lands were converted for non-agricultural         A
    purpose. But as on the date of notification, there was no
    development in that area. The oral evidence was adduced in
    which it was shown that upto a distance of 3/4th km. of the lands
    there was development. Some illegal constructions were made
    on the lands. Under those circumtances, the court concluded         8
    that as on the date of the notification there was no potential
    value to the lands though converted into non-agricultural lands.

       13. We believe that the present case can be distinguished
  from the abovementioned judgments. From evidence on record,
  though the claimant has been unable to ·prove the existence of        C
  a hotel, it has been found that some structures for the same
  existed. Therefore, unlike the abovementioned judgments, there
· is some development on the acquired land. Further, admittedly,
  travellers would stop by and utilize the hotel services provided
  by the claimants. The land is also adjacent to the Aurangabad-        D
  Jalgaon highway and is only 6 to 8 kms. away from the Ajantha
  caves, an internationally famous tourist destination. Thus, there
  is great future potential for development with respect to the
  acquired land. The potential to which the land is reasonably
  capable of being used in future by the owner should be taken          E
  into account in assessing compensation.

         14. In light of these circumstances, the compensation
    awarded by the Reference Court appears us to be just and
    reasonable, having been determined after correctly
                                                                        F
    appreciating all the material evidence on record. There was no
    need for the High Court to reduce the same, Accordingly, we
    set aside the judgment of the High Court and restore the award
    of the Reference Court.

        15. The appeals are partly allowed and the award of the         G
    Reference Court is restored.

           16. No order as to costs.

    R.P.                                    Appeals partly allowed.
                                                                        H