SAJANversusSTATE OF MAHARASHTRA AND OTHERS

930                    [2020] 4REPORTS
              SUPREME COURT     S.C.R. 930              [2020] 4 S.C.R.


A                                  SAJAN
                                         v.
                STATE OF MAHARASHTRA AND OTHERS
                    (Civil Appeal Nos. 2170-2171 of 2020)
B                               MARCH 17, 2020
              [R. BANUMATHI AND A. S. BOPANNA, JJ.]
            Land Acquisition:
            Acquisition of land – Comprising of cultivable as well as
C     non-agricultural land used for running sugar mill – Determination
      of compensation – Reference court enhanced the compensation
      amount treating the entire land as land meant for non-agricultural
      use and deducting 10% towards development costs – High Court
      in appeal reduced the compensation amount deducting 40%
      towards development costs – Appeal to Supreme Court – Held: The
D
      value arrived at by Reference Court is fair and reasonable – Rule
      of one-third deduction towards development is general rule – But
      deduction for development may vary from 20% to 75% depending
      upon purpose of acquisition etc. — In the present case, in view of
      purpose of acquisition, 20% deduction for development cost would
E     be reasonable – Valuation of the damages of Civil work and
      foundation as assessed by the High Court is affirmed – Award of
      amount towards depreciated market value of electrical installation
      by Reference Court is affirmed – Award of amount towards
      depreciated market value of machinery and mechanical installation
      as awarded by High court is affirmed – The concurrent finding
F
      for awarding compensation for loss of business is also affirmed –
      compensation amount accordingly modified.
            Partly allowing the appeals, the Court
            HELD: 1.1 The High Court has taken Exh. 23 dated
G     03.06.1976 as exemplar which is the sale deed for plot
      admeasuring 30x32ft. (960 sq.ft.) for Rs. 3,000/- i.e. at the rate
      of Rs. 3.12 per sq.ft. The appellants have also placed further
      reliance on the sale deed dated 03.02.1982 Exh. 35 wherein, the
      plot of admeasuring 5023 sq.ft. was sold for Rs. 35,000/- i.e. Rs.
      6.90 per sq.ft. The High Court has taken Exh. 23 sale deed dated
H
                                   930
     SAJAN v. STATE OF MAHARASHTRA AND OTHERS                        931


03.06.1976 and had taken 10% increase for every year and             A
arrived at the value at Rs.6 per sq.ft. Even going by Exh. 35
sale deed (03.02.1982) under which Rs.5023 sq.ft. was sold for
Rs. 35,000/- i.e. Rs. 6.90 per sq.ft., Exh. 35 sale deed
(03.02.1982) is after possession of the land was taken by the
State Government (21.11.1981) and Section 4 Notification dated
                                                                     B
10.02.1982. Since Exh. 35 sale deed dated 03.02.1982 is
between two dates - date of taking possession of the land and
the date of Section 4 Notification, it is necessary to adopt a
reasonable valuation. Considering Exh. 23 and Exh. 35, the value
adopted by the Reference Court at Rs.6.90 per sq.ft., fixation
of valuation at Rs.6.90 per sq.ft., the value adopted is fair and    C
reasonable and the same is affirmed. [Para 14] [938-C-F]
      1.2 Rule of one-third deduction towards development is
the general rule. But depending upon the purpose of acquisition
and taking note of well planned layouts, if any, the deduction for
development cost may vary from 20% to 75%. In the present            D
case, since the land was acquired for Dam project, much of the
development like in the case of a layout for housing colony is
not required. 40% deduction made by the High Court appears
to be on the higher side. Considering the purpose of the
acquisition and the facts and circumstances of the case, 20%
deduction for development cost would be reasonable. Taking the       E
entire land 2,61,300 sq.ft. as non-agricultural and making 20%
deduction for the development cost, the value of the land is
calculated at Rs.12,54,530/- [Paras 16 and 17] [939-D; 940-A-
B]
      Lal Chand v. Union of India and Another (2009) 15              F
      SCC 769 : [2009] 13 SCR 622 – relied on.
      Major General Kapil Mehra and Others v. Union of
      India and Another (2015) 2 SCC 262 : [2014] 10 SCR
      1153 – referred to.
                                                                     G
      2. After referring to the valuation of the civil work, the
evidence of PW-2 and witness No.3 for the State-Sub-Divisional
Engineer, the High Court has assessed the valuation of the
dismantling costs and damages of civil work and foundation to
the tune of Rs.4,09,565/- and Rs.17,325/- for transportation costs
of good materials and arrived at the total amounting to              H
932           SUPREME COURT REPORTS                     [2020] 4 S.C.R.


A     Rs. 4,26,890/-. There is no reason to take a different view and
      the amount of Rs. 4,26,890/- towards damages of civil work and
      foundation and transportation of good materials is affirmed. [Para
      18] [940-H; 941-A-B]
            3. As against the amount of Rs. 3,86,867/- awarded by the
B     Reference Court, the High Court has awarded Rs.2,39,000/-
      towards depreciated market value of the electrical installation.
      As per the project report that was initially prepared for the year
      1976, cost of factory installation was given at Rs. 6,93,677/- and
      as per award, it has been given Rs. 5,78,100/-. Referring to
      Exh.21 report and evidence of PW-2, the Reference Court has
C
      awarded Rs. 3,86,867/- towards dismantling charges in respect
      of electrical, mechanical and re-installation. During the course
      of dismantling and re-installation, there is every possibility of
      the electrical installation being damaged. Considering the
      findings of the Reference Court, the High Court was not justified
D     in reducing the amount of Rs. 3,86,867/- to Rs. 2,39,000/- on
      the ground of depreciated market value of electrical installation.
      Therefore, the amount of Rs.3,86,867/- awarded by the
      Reference Court is affirmed. [Para 19] [941-C-E]
            4. Based on the report Exh.21 and the evidence of PW-2,
E     the High Court has awarded depreciated market value of
      the machinery and mechanical installation to the tune of Rs.
      6,62,000/- and the same is affirmed. [Para 20] [941-F]
            5. A perusal of the evidence of PW-2 examined on behalf
      of the appellants shows that in the year 1978-79, when the
F     witness visited the factory of the appellants, he noticed that the
      production of the sugar had stopped. As pointed out by the
      Reference Court as well as by the High Court, as regards income,
      no statement of income had been produced. During the period
      1981 till 1986, the sugar mill was idle. The balance sheet for
      the years 1975-76 as per Exh.33 shows that the factory was
G
      running in loss initially during the year 1975-76. Though the
      appellants have claimed that they were making profit of
      Rs. 2,00,000/- per year, no statement had been filed to show that
      the sugar factory was making profit of Rs. 2,00,000/-. The courts
      below have recorded the concurrent findings for awarding the
H     compensation of Rs. 5,00,000/- for loss of business from the year
     SAJAN v. STATE OF MAHARASHTRA AND OTHERS                            933


1981, the time of taking possession of the property and                  A
compensation paid in the year 1986. The compensation amount
of Rs.5,00,000/- paid towards the loss of business is also affirmed.
[Para 21] [941-G-H; 942-A-C]
      6. The balance amount as per the modified amount of
compensation be paid to the appellants/claimants with all                B
statutory benefits as awarded by the Reference Court. [Para 23]
[943-C]
                       Case Law Reference
[2014] 10 SCR 1153                 referred to          Para 15
                                                                         C
[2009] 13 SCR 622                  referred to          Para 15
      CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 2170-
2171 of 2020
      From the Judgment and Order dated 21.08.2017 of the High
Court at Bombay, Bench at Aurangabad in First Appeal Nos. 601 of         D
1997 and Cross Objection ST. No. 22145 of 1997
      With
      Civil Appeal Nos. 2172-2173 of 2020.
      Shirish K. Deshpande, Ms. Rucha Pravin Mandlik, Mohit              E
Gautam, Sagar N. Pahune Patil, Gopal Balwant Sathe, Rahul Chitnis,
Aaditya A. Pande, Sachin Patil, Advs. for the appearing parties.
      The Judgment of the Court was delivered by
      R. BANUMATHI, J.                                                   F
      1. Leave granted.
      2. These appeals have been filed by the appellants assailing the
impugned judgment and final order dated 21.08.2017 passed by the High
Court of Judicature at Bombay Bench at Aurangabad in First Appeal
No.601 of 1997 along with Cross Objection St. No.22145 of 1997 in        G
the First Appeal in and by which the High Court partly allowed the
appeal and inter-alia reduced the compensation for the land by giving
40% deduction towards development cost.
     3. The facts giving rise to these appeals are that land in Gat
No.85 at village Mhasekota, Tehsil Soyegaon, District Aurangabad         H
934            SUPREME COURT REPORTS                           [2020] 4 S.C.R.


A     admeasuring 6 acres (2.40 hectares) owned by the partnership firm of
      the appellant and respondents No.2 and 3 was proposed for acquisition
      for the purpose of construction of Hiwra Dam project by the office of
      the Executive Engineer, Jalgaon Medium Project Division. Accordingly,
      on 29.03.1982, the Special Land Acquisition Officer issued notification
      under Section 4 of the Land Acquisition Act, 1984 (for short, “Land
B
      Acquisition Act”) and on 03.11.1983, notification under Section 6 was
      published. Out of this acquired land, land admeasuring 0.80 hectares
      was non-agricultural land used for running the Sugar Mill by the
      partnership firm and the remaining was cultivable land.
            4. The Special Land Acquisition Officer, Aurangabad passed an
C
      award dated 01.09.1986 under Section 11 of the Land Acquisition Act
      awarding compensation considering valuation of land @ Rs.29,712/-
      (Rs.20,000/- per hectare for 0.80 hectares non-agricultural land,
      Rs.9500/- per hectare in respect of 1.44 hectare cultivable land and
      Rs.200 per hectare in respect of 0.16 hectare Potkharaba land). Apart
D     from the costs of the land, the S.L.A.O. has also fixed the valuation of
      structure under three heads i.e. (i) Civil part/Building valuation
      Rs.3,67,100/-; (ii) Electrical installation (now to be demolished)
      Rs.1,06,000/-; and (iii) Mechanical machinery (dismantling and
      transportation) Rs.1,05,000/-, total Rs.5,78,100/-. To this compensation
      amount, statutory entitlement of 30% solatium and 12% enhancement
E
      of compensation value w.e.f. notification under Section 4 was added.
      The net amount payable was calculated at Rs.36,00,385.50/-.
             5. Aggrieved, the appellant and also respondents No.2 and 3 filed
      reference application (Land Acquisition Reference No.299/94) under
      Section 18 of Land Acquisition Act on the ground that market value
F     has not been properly determined. The appellant and respondents No.2
      and 3 further claimed damages and loss of business @ Rs.5,00,000/-
      per year since 1981 till 1986 to the tune of Rs.30,00,000/-. The appellants
      claimed market value @ Rs.10 per sq.ft and claimed total compensation
      at Rs.1,69,45,111/- along with other statutory benefits.
G           6. The Reference Court-Civil Judge, Senior Division,
      Aurangabad, vide judgment and award dated 24.04.1996 awarded
      compensation at the enhanced rate of Rs.6/- per sq. ft. for the entire
      acquired land by treating the entire land as land meant for
      non-agricultural use and deducted 10% towards development costs,
H     Rs.3,86,867/- towards demolishing and dismantling charges of electrical,
     SAJAN v. STATE OF MAHARASHTRA AND OTHERS                               935
                   [R. BANUMATHI, J.]

mechanical and machinery installation, Rs.5,00,000/- was awarded for        A
loss of earning for the period from 1981 to 1986, Rs.91,000/- towards
damages and dismantling charges and Rs.15,000/- towards
transportation, loading and unloading along with the statutory
benefits. Thus, total additional claim of the appellant to the extent of
Rs.23,73,011/- was allowed.
                                                                            B
       7. Respondent-State filed First Appeal No.601 of 1997 assailing
the aforesaid order and the appellant and respondents No.2 and 3 also
filed Cross Objection bearing St. No.22145 of 1997. Initially this cross-
objection was dismissed by the High Court for non-removal of
objections. Restoration application was also dismissed on account of
                                                                            C
inordinate delay and the appeal filed by the respondents was partly
allowed. Against this dismissal, the appellant and respondents No.2 and
3 filed appeal No.2432 of 2005 before the Supreme Court which was
allowed vide judgment dated 20.04.2011 and the matter was remitted
back to the High Court for fresh disposal taking into consideration the
law laid down by this court in recent judgements.                           D
       8. Thereafter, by impugned Judgment dated 21.08.2017, the High
Court partly allowed the appeal as well as cross-objections and passed
the following award:-
      i.     Cost of the land @ Rs.6/-     ….     Rs.9,40,896/-             E
             per sq.ft. (Deduction at 10%)
      ii.    Dismantling and damage of      ….    Rs.4,26,890/-
             Civil work costs
      iii.   Replacement of electrical      ….    Rs.2,39,000/-
             installation                                                   F
      iv.    Depreciated value of           ….    Rs.6,62,000/-
             machineries
      v.     Loss of business               ….    Rs.5,00,000/-
             Total                          ….    Rs.21,60,974/-            G
       9. Mr. Gopal Balwant Sathe, learned counsel for the appellant
assailed the impugned judgment contending that the High Court failed
to consider the valuation certificate (Exh.-21) duly proved by PW-2-
Mukund Dharashivkar-Empanelled Government Valuer whose evidence
remained unrebutted by the State Government. Further, it has been           H
936            SUPREME COURT REPORTS                          [2020] 4 S.C.R.


A     submitted that Exh.-21 proves that the civil work comes to the tune of
      Rs.9,55,000/-, electrical installation Rs.3,21,000/- and mechanical
      installation Rs.10,69,000/- which totally comes to Rs.23,45,000/- and the
      depreciation value comes to Rs.14,28,000/-. Totally, the valuation of the
      civil, mechanical and electrical structure comes to Rs.63,80,000/- and
      the valuation done by PW-21-Valuer has not been considered by the
B
      High Court. It was further submitted that the High Court has completely
      ignored the fact that the respondents had not adduced any documentary
      evidence to show that the valuation certificate (Exh.-21) issued by PW-
      2 is not proper and lacks precision. It was further submitted that
      computation of loss of business @ Rs.1,00,000/- per year is completely
C     erroneous. It was submitted that the High Court erred in not taking into
      consideration that the appellant had to close the sugar factory and face
      financial crisis suffering decree of civil court for recovery of loan
      amount as the appellant had raised loan from the bank. It was further
      submitted that the High Court erred in making deduction of 40% though
      the lands were acquired for irrigation project which does not require
D
      development charges like providing basic amenities like roads, water
      etc. and the Reference Court rightly made deduction of 10% which is
      a reasonable deduction and the High Court erred in reducing the
      compensation amount.
             10. On the other hand, Mr. Aaditya A. Pande, learned counsel
E     appearing for the State of Maharashtra has submitted that the
      Reference Court has committed an error by considering the market
      value of fully developed plot and comparing the same with undeveloped
      land. It was submitted that village Mhasekota is a very small village
      having a population of one thousand, situated in a remote area without
F     any development potentials and there was no potential value of the
      acquired land as non-agricultural land. It was further contended that
      no purchaser will come forward to purchase the large area of land
      admeasuring 1.44 hectares on square feet basis and without considering
      this aspect, the Reference Court had enhanced the compensation @
      Rs. 6.90 per sq.ft. Drawing our attention to the evidence of the State
G     witness Dilip Gudwe, Sub-Divisional Officer, it was submitted that SDO
      had visited the site and factory premises and submitted a report (Exh.-
      54) mentioning that the factory was not in operation and the machinery
      was lying idle and considering the same, the High Court has recorded
      a finding that the claimants had closed the sugar factory. The learned
H     counsel urged that the High Court rightly reduced the compensation
     SAJAN v. STATE OF MAHARASHTRA AND OTHERS                              937
                   [R. BANUMATHI, J.]

awarded by the First Appellate Court and there is no ground warranting     A
interference with the impugned judgment.
      11. We have heard Mr. Shirish K. Deshpande and Mr. Sagar N.
Pahune Patil, learned counsel appearing on behalf of the appellants and
Mr. Rahul Chitnis, learned counsel appearing on behalf of the
respondent-State. We have carefully considered the contentions and         B
perused the impugned judgment and materials on record.
       12. The land Gat No.85 admeasuring 6 acres, situated at
Mhasekota in Soygaon Tahsil of Aurangabad district, owned by the
appellants-claimants came to be acquired by the Government for
construction of Hiwra medium project. The land Gat No.85 admeasuring       C
2 hectares 40 R came to be acquired including 0.16 hectare Potkharaba
land. Out of this area, land admeasuring 0.80 hectare has been
converted into non-agriculture (N.A) purpose for installation of
Khandsari factory (sugar factory). Rest of the area admeasuring 1.44
hectare is appellants claim that they have been using for non-
agricultural purpose. Though the claimants had asked for non-              D
agricultural permission for the land admeasuing 1.44 hectare out of the
land Gat No.85, the same was not granted by the concerned authority.
The S.L.A.O. on 29.03.1982 has published the notification under Section
4 of the Land Acquisition Act and on 01.09.1986 awarded the
compensation for the acquired land admeasuring 0.80 R, since converted     E
into the non-agriculture land, at the rate of Rs.2.00 per sq. meter i.e.
Rs.20,000/- per hectare. The S.L.A.O. has awarded the compensation
to the agricultural land admeasuring 1.44 R at the rate of Rs.9500/-
per hectare. So far as Potkharaba land, which is 0.16 hectare is
concerned, the S.L.A.O. has awarded the compensation at the rate of
Rs.200/- per hectare. The S.L.A.O. has awarded total compensation          F
at Rs.29,712/- as the costs of the land, as stated above.
       13. So far as the use of the entire land for non-agricultural
purpose is concerned, the High Court found that the Reference Court
is justified in treating the entire land having the potential for
non-agricultural purpose of the remaining area – 1.44 hectare. Referring   G
to the Project report – Exh.42 - scheme of the factory approved by
the Small Scale industries, Aurangabad, the High Court found that the
main raw material required for the sugar factory is sugarcane and part
of the building is used for keeping the raw materials. The High Court
further found that besides flow sheet, certain part of the land would be   H
938             SUPREME COURT REPORTS                           [2020] 4 S.C.R.


A     utilised for office building, workshop, staff quarters, etc. and also used
      for parking and various other purposes. The High Court also pointed
      out that the State has not adduced any evidence to the effect that the
      land admeasuring 1 hectare 44 R out of the acquired land was mainly
      used for agricultural purpose and not for the non-agricultural purpose.
      In view of the concurrent findings by the Reference Court and by the
B
      High Court that apart from 0.80 hectare, the land measuring 1 hectare
      44 R be taken as having the potential for non-agricultural purpose, we
      do not find any reason to take a different view.
            Market value and deduction for development
C             14. The High Court has taken Exh.23 dated 03.06.1976 as
      exemplar which is the sale deed for plot admeasuring 30x32 ft. (960
      sq.ft.) for Rs.3,000/- i.e. at the rate of Rs.3.12 per sq.ft. The appellants
      have also placed further reliance on the sale deed dated 03.02.1982
      Exh.35 wherein, the plot of admeasuring 5023 sq.ft. was sold for
      Rs.35,000/- i.e. Rs.6.90 per sq.ft. The High Court has taken Exh.23
D     sale deed dated 03.06.1976 and had taken 10% increase for every year
      and arrived at the value at Rs.6 per sq.ft. Even going by Exh.35
      sale deed (03.02.1982) under which Rs.5023 sq.ft. was sold for
      Rs.35,000/- i.e. Rs.6.90 per sq.ft., Exh.35 sale deed (03.02.1982) is after
      possession of the land was taken by the State Government (21.11.1981)
E     and Section 4 Notification dated 10.02.1982. Since Exh.35 sale deed
      dated 03.02.1982 is between two dates - date of taking possession of
      the land and the date of Section 4 Notification, it is necessary to adopt
      a reasonable valuation. Considering Exh.23 and Exh.35, the value
      adopted by the Reference Court at Rs.6.90 per sq.ft., in our view,
      fixation of valuation at Rs.6.90 per sq.ft., the value adopted is fair and
F     reasonable and the same is affirmed.
             15. Taking the value at Rs.6.90 per sq.ft, the High Court deducted
      40% towards the development cost and calculated the value of the land
      at Rs.2,61,300 sq.ft. at Rs.9,40,896.00. While determining the market
      value of the acquired land, normally one-third deduction i.e. 33 1/3%
G     towards development charges is allowed. After referring to number of
      judgments, in Major General Kapil Mehra and Others vs. Union
      of India and Another (2015) 2 SCC 262, the Supreme Court held
      as under:-
            “36. While determining the market value of the acquired land,
H           normally one-third deduction i.e. 33 1/3% towards development
     SAJAN v. STATE OF MAHARASHTRA AND OTHERS                              939
                   [R. BANUMATHI, J.]

      charges is allowed. One-third deduction towards development          A
      was allowed in Tehsildar (LA) v. A. Mangala Gowri (1991) 4
      SCC 218, Gulzara Singh v. State of Punjab (1993) 4 SCC 245,
      Santosh Kumari v. State of Haryana (1996) 10 SCC 631,
      Revenue Divl. Officer and LAO v. Sk. Azam Saheb (2009) 4
      SCC 395, A.P. Housing Board v. K. Manohar Reddy (2010)
                                                                           B
      12 SCC 707, Ashrafi v. State of Haryana (2013) 5 SCC 527
      and Kashmir Singh v. State of Haryana (2014) 2 SCC 165.
      37. Depending on the nature and location of the acquired land,
      extent of land required to be set apart and expenses involved
      for development, 30% to 50% deduction towards development
      was allowed in Haryana State Agricultural Market Board v.            C
      Krishan Kumar (2011) 15 SCC 297, Director, Land Acquisition
      v. Malla Atchinaid (2006) 12 SCC 87, Mummidi Apparao v.
      Nagarjuna Fertilizers & Chemicals Ltd. (2009) 4 SCC 402 and
      Lal Chand v. Union of India (2009) 15 SCC 769.”
      16. Rule of one-third deduction towards development is the           D
general rule. But depending upon the purpose of acquisition and taking
note of well planned layouts, if any, the deduction for development cost
may vary from 20% to 75%. Observing that deduction towards
development can range from 20% to 75% of the price of the plot, in
Lal Chand vs. Union of India and Another (2009) 15 SCC 769,
                                                                           E
the Supreme Court held as under:-
      “19. If the acquired land is in a semi-developed urban area, and
      not an undeveloped rural area, then the deduction for development
      may be as much less, that is, as little as 25% to 40%, as some
      basic infrastructure will already be available. (Note: The
      percentages mentioned above are tentative standards and subject      F
      to proof to the contrary.)
      …….
      22. Some of the layouts formed by the statutory development
      authorities may have large areas earmarked for water/sewage
                                                                           G
      treatment plants, water tanks, electrical substations, etc. in
      addition to the usual areas earmarked for roads, drains, parks,
      playgrounds and community/civic amenities. The purpose of the
      aforesaid examples is only to show that the “deduction for
      development” factor is a variable percentage and the range of
      percentage itself being very wide from 20% to 75%.”                  H
940            SUPREME COURT REPORTS                          [2020] 4 S.C.R.


A            17. In the present case, since the land was acquired for the
      construction of Hiwra Dam project, much of the development like in
      the case of a layout for housing colony is not required. In our view,
      40% deduction made by the High Court appears to be on the higher
      side. Considering the purpose of the acquisition and the facts and
B     circumstances of the case, 20% deduction for development cost would
      be reasonable. Taking the entire land 2,61,300 sq.ft. as non-agricultural
      and making 20% deduction for the development cost, the value of the
      land is calculated at Rs.12,54,530/- as under:-
            Value of the land
C           2,61,360 x 6.90        ….      Rs.18,03,384.00
            20% deduction          ….      Rs.3,60,67.68
            Rounded to             ….      Rs.3,60,677/-
            Total                  ….      Rs.14,42,707/-
D
            Valuation of the construction/civil works
              18. PW-2-Mukund Dharashivkar in his valuation report Exh.21
      has considered the valuation of the civil work and foundation under four
      heads:- (i) reproduction costs; (ii) market value as on today;
E     (iii) dismantling costs and damages; and (iv) transportation costs of good
      materials. The reproduction costs has been shown as Rs.9,55,020/-
      whereas, the market value as on the date of report has been shown at
      Rs.5,26,575/- and Rs.4,09,565/- has been shown under the head of
      dismantling costs and damages and further Rs.17,325/- has been shown
      as transportation costs of good materials. PW-2-Mukund Dharashivkar
F     has deposed that the valuation of the civil work is Rs.5,26,575/- and
      that it includes the valuation of foundation embedded in the earth. As
      referred to by the High Court in its judgment in Para (28), PW-2-Mukund
      Dharashivkar has considered the civil work and foundation with regard
      to power house, office and workshop, staff quarter, water storage tank
G     and other infrastructure/constructions with size, specifications and the
      number of items. Per contra, witness No.3 for the State,
      Sub-Divisional Engineer, Mr. Dilip Gudwe has assessed the valuation
      of civil work amounting to Rs.3,67,100/-. After extracting the relevant
      portion of the judgment of the Reference Court as to the valuation of
      the civil work, the evidence of PW-2 and witness No.3 for the State-
H     Sub-Divisional Engineer, the High Court has assessed the valuation of
     SAJAN v. STATE OF MAHARASHTRA AND OTHERS                                 941
                   [R. BANUMATHI, J.]

the dismantling costs and damages of civil work and foundation to the         A
tune of Rs.4,09,565/- and Rs.17,325/- for transportation costs of good
materials and arrived at the total amounting to Rs.4,26,890/-. We do
not find any reason to take a different view and we affirm the amount
of Rs.4,26,890/- towards damages of civil work and foundation and
transportation of good materials.
                                                                              B
      Electrical installation and re-installation
       19. As against the amount of Rs.3,86,867/- awarded by the
Reference Court, the High Court has awarded Rs.2,39,000/- towards
depreciated market value of the electrical installation. As per the project
report that was initially prepared for the year 1976, cost of factory         C
installation was given at Rs.6,93,677/- and as per award, it has been
given Rs.5,78,100/-. Referring to Exh.21 report and evidence of
PW-2-Mukund Dharashivkar, the Reference Court has awarded
Rs.3,86,867/- towards dismantling charges in respect of electrical,
mechanical and re-installation. During the course of dismantling and
re-installation, there is every possibility of the electrical installation    D
being damaged. Considering the findings of the Reference Court, in our
view, the High Court was not justified in reducing the amount of
Rs.3,86,867/- to Rs.2,39,000/- on the ground of depreciated market value
of electrical installation. Therefore, the amount of Rs.3,86,867/- awarded
by the Reference Court is affirmed. For the dismantling of the                E
electrical installation and re-installation of the same, the amount
of Rs.2,39,000/- awarded by the High Court is enhanced to
Rs.3,86,867/- as awarded by the Reference Court.
      Replacement cost of machinery and mechanical installation
        20. Based on the report Exh.21 and the evidence of PW-2, the          F
High Court has awarded depreciated market value of the machinery
and mechanical installation to the tune of Rs.6,62,000/- and the same
is affirmed.
      Loss of business
                                                                              G
       21. A perusal of the evidence of PW-2-Mukund Dharashivkar
examined on behalf of the appellants shows that in the year 1978-79,
when the witness has visited the factory of the appellants, he noticed
that the production of the sugar was stopped. As pointed out by the
Reference Court as well as by the High Court, as regards income, no
statement of income had been produced. During the period 1981 till            H
942            SUPREME COURT REPORTS                           [2020] 4 S.C.R.


A     1986, the sugar mill was idle. The balance sheet for the years 1975-76
      as per Exh.33 shows that the factory was running in loss initially during
      the year 1975-76. Though the appellants have claimed that they were
      making profit of Rs.2,00,000/- per year, as pointed out by the courts
      below, no statement had been filed to show that the sugar factory was
      making profit of Rs.2,00,000/-. The courts below have recorded the
B
      concurrent findings for awarding the compensation of Rs.5,00,000/- for
      loss of business from the year 1981, the time of taking possession of
      the property and compensation paid in the year 1986. The compensation
      amount of Rs.5,00,000/- paid towards the loss of business is also
      affirmed.
C           22. The compensation awarded to the appellants under various
      heads is modified as under:-
        Sr. Description of                 By the High       By the
        No. Items                          Court             Supreme Court
D       i.     Land value                  Rs.9,40,896/-     Rs.14,42,707/-
        ii.    Civil work                  Rs.4,26,890/-     Amount
                                                             confirmed
        iii.   Replacement of              Rs.2,39,000/-     Rs.3,86,867/- as
               electrical installation                       awarded by the
E                                                            Reference Court
        iv.    Depreciated value           Rs.6,62,000/-     Amount
               of the machinery and                          confirmed
               mechanical installation
        v.     Loss of business from       Rs.5,00,000/-
F
               the year 1981 to 1986                         Amount
                                                             confirmed
             In the counter affidavit filed by the respondent-State, it is stated
      that the office of the Executive Engineer, Jalgaon Medium Project
      Division-1 has deposited the decreetal amount of Rs.72,02,224/- by way
G     of a cheque deposited in the Civil court. Further the amount of
      Rs.10,00,000/- has been paid to the appellant on 21.09.2018 by way of
      cheque bearing No.000081 vide receipt No.0114362 and the amount
      of Rs.5,00,000/- has been paid to the appellants on 02.11.2018 by way
      of the cheque bearing No.000094 (receipt No.0114663). It is stated that
H     the appellant has also executed the receipt of the above said amount
      SAJAN v. STATE OF MAHARASHTRA AND OTHERS                                 943
                    [R. BANUMATHI, J.]

and has also executed an acknowledgement to the effect that, his entire        A
claim has been settled. As per the modified amount of compensation,
the appellants are entitled to the balance amount.
      23. In the result, the impugned judgment and final order dated
21.08.2017 passed by the High Court of Judicature at Bombay Bench
at Aurangabad in First Appeal No.601 of 1997 along with Cross                  B
Objection St. No.22145 of 1997 in the First Appeal, is modified as stated
above in Para (22) and these appeals are partly allowed. The balance
amount as per the modified amount of compensation be paid to the
appellants/claimants with all statutory benefits as awarded by the
Reference Court.
                                                                               C

Kalpana K. Tripathy                                  Appeals partly allowed.




                                                                               D




                                                                               E




                                                                               F




                                                                               G




                                                                               H