K. E. CHAUHAN, J.----This judgment will dispose of two Regular First Appeals bearing Nos. 53 of 1963 and 54 of 1963.
2. The Provincial Government acquired an area of 42 kanals and I marla (which is the subject- matter of dispute in R. F. A. 53 of 1963) and an area of 8 kanals and 18 marlas (which is the subject- matter of R. F. A. No. 54 of 1963), for the extension of Small Industries Estate on G. T. Road, Gujrat. The initial notification for the acquisition of the aforesaid areas was issued on 25-10-1961, with reference to which date the com--pensation for payment to the land owners is to be assessed. The Land Acquisition Collector gave awards on 19-5-1962, holding that the compensation to the land owners should be assessed at the rate of Rs. 40 per marla. This evaluation was based on the nature of the land being chahi agricultural land and was worked out on the score of the Ausat Panjsala which had been prepared by the Patwari in the case.
3. The owners with regard to the aforesaid two sets of land claimed references under section 18 of the Land Acquisition Act, which were decided by the learned Administrative Civil Judge, Gujrat on 1- 5-1963. The learned Civil Judge enhanced the rate to Rs. 70 per marla. The Provincial Government has come up in appeals against the aforesaid judgments and orders of the learned Administrative Civil Judge.
4. In the course of the proceedings before the learned Civil court, the land owners produced seven witnesses and led some documentary evidence. P. W. 1 was Muhammad Aslam Patwari who produced Aks Shajra Kishtwar (Exh. P. 1) of the area in dispute which is situated in village Kalrakhasa. He deposed in his examination-in-chief that around the land in dispute there were factories. The witness was not cross-examined. P. W. 2 was Jaffer Shah, Colony Clerk Gujrat. He produced a copy of a notice (Exh. P/2) issued by the Collector. It may be mentioned that in the locality in dispute there is situated Khasra No. 22 which belongs to the Provincial Government. It appears that this area was decided by the Provincial Government to be given over to the Small Industries Corporation for construction of Small Industries Estate at Gujrat, at the rate of Rs. 69.23 per marla. Through the aforesaid public notice, the Collector had indicated that if anybody had any objection to that price or if anyone wanted to purchase the said area at a higher rate, then he should indicate his objection or desire to him. The witness deposed that nobody came forward to purchase the aforesaid land at any higher rate. He, however, admitted in cross-examination that the land involved in the said Khasra number was Banjar Qadeem. P. W. 3 was Inayatullah who produced a copy of sale-deed (Exh. P. 3), by which land .Consisting of Khasra Nos. 54, 55, 56 and 57/1041 (area 50 marlas) (Barani) was sold on 29-4-1961. According to the -said document the sale was at the rate of Rs. 100 per marla. P. W. 4 was Ghulam Muhammad who proved a similar sale transaction by means of a copy of a registered sale-deed (Exh. P. 4), dated 27-5-1959. A perusal of this document shows that the land involved therein was 80 marlas and was sold at the rate of Rs.
62.50 per marls and comprised of a part of Khasra No. 57/1040. P. W. 5 was Abdur Rashid. He proved a sale transaction by means of a copy of a registered sale-deed (Exh. P. 5), dated 27-5-1959, comprising of a part of Khasra No. 57/1040 and Khasra No. 58. According to this document, the sale was at the rate of Rs. 62.50 per marla. P. W. 6 was Muhammad Bashir. He proved a sale transaction contained in a copy of registered sale --deed (Exh. P. 6), dated 3-10-1959, for an area of 240 marlas at the rate of Rs. 68.75 per marla. The land comprised in this sale-deed consisted of Khasra Nos.
108, 109, 110 and 111/106. P. W. 7 was one of the land owners in R. F. A. No. 53 of 1963. He stated that adjoining his land were factories and the price at that place was Rs. 100 per marla. The land owners tendered in evidence Exh. P. 7 lard-i-arazi, Exh. P. 8, another fard-i-arazi, Exh. P. 9, Khasra Girdawari Exh. P. 10, Award No. 13 as given by the Collector, Exh. P. 11, Award No. 12 as given by the Collector, with regard to another area of 90 kanals and 12 marlas, in which the Collector had assessed compensation at the rate of Rs. 40 per marla treating the land as agricultural 'land. This is the evidence in the case of R. F. A. 53/1963. Evidence in R. F. A. 54/63 is also the same except that Khasra Girdawari (Exh. P. 9) was not produced there.
5. The Provincial Government produced Munshi Muhammad Aslam Patwari (D. W. 1). He is the same person who appeared as (P. W. 1). He produced Ausat Panjsala (Exh. D. I) and deposed that while preparing the said list he has kept no regard of the tact as to whether the land which was included in his list was near the abadi or away from it. He also stated that he had not taken into consideration the sale-deed (Exh. P. 3), dated the 29th of April 1961. He stated that the land in dispute was at a distance of about one kills from the main G. T. Road, and that there were many factories around the land which ha& been installed ten or twelve years ago. He also deposed that the land around the area in question was being sold for the last --3/4 years at the rate of Rs. 100 per marla.
6. After referring to the above evidence, the learned Court came to the conclusion that since all around the area in dispute, there existed factorics, which had really become a potential, building site, it 'was liable to be assessed from that point of view and not as an agricultural land. Proceeding in that way, and, after referring to the sale-deeds (Exhs. P. 3 to P. 6), the notice-- of the Collector (Exh. P. 2) dated 22-4-1962, indicating the price of Rs. 69.23 per marls, and the statement of D. W. I who had deposed that for the last 3 or 4 years, the price prevalent in the locality was Rs. 100 per marla, the learned Court fixed the price at the rate of Rs. 70 per marls, The evidence in both the cases was almost similar and, therefore, both the references were decided by the learned civil Court in the same way. Learned counsel for the appellant has raised a number of points which we shall presently deal with.
7. The first point argued by the learned counsel for the appellant was that the learned Civil Court acted with material illegality in following the principle of "potential value" in this case. The contention has no force. In Mayor, Eldermen and Citizens of the City of Montreal v. Thomas Storrow Brown and another ((1876-77) 2 A C 168), Sir Henry Keating in delivering the judgment of the Privy Council said:- "The superior Court were of opinion that in valuing such land the prospective capabilities of it are not to be taken into consideration; that this is not a legal element in the calculation; that you are to look at the land and what is upon it at the time the valuation takes place; and that you are not to go into what they are pleased to term hypothetical or speculative inquiries as to what purposes the land might advantageously be applied to. Their Lordships are of opinion that the prospective capabilities of land may form and often are a very important element in the calculation of its value, and therefore, they cannot concur in the view of the superior Court."
"A second proposition may also be taken as conclusively established that the special, though natural, ad stability of the land for the purpose for which it is taken, is an important element to be taken into consideration in determining the market value of the land. It is quite true, observed Grave, J in Ossalinsky and Manchester Corporation (Brown and Allan's Law of Compensation, 2nd Edn., p. 659), before cited, `that land might be rightly valued at more than its value as agricultural land, if the land had any other capabilities for railway land or irrigating purposes, or for water works, or for anything else, and they are reasonable and fair capabilities, nor far-fetched hypothetical capabilities, but reasonably fair contingencies. Those are fair things to be considered by an arbitrator'. In Boom Co. v. Patterson 98 U S 403, the Supreme Court of the United States laid down that, as a general rule, the compensation to the owner is to be estimated `by reference to the uses for which the property is suitable, having regard to the existing business or wants of the community, or such as may be reasonably expected in the immediate future'. See also In re: Farman Street 17 Wend 669 and Guyandot Valley Railway Co. v. Buskirk 57 W Va. 417: 110 American St. Rep. 785."
Similar was the view enunciated by Lord Buckmaster in Fraser and others v. City of Fraserville (1917 A C 187), which was approved by the Privy Council in R. B. Lala Narsingh Das v. Secretary of State for India (AIR 1925 P C 91) and Vyricherla Narayana Gajapathiraju v. Revenue Divisional Officer, Vizagapatam (AIR 1939 P C 98). The following head notes in the latter ruling i.e, AIR 1939 P C 98 are of great value:- Headnote (c):- "There is not in general any market for land in the sense in which one speaks of a market for shares or a market for sugar or any like commodity. In the case of land, its value in general can be measured by a consideration of the prices that have been obtained in the past for land of similar quality and in similar positions, and this is what must be meant in general by `the market value' in section 23. But sometimes, it happens that the land to be valued possesses some unusual, and it may be, unique features, as regards its position or its potentialities.
Headnote (d):- "The increase accruing to the value of the land by reason of its potentialities or possibilities is to be measured in the following way. In the case of land possessing the possibility of being used for building purposes, the arbitrator would probably have before him evidence of the prices paid in the neighbourhood for land immediately required for such purposes. He would then have to deduct from the value so ascertained such a sum as he would think proper by reason of the degree of possibility that the land might never be so required or might not be so required for a considerable time. In the case, however of land possessing potentialities of such an unusual nature that the arbitrator has not similar cases to guide him, the value of the land must be ascertained in some other way. In such a case moreover there will, in all probability, be only a very limited number of persons capable of turning the potentialities of the land to account. If the owner of the land is the only person who can do so, the value to him must be ascertained by reference to what profit he might thereby have been able to derive from the land in future. The same consideration will apply to cases where the owner is not the only person but merely one of the persons able to turn the potentiality to account. But where the owner is himself unable to turn the potentiality to account whether by promotion of a company or otherwise, and there are several other persons who would be able to do so, the owner is entitled to be paid the value to him of the potentiality. The value of the potentiality must be ascertained by the arbitrator on such materials as are available to him and without indulging in feats of the imagination. Where there is only one possible purchaser, the value should be the sum which the arbitrator estimates a willing purchaser will pay and not what a purchaser will pay under compulsion." has no merit and is hereby repelled.
8. Learned counsel then argued with reference to Collector of Karachi v. Rustom F. Cowasji and others (PLD 1961 Kar. 639) and Babu Kailash Chandra Jain v. Secretary, of State (73 I A 134), that the market value in the instant case should be determined "according to the use to which the land was put at the date with reference to which the said value is to be assessed". He argued that at the time of the Notification under section 4 of the Land Acquisition Act, the land in dispute, as evident from Revenue Records, like Jamabandi etc., was agricultural land and was being used for that purpose and, therefore, should be considered as such for determining its market value. These cases are distinguishable from the one in hand, because there the properties were acquired under the Local Town Improvement Acts which modified the Land Acquisition Act, in the manner in which the proposition is being advanced by the learned counsel. So far as the facts of the present cases are concerned, the acquisition is not under the Punjab Town Improvement Act, but under the Land Acquisition Act I of 1894, and the cases have, therefore, to be decided on the wording of section 23 of the said Act, in which there is no such restriction or limitation, and irrespective of the actual use of the land at the date of expropriation, its potential value will have to be taken into account.
9. The next point argued was that in the instant case, the compensation should have been assessed on the basis of Ausat Panjsala (quinquennial average report) (Exh. D. 1), according to which the average price of the land, from the point of view of its being agricultural land, comes to Rs. 40.00 per marla. The contention cannot be accepted for various reasons. Firstly, because the Ausat Panjsala prepared by Muhammad Aslam Patwari (D. W. 1), according to his own deposition, does not keep regard of the fact as to whether the land was near the abadi or away from it.
Secondly, in this Ausat Panjsala, he has not included the sale transaction evidenced by Exh. P. 3, dated 29-4-1961, which showed that the land involved therein which consisted of Khasra Nos. 54, 55, 56 and 57/1041 was sold at the rate of Rs. 100 per marla. Thirdly, the witness himself admitted that in that locality sales during the past three or four years had been made at the rate of Rs. 100 per marla, which means that this deposition on oath was different from the excerpt prepared by him. Fourthly, this report lays emphasis on the agricultural nature of the land and ignores the point of view of "potential value". The locality where the land in dispute is situated is a commercial or factory area, in which are set up numerous factories and to evaluate such land as an agricultural land is not justified. This Ausat Panjsala was not accepted by the learned Civil Court and we are in agreement with him that it cannot constitute a valid basis for working out the amount of compen- -sation for the land in dispute. Learned counsel for the appellant argued that certain land owners whose land was involved in a different award (Exh. P. 11), had been awarded compensation at the rate of Rs. 40 per marla and that the said land owners had not challenged the said Award which, according to the learned counsel, showed that this was a fair rate and from that point of view the same should be fixed here. The plea cannot be accepted because as laid down in Atmaram Bhagwant Ghadgay v. Collector of Nagpur (AIR 1929 P C 92), such a course is not to be adopted. In that case, the Appellate Court had referred to the evidence as to the price accepted by other owners in respect of certain other plots, the conditions of which were not fully before it. The Privy Council did not approve of this practice and held, "It is in short hardly too much to say that the Appellate Court, in its exclusive reliance upon the attitude of the owners other than the appellant, were within an ace of ignoring the prohibition imposed upon them by section 21 of the Act and of extending the range of the inquiry beyond the statutory limit thereby set."
10. Learned counsel for the appellant lastly argued that even though the average price per marla calculated on the basis of the sale transactions contained in the sale-deeds Exhs. P. 3, P. 4, P. 5 and P. 6, works out to be Rs. 70 per marla, but some portion of the land involved in each of those sale- deeds had a frontage on the G. T. Road, whereas the land presently in dispute had no such frontage. He argued that even if Rs. 70 was to be taken as the average price, then some slashing should have been done in the instant case on account of the land being a little away from the G. T.
Road. The contention appears to have force. We have examined the land involved in each of these sale-deeds with reference to Aks Shajra (Exh. P. 1) and we notice that the land involved in Exh. P. 3 comprised of Khasra Nos. 54, 55, 56 and 57/1041. Out of these, two Khasra numbers, namely, 56 and 57 have a frontage on the G. T. Road itself and the other two Khasra numbers, namely, No. 54 and 55 are at the back of Khasra No. 56. Similarly, land involved in Exh. P. 4 bears Khasra No. 57/ 1040. As indicated earlier, Khasra No. 57 has a frontage on the G. T. Road. The land involved in Exh. P. 5 is again Khasra No. 57/1040 and Khasra No. 58. The latter Khasra is a little away from G. T. Road; but the former has a frontage. The land involved in Exh. P. 6 bears Khasra Nos. 108, 109, 110 and 111/106.
Out of these, one Khasra number, namely, 108, has a frontage on the G. T. Road and the remaining Khasra numbers are at its back. The average price of all these sale-deeds, as agreed to by the learned counsel for the parties, comes to be Rs. 70 per marls. As against all this, the land in question has no frontage on the G. T. Road. Keeping in view the over-all circumstances of the case, we, therefore, think that a slashing of Rs. 10 per marla would be quite within the fitness of things and we order accordingly.
11. The result is that the appeals are accepted to the extent hereinbefore indicated; compensation for the land in dispute is directed to be calculated at the rate of Rs. 60 per marls, on which should then be worked out 15 % compulsory compensation.
12. In the award and the judgment of the learned Civil Judge, it is indicated that the compensation for certain item or items, as for example well, tube-wells and buildings etc., was to be assessed later on. This judgment is not to affect the said item or items for which a supplementary award is to be given by the Collector.
The parties shall bear their own costs.