MUNICIPAL COMMITTEE, PATHANKOT Vs. BAJO RAM AND OTHERS

JUDGEMENT

(1.) Both the appeals are connected and they relate to determination to compensation for damages for acquisition of the property in which the landowners had established a kotha for running his business in firewood. The Reference Court had determined compensation of Rs. 15,000/- for value of the superstructure and Rs. 9,000/- for the loss of business. The evidence was that he had installed weighing scale at the spot and he was earning about Rs. 3,000/- from his business per month. He deposed that he had suffered Rs. 2 to Rs. 2 1/2 lakhs for destruction of the materials and Rs. 5 lakhs for the goodwill of business. Although objection by the Municipal Corporation was that there was no business, the Reference Court rejected the same and awarded Rs. 10,000/- towards loss of business and Rs. 16,000/- towards structure with the interest and solatium as prescribed under the Act. The Municipal Committee is in appeal in RFA No.718 of 1993 and the claimant is in appeal seeking for enhancement in RFA No.3361 of 1993.

(2.) Section 23 of the Land Acquisition Act provides for methods of assessment to compensation setting out several parameters. Even apart from the value of the land which is acquired, the landowner is also entitled to loss of business by the clauses 4 and 5 mentioned under Section 23(1). The loss of business is to be assessed by the loss of earning during the time that the person would require to restart his business, as held by the Supreme Court in Ramesh Dutta Versus State of Punjab, 2004 7 SCC 388. It cannot be assessed as though the business is completely lost. The evidence was that the landowner had lost goodwill of his business estimated at Rs. 5 lakhs and loss of material of Rs. 2 1/2 lakhs. I cannot accept the latter claim that any material had been damaged. There is no such evidence and the Court below has also not awarded the same. If the value of the superstructure itself was Rs. 16,000/-, I would assume that it is a small construction where landowner had been carrying on a firewood business. The determination of interest shall follow the decision stipulated in the judgment of the Supreme Court in State of Punjab Versus Amarjit Singh, 2011 4 SCC 734 and they are reproduced as under:-

(3.) The Collector had awarded while determining the damages at Rs. 9,000/- as the loss of business of firewood per year and calculated it for 8 1/2 years from 31.07.1980 to 31.01.1989, that is, from the date of Section 4 notification to the date when possession was taken. The appeal is filed contending that the multiplier of 8 1/2 times was not correct and that the loss of income for 30 years must have been calculated. I find the method of claim for damages is wholly faulty. The Supreme Court has held in Ramesh Gupta Versus State of Punjab, 2004 7 SCC 388 that the manner of assessment of damage shall be only on the basis of loss for the time that would require to restart business. Consequently, if the person lost business, it could be the time from the period when the property was taken possession of till the property was restarted. There is no basis for working out the damages by taking the possible income in business for 1 year and adopting a multiplier for the period from the date of notification issued under Section 4 to the date when possession is taken. The Collector has assessed the loss of profit at Rs. 9,000/- per year and has adopted a multiplier of 8 1/2 to take the loss of income as Rs. 76,500/-. The Reference Court had modified it by increasing the income at Rs. 10,000/- per year, but allowed for the retention of the same multiplier. The entire exercise, in my view, is wrong. All that the owner would be entitled to claim as damages would be a provision for relocating himself from the time when he lost the property by acquisition when the State took delivery of the property till the possible time when he would have taken for relocating the business. Even if we assume that he would have taken about 6 months to relocate the business and provided for the entire income as claimed by the petitioner per month that alone shall be the damages. Such an amount could not have been in excess of Rs. 76,500/-, going by his own assertion that he was earning about Rs. 3,000/- per month. In the same way, the loss of goodwill for the business cannot be taken to be a complete loss of the business itself.