Loss of milk business qualifies for compensation as a benefit arising from acquired land.

The Appellant’s land bearing Survey No. 71, Hissa No. 2(B), at Village Lonad, Taluka Bhiwandi, District Thane, together with his house and cattle shed, was acquired under Sections 4 and 6 of the Land Acquisition Act, 1894.

The Section 4 notification was issued on 12 February 1981, the award was made on 23 September 1986, and possession was taken on 19 January 2000.

Dissatisfied with the compensation, the Appellant sought a reference under Section 18 of the Act.

During the reference proceedings, he amended his claim to seek compensation for loss of his milk business, which had been conducted from the cattle shed on the acquired land.

He relied on an account book, valuation report, oral evidence, and representations made to the authorities recording the existence of the stable and the consequent stoppage of his milk business.

The Reference Court awarded additional compensation for the house but rejected the claim for loss of milk business.

The Appellant challenged that rejection in the present appeal.

Whether the Appellant could amend his Section 18 reference to claim compensation for loss of milk business, although that claim was not expressly included in the original reference application.

Whether the Appellant established that the acquisition caused loss of his milk business and was therefore entitled to enhanced compensation under the Land Acquisition Act, 1894.

Whether compensation for loss of the milk business constituted compensation connected with the acquired “land” under Section 3(a) of the Land Acquisition Act, 1894.

Section 18 of the Land Acquisition Act, 1894 permits a landowner objecting to the amount of compensation to seek a reference without specifying a final or exhaustive quantum of compensation or limiting the heads of compensation claimed.

The entire issue of compensation becomes open before the Reference Court, and the claimant may subsequently specify or amend the heads of compensation, provided the nature of the original objection is not changed.

The Supreme Court’s decision in Ambya Kalya Mhatre v. State of Maharashtra, (2011) 9 SCC 325, establishes that a claim for enhancement is not frozen at the amount or heads stated in the Section 18 application; however, an amendment cannot change an objection regarding the amount of compensation into an objection regarding measurement, apportionment, or another statutory category.

Under Section 3(a), “land” includes benefits arising out of land, permitting compensation for benefits or interests connected with the acquired property.

Compensation is to be assessed with reference to the principles under Section 23, together with applicable statutory benefits and interest under Sections 23(1-A), 23(2), and 28.

The High Court held that the Appellant’s amendment did not alter the nature of his objection, which remained a claim for enhancement of compensation.

It merely introduced an additional head of compensation arising from the acquisition and was therefore permissible under Ambya Kalya Mhatre.

The Appellant’s account book contained the names of milk customers, quantities supplied, milk rates, fodder expenses, labour payments, and medical expenses for the buffaloes, thereby linking the records to the milk business.

His oral evidence and prior representations to the authorities established that the acquired property contained a stable and that the business had to be discontinued because the acquisition deprived him of the facility necessary to conduct it.

The Reference Court had improperly disregarded the valuation report showing the cattle shed and had adopted an unduly technical approach despite the Appellant’s evidence remaining substantially unchallenged in cross-examination.

Since the milk business was a benefit arising from the acquired land and fell within the broad statutory concept of “land” under Section 3(a), the Appellant was entitled to compensation for the resulting loss.

The High Court modified the judgment and award dated 9 September 2010 and directed the Respondents to award compensation for the loss of the Appellant’s milk business in accordance with the calculation set out in his amendment application, in addition to interest and statutory benefits under Sections 23(1-A), 23(2), and 28 of the Act.

The Reference Court was directed to determine the enhanced amount within three months of receiving the judgment, and the State was directed to deposit the amount, after adjusting sums already received and subject to verification, within three months thereafter.

No order as to costs was made.