(Prayer: Appeal filed under Section 54 of the Land Acquisition Act, 1894, against the judgment and decree of the VI Assistant City Civil Court at Chennai made in L.A.O.P.No.68 of 2013, dated 22.04.2024.

Appeal filed under Section 54 of the Land Acquisition Act, 1894, against the judgment and decree of the VI Assistant City Civil Court at Chennai made in L.A.O.P.No.62 of 2013, dated 22.04.2024.

Appeal filed under Section 54 of the Land Acquisition Act, 1894, against the judgment and decree of the VI Assistant City Civil Court at Chennai made in L.A.O.P.No.80 of 2013, dated 22.04.2024.)

Common Judgment:

N. Sathish Kumar, J.

1. Challenging the Award of the VI Assistant City Civil Court, Chennai, (hereinafter referred to as “the Reference Court” for brevity) in L.A.O.P.No.68 of 2013, dated 22.04.2024, enhancing the compensation fixed by the Land Acquisition Officer and awarding compensation towards loss of rental income, the State has filed the Appeal in A.S.No.1014 of 2025.

2. Challenging the Award passed by the Reference Court in L.A.O.P.No.62 of 2013, dated 22.04.2024, enhancing the compensation fixed by the Land Acquisition Officer and awarding compensation towards loss of rental income, the State has filed the Appeal in A.S.No.1225 of 2025.

3. Challenging the Award passed by the Reference Court in L.A.O.P.No.80 of 2013, dated 22.04.2024, enhancing the compensation fixed by the Land Acquisition Officer and awarding compensation towards loss of rental income, the State has filed the Appeal in A.S.No.32 of 2026.

4. Though the Reference Court has disposed of the above three LAOPs vide separate Awards, all dated 22.04.2024, since the acquisition in all the three cases arise out of a common notification under Section 4(1) of the Land Acquisition Act, 1894, (hereinafter referred to as “the Act” for brevity) for the purpose of Chennai Metro Rail, we are inclined to dispose of all the three Appeals by this common judgment.

5. Following are the brief facts that are necessary for the disposal of these Appeals :

The appellant is the acquisition body, who shall hereinafter be referred to as Land Acquisition Officer. The 2nd respondent in these Appeals/Chennai Metro Rail Limited is the requisition body. The lands were sought to be acquired by the requisition body for the purpose of construction of Metro Rail. The Land Acquisition Officer initiated the acquisition proceedings by invoking emergency clause under Section 17(1) of the Land Acquisition Act, 1894, as per G.O.Ms.No.130, Planning and Development Department, dated 25.03.2009. Notification under Section 4(1) of the Act was published on 10.11.2011. Thereafter, declaration under Section 6 of the Act was published on 07.12.2011.

6. In the acquisition proceedings, a total extent of 4794 sq.ft. at Aarthi Complex, Mount Road, Chennai, was acquired by the Land Acquisition Officer for the purpose of Metro Rail project. The said complex is a commercial complex having number of commercial units and office premises with different measurements owned by different owners with appropriate undivided share over the land in accordance with the extent of built up area purchased by them.

7. The 1st respondents in these Appeals are the owners of such commercial units. The 1st respondent in A.S.No.1014 of 2025, namely Gandhi, is the holder of undivided share of 2487.2 sq.ft, out of which, an extent of 549.24 sq.ft was acquired. The 1st respondent in A.S.No.1225 of 2025, namely GNG Consultancy Services (Madras) Private Limited, is the holder of undivided share of 2735.8 sq.ft., purchased under two sale deeds, out of which, an extent of 604.196 sq.ft. was acquired. The 1st respondent in A.S.No.32 of 2026, namely Sanyogta Ahuja, is the holder of undivided share of 177.30 sq.ft., out of which, an extent of 39 sq.ft. was acquired.

8. The Land Acquisition Officer passed an Award in No.10/2011-12 dated 01.03.2012 fixing the compensation at Rs.8,692/- per sq.ft., along with solatium and other entitlements as per the Act.

9. Not satisfied with the compensation amount awarded by the Land Acquisition Officer, the 1st respondents in these Appeals filed claim petitions seeking enhancement of the compensation at the rate of Rs.40,000/- per sq.ft., and accordingly, a reference was made by the Land Acquisition Officer under Sections 18 and 23 of the Act to the Reference Court and the cases were taken on file in L.A.O.P.No.68 of 2013 (in respect of Gandhi), L.A.O.P.No.62 of 2013 (in respect of GNG Consultancy Services (Madras) Private Limited) and L.A.O.P.No.80 of 2013 (in respect of Sanyogta Ahuja).

10. The Reference Court, by separate judgment and decree in the three LAOPs, all dated 22.04.2024, taking note of the sale exemplars relating to the nearby properties, particularly a sale deed dated 23.10.2008, has taken the market value at Rs.22,482.03 per sq.ft. and further, by adding 15% towards escalation cost from the date of sale deed till the date of notification under Section 4(1) dated 10.11.2011, fixed the final market value of the land at Rs.34,192/- per sq.ft., along with 30% solatium and 12% additional market value and interest in all three LAOPs. Apart from that, the Reference Court also awarded compensation towards loss of rental income at Rs.2,07,48,000/- in L.A.O.P.No.68 of 2013, which is the subject matter of A.S.No.1014 of 2025; Rs.2,28,26,700/- in L.A.O.P.No.62 of 2013 which is the subject matter of A.S.No.1225 of 2025; and Rs.10,000/- per month from 22.10.2014 in L.A.O.P.No.80 of 2013 which is the subject matter of A.S.No.32 of 2026. However, the Reference Court dismissed the claim with regard to loss of damages to the building.

11. Against the dismissal of the claim with regard to damages to the building, no Appeal, whatsoever, filed by the claimants.

12. Challenging the enhancement of compensation and the compensation for loss of rental income awarded by the Reference Court in all the three LAOPs, the State has filed the above Appeals.

13. During the pendency of the Appeals, two applications have been taken out in C.M.P.No.20644 of 2026 in A.S.No.1014 of 2025 and C.M.P.No.20643 of 2026 in A.S.No.1225 of 2025 by the respective claimants/1st respondent in those Appeals for reception of additional evidence. In C.M.P.No.20644 of 2026 in A.S.No.1014 of 2025, the Income Tax Returns of the claimant, namely Gandhi, for the Assessment Year 2011- 12 is sought to be received. In C.M.P.No.20643 of 2026 in A.S.No.1225 of 2025, (i) the Income Tax Return Acknowledgment for the Assessment Year 2011-12 in respect of the claimant, namely GNG Consultancy and (ii) the original Rental Income Certificate dated 27.07.2026 issued by the Auditor, are sought to be received as additional evidence.

14. It is the contention of the petitioners in those petitions that the aforesaid documents are necessary to show that the claimants have lost rental income and therefore, they seek to produce those documents. No counter has been filed to those petitions.

15. Learned Advocate General appearing for the appellant/Land Acquisition Officer would submit that the Land Acquisition Officer has taken exemplar sale deeds of Triplicane Village where the subject property located. Whereas, the Reference Court has taken the value of a building which situates at Nungambakkam Village, which is on the other side of the acquired lands. The document relied upon by the Land Acquisition Officer relates to a famous building ‘Buhari’ and the value has been fixed at Rs.8,692/- per sq.ft., which itself is a reasonable cost. Whereas, the Reference Court has relied upon a sale deed relating to a well furnished flat sold by Indian Overseas Bank, which is situated in a different Village. Therefore, he would submit that the Reference Court ought not to have relied upon the sale deed relating to the building owned and sold by Indian Overseas Bank building. It is his contention that the difference between old building and new building ought to have been taken note of by the Reference Court.

16. Further, it is the contention of the learned Advocate General that, admittedly, only the vacant site in front of the building has been acquired and necessary access is also provided to reach the building owned by the other building owners. However, the Reference Court has granted a huge compensation for loss of income without any proof. More particularly, the Reference Court, in L.A.O.P.No.80 of 2013 which is the subject matter of A.S.No.32 of 2026, has granted compensation from the date of the tenant vacating the premises till the date of completion of the Metro Rail project. It is his contention that such a compensation will have a drastic consequence, particularly in a project like Metro Rail. He would submit that the Reference Court, awarding compensation towards loss of rental income in a vast project like Metro Rail for many years together till the project is complete, that too, even without there being any evidence to prove the same, will have serious consequences in the acquisition proceedings and in fact, will open the pandora box. In support of his submissions, he placed reliance on the judgment of the Apex Court in Walchandnagar Industries Limited v. State of Maharashtra and another [(2022) 5 SCC 71] and also the Division Bench of this Court in The Sub Collector, Dindigul v. Lakshmi Ammal [2003 (1) CTC 193]. He would further add that, subsequently, the CMRL has acquired the entire building vide Award No.C3/058/2018 dated 31.10.2024 for various other purposes, by fixing the compensation on private negotiation.

17. Per contra, learned counsel appearing for the 1st respondent/claimant in all these Appeals, would submit that, in the present case, the emergency clause was invoked in the year 2009 and 4(1) notification was published on 10.11.2011. While invoking the emergency clause, no opportunity was given to the claimants. The entire acquisition was over within a short period. If the lands were acquired in normal course, the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, would have come into play and only in order to avoid the same, acquisition has been done in a hurried manner.

18. It is his further contention that the entire front portion of 160 feet has been acquired without there being any access to reach the remaining buildings, which has resulted in loss of rental income to the claimants. He would submit that the claimants have clearly established by way of evidence that, in view of the acquisition of the frontage of the building and taking of possession and blocking of frontage by putting up grill gates, the remaining building has been totally severed, which has injuriously affected the other properties of the claimants and also resulted in diminishing of their rental income. Therefore, it is his contention that the claimants are certainly entitled to damages as per Clauses thirdly and fourthly of Section 23 of the Land Acquisition Act. These facts have been taken note of by the Reference Court and therefore, the Reference Court has rightly awarded the compensation to the claimants for their loss of rental income. In support of the said contentions, the learned counsel relied upon the judgments of Hon'ble Supreme Court in Wazir and others v. State of Haryana [2019 (13) SCC 101], Kazi Akiloddin Sujaoddin v. State of Maharasthra and others [2013 Supreme (SC) 581] and Bombay High Court in The Executive Engineer, Works Division XXV (NH) PWD & another v. Sara Gracious [2010 Supreme (Bom) 1658].

19. The learned counsel would further submit that the Land Acquisition Officer has fixed the compensation taking note of the value of the land sold which is situated 1 ½ km away from the subject property. Though the exemplar sale deeds relied upon by the claimants relate to Nungambakkam Village, the fact remains that the subject matter of the acquisition and the property sold under exemplar sale deeds are situated in the same vicinity, opposite to each other across the main road, i.e,. Mount Road. He would submit that Mount Road is one of the commercial hubs in the city. Merely because of difference in names of the Villages, the value will not be different. It is his contention that the evidence adduced by the claimants clearly proves the fact that the land sold under exemplar sale deeds, relied upon by the claimants, is very near to the acquired land. Therefore, at no stretch of imagination, such value can be said to be higher. Whereas, the Land Acquisition Officer has relied upon the value of the building, namely Buhari, which is situated at a distance of 1 ½ km from the lands acquired. Therefore, adopting such a value will only lead to injustice to the land owners whose properties have been acquired. According to him, the highest of the sale exemplars placed for consideration has to be taken into account. In support of the said contention, he relied upon the judgment of the Hon'ble Supreme Court in Mehrawal Khewaji Trust (Regd.) Faridkot and others v. State of Punjab and others [2012 Supreme (SC) 336]. The highest of the sale exemplars was the sale deed dated dated 23.10.2008 in respect of the building sold by Indian Oversees Bank at Rs.22,482.03 per sq.ft. Therefore, the Reference Court has rightly taken note of the same and after adding escalation cost, the Tribunal has fixed the market value at Rs.34,192/- per sq.ft., which does not require any interference. In support of the said submission, he relied upon the judgments of the Hon'ble Supreme Court in Krishi Utpadan Mandi Samiti Sahaswan District Badaun through its Secretary v. Bipin Kumar and another [2004 Supreme (SC) 674] and Chakas v. State of Punjab and others [2012 (1) MLJ 183].

20. In the light of the above submissions, now the points that arise for consideration in these Appeals are as follows :

                   i. Whether the applications filed by 1st respondents/claimants to receive additional evidence at the appellate stage, can be allowed ?

                   ii. Whether the Reference Court is right in fixing the market value at Rs.34,192/- per sq.ft. as compensation ?

                   iii. Whether the Reference Court is right in awarding compensation for loss of rental income in all the three cases, especially, from 22.10.2014 till the date of completion of project in L.A.O.P.No.80 of 2013 (pertaining to A.S.No.32 of 2026) ?

                   iv. To what relief, the parties are entitled to ?

Point No. (i) :

21. The additional documents that are sought to be received as additional evidence to prove the rental income are (i) the Income Tax Returns of the claimants for the Assessment Year 2011-2012 and (ii) the Certificate issued by the Auditor.

22. The said Income Tax Returns are of the Assessment year 2011-12, which pertains to the period upto 31.03.2011. Whereas, the acquisition commenced in the year 2012. Therefore, any rental value shown prior to the acquisition will not be helpful to the claimants. Therefore, we are of the view that the additional document, viz., Income Tax Returns of AY 2011-12, will not serve any purpose.

23. The other document that is sought to be filed is the Certificate issued by the Auditor to show the rental income of M/s.GNG Consultancy Services (1st respondent/claimant in A.S.No.1225 of 2025) for the period from 2006 to 2013. When the claimant is in a position to obtain a certificate from the Auditor, there is no reason as to why they have not filed the Income Tax Returns for those years. Even before the Reference Court, they have not filed such Returns.

24. The parties to the Appeal seeking to adduce additional evidence at the appellate stage must establish that, notwithstanding the exercise of due diligence, such evidence was not within their knowledge or could not, after the exercise of due diligence, produce those documents before the trial Court. It is not the case of the petitioners/claimants that they exercised due diligence and despite the same, they were not in possession of the document during trial. In the absence of due diligence, as a matter of right, one cannot seek reception of additional evidence at appellate state.

25. Though the Appellate Court may also require any document to pronounce the judgment or for any other substantial cause, on careful perusal of the documents, as discussed above, one document is the Income Tax Returns relating to previous year just prior to the acquisition, which is no way useful to prove the case of the claimants; and the other document is only an Auditor’s certificate showing the rental income of the claimant, where, in the absence of Income Tax Returns, mere certificate by the Auditor will not prove their contention.

26. Hence, we are of the view that the claimants/petitioners have not made out their due diligence for reception of those documents at appellate stage. Accordingly, C.M.P.No.20644 of 2026 in A.S.No.1014 of 2025 and C.M.P.No.20643 of 2026 in A.S.No.1225 of 2025 for reception of additional evidence are dismissed. Point No.(i) is answered accordingly.

Point No. (ii) :

27. As far as compensation for the acquired lands is concerned, it is well settled that the market value of the land has to be taken into consideration and among the sale exemplars placed for consideration, the highest among them shall be taken into account. It is also settled that the value of the land must be determined on the basis of the sale deeds of comparable lands and the potential value of the land, lie of the land and the location in which it situates, etc., also have to be taken note of. In the present case, the lands have been acquired by invoking emergency clause. Therefore, it is trite that the land losers must be compensated with a reasonable compensation and such a compensation should not be a pittance. But that does not mean that the land losers should be granted a bounty or lottery so as to drain the State exchequer. While such power of compulsive acquisition lies with the State, it also has an inbuilt element of duty and responsibility to pay the compensation to the land owners, who have been unavoidably deprived of their property rights, which is just, fair and reasonable without delay.

28. Bearing this in mind, when the Award in the present case is carefully perused, it is seen that the Land Acquisition Officer has fixed the compensation at Rs.8,692/- per sq.ft. based on a sale deed in respect of one of the properties, namely Buhari building, situated in the Mount Road, which is also said to be in Triplicane Village in which the acquired land also situates. However, it is relevant to note that the distance between the said Buhari building and the land acquired is almost 1 ½ km in the same Mount Road. It is common knowledge that Mount Road is one of the busiest and costliest roads in Chennai. The value of each area on the said road will differ. Therefore, fixing the value based on some property situated 1 ½ km away from the land acquired, in our view, is not proper.

29. On the contrary, the claimants have marked exemplar sale deeds dated 23.10.2008 and 28.10.2008 as Exs.C3 to C6 in L.A.O.P.No.68 of 2013; Exs.C1 to C4 in L.A.O.P.No.62 of 2013; and Exs.C2 to C6 in L.A.O.P.No.80 of 2013, which relate to the sale of undivided share in respect of a building owned by Indian Overseas Bank, situated opposite to the land acquired. On a perusal of the said documents relied upon by the claimants, it is clear that the above sales is between the Indian Overseas Bank, which is a Nationalised Bank, and the Securities and Exchange Board of India, Export Credit Corporation of India Limited and Export-Import Bank of India, functioning under the control of the Central Government and Reserve Bank of India. Therefore, there cannot be any possibility of fake or nominal transactions that took place by way of the above documents. The above fact shows that the transactions under Exs.C3 to C6 in L.A.O.P.No.68 of 2013 are bona fide transactions, which took place on 23.10.2008 and 28.10.2008 and therefore, they can very well be taken into consideration. In this context, the Hon'ble Supreme Court in Mehrawal Khewaji Trust’s case (supra) has held as follows :

                   “17.It is clear that when there are several exemplars with reference to similar lands, it is the general rule that the highest of the exemplars, if it is satisfied that it is a bona fide transaction, has to be considered and accepted. When the land is being compulsorily taken away from a person, he is entitled to the highest value which similar land in the locality is shown to have fetched in a bona fide transaction entered into between a willing purchaser and a willing seller near about the time of the acquisition.”

30. Though it is much argued by the learned Advocate General that the building sold under the said sale deeds is situated in a different Village, namely Nungambakkam Village, we find from evidence that the subject matter of those sales also situate in the same Mount Road, just opposite to the acquired lands, within the same vicinity. Both the properties share the same main road, i.e., Mount Road. The Mount Road divides both the Villages, viz., Triplicane and Nungambakkam. This fact is not in dispute. There is no dispute with regard to the location of those buildings. Therefore, merely because the opposite area falls within a different Village, it cannot be said that its value cannot be taken into consideration. When it is established in evidence that both the buildings are in the same Mount Road and the Mount Road is the main road for both the areas, mere difference in the names of the Villages will not make any difference. Further, these are sales much prior to the acquisition. This fact is also not in dispute. Therefore, we are of the view that the Reference Court, relying upon the actual market value at Rs.22,482/- as per the sale deeds relied upon by the claimants, dated 23.10.2008 and 28.10.2008, marked as Exs.C3 to C6 in L.A.O.P.No.68 of 2013; Exs.C1 to C4 in L.A.O.P.No.62 of 2013; and Exs.C2 to C6 in L.A.O.P.No.80 of 2013, cannot be found fault with.

31. Further, the Reference Court has also awarded 15% escalation cost. Though the learned Advocate General would contend that the exemplar sale deeds relied upon by the claimants are only three years before acquisition and therefore, there is no necessity for again awarding escalation charges, we are of the view that the award of escalation cost has to be made keeping in mind the lie of the property, location, etc. It is relevant to note that the Hon'ble Supreme Court time and again, for instance, in Ranjit Singh vs. UT of Chandigarh [(1992) 4 SC 659], Krishna Utpadan Mandi Samiti vs. Bipin Kumar [(2004) 2 SCC 283], Land Acquisition Officer v. Ramanjulu [(2005) 9 SCC 594], Sardar Jogendra Singh v. State of U.P. [(2008) 17 SCC 133], Revenue Divisional Officer-cum-LAO v. Sk.Azam Saheb [(2009) 4 SCC 395], has held that, while fixing the value of the land, escalation in land prices should also be taken into consideration.

32. In General Manager, Oil and Natural Gas Corporation Ltd. v. Rameshbhai Jivanbhai Patel [(2008) 14 SCC 745], the Hon'ble Supreme Court has held as under:

                   “13.Primarily, the increase in land prices depends on four factors: situation of the land, nature of development in surrounding area, availability of land for development in the area, and the demand for land in the area. In rural areas, unless there is any prospect of development in the vicinity, increase in prices would be slow, steady and gradual, without any sudden spurts or jumps. On the other hand, in urban or semi-urban areas, where the development is faster, where the demand for land is high and where there is construction activity all around, the escalation in market price is at a much higher rate, as compared to rural areas. In some pockets in big cities, due to rapid development and high demand for land, the escalations in prices have touched even 30% to 50% or more per year, during the nineties.

                   …

                   15.Normally, recourse is taken to the mode of determining the market value by providing appropriate escalation over the proved market value of nearby lands in previous years (as evidenced by sale transactions or acquisitions), where there is no evidence of any contemporaneous sale transactions or acquisitions of comparable lands in the neighbourhood. The said method is reasonably safe where the relied-on sale transactions/acquisitions precede the subject acquisition by only a few years, that is, up to four to five years. Beyond that it may be unsafe, even if it relates to a neighbouring land. What may be a reliable standard if the gap is of only a few years, may become unsafe and unreliable standard where the gap is larger. For example, for determining the market value of a land acquired in 1992, adopting the annual increase method with reference to a sale or acquisition in 1970 or 1980 may have many pitfalls. This is because, over the course of years, the ‘rate’ of annual increase may itself undergo drastic change apart from the likelihood of occurrence of varying periods of stagnation in prices or sudden spurts in prices affecting the very standard of increase.”

                   (emphasis supplied)

33. Similarly, in Valliammal vs. Special Tahsildar (Laq) and another [2011 (8) SCC 91], the Hon'ble Supreme Court has held that, while fixing the market value, 10-15% increase per annum towards escalation of land can be given.

34. In the case on hand, there is a gap of three years between the date of sale deeds and 4(1) notification, which is not too large so as to render it an unreliable standard, nor too less to ignore the escalation cost itself. Mount Road is one of the costliest roads in Chennai and several developments take place day-to-day. Even finding a square foot land in the said road is highly difficult for anyone. Such being the position, the Reference Court, adding 15% towards the escalation of land cost, in our view, is just and reasonable and we do not find any infirmity in the same. Therefore, we are of the view that the land value fixed by the Reference Court after adding escalation cost @ 15% at Rs.34,192/- does not require any interference. Accordingly, Point No.(ii) is answered against the appellant.

Point Nos. (iii) & (iv) :

35. The Reference Court has awarded a sum of Rs.2,07,48,000/- in L.A.O.P.No.68 of 2013; Rs.2,28,26,700/- in L.A.O.P.No.62 of 2013; and Rs.10,000/- per month from 22.10.2014 till the completion of project as compensation for the loss of rental income suffered by the respective claimants.

36. Since it is the claimants’ case that the entire frontage of the building has been blocked and their rental income has totally diminished, the burden is always on them to show that, after acquisition of some portion of their property, the utility of the building has completely stopped and no one is able to enjoy the building all these years.

37. Insofar as L.A.O.P.No.68 of 2013 (pertains to A.S.No.1014 of 2025) is concerned, though much has been projected as if the previous tenant who was paying Rs.2,12,800/- had vacated pursuant to the acquisition proceedings, on a perusal of the lease agreement marked as Ex.C7 in L.A.O.P.No.68 of 2013, we are of the view that the contention of the claimant cannot be countenanced for the simple reason that the copy of the lease agreement would show that lease was only for a period of five years. Ex.C7 is an unregistered agreement said to have been entered on 01.06.2007 for a period of five years. Though an unregistered document cannot be looked into for any other purpose, even presuming the lease, the fact remains that the lease expired on 31.05.2012. Therefore, it cannot be said that the lessee had voluntarily vacated and left the place only due to the acquisition. Further, to show that any rent has been regularly received pursuant to this unregistered lease deed from the year 2007, no Bank account, whatsoever, filed by the claimant.

38. Insofar as L.A.O.P.No.62 of 2013 (pertains to A.S.No.1225 of 2025) is concerned, though it is projected as if two tenants have vacated and there is a loss of rental income of Rs.88,000/- and Rs.75,000/- per month respectively from the two tenants, no registered lease agreement, nor any Bank account to show the receipt of such rental income, whatsoever, filed by the claimant. Though Ex.C5 document has been filed stating to be Engineer’s report, the same has not been substantiated, since the author of the document has not been examined.

39. Insofar as L.A.O.P.No.80 of 2013 (pertains to A.S.No.32 of 2026) is concerned, though much emphasis has been placed before the Reference Court as if the access to enter into the building has been completely blocked and therefore, the rental income has completely diminished, the entire evidence clearly indicate that there was sufficient access already given. Even earlier, a writ petition has been filed by some of the shop owners in W.P.No.20302 of 2020, wherein, a prayer has been sought only to forbear the respondents therein, from in any manner, interfering with the access to the writ petitioners’ building from all points of the frontage of the petitioners’ building including the entry and exit. The said writ petition was disposed of by this Court by order dated 09.02.2021 stating that there is no such attempt, whatsoever, made. Later, a writ petition in W.P.No.35295 of 2019 has also been filed by some of the shop owners challenging the demand of Rs.2,01,37,093/- as lease charges made by the Chennai Metro Rail Limited for using the land acquired by them. The said writ petition was closed by this Court by order dated 07.06.2023 holding that the writ petition is an off-shoot of the demand made by the CMRL alleging that it had blocked the ingress and egress of the petitioner’s property and the said demand was also later recalled by CMRL. The very fact that the CMRL has demanded such a huge amount as lease charges over the property acquired, clearly indicates that the property has all along been used by the claimants herein and other persons. Therefore, the contention that there was total nonaccess to their property, cannot be countenanced. Even the Commissioner’s report indicates that, when they visited, the occupiers were very much there in the building. Though some of the shops were vacant, still, the building was in occupied condition. Therefore, the contention of the claimant that there was no access to use the remaining building, has not been established. Further, the quantum of rental income has also not been established in any case. Moreover, the fact remains that subsequently, the CMRL has acquired the entire building vide Award No.C3/058/2018 dated 31.10.2024 by fixing the compensation on private negotiation, which is not in dispute.

40. It is further to be noted that the Hon'ble Supreme Court in Walchandnagar Industries Limited’s case (supra) has held as follows :

                   “31.Section 23(1), which alone is relevant for our present purposes, is extracted as follows:

                   “23. Matters to be considered in determining compensation.—(1) In determining the amount of compensation to be awarded for land acquired under this Act, the Court shall take into consideration—

                   first, the market value of the land at the date of the publication of the notification under Section 4, subsection (1);

                   secondly, the damage sustained by the person interested, by reason of the taking of any standing crops or trees which may be on the land at the time of the Collector's taking possession thereof;

                   thirdly, the damage (if any) sustained by the person interested, at the time of the Collector's taking possession of the land, by reason of severing such land from his other land;

                   fourthly, the damage (if any) sustained by the person interested, at the time of the Collector's taking possession of the land, by reason of the acquisition injuriously affecting his other property, movable or immovable, in any other manner, or his earnings;

                   fifthly, if, in consequence of the acquisition of the land by the Collector, the person interested is compelled to change his residence or place of business, the reasonable expenses (if any) incidental to such change; and

                   sixthly, the damage (if any) bona fide resulting from diminution of the profits of the land between the time of the publication of the declaration under Section 6 and the time of the Collector's taking possession of the land.”

                   32. In simple terms, the six items covered by Section 23(1), which are to be taken into consideration by the court in determining compensation, can be summarised as follows:

                   32.1.The market value of the land on the date of publication of notification under Section 4(1).

                   32.2.The damage to standing crops or trees, which are on the land at the time of the Collector taking possession.

                   32.3.The damage sustained by reason of severing such land from the unacquired land.

                   32.4.The damage sustained by reason of the acquisition injuriously affecting the other property, movable or immovable, in any other manner or the earnings, of the person interested.

                   32.5.The reasonable expenses incurred by the person interested, in changing his residence or place of business, when he is compelled to do so in consequence of the acquisition.

                   32.6.The damage bona fide resulting from diminution of the profits of the land between the time of publication of the declaration under Section 6 and the time of the Collector's taking possession.

                   ….

                   35.It may be noted that clause thirdly of Section 23(1) relates only to land, as it speaks only about the severance of the acquired land from the unacquired land and the damage sustained as a consequence. In contrast, clause fourthly of Section 23(1) deals with the damage sustained by the person interested, due to the injurious affection, (i) of his other movable property; (ii) of his other immovable property; and (iii) of his earnings. In other words what is injuriously affected at the time of Collector's taking possession of the land, may either be the unacquired portion of the immovable property or other movable property or even the earnings of the person interested.

                   36.It may also be noted that the expression used in clause fourthly is “earnings”, while the expression used in clause sixthly is “profits”. But clause sixthly is confined only to diminution of the profits of the land between the time of publication of the declaration under Section 6 and the time of the Collector taking possession.

                   37.Coming to Section 49, it deals with two contingencies. They are,

                   (i) cases where what is sought to be acquired is only a part of any house, manufactory or other building; and

                   (ii) cases where a claim for compensation under the head “severance” under clause thirdly of Section 23(1) arises.

                   37.1.Insofar as the first contingency is concerned there is a bar under sub-section (1) of Section 49 for the acquisition of a part only of any house, manufactory or other building, if the owner desires that the whole of such house, manufactory or building shall be so acquired.

                   37.2.Insofar as the second contingency is concerned, there is a choice given to the appropriate Government to order the acquisition of the whole of the land, if the appropriate Government is of the opinion that the claim for severance compensation is unreasonable or excessive.

                   ...

                   41.As we have indicated earlier, clause thirdly relates to the damage sustained by the person interested, by reason of severance of the acquired land from the unacquired land, at the time of Collector's taking possession of the land. In contrast, clause fourthly of Section 23(1) deals with the damage sustained by reason of the acquisition injuriously affecting, (i) the other movable property; (ii) the other immovable property; and/or (iii) the earnings of the person interested.

                   42.The claim of the appellant before the Reference Court under clauses thirdly and fourthly of Section 23(1), presented a mix-up, with some items overlapping with others. This can be seen from para 22 of the award of the Reference Court, where the claim of the appellant is extracted by the Reference Court as follows:

                   “22. The main grievance of the claimant company is that the Special Land Acquisition Officer has not considered at all the claimant's claim for damages suffered by the claimant company on account of severance and injurious affection. Although the opponent has acquired only 6 km i.e. about 20.74 hectares of land under the trolley line, this acquisition has rendered the remaining portion of about 30 km i.e. 60.38 hectares of the land under the trolley line totally useless. In other words, the contention of the claimant company is that the acquisition of only 6 km has not only deprived the claimant company of the use of the trolley line facility, but it has also rendered the remaining portion of the trolley line of 30 km i.e. 60.38 hectares of land, the rolling stock, three diesel engines, buildings, telephone line and all other items connected with the trolley line, such as, civil works, embankments, C.D. works, culverts, bridges, totally redundant and obsolete. The claim can be divided into two categories as follows:

                   (i) Enhancement of compensation in respect of the acquired portion of the land; and

                   (ii) The compensation for the damages suffered by the claimant company in respect of the unacquired portion of the trolley line on account of severance and injurious affection under the following head:

                    (1)Unacquired portion of the land admeasuring about 60.38 hectares.

                    (2)The entire railway track of 36 km comprising of rails, sleepers, girders, etc.

                    (3)Rolling stocks, various types of wagons, tankers, etc.

                    (4)Diesel engines three;

                    (5)Telephone line and telephone poles, trees, wells, etc. embankments, C.D. works, bridges, culverts building, non-operation of nearly 30 km; diminution in the value of Walchandnagar Township, due to discontinuance of the trolley line facility which was hitherto available to the said industrial complex, the additional cost of transport for switching over from trolley line transport to road transport, the cost of remodelling the yard at Bhigwan Station in order to suit the transshipment of loading and unloading by road transport; total retrenchment compensation for about 52 persons, specially trained and employed for the operation of trolley line, who had come to be absorbed by the claimant company on humanitarian grounds and loss of earnings.”

                   …

                   44. Even within clause fourthly, what we are concerned in these appeals is the injurious affection of, (i) movable property such as rails and sleepers and rolling stock; and (ii) the loss of earnings due to increase in transportation costs. But unfortunately what the appellant did was to claim a sum of Rs 80,07,180 towards increase in transportation costs and a separate amount of Rs 35,62,000 towards loss of earnings. Even under the heading “loss of earnings”, what was claimed was actually loss of profits. The appellant did not realise that the diminution of profits fell under clause sixthly of Section 23(1) and the claim under this head is restricted to the time between the date of publication of the declaration under Section 6 and the time of Collector taking possession. Injurious affection to earnings is covered by clause fourthly and the statute has made a distinction between, (i) injurious affection to earnings; and (ii) diminution of the profits between the time of publication of the declaration under Section 6 and the time of taking possession.”

                   (emphasis supplied)

41. A careful perusal of the above judgment makes it clear that the Clause “thirdly” under Section 23(1) speaks about the severence of the acquired land from the unacquired land and the damage sustained as a consequence. Whereas, Clause “fourthly” under Section 23(1) speaks about damages sustained by a person due to the injurious affection of his properties, whether movable or immovable, in any other manner or his earnings, at the time of the Collector taking possession. While Clause “sixthly” under Section 23(1) deals with the diminution of the profits of the land between the time of publication of the Section 6 declaration and the time of the Collector taking possession.

42. Further, Para No.44 of the judgment in Walchandnagar Industries Limited’s case extracted supra makes it clear that the claimant therein had, in fact, claimed certain “loss of profit” suffered by them in the guise of “damages” under Clause fourthly. The Hon'ble Supreme Court has found that the same should fall only under Clause sixthly.

43. When a person claims any damages under any of the clauses under Section 23(1), it is for him to establish the same by convincing evidence. In the absence of any evidence to show that, at the time of Collector taking possession, there were damages occurred either by reason of severence or by reason of injurious affection or by reason of diminution of profits, the damages cannot be presumed automatically.

44. In the above background, the evidence in the present case when carefully scanned, it is clear that there was no complete blockage of the frontage of the building and the remaining part of the building was, in fact, put into use, which is evident from the writ petitions filed by the shop owners, as detailed above, and from the report of the Advocate Commissioner. Merely because some works were carried on by CMRL, damages cannot be presumed and it cannot be said that there was any injurious affection of earnings in the guise of loss of rental income, so to invoke Clause fourthly, especially, in the absence of any evidence to substantiate the same, as discussed in the foregoing paragraphs.

45. Further, the Hon'ble Supreme Court in Para No.35 in Walchandnagar Industries Limited’s case extracted supra, has held that the clause thirdly of Section 23(1) relates only to land, as it speaks only about the severance of the acquired land from the unacquired land and the damage sustained as a consequence. In the presence case, there is no evidence, whatsoever, to show that the unacquired land, due to severence, has suffered a reduction in its market value or potentiality or any permanent injury to render it completely unusable. From evidence, it is clear that the remaining building was very much in use and the huge demand made by the CMRL in one of the writ petitions as stated above, shows the extent of utilisation which the building was put to.

46. However, though there was no complete blockage of the frontage of the building, yet, from the evidence, it is clear that there was a grill gate upto 160 feet, which would have certainly caused some inconvenience to the claimants and the users of the building, thus, leading to some diminution in the profits to the claimants in utilising their property. Therefore, at the most, the claimants can be compensated only under Clause sixthly.

47. If at all any such diminution of profits had happened, the same can be claimed only between the date of declaration under Section 6 and the date of Collector taking possession of the land. Therefore, the Reference Court ordering such damages from the date of loss of such profits till the entire project is completed, in our view, is not a proper decision of law.

48. The Division Bench of this Court in Lakshmi Ammal’s case (supra) has held as follows :

                   “18.The question is what is the amount of compensation by way of damages sustained by the person, whose land has been acquired, wherein he was carrying on a business. It may be in some cases, the land/building acquired are in villages and there are cases where the acquisition is in respect of a property situated in town. The State invokes the special powers in cases of urgency under Section 17 of the Land Acquisition Act. In those cases, the possession will be taken early when compared to other cases. We find, the Allahabad High Court, in the decision referred supra, adopted 20 multiplier on the basis that the net income is multiplied for the purpose of finding out the capitalised value.

                   This Court finds it rather difficult to accept the view of the Allahabad High Court, cited supra. In Koyappathodi M. Ayisha Umma v. State of Kerala, AIR 1991 SC 2027, the Supreme Court has ruled that when there are standing coconut trees in the acquired land and the value of the lands is assessed on the basis of comparable sale transaction so far as the standing trees are concerned, the same has to be treated only as timber. But however, when the compensation is calculated on the basis of yield method, various multipliers are adopted depending upon the standing trees (kind of trees).

                   In the present case, it is not as if the source of income is destroyed by acquisition, but the only thing is, instead of carrying on business in the acquired property, the business has to be shifted to somewhere else and normally this should mean that it will take some time. Only keeping in mind the loss that may be incurred during that transit period, compensation has to be made. This Court is of the view that grant of six months net income would be a proper compensation in normal cases, where the emergency provision is not invoked. In fact, normally after Section 6 declaration is made, for the authorities to hold award enquiry and to take possession, it will take minimum of six months. Only on the basis of the above reasonings, this Court is of the view that compensation under the head of Loss of Earnings should be six months net income in ordinary cases, where emergency provision is not invoked. But however, where the emergency provision is invoked, the Court has to award some more compensation, which should be nine months net income. Needless to mention, the burden is solely on the Claimant/Land Owner, who is put to strict proof, to the satisfaction of the Court, as to what was the net income per month on the date of notification under Section 4(1) of the Land Acquisition Act.”

                   (emphasis supplied)

49. The above judgment makes it clear that, in the cases where emergency provisions are invoked, nine months’ net income can be granted as compensation. Admittedly, in the instant case, emergency provision has been invoked. Such being the case, at the most, as held by the Division Bench supra, nine months net income can only be granted.

50. However, though the claimants in L.A.O.P.Nos.68 and 62 of 2013 have claimed that they were receiving rent at Rs.2,00,000/- and odd per month and the claimant in L.A.O.P.No.80 of 2013 has claimed that he has suffered a rental loss of Rs.10,000/- per month, there is no evidence to substantiate the same so as to exactly work out the loss for nine months as laid down by the Division Bench of this Court. However, taking into consideration the inconvenience caused to the claimants due to the blockage of a portion of the frontage of the building, which may have certainly lead to some diminution in their profits, in the interest of justice, we deem it fit to award a sum of Rs.10,00,000/- to the claimants in L.A.O.P.Nos.68 and 62 of 2013 and Rs.5,00,000/- to the claimant in L.A.O.P.No.80 of 2013 as compensation under Clause sixthly of Section 23(1) of the Act. Accordingly, Point Nos.(iii) and (iv) are answered.

51. In fine, these Appeals are partly allowed. While confirming the market value of land fixed by the Reference Court at Rs.34,192/- per sq.ft., we set aside the judgment and decree of the Reference Court insofar as compensation for loss of rental income is concerned. Instead, there shall be a decree awarding a compensation of Rs.10,00,000/- (Rupees Ten Lakhs only) each to the claimants in L.A.O.P.Nos.68 and 62 of 2013 (pertaining to A.S.Nos.1014 and 1225 of 2025 respectively) and Rs.5,00,000/- (Rupees Five Lakhs only) to the claimant in L.A.O.P.No.80 of 2013 (pertaining to A.S.No.32 of 2026) towards diminution of profits. The appellant/State is directed to deposit the modified Award amount, less the amount already deposited, if any, within a period of two months from the date of the judgment. If the entire award amount had already been deposited, the appellant/State would be entitled to refund of the excess amount on making appropriate application before the Reference Court. No costs. Since all the points have been extensively argued and answered by this Court, the additional grounds sought to be filed in C.M.P.Nos.18946, 18952 and 18954 of 2026 stand closed. Connected other miscellaneous petitions are also closed.