M/S Rhodium Ferro Alloys PVT LTD vs. The State Of Andhra Pradesh

Held

The Court found that neither the petitioner's offer of Rs.81 per square yard nor the Sub-Registrar's value of Rs.500 per square yard was entirely tenable. The Rs.81 rate was a subsidized price for public purpose, not reflective of current market value in an industrial area. The Rs.500 rate was a minimum book value, unlikely to be the actual transaction rate. Similarly, the respondents' claim for three times the Sub-Registrar's value lacked documentary proof. The Court suggested two amicable solutions: (1) the petitioner pays twice the Sub-Registrar's book value for the land to enable AP TRANSCO to acquire similar land elsewhere, or (2) AP TRANSCO retains ownership and leases the land to the petitioner for the bay extension at an agreed rent. If neither option is agreeable, parties can approach a Civil Court for a decision on merits, without being influenced by the High Court's observations.

Facts

The petitioner, a manufacturer of Ferro Silicon, sought an enhancement of its contracted maximum demand (CMD) from 8000 KVA at 33 KV to 20500 KVA at 132 KV. This required an extension at the Gollapuram Sub-station. Initially, the petitioner paid development and other charges amounting to Rs.1,94,26,015/-. Subsequently, the respondent authorities demanded the petitioner to procure and gift substitute land for the bay extension. After attempts to acquire adjacent land failed, the respondents demanded payment for the land utilized for the bay extension. The Superintending Engineer initially demanded Rs.41,83,837.50, which was five times the Sub-Registrar's value. The impugned order from the 3rd respondent demanded three times the land cost, amounting to Rs.25,10,303/-.

Key Issues

1. What is the appropriate valuation for the land utilized by AP TRANSCO for the petitioner's bay extension at the Gollapuram Sub-station, considering the petitioner's offer of Rs.81 per square yard (the rate at which AP TRANSCO purchased land) or Rs.500 per square yard (Sub-Registrar's declared value), versus the respondent's demand of three times the Sub-Registrar's value? Petitioner's arguments: The petitioner argued that they are willing to pay either the rate at which AP TRANSCO purchased the land (Rs.81 per square yard) or the Sub-Registrar's declared market value (Rs.500 per square yard). They contended that the demand for five times the market value, and subsequently three times the market value, was arbitrary and unjustified. Respondents' arguments: The respondents contended that the land utilized for the bay extension was AP TRANSCO's own land, which could have been used for future public purposes. They argued that the Sub-Registrar's value of Rs.500 per square yard does not reflect the true market value, which is higher. They also stated that AP TRANSCO pays three times the registered value to farmers for land acquired for new sub-stations, justifying their demand for a higher valuation.