The Bombay High Court has held that loss of milk business carried on from a stable situated on acquired land qualifies for compensation, as “land” under Section 3(a) of the Land Acquisition Act, 1894, includes the benefits arising out of land. The Court observed that the Appellant had produced evidence regarding his milk business and that the loss of such business resulted from acquisition of the land.

Justice Abhay Ahuja was hearing an appeal filed seeking enhancement of compensation for acquired land and a cattle shed. The land in question was acquired pursuant to notifications issued under Sections 4 and 6 of the Land Acquisition Act, 1894, and possession was ultimately taken on January 19, 2000. The Appellant had initially sought enhancement of compensation through a reference under Section 18 of the Act. He subsequently sought to claim compensation for loss of milk business,

The Appellant produced an account book containing entries of persons to whom milk was sold, the rate of milk and expenses incurred for fodder, besides entries relating to purchase of buffaloes, payment of labourers and medicines. He also led oral evidence regarding the loss of milk business.

The Court relied on the Supreme Court's decision in Ambya Kalya Mhatre v. State of Maharashtra, observing that once a landowner seeks a reference objecting to the amount of compensation, the entire issue of compensation is open before the Reference Court.

“What is not permitted after the expiry of the period of limitation specified in Section 18 of the Act is changing the nature of objections from one category to another… objection to amount of compensation, the land owner cannot after period of limitation, seek amendment to change the claim as objection to the measurement or objection to the apportionment,” the Court remarked.

The Court held that the Appellant had not changed the nature of his objection, which remained one for enhancement of compensation. It observed that a land owner, who has lost his land, should get the real market value of the land and not be restricted by technicalities to some provisional amount he had indicated while seeking a reference.

Referring to Section 3(a) of the Land Acquisition Act, the Court noted that “land” includes the benefits to arise out of land.

“The learned District Judge after taking into consideration the material, particularly oral and documentary evidence on record, ought to have granted enhanced compensation for the loss of milk business. However, by not granting the enhanced compensation towards loss of milk business, the Appellant had suffered financial loss,” the Court observed.

The Court accordingly modified the award and directed the Respondents to compensate the Appellant for loss of milk business as per the calculation submitted in his amendment application.

Case Title: Kashinath Dudhaji Gaikwad v. The State of Maharashtra [First Appeal No. 20 of 2012]

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