AGGARWAL,J. - (1.) [His Lordship, after stating the facts of the case and dealing with points not relevant to this report, proceeded.] This bring us to the last category consisting of sale of survey Nos. 139, 168, 169, 173, 194, 282, 284, 287, 304, 306, 307, 360 and 421 admeasuring 15 acres 37 gunthas by Seva Mandal Trust to M/s Voltas Ltd. The price of Rs. 7 -25 per square yard was fixed by Award dated September 12, 1967, exh. 121 declared by Shri Kantilal T. Desai. Mr. Khambatta submitted that this price can be taken into consideration in arriving at the market value of the acquired lands. The parties had agreed to sell and purchase the said lands and merely left the question of price to be determined by an experienced retired Judge. Mr. Khambatta further submitted that before making the award, the learned arbitrator had fixed several meetings and heard advocate for M/s Voltas Ltd., and also done all things necessary to enable him to determine the price and therefore this sale instance represents the correct value. Mr. Khambatta further pointed out that the lands of Seva Mandal are comparable with the acquired lands and therefore the price fixed by the learned arbitrator should be taken as between a willing purchaser and a willing seller. On the other hand, the learned Government Pleader, submitted that the value fixed by the learned arbitrator is contrary to the concept of market value as understood in fixing compensation of compulsory acquisition, nor the learned arbitrator was required to determine the market value. The learned arbitrator has given no reason for fixing the price and the price fixed by him cannot take place of market value as required to be considered between a willing purchaser and a willing seller. The claimants have also not led any evidence before the Court as to the circumstances in which the learned arbitrator fixed the price of Rs. 7 -25 per square yard.
(2.) IT is necessary to note that the award exh. 121 is based on an agreement of reference dated October 25, 1966. The lands referred to in the schedule to that agreement are not the subject -matter of any acquisition proceedings. There is also on record another agreement of reference dated October 26, 1966, exh. 154, the schedule whereof refers to lands which were the subject -matter of notification No. LAQ/SR 221 dated May 19, 1965, under Section 4(1) of the Land Acquisition Act, 1894. The award, if any, on the basis of exh. 154 is not on record. There is considerable force in the submission of the learned Government Pleader that in the absence of any reason being given by the learned arbitrator as to how he had arrived at the figure of Rs. 7 -25 it is not possible for us to award compensation to the claimants at the rate of Rs. 7 -25 per square yard. Now compensation for compulsory acquisition as governed by Section 23 of the Land Acquisition Act gives high priority to the market value of the land as on the date of the publication of the notification under Section 4(1). The main criterion to determine the market value is what a willing purchaser would pay a willing seller and not what someone thinks ought to be the market value. One of the methods of valuation is the price paid for comparable property in the neighbourhood. The measure of value of the land is its market value. The owner is entitled to the value of the land with its intrinsic qualities and also its potentialities and other possibilities depending upon the facts and circumstances of each case. The question, before us is whether the price fixed by the learned arbitrator represents the market value. Can the price fixed by the learned arbitrator be said to be between a willing purchaser and a willing seller. In our view the price fixed by the learned arbitrator cannot be said to be the market value as understood in the concept of market value viz. as between a willing purchaser and willing seller. There is no open and free bargaining between the parties in fixing the price. The element of bargaining power is surrendered when that matter is left to an arbitrator. The process of the mind of an arbitrator is not made known for an arbitrator is not required to give reasons for his award. An award of an arbitrator is not a reasoned judicial decision. All that an arbitrator is required to do is to declare his decision without supporting it by any evidence on record and he can even ignore to take notice of evidence brought on record by the parties. All that he is required to do is to give an intelligible award which determines the rights of the parties in terms of the agreement of reference. Consistent with this position the award in the present case does not disclose how the rate of Rs. 7 -25 per square yard was arrived at.
(3.) MR . Khambatta frankly stated that he has not been able to trace any decision to support the view that price fixed by an arbitrator in compulsory acquisition cases could be equated with market value. Mr. Khambatta emphasised that the parties to the reverence had agreed to abide by the decision of the learned arbitrator and therefore the price awarded should be taken as a price between a willing buyer and a willing seller. We have given our anxious consideration to the fact that the learned arbitrator had wide and large experience and he must have taken all factors into consideration while fixing the price at Rs. 7 -25 per square yard. But we cannot persuade ourselves to accept that price as basis of market value for fixing compensation under the Land Acquisition Act in the absence of any reasons for the decision. It is to be noted that no attempt was made on behalf of the claimants to adduce any evidence in respect of this instance. There is no material on record which can legitimately guide us in determining the compensation on the basis of this instance except the decision of the learned arbitrator that he had fixed the compensation after visiting the site taking evidence and hearing the. solicitors and advocates for the parties and after taking into consideration all things necessary. In our opinion, it is unsafe to rely upon this instance.;