Full Judgment Text
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CASE NO.:
Appeal (civil) 6489-6490 of 2000
PETITIONER:
Land Acquisition Officer, A. P.
RESPONDENT:
Kamadana Ramakrishna Rao & Anr.
DATE OF JUDGMENT: 07/02/2007
BENCH:
C. K. Thakker & Lokeshwar Singh Panta
JUDGMENT:
J U D G M E N T
Lokeshwar Singh Panta, J.
These two appeals are directed against a common order
dated 11.11.1998 passed by the High Court of Judicature,
Andhra Pradesh at Hyderabad in AS No.1999/96 and AS
No.31/98. By the impugned order, the High Court enhanced
the amount of compensation to Rs.22,000/- per acre as
against Rs.6,000/- awarded by the learned Subordinate
Judge, Eluru, West Godavari District.
These appeals are taken up and heard together and are
decided by this common judgment.
The facts, in brief, are that the State of Andhra Pradesh
issued a Notification dated 03.01.1980 under Section 4(1) of
the Land Acquisition Act, 1894 (hereinafter referred to as ’the
Act’) for the acquisition of lands admeasuring Ac 385.46 in
Borrampalem village of Chintalapudi Taluk for foreshore
submersion of Yerakalva Reservoir Scheme under Vengalaraya
Sagar Project. Land of the claimants-respondents to the
extent of Ac 9.53 each was acquired for the said purpose.
After completion of the proceedings under the Act and after
observing all formalities, the Land Acquisition Officer awarded
compensation at the rate of Rs.1026/- per acre to the
claimants\026respondents vide his Award dated 18.05.1984. The
claimants-respondents received the amount of compensation
under protest and submitted separate applications under
Section 18 of the Act requesting the Land Acquisition Officer
to refer the matter to the Court. The matter was accordingly
referred to the Court of the learned Subordinate Judge, Eluru.
The Reference Court observed that the Land Acquisition
Officer had not considered the potentiality of the acquired land
with other lands of similar quality and potentiality. However,
taking into consideration the trend in the increase of the
prices of the lands, compensation is awarded at the rate of Rs.
300/- per acre on yield basis of the crops and multiplier of 20
years capitalization was applied and an amount of Rs.600/-
per acre has been awarded to the claimants-respondents. The
Court also found that there were no fruit-bearing trees on the
acquired lands.
The claimants-respondents, being still dissatisfied with
the enhancement of the amount of compensation awarded by
the Reference Court, filed two separate appeals under Section
54 of the Act before the High Court.
The High Court has come to the conclusion that the
Reference Court did not adopt the correct procedure in
determining the compensation, as the lands are situated in the
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important area of West Godavari District, for which the
compensation ought to have been not less than Rs. 25,000/-
per acre. The High Court observed that for similar lands
acquired for the same purpose prior to the issue of the
Notification under Section 4 of the Act in the present cases,
the compensation was fixed at Rs. 20,000/- per acre. If that is
taken into consideration as the basis for giving 10%
escalation, the compensation will be at Rs. 24,000/- per acre.
However, the High Court awarded the amount of
compensation at the rate of Rs. 22,000/- per acre to the
claimants-respondents, besides other benefits as prescribed
under the law.
The Land Acquisition Officer, being aggrieved against the
order of the High Court, has filed these appeals.
We have heard learned counsel for the parties. The
learned counsel for the appellant raised two contentions.
Firstly, he submitted that the High Court has committed an
error of law in not deducting amount towards cost of
cultivation and no reasons whatsoever are given by the High
Court in its order for enhancement of the compensation from
Rs. 6,000/- per acre to Rs. 22,000/- per acre. Secondly, it
was contended that the Reference Court had erroneously
applied multiplier of 20 for capitalizing the income. Such
multiplier should not be more than 10. On both these
grounds, therefore, according to the learned counsel for the
appellant, the impugned order is liable to be set aside and the
order passed by the Land Acquisition Officer deserves to be
restored.
Learned counsel for the claimants-respondents, on the
other hand, submitted that having considered the rival
contentions of the parties and keeping in view the evidence on
record, the High Court awarded just and reasonable amount of
compensation to the claimants-respondents. The present
appeals, therefore, deserve to be dismissed.
Having given our careful consideration to the
submissions of the learned counsel for the parties and after
having gone through the material on record, and having
considered the relevant decisions of this Court, we are of the
view that the appeals deserve to be dismissed.
So far as the first point is concerned, the learned counsel
for the appellant relied upon a decision of this Court in State
of Gujarat v. Rama Rana, [(1987) 2 SCC 693]. In that case,
compensation was awarded to the claimant on yield basis.
There was no sufficient evidence as to the income from
agriculture and the Reference Court noticed that the witnesses
exaggerated the yield. In the circumstances, the Reference
Court determined the market value after deducting 1/3rd
towards cultivation expenses and awarded compensation on
that basis. The High Court dismissed the appeal and
confirmed the order. The State approached this Court.
Allowing the appeal and reducing the amount of
compensation, this Court observed that it is common
knowledge that expenditure is involved in raising and
harvesting the crop and on an average, 50% of the value of the
crop realized would be spent towards cultivation expenses.
Deduction of 1/3rd, in the circumstances, was improper in
determining the compensation of the land on the basis of
yield. The Court also applied multiplier of 10.
Learned counsel for the appellant submitted that in the
instant cases, no deduction whatsoever has been made by the
Reference Court or by the High Court. It was submitted that
only on the basis of yield and gross income, the Reference
Court granted compensation to the claimants, which was
enhanced by the High Court without giving any plausible and
tenable reasons. He, therefore, submitted that the Award
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deserves interference.
Learned counsel for the claimants-respondents, on the
other hand, submitted that the decision in Rama Rana’s case
(supra) does not apply to the facts of these cases. In the
present matters, upon some portion of the acquired land
cashew nut bearing trees were planted and in the rest of the
land, different variety of crops were grown. It is in the
evidence that the trees were sufficiently old and grown up and
were giving fruits and it has been deposed by the claimants-
respondents in their evidence. Thus, there was evidence on
record to that effect. In the circumstances, there was no
question of deduction of any amount towards expenses and
the order passed by the High Court cannot be said to be
incorrect.
In the facts and circumstances, in our opinion, the ratio
laid down in Rama Rana’s case (supra) would not strictly
apply in the present cases inasmuch as in fruit growing trees
the expenses would not be 50% as held by this Court.
Moreover, the High Court also considered an important fact
that the claimants-respondents would be entitled to much
more amount of Rs. 25,000/- per acre on yield-basis but has
fixed the market value of the land at the rate of Rs 22,000/-
per acre. It, therefore, cannot be said that by not deducting
the amount of expenses for cultivation, the High Court had
committed any illegality. The first contention, therefore, in the
facts of the present appeals, is rejected.
Let us now consider the second point. This Court in
Special Land Acquisition Officer, Bangalore v. T.
Adinarayan Setty, [(1959) Suppl. (1) SCR 404 : AIR 1959 SC
429] held that in awarding compensation under the Act, the
Court has to ascertain market value of the land as on the date
of Notification under Section 4(1) of the Act. It was observed
that there were several methods of valuation, such as (1)
opinion of experts, (2) the price paid within a reasonable time
in bona fide transactions of purchase of the lands acquired or
the lands adjacent to the lands acquired and possessing
similar advantages, and (3) a number of years’ purchase of the
actual or immediately prospective profits of the land acquired.
In Smt. Tribeni Devi v. Collector of Ranchi, [(1972) 1
SCC 480], this Court reiterated the methods of valuation and
also stated that those methods do not preclude the Court from
taking into consideration other circumstances, the
requirement being always to arrive at the nearest correct
market value. It was also indicated that in arriving at a
reasonably correct market value, it may be necessary to take
even two or all of those methods into account since the exact
valuation is not always possible as no two lands would be the
same either in respect of the situation or the extent or the
potentiality nor would it be possible in all cases to have
reliable material from which such valuation can be accurately
determined.
In Special Land Acquisition, Davangere v. P.
Veerabhadarappa and Ors., [(1984) 2 SCC 120], this Court
held that when capitalization method for valuation is applied,
proper multiplier should be 10. Similarly, in Special Land
Acquisition Officer v. Virupax Shankar Nadagouda,
[(1996) 6 SCC 124], relying on P. Veerabhadarappa’s case,
this Court determined compensation on the basis of 10 years’
multiplier. In Krishi Utpadan Mandi Samiti v. Malik
Sartaj Wali Khan and Anr., [(2001) 10 SCC 660], this Court
held that computation of compensation for determination of
market value may be carried out on yield basis and multiplier
of 10 should be applied. Since multiplier of 20 was applied by
the High Court it was set aside by this Court by reducing the
amount of compensation.
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Again in a recent decision in Assistant Commissioner-
cum-Land Acquisition Officer, Bellary v. S.T. Pompanna
Setty, [(2005) 9 SCC 662] it is reiterated that where
compensation is awarded on yield basis, multiplier of 10 is
considered proper and appropriate.
Applying the ratio of the decisions of this Court in the
above-said cases, we are of the view that the High Court
committed no error of law or any perversity in awarding the
amount of compensation at the rate of Rs. 22,000/- per acre
to the claimants-respondents. It is no doubt true that the
High Court has not given adequate and proper reasons in its
order, but the pith and substance of the order cannot be found
to be faulty.
The claimants-respondents have placed on record Ex. A-
2, a certified copy of the Agreement to sell and Ex. A-3, the
Registration Extract of the Sale Deed in pursuance to Ex. A-2.
PW-2, the purchaser of the land, has purchased one acre of
land for Rs. 19,800/- from Durga Prasad, a resident of
Mathannagudem village. PW-1 has placed on record a copy of
the Award in O.P. No. 88 of 1982 (Ex. A-4), whereby and
whereunder the Reference Court enhanced the amount of
compensation at the rate of Rs. 22,000/- per acre for the land
in Mathannagudem village, which was acquired for the same
purpose. A copy of the Award in O.P. Nos. 70 of 1982 and 71
of 1982, marked as Ex. A-5, would reveal that the Reference
Court awarded a sum of Rs. 22,000/- per acre for the lands
acquired for the same purpose in village Borrampalem. It has
come in the evidence of PW-1 that against the said Award the
State Government preferred an appeal, which came to be
dismissed by the High Court on 10.02.1989, a certified copy
whereof was placed on record as Ex. A-6 in support of the
claims by the claimants-respondents. The claimants-
respondents made the claim of their lands at the rate of Rs.
40,000/- per acre. The Reference Court has noticed in its
order that village Mathannagudem, village Tadavi and village
Borrampalem in which the lands of the claimants-respondents
were acquired are quite adjacent to each other. The Land
Acquisition Officer himself awarded compensation at the rate
of Rs. 12,000/- per acre for the lands covered by S. No. 98 of
village Borrampalem vide Award Ex. A-5. The Reference
Court has rejected the claim raised by the claimants-
respondents for compensation of cashewnut plants planted in
an area to an extent of Ac. 4.50 cents in the acquired lands,
merely on the ground that no trees were found in existence on
the lands at the time of the Notification under Section 4 of the
Act or at the time of passing of the Award. The High Court
has not recorded any finding in respect of the cashew nut
plants grown by the claimants-respondents on some portions
of the acquired land.
The Land Acquisition Officer in his order has recorded
that rain-fed crops such as horsegram, bobbara, cholum were
grown by the claimants-respondents in the acquired land No.
F. 1384 to 1388 and in F. 1388, cashew nut plants were
raised in some parts of the land to the extent of about Ac. 9.00
cents. Therefore, the finding of the Reference Court that there
were no cashew nut trees found on the acquired land is
factually incorrect and cannot be sustained. It has come in
the evidence of the claimants-respondents led before the
Reference Court that they had raised maize crop at one time,
which would have fetched Rs. 4,000 to Rs. 5,000 per acre to
them and other crops jowar and bobbara in the next season.
The computation of compensation for determination of market
value may be carried out on yield basis and multiplier of 20
adopted by the Reference Court in the cases on hand is on the
higher side and contrary to the well-settled proposition of law
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as laid down by this Court. However, this Court is not
precluded from taking into consideration other circumstances
such as, the potentiality and utility of the land acquired and
awarding just compensation to the claimants who are deprived
of their lands and other property. Keeping in view the facts
and circumstances of these cases, as discussed above, we are
of the view that the amount of compensation awarded by the
High Court at the rate of Rs. 22,000/- per acre to the
claimants-respondents is adequate, just and reasonable and
cannot be said to be excessive or unwarranted.
For the foregoing reasons, the appeals are, accordingly,
dismissed. The parties shall bear their own costs.