G. Ramanujam, J.@mdashAn extent of 41.97 acres in survey Nos. 272, 280, 286, 287, 288, 294, 295, 299, 300, 302 and 306 to 308 in Putlur
village was originally requisitioned under the Madras Requisitioning and Acquisition of Immovable Property Act, 1956, for establishing a State
Seed Farm, by a notification dated 31st October, 1962. The lands were taken possession of by the State on 24th January, 1963. Subsequently
the State acquired the lands under the provisions of the said Act, While awarding compensation for the lands acquired the competent authority, the
District Revenue Officer, Saidapet, grouped the lands under three heads : (1) wet lands 4.55 acres, (2) nanavari lands 14.01 acres and (3) dry
lands 23.41 acres. Out of the wet lands 7 cents were treated as vacant site with certain structures, and the rest 4.48 acres were valued at Rs. 35
per cent, based on the basis of a sale deed Exhibit B-3 dated 27th August, 1962, relating to survey No. 195/2. As regards manavari lands, out of
the extent of 14.01 acres the competent authority found that actually 13.57 acres were being cultivated with paddy, and therefore, he treated it
more or less as wet land and fixed a compensation at Rs. 31 per cent, based on Exhibit B-4 dated 19th February, 1963, which dealt with survey
Nos. 402 and 396. Out of dry lands of 231.41 acres the competent authority found that 5.44 acres have been actually irrigated with well water
and paddy is raised. For those lands he has fixed Rs. 20 per cent, as the market value based on Exhibit B-5 dated 17th September, 1962, dealing
with survey No. 10/1. 17.72 acres out of the dry lands were found to be cultivated with dry crops and therefore he fixed a sum of Rs. 15 per cent,
for those lands based on the sale deed Exhibit B-6 dated 20th July, 1961, dealing with survey No. 126. As regards the balance of the 25 cents out
of the dry lands it was found that it was only vacant lands with occasional cultivation with dry crops and for this extent the competent authority
fixed the value at Rs. 10 per cent. The competent authority thus fixed the compensation for the entire lands acquired only on the basis of the
existing sale deeds in and around the locality. When the matter was referred to the arbitrator (District Judge) at the instance of the appellant, he
also adopted the same basis. But he however increased the value fixed by the competent authority slightly in respect of all the categories of lards as
shown in the statement given below.
______________________________________________________________________
Value fixed
by competent Awarded by Claim in
S.No. Nature Acres authority Court appeal.
per cent. per cent.
A.C. Rs. Rs. Rs.
______________________________________________________________________
295-A Wet 4.48 35 40 80
300-2
302-A Wet 0.7 10 12 80
288-3,4,5 Manavari
291-2, 1 paddy 13.57 31 35 80
cultivation
295-3-B
302-1-A
272-3, 280, Dry paddy
286, 287-1, grown. 5.44 20 24 80
287-2, 288-1
2,299-2 17.72 12 15 45
307-2, 308, Rainfed
306-2 dry crops. 0.25 10 12 45
_____________________________________________________________________
2. En the lands acquired, there were five wells, one each in each of the survey Nos. 280, 299/1, 298/3, 302/1-A and 307/2. The competent
authority valued all these wells and fixed compensation therefor. There were certain structures such as cattle-shed, pump set, etc. in survey No.
298/2, a cattle shed in survey No. 307 and a pumpset in survey No. 307/2 and those structures were also valued by the arbitrator. The appellant
was aggrieved against the Valuation fixed by the competent authority in respect of the two wells situate in survey Nos. 293/3 and 307/2 alone, and
the Court enhanced the value of these two wells to Rs. 5,000 each. Not satisfied with the compensation fixed by the lower Court (Arbitrator) for
the lands, structures and wells, the appellants are before this Court in A.S. No. 778 of 1967. They claim compensation at the rate of Rs. 80 per
cent in respect of lands which are cultivated with paddy and at the rate of Rs. 45 per cent for the other lands in which admittedly dry crops are
raised. The appellants also claim an enhanced compensation of Rs. 23,870 for the structures and wells in addition to the sum of Rs. 26,130-15
already awarded by the lower Court. Hence the question in the said appeal is whether the valuation fixed by the Court for the lands, wells and
structures is proper and reasonable.
3. In A.S. No. 779 of 1967 the appellants claim a higher recurring compensation of Rs. 30,000 for the period of requisition as against the sum of
Rs. 13,686-76 fixed by the competent authority and affirmed by the arbitrator.
4. When these appeals were taken up for hearing at an earlier stage the appellant pleaded that the compensation should be fixed on the
capitalisation method based on the annual income from the properties as the sale deeds filed in the case by both the parties were not comparable.
But no material had been placed either before the competent authority or before the arbitrator by either of the parties to show the actual income
from the properties, and both of them sought the valuation to be fixed on the basis of the sale deeds filed by them and not on any other basis. As
we felt that the relevant data as to the nett income from the properties was necessary if the appellant''s claim for compensation on the basis of
capitalisation of the income is accepted, we called for a finding from the lower Court as to the probable nett annual income from the lands
acquired. The lower Court has rendered a finding after taking evidence, both oral and documentary adduced on either side to the effect that the
gross income from the lands at the time of the acquisition was about Rs. 31,275, that after deducting 1/3rd out of this towards the cost of
cultivation if the lands had been personally cultivated the nett income would be Rs. 20,850, but that if the land had been leased out to the tenants
the nett income would be Rs. 12,510.
5. The learned Government Pleader appearing for the State raised a twofold preliminary objection at the time of the hearing of the appeals, (1) that
the appellant cannot seek a different mode of valuation, when he did not seek, capitalisation method to be adopted either before the competent
authority-or before the lower Court and (2) that, in any event, when there are comparable sale deeds available in respect of the lands in and
around the locality, the capitalisation method cannot be adopted. The learned Government Pleader takes us through the provisions of Sections 8(2)
and 8(3) of Madras. Act XLII of 1956 and states that the income is relevant for fixing compensation for lands requisitioned u/s 8(2) while for fixing
of compensation for the lands acquired u/s 8(3) income is not taken into account. He specifically refers to Clause (a) of Section 8(3) Which is as
follows:
The price which the requisitioned, property would have fetched in the open market, if it had remained in the same condition as it was at the time of
requisitioning and been sold on the date of acquisition....
and submits that it is not possible to bring in the notion of market value in the light of Section 23 of the Land Acquisition Act while interpreting
Section 8(3)(a) and that the only basis that can be adopted for fixing the compensation, u/s 8(3)(a) can only be on the basis of the sale deeds and
not on the basis of capitalisation of income. We feel that as we are accepting the second contention advanced on behalf of the. State that whenever
there are comparable sale deeds with reference to similar lands in the locality in or about the time of the acquisition the capitalisation, method
cannot be adopted, it is not necessary to decide the question as to whether the income basis could or could not be adopted u/s 8(3)(a) of the Act
for fixing the compensation for the lands acquired. In AIR 1939 98 (Privy Council) , the Judicial Committee had observed in dealing with the
question of fixing the market value u/s 23(1) of the Land Acquisition Act thus:
There is not in general any market for land in the sense in which one speaks of a market for shares or a market for sugar or any like commodity.
The value of any such article at any particular time can readily be ascertained by the prices being obtained for similar articles in the market. In the
case of land, its value in general can also be measured by a consideration of the prices that have obtained for similar land of similar quality and in
meant position; and this is what must be meant in general by ''the market value'' in Section 23.
In The Sub-Collector Vs. Pillarisetti Parthasarathi Naidu and Another, , a Bench of this Court has held that the capitalisation method could be
adopted only as a last resort and that relevant observation is extracted below:
After all the function of the Court in awarding compensation is to ascertain the market value of the land at the date of the notification u/s 4(1).
Where definite material is not forthcoming either in the shape of sales of neighbouring land at or about the date of the notification or otherwise, the
Court can only proceed to do the best, it can under the circumstances. In the present case we think we shall not be erring on the wrong side if we
say that the market value should be fixed by capitalising the net annual income at twenty years'' purchase.
In State of Kerala Vs. P.P. Hassan Koya, , the Supreme Court said that an instance of sale which is proximate in time to the date of the
notification u/s 4(1) of the Land Acquisition Act in respect of land similarly situate and with similar advantages and which is proved to be a
transaction between a willing vendor and a willing purchaser would form a reliable guide for determining the market value. In that case the Supreme
Court adopted the method of capitalisation of return in the case of acquisition of land with buildings as there was no reliable evidence of instances
of sales of similar land with buildings proximate to the time of the date of the notification u/s 4(1). In State of Gujarat etc. Vs. Vakhtsinghji
Sursinghji Vaghela and Others etc., , the Supreme Court again had reiterated that the market value to be fixed u/s 23(1) of the Land Acquisition
Act is ""the amount for which the land is sold in the open market, which a willing seller might be expected to realise. In the case of land the market
value is generally ascertained on a consideration of the prices obtained by sale of adjacent lands with similar advantages. Where there are no sales
of comparable lands, the value must be found in some other way. One method is to take the annual income which the owner is expected to obtain
from the land and to capitalise it by a number of years'' purchase.
Therefore, we are of the view that when there are comparable sale deeds which could form a proper basis for finding out the value of the lands as
on the date of the acquisition, the method of capitalisation of income could not be adopted. As a matter of fact both the parties went before the
competent authority as well as the Arbitrator and sought the fixation of the value of the lands only on the basis of the existing sale deeds in relation
to the lands situate near by and it is only before this Court the appellant has made an attempt to have the compensation fixed by adopting the
method of capitalisation of income by filing additional grounds of appeal. Therefore we shall proceed to see whether the value fixed by the lower
Court is just and fair having regard to the prevalent prices of lands in the locality.
6. As already stated, the competent authority classified the lands into three categories, that is, wet lands, manawari lands and dry lands and treated
portions of the manawari lands as well as dry lands as lands wherein wet cultivation was carried on by the appellant before the date of acquisition.
But, in our view, there is no reason for differentiating the lands which are put to the same use and which practically yield the same income to the
owner. The mere fact that some of the lands where wet cultivation was carried on has been registered as wet and the others as manawari or dry in
the Government record will not make the actual user of the lands as irrigated lands different from wet lands. In this case it is not in dispute that
there were five wells in the entire lands acquired out of which a well situate in survey No. 293/3 had an electric motor of 5 H.P. and a well in
survey No. 307/7 had an electric motor of 15 H.P. both of which having copious supply of water. It is also in evidence that the appellant had been
selling water from these two wells to others owning lands nearby for irrigation of their lands. Therefore we feel that all the lands which were being
used for wet cultivation should be treated alike notwithstanding the registration of the lands either as wet, manawari or dry. It is true that the lands
registered as wet will have a right to receive water from a Government source of supply. But, in this case, it is not the case of the State that the
lands registered as manawari and dry and which have been actually put to wet cultivation suffered for want of water from the wells. When the
appellant had sufficient number of wells to irrigate his lands with wet crops the mere fact that such lands were registered as manawari or wet in the
Government records would not make any difference in fixing the valuation. Therefore, we intend treating all the lands which were used for raising
wet crops as wet lands. Hence on the basis of the finding given by the competent authority 4.48 acres in group 1,13.57 acres in group 2 and 5.44
acres in group 3 should be treated alike for the purpose of valuation. That leaves a balance of 17.72 acres of dry lands and 76 cents of vacant sites
wherein certain structures existed and were left uncultivated.
7. Then coming to the valuation, the competent-authority has adopted the sale deed Exhibit B-3 dated 27th August, 1962, in respect of survey
No. 195/2 which was sold at the rate of Its. 30 per cent as the basis for fixing the value of wet lands. Survey No. 195/2 covered by the sale deed
Exhibit B-3 is somewhat distant from the acquired fields and it has not been shown that any well existed in that land. The land has to mainly depend
upon irrigation for the supply of water from the Putlur Eri. It is also situate farther away from the lake than the acquired fields. Therefore, we feel
that the sale deed Exhibit B-3 cannot be taken as a reliable basis for fixing the value of the wet lands. Similarly, Exhibit B-2 dated 27th August,
1962, dealing with survey No. 411/3 giving a rate of Rs. 30 per cent cannot be relied on, Survey No. 411 is still farther from the lake than the
lands in survey No. 195/2 and there also there is no well and the land has to mainly depend upon the lake water. On the other hand the appellant
has produced Exhibits A-1, A-2, A-3 and A-4, as more reliable data for the purpose of fixing the market value of the wet lands acquired. Exhibit
A-1 is dated 7th December, 1963 and it is an agreement of sale under which 48 cents in survey No. 297/P. Was agreed to be sold at the rate of
Rs. 52 per cent and Exhibit A-2 is the relevant sale deed dated 6th May, 1964, Exhibit A-4 is an agreement of sale dated 20th January, 1964,
whereunder 35 cents of land in survey No. 198/3 has been agreed to be sold at the rate of Rs. 60 per cent and the relevant sale deed is Exhibit A-
3 dated 9th April, 1964. These documents have been attacked by the State as having been got up only for the purpose of boosting up the value of
the lands. It is pointed out that the agreements Exhibits A-1 and A-4 had been brought into existence just before 6th January, 1964, the date of
notice of acquisition under the Act and the stamp papers wherein the agreements have been engrossed showed that they had been purchased long
before in the name of third parties and that there is considerable suspicion as to whether in fact the agreements came to be entered into on the
dates alleged. Exhibits A-3 and A-4 are also attacked on the ground that the purchaser thereunder was the nephew of the appellant, and therefore,
they could not be taken at their face value, as there is sufficient motive for the nephew to boost up the price and put a higher value for the lands
purchased by him so as to help his uncle. Though we are inclined to ignore Exhibits A-3 and A-4 for the reasons and the suspicious circumstances
mentioned by the learned Government Pleader, we are not inclined to ignore Exhibits A-1 and A-2 which are between third parties. There is no
motive alleged either against the vendor or the purchaser thereunder except the fact that the stamp papers used for the agreement Exhibit A-1 is
somewhat of earlier date which can be explained by the fact that the document writer might have used stamps which were immediately available.
There are no vitiating circumstances shown as to why the sale under Exhibit A-2 should be ignored. As a matter of fact the land covered by Exhibit
A-2 practically abuts the lands acquired on the east and it has got all the advantages which the acquired lands had. It was also a registered wet
land and it had also the facility of a well. C.W. 1, the purchaser under Exhibit A-2 says that he has been raising three crops in that land after his
purchase. We therefore see no reason as to why the rate fetched under Exhibit A-2 for the neighbouring land should not be adopted for fixing the
value of the wet lands. But we cannot ignore the basic fact that Exhibit A-2 covered only a small piece of land of 48 cents and the lands acquired
are extensive fields having a total extent of 41.97 acres. It is well known that large and extensive block of land cannot fetch the same price as a
small bit of land will fetch though with similar advantages. Giving due allowance for that fact and adopting the rate paid under Exhibit A-2 we fix
the value of the lands which were put to wet cultivation at the rate of Rs. 50 per cent.
8. In respect of the dry lands which is of the extent of 17.72 acres the competent authority awarded Rs. 12 per cent and the Court (Arbitrator)
increased it to Rs. 15 per cent and the basis adopted, as already stated, Was the sale deed Exhibit B-6 dated 20th July, 1961, relating to survey
No. 126. It is seen that survey No. 126 is very far from the acquired lands and it has not been shown to have the same advantages as the acquired
lands which practically abut the Putlur tank. We therefore feel that the value of dry lands cannot be based on Exhibit B-6. We have already seen,
that the dry lands form part of a compact block along with the wet lands of the appellants and a portion of the same has already been converted as
wet with the help of the well water. If there is copious supply of water in the five wells which have been acquired, there is a possibility of the dry
lands being converted into either garden lands or wet lands. Even otherwise, the evidence of the appellant is to the effect that commercial crops
like groundnuts were being raised in these dry lands. The appellant''s evidence which has not been controverted on this aspect is as follows:
I used to cultivate both dry and wet in the remaining 17 acres and 17 cents. The soil is a bit inferior. It is now sandy. If groundnuts are grown there
will be good yield. It is in one block with the wet lands. There are two wells.
It is only because of these circumstances, the lower Court increased the value of dry lands from Rs. 12 to Rs. 15. But in our view, the reasonable
and proper value will be about Rs. 20 per cent having regard to the document Exhibit B-5 dated 17th September, 1962, relating to a dry land in
survey No. 10/1 which had been sold at the rate of Rs. 20 per cent. As regards the rest of the extent which has been taken as vacant sites with
structures etc. the competent authority fixed the value at Rs. 10 and the Court below has awarded Rs. 12 per cent. We are of the view that no
distinction need be made between the dry lands and this extent of land which has also been classified as dry lands but left vacant or fallow without
cultivation for the purpose of erecting structures etc. In our view the result will be the appellant will be entitled to get compensation for 23.49 acres
at Rs. 50 per cent and for 18.48 acres which are all treated as one category of dry lands at the rate of Rs. 20 per cent.
9. As regards the enhanced compensation claimed by the appellant for the wells and structures, we consider that the decision of the lower Court is
quite justified and the compensation fixed is fair and reasonable. It has accepted the estimate made by R.W. 2, the Union Engineer in Exhibits B-9
and B-10 as they were based on Government scheduled rates as against estimated value given by G.W. 4 in Exhibit A-18 series. We see no
reason to differ from the lower Court in this regard. The appellants contend that they are entitled to get something more for the two wells situate in
survey Nos. 298/3 and 307. It is seen from the data given by R.W. 2 as also the data given by C.W. 4 that the soil is sandy. Therefore the cost of
digging the well may not be as much as that of a well dug in a rocky soil. The Court below has accepted the value fixed by the competent authority
in respect of the wells, except the wells in survey Nos. 289/3 and 307/2 which had copious supply of water, and raised their value to Rs. 5,000
each. We do not see any justification to further enhance the value of the said two wells or the other wells acquired any further. In our view Rs.
5,000 awarded for each of the two wells is just and fair.
10. The learned Counsel for the appellant says that he is entitled to interest for the compensation awarded. The Court below has not awarded any
interest, presumably on the basis that the statute does not provide for payment of any interest. But it has been held in Satinder Singh and Others
Vs. Amrao Singh and Others, , with reference to the provisions of the East Punjab Requisition of Immovable Property (Temporary Powers) Act
(XLVIII of 1948) that a person whose lands have been acquired under that Act is entitled to interest from the date of acquisition either on
equitable grounds or under the provisions of the Interest Act. We have also followed that decision and awarded interest at 4% in a case arising
under the provisions of Madras Act XLII of 1956 in A.S. No. 192 of 1964. There we have held, after referring to the decision in Valia Maliyakkal
Sayid Muhammad Jiffiri Attakoya Thangal and Others Vs. Sayid Muhammad Bin Alabi Ayidross Kunhikoya Thangal, , and the decision of the
Supreme Court above referred to, that if a person is compulsorily kept away from the possession of his property then he would be entitled to the
payment of such compensation therefor, and if there is a delay in the grant of such compensation he will be entitled in equity to interest on the
quantified amount even though such quantification was done later and that he will be entitled to interest as per Section 1 of the Interest Act. We
therefore hold that the appellants are entitled to interest on the compensation paid at 4% per annum.
11. The appellants'' Counsel then contends that the appellants arc also entitled to a solatium of 15% as is normally given in cases under the Land
Acquisition Act. But we are of the view that as the provisions of the Madras Requisitioning and Acquisition of Immovable Property Act, 1956 is
silent on the question of solatium, it is not possible to grant solatium of 15% along with the compensation on the analogy of the Land Acquisition
Act. In the decision rendered by us in Ramaswami Naidu and Another Vs. The State of Madras, we have held that solatium of 15% is not payable
in cases of acquisition under Madras Act XLII of 1956. Therefore, following that decision, We hold that the appellants are not entitled to the
payment of solatium of 15% on the compensation fixed for the lands in question.
12. As regards the compensation payable to the appellants for the period of requisition, the competent authority fixed a sum of Rs. 13,686-76 and
the lower Court accepted the same as fair and proper, having regard to the evidence of R.Ws. 1 and 2 and C.W. 5. We also feel that the recurring
compensation fixed for the period of requisition is fair and reasonable. u/s 8(2) of the Act the amount of compensation payable for the
requisitioning of any property shall consist of a recurring payment of a sum equal to the rent which would have been payable for the use and
occupation of the property if it had been leased out for that period. The proviso to Section 8(2) provides that in case of cultivable lands, such rent
shall be fair rent payable under the Madras Act XXIV of 1956. The finding rendered by the lower Court in pursuance of our direction on the
question of income after considering the oral and documentary evidence specifically adduced by the parties shows that if the lands has been leased
out by the appellants, their rental income would be Rs. 12,510 being 40 per cent, of the gross income which is found to be Rs. 31,275. In the light
of the finding given by the lower Court, we find that recurring compensation fixed by the competent authority and confirmed by the lower Court
does not call for any interference.
13. The result is A.S. No. 778 of 1967 is partly allowed and A.S. No. 779 of 1967 is dismissed. The appellant in A.S. No. 778 of 1967 will get
proportionate costs in this Court. There will, however, be no order as to costs in A.S. No. 779 of 1967.
