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1954 DIGILAW 136 (KER)

Abdul Rehiman Kunju v. State

1954-08-18

GOVINDA PILLAI, T.K.JOSEPH

body1954
Judgment :- 1. The plaintiff is the appellant. 3.570 cents of land in S.No. 5 of the Iranimuttom Pakuthy were acquired by the State with the building standing thereon. The Land Acquisition Officer awarded compensation at Rs.150 per cent for the land and Rs.882/- for the building. The plaintiff applied for a reference to the District Court and the Additional District Judge enhanced the ground value to Rs.300 a cent. He also made some increase in the value of the building. The plaintiff in appeal claims land value at Rs. 600 a cent and also Rs. 3,670 more for the building. 2. The plaintiff had not produced any documents relating to the sale of any neighbouring properties to enable the court to fix the market value of the property acquired. The State also did not produce any documents. It was stated that no contemporaneous documents relating to adjacent or neighbouring properties had come into existence. The lower court adopted a rough and ready measure to fix the market value, relying also on the admissions made by the witnesses regarding a bit of property for which Rs. 150 a cent had been awarded as compensation in 1115. But that award has not been produced in this case. The lower court proceeded on the admission of the parties. According to the lower court if the property could be valued at Rs. 150 a cent in 1115 it could be valued at Rs. 300 in 1120, when the property was acquired as the price of properties was going high. We think it proper to accept this. 3. As regards the building the Land Acquisition Officer as well as the lower court had adopted a peculiar way of making allowance for the depreciation of the building. The building in this case had a granite foundation, the walls were built of burned bricks though mud was used in place of chunnam for masonary works and the plastering was with chunnam and the wooden materials used consisted of Anjili, Teak and other hard woods. The building was said to be 35 years old. The PWD Officer who estimated the value fixed the price at Rs. 5,322/-. Then he deducted for each year 5 per cent for depreciation so that when deduction in that way was made the net result after 35 years brought the value of the building to Rs. 882. The building was said to be 35 years old. The PWD Officer who estimated the value fixed the price at Rs. 5,322/-. Then he deducted for each year 5 per cent for depreciation so that when deduction in that way was made the net result after 35 years brought the value of the building to Rs. 882. The lower court issued a commission to assess the value of the building. The commissioners found that Rs. 6,500-5-10 would be required to construct the building and they deducted 3/4ths on account of depreciation. This figure was not accepted by the lower court. The lower court however took into consideration the figure arrived at by the PWD officer who had been examined in this case as DW.1, and deducted 3/4th of the value for depreciation. The mode of valuation adopted by the lower court and the PWD Officer cannot be accepted. The Judicial Committee of the Privy Council in Hari Chand v. Secretary of State, AIR 1939 PC 235 laid down that where the subject to be valued was a building apart from site, the principle of fixing value by ascertaining the cost of reproducing the building at the present time and then allowing for depreciation in consideration of the age of the building and for the costs of such repairs as might be required apart from depreciation, was quite a well known and recognised method of valuing building for the purpose of compensation. This principle was again affirmed in Secretary of State v. Narain Khanna, AIR1942 PC 35 and followed. So to arrive at the present value of the building, the proper course would be to find out the cost of constructing a building of this type at the time of the acquisition and then deduct from it the depreciation value on account of the age of the building and also the amount required for repairs to keep the building in a fit condition. It is true that nowhere in the Land Acquisition Act or rules framed thereunder has any rule been laid down relating to the deduction on account of depreciation. The natural way to look at the matter would be to find out the approximate number of years the building could be used with proper care and maintenance and then divide the total cost of maintenance by the number of years and deduct the quotient as depreciation for each year. The natural way to look at the matter would be to find out the approximate number of years the building could be used with proper care and maintenance and then divide the total cost of maintenance by the number of years and deduct the quotient as depreciation for each year. Om Prakash Aggarawala in his commentary on the acquisition of land in India and Pakistan 3rd Ed. at p. 282, refers to the opinion of experts in making deductions of depreciation thus: "From the 'prime cost' thus obtained a deduction has next to be made for depreciation in consideration of the age and condition of repairs of the existing building: Assuming that the building has been kept in good normal repairs, one method approved by experts is to deduct the first 5 years, and then take 5 per cent for every 6 years. In a case before the Calcutta Improvement Tribunal (Case No. 93 of 1914) the court observed that taking the building as a second class building under the PWD standard the depreciation may be calculated at the rate of 5 per cent for every 6 years. Much will depend upon the condition of repairs in which a building or other structure has been kept." This does not vary much from what has been mentioned above. In the case of first class buildings no depreciation is to be deducted for 5 years and then 5/6th per cent has to be deducted for every subsequent year. Due allowance has to be made for maintenance and repairs. In the case of second class buildings 5/6th per cent depreciation has to be deducted for each year as was done in the case No. 93 of 1914 mentioned above. Judging from the nature of the materials used in the construction of the building in the present case, it can very well be classed as a second class building. The building was not demolished immediately after acquisition. It was kept by the State for a number of years and had let it out by auction. It is admitted by the State that it fetched a rent of Rs.40 a month. It must therefore had been a good building and even according to the PWD estimate the cost of construction came to over Rs. 5,000/-. DW.1 was the PWD officer who valued the building. It is admitted by the State that it fetched a rent of Rs.40 a month. It must therefore had been a good building and even according to the PWD estimate the cost of construction came to over Rs. 5,000/-. DW.1 was the PWD officer who valued the building. He had valued the materials on the basis of the PWD rates and according to him the prevailing market rate in 1120 was certainly 25 per cent more than the rates adopted by him in the calculation. So it can be taken that the cost of putting up a building with fresh materials in 1120 would have been Rs. 5,322 plus 25 per cent of that amount. That would come to Rs. 6,6521/2. From this has to be deducted the depreciation and the cost of repairs and maintenance for each year. From the nature of the materials used in construction and the way in which it was maintained the building fetching an income of Rs. 40 per month even after acquisition, we may feel that the building would have been in a serviceable condition for at least a 100 years from the date of its completion. Deducting one per cent on account of depreciation and cost of maintenance and repairs for every year of its existence we have to deduct 35 per cent from this and the balance will be the compensation which the plaintiff would be entitled to get. The balance would come to Rs. 4,324 in round figures. The lower court had allowed only Rs. 1,330 Chs.14 on account of value of the building. The plaintiff is therefore entitled to get Rs. 2,993 Chs.14 more on this account alone. We allow the same. 4. The appellant's learned Advocate had advanced an argument that the building should have been valued on a rental basis. It is not safe to adopt the same for in that case no assessment is possible with regard to the value of the materials used and the period for which the building is likely to exist in a good condition. It may be that with unburned bricks and bamboo rafters, a thatched building can be constructed to fetch a decent rent; but to value such a building for the purpose of awarding compensation on the basis of rental value would be unsafe and improper. So we do not allow the building to be valued on that basis. It may be that with unburned bricks and bamboo rafters, a thatched building can be constructed to fetch a decent rent; but to value such a building for the purpose of awarding compensation on the basis of rental value would be unsafe and improper. So we do not allow the building to be valued on that basis. 5. In the result we allow the plaintiff Rs. 2,993 Chs.14 more than that allowed by the lower court. The usual solatium and interest is also allowed. The parties will have proportionate costs here. The plaintiff had not however paid court fees on solatium for the amount claimed by him. In the case of compulsory acquisition the party gets a statutory right to claim solatium at a fixed rate on the amount granted as compensation. So when any enhancement is claimed there goes with it a claim for solatium as well and so the Travancore High Court in Narayana Pillai v. Sirkar reported at page 151 in 46 TLR and the Madras High Court in Brahmanandam v. The Secretary of State in Council 1929 MWN 599, held that the party claiming enhancement must pay court fees on that count as well as on 15 per cent solatium. The plaintiff in this case claimed Rs. 4,741 more. 15 per cent of the same will be Rs. 711/-. The plaintiff will pay court fees on Rs. 711 in the lower court before he is allowed to execute the decree now passed by us.