Collector, Varanasi v. Ajit Pratap Singh — 1979 DIGILAW 347 (ALL)

JUDGMENT M. N. Shukla, J. - These two connected first appeals arise out of the judgment and decree dated 17-12-1967, passed by the Chairman of the Tribunal constituted under Section 371 of the U. P. Nagar Mahapalika Adhiniyam, 1959 for the Nagar Mahapalika, Varanasi in Reference No. 7 of 1955. They raise common points of law and facts and may be conveniently disposed of together. 2. Two plots Nos. 1871 and 1872, measuring 1.57 acres in all, were acquired under the U. P. Town Improvement Act, 1919 for Bahlupur Housing and General Development Scheme. The notification under Section 4 of the Land Acquisition Act was made on 17-12-1949 and notice under Section 9 of the Land Acquisition Act was issued on 22-2-1952. The owner filed a claim of rupees two lacs and sixty seven thousand. The special Land Acquisition Officer by his award dated 5-7-1955, allowed a sum of Rs. 9,435.50 as total compensation in the manner indicated below: - For Land Rs. 6317.50 For construction Rs. 2034.00 For trees Rs. 1084.00 Total Rs. 9,435.50 3. At the instance of the claimant a reference was made under Section 18 of the Land Acquisition Act and the Tribunal allowed Rs. 35,534.00 as total compensation for the property acquired. Aggrieved by this judgment both the parties have come up in appeal to this court. 4. We have heard the counsel for , the parties at length in the two appeals. As far as First Appeal No. 315 of 1968 is concerned, the learned Chief standing counsel took us through the evidence and submitted that the compensation allowed by the Tribunal was not justified and the proper and fair compensation for the property acquired was the one allowed by the Land Acquisition Officer. The learned Chief Standing Counsel has not been able to satisfy us that the compensation awarded by the Tribunal was in any manner excessive and was liable to be interfered with by this court in favour of the present appellant. In the circumstances we find no force in this appeal and we dismiss the same with costs. In fact, the main contentions of the learned Chief Standing Counsel were raised in reply to the arguments of the appellant in the other First Appeal No. 441 of 1968 with which we now propose to deal. 5. In the circumstances we find no force in this appeal and we dismiss the same with costs. In fact, the main contentions of the learned Chief Standing Counsel were raised in reply to the arguments of the appellant in the other First Appeal No. 441 of 1968 with which we now propose to deal. 5. The very first point which may be disposed of in this appeal is the one relating to solatium. The Tribunal had disallowed the payment of 15% solatium, claimed on behalf of the owner of the property. The learned Chief Standing Counsel strongly supported the view of the Tribunal and raised a number of arguments to support the above finding. To begin with, it was contended by him that sub-section (2) of Section 23 of the Land Acquisition Act was deleted by Section 2 of the Land Acquisition (U. P. Amendment) Act, 1954 (Act XXII of 1954) and consequently the claimant was not entitled to solatium. It may, however, be pointed out that Section 3 of the said Act, contains a saving clause and reads: - "Notwithstanding anything contained in Section 2, Section 23 of the Principal Act, shall, in respect of any acquisition of land made in pursuance of notification under Section 4 of the said Act issued prior to the commencement of this Act, have effect as if sub-section (2) thereof had not been omitted." It will be noticed that Section 2 of the Amending Act XXII of 1954 deleted sub-section (2) of Section 23 of the principal Act, which related to the payment of solatium, but obviously the effect of the saving clause is to make Section 2 of the Amending Act itself inapplicable to those cases of acquisition in which the notification under Section 4 of the Land Acquisition Act was issued prior to the commencement of Act XXII of 1954. In the instant case the notification under Section 4 of the Land Acquisition Act was issued on 17-12-1949 i.e. long before the enactment of Act XXII of 1954. Hence, the provision in the main Act for payment of solatium was applicable with full force. 6. In the instant case the notification under Section 4 of the Land Acquisition Act was issued on 17-12-1949 i.e. long before the enactment of Act XXII of 1954. Hence, the provision in the main Act for payment of solatium was applicable with full force. 6. The learnd Chief Standing Counsel, however, placed reliance on the provisions of Section 58 of the Town Improvement Act which provided that for the purpose of acquiring land under the said Act for the Improvement Trust the Land Acquisition Act shall be subject to the modification enacted in the Schedule incorporated in the Town Improvement Act. Paragraph 10 of the Schedule II contains sub-paragraph (2) which reads as follows: - "10 (3) - At the end of Section 23 of the said Act, the following shall be deemed to be added, namely: '2. For the purpose of clause first of sub-sec. (1) of this section - (a) the market-value of the land shall be the market-value according to the use to which the land was put at the date with reference to which the market-value is to be determined under that clause. " We were also referred to clause (c) of clause (2) of paragraph 10 and on its basis it was submitted that sub-section (2) of Section 23 of the Land Acquisition Act would not be applicable to any land acquired under the United Provinces Improvement Act except in case of 'gardens not let to tenants but used by the owners as a place of resort. This argument may be completely answered merely by noting the fact that the Town Improvement Act stood repealed by Section 581 of the U. P. Nagar Mahapalika Adhiniyam, 1959. 7. In the next resort, however, the learned Chief Standing Counsel placed reliance on Section 376 of the U. P. Nagar Mahapalika Adhiniyam. Admittedly the Tribunal in the instant case was constituted under Section 371 of the U. P. Nagar Mahapalika Adhiniyam and the cases pending before the U. P. Town Improvement Act were transferred to the Tribunal set up under the Adhiniyam. Section 376 of the Adhiniyam provides that for the purpose of acquisition of land for the Mahapalika under the Land Acquisition Act, the said Act shall be subject to the modification specified in the Schedule to this Act (Adhiniyam). Section 376 of the Adhiniyam provides that for the purpose of acquisition of land for the Mahapalika under the Land Acquisition Act, the said Act shall be subject to the modification specified in the Schedule to this Act (Adhiniyam). The learned Chief Standing Counsel placed strong reliance on paragraph 10 of the Schedule II to the Adhiniyam and vehemently urged that in view of cl. 3 of the said paragraph it must be inferred that at the relevant time the provision for the payment of solatium i.e. sub-section (2) of Section 23 did not exist and, therefore, the Tribunal was justified in disallowing the solatium to the claimant. In this context it will be pertinent to reproduce clause 3 of paragraph 10 of the schedule to the Adhiniyam in so far as it is relevant for the purpose of this case: - "(3) for the purposes of clause first of sub-section (1) of this section - (a) the market-value of the land shall be the market-value according to the use to which the land was put at the date with reference to which the market-value is to be determined under that clause". 8. In a nutshell the argument of State may be stated in these words. In the Schedule to the U. P. Nagar Mahapalika Adhiniyam, 1959, originally there was nothing like paragraph 10, sub-clause (2). In other words, there was no restriction with regard to the payment of solatium and the provision which originally restricted the payment of solatium under the provisions of the Town Improvement Act was not included in the U. P. Nagar Mahapalika Adhiniyam. Later, however, by Act XIV of 1959 in paragraph 10 of Schedule II appended to the U. P. Nagar Mahapalika Adhiniyam, the following amendment was introduced. "10. Amendment of Schedule II to U. P. Act II of 1959 - In para 10 of Schedule II appended to the principal Act, renumber sub-para (2) as sub-para (3) and insert the following as sub-para (2); "(2). "10. Amendment of Schedule II to U. P. Act II of 1959 - In para 10 of Schedule II appended to the principal Act, renumber sub-para (2) as sub-para (3) and insert the following as sub-para (2); "(2). The fullstop at the end of subsection (2) of Section 23 of the said Act shall be deemed to be changed to a colon, and the following proviso shall be deemed to be added: "Provided that this sub-section shall not apply to any land acquired under Chapter XIV of the Uttar Pradesh Nagar Mahapalika Adhiniyam, 1959 except - (a) land acquired under sub-section (4) of Section 348 of that Adhiniyam, and? (b) building's in the actual occupation of the owner or occupied free of rent by relative of the owner, and land appurtenant thereto, and (c) gardens not let to tenants but used by the owners, as a place of resort." 9. But by U. P. Act No. XXIII of 1961 the above provision in paragraph 10 of Schedule II appended to the Nagar Mahapalika Adhiniyam itself was deleted. The learned Chief Standing Counsel, however, submits that it will be noticed in the above provision that the intention of the Legislature by enacting Act XIV of 1959 and amending paragraph 10 of Schedule II of the Uttar Pradesh Nagar Mahapalika Adhiniyam was to incorporate that provision as sub-section (2) of Section 23 of the Land Acquisition Act and accordingly that provision must be deemed to have become a part of Section 23 aforesaid as sub-section (2) thereof. In this manner, according to his contention, there was no room for introducing any other provision as sub-section (2) of Section 23 of the principal Act and consequently the amendment introduced in 1972 would be wholly ineffectual. It may be mentioned at this stage that by the Land Acquisition (U. P. Amendment) Act, 1972 (U. P. Act XXVIII of 1972) sub-section (2) to Section 23 was re-enacted and made a part of Section 23 of the principal Act. The relevant provision, namely, Section 3 of U. P. Act XXVIII of 1972 runs as follows: - "3. It may be mentioned at this stage that by the Land Acquisition (U. P. Amendment) Act, 1972 (U. P. Act XXVIII of 1972) sub-section (2) to Section 23 was re-enacted and made a part of Section 23 of the principal Act. The relevant provision, namely, Section 3 of U. P. Act XXVIII of 1972 runs as follows: - "3. Amendment of Section 23 - in Section 23 of the principal Act, - (a) in sub-section (1), the Explanation to the clause shall be omitted; (b) after sub-section (1), the following sub-section shall be inserted, namely: - "(2) In addition to the market-value of the land as above provided, the court shall in every case award a sum of fifteen per centum or such market-value in consideration of the compulsory nature of the acquisition." (emphasis added). The Chief Standing Counsel argued that since the vacuum created by the deletion of sub-section (2) was already filled by the introduction of clause 3 of paragraph 10 of Schedule II of the Adhiniyam to which we have already adverted, there was no room for accommodating the provisions re-enacted by Section 3 of U. P. Act No. XXVIII of 1972 within the ambit of Section 23 of the principal Act. This is a purely hypothetical and ingenious argument for circumventing the provisions of the later Act of 1972 and declining to give effect to the intention of the Legislature so far as the question of payment of solatium to the claimant is concerned. The argument is wholly untenable. The legislature had significantly used the expression "inserted" in Section 3 of U. P. Act XXVIII of 1972. The ordinary meaning of the word 'insert is to introduce or push by force and its implications are vividly illustrated by medical operations in surgical context. Hence, it would not be inappropriate to read this Section as introduced again in Section 23 of the principal Act as sub-section (2). As contrasted with this the language used by the Legislature in clause 3 of paragraph 10 of Schedule II to the Nagar Mahapalika Adhiniyam is materially different and must be underlined. Clause 3 of paragraph 10 says "at the end of Section 23 of the said Act, the following shall be deemed to be added." The simple meaning of the word "add" is to augment, to increase in number etc. Clause 3 of paragraph 10 says "at the end of Section 23 of the said Act, the following shall be deemed to be added." The simple meaning of the word "add" is to augment, to increase in number etc. The Legislature has advisedly used the expression "at the end of Section 23" and thereby removed all possible doubts. The intention appears to be to let the provision contained in cl. 3 of paragraph 10 of Schedule II be added right at the end of Section 23 and the mere numerical description of the sub-clause as "(2)" would be immaterial. The use of the expression 'inserted in the Act of 1972 and the materially different phraseology employed therein suggest a mode or reconciling the two and enabling the court to place a harmonious interpretation on both the provisions. In this view of the matter the argument of the learned Chief Standing Counsel must be rejected. 10. Apart from this, it must also be mentioned that paragraph 10 (3) of Schedule II of the Nagar Mahapalika Adhiniyam quoted earlier in this judgment was struck down by a Division Bench of this court in 1973 All LJ 656 (Prabhu Lal v. S. L. A. Officer). It was held to be hit by Article 14 of the Constitution and the view of the Bench was that "even though the proceedings for acquisition would not be bad, the amendments made in the Land Acquisition Act by the aforesaid provisions of the Act and the Adhiniyam could not have been taken into consideration while determining the compensation payable to the appellants." Paragraph 10 (3) of Schedule II of the Nagar Mahapalika Adhiniyam has for this reason to be excluded from consideration. Therefore, the only provision which would govern the question of payment of solatium would be one existing on the date of hearing of the present appeal i.e. sub-section (2) of Section 23 as re-introduced by U. P. Act XXVIII of 1972. Consequently the claimant would be entitled to payment of 15% solatium. 11. Sri V. B. Singh, learned counsel for the claimant, who has filed this appeal contended that the Tribunal was in error in fixing the value of plot No. 1872 on which an orchard was situate at Rs. 9000/- only. It was submitted that the claimant was entitled to compensation for the value of the land also which was covered by the orchard. 9000/- only. It was submitted that the claimant was entitled to compensation for the value of the land also which was covered by the orchard. The mode adopted by the Tribunal for determining the value of this plot was that the annual gross income of the garden was taken as Rs. 600/- as stated by the claimant himself. A deduction of Rs. 100/- per year was made by the Tribunal on account of the cost of maintenance and computing on this basis the annual income of the garden was taken to be only Rs. 450/- per year. Sri Mathura Prasad, P. W. 4 in his statement deposed that the average annual profit from the orchard was Rs. 600/-. In our opinion the statement fmjust be taken on its face value and there is no justification for treating this as only the gross value and not the net profit of the orchard. In popular parlance when a person makes a statement about the profit, of a property, he means net profit which he derives after meeting the cost of maintenance etc., unless he qualifies his statement by expressly referring to the cost of maintenance etc. Therefore, the Tribunal was in error in not accepting Rs. 600/- as the annual profit. I hold that the figure of Rs. 600/- represents the net annual profit of the orchard. However, the court after taking the income of the garden capitalised it by multiplying it by twenty and thereby arrived at the value of the orchard. It was contended by the appellants that this would not represent the entire value of the said property unless separate valuation had been made of the land on which the orchard stood. We are unable to accept this contention in view of the particular mode of assessment adopted by the Tribunal in the instant case. When the income or profits of an orchard are taken into account, surely they proceed from the trees standing on the land in the orchard. The land is in fact a component part of the orchard. We cannot conceive of the trees in an orchard yielding any substantial income, detached from 'terra-firma. Hence land is only one of the component factors and the aggregate of the income from an orchard includes the value of the land on which the orchard is situated. The land is in fact a component part of the orchard. We cannot conceive of the trees in an orchard yielding any substantial income, detached from 'terra-firma. Hence land is only one of the component factors and the aggregate of the income from an orchard includes the value of the land on which the orchard is situated. Any attempt to separately value the land and add it to the income from the orchard would inevitably result in what may be called 'duplication of values. We were referred in this connection to a decision of the Supreme Court in AIR 1969 SC 255 (Chaturbhuj Pande v. Collector, Raigarh). Sri V. B. Singh placed reliance on this decision and submitted that the court assessed the value of the property in that case by fixing the value of the land. It must be observed that broadly speaking the Land Acquisition Act contemplates only the determination of the value of 'land, which term is, however, used, in a compendious sense and according to the definition given therein includes "benefit to arise out of land and things attached to the earth or permanently fastened to anything attached to the earth". Hence, even when the value of trees in an orchard is being determined, really speaking it is the determination of the value of 'land the term being used in a general sense. It was in this sense that in the case of Chaturbhuj Pande (supra), the Supreme Court while determining the value of the orchard described it as the "value of the land. A perusal of the facts of that case clearly reveals that no separate value of the land underneath the trees of the orchard was made or added to the total value of the land. In paragraph 8 of the Reports it was observed, - "the value of the trees was ascertained only for the purpose of fixing the market-value of the land. On the value of the land as determined, the court was bound to allow the 15 per cent allowance provided by Section 23 (2) of the Act." Thus, generally speaking if the mode of assessment referred to above is adopted, the value of land in the case of an orchard will be the value arrived at by ascertaining the income from the profits of the orchard. There may, of course, be exceptional cases where the overwhelmingly high intrinsic value of the land could by recent development and growth etc. may have to be considered by the court but the general rule is otherwise. In the instant case no such evidence was adduced to justify any departure from the above rule. Hence, we hold that the value of the orchard may be determined by multiplying Rs. 600/- by twenty, which works out at Rs. 12,000/-. 12. The judgment of the Tribunal was further assailed on the ground that - the market-value of plot No. 1871 had also been wrongly determined. According to the Land Acquisition Officer it consisted of some structures and some land which had been held to be appurtenant to the building. The argument of the learned counsel for the appellant was confined to the value of the constructions on the said plot. He relied on a report submitted by Shri Saran Bihari Lal, retired Engineer of the U. P. Engineering Service and formerly Engineer of Banaras. According to this report the total value of the construction was Rs. 18957.00. Un-fortunately he passed away and was not available for cross-examination and his report was formally proved and admitted in evidence as Ex. 18. We have carefully scrutinised this report. Though it is comprehensive, it does not mention the basis on which the cost had been calculated. It does not disclose as to what rule or according to which provisions certain rates had been applied. We are, therefore, unable to accept that report 'in toto. The learned Chief Standing Counsel, how-' ever, relied on a report dated 22-6-1975 submitted by Sri Satya Deo Raidas, Assistant Engineer, P. W. D. (Ex. A-4). Sri Das was examined as D. W. 2 in the case and was thoroughly badgered in cross-examination. He admitted that the original report had not been written by him and he could not even state as to who was the author of the original report. He frankly conceded that he was not acquainted with the handwriting of the Overseer who had accompanied him at the time of making the measurement, Sri Satya Deo Raidas further conceded that he had not prepared any outlines or plan at the time of the local inspection. He was not in a position even to state as to the persons from whom he made enquiries at the time of inspection. He was not in a position even to state as to the persons from whom he made enquiries at the time of inspection. In these circumstances the report submitted by him cannot be accepted and we have mostly to fall back upon the statement of the claimants agent Sri Matura Prasad, P.W. 4. There was nothing in his cross-examination which may discredit him on certain material points in the case. According to him the value of the road proceeding on plot No. 1871 was Rs. 700 the cost of the boundary wall was Rs. 6,000 and the value of the chabutra was Rs. 500. These are some of the items to be considered while dealing with the structures on the said land. Besides this there were three rooms also on which however, we do not find anything in deposition of the said witness. With regard to those rooms Sri Raidas in his report Ex. A-4, noted that there were old rooms and he valued them at Rs. 1,134. For want of any better material we are inclined to accept this figure as representing the' value of three rooms. Thus, on this basis the total value of the constructions works out at Rs. 8,334. With regard to the value of the land, suffice it to mention that the Tribunal was perfectly right in accepting the sale deed dated 6-6-1949 (Ex. 3) as an exemplar for the purpose. The acquisition in the instant case was also made in the year 1949. The above sale deed indicated the rate at Rs. 850 per biswa but making a reduction of Rs. 100 per biswa on account of the fact that a small house and a boundary wall had also existed on the plots covered by the exemplar, the Tribunal arrived at the figure of Rs. 750 per biswa. The same rate was also pulled out from the three other exemplars Exs. 6, 8 and 9. In the circumstances we endorse the finding of the court below that the value of land can be reasonably assessed at the rate of Rs. 750 per biswa. The land measured 0.88 acre and therefore the price worked out at Rs. 23,500. 13. The same rate was also pulled out from the three other exemplars Exs. 6, 8 and 9. In the circumstances we endorse the finding of the court below that the value of land can be reasonably assessed at the rate of Rs. 750 per biswa. The land measured 0.88 acre and therefore the price worked out at Rs. 23,500. 13. The learned Chief Standing Counsel relied on the decision of the Supreme Court in AIR 1968 SC 1201 (State of Kerala v. P. P. Hassan Koya) and urged that a land with the building must be treated as a single unit and there was no legal justification for determining the value of the land and the building separately for fixing the amount of compensation payable to the claimant. It was observed in Paragraph 5 in that case: - "The land and the building constitute an unit, and the value of the entire unit must be determined with all its advantages and its potentialities. Under Section 23 of the Land Acquisition Act compensation has to be determined by taking into consideration the market value of the land at the date of the publication of the notification under Section 4 (1) and the damage, if any, sustained by the persons interested under any of the heads mentioned in "secondly" to "sixthly" in Section 23 (1) of the Land Acquisition Act." 14. The above case does not support the wide proposition urged by the learned Chief Standing Counsel. In that case there was no other suitable data available and consequently the court adopted the mode of determining the value of the land with the building, but it did not lay down that this was the only way of determination of such value. In a case where for want of reliable material the general method of capitalising of the returns is ultimately adopted, there would certainly be no justification for separately adding the value of the land. This was made clear in paragraph 6 of the Report wherein it was observed - "When the property sold is land with building it is often difficult to secure reliable evidence of instances of sale of similar lands with buildings proximate in lime to the date of the notification under Section 4. This was made clear in paragraph 6 of the Report wherein it was observed - "When the property sold is land with building it is often difficult to secure reliable evidence of instances of sale of similar lands with buildings proximate in lime to the date of the notification under Section 4. Therefore, the method which is generally resorted to in determining the value of the land with building especially those used for business purposes is the method of capitalisation of return actually received or which might reasonably be received from the land and the buildings." It has also to be borne in mind that in the case before the Supreme Court the building was used mainly for business purposes and the land involved was almost insignificant and small in area, measuring 3,911 sq. feet only. Thus, there is no substance in the contention of the learned Chief Standing Counsel that in every case where the value of land with building thereon has to be assessed, it must be treated as a single unit and the land in the building should not be valued separately. It has long been recognised that there can be more than one method of determining the valuation of property which is acquired. In Harish Chunder v. Secretary of State, reported in (1907) 11 Cal WN 875, three modes of valuation were stated as follows: - "(a) The price fixed should have relation to the price paid within reasonable time in bona fide transactions of land acquired or lands adjacent to the land acquired which possess similar advantages. (b) The number of years purchase of the actual or immediately prospective profits of the land acquired. (c) The opinion of experts." 15. Any one or more of the above methods may be resorted to for arriving at a fair valuation of the property, depending upon the facts of each case. Therefore, in our opinion the claimant is entitled to the following compensation: (1) Valuation of the land in plot No. 1871 Rs. 23,500.00 (2) Valuation of the construction of plot No. 1871 Rs. 8,334.00 (3) Valuation of the orchard of plot No. 1872 Rs. 12,000.00 (4) Amount payable on account of severance of the remaining land after acquisition Rs. 1,000.00 Total Rs. 44,834.00 16. It is necessary to point out that Rs. 23,500.00 (2) Valuation of the construction of plot No. 1871 Rs. 8,334.00 (3) Valuation of the orchard of plot No. 1872 Rs. 12,000.00 (4) Amount payable on account of severance of the remaining land after acquisition Rs. 1,000.00 Total Rs. 44,834.00 16. It is necessary to point out that Rs. 1,000 for the amount allowed on account of severance as mentioned above has not been challenged in the appeal. 17. In addition to the market value of the land as stated above, the claimant is also entitled to 15% solatium at such market value in consideration of the compulsory nature of the acquisition. 18. In the result, Appeal No. 315 of 1968 fails and is dismissed with costs. Appeal No. 441 of 1968 succeeds and is partly allowed with proportionate costs, The claimant shall be entitled to interest at 6% per annum with effect form the date of possession.