Chand Bai Bajoria v. Collector, Varanasi — 1979 DIGILAW 363 (ALL)

JUDGMENT M.N. Shukla, J. - This appeal is directed against the judgment and decree of the Chairman, Nagar Mahapalika Tribunal, Varanasi dated 17-12-1967 in Reference No. 11 of 1955 awarding a sum of Rs. 80,663.55 to the claimant as compensation for acquiring the land of the claimant together with interest at the rate of 6 per cent per annum on the sum in excess of the amount already deposited with effect from the date of possession. 2. Portions of three plots with a total area of 2.38 acres (about 3 Bighas 16 Biswas) situate in village Bhadaini, Pargana Dehat Amana, district Varanasi were acquired for the Improvement Trust for project No. 3 of 1948-50 Bhelupur Housing and General Development Scheme. The notification under Section 36 of the Town Improvement Act was issued on 24-12-1949. The notification under Section 42 of the Town Improvement Act followed on 1-9-195) and possession of the land was taken on 10-3-1955. It may be noted at the very outset that about 10 Biswas of the land was covered by constructions and the remaining was a well-kept garden consisting of fruit and flower bearing trees. The acquired land was adjacent to the palatial building of the claimant Smt. Chand Bai Bajoria. The Land Acquisition Officer had awarded Rs. 5,601.25 as compensation for the land, Rs. 2,940 for trees, Rupees 20,642.25 for constructions and Rupees 2,000 as damages for severance. The claimant had asked for compensation of the land at the rate of Rs. 2,500 per Biswa. Dissatisfied with the award the owner applied for a reference under Section 18 of the Land Acquisition Act and before the Tribunal constituted under Section 371 of the U. P. Nagar Mahapalika Adhiniyam at Nagar Mahapalika, Varanasi the owner claimed Rs. 2,00,000 for the land, Rs. 28,251 for the constructions, Rs. 25,000 as severance charges and Rs. 25,000 for the trees. The Tribunal awarded compensation as follows: - Garden Rs. 40,000.00 Constructions Rs. 20,642.25 House site Rs. 7,500.25 Damages for severance Rs. 2,000.00 Total Rs. 70,142.25 The claimant was also awarded 15 per cent compulsory acquisition charges and interest at 6 per cent per annum on the amount awarded in excess of Its. 35,561.00 with effect from the date of possession. The Tribunal awarded compensation as follows: - Garden Rs. 40,000.00 Constructions Rs. 20,642.25 House site Rs. 7,500.25 Damages for severance Rs. 2,000.00 Total Rs. 70,142.25 The claimant was also awarded 15 per cent compulsory acquisition charges and interest at 6 per cent per annum on the amount awarded in excess of Its. 35,561.00 with effect from the date of possession. The Tribunal treated the alleged garden on the land as a garden for all intents and purposes and determined the compensation for the same on .the basis of the profits derived from the same. It did not award separate compensation for the land covered by the trees of the garden. 3. The contention of the learned counsel for the appellant is that the appellant was entitled to separate compensation for the land on which the trees and the garden stood and that this land should have been treated as a potential building site. The very first question, therefore, which falls for consideration is as to whether on the facts of this case the garden should be treated as a garden simpliciter or merely land on which the trees or the flower plants stood. The legal character or label which should be assigned to a property which is the subject-matter of acquisition would depend upon its predominant characteristics. In cases of orchards and gardens there are likely to arise two positions mainly. Firstly, a garden or orchard standing on a plot of land may constitute the principal value, of that property and may be actually utilised as a source of income. In that case it will be in the eye of law' a garden or orchard and nothing more. Secondly, a garden or orchard may be laid out only for purposes of embellishment of a nearby structure or buildings and it may not at all be used as a source of income. In that event the garden would not constitute the principal value of the property and the plot or land simpliciter will be the real subject-matter of acquisition in the eye of law. It is common knowledge that in the days of feudalism the rich used to maintain orchards and gardens quite often without any intention of deriving any profit from them or making them a source of income. They were places where periodically they used to repair for refreshment and repose. It is common knowledge that in the days of feudalism the rich used to maintain orchards and gardens quite often without any intention of deriving any profit from them or making them a source of income. They were places where periodically they used to repair for refreshment and repose. With the change of times that luxurious diversion has greatly dwindled but it has not completely disappeared. Even the prosaic and comparatively impoverished age in which we now live is not altogether devoid of some affluent and refined persons, howsoever few, who swear by the Baconian doctrine; 'God Almighty first planted a garden. And, indeed, it is the purest of human pleasures, or the Shevian aphorism: "The best place to seek God is in a garden. You can dig for Him there, and who seem to agree with Voltaire. "That is well said, replied Candide, but we must cultivate our garden". Obviously if gardens or orchards are cultivated and maintained with such non-mercenary motives, they cannot be treated as orchards or gardens 'simpliciter so as to justify determination of their value on the basis of the profits or income they are capable of yielding. In such cases they would merely be certain assets existing on the land the value of which has to be assessed as land 'simpliciter'. In other words, this would mean that it is only the value of the trees as timber and fuel and the price of the flower plants etc. which they would fetch which would be relevant for determination of the value and not their profit or income. In the instant case the claimant led evidence which leaves no room for doubt that the orchard or the garden and the flower plants were never treated as sources of income. The primary character of this property was land and the garden or orchard was secondary. Ganpat Sharma (P.W. 1), Managing Director of the appellant, categorically stated that the flowers were not sold and if the fruits and flowers had been sold, they would have fetched a price of Rs. 4000/- 5000/- and Rs. 2000/-3000 annually respectively. Likewise Sheo Prasad (P.W. 2). Ganpat Sharma (P.W. 1), Managing Director of the appellant, categorically stated that the flowers were not sold and if the fruits and flowers had been sold, they would have fetched a price of Rs. 4000/- 5000/- and Rs. 2000/-3000 annually respectively. Likewise Sheo Prasad (P.W. 2). a gardener of eminence inasmuch as he had served as a Mali of the Maharaja of Vizianagram for about forty-five years and used to assist Jokhan, who looked after the garden in question, also deposed from personal knowledge that the fruits and flowers of the gardens would fetch Rs. 2500/- or 3000/- annually, if sold. Thus, the witnesses examined by the claimant have scrupulously stated that the fruits and flowers were not sold and they only gave their estimate of the price which they would have fetched if they were actually sold. A list of the annual income raised and the total valuation of the fruits and flowers was filed as Exhibit 9 in the case. Relying on the past evidence the Tribunal accepted the figure Rs. 2,500/-per year as profits of the garden and after making a deduction of Rs. 500/- per year as costs of maintenance, the Tribunal arrived at the figure of Rupees 2000/- as the annual profits of the garden and multiplying this by 20 the Tribunal arrived at the figure of Rupees 40,000/- which represented the value of the entire garden, including the constructions and their site. In our opinion, if the contention of the appellant is accepted, namely, that the land on which the garden stood was to be treated as a building site, to which question we shall shortly turn, it will not be correct to fix the value of the garden on the basis of the profits derived from it. The income from the garden accrued by virtue of the trees and plants existing on the land and in such case the land is also a component part of the garden whose income is determined. There cannot be any justification for separately valuing the land in such case and at the same time fixing the value of the trees etc. by taking into account their profits. This will result in duplication of values. There cannot be any justification for separately valuing the land in such case and at the same time fixing the value of the trees etc. by taking into account their profits. This will result in duplication of values. As we have already observed, it is the principal character of the property which would be conclusive on the question as to whether it should be treated on the facts of the case as a garden or orchard simpliciter in which case the value would be ascertained by considering the profits or income, or it should be treated as 'land simpliciter and the value of the trees etc. may be added to the value of the land. We are fortified in the view that we are taking by several authorities. In the State of Madras v. Alamelutha-yammal, AIR 1970 Mad 184 the earlier decision of the same court reported in AIR 1924 Mad 252 Thereesamma v. Deputy Collector, Cochin was affirmed and the contention that the claimants were entitled to the value of the trees on the footing that they were fruit-bearing trees was rejected as untenable, because the basis of the claim was that the lands were valued as building sites and the claimant could not also have the advantage which they would be entitled to only if the lands had been dealt with as agricultural land. It was pointed out that what had been awarded to the claimants was an inclusive price and that they could not be heard to say that the trees should be separately assessed as fruit-bearing trees. To the same effect is the Division Bench decision of the Karnataka High Court in Land Acquisition Officer, Tumkur v. T. S. Aswathanarayana Rao, AIR 1974 Kant 112. It was held therein that when a cocoanut garden, areca garden or mango garden was acquired, the proper method of valuation was not to value the land separately and trees separately, but to consider the market value of the cocoa-nut garden or the like. It was also held that separate compensation could not be awarded for fruit growing trees standing on the land acquired. Hence if we accede to the appellants contention that the land should be treated as building site we cannot in law allow the compensation to be assessed on the. basis of the profits or the income derived from the garden. It was also held that separate compensation could not be awarded for fruit growing trees standing on the land acquired. Hence if we accede to the appellants contention that the land should be treated as building site we cannot in law allow the compensation to be assessed on the. basis of the profits or the income derived from the garden. In that case only, the price of the fruit bearing trees or the flower plants can be taken into consideration. Ganpat Sharma (P.W. 1) proved Exhibit 9 which is a list of fruit bearing trees and plants with their value and trees and plants not bearing fruits. Thus, there is un-controverted evidence on record and nothing has been shown to us which may persuade us to reject this evidence. According to Exhibit 9 the total value of the trees and plants not bearing fruits is Rs. 554 and the total value of the flower plants is Rs. 936. As regards the list of the fruit bearing trees and plants barring a few exceptions, it merely gives the annual income or profits derived from the trees or plants and not the price of the trees and plants. There is, however, some overlapping in the list and the three items in this list, namely, Aam, Ber, (Plum), Jamun and Bel (Kagji) occur in the list of trees and plants not bearing fruits also. Hence, the price of these items indicated therein can also be safely taken into account and the total value of these plants comes to Rs. 600. On this basis the total value works out at Rs. 2090. The Land Acquisition Officer, however, fixed the value of the same at Rs. 2,940. For want of specific evidence with regard to the timber of the remaining trees etc. we are satisfied that the figure arrived at by the Land Acquisition Officer was correct and should be adopted. 4. The next question which arises is as to whether the land covered by the garden should be treated as building ,site. The most important consideration in the present case which suggests that the claimant is entitled to have the land treated as building site is a finding that we have already recorded that the garden or orchard in this case was more or less for decorative purpose and was not a source of income. The most important consideration in the present case which suggests that the claimant is entitled to have the land treated as building site is a finding that we have already recorded that the garden or orchard in this case was more or less for decorative purpose and was not a source of income. In other words, the land was primarily land simpliciter and therefore in case the other necessary ingredients are proved there is nothing to prevent it from being' treated as building site. In this context the relevant factor which the court must take into account is the surrounding area of the property acquired. If it is a place which is entirely in the wilderness without any prospect of being populated and with very limited utility, surely it cannot have the semblance of a building site. On the other hand, if it is proved that it is a developed area and buildings have already come up or are in the offing, places of importance are situated in the proximity, roads have been cut or are in the process of being made, the locality is well connected with the main town or is situated within the Municipal limits, these are some of the salient considerations which may justify the inference that the land is a potential building site. In the Division Bench decision of this Court in Azimuddin Ashraf Chaudhari v. Municipal Board, Bara Banki, ILR (1961) 1 All 988 this Court had occasion to examine the question as to what are the relevant considerations for adjudging the position of a land as potential building site. The factors which weighed with the Court were that there were houses and other buildings on every side, that at a short distance stood a High School and also a Boarding House, an orphanage, a Tahsildars house, a Lady Doctors house and other similar buildings and a Kothi as well. It was observed that the presence of these buildings, the existence also of important roads on at least three sides and its location within the municipal limits left no room for doubting that the land was a potential building site. It was also emphasised . that "the present use to which it is being put is not material in judging its potential value." There is evidence in the instant case to indicate that the area acquired was a potential building site. It was also emphasised . that "the present use to which it is being put is not material in judging its potential value." There is evidence in the instant case to indicate that the area acquired was a potential building site. Ganpat Sharma (P.W. 1) stated that the land acquired was at a distance of 20-30 feet to the east of the Durga Kund Road and new population was springing up to the east of this road, that a large number of houses had come up within the last ten years, that the localities of Ilanu-man Pura, Kashmiri Ganj and Nawab Ganj were situated at a very short distance from this area, that the University was also close to the plot in question and that the land was situated within the Municipal limits and the police station was also within 30-35 feet from this land and was connected by a lane. Dinesh Chandra Banerji, a witness examined in the case, was a Practising Consulting Engineer and Building Surveyor and was also a Death Duty, Wealth Tax and Income Valuer. He made a valuation of the property in dispute and the map filed by him reveals that to the east of this property was an Achoot Ashram. Therefore, it has been abundantly proved in the present case that the land in question was a potential building site. In the case of Azimuddin Ashraf Chaudhari (supra) also the land acquired was situate within the Municipal limits and was at the time of the notification under Section 4 of the Land Acquisition Act. held either by hereditary tenants for the purpose of cultivation or was lying unoccupied. Still it was treated as a potential building site. A perusal of the map filed by the Surveyor in the present case indicates that the trees are not dense or compact but are more or less sparse. On the front portion is situate the palatial house which is not under acquisition. To the back of it lies the plot of land which has been acquired and the outhouses. It may appear that the major part of the land acquired is covered by trees and plants so as to give it the appearance of a garden simpliciter. On the front portion is situate the palatial house which is not under acquisition. To the back of it lies the plot of land which has been acquired and the outhouses. It may appear that the major part of the land acquired is covered by trees and plants so as to give it the appearance of a garden simpliciter. But it is not possible to have a proper perspective of the property in question without also taking into consideration the fact that the main building is situate on the front side, even though it is not the subject-matter of the acquisition and the trees are on the back side and naturally therefore the minor constructions in the nature of outhouses etc. in the back portion are negligible. In order to arrive at a correct position the front and back portion of the land acquired must also be considered and then it would be apparent that it is not a case of garden in the sense that the garden was raised not as a source of income but it was really a case of land simpliciter with trees interspersed and major part of the land being covered by a spacious lawn and approach roads. 5. A direct consequence of the finding that the land is a potential building site is that while judging its market value, the rent, alone earned from it through agricultural tenants will not be a correct measure. Its potentiality as a building site is a material circumstance, independent and distinct from the rights held by tenants. It is with reference to this potentiality that the value has therefore to be determined with the aid of exemplars by which similar lands in the locality might have been transferred for such purposes. See the case of Azimuddin Ashraf Chaudhari (supra) and the case of E. H. Hamberger v. Revenue Divisional Officer, Bandar, AIR 1964 Andh Pra 504. The Tribunal has referred to a number of exemplars which have been filed by the claimant. Exhibit 4 is a sale deed dated 6-6-1949 under which 3.83 acres of land were sold for Rs. 1,05,000 and the rate after making allowance for a house and the boundary wall will work out at Rs. 750 per Biswa. Two other sale-dees Exhibits 5 and 6 both of the same date i.e. 9-8-1948 were also filed on behalf of the claimants. 1,05,000 and the rate after making allowance for a house and the boundary wall will work out at Rs. 750 per Biswa. Two other sale-dees Exhibits 5 and 6 both of the same date i.e. 9-8-1948 were also filed on behalf of the claimants. The former related to the land measuring 72 Acres (1 Bigha, 2 Biswas and 4 Dhoors) which was sold for Rupees 7,000/- and the rate comes to Rs. 320/- per Biswa. The latter sale-deed related to the land measuring 72 Acres (1 Bigha 2 Biswas and 4 Dhoors) which was sold for Rs. 15,000/- and the rate comes to Rs. 675/- per Biswa. There was also a sale-deed dated 29-4-1944 (Exhibit 7) which related to the land measuring a little less than 1 Biswa which was sold for Rs. 1,730/-. Lastly, there was Exhibit 8, a sale-deed dated 4-3-1949 which related to the land measuring 1040 sq. feet which was sold for Rs. 2744/7/-. Learned counsel for the appellant submitted that the last exemplar Exhibit 8 should alone be considered a safe basis for assessing the market value of the land and the claimant had asked for a compensation of Rs. 2,500/- per Biswa which is at a lower rate than that and, therefore, the same should not have been disallowed by the trial court. On the other hand, the learned Standing Counsel supported the finding of the Tribunal and said that the sale-deed dated 6-6-1949 was the nearest in point of time of the notification in the present case and the Tribunal was justified in making the same as the basis for examining the market value. All the three exemplars Exhibits 4, 5 and 6 relate to land along with structures thereon, and, therefore, for the purpose of the present case where the value of the land is being computed, they would not furnish adequate and wholly reliable criteria. It would be preferable to take into consideration the sale deed by which land alone was transferred and from this stand-point Exhibit 8, the sale deed dated 4-3-1949 may be regarded as relevant. It must, however, be borne in mind that the subject-matter of that sale-deed was a small plot and it is common knowledge that a small plot fetches higher price than a larger plot. It must, however, be borne in mind that the subject-matter of that sale-deed was a small plot and it is common knowledge that a small plot fetches higher price than a larger plot. Consequently even though Exhibit 8 may be preferred to Exhibit 4 and may be of greater assistance in determining the market-value in the present case, yet the plot of land with which we are dealing was a much larger plot and, hence, the rate culled out from Exhibit 8 cannot be implicitly adopted. Taking into consideration all the relevant factors we are of the opinion that a fair and reasonable market price of the land in dispute would be available if Rs. 1500/- per Biswa is accepted as the criterion. Calculated at this rate the market value of the land acquired comes to Rs. 1,14,000/-. 6. Learned counsel for the appellant also attacked the finding of the Tribunal with regard to the damages awarded for severance but he was unable to point out any material on the basis of which the damages on account of severance awarded by the Tribunal could be held to be inadequate. The finding, therefore, does not call for any interference. 7. Lastly, the learned counsel for the appellant strenuously urged that in the present case the appellant was entitled to the benefit of clause 2 of Section 23 (1) of the Land Acquisition Act and the Tribunal should have awarded damages sustained by the claimant on account of possession being taken of the trees and flower .plants. According to his submission the .essence of awarding damages is to place the claimant in the same position .and restore to him the benefit which he would have normally enjoyed, if he had not been deprived of such trees etc. Therefore, the profit or the income from the trees about which evidence had been adduced would alone furnish the correct criterion for assessing the damages. Clause 2 of Section 23 (1) of the Land Acquisition Act reads: "23 (1) In determining the amount of compensation to be awarded for land acquired under this Act the Court shall take into consideration - ........................... Clause 2 of Section 23 (1) of the Land Acquisition Act reads: "23 (1) In determining the amount of compensation to be awarded for land acquired under this Act the Court shall take into consideration - ........................... Secondly, the damage sustained by the person interested, by reason of the taking of any standing crops or trees which may be on the land at the time of the Collectors taking possession thereof." The standing crops or the trees on the date of declaration are to be included in the general award as things attached to the earth vide Sections 3 (a) and 19 (a) of the Land Acquisition Act, It cannot be disputed that the criterion for compensation under this clause is the damage and not the market-value. Under clause firstly of Section 23 (1) of the Land Acquisition Act the market-value of the land is ascertained with reference to the date of the notification under Section 4 of the Land Acquisition Act but in clause 'secondly of Section 23 (1) of the Land Acquisition Act the relevant date for assessing the damage is the date of taking possession. The market value of the property acquired is more or less a fixed quantity which has to be determined as existing on a specified date viz., the date of notification under Section 4 but over and above that, the property may have certain collateral advantages and the benefits accruing from the same may have supervened after the declaration under Section 4 or may have later crystallised and become visible. The Legislature has made a provision for awarding additional amount claimed for loss suffered. In certain cases such as those of unripe crops this provision would embrace within its scope such condition as may not be immediately apparent but may be reasonably anticipated. The Legislature has made a provision for awarding additional amount claimed for loss suffered. In certain cases such as those of unripe crops this provision would embrace within its scope such condition as may not be immediately apparent but may be reasonably anticipated. The underlying principle of this provision was emphasised by Boys, J. in Collector of Bareilly v. Sultan Ahmad Khan, AIR 1926 All 689 in these words: " "Damage", if any, for taking trees under Section 23 (1), secondly would similarly appear as an item altogether independent of the market value of the land and of the "value" of the trees as part of the market value of the land." After tracing the legislative history of the law of the Land Acquisition the principle embodied in the second clause of Section 23 (1) was elucidated by the Calcutta High Court in Bhusan Chandra Samanta v. The Secretary of State for India in Council (1936) 40 Cal WN 1034 in these words : - "By the previous enactment, Act X of 1870, market value of the property acquired at the time of the award made by the Collector had to be given; under the present law, Act 1 of 1894, market value at the time of the declaration has to be awarded. To give full effect to the policy of the law, the change made in the previous law required the addition of a provision like the one contained in Section 23 (1) 'secondly'......................." The rationale of the same provision was examined in Deyaprakash' Trikambhai v. Special Land Acquisition Officer, Baroda, AIR 1969 Guj 34 . The following comments under the heading "Clause Secondly" are noteworthy: - "Compensation when paid under the clause, is damage and not market-value, and the measure of damage is the loss which owner suffers by being deprived of the harvest and not the price (if any) of the unripe crop. In other words, the amount would be about the same as the value of the ripe-crop when reaped in due course. In practice, however, it is usual to postpone, wherever possible, taking possession of lands with standing crops till they are harvested, so that the crops may be saved," "It is pertinent to note that the criterion for compensation is the damage and not the market value. In practice, however, it is usual to postpone, wherever possible, taking possession of lands with standing crops till they are harvested, so that the crops may be saved," "It is pertinent to note that the criterion for compensation is the damage and not the market value. The actual loss to the owner, by depriving him of the harvest, is the basis, and not the price of the unripe crops." We have already observed in the earlier part of this judgment that where ostensibly an orchard is really not a source of income but is only for purpose of embellishment of a nearby structure and the claimant is entitled to have the land itself treated as a potential building site, the value of the trees and plants will be determined not on the basis of the profits or income derived from them but on prices alone. We have also pointed out that where this principle is departed from it will result in duplication of values and certainly the claimant is not entitled to have it both ways. Therefore, the only damage which the claimant could have suffered was the value as arrived at by calculating the price of timber and plants. We have dealt with this point at length earlier and referred to the list furnished by the appellant. The total value calculated in this manner amounted to Rs. 2940/- and we accepted the same figure as allowed by the Land Acquisition Officer. 8. As regards the value of the constructions standing on the land, the amount awarded by the Tribunal has not been challenged. 9. According to our finding the value of the land would work out at Rupees 1,14,000/- but since the same has been valued by the appellant in the memo of appeal at Rs. 55,500/- only, we re- duce the compensation for the land to Rs. 55,500/-. Land ... Rs. 1,03,000.00 Constructions ... Rs. 20,642.25 Trees ... Rs. 2,940.00 Damages for severance ... Rs. 2,000.00 Rs. 1,28,582.25 The claimant has already been awarded and has received a sum of Rs. 47,500/- as compensation for the land. He would, therefore, be entitled to Rs. 55,500/-only as additional amount. 10. This appeal is, therefore, allowed with costs and the decree of the court below is modified. The appellant will be entitled to a sum of Rs. 2,000.00 Rs. 1,28,582.25 The claimant has already been awarded and has received a sum of Rs. 47,500/- as compensation for the land. He would, therefore, be entitled to Rs. 55,500/-only as additional amount. 10. This appeal is, therefore, allowed with costs and the decree of the court below is modified. The appellant will be entitled to a sum of Rs. 55,500/- as additional compensation together with 15 per cent as solatium on the amount enhanced by this Court. The appellant will also be entitled to interest at 6 per cent per annum on the amount enhanced with effect from the date of possession.