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1990 DIGILAW 317 (KER)

Bhavani Ramalakshmy v. State of Kerala

1990-08-08

PADMANABHAN

body1990
Judgment :- In this appeal filed by the claimant, enhancement is claimed in land value and value of building. After elaborate arguments and perusal of papers, it was felt that the enhanced land value is reasonable and it requires no interference and if at all interference is required, it is only in the value of the building. Valuation of the building was on the basis of the schedule of rates of the Public Works Department in existence before 1-7-1980. For claiming enhanced land value, court fee was also not paid. 2. Under S.17 of the Kerala Land Acquisition Act, the valuation statement regarding buildings prepared by the Land Acquisition Officer will have to be approved by the District Collector, when the Collector making the award is not the District Collector, and by the Board of Revenue, when the Collector making the award is the District Collector. In this case, the award was not made by the District Collector and, therefore, the authority competent to approve the valuation statement was the District Collector. In that capacity, the appellant complained to the District Collector that the valuation is not proper. The District Collector contacted the concerned Executive Engineer. By Ext.A2 letter dated 29-7-1981, the Executive Engineer informed the District Collector that the revised P W.D. schedule of rates from 1-7-1980 was in force at the time when the valuation was made and, therefore, revised valuation is being undertaken for the building and a fresh certificate will be issued. The District Collector informed the appellant accordingly by Ext.A4 letter on 1-4-1982. Even before that date, the award was passed on 18-3-1981 and, therefore, no revision in the valuation was made. These facts were brought to the notive of the trial court by the appellant. 3. After possession was taken, the Government took steps to demolish the building. Appellant then filed O.S.No.449 of 1981 against the State for injunction. In that suit, a Commissioner was deputed to assess the value of the building and he submitted the original of Ext. A3 report. In Ext. A3, the building was valued at Rs.48, 523/-. Appellant further wanted to call for a revised valuation statement. He cited the Commissioner as a witness and wanted to examine him. But, unfortunately, the Commissioner died. Therefore, he could not be examined. The injunction suit happened to be dismissed as in fructuous. A3 report. In Ext. A3, the building was valued at Rs.48, 523/-. Appellant further wanted to call for a revised valuation statement. He cited the Commissioner as a witness and wanted to examine him. But, unfortunately, the Commissioner died. Therefore, he could not be examined. The injunction suit happened to be dismissed as in fructuous. Under these circumstances, the trial court refused to act on Ext.A3 report. That is how the claim for enhancement in the value of the building was not considered. 4. The claimant in a land acquisition reference is in the position of a plaintiff in a civil suit, who has to show that the price offered for his land in the award is inadequate on the basis of the materials produced in court. The materials produced and proved by the opposite side also could be taken into account for the purpose, as held in Chimanlal v. Special Land Acquisition Officer, Poona (AIR 1988 S.C.1652 ). But the trial court proceeded as if it was sitting in appeal over the decision of the Land Acquisition Officer. The position is that a reference for enhancement of compensation is not an appeal against the award. The court cannot take into account the materials relied on by the Land Acquisition Officer in the award unless they are produced and proved before the court. The award of the Land Acquisition Officer is not to be treated as a judgment of the trial court open or exposed to challenge before the court hearing the reference. It is merely an offer made by the Land Acquisition Officer and the materials utilized by him for making his valuation cannot be utilized by the court unless produced and proved before it. It is not the function of the court to sit in appeal against the award, approve or disapprove its reasons, or correct its errors or affirm, modify or reverse the conclusions reached by the Land Acquisition Officer, as if it was an appellate court. The reference court has to treat the reference as an original proceeding before it and determine the market value afresh on the basis of the materials produced before it. 5. The reference court has to treat the reference as an original proceeding before it and determine the market value afresh on the basis of the materials produced before it. 5. So far as this case is concerned, the only material that could be and was produced by the appellant before the reference court for the purpose of challenging the valuation made by the Land Acquisition Officer was the report of the Commissioner marked as Ext.A3. The trial court found that report to be unacceptable for that purpose. The appellant, therefore, wanted a re-valuation. That request was not granted. Thereafter, the trial court proceeded as if the valuation made by the Land Acquisition Officer does not require interference on the ground that it was not proved to be incorrect. The appellant was not given an opportunity of having a fresh valuation of the building as she wanted. That means, she was denied an opportunity of placing sufficient materials before court in the discharge of her burden. 6. What is relevant for the purpose of valuing the building is not the schedule of rates of the Public Works Department. The claimant is entitled to get the market value of the building as on the relevant date. Where the subject to be valued is a building apart from the site, the principle of fixing value by ascertaining the cost of reproducing the building at the relevant 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 is quite a well known and a recognized method of valuing buildings for the Purpose of compensation. That method is not in any way affected by the land acquisition. This principle was laid down by the Privy Council in Harichand v. Secretary of State (AIR 1939P.C. 235) and Secretary of State v. VarainKhanna (AIR 1942P.C. 35). These two decisions of the Privy Council were considered and approved by the Supreme Court in State of Kerala v C.L Palu (1979 (3) S.C.C. 780). This principle was laid down by the Privy Council in Harichand v. Secretary of State (AIR 1939P.C. 235) and Secretary of State v. VarainKhanna (AIR 1942P.C. 35). These two decisions of the Privy Council were considered and approved by the Supreme Court in State of Kerala v C.L Palu (1979 (3) S.C.C. 780). So also, a Division Bench of the Travancore Cochin High Court in Abdulrahiman Kunju v. State (1954 KLT 798) considered the Privy Council decisions and held that in order to arrive at the present value of the building, the proper course would be to find out the cost of constructing a building of that type at the time of acquisition and then deduct from it the depreciation value on account of the age of the building and also the amount required for the repairs to keep the building in a fit condition. The natural way to look at the matter would be to find out the approximate number of years and deduct the quotient as depreciation for each year. In the case of first class buildings, no depreciation is to be deducted for the first five years and then 5/6% 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, 5/6% depreciation has to be deducted for each year. 7. It, therefore, follows that the appellant is entitled to have the building revalued. For that purpose, she did not get an opportunity. Therefore, the request was that the case maybe remanded to the trial court in order to enable her to have the building re-valued. I think that the request is only legitimate and it has to be allowed. Subject to the finding that the land value does not require interference, the appeal is partly allowed and the judgment of the trial court is vacated, so far as the value of the building is concerned. The case is remanded for decision afresh after giving the appellant an opportunity to have the building re-valued. If necessary, the parties will be permitted to adduce further evidence also. Thereafter, the trial court will proceed to dispose of the matter afresh as expeditiously as possible in accordance with law, subject to what is stated above. The office will transmit the records to the trial court forthwith and the parties will appear before the court below on 8-10-1990. If necessary, the parties will be permitted to adduce further evidence also. Thereafter, the trial court will proceed to dispose of the matter afresh as expeditiously as possible in accordance with law, subject to what is stated above. The office will transmit the records to the trial court forthwith and the parties will appear before the court below on 8-10-1990. Since it appears that the valuation of the appeal is only the difference in the value of building, thee n tire court fee paid on the memorandum of appeal will be refunded to her. I made no order as to costs.