LAND ACQUISITION OFFICER, A.P. versus KAMANDANA RAMAKRISHNA RAO AND ANR.

These two appeals are directed against a common order dated 11.11.1998 passed by the High Court of Judicature, Andhra Pradesh at Hyderabad in AS No.1999/96 and AS No. 31/ 98. By the impugned order, the High Court enhanced the amount of compensation to Rs. 22,000/- per acre as against Rs. 6,000/- awarded by the learned Subordinate Judge, Eluru, West Godavari District.

p. 329, margin E

These appeals are taken up and heard together and are decided by this common judgment.

p. 329, margin F

The facts, in brief, are that the State of Andhra Pradesh issued a Notification dated 03.01.1980 under Section 4(1) of the Land Acquisition Act, 1894 (hereinafter referred to as 'the Act') for the acquisition of lands admeasuring Ac 385.46 in Borrampalem village of Chintalapudi Taluk for foreshore submersion of Y erakalva Reservoir Scheme under Vengalaraya Sagar Project. Land of the claimants-respondents to the extent of Ac 9.53 each was acquired for the said purpose. After completion of the proceedings under the Act and after observing all formalities, the Land Acquisition Officer awarded compensation at the rate of Rs. I 026/- per acre to the claimantsrespondents vide his Award dated 18.05.1984. The claimants-respondents received the amount of compensation under protest and submitted separate applications under Section 18 of the Act requesting the Land Acquisition Officer to refer the matter to the Court. The matter was accordingly referred to the Court of the learned Subordinate Judge, Eluru. The Reference Court observed that the Land Acquisition Officer had not considered the potentiality of the acquired land with other lands of similar quality and potentiality. However, taking into consideration the trend in the increase of the prices of the lands, compensation is awarded at the rate of Rs. 300/- per acre on yield basis of the crops and multiplier of 20 years capitalization was applied and an amount of Rs.6000/per acre has been awarded to the claimants-respondents. The Court also found that there were no fruit-bearing trees on the acquired lands.

pp. 329–330, margin G

The claimants-respondents, being still dissatisfied with the enhancement of the amount of compensation awarded by the Reference Court, filed two separate appeals under Section 54 of the Act before the High Court.

p. 330, margin D

The High Court has come to the conclusion that the Reference Court did not adopt the correct procedure in determining the compensation; as the lands are situated in the important area of West Godavari District, for which the compensation ought to have been not less than Rs. 25,000/- per acre. The High Court observed that for similar lands acquired for the same purpose prior to the issue of the Notification under Section 4 of the Act in the present cases, the compensation was fixed at Rs. 20,000/- per acre. If that is taken into consideration as the basis for giving I 0% escalation, the compensation will be at Rs. 24,000/- per acre. However, the High Court awarded the amount of compensation at the rate of Rs. 22,000/- per acre to the claimants-respondents, besides other benefits as prescribed under the law.

p. 330, margin D

The Land Acquisition Officer, being aggrieved against the order of the High Court, has filed these appeals.

p. 330, margin G

We have heard learned counsel for the parties. The learned counsel for the appellant raised two contentions. Firstly, he submitted that the High Court has committed an error of law in not deducting amount towards cost of cultivation and no reasons whatsoever are given by the High order for enhancement of the compensation from Rs. 6,000/- Rs. 22,000/- per acre. Secondly, it was contended that the Reference erroneously applied multiplier of20 for capitalizing the income. Such should not be more than I 0. On both these grounds, therefore, according the learned counsel for the appellant, the impugned order is liable aside and the order passed by the Land Acquisition Officer deserves restored.

pp. 330–331, margin G

Learned counsel for the claimants-respondents, on the submitted that having considered the rival contentions of the keeping in view the evidence on record, the High Court awarded reasonable amount of compensation to the claimants-respondents. appeals, therefore, deserve to be dismissed.

p. 331, margin B

Having given our careful consideration to the submissions learned counsel for the parties and after having gone through the record, and having considered the relev:::nt decisions of this Court, the view that the appeals deserve to be dismissed.

p. 331, margin C

So far as the first point is concerned, the learned counsel appellant re lie~ upon a decision of this Court in State of Gujarat Rana, (1987] 2 SCC 693. In that case, compensation was awarded claimant on yield basis. There was no' sufficient evidence as to from agriculture and the Reference Court noticed that the witnesses exaggerated the yield. In the circumstances, the Reference Court determined value after deducting 1/3rd towards cultivation expenses and compensation on that basis. The High Court dismissed the confirmed the order. The State approached this Court. Allowing and reducing the amount of compensation, this Court observed common knowledge that expenditure is involved in raising and harvesting crop and on an average, 50% of the value of the crop realized would towards cultivation expenses. Deduction of 1/3rd, in the circumstances, improper in determining the compensation of the land on the basis The Court also applied multiplier of I 0.

p. 331, margin D

Learned counsel for the appellant submitted that in cases, no deduction whatsoever has been made by the Reference Court the High Court. It was submitted that only on the basis of yield income, the Reference Court granted compensation to the claimants, was enhanced by the High Court without giving any plausible reasons. He, therefore, submitted that the Award deserves

pp. 331–332, margin G

Learned counsel for the claimants-respondents, submitted that the decision in Rama Rana's case (supra) the facts of these cases. In the present matters, upon some acquired land cashew nut bearing trees were planted and land, different variety of crops were grown. It is in the evidence were sufficiently old and grown up and were giving fruits deposed by the claimants-respondents in their evidence. evidence on record to that effect. In the circumstances, there of deduction of any amount towards expenses and the order High Court cannot be said to be incorrect.

p. 332, margin A

In the facts and circumstances, in our opinion, in Rama Rana's case (supra) would not strictly apply in inasmuch as in fruit growing trees the expenses would not by this Court. Moreover, the High Court also considered that the claimants-respondents would be entitled to much Rs. 25,000/- per acre on yield-basis but has fixed the market at the rate of Rs 22,000/- per acre. It, therefore, cannot deducting the amount of expenses for cultivation, the committed any illegality. The first contention, therefore, present appeals, is rejected.

p. 332, margin C

Let us now consider the second point. This Court Acquisition Officer, Bangalore v. T. Adinarayan Setty, [1959] 404 : AIR (1959) SC 429 held that in awarding compensation the Court has to ascertain market value of the land Notification under Section 4( I) of the Act. It was observed several methods of valuation, such as (I) opinion of experts, within a reasonable time in bona fide transactions of purchase acquired or the lands adjacent to the lands acquired and advantages, and (3) a number of years' purchase of the actual prospective profits of the land acquired.

p. 332, margin E

In Smt. Tribeni Devi v. Collector of Ranchi, [1972] Court reiterated the methods of valuation and also stated do not preclude the Court from taking into consideration other the requirement being always to arrive at the nearest correct was also indicated that in arriving at a reasonably correct market value, it may be necessary to take even two or all of those methods into account since the exact valuation is not always possible as no two lands would be the same either in respect of the situation or the extent or the potentiality nor would it be possible in all cases to have reliable material from which such valuation can be accurately determined.

pp. 332–333, margin G

In Special Land Acquisition, Davangere v. P. Veerabhadarappa and Ors., [ 1984] 2 SCC 120, this Court held that when capitalization method for valuation is applied, proper multiplier should be 10. Similarly, in Special Land Acquisition Officer v. Virupax Shankar Nadagouda, (1996] 6 SCC 124, relying on P. Veerabhadarappa 's case, this Court determined compensation on the basis of IO years' multiplier. In Krishi Utpadan Mandi Samiti v. Malik Sartaj Wali Khan and Anr., (200 I] 10 SCC 660, this Court held that computation of compensation for determination of market value may be carried out on yield basis and multiplier of 10 should be applied. Since multiplier )f20 was applied by the High Court it was set aside by this Court by reducing the amount of compensation.

p. 333, margin B

Again in a recent decision in Assistant Commissioner-cum-Land Acquisition Officer, Bel/ary v. S.T. Pompanna Setty, (2005) 9 SCC 662 it is reiterated that where compensation is awarded on yield basis, multiplier of 10 is considered proper and appropriate.

p. 333, margin D

Applying the ratio of the decisions of this Court in the above-said cases, we are of the view that the High Court committed no error of law or any perversity in awarding the amount of compensation at the rate of Rs. 22,000/- per acre to the claimants-respondents. It is no doubt true that the High Court has not given adequate and proper reasons in its order, but the pith and substance of the order cannot be found to be faulty.

p. 333, margin E

The claimants-respondents have placed on record Ex. A-2, a certified copy of the Agreement to sell and Ex. A-3, the Registration Extract of the Sale Deed in pursuance to Ex. A-2. PW-2, the purchaser of the land, has purchased one acre of land for Rs. 19,800/- from Durga Prasad, a resident of Mathannagudem village. PW-I has placed on record a copy of the Award in O.P. No. 88 of 1982 (Ex. A-4), whereby and whereunder the Reference Court enhanced the amount of compensation at the rate of Rs. 22,000/- per acre for the land in Mathannagudem village, which was acquired for the same purpose. A copy of the Award in O.P. Nos. 70of1982 and 71of1982, marked as Ex. A-5, would reveal that the Reference Court awarded a sum of Rs. 22,000/- per acre for the lands acquired for the same purpose in village Borrampalem. It has come in the evidence of PW-I that against the said Award the State Government preferred an appeal, which came to be dismissed by the High Court on 10.02.1989, a certified copy whereof was placed on record as Ex. A-6 in support of the claims by the claimants-respondents. The claimantsrespondents made the claim of their lands at the rate of Rs. 40,000/- per acre. The Reference Court has noticed in its order that village Mathannagudem, village Tada vi and village Borrampalem in which the lands of the claimantsrespondents were acquired are quite adjacent to each other. The Land Acquisition Officer himself awarded compensation at the rate of Rs. 12,000/- per acre for the lands covered by S. No. 98 of village Borrampalem vide Award Ex. A-5. The Reference Court has rejected the claim raised by the claimants-respondents for compensation of cashewnut plants planted in an area to an extent of Ac. 4.50 cents in the acquired lands, merely on the ground that no trees were found in existence on the lands at the time of the Notification under Section 4 of the Act or at the time of passing of the Award. The High Court has not recorded any finding in respect of the cashew nut plants grown by the claimants-respondents on some portions of the acquired land.

pp. 333–334, margin F

The Land Acquisition Officer in his order has recorded that rain-fed crops such as horsegram, bobbara, cholum were grown by the claimantsrespondents in the acquired land No. F. 1384 to 1388 and in F. 1388, cashew nut plants were raised in some parts of the land to the extent of about Ac. 9.00 cents. Therefore, the finding of the Reference Court that there were no cashew nut trees found on the acquired land is factually incorrect and cannot be sustained. It has come in the evidence of the claimants-respondents led before the Reference Court that they had raised maize crop at one time, which would have fetched Rs. 4,000 to Rs. 5,000 per acre to them and other crops jowar and bobbara in the next season. The computation of compensation for detennination of market valile may be carried out on yield basis and multiplier of 20 adopted by the Reference Court in the cases on ha:id is on the higher side and contrary to the well-settled proposition of law as laid down by this Court. However, this Court is not precluded from taking into consideration other circumstances such as, the potentiality and utility of the land acquired and awarding just compensation to the claimants who are deprived of their lands and other property. Keeping in view the facts and circumstances of these cases, as discussed above, we are of the view that the amount of 335 -'{ compensation awarded by the High Court at the rate of Rs. 22,000/- per acre A to the claimants-respondents is adequate, just and reasonable and cannot be said to be excessive or unwarranted.

pp. 334–335, margin D

For the foregoing reasons, the appeals are, accordingly, dismissed. The parties shall bear their own costs. SKS. Appeals dismissed.

p. 335