IMPORTANT POINT
Yield of trees multiplied by an appropriate multiplier for its capitalization after taking into consideration all relevant factors would be the basis for determining the compensation for cutting of trees by the Appropriate Authority of India.

JUDGMENT

Shah, J.-Leave granted.

2. Appellant-Airports Authority of India has challenged the judgment and order dated 27-7-2000 passed by the High Court of Guwahati at Agartala in First Appeal No. 68 of 1995, whereby the Court determined compensation for cutting of trees by applying the multiplier of 18 years yield.

3. It is the contention of the learned counsel for the appellant that the impugned order is against the law laid down by this Court in State of Haryana v. Gurcharan Singh and Another [1995 Suppl (2) SCC 637] wherein this Court has held that under no circumstances, the multiplier should be more than 8 years when the market value is determined on the basis of the yield from the trees or plantation.

4. She has also submitted that as such the entire award of compensation to the respondent is also illegal because by Notification dated 15th March, 1979 issued by the Government of India, Ministry of Tourism and Civil Aviation, New Delhi in exercise of powers conferred under Section 9A of the Aircraft Act, 1934 (22 of 1934), respondents were directed that no building or structure should be constructed or erected or no tree should be planted on the land specified therein which included the land belonging to the claimants. She further pointed out that after issuance of the said Notification, compensation was paid for cutting the trees which were existing on the land. Thereafter, similar Notification was issued on 5th January, 1988 for the same purpose and the claimants again claimed compensation for cutting of trees planted by them on the specified land. In our view, the aforesaid submission does not require any consideration as it was neither raised before the High Court nor it was contended before the Arbitrator appointed by the Central Government. Further, this Court has issued notice confined to the question-whether multiplier applied by the impugned order is justified in view of the decision in Gurcharan Singh s case (supra). Hence, this submission is not required to be dealt with in this appeal.

5. Therefore, only question is-whether the multiplier applied by the High Court was justified? It is true that in the decision rendered by this Court in Gurcharan Singh s case, it has been held that in catena of decisions rendered by this Court when the market value is determined on the basis of the yield from the trees or plantation, 8 years multiplier would be appropriate multiplier.

6. As against this, learned counsel for the respondents-claimants submitted that this case does not call for any interference because small amount is awarded to the claimants and in number of such cases, this Court has refused to interfere. He referred to various decisions rendered by this Court including State of Madras v. Rev. Brother Joseph [AIR 1973 SC 2463].

7. Before dealing with the contentions raised by the learned counsel for the parties, we would reiterate that capitalisation means the method used to convert future benefits to present value by discounting such future benefit at an appropriate rate of return. It is the process of converting the net income of a property into its equivalent capital value. While capitalising the income, future income, its duration along with risk factory is to be taken into consideration. Capitalising rate means a designated rate of return which coverts net future benefits to capital value.

8. It is settled law that in evaluating the market value of the acquired property, namely, land and building or the land with fruit bearing trees standing thereon, value of both is to be determined not as separate units but as one unit. Therefore, it would be open to the Land Acquisition Officer or the Court either to assess the land with all its advantages and fix the market value thereof on the basis of comparable sale instances. In case where comparable sale instances are not available and where there is reliable and acceptable evidence on record of the annual income, market value could be assessed and determined on the ba