Judgement

SHAH, J. : On December, 8, 1954, the Government of Madras issued a notification under S. 4 of the Land Acquisition Act notifying for acquisition for a public purpose, viz. widening the Madras-Calicut Road at Palyam -seven units of land with buildings. One of the units was T. S. No. 298/2 admeasuring 3911sq. ft. together with a building standing thereon used for business purposes. Notification under S. 6 of the Act was issued on December 12, 1954, and possession of the land was taken soon thereafter.

2. The Receiver of Patinhare Kovilakam Estate held T. S. NO. 298/2 in Jenmi right. The respondent in this appeal held in that land the rights of a Kanomdar under a deed dated March 27, 1954. The buildings constructed on the land belonged to the respondent and were let out to tenants at an aggregate monthly rent of Rs 332.50. The Land Acquisition Officer determined the compensation payable to the persons interested at the rate of Rs 10,000/ per acre for the land, and for the houses standing thereon "at their break-up value" In a reference at the instance of the respondent under S. 18 of the Land Acquisition Act (in which the Receiver of Patinhare Kovilakam Estate did not join) the Subordinate Judge. Kozhikode, was of the view that the method adopted by the Land Acquisition Officer for determining compensation by separately valuing the lands as garden lands and the break-up value of the houses was "manifestly unjust and improper". In his view, each unit had to be valued as a composite property. He then proceeded to adopt the method of determining the market value by capitalizing the net rent received from the unit, and taking into consideration the return from gilt-edged securities at 3 1/2 per cent. at the relevant date, the learned Judge awarded compensation for the unit in which the respondent was interested at 35 times the net annual rental.

3. Against the award of the Subordinate Judge, the State of Kerala appealed to the High Court of Kerala at Erankulam. The High Court determined compensation by multiplying the net rent by 33 1/3 times that being in their view the true multiple derived from the return based on the current return from gilt-edged securities. Against the award made by the High Court, this appeal has been preferred by the State of Kerala with certificate under Art. 133 (1) (a) of the Constitution.

4. Two questions were urged in support of the appeal :

(1) that the Receiver having accepted the award of the Land Acquisition Officer, the respondent could claim compensation only for the right which he had in the land and the buildings and the method adopted by the Land Acquisition Officer was in the circumstances the only appropriate method; and

(2) that the rate of capitalization was unduly high.

In our judgment, there is no force in either of the contentions. When land - which expression includes by S. 3 (a) of the Act benefits to arise out of land and things attached to the earth or fastened to anything attached to the earth - is notified for acquisition, it is notified as a single unit whatever may be the interests which the owners thereof may have therein. The purpose of acquisition is to acquire all interests which clog the right of the Government to full ownership of the land, i. e. when land is notified for acquisition, the Government expresses its desire to acquire all outstanding interests collectively. That is clear from the scheme of the Land Acquisition Act. Under S. 11 of the Land Acquisition Act, the Collector is required to enquire into the objections raised by the persons interested in the land and into the value of the lard at the date of the publication of the notification under S. 4, sub-s. (1), and into the respective interests of the persons claiming the compensation, and then to make an award determining-(i) the true area of the land; (ii) the compensation which in his opinion should be allowed for the land; and (iii) the apportionment of the compensation among all the persons known or believ