The main legal point established in the judgment is the application of the capitalisation method for valuation, considering the prevailing rate of interest, safety and liquidity of investments, and the risk factors associated with investment in rubber plantation.

1. The State of Kerala, being aggrieved by the enhancement in compensation awarded by the Land Acquisition Court, Trichur in LAR No. 136.74, has filed this appeal. The claimants have preferred cross-objection.

2.937.9137/40 acres (379.5615 hectares) of land in various survey numbers in Vellayanikkara and Madakkathara villages were required by the State for the purpose of Kerala Agricultural University, the dates of publication of notification under S.3(1) of the Kerala Land Acquisition Act (for short'the Act') being 14-7-1970 and 21-7-1970. Possession was taken on 1-5-1973. The land belonged to A party. It was in the possession of B party as lessee. The Land Acquisition Officer in his Award fixed compensation payable to A party at Rs.19,16,385.08 and payable to B party at Rs.9,58,192.54. At the instance of the claimants reference was made to the Land Acquisition Court under S.20 of the Act. The claimants contended that valuation made by the Land Acquisition Officer was too low.

3. Out of the land acquired, 794.09 41/80 acres consisted of yielding rubber plantation with 83551 rubber trees. The remaining extent of 143.82 88/80 acres contained 21152 immature plants, said to have been planted in the year 1965-66. The claimants put forward a claim that the land should be valued at Rs.9,500/- per acre. According to them, yielding rubber trees would be worth Rs.30/- per tree and the immature plants would be worth Rs.15/- per plant. The Land Acquisition Officer assessed the value of the yielding plantation on capitalisation basis. In assessing the market value of the yielding plantation he estimated the yield to be 190 kgs. per acre (as against the claim of 250 kg. per acre), the expenses as Rs.620/- per acre (as against the claim of Rs.550/- per acre), the price of rubber as Rs.4.75 per kg. (as against the claim of Rs.5.25 per kg.) and the multiplier as 81/3 times (as against the claim of 30 times). He valued the immature rubber plants at Rs.3/- per tree as against the claim of Rs.15/- per tree.

4. The Land Acquisition Court fixed the yield as 190 kgs. per acre (that was agreed to by both the parties), the price as 5.20 per kg., expenses as Rs.550/- per acre and multiplier as 12 times. The value of the immature plants was fixed at Rs.10/- per plant. The court fixed net income at Rs.438/- per acre for the yielding plantation. Consequently, compensation for the yielding plantation was fixed at Rs.41,73,737.04 and the value of the immature plants was fixed at Rs.3 55,344.12. The valuation of other improvements was fixed at Rs.4.34,850.41. The total value fixed was Rs.49,63,951.57. Deducting the amount due to the Government, the balance payable was determined as Rs.49,52,289.18. The court also awarded 15 per cent as solatium. It was found that the sum of Rs.331/- was additionally due from the claimants and deducting the same, the balance compensation amount including solatium was fixed at Rs.56.94,801.50. A sum of Rs.28,74,577.62 had already been paid. The balance due as enhanced compensation was fixed at Rs.28,20,223.88, out of which A party was entitled to get Rs.18,80,149.25 and the B party Rs.9,40,074.63. Interest was awarded at 4 percent per annum from the date of taking possession. Both the parties were directed to bear their costs.

5. The learned Additional Advocate General who argued for the appellant confined his arguments to the following heads:

a) Price of the rubber adopted

b) Expenses assessed

c) Multiplier to be adopted for capitalisation

d) Value of immature rubber plants.

According to the claimants the court below under-estimated the price of rubber and the multiplier. These aspects are covered by the points already mentioned.

6. It is said that the statutory Rubber Board issues periodical notifications regarding price of rubber. But there is no dispute that the price thus published is only the floor price at which the various official agencies would be prepared to buy rubber, in case the growers would need such outlet.