1972 Supreme(Mad) 16

Madras High Court
RAMAPRASADA RAO,RAMANUJAM
A.Gopalakrishna Naidu - Appellant
Versus
District Revenue Officer - Respondent
Decided On : 01/11/1972

The capitalisation method of valuation cannot be adopted for fixing compensation when there are comparable sale deeds available in respect of similar lands in the locality.

Headnote:

MADRAS REQUISITIONING AND ACQUISITION OF IMMOVABLE PROPERTY ACT, 1956 - SECTIONS 8(2), 8(3) - COMPENSATION FOR LANDS ACQUIRED - VALUATION - CAPITALISATION OF INCOME - COMPARABLE SALE DEEDS - DRY LANDS - WET LANDS - RECURRING COMPENSATION FOR REQUISITION - SOLATIUM.

Fact of the Case:

An extent of 41.97 acres of land was requisitioned under the Madras Requisitioning and Acquisition of Immovable Property Act, 1956, for establishing a State Seed Farm. The lands were taken possession of by the State and subsequently acquired. The competent authority grouped the lands into three categories: wet lands, manavari lands, and dry lands, and awarded compensation accordingly. The appellant, the owner of the lands, challenged the valuation fixed by the competent authority and the arbitrator, claiming a higher compensation based on the capitalisation of income.

Finding of the Court:

The court held that the capitalisation method of valuation could not be adopted as there were comparable sale deeds available in respect of similar lands in the locality. The court also held that all the lands which were used for raising wet crops should be treated alike, irrespective of their registration as wet, manavari, or dry. The court further held that the value of the dry lands should be based on the sale deed of a nearby land with similar advantages. The court also upheld the compensation awarded for the wells and structures acquired.

Issues: 1. Whether the capitalisation method of valuation could be adopted for fixing compensation when there are comparable sale deeds available. 2. Whether all the lands used for raising wet crops should be treated alike, irrespective of their registration as wet, manavari, or dry. 3. Whether the value of the dry lands should be based on the sale deed of a nearby land with similar advantages. 4. Whether the compensation awarded for the wells and structures acquired was fair and reasonable. 5. Whether the appellant was entitled to solatium of 15% along with the compensation.

Ratio Decidendi: 1. The court held that the capitalisation method of valuation could not be adopted as there were comparable sale deeds available in respect of similar lands in the locality. The court relied on the provisions of Sections 8(2) and 8(3) of the Madras Act 42 of 1956, which provide that the compensation for lands requisitioned under Section 8(2) is based on the rent that would have been payable if the property had been leased out, while the compensation for lands acquired under Section 8(3) is based on the market value of the property. 2. The court held that all the lands which were used for raising wet crops should be treated alike, irrespective of their registration as wet, manavari, or dry. The court reasoned that the mere fact that some of the lands were registered as wet and others as manavary or dry did not make the actual user of the lands as irrigated lands different from wet lands. 3. The court held that the value of the dry lands should be based on the sale deed of a nearby land with similar advantages. The court reasoned that the dry lands formed part of a compact block along with the wet lands of the appellant, and a portion of the same had already been converted as wet with the help of the well water. The court also considered the evidence that commercial crops like ground-nuts were being raised in these dry lands. 4. The court held that the compensation awarded for the wells and structures acquired was fair and reasonable. The court accepted the estimate made by the Union Engineer based on Government schedule rates, as against the estimated value given by the appellant's witness. 5. The court held that the appellant was not entitled to solatium of 15% along with the compensation. The court reasoned that the provisions of the Madras Requisitioning and Acquisition of Immovable Property Act, 1956, were silent on the question of solatium, and it was not possible to grant solatium on the analogy of the Land Acquisition Act.

Final Decision: The court partly allowed the appellant's appeal and dismissed the State's appeal. The appellant was awarded compensation at the rate of Rs. 50 per cent for the wet lands and Rs. 20 per cent for the dry lands, along with interest at 4% per annum. The court also upheld the compensation awarded for the wells and structures acquired and denied the appellant's claim for solatium.