1964 Supreme(Mad) 68

Madras High Court
RAMAPRASADA RAO,RAMANUJAM
Ramaswami Naidu - Appellant
Versus
State of Madras, represented by the Collector of Coimbatore - Respondent
Decided On : 02/13/1964

The method of valuation adopted by the District Judge, which was based on capitalisation of the net income, was correct in the absence of any contemporary sale deed in respect of similar land.

Headnote:

MADRAS REQUISITIONING AND ACQUISITION OF IMMOVEABLE PROPERTY ACT, 1956 - SECTION 8 - COMPENSATION - VALUATION OF LANDS - CAPITALISATION OF INCOME - MULTIPLE - SOLATIUM - INTEREST.

Fact of the Case:

The Government acquired 49.51 acres of land belonging to the claimants for running a State Seed Farm under S. 8(1) (b) of the Madras Requisitioning and Acquisition of Immoveable Property Act, 1956. The Collector classified the lands into two groups for purposes of valuation: 32.73 acres as garden lands and 16.78 acres as rain-fed dry lands. The claimants challenged the valuation and the matter was referred to the District Judge, Coimbatore, who was appointed Arbitrator under the provisions of the said Act. The District Judge agreed with the claimants that except a small extent of 1.20 acres, the rest of the lands acquired were garden lands and awarded compensation on that basis. The State filed an appeal against the classification of the lands and the value fixed for the garden lands as well as dry lands. The State also questioned the claimants' entitlement to any solatium or interest on the compensation.

Finding of the Court:

The court held that the classification of the lands made by the District Judge was correct. The court also held that the method of valuation adopted by the District Judge, which was based on capitalisation of the net income, was correct. However, the court found that the multiple of 25 years' purchase adopted by the District Judge was too high and reduced it to 25 years' purchase for garden lands and 27½ years' purchase for dry lands. The court also held that the claimants were not entitled to any solatium in addition to the compensation fixed under Section 8(3)(a) of the Act. The court further held that the claimants were entitled to interest at the rate of 4% on the enhanced compensation fixed by the court.

Issues: 1. Whether the classification of the lands made by the District Judge was correct? 2. Whether the method of valuation adopted by the District Judge was correct? 3. Whether the multiple of 25 years' purchase adopted by the District Judge was too high? 4. Whether the claimants were entitled to any solatium in addition to the compensation fixed under Section 8(3)(a) of the Act? 5. Whether the claimants were entitled to interest on the enhanced compensation fixed by the court?

Ratio Decidendi: 1. The classification of the lands made by the District Judge was correct as it was based on ample and reliable oral evidence corroborated by documentary evidence. 2. The method of valuation adopted by the District Judge, which was based on capitalisation of the net income, was correct as it was the most satisfactory method of valuation in the absence of any contemporary sale deed in respect of similar land. 3. The multiple of 25 years' purchase adopted by the District Judge was too high and was reduced to 25 years' purchase for garden lands and 27½ years' purchase for dry lands, taking into account the nature of the lands, the locality in which they were situated, and all the surrounding circumstances. 4. The claimants were not entitled to any solatium in addition to the compensation fixed under Section 8(3)(a) of the Act as the discretion given to the arbitrator under Section 8(1)(e) is to be controlled by the provisions in Section 8(3)(a) and the fairness and reasonableness of the compensation fixed by the Arbitrator under Section 8(1)(e) has to be viewed in the light of Section 8(3). 5. The claimants were entitled to interest at the rate of 4% on the enhanced compensation fixed by the court as the power to award interest on equitable grounds or under any other provisions of the law is expressly saved by the proviso to Section 1 of the Interest Act.

Final Decision: Both the appeals were allowed in part. The compensation was recomputed as per the court's directions. Each party was directed to bear its own costs.