The main legal point established in the judgment is the correct method of capitalizing the rental value of the acquired property and the discretion of the court in awarding costs under Section 27(2) of the Act.

King, J.

1. The subject-matter of this appeal is a small plot of land in Calicut measuring 2 cents which has been acquired for the purpose of a telephone exchange. Notification was issued in 1935. The evidence shows that at the time of the notification a building was standing upon the site which had originally consisted of four rooms on the ground floor and three rooms in the upper storey. In 1932, however, one of the rooms on the ground floor had been destroyed, and the whole of the upper storey had also been destroyed on account, as the claimant puts it, of a portion of the Anjuman building falling upon it. The owner of this property claimed Rs. 22,000 for it. The Land Acquisition Officer awarded Rs. 2,700. He arrived at this figure by calculating the annual rental actually derived from the property (it should be mentioned here that the rooms in the lower storey were let out as shops at Rs. 15 a month). Deducting three months rent as necessary expenditure for repairs and the payment of tax to the Municipality, the remaining nine months rent comes to Rs. 135. This sum capitalised at 20 years purchase amounts to Rs. 2,700. The claimant was dissatisfied with this award and the matter was referred to the learned Subordinate Judge of Calicut. The learned Judge held that by the expenditure of a small sum of money some use could have been made of the original fourth room on the ground floor and an additional rent of Re. 1 per month obtained. He calculated therefore the net rent after deducting necessary expenses at Rs. 144 and capitalised this sum at 33-1/3 years purchase instead of 20 years, following the decision of a Bench of this Court in Collector of Kistna v. Zamindar of Challapalli AIR1938Mad33 . The amount of Rs. 2,700 was thus increased to Rs. 4,800. Against this decision the Government has appealed and the claimant has filed a memorandum of cross objections. It should also be mentioned at this stage that under Section 27 (2) of the Act the Subordinate Judge in enhancing the award of the Collector ordered that no costs should be paid by the Collector to the claimant.

2. The first question which arises in this appeal is whether the learned Subordinate Judge was correct in adopting 33-l/3 years purchase in capitalising the rental value of the property. We are of opinion that he was correct. It is clearly laid down in the case already cited that it has long been the practice of the Courts in this Presidency to calculate the profits from any form of landed property as equal to the profits made by investing money in gilt-edged securities. It is no doubt argued on behalf of the Government in this appeal that a purchaser of house property in a Municipality like Calicut would expect to get more for his money than if he had invested it in Government securities. But on this point there is no evidence available in the proceedings before the learned Subordinate Judge, and we have not been shown any authority in which any distinction of this kind has been drawn between sites in a Municipality and sites in the country. We are of opinion that the learned Subordinate Judge was right in following the authority of Collector of Kistna v. Zamindar of Challapalli AIR1938Mad33 , and in view of the fact that there was evidence before him that the rate of interest obtainable on Government securities in 1935 was only 3 per cent. the method of capitalisation by taking 33-1/3 years purchase is mathematically correct.

3. The other question raised in the appeal is one of costs. It is argued that the learned Subordinate Judge, acting under Section 27 and finding that the claimant had made an extravagant claim would have better exercised his discretion not only by refusing costs to the claimant but by ordering the claimant to pay part of the Collectors costs. We see no good reason for interfering with the discretion exercised by the learned Subordinate Judge, and particularly so in view of the manner in which we proceed to dispose of the memorandum