Norman Macleod, C.J.
1. This is an appeal from the decision of Mr. Justice Kajiji in Land Acquisition Reference No. 8 of 1920. The land in reference was notified for acquisition on the 16th May 1916, it admeasured 3521-4/9 square yards, and was situated on the Golangi Hill. The photograph of the model at p. 11, Part III, gives us the best idea of the land and its surroundings. Before the Collector it was valued on what I may call a quarrying basis, that is to say, the total cubic contents of stone and Moorum were calculated and a particular value was given to them, written back according to the period estimated to be taken up for quarrying. Nothing was allowed for the land after the quarrying was finished. The total value arrived at by this method was for all interests Rs. 26,454.88. As the land is Toka the amount of the Government interest was deducted. Then to what was left was added fifteen per cent, for compulsory acquisition plus Rs. 500 for compensation for severance awarded to the appellant. The total for all the claim was Rs. 21,744.
2. The learned Judge after considering all the evidence before him with regard to the basis of valuation, came to the conclusion that if all the materials that were placed before him had been placed before the Land Acquisition Officer, the Land Acquisition Officer would not have valued the land on the quarrying basis. But the learned Judge thought; himself bound to hold that the land should be valued on the quarrying basis because that was the basis which was followed according to the evidence on both sides before the Land Acquisition Officer. We think the learned Judge was wrong in valuing the land on the quarrying basis when on the evidence before him he was of opinion that the land could not be used as a quarry. Even then on the evidence the learned Judge valuing the land on the basis that it would be used as a quarry valued all interests at Rs. 41,611, but valued the Government interest on a different basis to that on which it had been valued by the Collector, with the result that the amount awarded to the claimant was Rs, 37,365 plus Rs. 5,604-12-0, fifteen per cent, for compulsory acquisition.
3. Two questions arise: (1) what was the proper market value of all interests in the land to be acquired? and (2) what should be deducted for the value of the Government interest as the land was held on Toka tenure? It seems to have been admitted, at any rate for the purposes of argument before us, that the land would be worth in the market Rs. 7-8-0 a square yard if it was used for building purposes. There is no evidence whatever that a purchaser would have offered more than Rs. 7-8-0 a square yard for this land. No evidence was called on either side of any purchases of the land in the neighbourhood, and we have to rely mainly on expert evidence as to what a purchaser would be likely to give for this land. No doubt one is entitled to consider that a purchaser looking at the land, and wanting to buy it, would take into consideration the fact that it rises in places to a height of about eighty feet above the ordinary level, and that if he did not wish to build on the surface, he could get some value out of the Moorum and stone beneath the surface. But all those calculations of the value of the cubic contents of the land above the ordinary level plus the deferred value of the land on the level when the material above it has been removed, appear to me to afford very little assistance to a Court in arriving as to what should be the market value of the land at the date of the notification because no evidence has been adduced from which the Court could hold that a purchaser would enter into all those elaborate calculations and base his offer for the land on the certainty that they would be realised. In all my experience I have never come across a purchaser who said he made hypothetical calculations of this character before he purchased; they are used by experts to justify an opinion which is as a rule equally valuable and less assailable without them; and the general fallacy underlying all these hypothetical calculations is this, that they result in the total profit a purchaser may expect on the most favourable estimates, which is a different thing from what a purchaser would give on an estimation of the profit which he would be likely to make, taking all risks into consideration.
4. Now the learned Judge in considering the evidence with regard to the quarrying potentialities of the land seemed to place far more reliance on the evidence for Government than on the evidence for the claimant. [His Lordship after discussing the evidence of the witnesses proceeded:-]
5. I think that Kajiji J. was quite right in thinking the evidence showed that the land should not be valued on a quarrying basis. It all amounts to this. There is Moorum and stone underneath the land. Whether it would pay a purchaser to extract it, would be purely problematical, and it has not been shown that a purchaser would be prepared to pay anything more than Rs. 7-8-0 for the land taking all its potentialities, whether for building or for quarrying purposes, into consideration. We think, therefore, that the Collector's estimate of the value of the land was correct, and that the value of all interests taken on the basis of his award should be Rs. 26,454.88 plus Rs. 500 compensation for severance.
6. Then the next question is as to the valuation of the Government interest, and that is a question of considerable difficulty. There always must be a difficulty in apportioning the total value, arrived at after valuing the land as free-hold, between the various parties who have interests in the land, because if an attempt is made to value each of those interests according to its market value, the total value of those interests valued in that way would be most unlikely to correspond with the market value of the land as a freehold. Now this land is Toka land, the occupant of which has to pay at present an annual rent of Rs. 18-5-5. In 1929-30 Government have a right to increase the assessment, and they could levy a rate of four per cent, on the value of the land. It has been generally in such cases taken as the basis for the prospective assessment that the land will be of the same value in 1929 as at the date of acquisition. The rent, therefore, the Government could charge in 1929-30 might amount to Rs, 1,056, A method which has been generally used to arrive at the present value of that rent is to capitalize at a certain rate and then write it back to the date of acquisition, the rate of capitalisation and the rate of writing back being the same. This is purely an artificial method of arriving at the value of the Government interest, and if it were possible to get evidence of what is paid in the market for Toka land as compared with freehold, the Court would be in a much better position to arrive at the difference which represents the present value of the Government interest. However we have not got that evidence. We, therefore, have to arrive at the value of the Government interest as best we can. I do not think that a universal rule can be laid down applicable to all cases. If the land is valued at the present time at a very low rate and owing to its situation it can be estimated that in 1929 it will be much more valuable so as to be able to bear an assessment of four per cent, on the present value, no doubt that could betaken as a basis for valuing the Government interest. But in this particular case we have to consider whether in 1929 this land could possibly bear a rent of Rs. 1,056 a year. It seems to me the claimant's argument that we cannot calculate that the assessment would be raised higher than two per cent, in 1929 requires to be considered. Looking at the situation of the land, whether we consider that in 1929 all the land would be reduced to the ordinary level by quarrying, or whether we consider the land will remain as it is, if the Government rent is to be taken at Rs. 1,056, there would be practically nothing left for the occupant, as he could hardly expect to get a higher rent from a tenant if he let it out either on a building lease or for any other purpose. I quite admit we are in a region of pure speculation, but I think we ought to do that which is most fair to the claimant. We should not expect that the assessment would be increased to a higher rate than two per cent, in 1929, but at the same time we think that the rate on which it was capitalised, namely, eight per cent., was wrong, and that it should be capitalised at six per cent, and written back at the same rate. The result is that the value of the Government interest is reduced by one half on the amount of the award of the Collector.
7. The award of Mr. Justice Kajiji is set aside and the Collector's award is varied by apportioning to Government Rs. 8991 instead of Rs. 7982. The claimant will get Rs. 3991 more plus fifteen per cent, and interest at six per cent, on the whole from the date of Collector's taking possession up to this day. The Government is entitled to withdraw such amount as has been paid into Court in excess as a result of Mr. Justice Kujiji's award. Government to get seven-eighth of their costs throughout.
8. I concur.