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Government Vs. the Century Spinning and Manufacturing Co., Ltd. - Court Judgment

LegalCrystal Citation
SubjectProperty;Civil
CourtMumbai
Decided On
Case NumberO.C.J. Appeal No. 9 of 1941
Judge
Reported in(1942)44BOMLR57
AppellantGovernment
RespondentThe Century Spinning and Manufacturing Co., Ltd.
DispositionAppeal allowed
Excerpt:
land acquisition act (i of 1894), section 23-land-compulsory acquisition-compensation-market value of land-mode of fixing market value-land subject to easement or restrictive covenants-valuation of easement-valuation of restrictive covenants-freehold land-leasehold land-differential value of- potential value-value of severance of land-land acquired to be valued as a whole.;the market value of the land referred to in section 23 of the land acquisition act, 1894, means the market value of the concrete piece of land to which the notification issued under section 4 of the act applies, and not separate interests in it. the normal method contemplated by the act for assessing compensation is to take the market value of the land, and then to apportion it amongst the different interests. the act,.....john beaumont, kt., c.j.1. this is an appeal from a decision of mr., justice b. j. wadia awarding compensation on a reference under the land acquisition act referred to him under section 18 of the act.2. the land to be acquired has an area of 16, 585 square yards, and it has a frontage of 473 feet to a sixty feet road, and a frontage of 518 feet to a forty feet road. it was conveyed to the claimants by two conveyances, one made in 1924 and the other in 1928, by the bombay improvement trust, who have now been succeeded by the bombay municipality. the land was conveyed as freehold, but subject under both conveyances to certain restrictive covenants. in the first conveyance the user was confined to residential purposes, offices and such class of shops only as were not prohibited by the.....
Judgment:

John Beaumont, Kt., C.J.

1. This is an appeal from a decision of Mr., Justice B. J. Wadia awarding compensation on a reference under the Land Acquisition Act referred to him under Section 18 of the Act.

2. The land to be acquired has an area of 16, 585 square yards, and it has a frontage of 473 feet to a sixty feet road, and a frontage of 518 feet to a forty feet road. It was conveyed to the claimants by two conveyances, one made in 1924 and the other in 1928, by the Bombay Improvement Trust, who have now been succeeded by the Bombay Municipality. The land was conveyed as freehold, but subject under both conveyances to certain restrictive covenants. In the first conveyance the user was confined to residential purposes, offices and such class of shops only as were not prohibited by the grantors; and under the later conveyance, which included the larger part of the land, the user was restricted to shops, chawls, offices, residences, go-downs and a Wireless Broadcasting Station. Under neither grant was there any power to use as a factory. The building was restricted to ground-floor and three upper floors, and certain spaces were to be left unbuilt upon.

3. In 1928 a lease was granted to the predecessors of the Government of India for a Broadcasting Station of plot A, which is shown on plan No. 5, which is the main plan showing the site in question and instances of other sales, and an option was granted over plot B, the remainder of the land to be acquired, and the capitalized value on the basis of which the lease and option were granted was Rs. 10 per square yard. But, of course, it has to be remembered that' that has little application to the value of the freehold. A man . may well be prepared to pay rent on a short lease based on a particular capital value, without being prepared to pay that capital value if he were buying the freehold. The lease expires in 1942.

4. A notification under Section 4 of the Land Acquisition Act was given on January 15, 1938. The Land Acquisition Officer divided the land to be acquired into plot A, which is included in the lease, and plot B over which the option was given by the lease. He valued plot A at Rs. 10 per square yard and plot B at Rs. 6-8-0 per square yard, the average being Rs. 8-8-0 per square yard. He allowed nothing for severance, but allowed a small sum for injurious affection. He also awarded a nominal sum of Rs. 100 to the Municipality in respect of their interest in the restrictive covenants.

5. On a reference to this Court the learned Judge treated the whole plot as one, and fixed the market value at Rs. 14-8-0 per square yard. He made his award on the footing that the claimants possessed an unrestricted freehold interest. He also gave Re. 1-4-0 per square yard for damage for severance and injurious affection. I agree with the learned Judge in thinking that there is no good reason for dividing this piece of land into two plots. It is all one compact area, and both plots have a frontage on the sixty feet road; and, in my opinion, there is no good reason1 for valuing] plot A on a much higher basis than plot B. I think one ought to value the whole plot together. But on the question whether the plot should be valued, and compensation fixed, on the basis that it is not subject to any restrictions, although in fact it is so subject, I am quite unable to agree with the learned Judge's view.

6. Sir Jamshedji Kanga has argued at great length and with an enthusiasm, worthy, I venture to think, of a better cause, that his clients are entitled to be paid compensation under the Act for something which they do not possess, have never possessed, and are unable to sell. The argument is this. It is said that under Section 23 of the Land Acquisition Act the Court has to fix the market value of the land, that is, of all interests in the land, and to base the total compensation on that value, and then to apportion that compensation between parties who have established their claim to be interested in the land. There are in this case only two parties, the claimants and the Municipality. The Municipality were awarded by the Land Acquisition Officer Rs. 100 in respect of the value of the benefit of these restrictive covenants, and they have not appealed. Therefore, the argument is, the whole balance of the compensation must go to the claimants, because there is nobody else, and if the Court increases the compensation, either they get the whole amount, or possibly the Municipality may be entitled to their proportion of the increase: but as their proportion is only one in 1665, the concession is not of any great value. It seems to me that the fallacy in the argument lies in the assumption that the value of an easement or restrictive covenant to the person entitled thereto is the same as the amount by which the existence of that easement or covenant depreciates the value of the land subject thereto.

7. No doubt, the general rule under the Land Acquisition Act is that the market value of the land must be taken into consideration. What Section 23 of the Act says is that in determining the amount of compensation to be awarded for land acquired under the Act, the Court shall take into consideration six matters, the first of which is the market value of the land at the date of the publication of the notification under Section 4. I think the market value of the land means the market value of the concrete piece of land to which the notification applies, and not separate interests in it. The question whether the correct procedure under the Act is to value the land including all interests therein, and then apportion the amount between the several interests, or to value the interests and ascertain the total by addition, was discussed in Bombay Improvement Trust v. Jalbhoy (1909) I.L.R. 33 Bom. 483 11 Bom. L.R. 674 S.C. and Mr. Justice Batchelor said that the method contemplated by the Land Acquisition Act for assessing compensation is that of ascertaining first the market value of the land as if all separate interests combined to sell, and then of apportioning that value among the persons interested. On the other hand, Mr. Justice Heaton expressed the view that the method of ascertaining compensation by valuing each interest in the land separately was not excluded by the Act. I agree that the normal method contemplated by the Act is to take the market value of the land, and then to apportion that amongst the different interests; but I also agree with Mr. Justice Heaton that the Act does not lay down any hard and fast rule, and that in special cases it may be desirable to adopt a different method.

8. There seems to be a dearth of authority as to acquisition of land subject to an easement, and for the moment I will deal with this case, as if it was one of easement, and not of covenant.

9. Under Section 3 of the Land Acquisition Act, 'land' is defined as including benefits to arise out of land, and 'person interested' as including all persons claiming an interest in compensation to be made on account of the acquisition of land under the Act, and a person is to be deemed to be interested in land if he is interested in an easement affecting the land. Where Government is seeking to acquire land, which is subject to an easement, in my opinion it has got to pay compensation to the land owner, that is, the owner of the servient tenement, and it has also got to pay compensation to the owner of the easement; and it is obvious that the value of the easement bears no relation to the value of the servient tenement. One may suppose a case of a factory enjoying a right of way to a railway siding, where the right of way is of incalculable value to the owner of the factory, and it is none the less valuable because the right of way runs over a piece of waste land which has no great market value. Or take the converse case. You may have a right of way going right across a piece of land so as seriously to affect its development as a building site, and depreciation in the value of the servient tenement due to that easement may be much more than the value of the easement to the owner of the dominant tenement. Whether you treat compensation to be paid to the owner of the easement as coming under the fourth head in Section 23 as damage sustained by the person interested by reason of the acquisition injuriously affecting his other property, or whether you treat the acquisition of an easement as not being one of the matters expressly to be taken into account under Section 23, seems to me to be immaterial. Section 23 is not in terms exhaustive. It only says that in determining the amount of compensation to be awarded for land acquired under the Act, the Court shall take certain matters into consideration; it does not direct that no other matter may be taken into account, and in special cases I have no doubt that the Court may take other matters into consideration. If the owner of an easement claims compensation for the acquisition of his easement, it seems to me perfectly clear that under the Act he is entitled to compensation, and that compensation will be the value of the easement to him. If it happens that the easement is of no great value, then Government may acquire both the servient tenement and the easement at a price which is less than the market value of the land free from the easement, which is substantially the case here. But all that means is that the value of the whole is greater than the combined value of the parts, and the increased value arising from the union of interests necessarily belongs to Government in whose hands the union takes place.

10. Now, in this particular case we are dealing with restrictive covenants which are not an easement, but have many features analogous to an easement. The Land Acquisition Officer assumed for the purposes of this case that the Municipality, as the person entitled to the benefit of the covenants, was a party interested within the meaning of the Act, but he considered that their interest was not seriously affected, and, as I have said, he awarded them only a nominal sum of Rs. 100. From that part of the award there is no appeal, and we are not, therefore, concerned to consider whether the Municipality were entitled to make any claim, or, if they were, whether the amount awarded to them is inadequate. But it is perfectly plain to my mind that restrictions of the nature imposed upon the land to be acquired by the conveyances of 1924 and 1928 must prejudicially affect the value of the land. It is quite impossible to say that the existence of those covenants, although they may be of no benefit to the Municipality, depreciates the land by only a nominal sum. The argument of the claimants would really produce this amazing result that, if a man had acquired land at a low price, because it was subject to a covenant not to build upon it, nevertheless if the land was acquired under the Land Acquisition Act, he would be entitled to claim the market value, although that market value be based on its value as a building site. Such a proposition is preposterous. There is nothing in the Land Acquisition Act to suggest that any person interested is to be paid for anything except the interest which he possesses, and as the claimants in this case only possess an interest in the land subject to restrictive covenants, they can only be paid compensation for such land. The learned Judge deducted from the sum awarded to the claimants the Rs. 100 paid to the Municipality, and that seems to me to show a misconception of the true position.

11. The Land Acquisition Officer based his valuation on a considerable number of instances of sales in the neighborhood; but before the learned Judge, and in this Court, it was admitted that only three instances had any relevance,-Instances Nos. 5, 6 and 10. The learned Judge discussed Instances Nos. 5 and 10, but came to the conclusion that the only instance on which he could properly base his valuation was Instance No. 6. All these instances, 1 may say, were not of sales, but of leases by the Municipality for 999 years subject to restrictions more or less onerous.

12. In the case of Instance No. 6 the capital value on which the lease was based was Rs. 13-2-0 per square yard, and the learned Judge took that as the basis of his award. He then made certain additions, which I will discuss presently, and made a deduction in respect of superior position, and by those means he arrived at a valuation of Rs. 14-8-0 per square yard for the land to be acquired, to which, of course, the statutory fifteen per cent, has to be added. I think that all the additions and subtractions made by the learned Judge, as he would probably admit, were largely speculative, but that criticism may be made upon almost all awards under the Act, including that which we are making. But, in my judgment, it is not correct to take Instance No. 6 as the basis of the award, and for this reason, that Instance No. 6, on which the Glaxo factory has been erected, and which contains 10,000 square yards, has frontages not only on the sixty feet road and the forty feet mad on which the land to be acquired has frontages, but also on the one hundred feet road, which is the Worli main road. Now, the Worli Road is not only a main road, but it is common knowledge that it is the main artery by which all motor traffic, or, at any rate, fast motor traffic, leaves Bombay, because the road connects up with the road to Thana, which divides into the road which goes to Poona and South India and the road which goes to Nasik and North India. A factory erected on that road is bound to possess considerable value from the advertisement point of view, because motorists passing by that road will see the name of the factory, and may carry that name in their memories. If I had to make a guess, without the assistance of any evidence, I should say that a site to be used for commercial purposes on a main road of that character would be worth something like twice as much as a site not on the main road. When one looks at Instances Nos, 5 and 10, it seems to me that that guess is a fairly accurate one, because one finds that Instance No. 10, which is a conveniently shaped piece of land abutting on the north side of the land to be acquired and having a frontage to the forty feet road and also to another forty feet road, at the back, with an area of 11,674 square yards, was leased on a capital basis of Rs. 64-6 per square yard, that is, less than half the rate at which the Glaxo Factory was leased. Instance No. 5 is not such a good example. It is situate also on the forty feet road; but it is of an inconvenient shape, and was leased at a rate of Rs. 5-10-3 per square yard. I do not think that that instance helps very much; but I think that Instance No. 10 does help, and I think that instance, taken in conjunction with Instance No. 6, shows that a large value is attributable to frontage on the main Worli Road. Taking these instances, and assuming the tenure of, and the covenants affecting, the land to be acquired to be the same as in these instances, I should be disposed to put the value of the land to be acquired at Rs. 8-8-0 per square yard, that is, increasing the value of Instance No. 10 by rather over Rs. 2 on account of the frontage to the sixty feet road, on which the land to be acquired abuts. But then one also has to consider that Instance No. 10 is, like Instance No. 6, leasehold land for 999 years, and I think that increased value must be allowed on account of the land to be acquired being of freehold tenure. The expert called by the claimants advanced the opinion, based on some instances of sales of small plots at Dadar, that freeholds will always fetch twenty-five per cent. more than leaseholds; but it is quite impossible, in my opinion, to generalize in that way. The difference between a freehold piece of land, and a piece of land leased for 999 years at a nominal rent, and with no restrictive covenants, would be purely sentimental. But where you have restrictive covenants, experience shows that as time passes, and lands change hands, it becomes difficult to enforce covenants between freeholders, whilst it is not difficult to enforce covenants against lessees, I think covenants are more detrimental in the case of leaseholds than in the case of freeholds, and I think also that, on the whole, the covenants are rather more severe in the case of these two leasehold properties than in the case of the land to be acquired. In one point the covenants are more severe in the case of the land to be acquired, because there is no right to build factories, and the evidence is that factories are springing up in this locality; but, as against that, in Instance No. 10 only one floor is allowed above the ground-floor, and in Instance No. 6 only two upper floors are allowed, and the spaces to be left open are rather greater in the case of the leasehold properties.

13. Giving the matter the best consideration I can, I would take the value based on the instances at Rs. 8-8-0, and I would add Rs. 2 for the advantage of freehold tenure and the less onerous covenants. That reaches a figure of Rs. 10-8-0 perl square yard, which is Rs. 2 more than the average allowed by the Land Acquisition Officer, and is rather more than the basis on which the leases of the lands were granted.

14. There are two matters in respect of which Mr. Justice B. J. Wadia gave compensation, to which I must refer. He added, I may say, twenty-five per cent, to the Rs. 13-2-0, the rate for the Glaxo Factory, in respect of the covenants and the tenure of the land, and what he called 'the reflex influence of the rise in the land values in its near vicinity.' In point of fact Instance No. 6 took place about a month later, and Instance No. 10 about eleven months later than the notification, and, therefore, if the reflex value due to rise in land is td be taken into account, the evidence being that land was rising in value, I should have thought a reduction ought to be made, and not an addition. However, I have given my views as to the matters covered by this twenty-five per cent.

15. Then the learned Judge allowed Re. 1-1-0 per square yard for the cost of filling the land and construction of the building, because the evidence showed that the land forming Instance No. 6 was not a levelled site, and had a hollow in the middle, and it was assumed that it would cost Re. 1-1-0-to level the site. But there is no evidence to justify that. It was admitted by the claimants' expert that normally the Bombay Municipality level a site before selling, and if they did not level this site, it was probably by arrangement with the lessee. If the claimants wanted to establish any claim in this connection, they should have called someone connected with the Glaxo Factory to produce figures, and show how much they had to spend by reason of the unlevelled nature of the surface. We cannot assume that they had to spend money merely because their expert said that a levelled surface fetches a higher price normally than an unlevelled surface. It is a question on which evidence could have been, but has not been, called.

16. Then the learned Judge also added four annas per square yard to the basic rate of Instance No. 6 because of the existence of the Broadcasting Station on a portion of the land to be acquired. What it really comes to is that ha was prepared to allow four annas per square yard to the claimants because of the existence of the Broadcasting Station erected by the Government of India, which prima facie seems an entirely unwarranted allowance. The Broadcasting buildings belong to the Government of India, and not to the claimants, who spent nothing whatever upon them; but the suggestion is that as the Government of India, if they did not acquire the freehold, would at the expiration of their lease be put to a fairly heavy expense in removing their buildings and materials, therefore, they must be regarded as likely to offer for the land more, by the amount of this expenditure, than anyone else, and that is an addition which can be made to the market value of the land. The argument is based on a dictum of the Privy Council in Vyricherla Narayana Gajapatiraju v. The Revenue Divisional Officer, Vizagapaam (1939) L.R. 66 IndAp 104 : removed from its context. Their Lordships, after pointing out that the value of the land is not to be estimated at its value to the purchaser, observed (P. 114):

But this does not mean that the fact that some particular purchaser might desire the land more than others is to be disregarded.

17. It is on that dictum that the learned Judge has added this four annas per square yard, because he says that he cannot disregard the probable or possible desires of the lessees. But the Privy Council in that case were dealing with the potential value of the lands to be acquired, and they held that the fact that the potential value was likely to affect only a single purchaser, who might be the person acquiring the land under the Act, did not prevent that potential value from being taken into account in fixing the market value. But in this case there is no question of any potential value of the land. There are no amenities of this land which make it specially suitable as a Broadcasting Station. What the claimants are seeking to take into account is a possible difficulty in which the lessees might find themselves; that they will either have to buy the freehold, or to pay for the removal of their building. The argument would seem to involve that in every case in which the land acquired is subject to a lease for a short term, under which the lessee is entitled to remove his building, the market value of the land must be increased by the amount of the expense to which the lessee would be put. In my opinion, there is no justification whatever for any such claim. We cannot assume that if this land had come into the market, the Government of India would have bought it in order to save the expense of removal. I think, therefore, that none of the special amounts, which the learned Judge allowed, can be admitted.

18. Then the only other question is as to severance or injurious affection. I think it would be probably more accurate to say 'severance' in this case. The Land Acquisition Officer allowed nothing for severance, and only a small sum for injurious affection. The learned Judge allowed Re. 1-4-0 per square yard under those two heads.

19. Now, when one looks at the map, it shows that the portion of the land left with the claimants is going to be a difficult piece of land to deal with. The area, which remains with the claimants, is rather more than half the total area which they possess; that is to say, the area left with them is rather more than the area acquired. But the land acquired includes the whole frontage to the forty feet road, and about three-fourths of the total frontage to the sixty feet road. So that, the claimants are left with an area of over 18,000 square yards and a frontage of only about 130 feet to the sixty feet road, and none to the forty feet road. It is obvious that the land, which is left with them, is not worth as much as it would be if it could be dealt with as part of the whole site. But the Land Acquisition Officer pointed out that the amount at which compensation is assessed is largely based on the value of the frontage to the sixty feet road and the forty feet road, and he considered that if you pay compensation by way of severance, because the frontage is reduced, you are really paying twice over for frontage. The learned Judge has not taken that argument into consideration, and there is no doubt some force in it. But at the same time it does not follow that compensation allowed on the basis that the land acquired has a certain frontage will cover the whole of the damage occasioned to the remainder of the land by reduction of the frontage. Suppose, for example, Government were acquiring the rest of the frontage, that is to say, the whole frontage to the sixty feet road, so that the land not acquired had no frontage at all, it is obvious that the loss in value to the land retained would be more than would be allowed for the frontage acquired. I think, having regard to the large proportion of frontage being acquired in this case, and the relatively small amount of frontage which is left with the claimants, that they are entitled to some compensation in respect of severance. I would deduct four annas from the amount allowed by the learned Judge in respect of the argument advanced above, and would allow Re. 1, per square yard as compensation for severance.

20. In the result, therefore, the valuation of Rs. 14-8-0 will be reduced to Rs. 10-8-0 per square yard. That, of course, will be subject to the statutory increase of fifteen per cent.; and the damage by severance will be reduced from Re. 1-4-0 to Re. 1 per square yard.

Sen, J.

1. I agree. I am also of opinion that the claimants are not entitled to the full market value, in the sense of the value of the land as an unencumbered freehold, minus the amount awarded to the Municipality. What they hold is. the land subject to certain restricted covenants, and there can be no doubt that if they had purchased the land free from those covenants they would have had to pay more than what they actually did. There is no reason why they should get the value for something which they did not possess.

2. As under Section 16 of the Land Acquisition Act the land on acquisition vests absolutely in Government free from all encumbrances, there is no doubt that what the expression 'market value' in Section 23 means is the value of the land as an unencumbered freehold inclusive of all interests in it, as held in Bombay Improvement Trust v. Jalbhoy (1909) I.L.R. 33 Bom. L.R. 483 which follows the earlier decision in Collector of Belgaum v. Bhimrao : (1908)10BOMLR657 . But I do not think that the Court is bound in every case to proceed to embark on a theoretical inquiry as to what price the land would fetch in the market if it were offered for sale free from all encumbrances or restrictive covenants. In certain cases it may be a more convenient method, first, to value each of the existing interests separately, and then to find out the total value by adding such values together. As held by Heaton J. in Bombay Improvement Trust v. Jalbhoy this method does not appear to be excluded by the decision in Collector of Belgaum v. Bhimrao, and it may in suitable cases provide a legitimate means of arriving at the market value.

3. In the present case the only parties whose interests are involved are the claimants and the Bombay Municipality, who have succeeded to the Bombay Improvement Trust in whose interest the restrictive covenants were inserted in the conveyances of 1924 and 1928. The Bombay Municipality have been content to accept a compensation of Rs. 100 for the loss of their interests. That does not appear to be a good ground why the claimants should claim the full market value of the land on the basis of its being an unencumbered freehold less this sum of Rs. 100. The difference between the value of the land as an unencumbered freehold and its value as subject to the present covenants would in the present case certainly be over a hundred rupees. It is difficult to say that the value to the covenantee or a dominant owner of the benefit of a covenant or an easement would in every case be equal to the difference between the market value of the land without the covenant or easement and its value subject to the latter. It seems to me that in the present case the market value can be effectively determined by adding together the market value of what the claimants hold, i.e. the land subject to the present restrictive covenants, and what has been awarded to the Municipality in respect of their claim. To seek to determine the market value on the basis that the land is an unrestricted freehold would be a more theoretical and speculative procedure; and in the present case it does not seem to me that such a procedure is necessary.

4. To arrive at the market value of what the claimants are parting with, we may take as our guide, first, the leases of 1928 and 1933, taking into consideration the possible rise in the land values between those years and the date of the notification, and, secondly, the Instances Nos. 5, 6 and 10, taking into consideration the differences in tenure, the covenants, and situation, inclusive of advantages and disadvantages such as frontage and the width and nature of the adjoining roads. There is no evidence as to any change in the land values between the date of the notification under Section 4, viz. January 15, 1938, and the dates of the leases in the Instances Nos. 5, 6 and 10, which are January, March and December of 1938, respectively. The prices paid for the lands under acquisition in 1924 and 1928 do not appear to be a satisfactory guide in the present case, because the price paid in 1924 was based on the price paid in 1919 which was in the boom period, and the price paid in 1928 was less than Rs. 4 per square yard when the prices had fallen abnormally.

5. Taking first the case of the two leases, it is to be remembered that they are short-term leases, and, therefore, would not be such a good guide as a long-term lease would have been. The lease of 1928 with respect to plot No. A was for five years from March, 1927, and the rent fixed was about Rs. 5,000 a year, with an option to the lessees to extend the period of the lease by a further period of ten years. This figure works out on a five per cent, basis to Rs. 10 per square yard as the value of the land. In the lease of 1933 the period of the lease was two years from April 1, 1932, with an option to extend the period of the lease by a further period of seven years, the rent being Rs. 4,500 a year, corresponding to the value of Rs. 9 per square yard. There was a covenant in both these leases that the adjacent plot B would be also available to the lessees on the same terms; and that would show that no distinction was drawn between the plots A and B as regards their value. The reduction made in the second lease does not appear to have been due to any depression in the market, but appears to have been made at the request of the Broadcasting Company. Since 1933 there appears to have been a rise in the land values. According to the Land Acquisition Officer the rise was about fifty per cent., while Mr. Divecha, the expert examined by the claimants, has contended that the rise was as large as one hundred per cent. But the parties to the leases must be supposed to have been aware at least in 1933 of the trend of the prices, and as the rent under a short-term lease would not ordinarily be lower than the rent under a long-term lease, I should think that if the Court had to rely on these leases alone without any instance being available, it would not be justified in assessing the value of the land to be acquired at a higher figure than Rs. 10-8-0 per square yard, i.e. allowing for a rise of five per cent, over the figure deducible from a lease that might remain in force up to the year 1941.

6. Taking now the instances, it seems to me that Instance No. 10 is a far more suitable guide than Instance No. 6 on which the learned Judge has based his calculations and arguments, Instance No. 5 not being of any great relevancy in the present case. Instance No. 6 has a very special situation value due to the fact that it has three frontages and stands on an important road one hundred feet wide, which no doubt gives to the occupants, the owners of the Glaxo Factory, a very good publicity value for which they may be expected to have paid a handsome additional price. That this is so is shown by the fact that whereas there is very little difference between the amounts paid for Instances Nos. 5 and 6, both being in the neighborhood of Rs. 6, the price calculated on the basis of the lease with respect to Instance No. 6 comes to over Rs. 13. In Instance No. 10 the covenants are on the whole certainly appreciably more onerous than those applying to the land under acquisition. In the first place, about twenty-three per cent, of the area of Instance No. 10 has to be kept open, i.e. to be left free from buildings, whereas in the land under acquisition the area required to be kept free from buildings is not more than ten per cent. Another important point to be noticed is that whereas in the case of the land under acquisition the claimants have been allowed to build the ground floor and three upper floors, in the case of Instance No. 10 not more than one upper floor besides the ground-floor can be built, and the outhouses are limited to one floor only. The number of restrictions imposed on the lessee in the case of Instance No. 10 is far more than in the case of the land under acquisition. The situation of Instance No. 10, again, is appreciably and very obviously inferior to that of the land under acquisition. It has one frontage on a forty feet road and another on a road, which is a ml de sac, of the width of forty feet, whereas the land under acquisition has a long frontage on a sixty feet wide road and another frontage on a forty feet road and is, besides, a corner plot. Some appreciable difference in value must also be attributed to the fact that the land under acquisition is a freehold, whereas Instance No. 10 is a leasehold. What the difference in this respect would be, especially where the person acquiring or purchasing the land is not acquiring it for residential purposes, can at best be a matter of speculation. On careful consideration it seems to me that it would be safe to take the aggregate of the advantages enjoyed by the land under acquisition over Instance No, 10 at something like seventy-five per cent, of what was paid for the latter. Adding seventy-five per cent, to Rs. 6-1-6 (the rate per square yard deducible from the lease of Instance No. 10), one arrives at the figure of Rs. 10-10-7 per square yard, a figure which is a very close approximation to Rs. 10-8-0, which, in my opinion, would be fairly deducible from the rents appearing in the leases of 1928 and 1933. I, therefore, agree that the value of the interests of the claimants in the land under acquisition may be taken at Rs. 10-8-0 per square yard.

7. With regard to the addition of four annas per square yard because of the existence of the Broadcasting Station upon a portion of the land, the learned Judge has relied on Vyricherla Nmayana Gajapatiraju v. The Revenue Divisional Officer, Vizagapatam (1939) L.R. 66 IndAp 104 and has taken into consideration the fact that the Broadcasting Company has already erected buildings and spent over three lakhs of rupees on the land and that, therefore, Government would not like to remove the Broadcasting Station to another piece of land; the land under acquisition has thus, in his opinion, acquired a special value to Government, who have succeeded to the Broadcasting Company. Accordingly, as Government might desire the land more than other possible purchasers, it would be legitimate, in his opinion, to add annas four per square yard on this account. It seems to me, however, that there is little evidence to suggest that in the present case if there were friendly negotiations between the parties for the acquisition of this piece of land, the claimants would not be content with the ordinary market value of the land. We have seen that in 1923 at the request of Government the rent was reduced from Rs. 5,000 to Rs. 4,500 a year. Besides, in the present case there appears to be nothing in the potentiality of the land as such that can be said to be of special value to the acquiring body. Whatever special value the site may be said to have acquired in the eyes of Government would be due to the fact that plants and buildings have been erected, i.e. to factors which are no part of, and are not indissolubly linked with, the land belonging to the claimants. It, therefore, seems to me doubtful whether the decision in Vyricherla Nmayana Gajapatiraju v. The Revenue Divisional Officer, Vizagapatam, applies to the facts of the present case.

8. As to the severance and injurious affection, I agree that there is no good reason for taking the value of these two items, in respect of the 18,299 square yards left with the claimants, at more than Re. 1 per square yard. There is no doubt that the piece of the land left with the claimants has suffered in its market value on account of the fact that its frontage has been considerably reduced, that it has been converted into an awkward shape and that compared with the frontage it has a large depth.

9. I, therefore, agree to the order proposed by my Lord the Chief Justice.

10. The learned Judge gave the costs of the hearing against Government holding that the claim of the claimants was not extravagant within Section 27(2) of the Land Acquisition Act. Although their claim was based on rather an extravagant basis, I am not prepared to differ from the order which the learned Judge made as to costs. The Government have substantially succeeded in the appeal, and we allow the appeal with costs, and dismiss the cross-objections with costs, on a long cause scale. Interest on costs at six per cent.

11. We certify that this case does not involve any question arising under the Government of India Act,


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