D.B. Deshpande, J.
1. This appeal by the State Government is directed against the order of the learned Civil Judge, (Senior Division), Parbhani, in Land Acquisition Reference No. 1 of 1975 on his file enhancing the amount of compensation granted to the claimants by the Land Acquisition Officer and feeling aggrieved by the meagre enhancement awarded by the trial Court the original claimants have filed cross-objections in this appeal and this appeal and the cross-objections arise out of the following facts.
2. An area of 5 acres 4 gunthas out of Survey No. 331 situated within the limits of Parbhani town out of total area of 5 acres 19 gunthas was acquired by the State Government for the purpose of Agriculture College at Parbhani. The date of notification under section 3 of the Hyderabad Land Acquisition Act, 1309, Fasli, is 17th November, 1960. In response to notice under the Land Acquisition Act, the claimants laid their claim before the Land Acquisition Officer and after considering the entire material that was available before him, the Land Acquisition Officer valued this land at Rs. 390/- per acre treating the land as a Jirayat land. Feeling aggrieved by this amount of compensation, the claimants sought for a reference to the Civil Court and their claim in the reference petition was at the rate of Rs. 1/- per square foot, although their claim before the Land Acquisition Officer was at the rate of Rs. 2/- per square foot. It may be mentioned here that after the Land Acquisition Officer made the award, notice under section 11(2) of the Land Acquisition Act was not served upon the claimants although the award was made sometime in the year 1963 and hence this reference petition was filed in the year 1969 for the claim mentioned by us earlier. It was contended by the claimants that they were unaware of the Award made by the Land Acquisition Officer. In Clause 9 of the reference petition they averred as follows :---
'That, when nothing could be heard about the disposal of the applicants claim, they through their Advocate got the inspection of the File No. RB.III.AR/44/55 of the office of the respondent No. 2 on 20th September, 1969. It was then disclosed to the applicants that the respondent No. 2 had framed a draft award and on 23rd June, 1962 sent the same to the respondent No. 1 for approval who in turn directed to modify the same on the terms and conditions given by the respondent No. 1. It was further disclosed on such inspection that as per the directions given by the respondent No. 1 the respondent No. 2 framed a final award on 28th February, 1963. No notice of such award has ever been given to the applicants or any of them though it was incumbent on the respondent No. 2 to do so under section 10(2) of the Hyderabad Land Acquisition Act. (It appeals that section 10(2) is a mistake and the notice required to be served is under section (11), or under section 12(2) of the Indian Land Acquisition Act). The applicants, therefore, submit that 20th September, 1969 is the date of knowledge of the applicants about the final Award dated 28th February, 1963. They further submit that starting point of limitation for preferring this reference petition is 20th September, 1969.'
3. The petition for reference was resisted on behalf of the State Government. The State Government denied that the notice of the award was not given to the claimants. The State Government further denied that 20th September, 1969 was the date on which the claimants came to know about the passing of the Award and that the said date is the starting point of the limitation. On merits also, the claimants' claim was resisted by the State Government.
4. In order of prove their claim, the claimants examined one of the claimants and also examined as many as seven witnesses in support of their claim. One of these witnesses was one expert by name Sondankar, C.W. 4. The other evidence consisted of a lease of a portion of the acquired land by the claimants to Burmah Shell. We shall come to these details later on. Under this lease deed 33 gunthas out of the acquired land was leased out to Burmah Shell at the rental of Rs. 150/- per month. This tenancy commenced sometime in the year 1965 and it was continuing at the time of acquisition and it seems that it continues to be so for a portion of 33 gunthas even after the acquisition. Then one more witness was examined to prove the lease of another portion of the adjacent property of the claimants to Essco Company which lease commenced sometime in the year 1963. Then evidence was led about the sale transactions, but these sale transactions were rejected by the trial Court as they were not instances of comparable sales. Two other witnesses were examined and they were on the point of recovery of land rent by the claimants from Burmah Shell. After considering the entire evidence, the learned trial Judge, as already stated, rejected the evidence about the comparative sale instances on the ground that they are not instances of comparable sales. According to the learned trial Judge, in the absence of any evidence of comparable sales, the only other method that was useful in ascertaining the market value of the acquired land was capitalisation basis and the learned trial Judge proceeded to hold that he was relying upon the method of capitalisation for ascertaining the market value of the land. On the basis that a rental of Rs. 150/- per month was being fetched for an area of 33 gunthas, the learned trial Judge calculated the income at Rs. 11,127.24/- per year in respect of the acquired land and he allowed 20 years profits as the market value of the acquired land. He, therefore, calculated the market value at Rs. 2,22,544.80/- and on this amount he awarded compensation which came to be tune of Rs. 33,308.75/-. From this he deducted the amount awarded by the Land Acquisition Officer and it was Rs. 2,287.35/- and he, therefore, passed an award in favour of the claimants for Rs. 2,53,566.20/- by way of enhanced compensation in addition to simple interest at the rate of 6 per cent annum from 19th December, 1961 till full payment. Feeling aggrieved by the enhancement of compensation, the State Government has preferred this appeal and feeling aggrieved by the meagre enhancement awarded to them by the trial Court, the claimants have filed cross-objections and that is how both are disposed of by this common judgment.
5. At the stage of hearing Mr. D.Y. Lovekar appearing for the claimants respondents sought permission to withdraw the cross-objections and this permission was allowed and accordingly the cross-objections are dismissed as withdrawn. This leaves us only with the appeal filed by the State Government.
6. It may be stated here that both sides were unanimous on the point that the market value of the acquired land could not be assessed on the basis of comparative sales and, therefore, the evidence led in the trial Court about comparative sales is not a useful piece of evidence and it need not be considered at all. In the absence of ascertaining market value on the basis of comparative sales, the other method of ascertaining the market value is capitalisation basis and there should be no quarrel about this mode of calculation of market value. Now the matter boils down to this. It is abundantly proved by the record that a portion of the acquired land admeasuring 33 gunthas is let out by the claimants to Burmah Shell and this fact is proved by the oral as well as documentary evidence on the record. C.W. 1 year is from Burmah Shell and he stated that 33 gunthas are let out to Burmah Shell at the rate of Rs. 150/- per month. The lease-deed is at Exhibit 68. He further stated that Burmah Shell is still in possession of the portion left after acquisition and, according to him, the rent that is paid by Burmah Shell to the claimants was only Rs. 63/- per month, as a portion of 33 gunthas that was let out to them was within the acquired area in this case. It appears that the total area of the land is 5 acres 19 gunthas and what is acquired is an area of 5 acres 4 gunthas and hence an area of 15 gunthas only is left with the tenant. It is, therefore, apparent that 18 gunthas out of the portion let out to the tenant are acquired along with the rest of the land. The other evidence of Remrao C.W. 5 and Mujibhai C.W. 6 also proves this factum of letting out by the claimants to Burmah Shell. The documentary evidence clearly supports this oral evidence. In addition to this, the claimants led evidence of Mulki Sadashiv Suwarna C.W. 2. This evidence goes to show that an area of 18,000/- square feet in a land adjacent to the acquired land was let out by Vishnu Ginning Factory to Esso Company at the rate of Rs. 127.05/- per month for a period of 20 years from 1st July, 1963. Apparently when the claimants have withdrawn their cross-objections, this evidence need not be considered in detail. All the same, this evidence goes to show that the rent per acre would come to Rs. 348/- per month in the year 1963. The present acquisition was in the year 1960 and hence this fact need not be considered by us while deciding this case.
7. Now the admission of claimant Kanchan C.W. 3 clearly goes to show that rest of the acquired land was never used for growing any crops. It is not disputed that this acquired land is adjacent to the railway line and is situated near about Parbhani Railway Station. Portion of 33 gunthas that it let out by the claimants to Burmah Shell is not for the purposes of installation of any petrol pump but it is for the purposes of storage and for distribution of the petroleum products in the town the Parbhani and nearabout. It appears that the letting out to Esso was also for the same purpose. Now the real controversy between the parties is whether the rental of the remaining land also is to be calculated on the basis of letting out of the portion of the acquired land to Burmah Shell. As already stated, the learned trial Judge has proceeded to arrive at the market value on the basis of the lease of a portion of the acquired land by the claimants to Burmah Shell. As already stated, 33 gunthas are let out for Rs. 150/- per month and so the rent comes to about Rs. 4.50/- per gunthas. So the real controversy turns on this fact. Mr. S.S. Choudhary appearing on behalf of the State urged that this was not the correct method of ascertaining the market value of rest of the land under acquisition excluding the land that was let out to Burmah Shell. Mr. Choudhari had no quarrel to ascertain the value of the rented portion of the land on the basis of capitalisation on the strength of the rental that was fetched to the claimants. Mr. Choudhari had a quarrel with the proposition that the rest of the land should be valued at the same rate.
8. On the other hand, Mr. Lovekar appearing on behalf of the claimants-respondents strenuously urged that the trial Court was right in ascertaining the market value of rest of the land on the basis of the letting of a portion to Burmah Shell. Mr. Lovekar placed reliance upon some rulings and the most important ruling on which he place reliance is the ruling of the Supreme Court in The Collector of Darrang, Tazpur v. Assam Industries (P) Ltd., : AIR1971SC1307 . In this ruling an area of 19 Bighas, 1 Katha and 4 Latchas was acquired for a public purpose. This are included 6 Bighas 2 Kathas and 17 Latchas which was at the time being used for the purposes of a Hat or a market. The rest of the area was not being used for Hat. The Collector gave an Award at the rate of Rs. 300/- per Bigha for the entire area that was acquired. On a reference, the District Judge confirmed the award and when the matter was taken to the High Court, the High Court assessed the value of 6 Bighas, 2 Kathas and 17 Latches at the rate of Rs. 15,000/- per Bigha and this assessment was confirmed by the Supreme Court also. But we are not concerned in this appeal before us with this part of the decision. We are rather concerned with the portion that remained after excluding the area under Hat. So far as this remaining area was concerned, the High Court also upheld the view of the District Judge and hence the compensation was awarded only at the rate of Rs. 300/- per Bigha for that area which was not under Hat. Hence the matter went to the Supreme Court as the Collector preferred an appeal against the award of Rs. 15,000/- per Bigha for the Hat and the claimants preferred an appeal in respect of the area which was not under Hat and para 5 of the judgment is relevant and material for our purpose. It runs as follows :
'As regards the remaining area of 12 Bighas, 3 Kathas and 7 Latchas for which compensation has been awarded at the rate of Rs. 300/- per Bigha that admittedly was not Hat land nor was it ever used for purposes of a Bazar. Reliance has been placed on behalf of the company on the rent of certain portion of it which were leased out. The first lease was of the year 1952 by which 6 latchas were leased out at a monthly rental of Rs. 4.4/-. As for a period of 20 years. It was stipulated in the lease that the tenant would not claim any compensation if the property was acquired by the Government. There are a number of subsequent leases which have been considered by the High Court. The District Judge had expressed the view that these leases were collusive transactions and the documents had been executed only for the purpose of creating evidence. The same suggestion has been pressed before us on behalf of the Collector. It has been suggested that it must have been known in 1952 that land in question was likely to be acquired and, therefore, the first lease came into existence. Even though there may be some suspicious features about the lease of 1952 no question was asked in cross-examination suggesting collusion or creation of evidence for the purpose of claiming compensation in acquisition proceedings. Keeping in view this evidence which relates only to a small portion of the land and the other evidence which has been read to us, we are inclined to the view that the proper compensation which should have been awarded for the aforesaid area should have been at the rate of Rs. 1,000/- per Bigha.'
It will, therefore, be seen that the Supreme Court proceeded to assess the value of the entire remaining portion only on the basis of a lease of a negligible portion of 6 Latchas. It is not disputed that 100 Latches made one Bigha. It will, therefore, be seen that even on the basis of the letting of a small portion of an acquired land, the Supreme Court proceeded to asses the value of that remaining portion on that basis. Thus the submission made by Mr. Lovekar finds support from the decision of the Supreme Court.
9. Then Mr. Lovekar placed reliance upon another decision of the Supreme Court in State of Gujarat etc. v. Vakhtsinghji Vajesinghji Vaghela, : 3SCR692 . The facts of this case before the Supreme Court are different from the facts in the instant case.
Mr. Lovekar tried to rely upon the following passage in paragraph 10 of this judgment.
'One method is to take the annual income which the owner is expected to obtain from the land and to capitalise it by a number of year's purchase.'
Stress was laid by Mr. Lovekar on the words 'expected to obtain'. Mr. Lovekar urged that the Supreme Court has not used the word 'obtaining'. We do not think that the Supreme Court wanted to lay down a law in this ruling that the value of the land can be assessed on the basis of setting out value even of a portion of that land to another person. These words are used in the context of that case and after reading this ruling, we are unable to draw support to the proposition put forth by Mr. Lovekar in this respect.
10. Then Mr. Lovekar placed reliance on the decision of the Madras High Court in Shri Lakshmi Narasimha Devaru by Adalthedar or Trustee M. Narayana Acharya v. The Revenue Division Officer, Mangalore (Land Acquisition Officer), A.I.R. 1949 Mad 902. He placed reliance upon paragraphs 1 and 5. The controversy before the Madras High Court was in relation to the dry land. The land was divided in three groups, namely we dry and garden lands and the only controversy before the Madras High Court in relation to the dry land. In that ruling the learned trial Judge before whom the reference case was going on raised the value to Rs. 60/- per acre from Rs. 25/- per acre awarded by the Land Acquisition Officer on the basis of rent for which the claimant himself had given plots in the adjoining survey number. Thus the stress of Mr. Lovekar was that even in the case where plots in adjacent survey numbers were let out, the value of the acquired land was ascertained by the Madras High Court. It appears from the Madras High Court ruling that the acquired land was productive and hence those observations were made by the Madras High Court. In the case before us admittedly the remaining land was unproductive and hence we do not think that the ruling of the Madras High Court supports the contention of Mr. Lovekar.
11. We find that as long back as in 1893 a similar question arose before the Privy Council arising out of a case from Madras and that is The Secretary of State for India in Council v. Shanmugaraya Mudaliar, I.L.R. 16 Mad. 369. In that ruling the tract of land, having on its surface, besides stone quarries, the temples and rock-cuttings, called 'the Seven Pagodas' was in existence. This land was acquired by the Government for the preservation of the ancient monument of 'Seven Pagodas.' The claimant, i.e. Mudaliar who was Zamindar laid claim for compensation and 42 Mirasidars also asserted a right to payment in respect of the quarries. The Collector referred the question of compensation to the District Judge. It was found that one Zamindar had in 1881 leased out the right to quarry stone in a certain portion of the said rocks at Rs. 140/- per annum. The District Judge though that for the right to quarry anywhere on the said hills the rental might fairly be raised to Rs. 200/- and the District Judge was of the opinion that 25 years' purchase was the proper price and so the District Judge assessed the compensation at Rs. 5000/- and added certain amount to the same. Appeals were carried to the Madras High Court by both sides. In appeal, the Madras High Court held relying upon the fact that since the annual rent was only Rs. 140/-, that alone would be the basis for ascertaining the value of the land and the Madras High Court further held that instead of 25 years' purchase, the purchase should be 15 years and, therefore, the High Court valued the land at Rs. 2,100/- instead of Rs. 5,000/- valued by the District Judge. The High Court went further and awarded Rs. 46,000/- by way of injurious affection. We are not concerned with this aspect of the matter. The appeal was filed by the Secretary of State before the Privy Council and the claimants filed cross appeals before the Privy Council and the Privy Council observed as followed :---
'It appears to their Lordships that the District Judge was right in estimating a rent for the whole of the lands instead of taking the rent actually received for part. It was the best, if not the only, method he had for getting at the market value of the ownership.'
And in this manner the Privy Council restored the order of the District Judge so far as this head was concerned and it is, therefore, apparent that the Privy Council upheld the decision of the District Judge wherein the District Judge had assessed the value of the entire land on the basis of the letting out of a portion of the land. The same principle is applicable to the facts before us and we do not think that the learned trial Judge was in any way wrong in ascertaining the value of the entire land on the basis of the letting out of a portion of the land by the claimants to Burmah Shell. In this respect we may also state that although the learned Government Pleader appearing on behalf of the State Government made a submission that the value of the remaining land cannot be assessed on the basis of the letting out of a portion of the acquired land, he did not make any submission as to the proposition as to on what basis the value of the remaining land should be ascertained and he remained content by saying that he leaves the matter to this Court. We are not happy about this say and whatever submission he wanted to make, should have been made by him. As there is no data placed before us by the learned Government Pleader, we could not say anything on that point in this judgment. We, therefore, hold relying upon the two decisions---one of the Privy Council and the other of the Supreme Court-that even the letting out value of the portion of the acquired land is sufficient to assess the value of the remaining land on the basis of that letting.
12. Reference was made to some other rulings by the learned trial Judge. However, in view of the fact that the value of the land is to be ascertained on the capitalisation basis, we do not think that those decisions have any relevance or bearing on the decision of this case.
13. Turning now, therefore, to the actual valuation on the basis of the letting of 33 gunthas to Burmah Shell at the rate of Rs. 150/- per month, we find that this rate of letting comes to Rs. 4.50 per gunthas approximately. The total area that is acquired is 5 acres 4 gunthas and it comes to 204 gunthas. Thus the total valuation on the basis of annual letting capitalised at 20 years' purchase price comes to Rs. 2,20,320/- on a fair measure and an amount of Rs. 3,000/- deserves to be deducted for maintenance and payment of taxes etc. in respect of the acquired land. This leaves us with the balance of Rs. 2,17,320/- and the claimants are entitled to this amount with 15 percent solatium and interest at 6 per cent per annum as awarded by the trial Court. The interest rate is 6 per cent per annum because the possession of the land was taken in the year 1961 when the Hyderabad Land Acquisition Act, 1309 Falsi was in force and the rate of interest provided in that Act is the rate of interest at 6 per cent per annum. Now 15 per cent solatium on Rs. 2,17,320/- comes to Rs. 32,598/- and, therefore, the total comes to Rs. 2,49,918/-. The learned trial Judge has awarded Rs. 2,53,566.20 and so the amount awarded by the trial Judge is set aside and the figure is modified by the figure of Rs. 2,49,918/-.
14. The result is that the decision of the trial Court is modified as followed. The appeal is partly allowed. The word 'total' is substituted for the word 'enhanced' appearing in the first sentence of the operative order of the trial Court and similarly the figure of Rs. 2,49,918/- is substituted for the figure of Rs. 2,53,566.20 appearing in the operative order of the trial Court and subject to these two modifications, the appeal filed by the State Government is dismissed and the order of the trial Court is confirmed. Excess amount if any, recovered by the claimants should be refunded by the claimants to the State Government with interest at 6 per cent per annum from the date of receipt of this amount till the date of payment. Cross objections are already dismissed. There will be no order as to costs they were withdrawn at the earlier stage. The claimants-respondent will be entitled to the refund of the requisite Court fees. There will be no order as to costs of this appeal also.