1. The facts of the case leading up to and relevant for the disposal of this appeal, briefly stated, are as follows. The Appellant purchased Survey No. 19 of Jakkasandra village, Bangalore North Taluk, in the year 1935 and after paying the requisite fine for converting the same into building sites secured the necessary sanction of the Government on 20-10-39. The Appellant next applied to the Bangalore Municipality for the sanction of a private lay out on 24-2-1940 and obtained the sanction on 31-3-1944. Portions of this land before its conversion as building sites were acquired by the Government for the purpose of putting up a maternity home and a school in 1937 and 1939 respectively. The Appellant after the conversion of the land into building sites, applied to the Municipality for a licence for putting up a building and constructed a house on a portion of the land and leased out the same on a rent of Rs. 50/- per month. Later he sold several sites at rates varying from Rs. 6-8-0 to Rs. 15/- per sq. yd. in the year 1945.
Preliminary notification for the acquisition of this land was published in the Mysore Gazette on 11-10-1945 and final notification on 30-5-1946. The Appellant objected to the acquisition on various grounds detailed in Ex. 11, the most important of them being, (1) that the land was un-suited for the purpose of a maternity hospital as the same was adjacent to the Mysore Maharaja Weaving Mills and the Labour Colony and (2) that the acquisition would be uneconomical inasmuch as the land proposed to be acquired was not agricultural land but a building site and compensation for its compulsory acquisition will have to be paid for at a high rate. The objections of the Appellant were overruled and possession of the land was taken on 7-5-1947 by the Municipal Engineer after the order for its acquisition on 1-5-1947.
2. The Appellant claimed compensation at the rate of Rs. 15/- per Sq. yd. but the Special Land Acquisition Officer awarded compensation at the rate of Rs. 10/- per sq. yd. The Land Acquisition Officer set off a sum of Rs. 98,807/- against the amount of compensation to be paid to the Appellant on the ground that the said sum was required for laying out roads and drains and for the installation of electric power. He disallowed the claim of the Appellant for compensation for the building put up by him on the ground that the same must have been constructed after the date of the preliminary notification and without the requisite licence from the Municipality.
The Land Acquisition Officer also excluded an area of 26248 sq. yds. from the award of compensation (the total area of the land acquired being 484041/3 sq. yds.) on the ground that the said area was required for laying out roads and drains. He left out of account an area of about 3000 sq. yds. on the ground that the same formed a hollow or 'halla' unfit for building or for any other purpose. The Appellant' prayed for a reference to the District Judge, Bangalore. He claimed compensation at the rate of Rs. 15/- per sq. yd., disputed the validity and correctness of the Land Acquisition Officer's decision disallowing compensation for an area of 26248 sq. yds. of land and for the house as also for the 'halla' etc.
3. The District Judge upheld the rate of compensation at Rs. 10/- per sq. yd. awarded by tne Land Acquisition Officer as also his decision dis allowing compensation for 26248 sq. yds. He also upheld the decision of the Land Acquisition Officer disallowing compensation for the building put up by the Appellant. He however allowed compensation at the rate of Rs. 3/- per sq. yd. for an area of about 3000 sq. yds. which had been left out of account by the Land Acquisition Officer. He also upheld the claim of the Appellant for Rs. 10,000/- which had been earmarked by the Land Acquisition Officer towards expenses for installing electric power and directed the said sum to be deducted from out of Rs. 98,807/- the sum directed to be set off against the compensation payable to the Appellant. Hence this present appeal.
4. The Appellant in his appeal memo has urged many grounds but his learned Counsel confined his arguments to the following, viz.:
(1) that compensation at the rate of Rs. 10/-per sq. yd. was quite inadequate and shouldhave been at the rate of Rs. 15/- per sq. yd.;
(2) that the Land Acquisition Officer and the District Judge were wrong in disallowing compensation for the entire area of 26248 sq. yds.;
(3) that a reservation of more than a sixth of the total area acquired for the purpose of making roads and drains was excessive and untenable;
(4) that both the Land Acquisition Officer and the District Judge were, wrong in charging 20 per cent, of the total cost of the amount required for laying out roads and drains as necessary for fluctuations in labour charges;
(5) that the learned District Judge who disallowed the claim of the Land Acquisition Officer for charges towards installing electric power amounting to Rs. 10000/- should have allowed to the Appellant a further sum of 17 1/2 per cent, of the said Rs. 10,000/- included by the Land Acquisition Officer for supervision charges; and
(6) that the award of compensation at the rate Of Rs. 3/- per sq. yd. for what was known as 'halla' was quite inadequate.
5. The Land Acquisition Officer has stated that he fixed the rate of compensation to be awarded at Rs. 10/- per sq. yd. on account of two grounds, viz. (i) an alleged agreement by the Appellant to receive compensation at that rate said to be implicit in Ex. II and (ii) that the rate of Rs. 10/- per sq. yd. is the average rate actually secured by the Appellant for sales effected by him prior to the preliminary notification. The District Judge relied on the same two grounds and also on the opinion of the two engineers examined for the respondent who say that the award of compensation at the rate of Rs. 10/- per sq. yd. was a very fair rate for the land acquired. The two Assistant Engineers have not given or placed any material in support of their opinion. The Respondent has also not produced any other evidence regarding the rate at which lands were sold in or about the locality at or about the time of the acquisition; even entries from the Sub-Registrar's Office regarding sales of lands in the locality at the relevant time have not been made available to the Court, The argument that the Appellant agreed to receive compensation at the rate of Rs. 10/- per sq. yd. is sought to be supported by his statement in Ex. II. A perusal of thesaid exhibit however does not warrant this contention. The Appellant has no doubt stated:
'This rate ranges from Rs. 10/- to 12/- on the average of Rs. 10/- a square yard as could be verified from entries in the local Sub-Registrars Office and Bangalore City Municipal Office. At any rate, I myself have sold in the course of this year some 6 sites out of the land proposed to be acquired for rates ranging from Rs. 7/- to 15/- or on an average of Rs. 10/- per square yard. At this rate the compensation amount will be Rs. 5,12,430/- adding the statutory allowance of Rs. 77,860/- at 15 per cent on the compensation amount; on account of the compulsory nature of the acquisition the that cost of the land will be Rs. 5,89,290/- or nearly six lakhs of rupees only for the land required for the maternity hospital is a very heavy amount.'
It is not clear how the Land Acquisition Officer and the District Judge spelled from the statement an agreement on the part of the Appellant to receive compensation at the rate of Rs. 10/- per sq. yd. It is obvious from the context that, the appellant agreed to receive compensation at the rate of Rs. 10/- per sq. yd. provided he was given compensation at that rate for the entire land without any deduction whatsoever. This is made manifest by his statement
'At this rate the compensation amount will be Rs. 512,430/-.'
It must be remembered here that the Appellant, when he sold, portions of his land did not exclude or leave out of account the space required for construction of roads and drains but expected and secured payment at the rate of Rs. 10/- per sq. yd. for every bit of land sold by him. The Land Acquisition Officer when he struck the average rate of Rs. 10/- per sq. yd. knew or must have known that every bit of the land included in the several sales was paid for and that no portion of the land sold, was excluded by the Land Acquisition Officer in calculating the average price per sq. yd.
6. Under these circumstances we fail to see how the statement extracted, above can be pressed into service to ferret out an agreement by the Appellant, to receive compensation at the rate of Rs. 10/- per sq. yd. for 'a portion only' of the acquired land as satisfactory compensation for 'the whole area acquired'. The agreement to receive Rs. 10 per sq. yd. for every inch of the land acquired cannot in fairness be pressed into service to pin the Appellant to receive compensation at the rate of Rs. 10/- per sq. yd. for only a portion of the land acquired. The learned Counsel for the Appellant pointed out that rates of Rs. 14/- and 15/- per sq. yd. for lands near or immediately abutting the 'halla' have been received by the Appellant as per his sale deeds, one or two months before the preliminary notification. He contended that in order to attract persons to purchase his sites, his client first put up a house at a cost of Rs. 7000/- and then leased out the same on a rental of Rs. 50/- per mensem; that as soon as the house was tenanted, some persons came forward, to purchase sites and put up buildings and that the rates at which they acquired sites rose steadily from about Rs. 6-8-0 per sq. yd. in the beginning to about Rs. 15/- per sq. yd. at or about the time of acquisition.
He also stressed that if the preliminary notification for acquisition had not been published, the Appellant would have secured very, much more and that the statement of his client thathe could have obtained a rate of Rs. 25/- per sq. yd. cannot be brushed aside on the ground that it was either unreasonable or improbable. It cannot be said that this contention is without force. There have been four Kales of sites in or touching the 'halla' and they have fetched a rate of Rs. 12/-, 15/-, 14/- and Rs. 7-3-0 per sq. yd. respectively and if the sites in or near the 'halla' for which the Land Acquisition Officer refused to award any compensation could fetch as much as Rs. 14-15/- per sq. yd. it must be conceded that the lands touching the Tumkur Road and the road on the side of the Maharaja Mills would have fetched very much more, possibly a rate approximating to or touching the rate mentioned by the Appellant.
7. The Appellant states that he purchased the survey number in question in the year 1935 and that he paid for the same in all Rs. 1,10,000/-. He has in addition paid to the Government a conversion fine of Rs. 11, 000/- and put up a building at a coat of Rs. 7000/-. Thus the total amount spent by the Appellant for the land acquired will be in the neighbourhood of Rs. 1,30,000/-. It cannot be disputed that the value of lands in Bangalore in or about 1935 was at about the lowest and that after the commencement of World War II, particularly after the threat of the Japanese invasion was removed, the value of lands shot up enormously, as much as 5 to 10 times its value in 1935 and in some cases even more An award of Rs. 1,41,169/- in 1947 for the compulsory acquisition of the land purchased in 1935 which cast the Appellant in all Rs. 1,30 000/- cannot at all be held to be adequate. It ignores entirely the sharp rise in the prices of lands in Bangalore referred to above which has more or less come to stay as is discernible from t the fact that the price of land still shows no signs of any appreciable sagging in spite of the lightness of the money market. Under those circumstance, we are of the opinion that the compensation at the rate of Rs. 10/- per sq. yd. and that for a portion only of the acquired land is inadequate and merits modification.
The learned counsel for the Appellant urged that the highest rate secured by his client for the sale effected by him prior to the preliminary notification should be taken as a proper index more particularly so because of the finding of the Land Acquisition Officer that the sales effected by the Appellant are genuine transactions--a finding which has been accepted by the District Judge and to which no objection has been taken by the Respondent in this appeal. It was pointed out that the Appellant as a prudent man in order to attract purchasers and develop the area offered lands for sale in the initial stages at lower rates with the reasonable hope that when the locality developed and got publicised, the sites will necessarily fetch much higher rates. It will be seen that it was only after the appellant had put up a house that purchasers stepped in to buy the suit lands and that generally speaking the later sales fetched a much higher price than the initial sales even though the last sales were of lands situated close to and abutting the hollow for which the Land Acquisition Officer gave no compensation on the ground that the same was unfit for any purpose.
It must be admitted that lands situate at higher levels and abutting the two roads must normally fetch a higher price than the lands touching the 'halla' which as seen in fee sale deed, Ex. 8 dated 2-8-45 secured a price of Rs. 15/- per sq. yd. just two months before the preli-minary notification. The land in question is situated close to the Maharaja Mills and a school, and a maternity home have already been put upon a portion of it. The learned Assistant Advocate-General submitted that the lands in to is very survey number were acquired by the Government on an average at Rs. 1/- per sq. yd. but this fact can have little or no bearing for the disposal of this appeal as the said acquisitions were, in 1937 and 1939, that is to say, long before the acquisition in question and the rise in prices of lands referred to earlier. Besides, the acquisitions in 1937 and 1939 were of agricultural land, long prior to its conversion as building sites and without the sanction of the Municipality for a private lay-out, whereas the present acquisition is of building sites with the requisite sanction for a private lay-out.
8. The next contention of the learned Assistant Advocate-General that, the area acquired is considerable and that the Appellant could not Have been sure of securing purchasers easily for all his sites at or about Rs. 15/- per sq. yd. has a good deal of force and must be borne in mind. It has been pointed cut that the expectations of the Appellant to secure a rate of more than Rs. 15/- per sq. yd. could not be said to be unsupported by data and on that ground discarded or considered unreasonable. The Appellant had pointedly drawn the attention of the acquisition officers to this important circumstance and it is a bit surprising to note that the acquisition proceeding were continued in spite of the caution and that too after a committee of medical men had given it as their opinion that the land was unsuited and unsuitable for the construction of a hospital.
The learned Counsel for the Appellant stressed on the opinion of medical men referred to above and on the delay in the proceedings regarding conversion, sanction of the private lay-out, and acquisition as also on the timing of the preliminary notification and submitted that his client Had been deliberately deprived of the benefit of the rise in prices, for his land. The necessity for and the bona fides of the acquisition of a large-area of very nearly 10 acres and 23 1/2 guntas of land in the heart of Malleswaram for the development of a comparatively small maternity home already possessing a compound of nearly 1 1/2 acres, against the opinion of a committee of medical men, the failure so far to put the land for the use for which it was acquired, the locking up of a considerable amount of public money without any benefit, incidental to the acquisition and the synchronisation of the preliminary notification with the success of the appellant in securing sales for his sites at good prices give point to and support the submission of the Appellant. These circumstances seem to indicate that there must be something more in these proceedings than meets the eye.
The plaintive wail of the Appellant regarding the delay in the acquisition proceedings seen in Ex. J dated 31-3-47 is under the circumstances not only understandable bill revealing. The evidence discloses that the Appellant has effected 4 sales about a couple of months prior to the date of preliminary notification and the rates secured by him are Rs. 12/- 15/-, 14/- and 7-8-0 which on calculation give an average of Rs. 12-2-0 per sq. yd. The Appellant's Counsel prayed for the award of compensation on the basis of the highest price secured by his client. We have already come to the conclusion that the submission of the learned Assistant Advocate-General that it would not have been easy for the Appellant toobtain the sale of all the lands at that rate is not without force. The learned Assistant Advocate-General stressed the necessity of bearing in mind this circumstance while fixing the rate at which compensation was to be awarded.
On a consideration of all the evidence and submissions made by the parties and keeping in mind the sharp rise in prices of lands, we feelthat a rate higher than the average rate will bea proper rate at which compensation should be awarded. The average as already seen works out to Rs. 12-2-0 per sq. yd. while the maximum price secured by the Appellant is Rs. 15/- per sq. yd. We feel that a rate approximating to the mean between these two rates viz., Rs. 13-8-0 will be the appropriate rate at which compensation has to be awarded and we order accordingly. We consider that a reduction of Rs. 1-8-0 per sq. yd. will be sufficient to cover the difficulty pointed out by the learned Assistant Advocate-General.
9. The next contention of the Appellant is that the refusal to award compensation for 26248 sq. yds. is unwarranted. The two engineer witnesses for the Appellant state that a reservation of not more than 20-25 per cent of the total area for roads and drains is reasonable and adequate in all modern lay-outs and one of the witnesses was responsible for completing the Tata Silk Farm Lay-out near the locality. The witnesses for the Respondent state that an area of 25-30 per cent. of the total area will be required but they have not produced any material to support their opinion. The Appellant's contention is that reservation of more than a sixth of the total area isunreasonable while the Respondent has set apartmore than 50 per cent. of the total area for the construction of drains and roads.
The learned Assistant Advocate-General contended that the Appellant must be deemed to have consented to the exclusion of this area in computing the compensation as the sanction for the lay-out was accorded according to the plan, Ex. I.and the said sanction has been accepted by the Appellant without any protest. His argument is that in the plan Ex. I roads and drains have been marked out and that for the area so earmarked no compensation is or can be awarded. The contention that the Appellant accepted without murmur the area set apart for roads and drains as marked out in the plan is opposed to the notice he issued through his advocate, Ex. VII dated 11-4-1943 wherein he has specifically stated his objection.
Further the area earmarked in the plan for roads and drains falls much short of 26248 sq. yds. This fact was stated to us by the Corporation Engineer at the time of arguments after taking out the measurement of the area earmarked for roads and drains in the plan, Ex. I. There is besides no conclusive proof on the part of the Respondent that the sanction for the layout was accorded as per the plan, Ex. I, while the appellant is positive that the lay-out sanctioned was not in accordance with the said plan. We consider it safe and proper on this state of evidence to reserve for roads and drains the maximum percentage spoken to by the engineer witnesses for the first Claimant-Appellant and the minimum percentage of the area stated by the engineer witnesses for the Respondent, viz., 25 per cent. We accordingly hold that 12101-1/12 sq. yds. should be earmarked for roads and drains land be excluded from calculation in the award of compensation.
10. The next point urged is that the rate of Rs. 3/- per sq. yd. awarded for the hollow or'halla' comprising 3000 sq. yds. is quite inadequate. The Respondent in the estimate for construction of roads and drains etc., has specified in Ex. XII an item of Rs. 15000/- towards the cost of filling up the 'halla' so as to bring it up to level of the road. It cannot be denied that the 'halla' when filled up as proposed, can be utilised for putting up buildings and the Appellant, as also one of his engineer witnesses, say that buildings can be put up in this area even without its being filled up. In any case it seems to us inequitable that the Appellant should be charged Rs. 15,000/- towards the cost of filling up the 'halla' in order to award him a compensation at Rs. 3/- per sq. yd. amounting in all to only Rs. 9000/-.
The learned Assistant Advocate-General submitted that the sum of Rs. 15,000/- was needed not only for filling up the one 'halla' which is about 3000 sq. yds. in extent but also several others and in support of his contention relied on the existence of the 'ravines and valleys' spoken to by the witnesses for the Respondent in their evidence before Court. The information furnished by the Assistant Engineer of the Municipality, R.W. 2, to the Land Acquisition Officer in Ex. 12 is however specific and sets out that this sum of Rs. 15,000/- was required to fill up 'the halla'. The use of the definite article and singular number in the phrase 'Cost of filling up 'the halla' on the area' negatives this contention. The evidence of the witnesses for the Respondent that there are 'valleys and ravines' in the land only goes to expose the bias and anxiety of the witnesses to support their actions and the case of the Respondent. This area after it is filled up can in no way be deemed to be inferior to the other portions and should also be awarded compensation on the same basis. This procedure will in effect mean the award of compensation for this area at Rs. 5/- less than the rate allowed for the other area.
11. The next contention of the Appellant is that a charge of 20 per cent. on the amount required for constructing roads and drains and for filling up the 'halla' is unwarranted. His argument is that when the cost of work has been estimated there is no reason why another sum amounting to Rs. 20 per cent. of the estimated cost should be added to it. This contention does not appear to us to be sound. The estimated cost is according to the evidence in the case, calculated on the basis of the schedule rates and schedule rates cannot be taken as the criterion for arriving at or determining the actual costs because of the fluctuations in labour charges which in all engineering contracts are fixed at 20 per cent. higher than the schedule rates. In this view this claim of the Appellant must fail and is accordingly rejected.
12. It is urged for the Appellant that the learned District Judge who disallowed the item of Rs. 10,000/- for the installation of electric power should also have taken away 17 1/2 per cent. and another 20 per cent of the amount so disallowed, included in the estimate on the ground of supervision and fluctuation in labour charges. His argument is that when the cost of installation of electric power is not to be borne by the Appellant, supervision and fluctuation in labour charges of 17 1/2 per cent. and 20 per cent. of the installation cost should not also be charged to him. This contention was not opposed by the learned Assistant Advocate-General and appears reasonable. It is accordingly allowed.
13. The last contention of the Appellant is that the learned District Judge erred in disallow-ing compensation for the house put up by him. The learned District Judge has adopted the reasoning of the Land Acquisition Officer for disallowing compensation claimed by the Appellant for his house. Those reasons are: (a) that the house must have been put up alter the date of the preliminary notification for acquisition of the land, and (b) that the house must have been constructed without the requisite licence from the Municipality. A scrutiny of the evidence on record discloses that both these reasons are incorrect and therefore untenable. The evidence for the Appellant is to the effect that he commenced construction of the building after he had made an application to the Municipality for the requisite licence and after waiting for more than a month for an endorsement from the Municipality.
His case is that according to Section 115(4) of the Municipalities Act an applicant who does not get an endorsement for a period of one month after the date of his application for a licence to put up a building can proceed to construct his building as per his plan. The Land Acquisition, Officer and the District Judge have apparently come to the conclusion that the evidence on behalf of the Appellant on this aspect of the case is not true. It will however be seen that the evidence of the Appellant on this point receives corroboration from an entry in the registers of the Municipality copy of which is produced in this Court. This entry shows that the appellant made an application to the Municipality on 19-2-45, that is to say, more than 7 months prior to the date of preliminary notification, for a licence to put up a house. His evidence is that he did not get an endorsement for the same for more than a month. The Respondent has not shown that he sent an endorsement to the Appellant. The Appellant was therefore quite within his rights to put up a building for which he now claims compensation.
The other reason is that the Appellant must have put up this construction after the preliminary notification. This is also opposed to the evidence in the case for as already pointed out the application for a licence was made on 19-2-1945 and the preliminary notification is on 4-10-45 and the evidence on behalf of the Appellant is that the building was put up prior to the date of preliminary notification. The learned District Judge has relied on a sentence said to occur in Ex. J dated 31-3-1947 in support of his argument for the disallowance of the claim for compensation for the building. The extract appearing in the judgment of the learned District Judge is as follows:
'As far back as December 1946 (i.e. subsequent to the notification) the foundation stone for the building stipulated on my land was also laid.'
He has also relied on the date appearing in Ext. D which is a bill, detailing cost of the building constructed near the Maternity Hospital at Malleswaram by Mr. V. Venugopal, viz. 25-12-1946. The date in Ext. D cannot be of much assistance in determining the question whether the building was put up prior to the preliminary notification. The bill must obviously have been prepared sometime after the construction was put up and cannot as such be a good or reliable guide for determining the exact date of the completion of the construction. A comparison of the sentence extracted above from the judgment of the learned District Judge with the sentence seen in Ext. J shows that the said extract is not correctly made. The correct extract from Ex. J, which is dated 31-3-1947 is as follows:
'As far back as December 1946, the foundation stone for the buildings to be erected on my land was also laid.'
This sentence can have no reference to the building put up by the Appellant for it clearly refers not to the building to be put up by him but to the laying of the foundation stone for the 'buildings' to be erected on his lands. This position is made clear from the next Exhibit, Ex. J-1 which is dated 22-3-1947, that is to say, 9 days earlier to the date of Ex. J in which he states:
'It is not correct to say that the building was erected subsequent to the publication of the preliminary notification. An application for a licence was sent to the Municipal Commissioner by registered post on 19-2-1945 and was duly acknowledged by him on the 22-2-1945. No reply has so far been received from him. Under Clause 4 of Section 115 of the City Municipal Regulation, a month after the acknowledgment by the Municipality of my application for a licence, the right to proceed with the construction of the building accrued to me. Accordingly on 25-3-1945 I started construction and proceeded with the work till the publication of the Government notification for the acquisition and immediately thereafter I stopped further construction.'
The fact that in Ex. K-3 dated 22-5-1947 the Appellant has asked the Municipal Engineer to take possession of the house from his tenant is yet another circumstance which goes to strengthen the evidence of the Appellant that he had put up the building prior to the preliminary notification. The evidence of the Appellant and his witnesses to the effect that the Appellant has spent Rs 7000/- for the construction of the building has not been challenged much less disproved by the Respondent. The Appellant offered the house to the Medical Department as a free gift though the same was refused by the Medical Authorities. Having regard to all these circumstances we fix the value of the building at Rs. 7000/- as spoken to by the Appellant and his witnesses. He is therefore entitled to get this amount along with the usual statutory allowance of 15 per cent thereon as compensation.
14. In the result, the appeal is allowed in the manner and to the extent indicated above. The Appellant will get the statutory allowance of 15 per cent on the value of the lands calculated in the manner stated above. He will also get interest at 6 per cent on the total amount of compensation from the date of taking possession. The parties will receive and pay costs in proportion to their success and failure both here and in the Court below. The decree passed by the learned District Judge will be modified accordingly.
15. Appeal allowed.