Skip to content


Radha Charan Vs. Secretary of State - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtAllahabad
Decided On
Reported inAIR1943All238
AppellantRadha Charan
RespondentSecretary of State
Excerpt:
.....in the matter of calculating prices, but we find that the witness says that in his opinion twenty years' purchase would be a fair basis for calculation in determining the price of a bungalow situated either on the canning road or on the albert road, as these two roads have the best sites for bungalows. that plot was owned by the pioneer press and it came into the market when the pioneer newspaper transferred its headquarters from allahabad to lucknow sometime about the year 1930. that plot had an area of over seven acres and there stood upon it a well-made and convenient house which was occupied by the editor of the paper. even if we base a decision upon the experience of the proprietors of the pioneer press we find that they sold half of the adjoining plot with a very good house upon..........of the learned judge was based upon the evidence of lala manmohan das who owns a great deal of house property in allahabad. this gentleman made the following statement:if a bungalow has six acres of freehold land attached to it instead of the same amount of land as leasehold, its price would go up by about rs. 6000.3. the learned judge said in his judgment that the appellant would have been entitled to a sum calculated on the basis of twenty years' purchase on the net rent if he had held only a lease of the property and consequently that he should be allowed a further sum calculated at the rate of rs. 1000 per acre because he was the full owner. this decision has given rise to a cross-objection on the part of the government and in our judgment this cross objection has force. we are.....
Judgment:

Allsop, J.

1. This is an appeal against an order passed by the District Judge of Allahabad in the course of proceedings for the acquisition of land by the Government. The property in dispute is a house No. 18 (formerly 12) Bank Road in Allahabad with the land appurtenant to it. The area of the site is 6.34 acres. The appellant, Babu Radha Charan, bought the property in the year 1920 for a sum of Rs. 22,000. The property was acquired by the Government for the Allahabad University in the year 1930. The amount of compensation was fixed on behalf of the Collector by his Land Acquisition Officer at a sum of Rs. 37,950 in the year 1933. The Land Acquisition Officer decided that the gross rental of the premises could not be more than Rs. 150 a month and he calculated the value of the property on the basis of sixteen and two-thirds years' purchases. On this basis the amount was Bs. 30,000. He then allowed Rs. 2400 for a fruit orchard on the basis of eight years' purchase on an annual rental of Rs. 300 and he allowed a further sum of Rs. 600 as the value of timber growing on the land. The total amount came to Rs. 33,000 and the allowance for compulsory acquisition was Rs. 4950. The appellant appealed to the District Judge against the Collector's award and was allowed a sum of Rs. 36,980 together with 15 per cent. upon that sum, the total being presumably Rupees 42,527. In the present appeal against the order of the District Judge the appellant has claimed a further sum of Bs. 44,000.

2. The learned Judge of the Court below based his decision upon the net annual rent of the property. He allowed a sum calculated at twenty years' purchase. He agreed with the Land. Acquisition Officer that a fair monthly rent would be Rs. 150 but he deducted there from the municipal taxes which amounted to Rs. 238 a year and a sum of ES. 180 that is one-tenth of the annual rent, for repairs. He also allowed the same amount of compensation as the Land Acquisition Officer for the orchard and the timber trees. According to this calculation the amount allowed for the house and land was a sum of Rs. 27,640 and there was a further sum of Rs. 3000 for the orchard and the trees which brought the total upto Rs. 30,640. The learned Judge then proceeded to add to this amount a further sum of Rs. 6340 at the rate of Rs. 1000 per acre upon the ground that the appellant was the full owner of the house and not a mere lease-holder. This decision of the learned Judge was based upon the evidence of Lala Manmohan Das who owns a great deal of house property in Allahabad. This gentleman made the following statement:

If a bungalow has six acres of freehold land attached to it instead of the same amount of land as leasehold, its price would go up by about Rs. 6000.

3. The learned Judge said in his judgment that the appellant would have been entitled to a sum calculated on the basis of twenty years' purchase on the net rent if he had held only a lease of the property and consequently that he should be allowed a further sum calculated at the rate of Rs. 1000 per acre because he was the full owner. This decision has given rise to a cross-objection on the part of the Government and in our judgment this cross objection has force. We are of opinion that compensation is allowed on the basis of twenty years' purchase because the assumption is that a person who is given a sum of money in lieu of landed property may generally expect to invest that money in some other undertaking and obtain interest at the rate of 5 per cent. If that is so, there is no reason why a person who holds a lease should get compensation on the basis of twenty years' purchase on annual rent. The amount of compensation he would get would depend upon the terms of the lease and the length of time that he might be expected to-remain in possession of the property. We consider that it is a full owner of land who normally gets compensation on the basis of 'twenty years' purchase.

4. We may add that we have been taken through the evidence of Lala Manmohan Das and we do not find that he says that the appellant would have obtained a price calculated on the basis of twenty years' purchase plus a further sum of about Rs. 1000 an acre if he had gone into the open market with this property. We might have recognised that the Judge was justified in placing confidence in the evidence of this witness if the witness purported to describe the general practice in the matter of calculating prices, but we find that the witness says that in his opinion twenty years' purchase would be a fair basis for calculation in determining the price of a bungalow situated either on the Canning Road or on the Albert Road, as these two roads have the best sites for bungalows. He also says that the prices of houses in Civil Lines are generally calculated on the basis of sixteen years' purchase. It seems to us, if the value of the property is to be calculated on the basis of a fair annual rent, that the appellant should get twenty times that rent because he is a full owner of the land and that he might get less if he held the land only on a lease. We are told, however, that there is not a great deal of difference between the rights of a lease-holder of land in Civil Lines and a full owner. A lease holder apparently holds the land from the Government for a period of 50 years with a right of renewal for another 50 years and there is a general stipulation that the Government if it ejects the lessee will compensate him for the value of any building which he may have erected on the land. As the buildings do not fall in to the lessor at the termination of the lease, the lessee loses very little, if anything, when the lease is terminated. As we think that the compensation of a full owner can fairly be calculated at the rate of twenty times the annual rent, we think that there was no justification for the grant of a further sum of Rupees 6340 to the appellant.

5. The appellant, however, maintains that the Land Acquisition Officer and the learned Judge of the Court below did not proceed upon the right lines. He argues that the area of land attached to the bungalow is very much larger than is necessary and that compensation should be paid on the assumption that part of the land can be set aside as a separate building site. This argument was placed before the learned Judge who repudiated it upon the ground that this method of calculation, though possibly a fair method in some circumstances, could not possibly be applicable to the property in dispute. He pointed out that there had never been any attempt to divide off a portion of the land as a building site or to mark it out with the necessary roads and arrangements for sanitation so that it was not possible to say whether it was possible in practice to keep the bungalow upon this plot and at the same time set apart a portion or portions of the land for other buildings. There is a great deal of force in what the learned Judge has said. The claim of the appellant seems to be based very largely upon the experience of the proprietors of an adjoining plot which lies between the plot in dispute and the University grounds. That plot was owned by the Pioneer Press and it came into the market when the Pioneer Newspaper transferred its headquarters from Allahabad to Lucknow sometime about the year 1930. That plot had an area of over seven acres and there stood upon it a well-made and convenient house which was occupied by the Editor of the paper.

6. The University suggested at one time that they might wish to acquire this plot and they made inquiries from the proprietors who offered them the land and the house in a letter dated 26th December 1933, for Rs. 42,742. It appears that the negotiations must have broken through because in the year 1936 the house with about half the area of the land was sold for Rs. 28,000. It appears that there was an agreement to sell to Mr. B. Malik, but that he consented to allow the property to be taken by the University. The remaining half of the plot was divided into small building sites and was sold at an auction for about ES. 27,000. The appellant, however, produced a number of witnesses, two of whom had purchased property at this auction and they themselves said that they had paid an exceptionally high price because they were particularly anxious to acquire sites in this locality. They were teachers in the University and. the sites were adjacent to the University grounds. All the witnesses said that the usual price for land in Allahabad for building sites was Rs. 5000 per acre. The site with which we are dealing has a narrow frontage upon the road and a glance at the map would show that it would be very difficult to divide it into plots for building.

7. No attempt was ever made by the appellant to set apart some of the land appurtenant to the house for the purpose of erecting other buildings. We do not think that one can necessarily infer that this land could be divided up and sold as building sites at the same rate as the sites in the adjoining plot which we have mentioned. There would only be a limited demand for houses for teachers in the University and it would be a mere matter of speculation whether more plots would sell at a high price or whether they would sell at all. It seems to us, however, that the appellant's argument even if it is partially accepted does not lead us very far. If the whole of the plot was divided into building sites and was sold at the rate of Rs. 5000 an acre which the appellant's own witnesses say is the normal rate, the compensation would amount to something over Rs. 30,000 which is practically the same as the amount allowed by the Land Acquisition Officer. It is obvious that the appellant cannot claim to get the value of the land and the value of the house separately. Even if we base a decision upon the experience of the proprietors of the Pioneer Press we find that they sold half of the adjoining plot with a very good house upon it for Rs. 28,000 and the remaining half without any house upon it for Rs. 27,000. It seems, therefore, that a house would make very little difference if any calculation were to be based upon the value of the land as a building site. The appellant has also produced a number of witnesses who occupied the house as tenants and most of them found it unsatisfactory and have stated that it was in a bad condition of repair. In all probability it was in no way comparable with the house next door which had been occupied by the editor of one of the leading newspapers in this part of India.

8. There are two reports of engineers who examined the house in dispute and they found that it was badly built and not in good condition. In our judgment, even if an attempt was made to calculate the value of the property in dispute on the basis of the experience of the proprietors of the Pioneer Press, the result would not be that the appellant would get a larger sum than about Rs. 30,000. The calculation on the basis of rent seems to us to be fair. The appellant attempted to establish that the' rental value of the house was more than Rs. 150 a month, but we do not think that his evidence establishes his point. It is true that various judges and officials occupied the house from time to time, but they did dot seem to have been permanent tenants. The house was admittedly divided into three parts, one of which was occupied by the appellant himself. The other two parts the appellant attempted to let to others. He seems to have obtained rents of about Rs. 60 or Rs. 70 a month from time to time, but the evidence is that the lessees were dissatisfied and left as soon as possible, so that in all probability these two parts were vacant more often than not. In these circumstances it cannot be said that the monthly rent on an average would have been more than us. 150. The municipality assessed the house at an annual rent of Rs. 385. It seems to us that the Land Acquisition Officer and the learned Judge, if they arred at all, erred rather on the side of the appellant. We think Rs. 150 a month is the most that could be considered as the fair monthly rental value of the house.

9. The learned Judge has allowed less compensation on the basis of rent than the Land Acquisition Officer. The reason for this is that the municipal taxes are rather heavy in Allahabad so that twenty times the net annual rent is less than sixteen and two-thirds times the gross annual rent. We have already held that the additional sum of Rs. 6340 allowed by the learned Judge does not seem to be justified on any principle. In our judgment therefore the amount of the award should not be greater than that allowed by the Land Acquisition Officer, who, in our opinion, was, if any thing, rather generous to the appellant. We have mentioned that the appellant had bought the house ten years before for a sum of Rs. 22,000. He has been allowed by the Land Acquisition Officer a sum of over Rs. 37,000. He certainly maintained that he had spent a good deal upon repairs and extensions, but there is no evidence in detail of the amounts spent and judging from the evidence of the witnesses produced by the appellant who occupied the house the amounts spent could not have been large. Lala Manmohan Das has deposed that he had supervised repairs and constructions in a very general way and his impression was that the work must have cost about Rs. 8000, but the evidence is vague and even if Rs. 8000 were spent upon the house, the appellant has received quite sufficient to compensate him seeing that he was in possession for only ten years after his purchase. The result is that we dismiss the appeal with costs. The appellant seems to have made an absurd claim. We allow the cross objection also with costs and direct that the appellant shall be allowed only the amount which was awarded to him by the Land Acquisition Officer and that the Government may re-cover the difference with interest at 6 per cent. per annum. A decree shall be drawn up accordingly.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //