1. The quantum of compensation awarded by Mr. K.M. Subudhi, the learned Subordinate Judge, Berhampur, for acquisition of land belonging to the three respondents on a reference being made to him under Section 18 of the Land Acquisition Act (the Act, for short) is under challenge by the State of Orissa. The total area of land acquired is 14 cents with trees standing thereon. The market value of the land was fixed by the Land Acquisition Officer at Rs. 2,000/- per acre, while according to the claimant-respondents, the land ought to have been valued at Rs. 50,000/-per acre. In respect of trees standing on the land, the case of the respondents was that from the trees alone, the income was about Rs. 7,000/- per year, but the compensation towards the trees was fixed at Rs. 7,245.35 paise by the Land Acquisition Officer which was grossly inadequate. One of the claimants, namely, Sadhu Charan Patnaik, spoke for himself and the other claimants in his deposition recorded by the learned Subordinate Judge and on behalf of the State, one witness, namely, P. Jaya Rao, a Lower Division Clerk in the Collectorate, was examined.
2. On a consideration of the materials placed before him, the learned Subordinate Judge found that the land ought to have been valued at least at Rs. 10,000/-per acre because it was a garden land and was nearer to the road and an industry. This finding recorded by the learned Subordinate Judge has not been assailed by the learned Advocate-General. It has, however, been contended on behalf of the State that the trees had properly been valued by the Land Acquisition Officer and in the absence of clear and cogent evidence in support of the claim put forward by the respondents, the learned, Subordinate Judge completely went wrong in awarding a sum of Rs. 50,000/- as compensation in respect, of the trees. Mr. S. Mohanty, the learned counsel for the respondents, has, however, submitted that on the evidence on record, the finding of the learned Subordinate Judge with regard to the valuation of the trees cannot be said to be unfounded and the learned, Subordinate Judge has correctly assessed the amount of compensation payable for the loss of the trees.
3. As has been laid down by the Supreme Court in AIR 1967 SC 465 (Raghubans Narain Singh v. Uttar Pradesh Government), the market value on the basis of which compensation is payable under Section 23 of the Act means the price that a willing purchaser would pay to a willing seller for a property having due regard to its existing condition, with all its existing advantages, and its potential possibilities when laid out in its most advantageous manner, excluding any advantages due to the carrying out of the scheme for the purposes for which the property is compulsorily acquired. In AIR 1968 SC 1481 State of Gujarat v. Vakhatsinghji Vajesinghji Vaghela, the Supreme Court observed (at p. 1487):
'...........The market value is the amount which the land if sold in the open market by a willing seller might be expected to realise. In the case of land the market value is generally ascertained on a consideration of the prices obtained by sale of adjacent lands with similar advantages. Where there are no sales of comparable lands, the value must be found in some other way. 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 years' purchase. The capitalised value is then taken as the market value which a willing vendor might reasonably expect to obtain from a willing buyer. In some special cases awards have been given on the basis of the reinstatement value which is assessed according to the cost of acquiring an equally convenient land or premises. ...'
An assessment of the compensation payable for the land acquired must take into account several factors including the nature of the land, its present use and its capacity for a higher potential, its precise location in relation to adjoining land, the use to which neighbouring land has been put and the impact of such use on the land acquired, and so on. (See AIR 1980 SC 1870 Adusumilli Gopalkrishna v. Special Deputy Collector (Land Acquisition)).
4. In the instant case, the valuation of the land, as found by the learned Subordinate Judge, has not been challenged, but the valuation of the trees has been arbitrary.
5. We would presently examine as to whether the valuation in respect of the trees has improperly and arbitrarily been made, as contended before us on behalf of the State. The sole witness on behalf of the claimants had testified about the valuation of the trees and one witness on behalf of the State had testified as to how the valuation of the trees had been reached for payment of compensation. In AIR 1969 SC 255 Chaturbhuj v. Collector, Raigarh, in which the question of valuation of the trees was involved, the Supreme Court observed (at p. 257):--
'........ The Judges are not computers. In assessing the value to be attached to oral evidence, they are bound to call into aid their experience of life. As Judges of fact it was open to the appellate Judges to test the evidence placed before them on the basis of probabilities.
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The High Court in our opinion was wrong in disallowing the statutory allowance permitted by Section 23(2) over the value of the trees. The High Court erred in thinking that the value of the trees falls under the second clause of Section 23(1). The first clause of Section 23 provides for determining the market value of the land acquired. Section 3(a) prescribes that the expression land includes benefits to arise out of land and things attached to the earth or permanently fastened to anything attached to the earth. Therefore the trees that Were standing on the land were a component part of the land acquired. The High Court failed to notice that what was acquired are not the trees but the land as such. The value of the trees was ascertained only for the purpose of fixing the market value of the land. On the value of the land as determined, the court was bound to allow the 15 per cent allowance provided by Section 23 (2) of the Act.
6. A perusal of the finding recorded by the learned Subordinate Judge in para 4 of the judgment under challenge would give a clear indication that the finding with regard, to the valuation of the trees has not been based on the materials placed before him after a proper evaluation of the evidence from both the sides, but on unfounded and uncalled for surmises and conjectures. According to the witness examined on behalf of the State, approximate valuation of the trees had been recorded in Ext. 1. The reasons for which the valuation of the trees had been put at Rs. 7,245.35 paise had been recorded therein. No clear and cogent evidence had been led from the side of the claimants to dislodge the valuation put by the Land Acquisition Officer under the Act. Testifying about the valuation of the trees, the witness for the claimants had deposed:--
'I am one of the claimants. Government has acquired Ac. O. 14 cents in S. No. 97/2 of village Kainchapur for railway building. We had a garden over the land. Government has valued it at Rs. 2000/- per acre. We had 15 coconut trees, 18 cashew-nut trees, 1 palm tree, 1 tamarind tree, 6 Bela trees, 1 Sandal wood tree, 2 Sirish trees, 41 Jhaun trees, 2 Paladhua trees, 2 Achhu trees and one black berry tree and some ghasa trees. Our annual income from the garden was about Rs. 7000/-. It was a suitable land for house site. Jayashree Chemical is half a mile from the place. This was also at a distance of 100 feet from National High Way. So we claim at the rate of Rs. 50,000/- per acre.
One Mahadeb Moharana has sold 71/2 cubits of lands for Rs. 800/-. Ext. A is the certified copy of sale deed. All the trees have been valued at Rs. 3900/-. I claim Rs. 23,500/- Government rate is low.'
It had been admitted by him that they did not maintain any accounts of the income. No justifiable grounds had been advanced by him in respect of the valuation of the trees. Unfortunate as it might seem, although this witness, speaking for all the claimants, had claimed Rs. 23,500/- in his deposition, the learned Subordinate Judge did not take care to refer to this statement in the judgment and, arbitrarily and without any justification whatsoever allowed Rs. 50,000/- as compensation for the trees although this was much higher than the total claim of Rs. 23,500/- advanced by the witness in his sworn testimony before the court. This the learned Subordinate Judge must never have done and to say the least, the finding recorded by him in this regard is illegal and arbitrary.
7. On the evidence on record, we were inclined to accept the valuation of the trees fixed by the Land Acquisition Officer. At the stage of hearing, however, we suggested to the learned Advocate-General that a reasonable amount should be paid to the claimants so that they would not feel aggrieved and the learned Advocate-General has fairly submitted before us that the claimants might be paid a total sum of Rs. 15,000/- for the land and the trees minus the amount received, by them under protest plus the statutory solatium to be paid in such cases. We would accept this submission made by him and modify the award accordingly.
8. In the result, the award by the learned Subordinate Judge is set aside and in lieu thereof, the respondents shall receive a consolidated, compensation amount of Rs. 15,000/- minus the amount already received by them, 15 per cent on the valuation of Rs. 15,000/-in consideration of the compulsory nature of the acquisition and interest at the rate of 6 per cent from the date of taking possession. The appeal is accordingly allowed in part. We make no order as to costs of this appeal which shall be borne by the parties to it.