1. For extension of the Cuttack-Kujang Road near Gopalpur, a notification was issued by Government on 26-4-1963 for acquiring 0.08 decimals of homestead land out of plot No. 608 appertaining to khata No. 222 of village Gopalpur, belonging to the respondents. On the said plot of land stood a house The Land Acquisition Officer fixed Rupees 400/- as value of the homestead land at the rate of Rs. 5000/- per acre and the value of the house at Rs. 15,306/-. To this amount of Rs. 15,706/- was added the statutory compensation calculated at 15 per cent. payable under Section 23(2) of the Land Acquisition Act, 1894 (hereinafter to be referred to as the Act). A sum of Rs. 18,827.20 p. in all was offered to the respondents which the latter accepted under protest, and on their request a reference was made by the Collector under Section 18 of the Act. The Subordinate Judge, Cuttack after necessary enquiry fixed the valuation of the land at Rs. 460/- and of the house at Rs. 30,000/- and together with the statutory compensation of fifteen per cent. payable thereon held that a total of Rs. 35,020-00 is payable to the respondents. Deducting the amount of Rupees18,827-20 p. already received by them, he directed payment of the balance of Rs. 16,201-80 p. together with interest at the rate of 6 per cent. per annum thereon from the date of taking over possession till payment. Being aggrieved by this decision, the State of Orissa has filed this appeal.
2. The learned Subordinate Judge held that the market value of the land would be Rs. 400/- and to this amount he added fifteen per cent. thereof towards the potential value and thus arrived at the figure of Rs. 460/-. Similarly, in res-pect of the house, he fixed the market value thereof together with its potential value at Rs. 30,000/-. The correctness of the value of the house as fixed by the learned subordinate Judge is now challenged before us on behalf of the State.
3. In determining the amount of compensation to be awarded for land acquired under the Act, the Court is to take into consideration the market value of the land at the date of publication of the notification under Section 4, Sub-section (1). The method of valuation of the land so acquired may be classified under three heads:--
(1) The opinion of the valuers or experts
(2) The price paid within a reasonable time of the material date in bona fide transactions of purchase of lands in the neighbourhood and possessing similar advantages; and
(3) By capitalising the net annual income from the land.
Admittedly, in this case, there is no evidence of any sale transactions of similar buildings in the locality. There is the estimation by an engineer (Ext. A) and his evidence as O. P. W. 1. There is also evidence about the annual net income from the house as can be gathered from the evidence of P. Ws. 2 and 3. Over and above that, there is evidence regarding the amount alleged to have been spent on construction of the disputed house as given by P. Ws. 4 and 5 and the evidence of P. W 1 who himself has constructed a house in the locality. P. W. 4 who serves under the respondents stated that he was in charge of construction of the acquired house and that a sum of Rs. 54,600/- was spent for its construction. In support of this, he has filed the account Ext. 2. P. W. 5, one of the respondents, stated that he verified the account Ext. 2 and found it to be correct. This account had never been produced before the Land Acquisition Officer before whom the respondents in their claim application Ext. B stated that the disputed building would cost Rs. 40,000/-. That apart, the account Ext. 2 shows that the expenditure on the building had beenincurred from 16-5-1963 and the account was closed on 26-12-1963. But the respondents themselves have let in evidence that in the year 1961, the Panchayat Samiti had passed resolution for taking this building on rent. In these circumstances, the learned Subordinate Judge was justified in holding that Ext. 2 had been manufactured for the purpose of this case and that it is not a true account of the construction of the Building. On this ground he rejected the evidence of P. Ws. 4 and 5. Similarly, the evidence of P. W. 1 that near about the disputed locality, he had constructed a one-roomed house at a cost of Rs. 15,000/- has not been corroborated either by oral or documentary evidence and consequently its rejection by the learned Judge also appears to be justified.
4. We then come to the evidence of P. Ws. 2 and 3. P. W. 2 is the Chairman of the Panchayat Samiti within the jurisdiction of which lies the disputed house. He states that on 29-4-1961, there was a resolution of the Panchayat Samiti that the disputed house might be taken on rent for the purpose of the office of the Samiti and that in pursuance of the said resolution he had a talk with the respondents in January, 1963 when the respondents demanded Rs. 200/- per month as rent for the house as against his offer of Rs. 150/-. P. W. 3 is the Goomastha of the firm Keshabchand Geurchand which has a jute godown at Jagannathpur. It seems, the Firm wanted to take the house on rent for the pur- pose of a godown and wrote the letter Ext. 1 to P. W. 3 in pursuance of which the latter had a talk with the respondents and offered to pay Rs. 200/- as rent per month. Under Ext. 1. P. W. 3 had been asked by his master to inform him immediately the result of his talk with the respondents. What reply P W 3 sent to his master has not been disclosed, and if he had sent any written reply to his master, that document has not been produced. The learned Judge did not accept either the evidence of P. W. 2 or of P. W. 3 in toto, but, having regard to the same, thought that the monthly net income from the house would be Rupees 125/-. By capitalising the net annual income at 20 years' purchase, he fixed the valuation at Rs. 30,000/-.
5. The engineer O. P. W. 1 who on the direction of Government, had valued the house, stated that the building has three rooms and one verandah having R. C. C. roof and 15 inches thick brick mortar masonry walls, and that there is an incomplete, block adjoining it which has got Ranigunj tile roof without cement flooring and without plastering. The two blocks are connected and enclosed by a right angular compound wall. He has valued the building as perthe rates approved by the Chief Engineer and determined the value at Rs. 15,306/-(Ext A). The estimate given by p. P. W. 1 suffers from the infirmity that in making the calculation he had not taken into consideration the fact that most of the materials namely, cement, iron rod etc. are not available in the locality and had to be carried from Cuttack which, we understand, is about 20 miles off. Ext. A cannot, therefore, afford a sure guide to determine the valuation of the building.
6. Where for the purpose of ascertaining the market value of the land at the date of notification under Section 4(1) of the Act definite material is not available, either in the shape of sales of the neighbouring land at or about the date of notification or otherwise, the Court would not be erring on the wrong side if it fixes the market value by capitalising the net annual income at twenty year's purchase. This method of valuation has been accepted by this Court in Surajmal Nagarmal v. Collector of Puri, (ILR (1958) Cut 704) and the learned Subordinate Judge has also followed the same. But. having regard to the situation and nature of the building and the accommodation it has, as revealed from Ext. A. we feel that the finding of the learned Court below that it would fetch a monthly rent of Rs. 125/- appears to_ be high. It would, in our opinion, be reasonable to fix the monthly rental value at Rs. 100/- and deducting Rupees 200/- per annum towards repair and maintenance, we hold that its net annual value would be Rs. 1,000/-. Capitalised at 20 years' purchase, we fix its market value at the date of notification at Rupees 20,000/-. Together with the cost of the land on which it stands, the market value of the acquired property would be Rupees 20,460/- and 15 per cent. statutory compensation thereon would come to Rupees 3,069/-. The total amount payable to the respondents, therefore, would be Rupees 23,529/-. Deducting therefrom the amount of Rs. 18,827.20 p. already paid to the respondents, the balance of Rs. 4,701.80 p. is still payable by the Collector to the respondents with interest thereon at the rate of six per cent. per annum from the date of taking over possession of the disputed property till the date of deposit of the amount in Court.
7. We accordingly allow this appeal in part, to the extent indicated above. In the circumstances, parties should bear their own costs in both the Courts.
G.K. Misra, C.J.
8. I agree. Appeal allowed in Part.