S. Rangarajan, J.
(1) These three Regular First Appeals (Nos. 77-D, 78-D 'and 79-D of 1961) have been preferred by Shrimati Chandra Kumari Mittal, Rajinder Singh and Harpal Singh respectively against the decrees passed by the Additional District Judge, Delhi (Shri Gurbachan Singh) in Lac Nos. 31 and 32 of 1960, which were disposed of by a common judgment. Lac 31 of 1960 arose out of reference application of Shrimati Chandra Kumari Mittal and the other out of the joint application of Rajinder Singh and Harpal Singh under section 18 of the Land Acquisition Act 1894. This judgment in RFA. 77-D will dispose of Fra Nos. 78-D and 79-D of 1961. The notice under section 4 of the Act was issued on 26th October 1957 for acquiring the lands belonging to the appellants and others. The Land Acquisition Collector gave his award on 10th October 1958. Compensation was awarded by him at the rate of Rs. 3.00 per square yard. Out of 2134 square yards belonging to him Harpal Singh had sold 500 square yards to Rajinder Singh by sale deed (Ex. CW4/1) on 4th January 1957 for Rs-.6,000.00 at the rate of Rs. 12.00 per square yard.
(2) Out of 2134.31 square yards belonging to her Shrimati Chandra Kumari Mittal had agreed to give 1222 square yards by registered lease (Ex. C.I) from 1st January 1957 to Messrs Caltex India Limited (hereinafter called the Caltex Company) for putting up a petrol pump. The rent agreed to be paid under this lease for 20 years amounted to Rs. 87,000.00 as hereinafter detailed and she claimed this amount as compensation for the leased area of her land. The Land Acquisition Collector awarded her an amount of Rs. 1600.00 in addition to the compensation at Rs. 3.00 per square yard. as being the 'diminution of the profit of the land between the time of publication of the declaration under section 6 of the Act (25th October 1957) and the time of Collector's taking possession of the land (2nd April 1958) at the rate of Rs. 300.00 per month according to the registered lease deed dated the 30th May 1957 in favor of Messrs Caltex India Limited'.
(3) Before the Additional District Judge, the appellants Harpal Singh and Rajinder Singh claimed compensation at the rate of Rs. 25.00 per square yard and appellant Shrimati Chandra Kumari Mittal claimed compensation as to 912.31 square yards at Rs. 15.00 per square yard and as to 1222 square yards leased out to Caltex Company, the claim was on the basis of the aggregate rent payable under the said lease for the period of the lease.
(4) The Additional District Judge awarded compensation at the rate of Rs. 7.00 per square yard. He held that Shrimati Chandra Kumari Mittal was not entitled to anything more than what the Collector had awarded towards the loss of lease money, which also according to him had not been correctly awarded.
(5) The claims made by the appellants before the Additional District Judge have been made in the appeals also. Details may be given olny of the claim of Shrimati Chandra Kumari Mittal and these are:
Compensation for 1222 square yards leased out on the basis of loss of rent For the first five years at Rs. 300.00 per mensern Rs. 18,000.00 Second five years at Rs. 350.00 per mensern .. Rs. 21,000.00 For the last ten years .. Rs. 48,000.00 Total .. Rs. 87,000.00 Cempensation for 912 square yards For 912 square yards at Rs. 15.00 per sq. yd. .. Rs. 13,680.00 Total ..Rs. 1,00,680.00 Amount awarded by the Additional District Judge Rs. 17,181.00 Resulting figure .. Rs. 83,499.00 Out of this the amount claimed in her appeal is only .. Rs 83,460.00
(6) The sale deed (Ex. CW. 4/1) dated 4th January 1957 executed by Harpal Singh (appellant in RFA. 79-D of 1961) in favor of Rajinder Singh (appellant in RFA. 78-D of 1961) was for 500 square yards out of the very land under acquisition. The Additional District Judge has found, as a fact, that the entire consideration of Rs. 6,000.00 was paid for the sale and that it was a bona fide transaction. No evidence of any other sale of land near about October 1957, regarding similar neighbouring property, has been produced. The property sold under Ex. CW4/1 is about l/12th the extent of the property acquired. The Additional District Judge did not adopt the said rate (of Rs. 12..00 per square yard) on two grounds : that the same price could not be had for larger plots and that for the proper utilisation of a larger plot not only had considerable amount of land to be left for construction of roads, drains, etc. but also further expenditure had to be incurred for providing amenities.
(7) It has been urged by Shri H. S. Tyagi, learned counsel for the appellants, that the property under acquisition has a unique location since it abuts the Ring Road on one side and an 80 feet road on the other, as per plan Ex. C. 2.
(8) The land had been purchased by three co-sharers Shrimati Chandra Kumari Mittal, Harpal Singh and Mrs. R. G. Manghar Malani (with whom we are not concerned in these appeals) in equal shares by sale deed (Ex. CW3/1) dated 23rd February 1955 for Rs. 20.320.00. The land was divided between each of the co-owners so that every one of them had about l 00 feet frontage on the Ring Road. Each of the three plots, along the Ring Road measured 11000 square feet or 1222 square yards; the remaining land was then divided (though not actually demarcated) into three plots of 500 square yards each.
(9) It may be recalled that Rajinder Singh (who was examined as CW4) had purchased from Shri Harpal Singh 500 sq. yards, on 4th January 1957 for Rs, 6,000.00, this portion having a frontage on the 80 feet road. on the rear, but not the Ring Road. We see great force in the contention of Shri Tyagi that having regard to the location and size of the plots under acquisition there was no need to lose any land in the matter of further pracelling them out into plots. His further contention is that since the prices according to the Land Acquisition Collector, as well as the learned Additional District Judge, had been and were rising in that area compensation at the rate of Rs. l5.00 should have been awarded. It seems to us that in any case there is no justification for awarding compensation at a rate lesser than what is seem from Ex. CW. 4/1 for there is no possibility of any amount being lost in the matter of developing this land as the learned Additional District Judge thought. But the other difficulty pointed out by the learned Additional District Judge would still remain, namely, that smaller plots usually fetch higher prices than bigger plots. There is no material on which to hold that the same price of Rs. 12.00 per sq. yd. realised for a smaller plot of 500 sq. yds., would be available for larger extent. But this may to some extent be off-set by the allowance that has to be made for rising prices, over the intervening period of ten months between the date of Ex. CW. 4/1 and the notification under section 4 of the Act. We accordingly hold that the market value of the entire property under acquisition could be reasonably fixed at Rs. 12.00 per sq. yd. In this view, there is no need to discuss the other evidence in, the case, which does not bear so directly as Ex. Cw 4/1 on the question of the market value of the land.
(10) The next question for consideration is whether there is any basis for the claim made by Shrimati Chandra Kumari Mittal that she should be given credit for the entire lease amount for a period of 20 years as per Ex. C. 1. It was rightly not contended by Shri Tyagi that the said basis should be adopted in fixing the amount of compensation due for the property other than the portion measuring 1222 sq. yds. leased out for putting up a petrol pump. Turning to the lease itself we find that even though the original proposal was to have the lease for ten years the lease period was stated to be only five years, during which period the monthly rent was fixed at Rs. 300.00. But the lease was renewable at the option of the lessee at the' rate of rents for the further period as noticed above.
(11) Section 23 of the Act prescribes that for determining the amount of compensation to be awarded 'the Court shall take into consideration-
First, market-value of the land at the date of the publication of the notification under section 4, sub-section (1)'.
(12) The view taken by the Supreme Court in The State of West Bengal v. Mrs. Bela Banerjee and others : 1SCR558 that the guarantee of right to compensation for compulsory acquisition under Article 31 clause (2), before the Fourth Amendment, ensured the owner receiving a 'just equivalent' or 'full indemnification' was re-affirmed by Shah J. (as his lordship then was) speaking for majority in Rustom Cavasjee Cooper v. Union of India : 3SCR530 . Shah J. also pointed out that compensatin being the equivalent in terms of money of the property compulsorily acquired, the principle for determination of compensation is intended to award to the expropriated owner the value of the property acquired. The science of valuation of property recognizes several principles or methods for determining the value to be paid as compensation to the owner for loss of his property. If an appropriate method or principle for determination of compensation is applied, the fact that by the application of another principle, which is also appropriate, a different value is reached, the Court will not be justified in entertaining the contention that out of the two appropriate methods, one more generous to the owner should have been applied by the Legislature (vide paragraph 100). The important methods of determining compensation were stated, among others, to be the following:
'(I)Market value determined from sales of comparable properties, proximate in time to the date of acquisition, similarly situate, and possessing the same or similar advantages and subject to the same or similar disadvantages. Market value is the price the property may fetch in the open market if sold by willing seller unaffected by the special needs of a particular purchase; (ii) capitalization of the net annual profit out of the property at a rate equal in normal cases to the return from gilt-edged securities. Ordinarily Value of the property may be determined by capitalizing the annual value obtainable in the market at the date of the notice of acquisition' etc. (vide paragraph 100, page 609).
(13) Our attention was also invited to the decision of a Division Bench of the East Punjab High Court in The Governor-General-in-Council and another v. Hafiz Ghias-ud-din and others AIR 1949 E Pun 160. Mahajan J. speaking for the Division Bench observed in follows:
'SALESof neighbouring plots of land similarly used and sold for the same use at a certain price on or near the date of notification will furnish a good guide of market-value. If there is good evidence of offers regarding such plots that evidence would also be relevant provided it is held that the offers were of a genuine character. Even expert evidence as to the market-value of similarly used plots may be taken into consideration. The net yield of the land at the time of acquisition and an estimate of market-value by capitalising it on the basis of a certain period of time is only one of the modes of assessing market-value, but it is not the only mode of arriving at the decision. It is not always a satisfactory method and considerable element of conjecture always finds place in this method. Whether capitalised value is to be given on 16 years or 20 years or 25 years' basis is always a difficult question and this method can only be adopted if no satisfactory evidence of other kinds is available to estimate the market-value. Evidence of sales of the same land or of similarly used land in the neighborhood furnish a better criterion of market-value if it is of a satisfactory character and the sales are of a genuine character,' etc.
(14) The contention of Shri Tyagi, learned counsel for the appellant in Rfa 77-D of 1961, is that compensation for the portion measuring 1222 sq. yds. leased out to the Caltex Company for putting up a petrol pump being Rs. 87,000.00 for a period of twenty years, compensation of at least Rs. 87,000.00 should be awarded in respect of the portion measuring 1222 square yards He has not been able to cite any decision which has gone to the length of holding that in spite of the market value being ascertainable on the basis of sales of neighbouring plots situate near the acquired land and near the date of notification, recourse must still be had to the method of capitalizing the income. over a certain period of time. of the property under acquisition.
(15) The decision of the Madras High Court in T. Radhakrishna Chattiar v. The Province of Madras AIR 1949 Mad 171 which was reiled upon by Shri Tyagi is not of much assistance to him because there was no discussion in that case as to whether the value as disclosed by sales of similar neighbouring property or the capitalized value should be the determining consideration: the discussion was only concerning the number of years purchase, based upon the rate of interest for gilt-edged securities, to be adopted for capitalization.
(16) On the other hand, as it was held in the Govemor-General-in- Council v. Ghias-ud-din and in Rustom Cavasjee Cooper v. Union of lndia the estimate of market value by capitalizing on the basis of income over a certain period of time is not the only mode of arriving at such a decision; it is not always a satisfactory method owing to a considerable element of conjecture implicit in such a method. The better and more certain guide for assessing the market value, thereforee, would be sales of similar neighbouring properties provided those are near the date of notification. We have the advantage in this case of the sale-deed (Ex. Cw 4/1) dated 4th January 1957, nearly ten months prior to the notification under section 4, of 500 square yards out of a larger extent of about 6000 square yards-the property under acquisition-at the rate of Rs. 12.00 per sq. yd. Shri Tyagi contends that the sale, under Cw 4/1, was of a plot behind the property of the appellant (also under acquisition) facing the Ring Road and, thereforee, the said sale was not of the very plot which is subject matter of RFA. 77-D of 1961. We see no force in this contention. For determining the market value of any land under acquisition one has to look to sales (if they are available) of neighbouring and similar property; it would not always be feasible to have sales of the very property under acquisition. Sales of similar neighbour properties near about the relevant date furnish a better guide of market value than the estimate, which is at best hypothetical, by capitalizing on the basis of the likely income over a certain period of time.
(17) In arriving at the market value we are not concerned with any special value which the Caltex Company might have had for the said 1222 square yards for installing a petrol pump there; this is not a value which might be said to exist .generally for intending lessees or vendees.
(18) In Rustom Cavasjee Cooper, above referred to, Shah J. observed that the method of determining the value of property by the application of an appropriate multiplier to the net annual income or profit is a satisfactory method of valuation of lands with buildings only if the land is fully developed, i.e.. it has been put to full use legally permissible and economically justifiable, and the income out of the property is the normal commercial and not a controlled return or a return depreciated on account of special circumstances. If the property is not fully developed, or the return is not commercial the method may yield a misleading result (vide paragraph 104). If seems to us, thereforee, that in the case of especially vacant land it would not be proper to capitalize on the basis of income to be got from a lessee like the Caltex in this case for putting up a petrol pump.
(19) In the appeal by Shrimati Chandra Kumari Mittal (RFA, 77-D of 1961 ) no amount has been claimed by way of damages on the head of loss due to the lease not materialising on account of this acquisition. It may be noted that the Land Acquisition Collector had himself awarded Rs. 1600.00 on the head of damages in respect of 1222 sq, yds. in addition to the market value as fixed by him.
(20) The market value is fixed at Rs. 12.00 per sq. yd. thus increasing the compensation to be awarded to the appellants in this case by Rs. 5.00 per square yard. It is stated that the appellants have drawn the compensation as awarded by the learned Additional District Judge. Shrimati Chandra Kumari Mittal will, thereforee, be entitled to further compensation of Rs, 10,671.55 Paise plus solarium of 15%, namely, Rs. 1600.73 Paise. totalling Rs. 12,272.28 Paise. She will also be entitled to interest on the said amount at 6% per annuum from 2nd April 1958. the date on which possession was taken from her till payment. R.F.A. 77-D of 1961 is, thereforee, allowed to the above extent with proportionate costs.
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