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Thareesamna and ors. Vs. the Deputy Collector and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai
Decided On
Reported in(1923)45MLJ339
AppellantThareesamna and ors.
RespondentThe Deputy Collector and ors.
Cases ReferredForeign Affiairs v. Charles Worth Pillink and Co.
Excerpt:
.....and it is impossible to state with precision what allowance should be made for them. 170 per cent, but this fact is not very useful, not only because the sale was subsequent to the date of the notification but also because the plot is, as the district judge describes it, a good corner block. i am satisfied that this is a fair valuation. 50 per cent, on the ground that the land in question did not have a proper access or a good frontage......his conclusions and i agree in the order proposed by my learned brother.venkatasubba rao, j.2. the land acquired is 6 acres 56 cents in extent and is in cochin town. the learned district judge has very clearly set out in his judgment the situation of the land, and it is sufficient for the present purpose to say that it is close to kalvetti densely covered with houses and that a tidal channel runs through it. on the west is the european quarter fronting the sea and on the north is the commercial land abutting on the back-water. the learned district judge has proceeded on the assumption that the value of the land in the aforesaid two localities cannot furnish any basis for purposes of comparison and this has not been seriously attacked before us.3. the main question, however is, is the.....
Judgment:

Phillips, J.

1. I think the District Judge is inclined to*allow insufficient weight to the award itself, which is the estimate of an impartial officer, based upon evidence and personal enquiry,, and cannot therefore be ignored in coming to a conclusion on the evidence, but notwithstanding this I am not prepared to differ from his conclusions and I agree in the order proposed by my learned brother.

Venkatasubba Rao, J.

2. The land acquired is 6 acres 56 cents in extent and is in Cochin Town. The learned District Judge has very clearly set out in his judgment the situation of the land, and it is sufficient for the present purpose to say that it is close to Kalvetti densely covered with houses and that a tidal channel runs through it. On the west is the European quarter fronting the sea and on the north is the commercial land abutting on the back-water. The learned District Judge has proceeded on the assumption that the value of the land in the aforesaid two localities cannot furnish any basis for purposes of comparison and this has not been seriously attacked before us.

3. The main question, however is, is the value to be assessed on the footing that the land is agricultural, as has been done by the Deputy Collector, or is its adaptability for building purposes to be taken into consideration, as has been done by the District Judge? On behalf of the Government three witnesses were examined. The 1st witness, who is a Municipal Councillor, admits that on the acquired portion people have lived for a long time and that there were tiled dwelling houses. He, however, states that it is marshy and not fit for commercial purposes and that respectable people would not live there. The second witness says that, except for 60 feet breadth of the canal, the whole site is available for house building and admits that the most profitable way of developing the acquired land would be to deepen the channel and use the banks for ware-houses. He also says that respectable people would not live on the site, and the 3rd witness similarly deposes that the land is not fit for mercantile purposes, that it is not healthy and that well-to-do people would not live there. The effect of the evidence is that the sanitary conditions are not satisfactory and that people, who can afford to live in more healthy surroundings or in more fashionable parts of the town, would not generally reside on the site acquired. The land has been acquired for building purposes and it is not disputed that, when it is reclaimed, it can be rendered suitable for house-sites.

4. The learned District Judge has held that the owner is entitled to the value obtainable in open market for the land if put to its most lucrative use. It seems to me that he has stated the principle correctly. In The Queen v. Brown L.R. 2 Q.B. 630 , agricultural land was held to have a potential value for building purposes, Cockburn, C. J. observing 'A Jury * * * * * * * may take into account not only the present purpose to which the land is applied, but also any other more beneficial purpose to which in the course of events at no remote period it may be applied * * * * *'

5. If the special value exists only for the particular purchaser who has obtained powers of compulsory purchase it cannot be taken into consideration in fixing the price. But when the special value exists also for other possible purchasers, the owner is entitled to have this element of value taken into consideration. See the observations of Lord Moulton in In re Lucas v. Chesterfield Gas and Water Board (1909) 1 K.B. 16. The principle underlying this dictum is that the purpose for which the land is acquired should not be taken into consideration, for, if it were so, the public would be purchasing as it were, its own improvements. See Wernicke v. Secretary of State for India in Council (1909) 13 C.W.N. 1046 . Land Acquisition Act, Section 24(5) embodies this rule. But when the special value exists for other possible purchasers, there is a market in which that special value goes towards fixing, the market price. See again the observations of Lord Moulton in In re Lucas v. Chesterfield Gas and Water Board (1909) 1 K.B. 16 at 31 above cited. Under Section 23, the Court is to take into consideration the market value of the land. The expression 'market value' has been described 'as the price that an owner, willing and not obliged to sell, might reasonably expect to obtain from a willing purchaser Kailash Chandra Mitra v. Secretary of State for India in Council (1910) 17 C.L.J. 34, and the special adaptability for building purposes has been repeatedly held to be an element to be taken into consideration. 'If, for instance,' says Vaughan Williams, L.J., in Bwilfa and Marthyr Dare Steam Collieries Ltd., v. Pontypridd Waterworks Co. (1902) 2 K.B. 135 'he (the umpire) has to assess the value of land which is used as an agricultural land, he is entitled to take into consideration its adaptability for building land, because that is a fact which is in existence at the time, the notice to treat is given.'

6. The value for future purposes is generally referred to as the potential value of the land. 'The tribunals assessing compensation may take into account not only the present purpose to which the land is applied, but also any other more beneficial purpose to which, in the course of events, it might within a reasonable period be applied....' Lord Halsbury's Laws of England, Vol. VI, page 37.

7. This is a well established principle and has been recognised in numerous decisions in India. It was held in Premchund Bussal v. The Collector of Calcutta I.L.R. 2 C. 103 , that the correct principle to apply is to assess the market value of the property not according to its present disposition but as laid out in the most lucrative and advantageous way in which the owners could dispose of it (p. 108). Similarly in In re The Collector of Poona v. Kasinath Khasgiwala I.L.R. (1886) B. 585, where the land acquired was originally devoted to agricultural purposes, compensation was awarded on the footing of the most lucrative use of the land; and it was not disputed that there the most advantageous way was to use it for building purposes. This principle was applied in In the matter of the Land Acquisition Act, Munji Khetsey ( I.L.R. 1891) B 279 where the land acquired lay in the vicinity of a town where building was going on and there was a fair probability of the owner being able, owing to its situation, to sell or lease his land for building purposes. 1 may also refer to a recent decision' of this Court in Raghunatha Rao v. Secretary of State for India 13 L.W. 11 which recognises this principle.

8. The Deputy Collector arrived at the value of the land by capitalizing income. The income was necessarily of the land according to its present disposition and not as laid out in the most lucrative and advantageous way in which the owner could dispose of it. The income was of the land as used for agricultural purposes. The method adopted is opposed to the principle as enunciated in the decisions on the subject both English and India. The learned District Judge, on the other hand, has adopted the method of valuation of fixing the price with reference to the^ value of the lands adjacent to the land acquired and possessing similar advantages. I have no doubt whatsoever that he has adopted the correct method.

9. I have so far dealt with the principle to be applied in determining the compensation. The next question to be decided is, has the District Judge come to a right conclusion on the evidence before him? In my opinion, he has correctly appreciated the evidence, and, as I agree with his conclusions. I shall deal with this aspect of the case very briefly. He has adverted to the sale deeds covering the lands in the vicinity. Of these it seems to me that the following are material and furnish the basis for the valuation of the land in question. (1) Ex. IX relates to No. 369 sold in 1913 at Rs. 75 per cent. (2) Ex. VI relates to No. 362 sold in 1916 at Rs. 80 per cent. (3) Ex. VIII relates to No. 360 sold in 1917 at Rs. 100 per cent. (4) Ex, XI relates to the thirty-year leases granted by the Municipality in 1918 at Rs. 176 to 225 per cent, of Survey No. 578 reclaimed by the Municipality. Then we have another class of sale deeds which have not the same direct bearing on the question but which, in a greater or less degree, prove that the value of land has been rising and is generally high throughout Cochin : (1) Ex. VII which relates to No. 79 sold for Rs. 170 per cent in 1919 after the date of the notification. (2) Ex. III which relates to No. 607 which fetched in 1918 Rs. 700 a cent. (3) Ex. XXI11 which relates to No. 571 which fetched Rs. 1,440 a cent. This was in 1919 after the date of the notification. On this material and on some oral evidence, the District Judge has come to the conclusion that Rs. 100 a cent fairly represents the value of sites with a good road frontage in the locality In question. I am not prepared to disagree with him. As was observed in In re The Trustees for the Improvement of the City of Bombay v. Kersandas I.L.R. (1908) B. 28 , no evidence of former sales can be obtained which shall be precisely parallel in all its circumstances to the sale of the land compulsorily acquired, and differences exist, and it is impossible to state with precision what allowance should be made for them. The learned District Judge has rightly refused to adopt a valuation based on Exs. III and XXIII. The lands comprised by them are situated in the northern portion which, as already observed, is the valuable commercial land abutting on the backwater. No. 79 fetched no doubt Rs. 170 per cent, but this fact is not very useful, not only because the sale was subsequent to the date of the notification but also because the plot is, as the District Judge describes it, 'a good corner block.' I may here state that, in respect of the land covered by Ex. XI, it costs the Municipality Rs. 80 per cent to reclaim it. It was argued on behalf of some of the claimants that the thirty-year leases of this reclaimed land fetched on the average Rs. 200 per cent and deducting Rs. 80 from it a compensation of at least Rs. 120 per cent, should have been awarded. But this argument ignores the fact that the situation of the reclaimed land, No. 578, is more favourable than that of the land in question. The former is much nearer the commercial quarter of the town.

10. Dealing with individual claims in regard to Nos. 373 to 375, the District Judge thinks that, as they constitute a compact site, Rs. 100 per cent, would be reasonable, and he deducts for cost of reclamation Rs. 60 and awards Rs. 40 per cent. I am satisfied that this is a fair valuation. It is difficult to say whether Rs. 100 or Rs. 120 or a little more or less is the proper value of the land, and it is equally difficult to say whether the cost of reclamation would be Rs. 80 or Rs. 60 or some other figure near it. The District Judge had before him the evidence that it costs the Municipality Rs. 80 per cent. to reclaim the land covered by Ex. XI. It is, indeed, impossible to accurately estimate the cost of reclamation. It will depend upon the state of the land acquired, and cost of labour and of material. As their Lordships of the Judicial Committee observe in In re The Secretary of State for Foreign Affiairs v. Charles Worth Pillink and Co. (1900) I.L.R. 226 B. 1 (P.C.), 'In such an enquiry relating to subjects abounding with uncertainties, there is more than ordinary room for guesswork, and it would be very unfair to require an exact exposition of reasons for the conclusions arrived at.' On the whole, however, I have come to the conclusion that Rs. 40 per cent, is a proper valuation.

10. In regard to the valuation of a house on this site there has been some dispute. The learned District Judge allowed Rs. 2,000 for it. There is evidence that it is worth that sum and there is no evidence contra.

11. Mr. Anantakrishna Aiyar argued on behalf of the claimants to whom these portions of the land belonged that his clients were entitled to the value of the trees on the land on the footing that they were fruit-bearing trees. This contention is untenable, because the basis of the calculation being that the lands are valued as building sites, the claimants cannot also have an advantage to which they will be entitled only if the lands have been dealt with as agricultural lands. On the other hand, what has been awarded is an inclusive price, and the claimants cannot be heard to say that the trees should be separately assessed as fruit-bearing trees.

11. The next item to be dealt with is item No. 392. For the land and houses the District Judge has awarded Rs. 6,000. The valuation of Rs. 75 per cent, allowing for the inferiority of the site is, in my opinion, right. The houses are valued at Rs. 4,800, and I am not prepared to say that the amount is excessive. The District Judge also takes note of the fact that there was an offer of Rs. 6,000 for the land and the houses together. I see no reason to differ from the findings of die District Judge on any of these points.

12. These conclusions will entail the dismissal of Appeal No. 145 of 1921 and the memorandum of cross appeal filed on behalf of the 1st respondent, the Deputy Collector or Cochin. They will accordingly be dismissed with costs. So far as the memorandum of objections is concerned, the costs will be paid by the 1st respondent to the appellant and 3rd respondent separately and will be taxed on the respective amounts claimed against each in the memorandum of objections.

13. There remains only one matter to be dealt with, the compensation fixed in respect of No. 378. The District Judge allowed only Rs. 50 per cent, on the ground that the land in question did not have a proper access or a good frontage. He further allowed Rs. 1,000 for a house standing on the site. Adding the statutory 15 per cent, he fixed the total sum at Rs. 1,840. This valuation was not seriously disputed either by the claimant or by the learned Advocate General who appeared on behalf of the Government. The District Judge, however, was under misapprehension as regards this portion of the claim. He thought that there was an omission on the part of the owner to make a claim pursuant to the notice given under Section 9, and he held that Section 25(2) was, therefore, applicable and refused to grant as compensation more than the amount awarded by the Collector, namely, Rs. 1,530 odd although on the merits he came to the conclusion that Rs. 1,840 was the correct valuation. It is now conceded that there was a claim pursuant to the notice under Section 9 and that there was an oversight on the part of the District Judge. The learned Advocate General, however, sought to support the judgment on the ground that it appears from the record that the application by the owner under Section 18 requiring a reference to the Court was made after the expiry of the period of six weeks mentioned in Clause 2 of that section. The point was for the first time taken before us, and we are not in a position to say that, if an opportunity had been given to the owner, he would not have had an answer on this part of the case, and we cannot see our way to allow this objection to prevail. That objection failing, we must necessarily allow the memorandum of cross objections filed by the 2nd respondent to the extent found in his favour by the District Judge. He will pay and receive proportionate costs both here and in the lower Court.


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