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The Sub-collector Vs. Pillarisetti Parthasarathi Naidu and anr. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai
Decided On
Reported inAIR1942Mad739; (1942)2MLJ512
AppellantThe Sub-collector
RespondentPillarisetti Parthasarathi Naidu and anr.
Cases ReferredCouncil v. Sham Bahadoor I.L.R.
Excerpt:
- - it is clearly laid down in the case already cited that it has long been the practice of the courts in this presidency to calculate the profits from any form of landed property as equal to the profits made by investing money in gilt-edged securities. 769. 6. after all the function of the court in awarding compensation is to ascertain the market value of the land at the date of the notification under section 4(1). where definite material is not forthcoming either in the shape of sales of neighbouring land at or about the date of the notification or otherwise, the court can only proceed to do the best, it can under the circumstances......twenty years' purchase is the maximum compensation payable. in, this he is wrong. the number of years purchase which should be adopted in a given case must vary with individual cases and will have to be decided upon the material placed before the court. as we have already pointed out, the learned judge also fell into an error in taking the gross rental value for purposes of capitalisation instead of the net annual value.5. in the absence of evidence on the point, we think that twenty years' purchase should be adopted as the basis for fixing the market value. this is ordinarily adopted as the basis and we see no reason to depart from the rule of ordinary practice. our attention has been drawn to two decisions of this court, the first of which is reported in collector of kistna v......
Judgment:

Krisknaswami Ayyangar, J.

1. This appeal arises out of certain land acquisition proceedings taken for the purpose of acquiring 648 sq. ft. in Town Survey No. 1625 /1-A in Ward No. 4, Block 39 in the Town of Rajahmundry. The land acquisition officer awarded compensation at the rate of Rs. 4-8-0 per square yard. On a reference under Section 18 of the Act, the District Judge of East Godavari enhanced the compensation by awarding Rs. 26 per square yard. The Government has preferred this appeal and objects to the award of the District Judge on the ground that it is too high.

2. It is contended by the Government Pleader that the learned Judge was in error in proceeding to fix the market value with reference to the rent which was received from the property acquired. He has argued that Ex. II which is a sale-deed of neighbouring property furnishes the true basis for the award of compensation. Ex. II is dated 23rd July, 1928, and is a sale of 1000 square yards at Rs. 3 a square yard. In view of the fact that the notification under Section 4(1) in the present case was issued on 11th December, 1934, and the sale-deed Ex. II was more than six years prior in date, we are of opinion that this document does not furnish proper material for fixing the market value. Moreover, there is the evidence of the second witness for the claimant who has deposed that the value of the sites in the locality has increased by reason of the springing up of fresh amenities not in existence before. He has stated that a large number of houses has sprung up near the site acquired and two cinema halls have also come into existence in the locality and a petrol bunk opposite to it. The learned Government Pleader has suggested that the evidence does not make it clear that these amenities came into existence before the notification under Section 4 (1). The learned Judge in the Court below is apparently of the opinion that they did. If it was the case of the Government that they came into existence after the notification the matter must have been cleared by cross-examination directed to the purpose. But no such thing has been done. 'We are prepared to hold with the District Judge that the springing up of fresh amenities in the neighbourhood has pushed up the value of the suit site and its neighbourhood. Apart from Ex. II, there is no other sale-deed of neighbouring land which has been put forward as furnishing data for arriving at the market value. One other sale-deed, Ex. III, dated 24th July, 1928, was filed but admittedly the property covered by it is situated about half a mile away from the suit site and cannot furnish a proper criterion of the value.

3. The only material placed before the learned Judge in the Court below thus consisted of rental agreements of the acquired site. These are Ex. D series. Ex. D-2 the earliest of them is dated 22nd August, 1931, and was for a period of one year at Rs. 10 per month. On 1st August, 1932, another rental agreement, Ex. D-l, came into existence covering a period of two years and the rent fixed was Rs. 13. Ex. D was the rental agreement in force at the time of the notification and is dated, 1st October, 1934, and the rent fixed under it was also Rs. 13 per month. The learned Judge was right in his conclusion that Rs. 13 per month should be taken to be the gross rental received from the property. But before capitalising the rental income he should have deducted the municipal taxes payable in respect of the property and Ex. C series show that the half-yearly tax was Rs. 10-13-3. Out of a gross annual rent of Rs. 156, Rs. 21-10-6 must therefore be deducted in order to arrive at the net rental annual value.

4. The learned Judge has fixed the valuation by adopting twelve years' purchase whereas the claimant wanted the calculation to be made upon thirty years' purchase. There is no evidence on the record upon which it could be decided that any particular number of years' purchase should be taken as the basis. There was no material for the learned Judge to fix it at twelve years' purchase and the claimant himself did not put forward any material for persuading the Court to accept his basis, namely, thirty years' purchase. The learned Judge is apparently of the opinion that twenty years' purchase is the maximum compensation payable. In, this he is wrong. The number of years purchase which should be adopted in a given case must vary with individual cases and will have to be decided upon the material placed before the Court. As we have already pointed out, the learned Judge also fell into an error in taking the gross rental value for purposes of capitalisation instead of the net annual value.

5. In the absence of evidence on the point, we think that twenty years' purchase should be adopted as the basis for fixing the market value. This is ordinarily adopted as the basis and we see no reason to depart from the rule of ordinary practice. Our attention has been drawn to two decisions of this Court, the first of which is reported in Collector of Kistna v. Zamindar of Challapalli : AIR1938Mad33 . and followed in the second of the cases cited, namely, Land Acquisition Officer, Calicut v. Suboa Rao : AIR1941Mad684 . The first of these cases deals with the compensation awardable in respect of the melvaram right of a zamindar on zamindari property. The second of the cases has reference to a site with a building thereon in the town of Calicut. It extends the principle of the decision in Collector of Kistna v. Zamindar of Challapalli : AIR1938Mad33 . The learned Judges make the following statement:

It is clearly laid down in the case already cited that it has long been the practice of the Courts in this Presidency to calculate the profits from any form of landed property as equal to the profits made by investing money in gilt-edged securities.

We are unable to discover in the judgment in the case referred to any statement of law to this effect. On the other hand, Venkatasubba Rao, J., has expressly stated that there is no uniform or rigid practice in regard to the number of years purchase and cites three cases in support of the statement, Harish Chunder Neogi v. Secretary of State for India in Council (1907) 11 C.W.N. 875. Secretary of State for India in Council v. Shanmugaraya Mudaliar . and Secretary of State for India in Council v. Sham Bahadoor I.L.R. (1884) Gal. 769.

6. After all the function of the Court in awarding compensation is to ascertain the market value of the land at the date of the notification under Section 4(1). Where definite material is not forthcoming either in the shape of sales of neighbouring land at or about the date of the notification or otherwise, the Court can only proceed to do the best, it can under the circumstances. In the present case we think we shall not be erring on the wrong side if we say that the market value should be fixed by capitalising the net annual income at twenty years' purchase. We accordingly hold that the respondents should have been given compensation at the said rate.

7. In the result the appeal fails and the cross-objections are allowed to the extent of the difference between the amount awarded by the District Judge and the amount to be calculated on the basis mentioned above. On this basis it is agreed between the parties that the respondent will be entitled to Rs. 3,090 in all including the fifteen per cent. compensation. The amount awarded by the lower Court is varied by substituting for it the figure Rs. 3,090. The respondent will also be entitled to the interest on the excess from the date of the taking up of possession by the Government to the date of payment. The appeal will be dismissed with costs but the appellant will pay only half the costs of the respondent in the memorandum of cross-objections which is partially allowed as mentioned above.

8. Appeal dismissed and memorandum of objections partially allowed.


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