G. Ramanujam, J.
1. An extent of 41.97 acres in survey Nos. 272, 280, 286, 287, 288, 294, 295, 299, 300, 302 and 306 to 308 in Putlur village was originally requisitioned under the Madras Requisitioning and Acquisition of Immovable Property Act, 1956, for establishing a State Seed Farm, by a notification dated 31st October, 1962. The lands were taken possession of by the State on 24th January, 1963. Subsequently the State acquired the lands under the provisions of the said Act, While awarding compensation for the lands acquired the competent authority, the District Revenue Officer, Saidapet, grouped the lands under three heads : (1) wet lands 4.55 acres, (2) nanavari lands 14.01 acres and (3) dry lands 23.41 acres. Out of the wet lands 7 cents were treated as vacant site with certain structures, and the rest 4.48 acres were valued at Rs. 35 per cent, based on the basis of a sale deed Exhibit B-3 dated 27th August, 1962, relating to survey No. 195/2. As regards manavari lands, out of the extent of 14.01 acres the competent authority found that actually 13.57 acres were being cultivated with paddy, and therefore, he treated it more or less as wet land and fixed a compensation at Rs. 31 per cent, based on Exhibit B-4 dated 19th February, 1963, which dealt with survey Nos. 402 and 396. Out of dry lands of 231.41 acres the competent authority found that 5.44 acres have been actually irrigated with well water and paddy is raised. For those lands he has fixed Rs. 20 per cent, as the market value based on Exhibit B-5 dated 17th September, 1962, dealing with survey No. 10/1. 17.72 acres out of the dry lands were found to be cultivated with dry crops and therefore he fixed a sum of Rs. 15 per cent, for those lands based on the sale deed Exhibit B-6 dated 20th July, 1961, dealing with survey No. 126. As regards the balance of the 25 cents out of the dry lands it was found that it was only vacant lands with occasional cultivation with dry crops and for this extent the competent authority fixed the value at Rs. 10 per cent. The competent authority thus fixed the compensation for the entire lands acquired only on the basis of the existing sale deeds in and around the locality. When the matter was referred to the arbitrator (District Judge) at the instance of the appellant, he also adopted the same basis. But he however increased the value fixed by the competent authority slightly in respect of all the categories of lards as shown in the statement given below.
by competent Awarded by Claim in
S.No. Nature Acres authority Court appeal.
per cent. per cent.
A.C. Rs. Rs. Rs.
295-A Wet 4.48 35 40 80
302-A Wet 0.7 10 12 80
291-2, 1 paddy 13.57 31 35 80
272-3, 280, Dry paddy
286, 287-1, grown. 5.44 20 24 80
2,299-2 17.72 12 15 45
307-2, 308, Rainfed
306-2 dry crops. 0.25 10 12 45
2. En the lands acquired, there were five wells, one each in each of the survey Nos. 280, 299/1, 298/3, 302/1-A and 307/2. The competent authority valued all these wells and fixed compensation therefor. There were certain structures such as cattle-shed, pump set, etc. in survey No. 298/2, a cattle shed in survey No. 307 and a pumpset in survey No. 307/2 and those structures were also valued by the arbitrator. The appellant was aggrieved against the Valuation fixed by the competent authority in respect of the two wells situate in survey Nos. 293/3 and 307/2 alone, and the Court enhanced the value of these two wells to Rs. 5,000 each. Not satisfied with the compensation fixed by the lower Court (Arbitrator) for the lands, structures and wells, the appellants are before this Court in A.S. No. 778 of 1967. They claim compensation at the rate of Rs. 80 per cent in respect of lands which are cultivated with paddy and at the rate of Rs. 45 per cent for the other lands in which admittedly dry crops are raised. The appellants also claim an enhanced compensation of Rs. 23,870 for the structures and wells in addition to the sum of Rs. 26,130-15 already awarded by the lower Court. Hence the question in the said appeal is whether the valuation fixed by the Court for the lands, wells and structures is proper and reasonable.
3. In A.S. No. 779 of 1967 the appellants claim a higher recurring compensation of Rs. 30,000 for the period of requisition as against the sum of Rs. 13,686-76 fixed by the competent authority and affirmed by the arbitrator.
4. When these appeals were taken up for hearing at an earlier stage the appellant pleaded that the compensation should be fixed on the capitalisation method based on the annual income from the properties as the sale deeds filed in the case by both the parties were not comparable. But no material had been placed either before the competent authority or before the arbitrator by either of the parties to show the actual income from the properties, and both of them sought the valuation to be fixed on the basis of the sale deeds filed by them and not on any other basis. As we felt that the relevant data as to the nett income from the properties was necessary if the appellant's claim for compensation on the basis of capitalisation of the income is accepted, we called for a finding from the lower Court as to the probable nett annual income from the lands acquired. The lower Court has rendered a finding after taking evidence, both oral and documentary adduced on either side to the effect that the gross income from the lands at the time of the acquisition was about Rs. 31,275, that after deducting 1/3rd out of this towards the cost of cultivation if the lands had been personally cultivated the nett income would be Rs. 20,850, but that if the land had been leased out to the tenants the nett income would be Rs. 12,510.
5. The learned Government Pleader appearing for the State raised a twofold preliminary objection at the time of the hearing of the appeals, (1) that the appellant cannot seek a different mode of valuation, when he did not seek, capitalisation method to be adopted either before the competent authority-or before the lower Court and (2) that, in any event, when there are comparable sale deeds available in respect of the lands in and around the locality, the capitalisation method cannot be adopted. The learned Government Pleader takes us through the provisions of Sections 8(2) and 8(3) of Madras. Act XLII of 1956 and states that the income is relevant for fixing compensation for lands requisitioned under Section 8(2) while for fixing of compensation for the lands acquired under Section 8(3) income is not taken into account. He specifically refers to Clause (a) of Section 8(3) Which is as follows:
The price which the requisitioned, property would have fetched in the open market, if it had remained in the same condition as it was at the time of requisitioning and been sold on the date of acquisition....
and submits that it is not possible to bring in the notion of market value in the light of Section 23 of the Land Acquisition Act while interpreting Section 8(3)(a) and that the only basis that can be adopted for fixing the compensation, under Section 8(3)(a) can only be on the basis of the sale deeds and not on the basis of capitalisation of income. We feel that as we are accepting the second contention advanced on behalf of the. State that whenever there are comparable sale deeds with reference to similar lands in the locality in or about the time of the acquisition the capitalisation, method cannot be adopted, it is not necessary to decide the question as to whether the income basis could or could not be adopted under Section 8(3)(a) of the Act for fixing the compensation for the lands acquired. In Raja Vyricherla Gajapatiraja v. Revenue Divisional Officer, Visakhapatnam , the Judicial Committee had observed in dealing with the question of fixing the market value under Section 23(1) of the Land Acquisition Act thus:
There is not in general any market for land in the sense in which one speaks of a market for shares or a market for sugar or any like commodity. The value of any such article at any particular time can readily be ascertained by the prices being obtained for similar articles in the market. In the case of land, its value in general can also be measured by a consideration of the prices that have obtained for similar land of similar quality and in meant position; and this is what must be meant in general by 'the market value' in Section 23.
In Sub-Collector Rajahmundry v. Parthasarathi : AIR1942Mad739 , a Bench of this Court has held that the capitalisation method could be adopted only as a last resort and that relevant observation is extracted below:
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.
In State of Kerala v. P.P. Hassan Koya : 3SCR459 , the Supreme Court said that an instance of sale which is proximate in time to the date of the notification under Section 4(1) of the Land Acquisition Act in respect of land similarly situate and with similar advantages and which is proved to be a transaction between a willing vendor and a willing purchaser would form a reliable guide for determining the market value. In that case the Supreme Court adopted the method of capitalisation of return in the case of acquisition of land with buildings as there was no reliable evidence of instances of sales of similar land with buildings proximate to the time of the date of the notification under Section 4(1). In State of Gujarat v. Vekkatsinghji : 3SCR692 , the Supreme Court again had reiterated that the market value to be fixed under Section 23(1) of the Land Acquisition Act is 'the amount for which the land is sold in the open market, which 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.
Therefore, we are of the view that when there are comparable sale deeds which could form a proper basis for finding out the value of the lands as on the date of the acquisition, the method of capitalisation of income could not be adopted. As a matter of fact both the parties went before the competent authority as well as the Arbitrator and sought the fixation of the value of the lands only on the basis of the existing sale deeds in relation to the lands situate near by and it is only before this Court the appellant has made an attempt to have the compensation fixed by adopting the method of capitalisation of income by filing additional grounds of appeal. Therefore we shall proceed to see whether the value fixed by the lower Court is just and fair having regard to the prevalent prices of lands in the locality.
6. As already stated, the competent authority classified the lands into three categories, that is, wet lands, manawari lands and dry lands and treated portions of the manawari lands as well as dry lands as lands wherein wet cultivation was carried on by the appellant before the date of acquisition. But, in our view, there is no reason for differentiating the lands which are put to the same use and which practically yield the same income to the owner. The mere fact that some of the lands where wet cultivation was carried on has been registered as wet and the others as manawari or dry in the Government record will not make the actual user of the lands as irrigated lands different from wet lands. In this case it is not in dispute that there were five wells in the entire lands acquired out of which a well situate in survey No. 293/3 had an electric motor of 5 H.P. and a well in survey No. 307/7 had an electric motor of 15 H.P. both of which having copious supply of water. It is also in evidence that the appellant had been selling water from these two wells to others owning lands nearby for irrigation of their lands. Therefore we feel that all the lands which were being used for wet cultivation should be treated alike notwithstanding the registration of the lands either as wet, manawari or dry. It is true that the lands registered as wet will have a right to receive water from a Government source of supply. But, in this case, it is not the case of the State that the lands registered as manawari and dry and which have been actually put to wet cultivation suffered for want of water from the wells. When the appellant had sufficient number of wells to irrigate his lands with wet crops the mere fact that such lands were registered as manawari or wet in the Government records would not make any difference in fixing the valuation. Therefore, we intend treating all the lands which were used for raising wet crops as wet lands. Hence on the basis of the finding given by the competent authority 4.48 acres in group 1,13.57 acres in group 2 and 5.44 acres in group 3 should be treated alike for the purpose of valuation. That leaves a balance of 17.72 acres of dry lands and 76 cents of vacant sites wherein certain structures existed and were left uncultivated.
7. Then coming to the valuation, the competent-authority has adopted the sale deed Exhibit B-3 dated 27th August, 1962, in respect of survey No. 195/2 which was sold at the rate of Its. 30 per cent as the basis for fixing the value of wet lands. Survey No. 195/2 covered by the sale deed Exhibit B-3 is somewhat distant from the acquired fields and it has not been shown that any well existed in that land. The land has to mainly depend upon irrigation for the supply of water from the Putlur Eri. It is also situate farther away from the lake than the acquired fields. Therefore, we feel that the sale deed Exhibit B-3 cannot be taken as a reliable basis for fixing the value of the wet lands. Similarly, Exhibit B-2 dated 27th August, 1962, dealing with survey No. 411/3 giving a rate of Rs. 30 per cent cannot be relied on, Survey No. 411 is still farther from the lake than the lands in survey No. 195/2 and there also there is no well and the land has to mainly depend upon the lake water. On the other hand the appellant has produced Exhibits A-1, A-2, A-3 and A-4, as more reliable data for the purpose of fixing the market value of the wet lands acquired. Exhibit A-1 is dated 7th December, 1963 and it is an agreement of sale under which 48 cents in survey No. 297/P. Was agreed to be sold at the rate of Rs. 52 per cent and Exhibit A-2 is the relevant sale deed dated 6th May, 1964, Exhibit A-4 is an agreement of sale dated 20th January, 1964, whereunder 35 cents of land in survey No. 198/3 has been agreed to be sold at the rate of Rs. 60 per cent and the relevant sale deed is Exhibit A-3 dated 9th April, 1964. These documents have been attacked by the State as having been got up only for the purpose of boosting up the value of the lands. It is pointed out that the agreements Exhibits A-1 and A-4 had been brought into existence just before 6th January, 1964, the date of notice of acquisition under the Act and the stamp papers wherein the agreements have been engrossed showed that they had been purchased long before in the name of third parties and that there is considerable suspicion as to whether in fact the agreements came to be entered into on the dates alleged. Exhibits A-3 and A-4 are also attacked on the ground that the purchaser thereunder was the nephew of the appellant, and therefore, they could not be taken at their face value, as there is sufficient motive for the nephew to boost up the price and put a higher value for the lands purchased by him so as to help his uncle. Though we are inclined to ignore Exhibits A-3 and A-4 for the reasons and the suspicious circumstances mentioned by the learned Government Pleader, we are not inclined to ignore Exhibits A-1 and A-2 which are between third parties. There is no motive alleged either against the vendor or the purchaser thereunder except the fact that the stamp papers used for the agreement Exhibit A-1 is somewhat of earlier date which can be explained by the fact that the document writer might have used stamps which were immediately available. There are no vitiating circumstances shown as to why the sale under Exhibit A-2 should be ignored. As a matter of fact the land covered by Exhibit A-2 practically abuts the lands acquired on the east and it has got all the advantages which the acquired lands had. It was also a registered wet land and it had also the facility of a well. C.W. 1, the purchaser under Exhibit A-2 says that he has been raising three crops in that land after his purchase. We therefore see no reason as to why the rate fetched under Exhibit A-2 for the neighbouring land should not be adopted for fixing the value of the wet lands. But we cannot ignore the basic fact that Exhibit A-2 covered only a small piece of land of 48 cents and the lands acquired are extensive fields having a total extent of 41.97 acres. It is well known that large and extensive block of land cannot fetch the same price as a small bit of land will fetch though with similar advantages. Giving due allowance for that fact and adopting the rate paid under Exhibit A-2 we fix the value of the lands which were put to wet cultivation at the rate of Rs. 50 per cent.
8. In respect of the dry lands which is of the extent of 17.72 acres the competent authority awarded Rs. 12 per cent and the Court (Arbitrator) increased it to Rs. 15 per cent and the basis adopted, as already stated, Was the sale deed Exhibit B-6 dated 20th July, 1961, relating to survey No. 126. It is seen that survey No. 126 is very far from the acquired lands and it has not been shown to have the same advantages as the acquired lands which practically abut the Putlur tank. We therefore feel that the value of dry lands cannot be based on Exhibit B-6. We have already seen, that the dry lands form part of a compact block along with the wet lands of the appellants and a portion of the same has already been converted as wet with the help of the well water. If there is copious supply of water in the five wells which have been acquired, there is a possibility of the dry lands being converted into either garden lands or wet lands. Even otherwise, the evidence of the appellant is to the effect that commercial crops like groundnuts were being raised in these dry lands. The appellant's evidence which has not been controverted on this aspect is as follows:
I used to cultivate both dry and wet in the remaining 17 acres and 17 cents. The soil is a bit inferior. It is now sandy. If groundnuts are grown there will be good yield. It is in one block with the wet lands. There are two wells.
It is only because of these circumstances, the lower Court increased the value of dry lands from Rs. 12 to Rs. 15. But in our view, the reasonable and proper value will be about Rs. 20 per cent having regard to the document Exhibit B-5 dated 17th September, 1962, relating to a dry land in survey No. 10/1 which had been sold at the rate of Rs. 20 per cent. As regards the rest of the extent which has been taken as vacant sites with structures etc. the competent authority fixed the value at Rs. 10 and the Court below has awarded Rs. 12 per cent. We are of the view that no distinction need be made between the dry lands and this extent of land which has also been classified as dry lands but left vacant or fallow without cultivation for the purpose of erecting structures etc. In our view the result will be the appellant will be entitled to get compensation for 23.49 acres at Rs. 50 per cent and for 18.48 acres which are all treated as one category of dry lands at the rate of Rs. 20 per cent.
9. As regards the enhanced compensation claimed by the appellant for the wells and structures, we consider that the decision of the lower Court is quite justified and the compensation fixed is fair and reasonable. It has accepted the estimate made by R.W. 2, the Union Engineer in Exhibits B-9 and B-10 as they were based on Government scheduled rates as against estimated value given by G.W. 4 in Exhibit A-18 series. We see no reason to differ from the lower Court in this regard. The appellants contend that they are entitled to get something more for the two wells situate in survey Nos. 298/3 and 307. It is seen from the data given by R.W. 2 as also the data given by C.W. 4 that the soil is sandy. Therefore the cost of digging the well may not be as much as that of a well dug in a rocky soil. The Court below has accepted the value fixed by the competent authority in respect of the wells, except the wells in survey Nos. 289/3 and 307/2 which had copious supply of water, and raised their value to Rs. 5,000 each. We do not see any justification to further enhance the value of the said two wells or the other wells acquired any further. In our view Rs. 5,000 awarded for each of the two wells is just and fair.
10. The learned Counsel for the appellant says that he is entitled to interest for the compensation awarded. The Court below has not awarded any interest, presumably on the basis that the statute does not provide for payment of any interest. But it has been held in Satinder Singh v. Umrao Singh : 3SCR676 , with reference to the provisions of the East Punjab Requisition of Immovable Property (Temporary Powers) Act (XLVIII of 1948) that a person whose lands have been acquired under that Act is entitled to interest from the date of acquisition either on equitable grounds or under the provisions of the Interest Act. We have also followed that decision and awarded interest at 4% in a case arising under the provisions of Madras Act XLII of 1956 in A.S. No. 192 of 1964. There we have held, after referring to the decision in Attakoya v. Kunhikoya : AIR1939Mad877 , and the decision of the Supreme Court above referred to, that if a person is compulsorily kept away from the possession of his property then he would be entitled to the payment of such compensation therefor, and if there is a delay in the grant of such compensation he will be entitled in equity to interest on the quantified amount even though such quantification was done later and that he will be entitled to interest as per Section 1 of the Interest Act. We therefore hold that the appellants are entitled to interest on the compensation paid at 4% per annum.
11. The appellants' Counsel then contends that the appellants arc also entitled to a solatium of 15% as is normally given in cases under the Land Acquisition Act. But we are of the view that as the provisions of the Madras Requisitioning and Acquisition of Immovable Property Act, 1956 is silent on the question of solatium, it is not possible to grant solatium of 15% along with the compensation on the analogy of the Land Acquisition Act. In the decision rendered by us in Ramaswami Naidu v. State of Madras : AIR1971Mad297 we have held that solatium of 15% is not payable in cases of acquisition under Madras Act XLII of 1956. Therefore, following that decision, We hold that the appellants are not entitled to the payment of solatium of 15% on the compensation fixed for the lands in question.
12. As regards the compensation payable to the appellants for the period of requisition, the competent authority fixed a sum of Rs. 13,686-76 and the lower Court accepted the same as fair and proper, having regard to the evidence of R.Ws. 1 and 2 and C.W. 5. We also feel that the recurring compensation fixed for the period of requisition is fair and reasonable. Under Section 8(2) of the Act the amount of compensation payable for the requisitioning of any property shall consist of a recurring payment of a sum equal to the rent which would have been payable for the use and occupation of the property if it had been leased out for that period. The proviso to Section 8(2) provides that in case of cultivable lands, such rent shall be fair rent payable under the Madras Act XXIV of 1956. The finding rendered by the lower Court in pursuance of our direction on the question of income after considering the oral and documentary evidence specifically adduced by the parties shows that if the lands has been leased out by the appellants, their rental income would be Rs. 12,510 being 40 per cent, of the gross income which is found to be Rs. 31,275. In the light of the finding given by the lower Court, we find that recurring compensation fixed by the competent authority and confirmed by the lower Court does not call for any interference.
13. The result is A.S. No. 778 of 1967 is partly allowed and A.S. No. 779 of 1967 is dismissed. The appellant in A.S. No. 778 of 1967 will get proportionate costs in this Court. There will, however, be no order as to costs in A.S. No. 779 of 1967.