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Manmatha Nath Mullick Vs. Secretary of State - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtKolkata
Decided On
Reported inAIR1924Cal574,83Ind.Cas.442
AppellantManmatha Nath Mullick
RespondentSecretary of State
Cases Referred and Sadhu Churn v. Secretary of State
Excerpt:
- .....j.1. this is an appeal against an award made under the land acquisition act, 1894, in respect of land acquired in connection with what is known as the central avenue scheme of the calcutta improvement trust. the declaration under section 6 was published on the 20th may, 1919, the claimant thereupon contended that the land should be valued at rs. 8,000 a cottah. the collector made an award at the rate of rs. 5,500 a cottah. as the land had been acquired for the purposes of the calcutta improvement trust, an appeal was preferred to the tribunal. the result was that the tribunal made an award at the rate of rs. 6,000 a cottah. the claimant has appealed to this court under section 3 of the calcutta improvement (appeals) act, 1911, and has valued the relief at rs. 20,000. it is consequently.....
Judgment:

Mookerjee, J.

1. This is an appeal against an award made under the Land Acquisition Act, 1894, in respect of land acquired in connection with what is known as the Central Avenue Scheme of the Calcutta Improvement Trust. The declaration under Section 6 was published on the 20th May, 1919, The claimant thereupon contended that the land should be valued at Rs. 8,000 a cottah. The Collector made an award at the rate of Rs. 5,500 a cottah. As the land had been acquired for the purposes of the Calcutta Improvement Trust, an appeal was preferred to the Tribunal. The result was that the Tribunal made an award at the rate of Rs. 6,000 a cottah. The claimant has appealed to this Court under Section 3 of the Calcutta Improvement (Appeals) Act, 1911, and has valued the relief at Rs. 20,000. It is consequently clear that the claimant does not adhere to his original estimate of Rs. 8,000 a cottah; he now claims in substance a little over Rs. 1,000 a cottah in excess of the rate allowed by the Tribunal. Under Section 3 the appeal can be maintained only on the grounds specified therein, namely, that-

(i) the decision is contrary to law or to some usage having the force of law;

(ii) the decision has failed to determine some material issue of law or usage having the force of law;

(iii) there has been a substantial error or defect in the procedure, which may possibly have produced error or defect in the decision of the case upon the merits.

2. The judgment of the President of the Tribunal shows plainly that the case does involve a question of principle; for, it is stated that the matter in dispute relates to the determination of the exact principle upon which prospects and possibilities of future development should be taken into account in determining the compensation to be paid for property compulsorily acquired. The circumstances which render the decision of this question necessary may be briefly stated.

3. Towards the west of the land, now acquired under what is known as Scheme XIII, lies another parcel 'which is marked green on the map previously prepared in connection with Scheme VII. The precise date when the declaration in respect of the other plot w-is published under Section 6 cannot be ascertained from the record. But as that scheme was sanctioned by the Government on the 30th March, 1916, it has been assumed that the declaration was published shortly afterwards. The contention of the claimant is that in the determination of the value of the land now under consideration he is entitled to have the land acquired in 1916 treated as an open space towards the west, with the consequence that the value of his land would thereby be considerably increased. The Tribunal has overruled this contention and has held that Clause (5) of Section 24 of the Land Acquisition Act militates against the argument put forward on behalf of the claimant. That section provides that in determining the amount of compensation to be awarded for land acquired under the Land Acquisition Act, the Court shall not take into consideration any increase to the value of the land acquired likely to accrue from the use to which it will be put when acquired. The Tribunal has come to the conclusion that Soheme VII and Scheme XIII, though nominally distinct, are so essentially interrelated that they may be treated in substance as one scheme and that under Section 24, Clause (5) the claimant is not entitled to have a higher value put upon his land by reason of the advantage which might have accrued owing to the action taken in respect of a neighbouring parcel acquired previously. In support of this view, reference is made in the judgment of the Tribunal to the decision of the Judicial Committee in the case of Secretary of State for Foreign Affairs v. Charlesworth Pilling, & Co. [1901] 26 Bom. 1 (P.C.) and Fraser v. City of Fraserville [1917] A.C. 187 in my opinion the question which has been discussed in the judgment of the President of the Tribunal does not really require examination in view of the circumstances of this ease.

4. Section 24, Clause (5) provides that the Court shall not take into consideration any increase to the value of the land acquired, likely to accrue from the use to which it will be put when acquired. The terms of this section cannot be made applicable to the precise events which have happened. The effect of the decisions of the Judicial Committee in the cases mentioned may be concisely summarised. The basis on which compensation for lands taken is to be assessed is the value of the lands to the owner as it existed at the date of the notice to treat and not their value, when taken to the promoters. Corrie v. Mac Dermott (1914) A.C. 1056, Cedard Rapiss . v. The Minister (1914) A.C. 1083 and South Eastern Rail Co. v. London C.C. (1915) 2 Ch. 252. All advantages which the land possesses present or future in the hands of the owner may be taken into consideration, Cedard Rapiss Manufacturing and Power Co. v. Lacoste (1914) A.C. 569, In re Lucas and Chesterfield Gas and Water Board (1909) 1 K.B. 16 and Fraser v. City of Fraserville[1917] A.C. 187, and the owner is entitled to have the price assessed in reference to those advantages which will give the land the greatest value. The value of an owner's interest is not properly compensated by assessing the amount of pecuniary benefits obtained by past user in disregard of possible benefits in the future. Trent-Stoughton v. Barbados Water Supply Co. (1893) A.C. 503 but cf. Eldon Earl v. North Eastern Rail Co. (1899) 80 L.T. 723. The probability of a more profitable future use is one such advantage which may be taken into consideration. Thus land which may probably be used for building purposes must not be valued on the same basis as purely agricultural land : R. v. Brown (1867) 2 Q.B. 630. But although prospective value is a necessary element in the assessment of compensation, such value must be entirely excluded where it would arise from the construction of the particular works authorised by the Act which gives compulsory powers : In re Lucas and Chesterfield Gas and Water Board (1909) 1 K.B. 16, Cedard Rapiss Manufacturing and Power Co. v. Lacoste (1914) A.C. 569 and Fraser v. City of Fraserville [1917] A.C. 187. It is a recognised principle to exclude from the assessment of compensation any enhancement or diminution in value consequent on the construction of works authorised by the special Act under which the assessment is made. The phraseology used in the decisions mentioned, specially in Fraser v. City of Fraserville [1917] A.C. 187 is 'enhancement or diminution in value,' whereas the language used in Clauses 4 and 5 of Section 21 is 'any damage which is likely to be caused to the land acquired in consequence of the use to which it will be put, and any increase to the value of the land acquired likely to accrue from the use to which it will be put when acquired.' Whether these two points of view are identical in all circumstances may be a matter for argument. This much is plain that in the case before us, what has to be ascertained is, as required by Clause (1), Sub-section (1) of Section 23, the market value of the land at the date of the publication relating thereto under Section 6.

5. The meaning of the expression 'market value of land' was considered in Bombay Improvement Trust v. Jalbhoy (1909) 33 Bom. 483 and Kailash Chandra Mitra v. Secretary of State for India in Council (1910) 17 C.L.J. 63. In the first case, the 'market value of land' was stated to mean the price which would be obtainable in the market for a concrete parcel of land with its particular advantages and its particular drawbacks both advantages and drawbacks being estimated rather with reference to commercial value than with reference to any abstract legal right. In the second case, tin market value of land was described as the price that an owner willing, and not obliged, to sell might reasonably expect to obtain from a willing purchaser with whom he was bargaining for the sale and purchase of the land; in other words, the price which a piece of land fetches when it is offered for sale, the seller being not obliged to sell it and the buyer being under no necessity of buying it. This is identical with the view adopted in Wernicks v. Secretary of State for India (1909) 13 C.W.N. 1046 and Sadhu Churn v. Secretary of State for India (1919) 31 C.L.J. 63. Consequently, what has to be ascertained in the present case is the market value of the land on the 28th May 1919, in view of the circumstances as they existed at that date. Now, it may be conceded that, on the materials on the record, it is fairly clear that the Improvement Trust authorities intended, when the land to the west of the site now under consideration, was acquired in 1916 that it should be kept as an open space. It is this expression of opinion on the part of the Improvement Trust authorities which is emphasised on behalf of the claimant, and his argument in substance is that any intending purchaser at the time when the declaration was published on the 28th May, 1919, would have paid a higher price for his land in view of the fact that the land towards the west was intended to be kept as an open space. This, however, is not a fair statement of the true facts. The record leaves no room for doubt that the Improvement Trust authorities intended to keep the land towards the west as open space in order that it might be annexed to the land now under consideration and the two parcels might be amalgamated with the Marcus Square for the purposes of extension. Consequently, an intending purchaser would be expected to have regard not merely to the fact that the land towards the west would be kept open, but also that the land now under consideration would be acquired by the Improvement Trust authorities. In such circumstances, it is impossible to believe that any purchaser, other than a speculator, would purchase the land now under consideration in order that he might possibly profit by the transaction; in other words, the benefit which might accrue to the purchaser from the expression of intention of the Improvement Trust authorities, if carried into effect, would immediately result in the destruction of his rights as purchaser. No evidence has been adduced to show that a purchaser could be had on the 28th May, 1919, who would have paid anything like Rs. 8,000 for the land now in dispute. It seems to me to be manifest that there is no substance in the contention of the appellant. It has finally been suggested that the case should be remanded for further investigation, but we cannot possibly accede to this request. No attempt was made in the Court below to lay the foundation for any alternative case and the petitioner is not now entitled to a remand.

6. The result is that the decree made by the Tribunal is affirmed and the appeal is dismissed with costs.

Rankin, J.

7. I entirely agree. It seems to me that the principles of law discussed in the judgment of the learned President of the Tribunal cover more ground than it is necessary to discuss for the disposal of the present case. At the time of the declaration under Scheme XIII, namely, the 28th May, 1919, the land occupied by the premises known as No. 38, Munshi Sadaruddin Lane had not been cleared and was not an open space, but was covered with buildings as it had always been. Nevertheless if the claimant can show that there was an intention on the part of the Improvement Trust authorities to the effect that this plot of land would be acquired and would be rendered capable of use and enjoyment to the advantage of premises Nos. 5, 6 and 6-1, Mitra Lane, he is entitled as a matter of abstract law to prove that circumstance as an element in the valuation taken into account. The question is whether on the facts of this case he has shown that an intending purchaser just before the 28th May, 1919, can be supposed to have been willing to give more for the claimant's premises by reason of such an intention on the part of the Improvement Trust. It is quite clear and it is so found by the learned President, that apart from user of the site of No. 38, Munshi Sadaruddin Lane in connection with a clearing scheme which would sweep away the claimant's premises, there never was any intention on the part of the Improvement Trust to keep premises No. 38, Munshi Sadaruddin Lane as an ornamental garden or an open space. The intention of the Calcutta Improvement Trust in this matter was entirely conditional upon the pushing forward to completion of Scheme No. 13. The claimant, says that he is entitled to add an element of value in respect of that intention. If, in the circumstances, it is not such an intention as can be supposed to affect the mind of a bond fide purchaser of house property in Mitra Lane, then it is of no service to the claimant. It has been contended that there is a principle to the: effect that the value of the premises is to be taken independently altogether of the scheme, that is to say, on the footing that Scheme No. 13 had never been sanctioned. In its true meaning, this principle has more than one fact. On the one hand, it means that you do not depreciate a man's property by saying that, as it was going to be acquired for public purposes, no one would readily have bought it or by treating the owner as a man obliged at any sacrifice to sell. On the other hand, it means that improvements to be made by the scheme itself are not a ground for giving to the owner an added value. Neither of these propositions touches or decides the question raised by the special facts of this case. The claimant claims to add a value by reason of a certain declaration on the part of the Calcutta Improvement Trust. That intention is not unconditional. When examined, it turns out to be one quiet inconsistent with the claimant's premises over having a chance to be used, occupied or enjoyed with the benefit of an open space to the west thereof. In these circumstances, it seems to me that the President of the Tribunal has come to a correct conclusion. He has allowed for the general rise of value in this neighbourhood by the Central Avenue Scheme. He has allowed for the principle very correctly stated by him that in assessing the value of land acquired for the purpose of a scheme, sales of other similar lands between the date of the promulgation of the scheme and the date of the declaration are admissible in evidence. In this case, no such evidence was put forward. If there had been evidence that the minds of prospective purchasers were being influenced by the chance that the plot of land to the west would be left as an open space and that Scheme No. 13 would not be carried out, I think, it would not have been right to exclude that evidence from consideration. No evidence of this sort was present and the surrounding circumstances make it improbable that such a case could have been successfully established. For these reasons, it seems to me that it is not necessary that this case should be sent hack and that the decision of the Tribunal should be affirmed.


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