(Delivered by the Chief Justice)
These two appeals arise out of two, among other references, made to the Court of the Subordinate Judge of South Kanara on the acquisition of about 25 acres and 10 cents of wet, dry and garden lands in the village of Jeppinamogru adjoining Mangalore town. The acquisition was for the Agricultural Department to open a paddy breeding station. The material notifications under S. 4(1) of the Land Acquisition Act are dated 29th June 1943 and 21st September 1943. The Land Acquisition Officer adopted the method of capitalising the annual rent of the lands for the award of compensation. The same method was followed by the learned Subordinate Judge and it is common ground before us that it was the correct method. The learned Subordinate Judge substantially accepted the award of the acquiring officer in so far as the average rent of the wet lands was concerned, but increased the price of rice from Rs. 7-4-0 to Rs. 9-5-6 per mura. In respect of the garden lands, the learned Judge confirmed the award of the Land Acquisition Officer. In respect of dry lands with which we are concerned only in A.S No. 679, while the Land Acquisition Officer adopted a rental of Rs. 25 per acre as the annual rent for building purposes, the Court increased it to Rs. 60. The claimants have preferred the two appeals, and their learned Counsel has urged for a higher valuation for the wet lands and the dry lands. He did not seriously contest the valuation of the garden lands.
Before dealing with the valuation, a preliminary point which arises in A.S No. 608 and which found acceptance with the Court below may be dealt with. The claimant filed a statement before the Land Acquisition Officer in response to a notice under S. 9 of the Act in which he put forward his claim in the following manner:
“That the valuation adopted is grossly inadequate and low considering the nature of the land, its situation, yield and the disadvantages caused by the acquisition of the same to the adjoining lands of the claimant. This claimant is entitled to not less than Rs. 3,000 per acre of nanja lands and Rs. 2,000 for garden lands exclusive of the value of trees which are proposed to be acquired in this case”
The objection on behalf of the Land Acquisition Officer was that as the claimant had not mentioned a specific amount as the compensation claimed by him for his lands, he must be deemed to have not made a claim and it was not open to him to pray for any enhancement of the award made by the Land Acquisition Officer. Reliance was placed on the ruling of a Bench of this Court in Subbanna v. Dt., Labour Officer, East Godavari (1) and following that ruling the learned Subordinate Judge upheld the contention. In our opinion, the principle of that ruling does not apply to the facts of this case. In that case beyond filing certain sale deeds of neighbouring lands, the claimant did not mention the rate at which he prayed that his lands must be valued. It was contended that the mere filing of the sale deeds amounted to making a claim for the amount which the sale deeds showed, but the learned Judges refused to accept that contention; The learned Chief Justice at page 538 said.
“What the Act does require is that there should be a specific claim, namely, a claim which states in rupees the value the claimant places upon his property.”
In the present case in paragraph 10 of his petition which we have extracted above, the claimant does mention his figures for nanja lands and for garden lands respectively. The Land Acquisition Officer himself understood the claim to be at the said rates. We do not therefore agree with the learned Subordinate Judge that the provisions of S. 9(2) of the Act have not been complied with and that therefore the claimant is not entitled to pray for enhancement of the award.
In ascertaining the fair rent of the wet lands acquired, the Land Acquisition Officer relied on the estimate made lay the Revenue Inspector (Ex. P. 6) who has been examined as P.W 1. He made the estimate taking into account the rate of assessment, the soil classification of the lands and such personal information about the nature of the lands as he could obtain on the spot. We fail to see what more he could have done in the circumstances. As against this the claimant relied upon his own statement that the rental which his father was getting for the nanja lands was 107 muras of rice and Rs. 119 per year. There is no documentary evidence to support this statement. The claimant could certainly have adduced better and more reliable evidence than his own oral testimony in support of his case. He produced one lease deed, but admittedly that lease covers other properties besides the properties that were acquired. The claimant also deposed that on some of the lands acquired three crops were grown, the first two being paddy crops and the last generally cereal. Even as regards this, there is no reliable evidence and accurate data to fix the income. On the evidence we do not see sufficient reasons to enhance the rent arrived at by the learned Subordinate Judge which itself was slightly in excess of that fixed by the Land Acquisition Officer.
The price of rice was apparently fluctuating at or about the time of the Notification under S. 4(1). The claimant relied upon the evidence of D.Ws 1 and 2, two merchants who spoke to prices ranging, in the vicinity of Rs. 13 to Rs. 15. But as the learned Judge points out, rice was being sold at abnormally high prices in consequence of hoarding and profiteering and the prices so obtaining could not be the basis of a fair valuation. The learned Judge refers to the fixing of Rs. 10 per mura as the price of rice in November 1933, but he adopts the price given in the Gazette Extraordinary of the district on the 25th March 1943 for Guddu variety viz., Rs. 9-5-6 per mura. We consider that the claimant should be given the benefit of the rate at which the Government itself fixed the price in November 1943, i.e, Rs. 10 per mura.
In arriving at the compensation payable for dry lands, the Land Acquisition Officer took the average annual rental per acre at Rs. 25 per year. The learned Judge raised it to Rs. 60 apparently on the basis of the rent for which the claimant himself had given plots in the adjoining survey numbers for the construction of 24 tenements about 12 years before the date of the acquisition. For the claimant it is urged that it should be further enhanced to Rs. 100 per acre and reliance was placed on Exs. D.7, D.8, D.9 and D.10 spoken to by D.Ws 3 and 4. We do not think that these last transactions furnish the correct criterion as they were for small extents of land and relate to land situate in a much better locality than the acquired lands. At the same time we are unable to uphold as reasonable the rate fixed by the learned judge. He concedes that prices have gone up considerably since the date of the claimant's lease of the lands in the adjoining survey number for building purposes and the value must be determined with reference to prices prevailing in June and September 1943, but he does hot arrive at the conclusion which logically follow from such concession. In our opinion Rs. 75 per acre would be reasonable and proper.
The learned Subordinate Judge capitalised the net annual income at 20 years' purchase. The learned Counsel for the appellants contended that the number of years purchase should be 33 1/3 relying upon the recent ruling in Radhakrishna Chettiar v. The Province of Madras . In that case the subject matter was a site measuring 7156 sq. ft. with a building thereon situate in Kumbakonam. It was held that the number of years purchase to be adopted for capitalisation had to be arrived at by taking into account the interest yielded by Government securities at the time of the notification under S. 4(1) of the Land Acquisition Act. One of the earlier decisions discussed therein was that of Krishnaswami Aiyangar and Horwill, JJ., in Revenue Divisional Officer, Trichinopoly v. S. Varadachari , which related to the acquisition of ryotwari land. Horwill. J., who delivered the judgment of the Bench made the following observations with reference to the principle applicable to the valuation of agricultural land:
“……Whatever may be said with regard to a melwarm interest in a Zamindari land or a vacant site it is difficult to accept the current rate of interest on gilt edged securities as a safe guide to the multiple to be applied to the annual profits on ryotwari land. The landlord in such cases not only expects to get a return on the capital invested on the land but also, something in addition to that as compensation for his trouble in attending to the land and for the risks involved in the cultivation of land. Although the tenants may agree to pay him a fixed rent in money, yet if a full crop is not raised on the land either through failure of rain or because of pests or for any other reason, it is extremely difficult for the landlord to realise the rent. For these reasons, the landlord naturally expects an appreciably larger return than he would expect from gilt edged securities which he leaves in the bank and for the realisation of the interest on which he is put to no trouble whatsoever.”
With respect we agree entirely with these observations. In the case of Radhakrishna Chettiar v. Province of Madras (2) it was not necessary to deal with the valuation of agricultural land. No decided case was brought to our notice in which for the valuation of such land a multiple of over 20 has been ever adopted for capitalisation.
The learned Advocate for the claimant contended that at least for the dry land which had been valued as potential building sites, the valuation may be made at more than 20 years' purchase. But these lands were ordinary dry lands at the time of the acquisition though they had a potential value as available for building purposes. We do not think that a different rule should be applied to these lands. We therefore agree with the learned Subordinate Judge in adopting 20 times the annual net income as furnishing the correct value of the lands.
The appeals are allowed in part to the extent indicated above and dismissed otherwise. The parties will pay and receive proportionate costs in this Court.
N.R.R