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Case Number

Appeal Nos. 198 and 211 of 1955, against decree of Sub-J., Madurai, in Original Suit 143 of 1951

Advocates

For the Appellant: P.S. Srisailam, R. Ratnam, V.S. Ramakrishnan, Advocates.

Judges

Ramaswami
Subrahmanyam, JJ.

Acts

Section 4(1) of the Land Acquisition Act

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Smart Summary

Concise Analytical Summary of the Opinion — Connected Appeals from O. P. No. 143 of 1951 (Subordinate Judge, Madurai)

Factual and Procedural Background

Two connected appeals arise from the order and decree of the learned Subordinate Judge of Madurai in O. P. No. 143 of 1951. Several contiguous Government-dry survey parcels (S. Nos. 386/1A, 386/1B, 386/1C1, 389/9A1, 389/9A2, 389/9B1 and 389/9B2), together amounting to 1 acre and 51 cents situate in Melur village, were acquired for use as a playground for the Roman Catholic Mission School in Melur.

The learned Subordinate Judge inspected the site with counsel for both parties. The site lies immediately south of the Melur–Sivaganga road; details of surrounding features (houses, cinema theatre, Panchayat Board well, Periyar branch channel, the R.C. School and adjacent gardens) are recorded in the opinion.

The Notification under Section 4(1) of the Land Acquisition Act was published in the Fort St. George Gazette on 28-3-1950; the draft declaration was published on 29-8-1950. The Land Acquisition Officer awarded compensation on the footing of Rs. 7-12-0 per cent (as recorded). The claimants sought Rs. 150 per cent; the learned Subordinate Judge awarded compensation (exclusive of solatium) at Rs. 45 per cent.

The narrow procedural question for the appellate court was whether the valuation fixed by the learned Subordinate Judge (Rs. 45 per cent) deserved revision.

Legal Issues Presented

Whether the valuation fixed by the learned Subordinate Judge (Rs. 45 per cent exclusive of solatium) for the acquired land merits revision on the materials before the Court.

Arguments of the Parties

Claimants' Arguments

The claimants asked for compensation at Rs. 150 per cent.
They relied on various sale deeds and documents (notably Exs. B-4, B-5, B-15 which are older sales within the same survey number, Exs. B-13 and B-14 dated 20-3-1942 showing purchases at about Rs.14 per cent, and later documents including Exs. B-6 to B-10 and agreements such as Ex. B-8).
The claimants placed some reliance on a post-notification agreement to sell (Ex. B-8 dated 19-7-1950) and a sale deed Ex. B-7 dated 19-12-1950 showing a rate of Rs.100 per cent for a plot on the opposite side of the road.

Government's / Respondent's Position

The Government produced documents Exs. A-1 to A-7 (principally from 1945–1948) including Ex. A-6 dated 18-1-1948, which when analyzed yields a rate of not more than Rs. 8 per cent for comparable land (excluding house-sites).
The Government pointed to the timing and character of the competing sales and agreements, arguing that post-notification transactions and offers may not reliably indicate market value at the material date.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Assistant Development Office, Trombay v. Tayaballi, AIR 1933 Bom 361	Valuation of land is not an exact science; judicial valuation allows room for inference and opinion.	Cited to support the proposition that fair compensation cannot be fixed with mathematical precision and that courts may rely on inference in valuation.
Secy. of State v. Charlesworth Pilling, ILR 26 Bom 1 (PC)	Same general principle: valuation admits uncertainty and inference.	Placed alongside other authorities to justify reliance on judicial judgment rather than strict formulae in valuation.
Secy. of State v. Altaf Hossain, AIR 1927 Cal 827	Same general principle about valuation not being an algebraic problem.	Used to reinforce the court's approach that exact exposition of reasons is often impractical in valuation matters.
Secy. of State v. Amulya Charan, AIR 1927 Cal 874	Same principle regarding uncertainties in valuation and room for judicial inference.	Cited as part of the established line that valuation involves judgments not reducible to exact reasoning.
Naoroji v. Government of Bombay, AIR 1925 PC 211	Authority for the view that valuation requires practical judgment and allowance for uncertainty.	Relied on as part of the judicial authorities explaining the nature of valuation exercise.
Secy. of State v. Gobind Ram, 11 Ind Cas 838 (Lab)	Similar authority on the non-exact character of valuation.	Grouped with other decisions to justify the court's evaluative approach.
Amrit Lal Bysak v. Secy. of State, 22 Ind Cas 78 (Cal)	Same general principle regarding valuation uncertainties.	Used to support the court's acceptance that valuation is not an exact science.
In re Monji Khetsey, ILR 15 Bom 279	Recognised methods of valuation (price paid, rents/profits, prices for adjacent lands, expert opinion).	Cited as authority for the recognised categories of evidence the court may consider for market-value.
Fink v. Secy. of State, ILR 34 Cal 599	Recognised valuation methods.	Applied to list acceptable methods of ascertaining market value.
Farman v. Secy. of State, 63 Pun Re. 1907	Recognised valuation methods.	Included among authorities enumerating reliable bases for valuation.
Land Acquisition Officer v. Fakir Mahomed, AIR 1933 Sind 124	Recognised valuation methods.	Cited to confirm accepted approaches to valuation evidence.
Govt. of Bombay v. Merwanji, 10 Bom LR 907	Offers, particularly oral offers unsupported by documents, carry little weight as evidence of market value.	Relied on to discount post-notification offers and to treat mere offers as of low probative value.
Mohini Mohan Bannerjee v. Secy. of State, 25 Cal WN 1002; AIR 1921 Cal 193	Offers and unsupported expressions of opinion are of limited value in valuation.	Used to justify not placing weight on oral offers or on post-notification agreements arranged to inflate claims.
Khushi Ram v. Asst. Collector of Shikarpur, AIR 1925 Sind 112	Offers unsupported by evidence have little probative weight.	Applied to discount evidence of offers as an index of market value.
Abdul Rahim v. Secy. of State, AIR 1926 Lah 618	Offers may be unreliable indicators of market value.	Invoked to support the court's caution about relying on offers and post-notification sales.
Reddiar v. Secy. of State, AIR 1928 Rang 65	Probative value of offers is low because offers can easily be arranged and may be fictitious.	Quoted to emphasize that post-notification agreements can be manufactured to inflate claims and therefore are unreliable.
Govt. of Bombay v. Karim Tarmahomed, ILR 33 Bom 325	Transactions are relevant only if they fairly indicate the value of the property as on the date of notification.	Applied to determine which sales or agreements should be considered when fixing market value as of the notification date.
Collector of Dacca v. Gholam Kuddus Choudhury, AIR 1936 Cal 688	Post- and pre-notification transactions must be weighed according to their relevance to the material date.	Used to affirm that subsequent sales may be given little weight if intervening circumstances have affected value.
Ahmed Khasim Saheb v. Land Acquisition Officer, Ramnad, AIR 1942 Mad 665	All transactions that can fairly indicate the value as on the date of notification are relevant; remote transactions carry little weight.	Relied upon to support the treatment of available sales evidence in relation to the 28-3-1950 notification date.

Court's Reasoning and Analysis

The court framed its analysis around accepted principles of valuation and the material date fixed by the Section 4(1) notification (28-3-1950). The reasoning proceeded in the following steps, drawing on the documentary evidence on both sides and established authorities:

The court reiterated the general principle that valuation of immovable property is not exact; judicial valuation allows room for inference and cannot always be reduced to exact reasoning. A number of precedents were cited to support this methodological stance.
The court set out recognised methods for assessing market value: (a) price paid within a reasonable time, (b) rents and profits shortly before acquisition, (c) prices for adjacent lands with similar advantages, and (d) opinions of valuators or experts. It observed that method (b) (rents/profits) was inapplicable because dry cultivated lands had been acquired as building sites; and method (d) (expert opinions) was not normally adduced in that State.
The evidence was examined chronologically and contextually:
- Claimants filed Exs. B-13 and B-14 (sale deeds dated 20-3-1942) showing purchases at about Rs.14 per cent. The learned Subordinate Judge had not taken these into account on the ground that there had been a rise in value after 1942.
- The Government relied on Exs. A-1 to A-7 (1945–1948); Ex. A-6 (18-1-1948) related to different survey numbers and, excluding house-sites, worked out at not more than Rs.8 per cent.
- The learned Subordinate Judge relied on Exs. B-4, B-5 and B-15 (sales within the same survey number, 1945–1946) which yielded prices of Rs.40–50 per cent; the judge fixed Rs.45 per cent taking into account that some of those sales related to very small extents (2 cents) while one (Ex. B-4) related to 10 cents and that small-extent prices should not govern valuation of larger extents like 1–51 cents.
The appellate court scrutinised post-notification and later transactions:
- Ex. B-8 (agreement dated 19-7-1950) was a post-notification agreement and the court observed that such agreements may be easily manufactured to inflate claims; offers and agreements after notification are of limited probative value. The court therefore declined to place reliance on Ex. B-8.
- Exs. B-6, B-9 and B-10 (1952 sales) were rightly discarded by the Subordinate Judge as not reflecting prices paid by willing purchasers without pressure and hence unreliable.
- Ex. B-7 (sale deed dated 19-12-1950) produced a rate of Rs.100 per cent but concerned a plot on the opposite (northern) side of the road in a built-up area. The court found it inapposite because the acquired land was undeveloped and had not attracted demand prior to acquisition; competition for built-up plots on the opposite side would not reflect the value of the acquired parcel. Hence Ex. B-7 could not be the basis for valuation.
Considering the absence of evidence of a material rise in land values between 1946 and the notification date of March 1950, the court held that the Subordinate Judge was justified in relying on the mid-1940s sales (Exs. B-4, B-5, B-15) and in rejecting later and post-notification transactions as unreliable indicators of the market value on the material date.
On the totality of the documentary evidence and guided by authorities on the proper approach to valuation evidence and the weight to be attached to offers and post-notification transactions, the appellate court found no ground to interfere with the valuation of Rs.45 per cent arrived at by the learned Subordinate Judge.

Holding and Implications

Holding: The valuation fixed by the learned Subordinate Judge (Rs. 45 per cent, exclusive of solatium) was upheld; accordingly, the appeals were dismissed. The court ordered no costs.

Implications:

Direct effect: The award of compensation at Rs. 45 per cent (exclusive of solatium) stands as the final disposition between the parties in these connected appeals.
Broader implication: The opinion applies established principles concerning valuation evidence—particularly the limited probative value of offers and post-notification transactions and the relevance of contemporaneous comparable sales—but does not announce a novel precedent; it affirms accepted approaches to weighing sale deeds, agreements, and the materiality of the notification date in land acquisition valuation disputes.

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M.S.O.S.P.V Velayudam Chettiar And Others v. The Special Tahsildar For Land Acquisition, Madurai At Madurai Town .

1. These are two connected appeals arising from the order and decree of the learned Subordinate Judge of Madurai in O. P. No. 143 of 1951.

2. S. Nos. 386/1A, 3S6/1B, 386/1C1, 889/9A1, 389/9A2, 389/9B1 and 389/9B2, Government-dry, totalling Ac. 1-51 cents in extent situate in Melur village, have been acquired for use as a playground for the Roman Catholic Mission School in Melur.

3. The site had been inspected by the learned Subordinate Judge with the counsel for both parties. The site is a contiguous plot lying immediately south of the Melur-Sivaganga road. It is at the end of the habitations commencing from the bazaar street. West of it are houses at a distance of half a furlong and a cinema theatre. On the northern side of the Melur-Sivaganga road and opposite to the site acquired there are houses and in particular, one belonging to R. W. 1. That site is however within the Melur Panchayat limits. There is a Panchayat Board well at its northwestern corner. South of the acquired site is the Periyar branch channel and south of that channel is the R. C. School which is a small building with a plantain garden on the east and on the other three sides punja lands and gardens.

4. The Notification under Section 4(1) of the Land Acquisition Act was published in the Fort St. George Gazette on 28-3-1950 and the draft declaration was published on 29-8-1950. The Land Acquisition Officer awarded compensation on the foot of Rs. 7-12-0 per cent.

5. The claimants who have asked for this reference claimed Rs. 150/- per cent. The learned Subordinate Judge awarded compensation exclusive of solatium at Rs. 45/- per cent.

6. The short point for determination is whether this valuation by the learned Subordinate Judge deserves to be revised.

7. There is nothing secret or mysterious about the value of land. It is a commodity commonly dealt in, and like every other commodity it has a price which can be ascertained within certain limits. This price, however, constantly varies according to the variations of the supply and demand and it is impossible to fix it at any given time with mathematical accuracy. Valuation of immovable property is not exact science. It is an enquiry relating to a subject abounding in uncertainties, where there is more than ordinary guess work and where it would be very unfair to require an exact exposition of reasons for the conclusions arrived at.

It has been held repeatedly that in all valuations, judicial or otherwise, there must be room for inference and inclinations of opinion which being more or less conjectural are difficult to reduce to exact reasoning or to explain to others and it is unfair to require an exact exposition of reasons for the conclusions arrived at. In short, the question of fair compensation is not an algebraic problem which would be solved by an abstract formula; Assistant Development Office, Trombay v. Tayaballi, AIR 1933 Bom 361; Secy, of State v. Charlesworth Pilling and Co., ILR 26 Bom 1 (PC); Secy, of State V. Altaf Hossain, AIR 1927 Cal 827; Secy. of State v. Amulya Charan, AIR 1927 Cal 874; Naoroji v. Government of Bombay, AIR 1925 PC 211; Secy. of State v. Gobind Ram, 11 Ind Cas 838 (Lab); Amrit Lal Bysak v. Secy, of State, 22 Ind Cas 78 (Cal).

8. Certain methods of valuation have however been recognised by tho various judicial decisions viz., (a) the price paid, within a reasonable time for the land (b) rents and profits of the land received shortly before the acquisition; (c) price paid for adjacent lands possessing similar advantages and (d) the Opinion of valuators or experts. In re Monji Khetsey, ILR 15 Bom 279; Fink v. Secy. of State, ILR 34 Cal 599; Farman v. Secy, of State, 63 Pun Re. 1907; Land Acquisition Officer v. Fakir Mahomed. AIR 1933 Sind 124.

9. In tins case on account of the fact that dry lands cultivated as such have been acquired as building sites method (b) is inapplicable. In regard to method (d) in this State opinion of valuators and experts is not normally adduced.

10. In this case the property in question has been purchased under Exs. B-13 and B-14 dated 20-3-1942. Ex. B-13 is a sale deed executed by P.W. 1 in favour of claimants 6 and 7 of a portion of the acquired land and other land 33 cents in extent for Rs. 462/-. Under Ex. B-14 the same vendors sold 32 cents for a sum of Rs. 448 in favour of the father of claimant No. 4. The rate per cent works out at Rs. 14/-. These documents have not been taken into consideration by the learned Subordinate Judge because there has been rise in value of the lands after 1942. In regard to the documents filed on the side of the Government, we have Exs. A-1 to A-7. Exs. A-1 to A-5 and A-7 are documents of the year 1945. Ex. A-6 is dated 18-1-1948. It relates to S. Nos. 389/8A, 389/8B and 389/4 comprising Ac. 2-59 cents and three house-sites sold for Rs. 2,000/-. Excluding the house-sites, the rate works out at not more than Rs. 8/- per cent.

11. The learned Subordinate Judge has relied upon Exs. B-4, B-5 and B-15 for fixing the valuation at Rs. 45/- per cent. These sale deeds relate to sub-divisions in the same survey number that has been acquired. The price paid under them works out at Rs. 40/- to Rs. 50/- per cent. In arriving at Rs. 45/- per cent, the learned Subordinate Judge has taken into consideration the fact that Exs. B-5 and B-15 are for small extents of two cents each while Ex. B-4 is in respect of ten cents. It is well-known that the valuation of petty extents cannot be made to govern the valuation for acquisition of large extents like Ac. 1-51 cents in this case. Therefore, taking all these circumstances into consideration the learned Subordinate Judge fixed the value of the land acquired at Rs. 45/-, per cent.

12. The only point of criticism is that these -documents are or the years 1945 and 1946. The only sale after these sales is Ex. A-6 and therein the value works out at not more than Rs. 8/- per cent. There are no other sales of land of similar description in the neighbourhood, which can be taken into account. There is no evidence also that between 1946 and the date of Notification in March 1950 there has been a rise in prices which would justify us in not accepting these Exs. B-4, B-5 and B-15. In fact this land has not been developed and the owners say that they were waiting for the fall in price of building materials for developing the same. It is also evident that there has been no firm offers for the purchase of this land. The claimants examined R.W. 1 to show that there was an offer to purchase the land at the rate of Rs. 100/- per cent: vide Ex. B-8. This agreement to sell dated 19-7-1950 is subsequent to the Notification. It is now well settled that though agreements to purchase when bona fide and satisfying other tests applicable to actual sales, may give an indication of the market-value, mere offers stand on a different footing. Evidence of offers as an index of market-value is of little importance. Too much weight should not be attached to such evidence.

Evidence of offers is admissible: but as an offer merely amounts to an expression of opinion on the part of the person making it oral offers unsupported by any documentary evidence do not carry any weight or afford any assistance: Govt. of Bombay v. Merwanji, 10 Bom LR 907; Mohini Mohan Bannerjee v. Secy. of State, 25 Cal WN 1002: (AIR 1921 Cal 193); Khushi Ram v. Asst. Collector of Shikarpur, AIR 1925 Sind 112; Abdul Rahim v. Secy. of State, AIR 1926 Lah 61.8. In this case this agreement to sell is a post-notification agreement and it is easy to bring into existence such agreements to buy in order to inflate the claims to bo made in regard land acquisition compensation.

In Reddiar v. Secy. of State, AIR 1928 Rang 65, it was pointed out that no doubt proof of bona fide offers have to be considered by a Court, but the probative value of offers has, gor good reasons in this country been held to be very low indeed, for the offers alleged in land acquisition proceedings are scarcely ever bona fide and that they can be easily arranged without any loss or inconvenience to either party, and individuals, respectable in their various stations in life have no compunction in lending themselves to a fictitious transaction which may assist a friend in extracting more than his due from Government or a public body at no cost to themselves. We are therefore unable to place reliance on Ex. B-8 and the criticism advanced against the now-acceptance of this document as a basis for the computation of value by the learned Subordinate Judge is not well-founded.

13. The learned advocate for the claimants seek to rely upon Exs. B-6 to B-10. Exs. B-6 B-9 and B-10 which are all post-notification sales of the year 1952 have been rightly discarded by the learned Subordinate Judge as not representing prices paid by a willing purchaser without pressure. They cannot afford a reliable basis for arriving at the correct market-value. Therefore, we have got to turn to Exs. B-7 and B-8 which are respectively dated 19-12-1950 and 19-7-1950. The date of the notification under Section 4(1) of the Act is important, as it fixes the material date for determining the market-value of the land to be acquired.

Therefore, a date of the sale to be relied upon ought to be of about this time, since if the sales fook place several years ago, then they might not be the best available evidence. Sales after notification must be discarded when it is proved that the values have been affected one way or the other by circumstances which have arisen after that date, whether by reason of the notification of the acquisition or otherwise. It may however, be observed that in determining the market-value of land to be acquired by Government, post-notification transactions should not necessarily be ignored altogether.

All transactions must be relevant which can fairly be said to afford a fair criterion of the value of the property as on the date of the notification: Govt. of Bombay v. Karim Tarmahomed, ILR 33 Born 325; Collector of Dacca v. Gholam Kuddus Choudhury, AIR 1936 Cal 688; AIR 1933 Bom 361; Ahmed Khasim Saheb v. Land Acquisition Officer, Ramnad, AIR 1942 Mad 665. If any considerable interval has elapsed, the Court will naturally attach little or no value to subsequent sales, just as transactions long prior to the notification will usually be discarded.

Ex. B-8 is only an agreement of sale and we have already pointed out now much reliance cannot be placed upon it. Ex. B-7 is a sale deed dated 19-12-1950, long after the date of notification, in respect of 20 cents in S. No. 307/2A on the northern side of the Melu-Sivaganga Road for Rs. 2,000/-. The rate works out at Rs. 100/- per cent. This document does not afford proper criterion because the property dealt with under it is on the opposite side of the road and to the acquired area and is in built-in area. The competition which would be forthcoming for the purchase of such a plot of land will not be the case in regard to the plot now acquired, which is in an undeveloped area and for which thera was no demand prior to this acquisition. In fact the owners have not thought of developing it. Therefore, we cannot take Ex. B-7 as the basis of our valuation.

14. The net result of this analysis is that the valuation by the learned Subordinate Judge merits no interference at our hands. These appeals are dismissed. No costs.

M.S.O.S.P.V Velayuda... v. The Special Tahsilda...