Revenue Divisional Officer, Kurnool Dist. vs M. Ramakrishna Reddy (D) by LRs.

Reportable

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 10362 OF 2010 [Arising out of SLP(C) No.35413/2009]

REVENUE DIVISIONAL OFFICER, .......APPELLANT KURNOOL DIST.

Versus

M. RAMAKRISHNA REDDY(D) BY .....RESPONDENTS LRS.

O R D E R

R.V. Raveendran, J.

Leave granted. Heard.

2. Respondents were the owners of a sweet

lime orchard measuring 4 acres 38 cents situated in

Survey No.395/3A and 395/4A in Singanapalle village, Owk

Mandal, Kurnool District in Andhra Pradesh. The said

lands, alongwith surrounding lands (in all 58 acres 30

cents) were acquired for construction of a percolation

tank. Possession was taken on 8.6.1988. However, the

preliminary notification under Section 4(1) of the Land

Acquisition Act, 1894 ('Act' for short) was issued only

on 27.8.1993. The Land Acquisition Officer, by award

dated 30.6.1994, offered compensation at the rate of 2

Rs.16,000/- per acre. The reference Court determined

the market value of the entire extent of 4 acres 38

guntas as Rs.12,28,500/- by capitalisation of yield

method. It awarded the said sum as compensation with

additional market value at 12% per annum on such market

value from the date of notification under Section 4(1)

of the Act till date of award or possession whichever

was earlier, 30% solatium on the market value and

interest at 9% per annum from date of possession for a

period of one year and thereafter at 15% per annum till

date of payment on the aggregate of compensation,

additional market value and solatium.

3. The appeal by the appellant, challenging

the quantum, as being excessive, was dismissed by the

High Court by the impugned judgment dated 19.3.2009.

The said judgment is under challenge in this appeal by

special leave. The only question that, therefore, arises

for consideration is whether the compensation determined

at Rs.12,28,500/- for 4 acres and 38 cents of land is

excessive.

4. In the year 1987, the claimants had filed

a writ petition for stopping construction of a

percolation tank, alleging that there were 350 sweet

lime trees in their land and that the construction of

the percolation tank would destroy their sweet lime 3

garden. The Land Acquisition Officer submitted a report

dated 1.2.1991 to the Collector confirming the existence

of 350 sweet lime trees in the claimants land on

8.6.1988 when possession was taken and the destruction

of all those trees due to stagnation of water on

construction of the percolation tank. They filed a

subsequent writ petition (WP 8665/1992) seeking a

direction for payment of compensation for the land and

350 sweet lime trees, as they were dispossessed, without

there being any acquisition. The High Court of Andhra

Pradesh directed the State Government to pay

compensation at the earliest in respect of the land and

350 sweet lime trees. It is thereafter that the

acquisition proceedings were initiated, by issuing a

notification dated 27.8.1993 under Section 4(1) of the

Act. The Land Acquisition Officer, while making the

award, did not value the land as a sweet lime orchard.

He ignored the sweet lime trees in the land and valued

it as bare land at Rs.16,000/- per acre (Rs.70,080/- for

the entire land). The Reference Court, after referring

to the factual background and the evidence, adopted the

yield capitalisation method, to arrive at the

compensation. It held that the net annual income

realised by the respondents was Rs.270/- per sweet lime

tree per annum or in all Rs.94,500/- from the entire

orchard with 350 trees. It adopted the multiplier of 13

and arrived at the compensation for the acquired land 4

with the sweet lime trees as 94500 x 13 = Rs.12,28,500/-

(that is Rs.280,479/45 per acre).

5. In this appeal, the State is aggrieved by

the multiplier of 13 adopted by the Reference Court. It

is pointed out that though the High Court had found the

multiplier of 13 to be on the higher side, it failed to

interfere with the judgment of the Reference Court. Mr.

I. Venkatanarayana, learned senior counsel for the

appellant submitted that the appropriate multiplier

should be 8, but under no circumstances it should be

more than 10. On the other hand, Mr. R. Venkataramani,

learned senior counsel appearing for the respondent

relied upon the decision of this Court in Union of India

Vs. Shanti Devi, (1983) 4 SCC 542 where this Court held

that a multiplier of 13 would be appropriate for

determining market value by capitalisation of income.

The decision in Shanti Devi relied on by the respondents

did not relate to a fruit tree grove, but an

agricultural crop land. The decision refers to other

decisions where multiplier of '8' was adopted.

6. This Court has considered this issue in

several decisions - State of Haryana Vs. Gurcharan Singh

- 1995 Supp.(2) SCC 637, Land Acquisition Officer

Malaprabha Dam Project Saundatti Vs. Madivalappa

Basalingappa Melavanki - (1995) 5 SCC 670, State of 5

Gujarat Vs. Rama Rana - (1997) 2 SCC 693, (4) Krishi

Utpadan Mandi Samiti Vs. Malik Sartaj Wali Khan & Anr.-

(2001) 10 SCC 660 and Airports Authority of India Vs.

Satyagopal Roy & Ors. - (2002) 3 SCC 527. In Madivalappa

Basalingappa Melavanki, this Court held that generally a

multiplier of 10 would be appropriate but depending on

the special facts and circumstances, the multiplier may

vary. In Rama Rana and Krishi Utpadan Mandi Samiti,

this Court adopted a multiplier of 10. In Gurcharan

Singh and Airports Authority of India, this Court

applied a multiplier of 8 for arriving at the market

value of orchard land. The general trend is to adopt a

multiplier of 8 to 10 in regard to plantations, fruit

groves and orchards and a multiplier ranging from 10 to

12 to agricultural crop land.

7. There are no special circumstances to

apply the higher multiplier of 12 or 13 or the lower

multiplier of 8. Having regard to the evidence in

regard to the nature, standard and position of the

orchard, we are of the view that the standard multiplier

of 10 should be applied. Therefore, the compensation

would be Rs.94,500 x 10, that is Rs.9,45,000/- for the

entire extent of 4 acres 38 cents (land with the trees).

8. The Reference Court has awarded

additional amount under Section 23(1A) at 12% per annum 6

from the date of preliminary notification (27.8.1993).

Award of additional amount under Section 23(1A) of the

Act would arise only where the possession is taken after

the notification under Section 4(1) of the Act. Section

23(1A) permits additional amount to be awarded from the

date of notification under Section 4(1) of the Act, to

the date of award of Collector or the date of taking

possession of the land, whichever is earlier. Where

possession is taken prior to the date of notification

under Section 4(1) of the Act, no additional amount is

awardable under Section 23(1A) of the Act. Award of such

amount cannot be sustained.

9. This appeal raises yet another issue. The

reference Court has awarded interest under Section 28 of

the Act from the date of possession, that is 8.6.1988,

and not from the date of notification under Section 4(1)

of the Act. The High Court has not interfered with the

award of such interest. The appellant relied upon

decisions of this Court in R.L. Jain(D) by LRs. Vs. DDA

& Ors., (2004) 4 SCC 79 and in Special Land Acquisition

Officer Vs. Karigowda & Ors., (2010) 5 SCC 164 to

contend that interest could be awarded only from the

date of notification under Section 4(1) of the Act, even

where possession had been taken on a date prior to the

date of preliminary notification. We, therefore, hold

that interest under Section 28 of the Act could have 7

been awarded only from the date of preliminary

notification, even if possession was taken prior to the

date of the preliminary notification.

10. Though respondents are not entitled to interest

under Section 28 of the Act, from a date prior to the

date of preliminary notification, they are entitle to

damages for wrongful use and damages of the lands from

the date of possession till date of notification under

Section 4(1) of the Act. In R.L. Jain (supra), this

court held:

"In a case where the landowner is dispossessed prior to the issuance of

preliminary notification under Section 4(1) of the Act the Government merely takes possession of the land but the title thereof continues to vest with the landowner. It is fully open for the landowner to recover the possession of his land by taking appropriate legal proceedings. He is therefore only entitled to get rent or damages for use and occupation for the period the Government retains possession of the property. Where possession is taken prior to the issuance of the preliminary notification, in our opinion, it will be just and equitable that the Collector may also determine the rent or damages for use of the property to which the landowner is entitled while determining the compensation amount payable to the landowner for the acquisition of the property. The provisions of Section 48 of the Act lend 8

support to such a course of action. For delayed payment of such amount appropriate interest at prevailing bank rate may be awarded."

11. The above position is reiterated in Karigowda

(supra). It is clear that even if the land owner may not

be entitled to interest from the date of possession but

only from the date of preliminary notification, he will

be entitled to compensation for wrongful use and

occupation from the date of actual dispossession till

the date of notification under Section 4(1) of the Act.

In this case, there is already a clear finding that the

loss of income per year is Rs.94,500/- from the acquired

lands. Therefore, instead of relegating the parties for

a further enquiry in regard to damages for wrongful use

and occupation from the date of dispossession to date of

preliminary notification, we proceed to determine the

same at Rs.94,500/- per annum for the period from

8.6.1988 to 27.8.1993 (which is rounded of to five

years) with interest at 6% per annum from 30.6.1994 to

date of payment.

12. In view of the above, this appeal is allowed in

part as follows:

(a) The compensation for the land acquired (4 acres

38 cents) is determined as Rs.9,45,000/- with solatium

under Section 23(2) of the Act.

9

(b) The respondents will also be entitled to damages

of Rs.4.72,500/- (at the rate of Rs.94,500/- per annum)

for use and occupation, for the period between date of

dispossession and date of preliminary notification.

(c) The respondent will be entitled to interest on

the amount due under para (a) less the amount awarded by

the Land Acquisition Officer, at the rate of 9% per

annum for one year from 27.8.1993 and thereafter at the

rate of 15% per annum on the enhanced amount, under

Section 28 of the Act.

(d) The respondents shall be entitled to interest on

the amount due under para (b) above, at the rate of 6%

per annum from 30.6.1994 (date of award) till date of

payment.

(e) Parties to bear their own costs.

......................J. ( R.V. RAVEENDRAN )

New Delhi; ......................J. December 08, 2010. ( A.K. PATNAIK )