1955 (3) TMI 56 - HC - Indian Laws

Summary

Issues Involved:
1. Quantum of compensation
2. Constitutionality of the first proviso to Section 7(1)(e) of the Orissa Development of Industries Irrigation, Agriculture, Capital Construction and Resettlement of Displaced Persons (Land Acquisition) Act, 1948
3. Valuation of Bhogra lands
4. Saleability and compensation of Gaonti-raiyati lands
5. Compensation for trees on Bhogra, Gaonti-raiyati, and waste lands
6. Costs of cultivation

Detailed Analysis:

1. Quantum of Compensation:
The primary issue was the determination of the quantum of compensation for the lands acquired under the Act. The Government offered Rs. 4044-8-6, whereas the respondent claimed Rs. 38,305/-. The matter was referred to the Arbitrator for fixation of compensation under Rule 9 of the Rules framed under the Act.

2. Constitutionality of the First Proviso to Section 7(1)(e) of the Act:
The respondent challenged the constitutionality of the first proviso to Section 7(1)(e) of the Act, arguing it was ultra vires as it offended Article 31 of the Constitution. The Court noted that the Act did not receive the President's certification as required under Article 31(6). The Court held that the proviso, which fixed compensation based on the market value as of 1939 plus fifty percent, was arbitrary and did not ensure a "just, reasonable and equivalent price" for the acquired land. The Court declared the proviso ultra vires as it contravened Article 31(2) of the Constitution.

3. Valuation of Bhogra Lands:
The Court considered the valuation of 10.62 acres of Bhogra lands. The Arbitrator relied on the annual net profits due to the absence of reliable documentary evidence. The Court referred to a precedent from the Patna High Court, which suggested paying compensation equivalent to 16 to 20 years' purchase of the annual net produce. The Court accepted the Arbitrator's method of using Hamid's Settlement Report of 1926 to estimate the annual gross produce and deducted half of the gross produce as costs of cultivation. The final compensation for Bhogra lands was fixed at Rs. 7,650/-.

4. Saleability and Compensation of Gaonti-raiyati Lands:
The Court examined whether Gaonti-raiyati lands were saleable. It concluded that these lands were non-transferable as the Gountia held them as a tenant under the Government. The compensation was thus fixed at 500 times the deduced rent, amounting to Rs. 678/10/- after deducting the Government's share.

5. Compensation for Trees on Bhogra, Gaonti-raiyati, and Waste Lands:
The Court evaluated the compensation for trees on Bhogra, Gaonti-raiyati, and waste lands. The Arbitrator's valuation was found to be exaggerated. The Court revised the compensation for trees on Bhogra and Gaonti-raiyati lands to Rs. 409/- and for trees on waste lands to Rs. 871/-, totaling Rs. 1,280/-.

6. Costs of Cultivation:
The Arbitrator deducted half of the gross produce as costs of cultivation, which the respondent contested, arguing that one-third would suffice based on the 1926 Settlement Report. The Court upheld the Arbitrator's deduction of half the gross produce, citing the significant rise in cultivation costs since 1942.

Conclusion:
The Court modified the Arbitrator's award, reducing the compensation to Rs. 9,662/8/11 from Rs. 14,620/1/11, with interest at six percent per annum from the date of possession till the date of payment. The cross-appeals were dismissed without costs, and the First Appeal No. 20 of 1953 was dismissed with costs. The Court also declared the first proviso to Section 7(1)(e) of the Act ultra vires.