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TMI Blog1983 (10) TMI 290X X X X Extracts X X X X X X X X Extracts X X X X ..... te of Punjab and its members included Ministers of the States of Punjab and Rajasthan and senior officers of the Central Government and of the two States. The decisions of the Beas Control Board used to be implemented by the Punjab Government which was administering and executing the works on the Project. The expenditure on the Project was shared by the Rajasthan Government. 3. With the coming into force of the Punjab Reorganisation Act, 1966 (Act 31 of 1966), the new State of Haryana and the Union Territory of Chandigarh came into being, having been formed out o f the territory of the erstwhile State of Punjab. A part of the Punjab territory was also transferred to what was then the Union of Territory of Himachal Pradesh. What remained with Punjab became the new State of Punjab. 4. Sub-section (1) of Section 80 of the Punjab Reorganisation Act, 1966 provided that the construction including the completion of any work already commenced of the Beas Project should on and from November 1,1966 be undertaken by the Central Government on behalf of the successor States (as defined under that Act) and the State of Rajasthan should provide the necessary funds to the Central Government ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ivity and potentiality of land in Tikka Bhararian (the lands in question) were more or less comparable with those of the lands situated in Tikka Bihari and that the classification and valuation of lands in the award passed by Shri Jaswant Singh were quite fair, adopted the same for the purpose of passing the award in respect of the lands in question. It may be mentioned here that Shri Jaswant Singh had adopted for the purpose of valuation of lands the principle of capitalisation. He was of the view that the rule of 20 years purchase was to be adopted. He accordingly after determining the net annual profit per kanal of land of the best category at ₹ 50 and multiplying it by 20 arrived at ₹ 1,000 as the value of one kanal of the best variety of land. In order to determine the net annual profit from the land, it appears that he had carried out a crop cutting experiment on some Plot of land after the publication of the notification Under Section 4(1) of the Land Acquisition Act. It would appear that on behalf of the Department, a statement had been filed showing that the lands of similar quality were being sold at or about the time of publication of the notification Under S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... land which were involved in these cases except in the case of G.M. abadi land for which he fixed at ₹ 650 per kanal. Aggrieved by the decision of the District Judge, the Union of India and the State of Himachal Pradesh preferred appeals before the High Court of Himachal Pradesh. The appellants contended that the methods adopted by Land Acquisition Officer and the District Judge were both faulty and if the principle adopted by them was used in respect of all the 70,000 acres of land acquired, the Government would suffer a huge loss. 7. It is necessary to state here that in the meanwhile the High Court disposed of two appeals being R.F.A. Nos. 16 and 17 of 1970 in respect of the same lands in Tikka Bihari where the two learned Judges (R.S. Pathak, CJ. (as he then was) and D.B. Lal, J.) who heard the said appeals by their separate judgments dated January 14. 1976 set aside the judgment of the District Judge and remanded the cases for fresh disposal to the District Court. Pathak, C.J. in the course of his judgment observed : In my opinion the position is this. The Collector had determined the market value at ₹ 1000 per kanal of the best category of land. He did this o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in these and other similar cases relating to the acquisition of land for the Beas Project. As mentioned earlier the total extent of land acquired is 70,000 acres. We are told there are nearly 800 cases before this Court arising out of those acquisition proceedings. There may be many others which have not yet reached this Court. The only method of valuation adopted in all cases appears to be the capitalisation method. The evidence regarding the crop cutting experiment said to have been conducted is not satisfactory. The crop in question is said to have been grown after the acquisition proceedings commenced only for the purpose of determining the compensation. Naturally if such crop is grown by the owner, there is bound to be some anxiety on his part to adopt extraordinary agricultural practices to show a higher yield than what would be the normal yield of the land. It is seen that the direction given by Pathak, C.J. in the order of remand passed in 1976 in the cases pertaining to lands in Tikka Bhararian referred to above appears not to have been kept in view either by the District Court and by the High Court when they subsequently disposed of hundreds of cases arising out of thes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation Under Section 4(1) is published. The capitalised value of a property is the amount of money whose annual interest at the highest prevailing interest at any given time will be its net annual income. The net annual income from a land is arrived at by deducting from the gross annual income all out goings such as expenditure on cultivation, Land revenue etc. The net return from landed property generally speaking, reflects the prevalent rate of interest on safe money investments. It is on this basis, Rajamannar offg. C. J. held in T. Radhakrishna Chettiar v. The Province of Madras A.I.R. 1949 Mad 171 that the number of years' purchase to be adopted was 33 I where the interest paid on gilt-edged securities at the time of acquisition i. e. in 1942 was 3% per annum. But the same learned Chief Justice held in Sri Lakshmi Narasimha Devaru and Anr. v. The Revenue Divisional Officer. Mangalore and Anr. A.I.R. 1949 Mad 902 that 20 years' purchase was the appropriate rule to be followed in determining the value of agricultural Land acquired in the year 1943 by capitalisation method. In State of Kerala v. Hassan Koya: [1968]3SCR459 in the case of a Land with building acquir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial undertaking such as the petitioner's is reasonable and on that basis adopts the multiplier 'eight', it is not for this Court to sit in judgment and attempt to determine a more appropriate multiplier. We are unable to see how the adoption of the particular multiplier in the present case is the result of the application of any irrelevant principle. We do not, therefore, agree with the submission of Shri Sen., 15. In the above case the Court felt that if 12 1/2% was the annual return, the adoption of multiplier 'eight' could not be unreasonable in the year 1962 in the case of an industrial undertaking. 16. A perusal of the decisions referred to above and some others which have not been cited here shows that in India the multiplier which is adopted in determining the compensation by the capitalisation method has been 33 1/3, 25, 20, 16 3/2 11 and 8. The number of years' purchase has gradually, decreased as the prevailing rate of interest realisable from safe investments has gradually increased the higher the rate of interest, the lower the number of years' purchase. This method of valuation involves capitalising the net income that the property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ict Court erred in applying the twenty years, purchase rule in the case of these lands which were acquired in the years 1962 and 1963. The proper principle was fifteen years' purchase rule. The District Judge awarded compensation in all these cases at ₹ 1,000 per kanal for the land of the first category by applying the twenty years' purchase rule and has fixed the compensation for other lands on the above basis. The High Court has affirmed it. Since we have held that the proper basis of fixing compensation in these cases was fifteen years' purchase rule, the compensation awarded for lands in these cases should be reduced by one-fourth i.e. for lands of the first category compensation payable should be ₹ 750 per kanal instead of ₹ 1,000 per kanal. Similarly in the case of other lands also there should be a reduction of the compensation awarded by one-fourth. The claimants shall get solatium of 15% on the compensation computed on the above basis and they shall be paid interest at the rate ordered by the District Judge on the aggregate amount from the date of taking possession of the land till the date of payment. The orders passed by the High Court in al ..... X X X X Extracts X X X X X X X X Extracts X X X X
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