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TMI Blog2002 (3) TMI 956X X X X Extracts X X X X X X X X Extracts X X X X ..... ed counsel for the appellant that the impugned order is against the law laid down by this Court in State of Haryana v. Gurcharan Singh and Anr. [1995 Suppl. SCC 637] wherein this Court has held that under no circumstances, the multiplier should be more than 8 years when the market value is determined on the basis of the yield from the trees or plantation. 4. She has also submitted that as such the entire award of compensation to the respondent is also illegal because by Notification dated 15th March, 1979 issued by the Government of India, Ministry of Tourism and Civil Aviation, New Delhi in exercise of powers conferred under Section 9A of the Aircraft Act, 1934 (22 of 1934), respondents were directed that no building or structure should b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claimants and in number of such cases, this Court has refused to interfere. He referred to various decisions rendered by this Court including State of Madras v. Rev. Brother Joseph [1974] 1 SCR 309. 7. Before dealing with the contentions raised by the learned counsel for the parties, we would reiterate that capitalisation means the method used to convert future benefits to present value by discounting such future benefit at an appropriate rate of return. It is the process of converting the net income of a property into its equivalent capital value. While capitalising the income, future income, its duration along with risk factor is to be taken into consideration. Capitalising rate means a designated rate of return which converts net futur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... along with the land can be safely assessed as Rs. 50,000/-. In the present case, there is no question of acquiring the land. The land remains with the claimants. The question is limited with regard to payment of compensation for the damages because of cutting of trees. With regard to fruit bearing trees, its life span including risk factor is also required to be taken into consideration. Hence, yield of trees multiplied by an appropriate multiplier for its capitalization after taking into consideration all relevant factors would be the basis for determining the compensation. 9. Law on this point is discussed in Union of India and Anr. v. Shanti Devi and Ors. [1984] 1 SCR 217 : [1984] 1 SCR 217, wherein the Court dealing with similar conten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttendant benefits such as the possibility of issue of bonus shares and rights shares and appreciation of the value of the shares themselves. They are attracting a lot of capital investment. A return of 10 per cent per annum on such safe investments is almost assured. Today nobody thinks of investing on land which would yield a net income of just 5 per cent to 6 per cent per annum. A higher return of the order of 10 per cent is usually anticipated. Even in the years 1962 and 1963 an investor in agricultural land expected annual net return of at least 8 per cent. It means that if the land yielded a net annual income of Rs. 8 a willing buyer of land would have paid for it Rs. 100 i.e. a little more than 12 times the annual net income. The mult ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rson investing his capital in agricultural lands would ordinarily expect 2 per cent to 3 per cent more than what he could obtain from gilt-edged securities or other forms of safe investment and therefore the proper multiplier to be applied for the purpose of capitalization could not, in any event, exceed "ten". 12. Now, in the light of the aforesaid two decisions, we would refer to the decision rendered by this Court in Gurcharan Singh (supra). In that case, the Court considered the question whether the High Court erroneously enhanced the compensation by 60% on the basis of price indeed in a case where Land Acquisition Officer determined the compensation on the basis of market value as well as on the basis of yield as if both we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re was no reason for the High Court not to follow the decision rendered by this Court in Gurucharan Singh's case (supra) and determine the compensation payable to the respondents on the basis of the yield from the trees by applying 8 years' multiplier. In this view of the matter, in our view, the High Court committed error apparent in awarding compensation adopting the multiplier of 18. 15. However, it is true that this Court in State of Madras v. Rev. Brother Joseph [1974] 1 SCR 309 refused to interfere with the award on the ground that the compensation awarded was meager. Similarly, in Special Land Acquisition Officer, Malaprabha Dam Project, Saundatti and Ors. v. Madivalappa Basalingappa Melavanki and Ors. (1995) 5 SCC 670, this ..... X X X X Extracts X X X X X X X X Extracts X X X X
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