Orissa High Court
State Of Orissa vs Madhabi Padhan & Others on 22 March, 2024
IN THE HIGH COURT OF ORISSA, CUTTACK
L.A.A. No.18 of 2011
State of Orissa ....... Appellant
-Versus-
Madhabi Padhan & others ....... Respondents
For Appellant : Mr. A. Behera,
Addl. Standing Counsel
For Respondents : Mr. A. Panda,
Proxy Counsel
----------------------------
CORAM: JUSTICE SANJAY KUMAR MISHRA
---------------------------------------------------------------------------------
Date of Hearing & Judgment: 22.03.2024
---------------------------------------------------------------------------------
S.K. Mishra, J. This appeal has been preferred by the Appellant
challenging the judgment dated 26.04.2010 passed in
L.A.R. No.78 of 2009, vide which the Court below, adopting
the capitalization method, determined the market price of
the acquired land of the Petitioners (Respondents herein)
and enhanced the compensation amount from Rs.21,321/-
per acre to Rs.1,00,000/- per acre.
2. The brief background facts, which led to filing of
this Appeal, are that as per the Notification dated
28.08.2002 made under section 4(1) of the Land
Acquisition Act, 1894, an area of Ac.0.24 decimals Mala
Kissam of land under Plot No.358 and khata No.62 of
mouza Thapen was acquired by the State Government for
construction of Bhaludarah M.I.P. in connection with L.A.
Case No.16/2002. The Land Acquisition Officer granted
compensation of an amount of Rs.21,321/- per acre for
acquiring an area of Ac.0.24 decimals land of the
Respondents and directed that they are entitled to
compensation of Rs.10,381/- for the acquired land. Being
aggrieved by the said determination, the present
Respondents filed an application under section 18 of the
Land Acquisition Act, 1894 before the Land Acquisition
Officer, Kendrapara, claiming Rs.1,00,000/- per acre which
was referred to the Court below and got registered as L.A.R.
No.78 of 2009. After giving chance to the parties to the said
referral case, the Court below enhanced the compensation
amount as detailed above. Being aggrieved by the said
judgment dated 26.04.2010 passed in L.A.R. No.78 of 2009,
L.A.A. No.18 of 2011 Page 2 of 13
this Appeal has been preferred by the State basically on the
grounds that the Court below has failed to consider the
mandatory guidelines as envisaged under Sections 23 & 28
of the Land Acquisition Act, 1894, while
determining/enhancing the compensation and thereby
acted illegally with material irregularities while passing
the impugned judgment.
3. Apart from other grounds, a ground has also
been taken that the Court below has illegally applied 16
multiplier for determining the compensation which is
contrary to the settled position of law and in that place 12
multiplier should have been applied while enhancing the
compensation amount.
4. Reiterating the grounds taken in the Appeal
Memo, Mr. A. Behera, learned Counsel for the
State/Appellant submitted that the impugned judgment
passed in L.A.R. No.78 of 2009 deserves interference and
the same should be set aside and matter should be
remitted back to the referral Court for re-adjudication.
5. In response to the said submission made by Mr.
Behera, learned Additional Standing Counsel for the
L.A.A. No.18 of 2011 Page 3 of 13
State/Appellant, learned Counsel for the Respondents,
drawing attention of this Court to the observation made by
the Court below in the impugned judgment submitted that,
taking into consideration oral as well as documentary
evidence on record, the Court below passed the impugned
judgment and there is no infirmity or illegality in the said
findings of the impugned judgment.
6. Learned Counsel for the Respondents further
submitted that the Court below was justified to enhance
the compensation amount, as in view of the settled position
of law, in absence of any evidence of the requisite sales
statistics, in order to arrive at the actual market price of
acquired lands of the Petitioner at the time of Notification
made under section 4(1) of the Land Acquisition Act, 1894,
in such circumstances, when the yield produced an income
from the acquired land is specifically brought by way of
evidence, then the Court has to adopt the capitalization
method for determining the market price of the acquired
land. Accordingly, the Court below rightly adopted the
capitalization method to enhance the compensation amount
L.A.A. No.18 of 2011 Page 4 of 13
taking into consideration the undemolished evidence of
P.W. No.1.
7. In view of the submissions made by the learned
Counsel for the parties, it would be apt to reproduce below
the relevant portion from paragraph-6 of the impugned
judgment:-
"6. xxx xxx xxx
I have perused the oral as well as documentary
evidence adduced on record. On such perusal, it
is found that P.W.1 has deposed that their
acquired lands were Bari Kissam of lands
and they were cultivating different
varieties of vegetables by digging well on
the acquired lands and were earning a net
income of Rs.6,750/- per year by cultivating
tomato and brinjal and was getting the
yield of 20 quintals of tomato and 15
quintals of brinjal and selling the tomato
at the rate of Rs.300/- per quintal and
brinjal at the rate of Rs.500/- per quintal
and she was getting a gross income of
Rs.13,500/- per year per acre. Such
adduced facts in the mouth of P.W.1 has
not been duly discredited in her cross-
examination by the opposite party. P.W.1
marked Ext.1, the certified copy of judgment
dated 27.2.2010 passed by this Court in L.A.R.
No.77/2009 wherein the similar kissam of
acquired lands of petitioner, Basanta Padhan
has been considered and his acquired lands
therein has been evaluated at the rate of
Rs.1,00,000/- per acre towards the market
price.
xxx xxx xxx
But in his cross-examination he has deposed
that the acquired lands of the petitioners were
L.A.A. No.18 of 2011 Page 5 of 13
recorded as Mala Kissam of lands wherein the
petitioner was growing vegetables and lying
adjacent to the acquired lands of Basanta
Padhan (petitioner in L.A.R. case No.77/2009)
and having similar potentiality.
xxx xxx xxx
On such calculation when the petitioner
were getting the net income of Rs.6500/-
per acre per year from their acquired lands
after deduction of fifty percent of cost
towards the cost of cultivation, then in
such circumstances, by applying the
multiplier of 16(sixteen) thereon as per the
Government of Orissa instructions
regarding fixation of market value of the
lands under L.A. Act vide Government of
Orissa, Revenue Department Notification
No. L.A.(C)-5/2003(Misc.) 21963/R., dated
30.04.2003, the market price of the
acquired Mala Kissam of land of the
petitioners is held and found to be
Rs.6750x16 = Rs.1,08,000/- per acre, but
when the petitioners have restricted their claim
to Rs.1,00,000/- per acre for their acquired
lands, then in such circumstances, they are
entitled to get the said claimed amount of
award of compensation along with other
statutory benefits as per the humble opinion of
this Court herein."
(Emphasis supplied)
8. That apart, the Court below has also taken note
of the judgment dated 27.2.2010 passed by the said Court
in L.A.R. No.77 of 2009, wherein similar kisam of acquired
land of the Petitioner namely, Basanta Padhan was
considered and his acquired land therein has been
L.A.A. No.18 of 2011 Page 6 of 13
evaluated @ Rs.1,00,000/- per acre towards the market
price.
9. So far as the ground of illegal application of 16
multiplier for determination of compensation, learned
Counsel for the Respondents, handing over a copy of the
Revenue Department Notification dated 30.04.2003,
submitted that, as per the said Notification, 16 multiplier is
to be applicable for fixation of market value. As the Court
below has acted in terms of the said Revenue Department
Notification dated 30.04.2003 for fixation of market value,
no illegality being committed by the Court below, the said
ground agitated in the Appeal is not sustainable and the
Appeal deserves to be dismissed being devoid of any merit.
10. In view of the said submission made by the
learned Counsel for the Respondents, it would be apt to
reproduce below the contents of the said circular dated
30.04.2023 which deals with the multiplier to be applied for
calculating the market value of the lands under the L.A.
Act, 1894.
L.A.A. No.18 of 2011 Page 7 of 13
"Government of Orissa
Revenue Department
No. LA(C)-5/2003(Misc) 21963/R.,
Bhubaneswar, dated the 30.04.2003
From
Sri Ashok Momin.
Addl. Secretary to Government.
To
All Collectors
All Special Land Acquisition Officers.
Sub: Instruction regarding fixation of
Market Value of Land under L.A. Act.
Sir/Madam,
I am directed to say that the market value of
private lands, acquired for public purposes is
being determined in accordance with the
provisions of Land Acquisition Act, 1894 and the
executive Instructions contained in the Land
Acquisition Mannual. The Revenue Department
have also issued following guidelines on different
occasions in the past regarding determination of
Market value of land.
1. Land value is usually fixed on the basis of sale
statistics collected from concerned Sub-
Registrar's Office as on the date of Notification
published U/S 4(1) of L.A. Act. In case the sale
date of a particular class of land of the village in
question is not available, then the sale instances
of identical class of land in the neighbouring
village is to be taken into account.
2. In absence of sale statistics, the next best
course is to ascertain the net profit the
tenant derives from the land over a certain
number of years as indicated in this
department Circular No.16421/R. dated
9.4.1996. The said circular was issued
basing on the decision of the Hon'ble High
Court, Orissa, in First Appeal No.35/87,
L.A.A. No.18 of 2011 Page 8 of 13
where the Hon'ble High Court observed that
the market value of land should be
calculated by applying 16 (sixteen) years
multiplier of the annual letting value of
land. Subsequently another Circular was issued
by this Deptt. bearing No.45846/R dated
10.10.1996 wherein it was instructed to
calculate the market value of the land by taking
multiplier of 10 (ten) of net annual yield (Total
yield minus 50% of it towards cost of
cultivations). The aforesaid instructions
originated from the order dated 4.12.1995 of the
Hon'ble Supreme Court of India in Civil Appeal
No.11967 of 1995. 3. But in the meanwhile,
Hon'ble Supreme Court while delivering
judgment in Civil Appeal Nos. 4932-33/94
(Reported in AIR, 2000, Supreme Court
2619) has upheld the Division Bench
decision of High Court of Orissa in land
Acquisition Zone Officer Vrs. Dambarudhar
Pradhan that adoption of multiplier of 16
(sixteen) for fixing market value of land in
Orissa is proper.
You are, therefore, requested to follow the above
principle enunciated in the judgment of the Apex
Court by applying multiplier of 16 (sixteen) times
of the net annual yield (Total yield minus 50% of
it towards cost of cultivation) while fixing the
market value of land in absence of sale statistics.
The copy of aforesaid judgment of the Apex Court
is enclosed for your reference.
Yours faithfully,
Sd/-
Addl. Secretary to Government"
(Emphasis supplied)
11. As in the circular dated 30.04.2003, there is a
reference to the judgment of Division Bench of this Court
L.A.A. No.18 of 2011 Page 9 of 13
reported in AIR 1991 Ori 271 (Land Acquisition Zone
Officer Vs. Damberudhar Pradhan & others) so also
judgment of the apex Court reported in (2000) 6 Supreme
Court Cases 326 (Executive Director Vs. Sarat Chandra
Bisoi & another), it would be apt to deal with the said
Judgments.
In Damberudhar Pradhan (supra) vide
Paragraph No.11, a Division Bench of this Court held as
follows:-
"11. Even in respect of acquisition of
agricultural land in rural areas in the year 1984
where expenses for collection of investments
would be higher, one of us (S. C. Mohapatra, J)
in two decisions in F.A. 218 of 1986 and
batch (Land Acquisition Officer, Rangali and
Bhimkund Irrigation Project, Sambalpur v.
Rakuli Charan Sahu) decided on 11-11-
1987** and F.A. 30 of 1989 (State of Orissa
through Collector, Sambalpur v. Balaram
Babu) decided on 18-2-1991, held that
adopting multiple of 16 would be proper.
This has been approved by the Division
Bench in the decision in F.A. 155 of 1986
(State of Orissa represented by Land
Acquisition Officer, Rangali and Bhimkund
Irrigation Project, Deogarh) decided on 25-4-
1989. In this case the land is agricultural land
situated near urban areas where expenses for
collection would be less as banking facilities are
available near at hand. If annual yield of
investment is taken to be rate of interest in fixed
deposit less than 10 would be the multiple since
an amount equal to less than 10 times would
L.A.A. No.18 of 2011 Page 10 of 13
give interest equal to net annual yield. Being
agricultural land 2 to 3 per cent more even if
added would also not be of any assistance to the
claimants. However, in AIR 1972 SC 1417 (Smt.
Tribeni Devi v. The Collector, Ranchi), it has been
held that Court is not precluded from taking into
consideration any special consideration. Potential
value of the land being in the industrial belt is a
special consideration which weighs with us.
Besides we can take note of gradual increase in
rate of land year to year, though annual yield
may not increase. In absence of any definite
data, we would have to make an estimate.
Estimation in many cases depend largely on
evaluation of imponderable and it must
necessarily be to some extent a matter of
conjuncture or guess as has been held in AIR
1979 SC 869 (Krishna Yachendra
Bahadurvaru v. The Special Land
Acquisition Officer, City Improvement Trust
Board, Bangalore), we feel, 16 times the net
annual yield would be the proper multimate
to be adopted in this case."
(Emphasis supplied)
Similarly, in Sarat Chandra Bisoi (supra), the apex
Court, referring to the judgment in Damberudhar Pradhan
(supra), vide Paragraph Nos.5 & 6 held as follows:-
"5. We have heard the learned counsel for the
parties. Ordinarily, the most accepted and
recognised method of appointing compensation for
land acquisition is to find out the value of the land
prevailing on the date of notification under Section
4 of the Land Acquisition Act which can best be
enabled by tendering in evidence documentary
evidence showing the price at which similar pieces
of land have been bought and sold on and around
the date of notification. Where there are no
sales of comparable land the value has to be
L.A.A. No.18 of 2011 Page 11 of 13
found out in some other way. One of the
methods is to find out the annual income of
the land which the owner has been deriving
or is expected to derive from the use of the
land and capitalise the same by adopting a
multiplier. In Union of India v. Shanti Devi
[(1983) 4 SCC 542 : AIR 1983 SC 1190] this Court
has said: (SCC p. 550, para 14)
"The capitalised value of a property is
the amount of money whose annual
interest at the highest prevailing rate of
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
outgoings 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."
6. It was a case of a very large tract of agricultural
land having been acquired for the Beas project.
This Court held that in the facts and
circumstances of that case 15 years' purchase
would be proper for determining the compensation
and not 20 years' purchase. Our attention has
been invited to a Division Bench decision of
the High Court of Orissa in Land Acquisition
Zone Officer v. Damberudhar Pradhan [AIR
1991 Ori 271] wherein on a conspectus of
decided cases, the Division Bench has held
that 16 years' purchase was ideal to be
adopted for fixing the market value of the
land in Orissa. The High Court has adopted
the same multiplier for this case. We do not
find any fault therewith, in the facts and
circumstances of the case and approve the
same."
(Emphasis supplied)
L.A.A. No.18 of 2011 Page 12 of 13
12. In view of the above, this Court is of the view
that the Court below has rightly applied multiplier of 16
(sixteen) while re-determining the market value of the land
acquired by the State and there is no infirmity or illegality
in the impugned judgment passed by the Court below in
L.A.R. No.78 of 2009. Accordingly, the Appeal stands
dismissed.
13. The State/Appellant is directed to act in terms of
the judgment dated 26.04.2010 passed in L.A.R. No.78 of
2009 within eight weeks hence.
...................................
S.K. MISHRA, J.
High Court of Orissa, Cuttack The 22th March, 2024 /Kanhu Signature Not Verified Digitally Signed Signed by: PRASANT KUMAR PRADHAN Designation: Secretary Reason: Authentication Location: High Court of Orissa, Cuttack. Date: 25-Mar-2024 13:04:59 L.A.A. No.18 of 2011 Page 13 of 13