Orissa High Court
State Of Orissa vs Himadri Sahu And Two Ors. on 1 May, 2007
Equivalent citations: 104(2007)CLT289, 2007(II)OLR239, 2007 A I H C 2727, (2007) 2 ORISSA LR 239, (2007) 104 CUT LT 289, (2007) 2 CLR 145 (ORI), (2007) 2 LACC 421
Author: A.K. Parichha
Bench: A.K. Parichha
ORDER A.K. Parichha, J.
1. These are appeals filed by the State against the awards passed by the learned Civil Judge (Senior Division), Deogarh in L.A. Case Nos.98/98, 25/98, 79/98, 123/98, 11/99, 21/99, 129/98, 7/99,23/99, 96/98, 60/99, 73/98,26/99, 36/99, 36/96, and 82/98 answering the references under Section 18 of the Land Acquisition Act (in short, 'the Act') made by the concerned Land Acquisition Zone Officer for determination of the proper market value of the acquired lands.
2. The lands belonging to the claimants-respondents of the above noted appeals were acquired by the State of Orissa for the purpose of Rengali Dam Project vide notification under Section 4(1) of the Act. The Land Acquisition Zone Officer, Deogarh after conducting enquiry under Section 11 of the Act awarded respective compensation to the claimants-respondents for the acquired lands and trees. Not being satisfied with the quantum of compensation, the claimants-respondents filed separate protest petitions demanding reference of the matter to the Civil Court for determination of the correct market value of the acquired lands. Consequently, the matters came up before the learned Civil Judge (Senior Division), Deogarh in the above noted L.A. Misc. Cases.
3. The learned referral Court conducted separate enquiry in the reference proceedings and allowed the claimants as well as L.A. Zone Officer to produce evidence in support of their respective claims. Analysing the evidence produced by the parties and adopting capitalization methods, he determined the quantum of compensation for the lands and trees acquired. Aggrieved by the awards so made in the above noted L.A. Misc. Cases, the State has preferred the present appeals.
4. There is no dispute about the acquisition of lands of the claimants-respondents for the purpose of Rengali Dam Project and the extent thereof. There is also no dispute about the legality of use of capitalization method for determining tho market value of the acquired lands. The uniform controversy in these appeals is about the number of multiplier used by the learned referral Court.
5. Mr. Sangram Das, learned Addl. Standing Counsel appearing for the appellant contended that though the annual net income from the acquired lands have been reasonably determined by the referral Court but use of 16 multiplier on this annual income was not proper.
According to him, the correct multiplier should have been 12 as the lands acquired are agricultural lands. In support of his contention, Mr. Das relied on several decisions of the apex Court as well as this Court namely, State of Haryana v. Gurucharan Singh , Airport Authority of India v. Satya Gopal Roy and Ors. , L.A.Z.O., TSRL v. Kulamani Sahu 2005 (Supp.) OLR (NOC), 1099, Bidya Satnami v. Z.O.L., Dharamgarh 100 (2005) C.L. T., 447 and State of Orissa v. Giridhari Nayak 2006 (II) OLR, 329.
6. Learned counsels appearing for the respondents supporting the impugned awards stated that 16 multiplier under capitalization method is just and proper as this Court as well as the apex Court in many cases have ruled that use of 16 multiplier is reasonable for the lands of this State. In support of their contentions, they relied on the cases of Land Acquisition Zone Officer v. Damberudhar Pradhan and Ors. , State of Orissa v. Kapila Sabar 2002 (II) OLR, 565, Executive Director v. Sarat Chandra Bisoi AIR 2000 SC 2619, State of Orissa v. Bibhuti Bhusan Singh and Anr. .
7. As has been said in the case of The Dollar Company, Madras v. Collector of Madras , the value of the land acquired shortly before notification under Section 4(1) of the Act is the best evidence to determine market value. In absence of such material, contemporaneous transaction of lands having similar advantages would give good guidance for determination of market value. Opinion of experts on valuation of and can be adopted as a method for determination of market value. In absence of any of these methods, market value can be determined by capitalizing number of years, purchase of net annual yield. What would be the multiple on basis of which capitalization method would be adopted would vary from case to case and time to time. In the present appeals the parties have no dispute about the correctness of adopting method of capitalization and also the annual net income assessed by the referral Court. The only dispute relates to the number of years used as suitable multiplier. The appellants canvass that 12 multiplier would be proper whereas the claimants-respondents propagate that 16 multiplier would be reasonable and fair. In some of the earlier cases, namely, the Land Acquisition Zone Officer v. Damberudhar Pradhan and Ors. (supra), State of Orissa v. Kapila Sabar (supra), State of Orissa v. Bibhuti Bhusan Singh and Anr. (supra), this Court adopted 16 multiplier in respect of agricultural lands. In some other cases, namely, in the cases of TSRL v. Kulamani Sahu (supra), State of Orissa v, Giridhari Nayak (supra) and Bidya Satnami v. Z.O.L.A., Dharamgarh, this Court took the view that use of 12 multiplier for agricultural lands would be just and proper. In such backdrop it becomes necessary to examine the view expressed by the apex Court on the subject.
8. In the case of State of Haryana v. Qurucharan Singh (supra), a two-Judge Bench of the apex Court observed that under no circumstances, the multiplier should be more than 8 years for lands having trees or plantation and 12 years for agricultural lands, in the case of Airport Authority of India v. Satya Gopal Roy and Ors. (supra), a three-Judge Bench approved the ratio laid down in Gurucharan Singh's case (supra), thereby ruling that 12 multiplier is reasonable for agricultural lands. Learned counsels for the respondents submitted that the ratio of the above noted cases would not apply to the present case as the lands in those cases belong to other States and all the factors guiding determination of compensation of lands were not taken into consideration. According to them, the ratio laid down in the case of Executive Director v. Sarat Chandra Bispi (supra) would cover the present case as the land involved in that case was of the same area and of similar nature. In the case of Executive Director v. Sarat Chandra Bisoi (supra) the lands in question no doubt belong to the State of Orissa and the same area, but in that case Guru Charan Singh's case was not cited and the ratio laid down in that case was not discussed. Moreover in that case the multiplier was determined taking into consideration the facts and circumstances of that case and no ratio was laid down. It is to be noted that the decision of the earlier Bench is binding unless explained by the later Bench in which case the later decision is binding. That apart in the case of Airport Authority of India (supra) after considering all the earlier judgments rendered by the apex Court on the point of appropriate multiplier including Guru Charan Singh's case (supra), three three-Judge Bench approved the ratio noted in Guru Charan Singh's case. In that situation, the ratio laid down in Guru Charan Singh's case and Airport Authority of India (supra) would form ratio decidendi and binding on all the Courts.
9. In the case of Special Land Acquisition Officer, Davanagare v. P. Veerabhadrappa etc. etc. AIR 1984 SC, 774, the apex Court formulated the main features to be considered in determining the multiplier while determining the market value of a land under capitalization method. The observation of the apex Court in that regard is quoted below:
...In valuing land or an interest in land for purposes of land acquisition proceedings, the rule as to number of years' purchase is not a theoretical or legal rule but depends upon economic factors such as the prevailing rate of interest in money investments. The return, which an investor will expect from an investment will depend upon the characteristic of income as compared to that of idle security. The main features are : - (1) Security of the income; (2) fluctuation (3) Chance of increase, (4) cost of collection etc. The most difficult and yet the most important and crucial part of the whole exercise is the determination of the reasonable rate of return in respect of investment in various types of properties. Once this rate of return and accordingly the rate of capitalization are determined there is no problem in valuation of the property.
Considering the above noted aspect in that case the apex Court adopted 12 multiplier as the just and proper.
10. Coming to the case decided by this Court, it is worthwhile to point out that in Kapil Sabar's case (supra) though Gurucharan Singh's case (supra) was cited, no observation was made as to why the ratio laid down in that case was not followed. The decisions in Damberudhar Pradhan and others (supra) and Bibhuti Bhusan Singh and Anr. (supra) were rendered before the apex Court laid down the ratio in Gurucharan Singh's case.On the other hand, in the case of Kulamani Sahu (supra) and Giridhari Nayak (supra) the multiplier was fixed taking use of the ratio of Gurucharan Singh's case (supra). In the case of Bidya Satnam (supra), a Division Bench of this Court following the ratio of Gurucharan Singh's case also held that 12 multiplier is proper for determination of the market value of the acquired land under capitalization method.
11. No doubt in the past, this Court adopted different multiplier, but taking note of the above said principJe and the ratio laid down by the apex Court and the increase in the rate of interest on the term deposits and investments, multiplier of 12 appears to be just, proper and reasonable for the agricultural lands of our State.
12. Thus, I am of the considered opinion that use of 12 multiplier would be just and proper for determination of the market value of the acquired lands involved in the above noted appeals. The impugned awards are accordingly modified to the extent that the value of the acquired land would be determined by use of 12 multiplier on the annual net income of the respective lands. The rest awards relating to trees, shifting of residence, business and statutory benefits under the amended L.A. Act granted by the referral Court would remain unaltered.
13. In the result the appeals allowed in part. No cost.