Punjab-Haryana High Court
Subhash Chander And Others vs State Of Punjab on 17 December, 2012
Author: K. Kannan
Bench: K. Kannan
RFA No.819 of 1993 -1-
IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYANA AT
CHANDIGARH
RFA No.819 of 1993
Date of Decision. 17.12.2012
Subhash Chander and others .......Appellants
Versus
State of Punjab .....Respondent
2. RFA No.918 of 1993 The State of Punjab .......Appellant Versus Subhash Chander and others .....Respondents Present: Mr. Rakesh Gupta, Advocate and Mr. Karan Gupta, Advocate for the appellant in RFA No.819 of 1993 and for the respondent in RFA No.918 of 1993.
Mr. Deepak Gargi, AAG, Punjab for the appellant in RFA No.918 of 1993 and for the respondent in RFA No.819 of 1993.
CORAM:HON'BLE MR. JUSTICE K. KANNAN
1. Whether Reporters of local papers may be allowed to see the judgment ? Yes
2. To be referred to the Reporters or not ? Yes
3. Whether the judgment should be reported in the Digest? Yes
-.-
K. KANNAN J.
1. Through a reference made to the Court by the Collector under Section 18 of the Land Acquisition Act, the Reference Court was required to assess the compensation payable for the value of eucalyptus trees in the property acquired. The Reference Court found that there were 4000 eucalyptus trees as found in the report of Mihan Singh, RFA No.819 of 1993 -2- Kanungo in the office of SYL Rajpura and proceeded to assess compensation @ ` 188.65 per tree. The Court found that owners would also be entitled to solatium @ 30% but shall not be entitled to the benefit under Section 23(1-A) for the acquisition of land as additional amount. The Reference Court also provided for interest on the enhanced amount under the provisions of the Land Acquisition Act. The State has come on appeal in RFA No.918 of 1993 against the compensation as being in excess of what is appropriate while the land owners have come on appeal in RFA No.819 of 1993 complaining that the assessment of value of eucalyptus trees as though there was only one crop was inadequate.
2. The question of assessment of compensation for trees have come to Courts in several cases in the past and they have adopted different modes. (i) Where a property is sold as orchard and where there are fruit yielding trees, the value of the orchard itself takes the component of the value of the land plus the value of the trees and their possible yield. In such an event there is no requirement of having to determine either the value of the land or the value of the trees separately; (ii) Where a land is acquired over which the trees exist, which are not fruit yielding but they have a potential for use as timber for furniture etc., the assessment would be made with reference to the land plus the value of the timber minus the cost of felling the trees and transportation of trees to the market for sale; (iii) Where trees are fruit yielding and they have recurrent crops over a period of time say 10-20 years or the trees themselves have a long life span such as when it is a mango tope where the mango trees which can have long life span of 60 RFA No.819 of 1993 -3- or 70 years, the assessment of timber value would be inappropriate. The potential for the trees to yield fruits recurrently for several years would themselves be the appropriate method of determining compensation.
3. For each one of the situations, Courts have adopted different techniques of assessment of compensation but in the judicial approaches undertaken by trial Courts, there has been always some confusion about the assessment of compensation. Sometimes a particular method of compensation that is suitable for one type of situation is wrongly applied to another type. It is, therefore, necessary to merely outline the different approaches that the Courts have adopted and the need to standardize the correct mode of determination of compensation. To the first category of cases where the property is sold as an orchard where the value of the land plus the value of the trees grown are aggregated, the Courts have looked for transactions where their combined values of the orchard itself have been taken. Here the value of the land or the value of the yield as separate items is irrelevant. In Ambya Kalya Mhatre Vs. State of Maharashtra (2011) 12 SCC 87, the land was sold as orchard and the value given thereof was to be taken as the value for the trees as well. The Court, however, cautioned that if the exemplar was only for an agricultural land, the Courts would require to make a provision for the value of trees as well. The second type of situation of valuation of the land and valuation of the trees separately was approved of by the Supreme Court in Deputy Director, Land Acquisition Vs. Malla Atchinaidu (2006) 12 SCC 87. The Court held that trees standing on land cannot be valued separately RFA No.819 of 1993 -4- on the basis of horticulture value or with reference to the value of the yield and the award of compensation shall be on the basis of the value of land as well as the value of the trees. The value of the trees would be made separately as timber fuel after deducting cost of cutting and removing them from land as salvage. The third type of situation for valuation of fruit yielding trees on the basis of yield was adopted by the Supreme Court in S.K. Imambi Vs. Collector (2011) 11 SCC 639 for the orchard consisted of citrus trees. Considering the life span of the trees and the yield that they could make possible for an owner, the Court adopted a multiplier of 10 in regard to the annual income which was assessed at ` 80 per tree. The Court was reiterating a principle of what had already been considered by the Supreme Court in Kerala State Electricity Board Vs. Livisha (2011) 9 SCC 792 where the Court was holding that in so far as compensation in relation to fruit bearing trees was concerned, the determination on yield basis would be relevant. In one of the earlier rulings, the Supreme Court had noticed that when the Court was determining compensation on the basis of yield, it would not determine a compensation for value of the land as well as the value of trees. In State of Haryana Vs. Gurcharan Singh (1995) Supp (2) SC 637, the Court was considering the issue of compensation for plantation crop where it held that the market value determined by applying a 8 years multiplier for trees and 12 years multiplier for agricultural land was proper. The Court was explaining that if it was not a fruit yielding tree then the tree could be valued only as fire wood. In a still earlier judgment in State of Tamil Nadu Vs. Rev. Brother Joseph 1973 AIR (SC) 2463, the Supreme Court was holding that where fruit bearing trees RFA No.819 of 1993 -5- were likely to yield crops for a long number of years, say 20 years, capitalization of net income at 20 years purchase was not improper. It must be noticed that in this case the Court was taking the average income secured through the value of fruits and was capitalizing that value for 20 years period in the same manner that the Courts would provide for the higher multiplier for death of a person, which multiplier would not normally exceed 18. However, for trees, which have a longer life span, the assumption is that they outlive even a human being and hence, higher multiplier is adopted.
4. Even in the choice of multiplier when a capitalization method is taken for fruit yielding trees, which have long span of life, Courts would adopt such multiplier depending on the evidence relating to the life span of the trees and the value of the fruit yield. In Land Acquisition Officer Vs. Kamadana Ramakrishna Rao and another 2007 AIR (SC) 1142, the Court was considering the appropriate multiplier to be applied and held that it would depend upon the facts of each case. The main purpose, however, was to reach a reasonable figure to compensate the land owner with reasonable market value that will return a value per year, which would be more or less equivalent to the value of the yield from the crop. A certain guess work was surely involved in all such exercise but it is essential that the Courts look for appropriate evidence before applying a suitable multiplier, as cautioned by this Court in Sukhdev Singh Vs. State of Punjab and another 1990 (1) RRR 2. The most important thing to remember is that when we are considering the issue of fruit yielding trees, the Court shall resist the temptation to assess the value of the land separately and take the value RFA No.819 of 1993 -6- of the trees separately.
5. In this case the issue involved is the value of of eucalyptus trees. In Sukhdev Singh's case (supra), this Court was considering the acquisition of land with eucalyptus trees which yield three crops within a span of 35 years. Market value of the trees were fixed ` 377.30 per tree for two crops. The Court was deliberately slicing out the value of one crop on the ground that the compensation for third crop shall not be payable since a lump sum payment was made by accelerating such payment at least 25 years prior to the annual yield of crops. In this case, the Court has adopted value of ` 188.30/- but it has provided for valuation only for one crop. This does not appear fair and this has to be at least for two crops in the manner dealt with by this Court in Sukhdev Singh's case above. The modification that is required is to take the number of trees as 4000 as already assessed by the Reference Court and in respect of valuation at Rs.188.30 per tree as determined by the Court, it shall be ` 377/- per tree for two crops. The value per crop is taken having regard to the then market rate in 1983. The award of compensation by the Reference Court would stand modified and the appeal is allowed to the above extent. As held already by the Court below, the additional compensation that is determined will secure the benefit of Section 23(2) for solatium but the benefit under Section 23(1- A) shall not be available. The land owners would also be entitled to the interest in the manner contemplated under Sections 28 of the Land Acquisition Act.
6. The appeal by the State seeking for reduction of compensation already determined in RFA No.918 of 1993 is dismissed RFA No.819 of 1993 -7- and the appeal by the land owners seeking for enhancement of compensation in RFA No.819 of 1993 is allowed.
(K. KANNAN) JUDGE December 17, 2012 Pankaj*