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First, whether the High Court was right in taking a period of 20 years only under sub-clause (i) of Section 39(1)(e) for the purpose of calculating the average annual income of the fores's from Village Sorna ? Second, whether the Compensation Officer was required to appraise the annual yield of the forests on the date of vesting and take such yield, also, into consideration while assessing the average annual. income from the forests under clause (e) of Section 39 (1) ? The whether under clause (c) of Section 44, 15% is deductible from the average annual income from a forest worked out in accordance with clause (e) of Section 39(1) ?

(i) the agricultural income-tax, if any, payable th erefore in the previous agricultural year in respect of the land to be ascertained in the prescribed manner;

(ii) the land revenue, cesses and local rates payable therefore in the previous agricultural year to be ascertained in the prescribed manner, and

(iii) fifteen per centum of such amount on account of matters referred to in clause (c);

(e) the average of the income-tax paid in respect of the income from royalties mentioned in clause (f) of Section, 39 computed over the period mentioned in the said clause and the cost of collection at such rates as may be prescribed;

The issue before the Compensation Officer was : What should be the number of years by which this figure of the total income, was 'to be divided to ascertain the average annual income of the forest in Village Sorna ? The contention of the intermediary was that for this purpose it should be divided by the number of sale-years only. This contention was rejected-and we think rightly-by the Compensation Officer But he wrongly fixed this number at 35. Clause (1) (i) of Section 39(1) (e) gives a discretion to the Compensation Officer to take any figure from 20 to 40 agricultural years for the purpose of calculating the average annual income from the forests. The words "considered reasonable" in sub-clause (i) enjoin a duty on the Compensation Officer to exercise this discretion reason- ably and not arbitrarily. 'Rule 34, extracted above, gives guidelines for determining the period for which average income shall be taken under the aforesaid sub-clause (i). For determining such period, the Compensation Officer has to take into consideration several factors, namely, the class of the forest, the periodical fellings made therein during the 40 years preceding the vesting, the income received year after year during the 40 years preceding the vesting, the species of the trees in the forest and their age and class, the condition of forest, etc. Mr. Dikshit contends that the factors enumerated in sub- clauses (iv) and (v) of Rule 34(1) furnish more important criteria than those indicated in the other sub-clauses for determining the period for which the average is to be taken. It is pointed out that the Uttar Pradesh Legislative Assembly had passed a resolution on August 8, 1946 to abolish Zamindari or big estates in the State; that since this intermediary bad purchased the forest in question in 1948, he must be presumed to. be fixed with the knowledge that the days of the Zamindari which he was purchasing were numbered. With this background proceeds the argument the intermediary must have mercilessly exploited the forest, leaving nothing to be acquired under the Act, 1950, excepting stumps or small saplings of tender age. We are afraid this argument is not based on any evidence, whatever. Mr. Dikshit referred to the evidence of Babu Singh (D.W.4.) to show that the trees left in this forest at the date of vesting were hardly 3" in diameter.

The Compensation Officer, as mentioned earlier, did not appraise the annual yield of the forest on the date of vesting. A plain reading of clause (e) of Section 39(1) shows that its sub-clauses (i) and (ii) do not provide for two alternative methods of calculating the average annual income of the forest. The conjunction "and" at the end of sub-clause (i) cannot be read as "or". It conjoins the two subclauses, and in effect, read in the context of "shall" in the opening part of clause (e), mandates the Compensation Officer to take both the factors into consideration in assessing the average annual income from the forest. The reason why the Legislature has made compliance with the requirement of this sub-clause (ii), also, obligatory, appears to be to ensure that the compensation assessed has a reasonable nexus and proportion to the actual and potential value of the forest as on the date of vesting. If a forest has been repeatedly, wholly and indiscriminately exploited within forty years or less immediately before the vesting, its actual and potential value as a forest on the date of the vesting might be far less than the one calculated on the basis of its average annual income of the preceding 20 to 40 years as the case may be. In such a case, average annual income calculated merely on the basis of the income for a period of 20 to 40 years preceding the vesting, may cause fortuitous inflation in the assessment of compensation, conversely, if a forest has been very little exploited in the preceding forty years and is well-preserved and well- developed on the date of vesting, then calculation of its average annual income on the basis of sub-clause (i) alone, without taking into account its- potential yield on the date of the vesting, will make the compensation assessed wholly 'illusory, having no relation whatever to the value of the forest as at the date of vesting. Entry of the appraised annual yield of the forest on the date of vesting, into computation under clause (e), operates as a counterpoise against fortuitous inflation or deflation in the assessment. in the view we take we are fortified by a decision of this Court in Ganga Devi v. State of Uttar Pradesh, where it was pointed out that in computing the average annual income under clause (e) of Section 39(1), the Compensation Officer has to refer to both these sub-clauses (i) and (ii). He cannot adopt either of these sub-clauses. It was also pointed out that under sub-clause (ii) the annual yield on the date of vesting is to be appraised by taking into consideration, inter alia, the number and age of the trees, the area under forest and the produce. The High Court in the instant case, while determining the yield under sub- clause (ii) has relied upon the evidence of Mr. Chopra, a retired Forest Officer, who took all the relevant factors into consideration. The High Court also accepted the evidence of Chaudhri Babu Singh, Forest Contractor, which was to the effect that for the year ending March 1953, the sale of one coupe of this forest by the Forest Department of the State, fetched Rs. 53,000/-. No fault therefore, can be found with the High Court's finding that on the date of vesting, the annual yield of the forest, appraised under subclause (ii) of clause (e) was not less than Rs. 47,128/. The figure worked out by the High Court under sub-clause (i) by dividing the total income of sales during the preceding 10 or 11 years, i.e. Rs. 6,13,334-8-3 by 20, was Rs. 30,666-11-3. The total of these figures thus worked out under sub-clauses