- (1.) These appeals are by certificate against the judgment of the Patna High Court in land acquisition appeals. Two notifications dated 7-7-1954 under S. 4 of the Land Acquisition Act 1894 (Act 1 of 1894) (hereinafter called 'the Act'), were issued one in respect of a portion of Plot Nos. 178 and 1784 admeasuring 2.65 acres and the other in respect of the whole of the plot No. 1783 admeasuring 2 acres situated in Ward No. 3 of Ranchi Municipality. Section 6 notification in respect of these lands was published on 7-9-1954 and possession was taken on 23-9-1954 under S. 17 (1) after making a declaration under section 17 (4) that the provisions of section 5A shall not apply. The Collector awarded compensation of Rs. 1,20,419-6-11 in respect of the first acquisition and Rs. 47,648-13-6 in respect of the second. Thereafter, at the instance of the claimant, a reference under S. 18 of the Act was made to the Judicial Commissioner of Chhota Nagpur, Ranchi who, while maintaining the market value of the land awarded by the Collector, gave further compensation for severance at the rate of 5% and 10% in respect of potential value of the land. The Judicial Commissioner, however did not grant the 15% solatium under section 23 (2) of the Act. Being dissatisfied, the claimants preferred appeals to the High Court. The High Court revised the compensation and awarded Rs. 90,000/- per acre and 15% as solatium on the market value under section 23 (2) of the Act but did not grant them the 5% towards severance Interest at 6% per annum on the amount of enhanced compensation from 23-9-1954 together with costs was also decreed. Against the judgement and decree, the claimants have filed Civil Appeals 661 and 1380/67 while the State has filed Civil Appeals 1885-86/67.
(2.) The lands in question which have been acquired were earlier leased on 22-9-1944 to the Military authorities on a rent of Rs. 600/- per month for period of 6 months under a registered lease deed with option to renew for a maximum period of 10 years which period expired on 21-9-1954 One of the conditions of the lease was that on the termination of the lease, the lessor would exercise the option given under the lease to purchase all buildings, structures gardens and any other structures constructed by the lessee during their occupation of the leased property, at 75 per cent of the valuation that would be determined by the Superintending Engineer, Chhota Nagpur Circle, and in case the lessors refused to purchase, the lessee was entitled to dismantle and take away the materials. Towards the end of the lease period, the Government of Bihar decided to acquire the property for the State Soldiers. Sailors and Airmen's Board and initiated proceedings as aforesaid.
(3.) In these appeals the only question that has to be determined is What is the market value of the property as on the date of section 4 notification In the valuation report given by the Land Acquisition Officer, Ranchi, Ex.-1 the principle of capitalisation on the basis of 20 times the annual rental of Rs. 7,200/- at the rate of Rs. 600/- p.m. was adopted as the price of the lands. In that report it was also pointed out that the sale price of 1,085 acres out of the premises of the Ranchi Club as per registered sale-deed, Ex. C-1 dated 1-4-1953, was Rs. 41, 470/- per acre, which was not fair. Apart from these, 25 other sale transactions in respect of portions of Plot No. 1789 between 1952 and 1953 were also referred in that report. Some of those lands were situated opposite to the Ranchi Club and the sale price came to Rs. 1092/- per katha, which is about Rs. 60,000/- per acre. It was further pointed out that some other lands a little further away from the main road but belonging to the same Plot No. 1789 were sold at the rates between Rs. 250/- to Rs. 800/- per katha. This report formed the basis of the award made by the Collector. The High Court took judicial notice, and in our view rightly so, that after the termination of the Second World War in 1945 there was a rise in land values due to the increased demand of homestead lands for building purposes. It also considered various sale-deeds produced and proved on behalf of the claimants along with the oral evidence to determine the market value of the land. The objections from both the appellant and the respondent were taken into account in respect of each of these and most of them were considered as not furnishing a proper or adequate valuation either having regard to the distance of the lands which were the subject-matter of the sale or the inadequacy of the information pertaining thereto. The High Court, however, adopted the price in the sale deed Ex. C-1 executed on 6-5-1953 by the Ranchi Club Ltd., in favour of the President of India in respect of 1,085 acres 3 bighas 5 kathas 10 chhataks in Plot No. 1221 for Rs. 45,000/- as the basis for arriving at the market value of the acquired land. Though the land in question was situated on the main Ranchi-Chaibasa Road, a strong objection was taken against adopting the price as a basis because it was not only 1/2 mile away from the land under acquisition but what was sold was only the lease-hold right in the land. These objections were rejected on the ground that for all practical purposes the interest that was held or sold by the Ranchi Club under Ex. C-1 was not inferior to an absolute title. The area of the land the subject-matter of the sale, was considered to be fairly large being more than 1 acre and the situation was also the same as the land under acquisition expect that it was further away from it. In these circumstances, the High Court thought, after a proper allowance is made for the difference in distance, the transaction yields a more acceptable guide for determining the market value of the land under acquisition and accordingly, it adopted twice the price as charged for the land in Ext. C-1 as indicating a fair market value of the land in question. The High Court further added Rs. 7060/- per acre as the difference between tenure rights and lease-hold rights that were held by the President of India and awarded Rs. 90,000/- per acre. This, it did not withstanding the fact that it was conscious that there was no definite data for the two additional that have been made, because in its view in cases of this nature a certain amount of estimate has to be made which may even be arbitrary. Accordingly, it awarded compensation for the 4.65 acres of land which was acquired by the Government at Rs. 90,000/- per acre together with 15% solatium payable under clause (2) of section 23 of the Act 5% compensation for severance of land from the claimants' other portion of the land that remained with them after acquisition, which was awarded by the Judicial Commissioner, Chhota Nagpur, was disallowed on the ground that there was an entrance to the back portion of the land which was left with the owners and also because there was no evidence to show that in fact there had been any depreciation in the value of the remaining area and if so, to what extent. On the other hand, it maintained the 10% on the market value of the land awarded by the Land Acquisition Court on account of the increase in the potentialities of the land. The basis adopted by the High Court is challenged on the ground that they are contrary to the well established principles applicable for determining the value of lands acquired under the Act.;