The State of Madras vs M. Chinnasamy

Ramaprasada Rao, J.—The State is the appellant and the claimant is the cross-objector. The subject matter is A. S. No. 380 of 1964

consists of land is which the owner has an one-third share. The survey numbers acquired in this appeal are S. Nos. 64/2, 64/3 and 92/2.

Reckoning the owner''s 1/3rd share therein. He was entitled to an extent of 2.03 acres therein. It is not in dispute that the 67 cents in S. No. 64/2

belonging to the owner, abuts a road and the rest of the properties are interior and not accessible to a public road. In App. 381 of 1964, the extent

of the lands acquired is 2.82 acres in S. No. 109/2. All the above lands are situated in the village of Pettapalayam, Namakkal Taluk, Salem Dt.

and they were acquired for the construction of the Salem Co-operative Sugar Mills Ltd, Mohanur, and for the quarters of the staff of the said

Mills. The notification under S. 4 (1) of the Land Acquisition Act (hereinafter called the Act), was made on 20th September, 1961. We may at

once state that prior to the issuance of this notification, there was a similar notification under S. 4 (1) of the Act, but dated 21st April, 1961. Under

this notification, a proposal was made to acquire about 248 acres, 44 cents, but later the acquisition was restricted to 150 acres therein. This

acquisition proceedings, after having been dealt with by the usual hierarchy, came up to this Court, and ultimately this Court decided in A. S. 674

and 708 of 1963, that a sum of Rs. 2,000 per acre would represent a fair market value of the properties acquired under the notification dated 21st

April, 1961. Obviously, from and out of a desire to acquire further extents of land, the present notification under S. 4 (1) of the Act was made on

20th September, 1961 and it appears that more than 30 acres of land were sought to be acquired pursuant to the notification in question. One such

land is the land belonging to he respondent, of which we have already set forth the details. The Land Acquisition Officer, after following the

prescribed procedure, evaluated the lands at Rs. 1380 per acre uniformly. On a reference under S. 18 of the Act, made to court at the instance of

the owner, the lower court awarded at the rate of Rs 3000 per acre for the roadside land, of an extent of 67 cents in S. No. 64/2 and for the rest

of the land in both the appeals, awarded compensation at the rate of Rs. 2000 per acre. Though the owners claimed a much larger amount, before

the Land Acquisition Officer and the court below, they in their cross-objections filed, have restricted their claim for the road side lands at Rs. 5000

per acre and for the rest of the lands at Rs. 3000 per acre. The State, who are the appellants in both the appeals, on the other hand, would say

that the compensation awarded by the court below is excessive and for that purpose they referred to the judgment of this Court in A. S. 674 and

708 of 1963, and would also refer to the other documents and evidence in the case, to sustain their contention.

We have already noticed that the earlier acquisition which was initiated on the notification dated 21st April, 1961, ended in a final decision of

this Court, which awarded a uniform rate of compensation at Rs. 2000 per acre, for the lands around the acquired lands. From the sketch, Ex. B.

1, we are able to find that the lands which were the subject matter of the first acquisition, as the witnesses would characterise it, in this case, are

very near and contiguous to the plots acquired. this Court gave a compensation of Rs. 2000 per acre for the lands then acquired. But, we cannot

ignore the practical that the acquisition which was for the location of a sugar factory, did have an impact on the minds of the owners of land is the

vicinity, which was reflected in the market price of the lands rising immediate after the first notification. By way of an illustration, the owners who

have filed a cross-objection in this case, filed Ex. A-1 and A-2 in the court below. They relate to sales of small extents of land in S. No. 103/B

which fetched a price of Rs. 12,500 per acre and Rs. 10,000 per acre respectively. No doubt, the price is obviously fanciful. But, the point

remains that the impetus in the market price of the land was there and was noticeable, and there was indeed a trend prevailing in the locality,

indicative of a higher price than that which prevailed on 21st April, 1961. In Dhusabhai Polabhai and Others Vs. Special Land Acquisition Officer,

Ahmedabad, the learned Judges, considering a similar position, expressed the view thus:

If a person desires to acquire land or settle down in a place which is full of promise for development and holds out such prospects as stated above,

the desire could not be condemned as a mere speculative desire. There could be nothing unreal or undesirable about it. If the impress of

circumstances such as the establishment of an University, the founding of constituent colleges, building of hostels where the alumni of the University

would reside, raises the tone of the market and give impetus to the market, a new market rate would be created, may be by even speculation

entering into the said rate, and the transactions would be governed by that rate.

We respectfully adopt the force and intendment of this passage and we would like to add that every transaction indulged in by a person in such

circumstances as above, need not necessarily be characterised as speculative for the reason that every human mind, which is always considered to

be normal until proved otherwise, will take advantage of any favourable situation and exploit it to its benefit. In fact, the learned Judges of this

Court in Padmaji Miachand v. Deputy Collector, Adoni AIR 1915 Mad 272 expressed the view that where on the date of a declaration there was

a scheme of development of the town and that was knows generally, enhancement in the value of the market rates consequent on such

development must be taken into account for determining the market value of the land to be acquired.

In this case, there is the evidence of R.W. 2 to the effect that ""the public came to know of the acquisition only by the notification under S. 4 (1)

and that before S. 4 (1) notification, only officials who had access to the record knew about it. R. W. 1 would say that "" the notification for the

present acquisition is five months after the first acquisition, and that all lands adjoining the road went up in prices on account of the first acquisition"".

It is well-settled that if two independent notifications are issued under S. 4 (1), one covering a certain extent of land and the other, but later,

embracing a certain other extent of land, each notification is independently self-active and not interdependent, notwithstanding the fact that the

acquisition is for common or the same purpose. The Privy Council, in a similar situation, laid down the law in Ma Sin and others v. Collector of

Rangoon AIR 1929 P.C. 126. The learned Law Lords would say that if the Government changed their mind about acquiring the land and changed

the date of the notification from an earlier one to a later date, then the only notification which gave the right to take the land was the second

notification and therefore that date must be the date taken in determining the amount of compensation to be awarded. We have only cited this to

show that each notification under S. 4 (1) is independent and operates on its own. Therefore, if within the first notification and the second

notification, which according to R.W. 2 was not even known to the public, the prices have increased in this area, then undoubtedly and in the

absence of evidence that such an increase was attributable to wild speculation, it should be considered as representing the prevailing market rate In

the locality.

If this were to be the correct position in the reckoning of the market value of the properties acquired compulsorily, then in the instant case the

owners should be given the benefit of such an increase.

The question is as to what would be the quantum of benefit to which the owners would be entitled. this Court, in A.S. No. 674 and 708 of

1963, fixed the market value of the surrounding lands at Rs, 2,000 per acre. The second notification, if we may characterise it so, which is the

notification in question in these appeals, was five months after the first notification. Taking this and the impetus in the market and the atmosphere

prevailing during that period reflecting the increase in the market rate of land, we consider that the road-side lands (67 cents in S. No. 64/2) should

to evaluated at Rs. 3,500 per acre and the lands other than the road-side lands be evaluated at Rs. 2,500 per acre. The same applicant will be

entitled to the usual solatium. In the view held by us, that the cross objectors are entitled to a higher quantum of compensation, the appeals fall and

they are dismissed. The Memoranda of cross-objection are partly allowed. But, as neither party has succeeded in full, there will be no order as to

costs in both the appeals.