Case Note & Summary
The appeals by Special Leave arose from the judgment of the High Court of Karnataka dated August 10, 1981 in Misc. Appeal Nos. 1406-1428/1981. The High Court, following its earlier judgment in Special Land Acquisition Officer, Hassan v. Mallesha M.S., applied a multiplier of 15 years to average annual income of Rs.720 per acre and upheld the fixation of market value at Rs.800 per acre. Notification under Section 4(1) of the Land Acquisition Act, 1894 dated March 13, 1980 was published in the State Gazette on July 24, 1980, acquiring 10 acres of land for Upper Krishna Project. The District Judge found from evidence that the lands were madikattu lands and two dry crops of groundnuts in the first season and jowar or cotton in the second rabi season were being raised. He determined the market value of the crop at Rs.720 per acre after deducting expenses. Though it was doubtful whether two crops could be raised in dry lands, the Supreme Court proceeded on the footing that the evidence showed two crops were raised and annual yield was Rs.720 per acre. The crucial question was the suitable multiplier applicable to agricultural crops. The Supreme Court noted that the question was squarely covered by its earlier judgment in Special Land Acquisition Officer, Davangere v. P. Veerabharappa & Ors., [1984] 2 SCC 120, where it had held that ten years multiplier would be the proper method in determining total market value by following the method of capitalisation as just and reasonable principle. The Court found that this principle was quite consistent with the valuation of the land allowed by multiplying the value of the annual yield in the absence of any other acceptable evidence. Following that ratio, the Supreme Court held that ten years multiplier is the proper method of valuing the lands by capitalisation method. Accordingly, the appeals were allowed in part and the respondents were held entitled to solatium at 15% and interest at 5% from the date of taking possession till date of deposit. The appellant was entitled to recover the balance amount from the respondents. No costs were awarded.
Headnote
A) Land Acquisition - Determination of Market Value - Capitalisation of Annual Yield - Multiplier of Ten Years - Land Acquisition Act, 1894, Section 4(1) - The High Court applied a fifteen-year multiplier to annual yield of Rs.720 per acre, fixing market value at Rs.800 per acre. The Supreme Court, following its earlier decision in Special Land Acquisition Officer, Davangere v. P. Veerabharappa, held that a ten-year multiplier is the proper method for capitalising agricultural yield in the absence of other acceptable evidence. Held that ten years' multiplier is appropriate and appeals allowed in part, with solatium at 15% and interest at 5% (Paras Not mentioned).
Issue of Consideration
What is the suitable multiplier for capitalising annual agricultural yield to determine market value of acquired land under the Land Acquisition Act, 1894?
Final Decision
The Supreme Court allowed the appeals in part, holding that ten years' multiplier is the proper method of valuing the lands by capitalisation method. The respondents are entitled to solatium at 15% and interest at 5% from the date of taking possession till date of deposit. The appellant is entitled to recover the balance amount from the respondents. No costs.
Law Points
- For determining market value of agricultural land by capitalisation method
- the annual yield should be multiplied by ten years
- not fifteen
- this is just and reasonable in absence of other acceptable evidence
- valuation may be arrived at by multiplying the value of annual yield
- solatium at 15% and interest at 5% from date of possession till deposit are payable under Land Acquisition Act
- 1894
