RARUKUTTY Vs. SPECIAL TAHSILDAR AND LAO KOZHIKODE

JUDGEMENT

(1.) THESE appeals have been placed before a Full Bench as they raise a common question of general importance concerning the fixation of compensation payable for a land with buildings on the acquisition of such a property under the Kerala Land Acquisition Act, 1961. The question is whether capitalisation of the income received from the land and the buildings is the only method for determining the compensation.

(2.) S. 25 of the Act enumerates the things to be taken into consideration in determining the amount of compensation. The first thing is the market value of the land at the date of the publication of the notification under S. 3 (1) of the Act. The other considerations are not relevant here. Land as defined in the Act includes benefits arising from it and things attached to the earth. So the compensation payable for a land with buildings in such a case is the market value of that property on the relevant date. The term "market value" is not defined in the Act, nor is there any provision in the Act or the Rules thereunder as how to decide it. The Land Acquisition bill, 1893 contained a definition of "market value". But the Select committee which scrutinized the Bill dropped that definition; and it stated that no attempt should be made to define that term and that "the price which a willing vendor may" be 'expected to obtain in the market from a willing purchaser" should be left to the decision primarily of the collector and ultimately of the Court. The Law Commission of India, 1957 agreed with the above view. The Privy Council stated in Gajapatiraju v. Revenue divisional Officer, AIR. 1939 P. C. 98: "the compensation must be determined therefore by reference to the price which a willing vendor might reasonably expect to obtain from a willing purchaser. "

(3.) REFERENCE was also made by counsel for the appellants to the decision of the Supreme Court in State of Gujarat v. Vakhatsinghjl AIR. 1968 SC. 1481 and reliance was made on the following passage in that decision: "the owners could be fairly compensated by giving the market value deduced from the estimate yield. The High Court rightly rejected the reinstatement method. The value of irrigational bunds, tanks and wells is not what they cost but what they paid in annual income. " This is an observation made by the Court, while dealing with the fixation of compensation for irrigational bunds, tanks and wells vested in the Government under the Bombay Taluqdari Act, 1949. This statement is no authority for the proposition that in the case of a land with buildings, the market value should be determined on the basis of the annual income.