RADHA CHARAN Vs. SECRETARY OF STATE

JUDGEMENT

(1.) This is an appeal against an order passed by the District Judge of Allahabad in the course of proceedings for the acquisition of land by the Government. The property in dispute is a house No. 18 (formerly 12) Bank Road in Allahabad with the land appurtenant to it. The area of the site is 6.34 acres. The appellant, Babu Radha Charan, bought the property in the year 1920 for a sum of Rs. 22,000. The property was acquired by the Government for the Allahabad University in the year 1930. The amount of compensation was fixed on behalf of the Collector by his Land Acquisition Officer at a sum of Rs. 37,950 in the year 1933. The Land Acquisition Officer decided that the gross rental of the premises could not be more than Rs. 150 a month and he calculated the value of the property on the basis of sixteen and two-thirds years purchases. On this basis the amount was Bs. 30,000. He then allowed Rs. 2400 for a fruit orchard on the basis of eight years purchase on an annual rental of Rs. 300 and he allowed a further sum of Rs. 600 as the value of timber growing on the land. The total amount came to Rs. 33,000 and the allowance for compulsory acquisition was Rs. 4950. The appellant appealed to the District Judge against the Collector's award and was allowed a sum of Rs. 36,980 together with 15 per cent. upon that sum, the total being presumably Rupees 42,527. In the present appeal against the order of the District Judge the appellant has claimed a further sum of Bs. 44,000.

(2.) The learned Judge of the Court below based his decision upon the net annual rent of the property. He allowed a sum calculated at twenty years purchase. He agreed with the Land. Acquisition Officer that a fair monthly rent would be Rs. 150 but he deducted there from the municipal taxes which amounted to Rs. 238 a year and a sum of ES. 180 that is one-tenth of the annual rent, for repairs. He also allowed the same amount of compensation as the Land Acquisition Officer for the orchard and the timber trees. According to this calculation the amount allowed for the house and land was a sum of Rs. 27,640 and there was a further sum of Rs. 3000 for the orchard and the trees which brought the total upto Rs. 30,640. The learned Judge then proceeded to add to this amount a further sum of Rs. 6340 at the rate of Rs. 1000 per acre upon the ground that the appellant was the full owner of the house and not a mere lease-holder. This decision of the learned Judge was based upon the evidence of Lala Manmohan Das who owns a great deal of house property in Allahabad. This gentleman made the following statement: If a bungalow has six acres of freehold land attached to it instead of the same amount of land as leasehold, its price would go up by about Rs. 6000.

(3.) The learned Judge said in his judgment that the appellant would have been entitled to a sum calculated on the basis of twenty years purchase on the net rent if he had held only a lease of the property and consequently that he should be allowed a further sum calculated at the rate of Rs. 1000 per acre because he was the full owner. This decision has given rise to a cross-objection on the part of the Government and in our judgment this cross objection has force. We are of opinion that compensation is allowed on the basis of twenty years purchase because the assumption is that a person who is given a sum of money in lieu of landed property may generally expect to invest that money in some other undertaking and obtain interest at the rate of 5 per cent. If that is so, there is no reason why a person who holds a lease should get compensation on the basis of twenty years purchase on annual rent. The amount of compensation he would get would depend upon the terms of the lease and the length of time that he might be expected to- remain in possession of the property. We consider that it is a full owner of land who normally gets compensation on the basis of twenty years purchase.