GOVERNMENT OF BOMBAY Vs. MERWANJI MUNCHERJI CAMA

JUDGEMENT

(1.) The question involved in this appeal is, as to the compensation which should be awarded to the claimants, the brothers Cama. in respect of certain land of theirs which has been acquired by the Government under the Land Acquisition A.ct for the purposes of the Great Indian Peninsula Railway Company. The land acquired comprised a total area of 85.799 sq. yds., and consisted of four several parcels; but with three of these parcels we are not now concerned as the award made in respect of them has been accepted. The single parcel to which this appeal is confined measures 14,817 acres, or 71,714 sq. yds, having a frontage of 1,268 ft. on the Parel Road, and an average depth of about 500 ft. It is the " front land " referred to in the judgment under appeal, and was notified for acquisition in April 1904. The brothers Cama claimed Rs. 8,37,780 for the land. The Collector awarded Rs. 3,93,143, to which were to be added Rs. 7,576 the value of the materials of the building standing on the land, and Rs. 60,107, in respect of the 15 per cent for com-pulsory acquisition: the total sum offered by the Collector was thus Rs. 4,60,826. Being dissatisfied with this offer, the claimants caused the Collector to refer the matter to this Court, and Mr. Justice Batty has increased the Collector's award for the land alone from Rs. 3,93,143 to Rs. 4,48,222 and for the building material from Rs. 7.576 to Rs. 10,794: to these sums will have to be added the 15 per cent, The Government now appeals against Mr. Justice Batty's decision, and cross objections have been filed by the brothers Cama.

(2.) We are met at the outset by the necessity of determining a question of principle, namely the question whether the Court below was right in adopting as the basis of its decision for the more valuable portion of the land that method of valuation which is known in these Courts as the hypothetical building scheme. This method consists in an attempt to value a parcel of land by means of figures based upon the calculated financial results of a notional erection of buildings on the land, and its notional development in the most profitable manner. The land to be assessed is imagined as covered with as many houses or shops of as profitable a character as can be reconciled with existing and presumed future circumstances of demand; then the nett annual returns from these buildings are capitalised, and from this figure the calculated cost of construction is deducted : the balance is said to be the prospective value of the land, and from this figure the present value is inferred by deducting various sums on account of loss of interest on capital and so forth.

(3.) We shall inquire presently whether this is a legitimate investigation for a Court to pursue, but, assuming for the moment that it is legitimate, it appears to us that the judgment under appeal is open to objection inasmuch as, while it adopts only part of the hypothetical scheme tendered to the Court on behalf of the claimants, it applies to that part several important considerations which are applicable only if the scheme be accepted as a whole. Thus, in the scheme propounded there were contemplated 2,440 double rooms yielding a rental of Rs. 23,180, and this item was reduced by the Court on the groud that there was no proof of a demand for these rooms; but though, for this and other reasons, the numbers of the colony imagined as settled on the land were necessarily reduced by the learned Judge, he has allowed the imaginary shops to be as numerous and as productive as they were represented in the original scheme. So, two blocks of buildings which the scheme had placed at the southern end of the property were ultimately permitted by the learned Judge to be conceived as transported to the other end with a frontage on the Parel Cross Lane, with the result that, as may be seen on reference to the plan Ex. 56, which we have had prepared for ourselves, this one piece of land fronting on the Cross Lane is variously estimated from East to West at about Rs. 27, Rs. 6 1/2, Rs. 10 and Rs. 3 5/8 per sq. yard. It is clear that contiguous parcels of the same plot are not really susceptible of such differences in value, as, no doubt, the learned Judge would himself have realised if the consequences of his judgment had been clearly present to his mind. That they were not so present is, we think, fairly certain, for, as we are informed by counsel, the long judgment now under appeal is but an abbreviated form of the judgment first delivered, and the judge, who suffered from some physical disability, had the case reargued on more than one occasion after the first judgment was pronounced. In these circumstances, and remembering that no map was prepared to illustrate the effect of the judgment, which moves amid a labyrinth of intricate calculations, we are led to accept the suggestion made to us that the learned judge may well have failed to realize all the consequences of accepting in part and rejecting in part the hypothetical scheme tendered to him on behalf of the claimants.