SPECIAL LAND ACQUISITION OFFICER· · & Ors. v. KARIGOWDA interest for the period prior to notification not permissible - However & Ors.

1.7. The expression "Such market value" as occurring in Section 23(2), is an expression which must be read ejusdem generis to the provisions of Section 23(1) of the Act, as they alone would provide meaning and C relevancy to the guidelines which are to be taken into consideration by the courts for determining the market value of the land. The expression 'shall' as occurs in Section 23(1) can hardly be construed as 'may' giving an absolute discretion to the court to take or not to take into D consideration the factors stated in Section 23(1) of th.e Act. The expression 'shall' thus would have tJ be construed as mandatory. and not directory. It is more so, keeping in view the language of Section 24 of the Act, which mandates that the court shall not take into E consideration the matters indicated in firstly to eighthly of Section 24 of the Act. This legislative intent needs to be· noticed for beneficial and proper interpretation of these provisions in the light of the scheme underlining the provisions of the Act. [Para 28] [199-C-F] ' F H

1.8. The expression 'such market value' used in Sections 23(1-A) and 23(2) respectively obviously would mean and refers to the market value determined in terms of Section 23(1) of the Act. "Such market value" is the G price which a willing vendor might be expected to obtain in the open market from a willing purchaser. It is the price which would be payable to a person after the complete appraisal of land with its peculiar advantages and disadvantages being estimated with reference to commercial value. Thus, other consequential right, legal SPECIAL LAND ACQUISITION OFFICER v. . KARIGOWDA & ORS. 171 or commercial, which remotely flows from an agricUltural A activity will not and should not be treated as a relevant consideration. The potentiality has to be directly relatable to the capacity of the acquired land to produce agricultural products or, its market value relatable to the known methods of computation of compensation. [Paras a 29, 30 and 35] [199-F-H; 200-A-B; 201-G-H] Municipal Council of Colombo v. Kuna Mana Navanna Suna Pana Letchiman Chettiar AIR (34) 1947 PC 118, referred to c

1.9. The extent of compensation would always depend on the facts and circumstances of the given case and it is not possible to set any absolute legal principle as a panacea which uniformly will be applicable or capable of being applied as a binding precedent dehors D the facts of a given case. The discretion of the court, therefore, has to be regulated by the legislative intent spelt out under these provisions. The computation. of compensation has to be in terms of Sections 23 and 24 of the Act and that too from the date of issuance of the E Notification under Section 4 of the Act. It is only the statutory benefits which would be available in term~ of Sections 23(1-A) and 23(2) of the Act. [Paras 31 and '32] [200-C-F] Mohammad Raofuddin v. The Land Acquisition Officer F (2009) 5 SCR 864, relied on Nelson Fernandes and Ors. v. Special Land Acquisition Officer, South Goa and Ors. (2007) 9 SCC 447, referred to

1.10. The purpose is not to connect the acquisition to remote factors which may have some bearing or some connection with the agricultural activity being carried on, on the land in question is neither permissible nor prudent, as it would be opposed to the legislative intent contained G H 172 SUPREME COURT REPORTS [2010) 5 S.C.R. A under the provisions of Sections 23 and 24 of the Act. '\ . [Para 36] [202-C-E] . State of Orissa v. Brij Lal Misra and Ors. (1995) 5 SCC 203, relied on. · B

1.11. There was no evidence led by the claimants to substantiate and justify their claim with reference to the alleged silk cocoons being an agricultural activity, the onus being upon them. There wa~,. a presumption in the mind of the court as well as the claimants that, the C manufacture of silk thread by the stated process of boiling silk cocoons which is the result of the silk worm being fed by mulberry leaves is an agricultural activity. This presumption is contrary to law and the literature referred by the ·expert body as well. [Para 48] [206-A-C] D

1.12. Activity of agriculture cannot be equated to sericulture. While agricultural activity is the growing of mulberry crop and disbursing it, manufacture of silk thread from silk worms who are fed with mulberry leaves, E · and then converted through the specified process into cocoons and ultimately silk thread and its sale is an activity of sericulture which primarily fa, lls in the domain of manufacturing and commercial activity. This activity of producing silk from' silk worms for which mulberry ·crop· is used as food, therefore, cannot be an activity directly F covered under the provisions of Section 23 of the Act. Even by the process of judicial interpretation, it will amount to drawing an impermissible inference that sericulture is a part of agricultural activity, that too to the extent to make· it a permissible consideration under the G relevant provisions of the Act.· [Para 49] [206-D-G] f:( Lakshma9an. and C~. and Ors. ~- Commissioner of Income Tax, (19~8) 9 SCC 537, relied on ,

1.13. The basic error of law to which the courts below H SPECIAL LAND ACQUISITION OFFICER v. KARIGOWDA & ORS. 173 have fallen is that ultimate manufacturing of silk thread A under the nomenclature of cocoons has been treated as a purely agricultural activity relevant for determination of fair market value of the land in terms of Section 23 of the Act. The courts .have treated the cocoons as the crop and not mulberry leaves. [Paras 53 and 55] [208-A-B-E] B

The onus to prove entitlement to receive higher compensation is upon the claimants. The claimant, can discharge the onus while placing and proving on record sale instances and/or such other evidences as they deem C proper, keeping in mind the method of computation for awarding of compensation which they rely upon. The onus being primarily upon the claimants, they are expected to lead evidence to revert the same, if they so desire. It cannot be said that there is no onus whatsoever upon the State in such reference proceedings. The court D cannot lose sight of the facts and clear position of "documents, that obligation to pay fair compensation is on the State in its absolute terms. Every case has to be examined on its own facts and the Courts are expected to scrutinize the evidence led by the parties in such E proceedings. [Para 21] [194-E-G; 195-C-D] Basant Kumar and Ors. v. Union of India and Ors. (1996) 11 SCC 542; Gafar v. Moradabad Development Authority (2007) 7 sec 614, relied on. F

3.1. The methodology adopted by the courts as well as the extent of compensation awarded to the claimants cannot be upheld. While adopting the criteria of capitalization and multiplying the same by 10, the finding of the High Court is clearly not supported by any cogent G evidence on record and.thus the question of applying the multiplier to a figure which has been arrived at, without any evidence would be inconsequential. There is no direct and appropriate evidence to show any nexus to support the claim of the claimants. Thus, cocoons cannot H 174 SUPREME COURT REPORTS [2010) 5 S.C.R. A be considered as a crop even as per literature submitted by the respective parties. Therefore the finding recorded is unsustainable even on appreciation of evidence. · [Paras 54, 57 and 58) [208-B-C; 209-E-F] 8

3.2. The courts have been exercising their discretion by adopting different methods, viz. Sales Statistics Method, Capitalization of Net Income Meth'od and Agriculture Yield Basis Method. Normally where the compensation is awarded on agricultural yield or C capitalization method basis, the principle of multiplier is also applied for final determination. These are broadly the methods which are applied by the courts with further reduction on account of development charges. In some cases, depending upon the peculiar facts, this Court has accepted the principle of granting compound increase at the rate of 10% to 15% of the fair market value determined· in accordance with law to avoid any unfair loss to the claimants suffering from compulsive acquisition. However, this consideration should squarely fall within the parameters of Section 23 while taking care that the E negative mandate contained in Section 24· of the Act is not offended. How one or any of the principles is to be applied by the courts, would depend on the facts and circumstances of a given case. [Paras 60 and 61) [210- C-D; 211-C-E] D F Faridabad Gas Power Project, N. T.P.C. Ltd. and Ors. v. Om Prakash and Ors. 2009 (4) SCC 719; Shaji Kuriakose and Anr. v. Indian Oil Corp. Ltd. and Ors. AIR 2001 SC 3341; Ravinder Narain and Anr. v. Union of India 2003 (4) SCC. 481; Union of India and Anr. v. Smt. Shanti Devi and Ors. G 1983 (4) SCC 542; Executive Director v. Saraf Chandra Bisoi and Anr. 2000 (6) SCC 326; Nelson Fernandes and Ors. v. Special Land Acquisition Officer, South Goa and Ors. (2007) 9 sec 447, referred to H

3.

In the present case, the court has declined to SPECIAL LAND ACQUISITION OFFICER v. KARIGOWDA & ORS. 175 accept the method adopted by the Collector for granting A compensation' to the claimants for the reason that the SLAO ought not to have taken recourse to the method of sale statistics. It was further recorded that no sale instances of the village in question, three years prior to 2002 were available and instances of adjacent village B should not have been taken into consideration. Instead, the market value should have been calculated by adopting capitalization method and no reason was stated as to why this method was not applied. [Para 62] [211-F- ' H; 212-A] C

3.

The Reference Court fell in error of law in stating that the lands of the adjacent or nearby villages could not have been taken into consideration. It is a settled principle of law that lands of adjacent villages can be made the basis for determining the fair market value of the acquired D land. The evidence tendered in relation to the land of the adjacent villages would be a relevant piece of evidence for such determination. Once it is shown that situation and potential of the land in two different villages are the same then they could be awarded similar compensation or E such other compensation as would be just and fair. [Paras 62 and 64] [212-8-C, F-G; 213-A-B]