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Reportable

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 10362 OF 2010 [Arising out of SLP(C) No.35413/2009]

REVENUE  DIVISIONAL  OFFICER,  KURNOOL DIST.

.......APPELLANT  

Versus

M. RAMAKRISHNA REDDY(D) BY  LRS.

.....RESPONDENTS

O R D E R

R.V. Raveendran, J.

Leave granted.  Heard.

2. Respondents  were  the  owners  of  a  sweet  

lime  orchard  measuring  4  acres  38  cents  situated  in  

Survey No.395/3A and 395/4A in Singanapalle village, Owk  

Mandal, Kurnool District in Andhra Pradesh.  The said  

lands, alongwith surrounding lands (in all 58 acres 30  

cents) were acquired for construction of a percolation  

tank.  Possession was taken on 8.6.1988.  However, the  

preliminary notification under Section 4(1) of the Land  

Acquisition Act, 1894 ('Act' for short) was issued only  

on 27.8.1993.  The Land Acquisition Officer, by award  

dated  30.6.1994,  offered  compensation  at  the  rate  of

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Rs.16,000/- per acre.  The reference Court determined  

the market value of the entire extent of 4 acres 38  

guntas  as  Rs.12,28,500/-  by  capitalisation  of  yield  

method. It awarded the said sum as compensation with  

additional market value at 12% per annum on such market  

value from the date of notification under Section 4(1)  

of the Act till date of award or possession whichever  

was  earlier,  30%  solatium  on  the  market  value  and  

interest at 9% per annum from date of possession for a  

period of one year and thereafter at 15% per annum till  

date  of  payment  on  the  aggregate  of  compensation,  

additional market value and solatium.  

3. The appeal by the appellant, challenging  

the quantum, as being excessive, was dismissed by the  

High  Court  by  the  impugned  judgment  dated  19.3.2009.  

The said judgment is under challenge in this appeal by  

special leave. The only question that, therefore, arises  

for consideration is whether the compensation determined  

at Rs.12,28,500/- for 4 acres and 38 cents of land is  

excessive.

4. In the year 1987, the claimants had filed  

a  writ  petition  for  stopping  construction  of  a  

percolation  tank,  alleging  that  there  were  350  sweet  

lime trees in their land and that the construction of  

the  percolation  tank  would  destroy  their  sweet  lime

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garden.  The Land Acquisition Officer submitted a report  

dated 1.2.1991 to the Collector confirming the existence  

of  350  sweet  lime  trees  in  the  claimants  land  on  

8.6.1988 when possession was taken and the destruction  

of  all  those  trees  due  to  stagnation  of  water  on  

construction  of  the  percolation  tank.  They  filed  a  

subsequent  writ  petition  (WP  8665/1992)  seeking  a  

direction for payment of compensation for the land and  

350 sweet lime trees, as they were dispossessed, without  

there being any acquisition. The High Court of Andhra  

Pradesh  directed  the  State  Government  to  pay  

compensation at the earliest in respect of the land and  

350  sweet  lime  trees.   It  is  thereafter  that  the  

acquisition  proceedings  were  initiated,  by  issuing  a  

notification dated 27.8.1993 under Section 4(1) of the  

Act.  The Land Acquisition Officer, while making the  

award, did not value the land as a sweet lime orchard.  

He ignored the sweet lime trees in the land and valued  

it as bare land at Rs.16,000/- per acre (Rs.70,080/- for  

the entire land). The Reference Court, after referring  

to the factual background and the evidence, adopted the  

yield  capitalisation  method,  to  arrive  at  the  

compensation.  It  held  that  the  net  annual  income  

realised by the respondents was Rs.270/- per sweet lime  

tree per annum or in all Rs.94,500/- from the entire  

orchard with 350 trees.  It adopted the multiplier of 13  

and arrived at the compensation for the acquired land

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with the sweet lime trees as 94500 x 13 = Rs.12,28,500/-  

(that is Rs.280,479/45 per acre).

5. In this appeal, the State is aggrieved by  

the multiplier of 13 adopted by the Reference Court. It  

is pointed out that though the High Court had found the  

multiplier of 13 to be on the higher side,  it failed to  

interfere with the judgment of the Reference Court. Mr.  

I.  Venkatanarayana,  learned  senior  counsel  for  the  

appellant  submitted  that  the  appropriate  multiplier  

should be 8, but under no circumstances it should be  

more than 10. On the other hand, Mr. R. Venkataramani,  

learned  senior  counsel  appearing  for  the  respondent  

relied upon the decision of this Court in Union of India  

Vs. Shanti Devi, (1983) 4 SCC 542 where this Court held  

that  a  multiplier  of  13  would  be  appropriate  for  

determining market value by capitalisation of income.  

The decision in Shanti Devi relied on by the respondents  

did  not  relate  to  a  fruit  tree  grove,  but  an  

agricultural  crop  land.  The  decision  refers  to  other  

decisions where multiplier of '8' was adopted.    

6. This Court has considered this issue in  

several decisions - State of Haryana Vs. Gurcharan Singh  

-  1995  Supp.(2)  SCC  637,  Land  Acquisition  Officer  

Malaprabha  Dam  Project  Saundatti Vs.  Madivalappa  

Basalingappa  Melavanki -  (1995)  5  SCC  670,  State  of

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Gujarat Vs. Rama Rana - (1997) 2 SCC 693, (4) Krishi  

Utpadan Mandi Samiti Vs. Malik Sartaj Wali Khan & Anr.-  

(2001) 10 SCC 660 and  Airports Authority of India Vs.  

Satyagopal Roy & Ors. - (2002) 3 SCC 527. In Madivalappa  

Basalingappa Melavanki, this Court held that generally a  

multiplier of 10 would be appropriate but depending on  

the special facts and circumstances, the multiplier may  

vary.  In  Rama Rana  and  Krishi Utpadan Mandi Samiti,  

this  Court  adopted  a  multiplier  of  10.  In  Gurcharan  

Singh  and  Airports  Authority  of  India,  this  Court  

applied a multiplier of 8 for arriving at the market  

value of orchard land.  The general trend is to adopt a  

multiplier of 8 to 10 in regard to plantations, fruit  

groves and orchards and a multiplier ranging from 10 to  

12 to agricultural crop land.

7. There  are  no  special  circumstances  to  

apply the higher multiplier of 12 or 13 or the lower  

multiplier  of  8.   Having  regard  to  the  evidence  in  

regard  to  the  nature,  standard  and  position  of  the  

orchard, we are of the view that the standard multiplier  

of 10 should be applied.  Therefore, the compensation  

would be Rs.94,500 x 10, that is Rs.9,45,000/- for the  

entire extent of 4 acres 38 cents (land with the trees).

8. The  Reference  Court  has  awarded  

additional amount under Section 23(1A) at 12% per annum

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from the date of preliminary notification (27.8.1993).  

Award of additional amount under Section 23(1A) of the  

Act would arise only where the possession is taken after  

the notification under Section 4(1) of the Act. Section  

23(1A) permits additional amount to be awarded from the  

date of notification under Section 4(1) of the Act, to  

the date of award of Collector or the date of taking  

possession  of  the  land,  whichever  is  earlier.  Where  

possession is taken prior to the date of notification  

under Section 4(1) of the Act, no additional amount is  

awardable under Section 23(1A) of the Act. Award of such  

amount cannot be sustained.

9. This appeal raises yet another issue. The  

reference Court has awarded interest under Section 28 of  

the Act from the date of possession, that is 8.6.1988,  

and not from the date of notification under Section 4(1)  

of the Act. The High Court has not interfered with the  

award  of  such  interest.  The  appellant  relied  upon  

decisions of this Court in R.L. Jain(D) by LRs. Vs. DDA  

& Ors., (2004) 4 SCC 79 and in Special Land Acquisition  

Officer Vs.  Karigowda  &  Ors.,  (2010)  5  SCC  164  to  

contend that interest could be awarded only from the  

date of notification under Section 4(1) of the Act, even  

where possession had been taken on a date prior to the  

date of preliminary notification. We, therefore, hold  

that interest under Section 28 of the Act could have

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been  awarded  only  from  the  date  of  preliminary  

notification, even if possession was taken prior to the  

date of the preliminary notification.

10. Though respondents are not entitled to interest  

under Section 28 of the Act, from a  date prior to the  

date of preliminary notification, they are entitle to  

damages for wrongful use and damages of the lands from  

the date of possession till date of notification under  

Section  4(1)  of  the  Act.  In  R.L. Jain (supra), this  

court held:

“In  a  case  where  the  landowner  is  

dispossessed  prior  to  the  issuance  of  

preliminary notification under Section 4(1)  

of  the  Act  the  Government  merely  takes  

possession of the land but the title thereof  

continues to vest with the landowner.  It is  

fully open for the landowner to recover the  

possession of his land by taking appropriate  

legal  proceedings.  He  is  therefore  only  

entitled to get rent or damages for use and  

occupation  for  the  period  the  Government  

retains possession of the property.  Where  

possession is taken prior to the issuance of  

the  preliminary  notification,  in  our  

opinion, it will be just and equitable that  

the Collector may also determine the rent or  

damages for use of the property to which the  

landowner is entitled while determining the  

compensation amount payable to the landowner  

for the acquisition of the property.  The  

provisions  of  Section  48  of  the  Act  lend

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support  to  such  a  course  of  action.   For  

delayed payment of such amount appropriate  

interest  at  prevailing  bank  rate  may  be  

awarded.”

11. The  above  position  is  reiterated  in  Karigowda  

(supra). It is clear that even if the land owner may not  

be entitled to interest from the date of possession but  

only from the date of preliminary notification, he will  

be  entitled  to  compensation  for  wrongful  use  and  

occupation from the date of actual dispossession till  

the date of notification under Section 4(1) of the Act.  

In this case, there is already a clear finding that the  

loss of income per year is Rs.94,500/- from the acquired  

lands.  Therefore, instead of relegating the parties for  

a further enquiry in regard to damages for wrongful use  

and occupation from the date of dispossession to date of  

preliminary notification, we proceed to determine the  

same  at  Rs.94,500/-  per  annum  for  the  period  from  

8.6.1988  to  27.8.1993  (which  is  rounded  of  to  five  

years) with interest at 6% per annum from 30.6.1994 to  

date of payment.

12. In view of the above, this appeal is allowed in  

part as follows:

(a) The compensation for the land acquired (4 acres  

38 cents) is determined as Rs.9,45,000/- with solatium  

under Section 23(2) of the Act.

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(b) The respondents will also be entitled to damages  

of Rs.4.72,500/- (at the rate of Rs.94,500/- per annum)  

for use and occupation, for the period between date of  

dispossession and date of preliminary notification.

(c) The respondent will be entitled to interest on  

the amount due under para (a) less the amount awarded by  

the  Land  Acquisition  Officer,  at  the  rate  of  9%  per  

annum for one year from 27.8.1993 and thereafter at the  

rate  of  15%  per  annum  on  the  enhanced  amount,  under  

Section 28 of the Act.

(d) The respondents shall be entitled to interest on  

the amount due under para (b) above, at the rate of 6%  

per annum from 30.6.1994 (date of award) till date of  

payment.

(e) Parties to bear their own costs.

  ......................J.          (  R.V.  

RAVEENDRAN )

New Delhi;         ......................J. December 08, 2010.           ( A.K. PATNAIK )