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PETITIONER: ADMINISTRATOR GENERAL OF WEST BENGAL

       Vs.

RESPONDENT: COLLECTOR, VARANASI

DATE OF JUDGMENT16/02/1988

BENCH: VENKATACHALLIAH, M.N. (J) BENCH: VENKATACHALLIAH, M.N. (J) NATRAJAN, S. (J)

CITATION:  1988 AIR  943            1988 SCR  (2)1025  1988 SCC  (2) 150        JT 1988 (1)   529  1988 SCALE  (1)484  CITATOR INFO :  R          1989 SC2051  (4)  R          1991 SC2027  (5,6)  R          1992 SC2298  (9)

ACT:      Land Acquisition  Act, 1894: Sections 4, 11, 18 and 23- Compensation-Valuation  of   land-Determination  of   market value-Price fetched  for comparative  land sold  at time  of section 4  Notification-Best evidence of valuation-Land with building-Determination of  value of  building-Free growth on land-Whether can be valued on basis of horticultural value.      Solatium and  interest-Applicability of  higher  rates- Effect of  U.P. Land  Acquisition (Amendment)  Act 1972  and Central Amendment  Act 1982-Question  left open  in view  of pendency of Bhag Singh v. U.T. Chandigarh.      Practice and  Procedure: Compensation to be awarded for change of residence-Question under Section 23 clause Fifthly L.A. Act  1894-Raised for first time in S.L.P. under Article 136 without taking specific ground-New plea-Disallowed.

HEADNOTE: %      The suit  property known  as "Gopal Lal Villa" situated on the  outskirts of the city of Varanasi was a sprawling 60 years old building, part of the estate of a Raja, and vested in the  appellant. It  was acquired  pursuant to preliminary Notification dated  4.7.1959 under  the Land Acquisition Act 1894 for  the purposes  of the  Education Department  of the Government of Uttar Pradesh.      The building  was of  about 25,000  square feet  plinth area comprising 35 rooms, halls and other appurtenances, and the 23.66  acres of  ground appurtenant to the building, had 431 fruit and 13 timber trees and 12 bamboo clumps.      The appellant  claimed compensation  of Rs.8,00,580 for the land  valuing it  at Rs.352 per decimal. Rs.3,50,000 for the building  and structures;  Rs.41,010 for the tree growth and Rs.5,000 as compensation for change of residence.      The  Land   Acquisition  Officer  by  his  Award  dated 4.11.1961 1026 under s.  11 of  the Land  Acquisition  Act  determined  the

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market value of the land at Rs.3,31,340 valuing it at Rs.140 per decimal; of the building and superstructure at Rs.57,660 and of the tree growth at Rs.355.83.      Being aggrieved  with the  aforesaid  determination  of compensation  the   appellant  did   not  accept  the  offer contained in  the Award, and sought for a reference under s. 18 of the Act to the Civil Court.      The District  Court enhanced  the market  value of  the land to  Rs.4,73,200 i.e.  from Rs.140 to Rs.200 per decimal and left  the valuation  of the building and the tree growth undisturbed.      The High Court affirmed the Award of the District Court and dismissed the appellant’s claim for further enhancement.      In the appeal to this Court, it was contended on behalf of the  appellant that  the claim  of Rs.352 per decimal was not accepted  and that  the  High  Court  in  affirming  the valuation  of   the  land  at  a  mere  Rs.200  per  decimal overlooked  certain  settled  principles  of  valuation.  It adopted the District Judge’s valuation which was the average of the  valuation reflected  in Ext. 2 and Ext. 19 while the higher of  the two  figures indicated  by Ext. 2 should have been adopted.  It was  further contended  that the appellant was entitled  to solatium  and interest  at higher  rates in view of  the re-introduction of s. 23(2) in 1972 by the U.P. Land Acquisition (Amendment) Act, 1972 and under the Central Amendment Act 68 of 1984.      On behalf  of the  respondent it was contended that the changes in  law brought about by the State Amendment Act No. 28 of  1972 and  the Central  Amending Act  68 of  1984  are presumptively prospective except to the extent that they are made expressly or by compelling implication retrospective in the extension of their benefits.      On the question whether:      (1)<the estimate  of the  market-value of  the acquired land at  Rs.200 per  decimal  is  unreasonably  low  and  is arrived at  ignoring the  evidence  on  record  and  settled principles of valuation.      (2)< the valuation of the buildings and structures at a mere Rs.57,660 calls for an upward revision. 1027      (3)< the  award made  for the tree-growth is inadequate and is required to be valued higher.      (4)< appellant  is entitled  to the benefit of s. 23(2) of the  Act as  introduced  by  the  U.P.  Land  Acquisition (Amendment) Act  1972 providing  for solatium  and to higher rates of  solatium and  interest under  the Central Amending Act 1984  on the  ground that  proceedings were  pending  in appeal before  this Court  on the  dates the amendments came into force.      Appeal allowed  in part-compensation  awarded for  land left undisturbed,  compensation for building and tree growth enhanced. ^      HELD: 1.(i)  The determination  of  market-value  of  a piece of  land with  potentialities  for  urban  use  is  an intricate exercise  which calls for collection and collation of diverse economic criteria. [1033C-D]      (ii) The  market value  of  a  piece  of  property  for purposes of  s. 23  of the Land Acquisition Act is stated to be the  price at  which the  property changes  hands from  a willing seller  to a  willing, but  not too anxious a buyer, dealing at arm’s length. [1033D]      (iii) Prices  fetched for  similar lands  with  similar advantages and potentialities under bonafide transactions of sale at  or about  the time  of the preliminary notification

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are the  usual, and  indeed the  best, evidences  of  market value. Other  methods of  valuation are  resorted to  if the evidence of  sale of similar lands is not available. [1033E- F]      (iv) Prices  fetched for smaller plots cannot form safe bases valuation  of large  tracts of land as the two are not comparable properties. [1034E]      Collector of Lakhimpur v. B.C. Dutta, AIR 1971 SC 2015; Mirza  Nausherwan   Khan  &  Anr.  v.  The  Collector  (Land Acquisition), Hyderabad,  [1975] 2 SCR 184; Padma Uppal etc. v. State  of Punjab  & Ors.,  [1977]  1  SCR  329  and  Smt. Kaushalya Devi  Bogra & Ors.v. The Land Acquisition Officer, Aurangabad & Anr., [1984] 2 SCR 900, referred to.      (v) However, if it is shown that the large extent to be valued does  admit of  and is  ripe  for  use  for  building purposes; that  building plots that could be laid-out on the land would  be good  selling propositions and that valuation on the basis of the method of a hypothetical lay out 1028 could with  justification be  adopted, then  in valuing such small, laid  out sites  the valuation  indicated by  sale of comparabe small  sites in  the area  at or about the time of the notification would be relevant. [1034G-H]      (vi) In  a case  such as the above, necessary deduction for the  extent of  land required for the formation of roads and other  civic amenities;  expenses of  development of the sites  by  laying  out  roads,  drains,  sewers,  water  and electricity lines,  and the  interest on the outlays for the period of  deferment of  the realisation  of the  price; the profits on the venture etc. are to be made. [1034H; 1035A-B]      Sahib Singh  Kalha & Ors. v. Amritsar Improvement Trust and Ors., [1982] 1 SCC 419 referred to.      (vii) Prices fetched for small plots cannot directly be applied in  the case of large areas, for the reason that the former reflects  the ’retail’  price of  land and the latter the ’wholesale’ price. [1035B]      (viii) Subsequent  transactions which are not proximate in point  of time  to the  acquisition  can  be  taken  into account for  purposes of  determining whether as on the date of acquisition  there was  an upward  trend in the prices of land in the area. [1035C]      (ix) Where  it is  shown that the market was stable and there were no fluctuations in the prices between the date of the preliminary notification and the date of such subsequent transaction, the  transaction could  also be  relied upon to ascertain the  market value.  (a) When  there is evidence to the effect  that there  was no upward surge in the prices in the interregnum.  (b) The  burden of establishing this would be  squarely   on  the  party  relying  on  such  subsequent transaction. [1035C-D,G]      State of  U.P. v. Major Jitender Kumar, AIR 1982 SC 877 referred to.      In the instant case, the appellant did not endeavour to show that  between the date of preliminary notification i.e. 4.7.1959 and  the date  of Ext. 24 i.e. 18.8. 1960 there was no appreciation in the value of land in the area. Therefore, Ext. 24  cannot be  relied upon as affording evidence of the market value as on 4.7.1959. [1035G-H]      (xi) The  valuation of  land made  in the  present case does not call for or justify any upward revision at all. (a) There  is   no   justification   to   interfere   with   the determination of  the market  value of  the land approved by the High Court. [1036C-D] 1029      In the  instant case  Rs.200 per  decimal for the large

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extent of the acquired land works out to 40% of the "retail" price even  if Rs.500  is taken  as the ’retail’ price. That apart, in  the case  of land  with potentialities for a more profitable use  it is necessary to acknowledge, and make due allowance for,  the possibility  that the  land might not be applied for  the prospective  use at  all or  not so applied within a reasonable time. [1036H; 1037A-B]      Bombay Improvement v. Mervanji Manekji Mistry, AIR 1926 Bombay 420 referred to.      2.(i) Usually  land and building thereon constitute one unit. Land  is one  kind  of  property;  land  and  building together  constitute   an  altogether   different  kind   of property. The latter must be valued as one unit. [1037C-D]      (ii) However,  where, the  property comprises extensive land and  the structures  standing do  not  show  that  full utilisation potential  of the  land is realised it might not be impermissible to value the property estimating separately the market  value of  the land with reference to the date of the preliminary-notification  and to  add to it the value of the structures as at that time. [1037D-E]      (iii) By  the above method, building value is estimated on the  basis of  the prime-cost  or  replacement-cost  less depreciation.  The   rate  of  depreciation  is,  generally, arrived at  by dividing  the cost  of construction (less the salvage valued  at the  end of the period of utility) by the number of years of utility of the building. [1037E-F]      (iv) The  factors that  prolong the life and utility of the building,  such as good maintenance, influence and bring down the rate of depreciation. [1037F]      In the instant case, the estimate of the proper market- value  of  the  building  has  not  received  the  requisite attention both before the High Court and the District Court. It is  no doubt  true that the Valuation Report, Ext. I, was prepared on  20.7. 1960  one year  after  the  date  of  the preliminary notification.  But the  extent of the built area was about  25,000 sq.  ft. There  is no  evidence to suggest that the  rates mentioned  and adopted  in Ext.  I were  not rates valid  for a  spread out  period. No case was made out that the  building had  lost its  utility and  that the only mode of  valuation  appropriate  to  the  case  was  one  of awarding merely  the salvage-value.  The building, according to the evidence was quite 1030 strong  though   about  60   years  old  at  the  time.  The appropriate thing  to do  would have  been to  set aside the award in  so  far  as  the  valuation  of  the  building  is concerned and  remit the matter for a fresh determination of its market  value as  on 14.7.1959. However, in the interest of justice  it would  be proper to make some ready and rough estimate drawing  such sustenance  as the evidence on record could afford  and impart a quietus to this vexed litigation. Accordingly,  the   compensation  for   the  buildings   and structures  is   enhanced  from  Rs.57,660  to  Rs.2,00,000. [1038G-H; 1039D-G; 1040G]      3.  Where   land  is   valued  with  reference  to  its potentiality for  building purposes  and  on  the  basis  of prices fetched  by small sites in a hypothetical lay-out the tree growth  on the  land cannot  be valued independently on the basis  of its  horticultural value  or with reference to the value  of the  yield. This  principle, however, does not come in the way of awarding the timber-value or the salvage- value of  the tree  growth after  providng for  the cost  of cutting and removing. [1040G-H; 1041A]      In the instant case, the evidence shows that there were 471 fruit  bearing trees  and plants, 13 timber trees and 12

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bamboo clusters.  Though there  is some  evidence as  to the value of  the yield,  there is  no evidence about the timber value and  fuel value  of the  trees. The District Judge has awarded a  sum of  Rs.355.85 for  the  entire  tree  growth. Having regard  to the  large number of trees and to the fact that some of them were timber trees, it would be appropriate to award  a  lump-sum  of  Rs.7,500  under  this  head.  The compensation for  tree growth  is accordingly  enhanced from Rs.355.85 to Rs.7,500. [1041A-C]      4. By  the U.P. Land Acquisition (Amendment) Act, 1954, Section 23(2)  had been deleted from the statute. It was re- introduced by  the U.P.  Land  Acquisition  (Amendment)  Act 1972. The  preliminary notification  for the acquisition was issued subsequent  to the  deletion. Whether re-introduction of sub-section  (2) would enure to the benefit of the person whose land  is acquired  on the  ground that  proceedings in appeal were  pending on  the date  of introduction  of  that provision, and  availability for  further enhancement of the solatium and  rates of  interest under the Central Amendment Act 68  of 1984  are left open with consent of counsel to be agitated after  final decision  in Bhag  Singh v.  U. T.  of Chandigarh, by  a larger  Bench  of  this  Court.  [1041E-F; 1042B]      5. The  point concerning compensation to be awarded for change of  residence under clause ’fifthly’ in section 23(1) does not  appear to  have been  raised and  urged before the High Court. No specific ground 1031 has also been taken in this behalf in the appeal before this Court. The  appellant should not, therefore, be permitted to re-agitate this question over again in this Court. [1042D]

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil  Appeal No.877  of 1974.      From the  Judgment and  Decree dated  17.11.1971 of the Allahabad High Court in First Appeal No. 171 of 1966.      D.N. Mukherjee,  G.S. Chatterjee  and A.  Bhattacharjee for the Appellant.      Prithvi Raj and Mrs. Shobha Dikshit for the Respondent.      The Judgment of the Court was delivered by      VENKATACHALIAH, J.  This  appeal,  for  enhancement  of compensation,  by  Special  leave,  arises  out  of  and  is directed  against   the  judgment   and  decree  dated  17th November, 1971  of the  High Court  of  Allahabad  in  First Appeal No.  171 of 1966 affirming the Award and Decree dated 13.12.1965 of  the Ist  Addl. District Judge, Varanasi, made in a  Reference Under Section 18 of the Land Acquisition Act 1894.      Property known as "Gopal Lal Villa" a sprawling 60 year old building  of about  25,000 square  feet  of  plinth-area comprising of  35 rooms,  halls and other appurtenances, its large 23.66 acre grounds with 431 fruit and 13 Timber trees; 12 Bamboo-clumps,  situated on  the outskirts of the City of Varanasi, originally part of the estate of Raja P.N. Tagore, and now  vesting in  the Administrator General, West Bengal, was  acquired  pursuant  to  the  preliminary  notification, published in  the Gazette,  dated, 4.7.1959 for the purposes of the  education department  of  the  Government  of  Uttar Pradesh.      2.  Before  the  Land  Acquisition  Officer,  Appellant claimed compensation  of Rs.8,00,580 (at Rs.352 per decimal) for the  land; Rs.3,50,000  for the building and structures;

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Rs.41,010 for  the tree growth; and Rs.5,000 as compensation for change of residence.      The Land  Acquisition Officer,  however, by  his  Award dated 4.11.1961  under Section  11 of the Act determined the market-value of  the land  at Rs.3,31,340 valuing it Rs. 140 per decimal (or Rs.14,000 per 1032 acre); of  the building  and structures  at Rs.57,660 and of the treegrowth  at Rs.355.83. Appellant, not having accepted the offer  contained in  the award,  sought for  a reference under  Section   18  of  the  Act  to  the  Civil  Court  in proceedings pursuant  to which  the District-Court  enhanced the market-value  of the land to Rs.4,73,200 (from Rs.140 to Rs.200 per  decimal) leaving  the valuation  of the building and the tree-growth undisturbed. The High Court has affirmed the  Award   dismissing  appellant’s   claim   for   further enhancement before it.      3. We  have heard  Shri D.N. Mukherjee, learned counsel in support  of  the  appeal  and  Shri  Prithviraj,  learned Senior-Advocate for  the  respondent.  We  have  been  taken through the  judgment  under  appeal  and  the  evidence  on record.      On the  contentions urged at the hearing, the following points fall for consideration:      (a)   Whether the  estimate of  the market-value of the           acquiredland at Rs.200 per decimal is unreasonably           low and  is arrived  at ignoring  the evidence  on           record and settled principles of valuation?      (b)  Whether   the  valuation   of  the  buildings  and           structures at a mere Rs.57,660 calls for an upward           revision?      (c)   Whether the  award made  for the  tree-growth  is           inadequate and is required to be valued higher?      (d)   Whether appellant  is entitled  to the benefit of           Sec. 23(2)  of the  Act as  introduced by the U.P.           Law Acquisition (Amendment) Act 1972 providing for           solatium and, further, to higher rates of solatium           and interest  under the  Central Amending Act (Act           No. 68  of 1984)  on the  ground that  proceedings           were pending  in appeal  before this  court on the           dates these amendments came into force?      4. Re: Contention (a)      The acquired  land had  the potentiality  for  building purposes. Learned District Judge found that:           "....  The   Land  Acquisition   Officer   himself           realised this fact and has observed that "the land           under acquisition is 1033           situated within  the Corporation limits in Mohalla           Orderly Bazar, a thickly populated locality and is           near to  Kutchery. It  has, therefore, a potential           value as  building site."  I  may  add  here  that           though the acquired land is at a distance of about           3 to 3 1/2 miles from the main markets of Varanasi           City, yet  every thing  of daily  need and  of day           today utility  is available  in the  market  which           exists in  the locality  of the  acquired land. It           may also  be added  that the  land adjacent to the           west of  the acquired land known as ’Tagore Nagar’           formerly formed  part of  this Gopal Lal Villa and           both were  covered by  one boundary.  The land  of           Tagore Nagar  has been divided into small portions           and a  colony with  residential quarters has grown           up there. This was already in existence before the           present acquisition ....."

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    The determination  of market-value of a piece land with potentialities for  urban use is an intricate exercise which calls for  collection  and  collation  of  diverse  economic criteria. The  market-value of  a  piece  of  property,  for purposes of Section 23 of the Act, is stated to be the price at which the property changes hands from a willing seller to a willing,  but not  too anxious  a buyer,  dealing at  arms length. The determination of market-value, as one author put it, is  the prediction of an economic event. viz, the price- outcome of  a  hypothetical  sale,  expressed  in  terms  of probabilities. Prices fetched for similar lands with similar advantages and  potentialities under  bona fide transactions of sale at or about the time of the preliminary notification are the  usual, and  indeed the  best, evidences  of market- value. Other  methods of  valuation are  resorted to  if the evidence of sale of similar lands is not available.      In the  District-court,  appellant  relied  upon  eight transactions of  what,  according  to  him,  were  sale,  of similar lands.  The transactions  at Ext. 18, 20, 21 and 22, dated,   25.3.1952,   1.12.1955,   11.8.1953   &   11.7.1957 respectively were  rejected by learned District Judge on the ground that  they were long enterior in point of time to the acquisition and  lacked the element of contemporaneity. Ext. 23 dated,  25.10.1958 and Ext. 24 dated, 18.8.1960 were also held not  to afford reliable evidence of market-value on the ground that  while in  the former case the property was sold along with  a construction thereon without any indication as to the  apportionment of  the price between the land and the construction, in  the latter case the sale was about an year subsequent to the date of the preliminary notification. 1034      What remained were the evidence of sale transactions at Exts. 2  and 19  dated 16.9.1958 and 22.12.1958 respectively indicating  a   price  of   Rs.1250  and  Rs.900  per  biswa respectively. The  District Judge  struck an  average of the two and fixed the rate at Rs.1075 per biswa which worked out to about Rs.350, or thereabouts, per decimal. But since Ext. 2 and  Ext. 19  related to  very small  plots,  the  learned District Judge  on some  calculations of  his own, fixed the rate of Rs.200 per decimal for the acquired land.      5. Shri  Mukharji in support of the appellant’s claim @ Rs.352  per  decimal  submitted  that  the  High  Court,  in affirming the  valuation of  the land  at a  mere Rs.200 per decimal, overlooked  certain settled principles of valuation in that  it approved  the  process-adopted  by  the  learned District Judge-of  striking an  average  of  the  valuations reflected in Ext. 2 and Ext. 19, while the higher of the two figures indicated  by Ext.  2,  should  have  been  adopted. Learned Counsel  submitted that  the acquired  land,  though situate about  3 1/2  miles away  from the heart of Varanasi City, had all the potentiality for use for building purposes and that  the rejection  of  the  evidence  of  market-value afforded by Ext. 24, the transaction of sale dated 14.7.1960 which indicated  a price of Rs.2,000 per biswa on the ground that it  was an year later than the preliminary notification was erroneous.      6. It  is trite  proposition that  prices  fetched  for small plots  can not  form safe-bases for valuation of large tracts of  land as  the two  are not  comparable properties. (See Collector of Lakhimpur v. B.C. Dutta, AIR 1971 SC 2015; Mirza  Nausherwan   Khan  &  Anr.  v.  The  Collector  (Land Acquisition), Hyderabad,  [1975] 1  SCR; Padma Uppal etc. v. State of  Punjab &  Ors., [1971]  1 SCR; Smt. Kaushalya Devi Bogra &  Ors. v.  The Land  Acquisition Officer Aurangabad & Anr., [1984]  2 SCR.  The principle that evidence of market-

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value of sales of small, developed plots is not a safe guide in valuing large extents of land has to be understood in its proper  perspective.  The  principle  requires  that  prices fetched for small developed plots cannot directly be adopted in valuing  large extents.  However, if it is shown that the large extent  to be valued does admit of and is ripe for use for building  purposes; that  building lots  that  could  be laid-out on  the land would be good selling propositions and that valuation  on the basis of the method of a hypothetical lay-out could with justification be adopted, then in valuing such small,  laid-out sites  the valuation indicated by sale of comparable  small sites  in the area at or about the time of the  notification would  be relevant.  In  such  a  case, necessary deductions for the extent of land required for the formation of roads and other civic 1035 amenities; expenses  of development  of the sites by laying- out roads,  drains, sewers, water and electricity lines, and the interest  on the  outlays for the period of deferment of the realisation  of the  price; the  profits on  the venture etc. are to be made. In Sahib Singh Kalha & Ors. v. Amritsar Improvement Trust  and Ors., (See 1982 1 SCC 419, this court indicated that  deductions for  land required  for roads and other developmental  expenses can,  together, come-up  to as much as  53%. But  the prices fetched for small plots cannot directly be  applied in  the case  of large  areas, for  the reason that  the former  reflects the ’retail’ price of land and the latter the ’wholesale’ price.      The sale transaction at Ext. 24 was an year later. Such subsequent transactions  which are not proximate in point of time to  the acquisition  can  be  taken  into  account  for purposes  of   determining  whether   as  on   the  date  of acquisition there  was an upward trend in the prices of land in the area. Further under certain circumstances where it is shown  that   the  market  was  stable  and  there  were  no fluctuations  in   the  prices   between  the  date  of  the preliminary notification  and the  date of  such  subsequent transaction, the  transaction could  also be  relied upon to ascertain the  market-value. This  court in State of U.P. v. Maj. Jitender Kumar, (See AIR 1982 SC 877) observed:           "..... It  is true that the sale deed Ext. 21 upon           which the High Court has relied is of a date three           years later  than the  Notification under S. 4 but           no material  was  produced  before  the  Court  to           suggest that  there was  any  fluctuation  in  the           market rate  at Meerut from 1948 onwards till 1951           and if  so to  what extent.  In the absence of any           material showing  any fluctuation  in  the  market           rate the  High Court  thought it  fit to rely upon           Ex. 21  under which the Housing Society itself had           purchased land  in the  neighbourhood of  the land           dispute. On  the whole  we are not satisified that           any error  was committed  by  the  High  Court  in           relying upon the sale deed Ex. 21....." But this  principle could be appealed to only where there is evidence to the effect that there was no upward surge in the prices in  the interregnum.  The burden of establishing this would be  squarely on  the party  relying on such subsequent transaction. In the present case appellant did not endeavour to show  that between  the date  of preliminary notification i.e. 4.7.1959  and the  date of Ext. 24 i.e. 18.8.1960 there was no  appreciation in  the value  of  land  in  the  area. Therefore, Ext.  24  cannot  be  relied  upon  as  affording evidence of the market- 1036

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value as on 4.7.1959. We cannot accept the argument that the price indicated in Ext. 24 should be accepted after allowing an appropriate  deduction for  the possible  appreciation of the land-values  during the  period of  one year. Apart from other difficulties in this exercise, there is no evidence as to the rate and degree of appreciation in the values of land so that  the figure could be jobbed backwards from 14.7.1960 to 4.7.1959.      7. It  appears to us that even if the value at Rs.1,250 as on 27.8.1958 indicated by Ext. 2 is adopted and something is added  thereto for  the  possible  appreciation  for  the period till  the preliminary  notification, also taking into account the  trend of appreciation in the prices in the area as indicated  by Ext.  24 and  the value  of small developed sites is  estimated somewhere  between Rs.1,400 and Rs.1,600 per  biswa  or  Rs.450  to  Rs.500  per  decimal,  yet,  the valuation made  in the  present case  does not  call for  or justify any upward revision at all. There is a simple way of cross checking  these results.  The value  of  small  plots- Rs.500 per  decimal as  now estimated-represents what may be called the  "retail" price  of  the  land.  What  is  to  be estimated therefrom  is the  "wholesale" price  of land.  In Bombay Improvement v. Mervanji Manekji Mistry, (See AIR 1926 Bombay 420) Mecleod CJ suggested a simple rule:           ".....Valuation cases  must be  dealt with just as           much from  the point  of view  of the hypothetical           purchase as  of the claimant. The valuation itself           must often  be more or less a matter of guesswork.           But it  is obviously wrong to fix upon a valuation           which, judged by everyday principles, no purchaser           would be likely to give ....."           ".....I have  always  been  adverse  to  elaborate           hypothetical calculations which are no more likely           to lead  to a  fair conclusion  than  far  simpler           methods. But, in any event, no harm can be done by           testing a  conclusion arrived  at in  one way by a           conclusion arrived at in another ....."           ".....A  very   simple  method   of  valuing  land           wholesale from  retail prices  is to take anything           between  one   and  half  onethird,  according  to           circumstances of  the expected gross valuation, as           the wholesale price....."                                          (emphasis supplied)      In the  present case,  Rs.200 per decimal for the large extent of the 1037 acquired land works out to 40% of the "retail" price even if we take,  Rs.500 as  the "retail"  price. That apart, in the case of  land with potentialities for a more profitable use, it is  necessary to acknowledge, and make due allowance for, the possibility  that the  land might not be applied for the prospective use at all or not so applied within a reasonable time.      There is, therefore, no justification to interfere with the determination  of the  market-value of the land approved by the  High Court.  Contention (a)  is accordingly answered against the appellant.      8. Re: Contention (b)      The District  Court proceeded  to value the property on the "Land  and Building  Method". The  appositeness of  this method to  the present  case  was  not  debated  before  us. Usually, land and building thereon constitute one unit. Land is  one   kind  of  property;  land  and  building  together constitute an  altogether different  kind of  property. They must be valued as one unit. But where, however, the property

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comprises extensive  land and  the structures thereon do not indicate a  realisation of  the full developmental potential of the  land, it  might not  be impermissible  to value  the property estimating  separately the market-value of the land with reference  to the  date of  the preliminarynotification and to  add to  it the  value of  the structures  as at that time. In  this method,  building-value is  estimated on  the basis   of    the   primecost   or   replacement-cost   less depreciation.  The   rate  of  depreciation  is,  generally, arrived at  by dividing  the cost  of construction (Less the salvage value  at the  end of  the period of utility) by the number of years of utility of the building. The factors that prolong the  life and  utility of the building, such as good maintenance, necessarily  influence and  bring down the rate of depreciation.      Hari Shanker  Misra PW  3 referring  to the  nature and quality of the building stated:           ".... The  Northern part  of this Villa was double           storeyed and  rest was single storeyed. Its plinth           was 3  feet high  and rooms were 14 feet high. The           building bore  35 rooms and besides this there was           a big  hall 65  feet x 22 feet. Its floor was made           up of some patent stones. Some monthly some market           and Vkiya  were stoned.  The doors were 8 feet x 4           feet and  they were made up of Burma teak wood and           up ways were double doored. When Improvement Trust           oc- 1038           cupied the property of Nejai at that time building           was well  maintained.  Over  and  above  the  main           building there were manager quarters. Kitchen, out           house, servant  quarters, Chowkidar quarters and a           stable. Now  they  were  in  good  condition.  Its           boundary wall  was 7  feet and at some places they           were 8  feet high.  This also  consists of  2 iron           gates. One  is main  gate and  the other one is by           its side of some distance......" Learned District  Judge based  his valuation almost entirely upon the  report  of  the  Chief  Engineer,  estimating  the building at Rs.57,660. That report itself was not brought on record in the proceedings of reference. It is not clear from the judgment  of the  High Court  whether this  estimate  of Rs.57,660  represented   the  cost  of  replacement  of  the structure less depreciation or whether it represented merely the salvage-value  of the  building. High Court rejected the Valuation Report, Ext. 1 relied upon by the appellant on the ground that  it was  made with reference to a date which was an year  later than  the preliminary  notification. The High Court observed:           ".... The appellant had examined Narain Chand Das,           an  Overseer   who  had   assisted  the  Executive           Engineer,  in   preparing  the  valuation  of  the           constructions and  the well.  The  report  of  the           Executive Engineer  is Ext.  1 on  the record.  It           appears from  the said  report that  the valuation           was  determined   on  the   basis  of   the  rates           prevailing  in   the  year   1960   where-as   the           preliminary notification  in the  instant case was           issued in  the year  1959. Moreover, this building           appears to  be about  60 years  old and the market           value thereof could not be determined on the basis           of the  cost of  constructions prevailing  in  the           year 1960.  This method  of calculating the market           value of  the property  is obviously erroneous and           cannot be accepted. No other evidence was produced

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         by the  appellant to  determine the  value of  the           constructions and  the well. The evidence produced           by him  being not  satisfactory, the  compensation           already determined by the Land Acquisition Officer           in respect  of this  item of  the property was not           liable to be enhanced....."      We are  afraid the  estimate of the proper market-value of the  building has  not received  the requisite  attention both before  the High Court and the District Court. It is no doubt true  that Ext.  1 was  prepared on 20.7.1960, an year after the date of the preliminary notifi- 1039 cation in the present case; but the extent of the built-area was about 2,500 sq. ft. Ext. 1 gives a breakdown of the area of the various parts of the building and sets out the nature of the  construction and  proceeds to  estimate the value in terms of  the then  current PWD  rates less  depreciation of 20%. The  rates adopted  were not  particular to the date of valuation i.e. 20.7.1960. The PWD rates are operative over a period, generally  for an  year or  so. The  extent  or  the quality of  construction were  also not in dispute. The main building of  an area of 18828 sq. ft. consisted of 35 rooms, and  a   big  hall   with  ’Marble  Flooring’,  ’Burma  Teak Shutters’, ’Stone  Slab Roofing’,  a  portico  with  ’Glazed Gracian Pillars’ etc. In Ext. 1, the main portion was valued at Rs.12  per sq.  ft. Apart  from the  main building, there were other  appurtenances such  as the  Managers’  quarters, kitchen-house,  chowkidars’  quarters,  out-house,  stables, pucca wells etc. The other structures have been valued area- wise at  much lesser  rates, according  as the nature of the construction. The  decendants of  Raja P.N.  Tagore, it  was claimed, were  residing in  the building  till  a  few  days before possession was taken. There is no evidence to suggest that, the  rates mentioned  and adopted  in Ext.  1 were not rates valid for a spread-out period.      It  appears   to  us  somewhat  unreasonable  that  the extensive building  of 25,000  sq. ft. with big-halls and 35 rooms constructed  with quality-material,  marble  flooring, burma teak  joinery should be valued at a mere Rs.57,660. No case was made-out that the building had lost its utility and that only  mode of valuation appropriate to the case was one of  awarding   merely  the   salvage-value.  The   building, according to  the evidence, was quite strong though about 60 years old at the time.      Having regard  to the  circumstances of  this case, the appropriate thing  to do  would have  been to  set-aside the award in  so  far  as  the  valuation  of  the  building  is concerned and  remit the matter for a fresh determination of its market-value  as on 14.7.1959. But the parties have been at litigation  for decades.  The acquisition  is of the year 1959. We,  therefore, thought-and put to the learned counsel on both  sides-whether in the interests of justice, it would not be proper to make some rough and ready estimate, drawing such sustenance  as the  evidence on record could afford and impart a  quietus to  this vexed litigation. Learned counsel very fairly  submitted that  this would  be the  appropriate course. In  the very  nature of things, the exercise that we make, must  share  the  imperfections  of  the  evidence  on record. But  then, some element of speculation is inevitable in all valuations. In the 1040 best of  exercises some measure of conjecture and guess-work is inherent in the very nature of the exercise.      9. We  may first  proceed to estimate the prime-cost of the building.  The measurement  set-out in  Ext.  1  is  not

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disputed. If  Ext. 1  is taken as the starting point for the estimate  of   cost  of   replacment  as  on  4.7.1959;  the depreciation of  20% allowed  in Ext. 1 has to be added back and, further, some deduction towards the possible escalation of costs  of construction  between the  date of preliminary- notification and  of the  period of  validity of  the  rates adopted in Ext. 1 has to be made. On this basis, the cost of replacement could  be estimated  at about  Rs.4 lakhs.  This works out  to Rs.16  sq. ft. on the average. Even in respect of 1959,  this figure  may not be much, having regard to the quality of the construction.      From this  sum of Rs.4 lakhs, depreciation for the past life of  60 years  of building  would have  to be  deducted. Depreciation depends  upon and  is deduced from factors such as the cost of the construction; the expected life-span; its salvage-value realisable at the end of the period of utility etc. Rate  of depreciation is generally, the prime-cost less salvage value  divided by  the life-span.  These, of course, are matters  of evidence.  In the present case, if we make a rough and ready estimate of the salvage-value at say, 10% of the cost  and estimate the period of utility of life-span of the building  at, say,  90 years,  the depreciation which is the annual loss of value due to physical wear and tear works out to  about Rs.4,000 per year or roughly 1%. Without going to the  finer details of the calculation of the depreciation on  the   progressive  written-down  values,  we  think,  an estimate of  50% of the cost of the building may, again on a rough and ready basis, be deducted towards depreciation. The market-value  of   the  building  as  on  the  date  of  the preliminary  notification  could  accordingly  be  fixed  at Rs.2,00,000.      Accordingly, the  compensation for  the  buildings  and structures is  enhanced from Rs.57,660 to Rs.2,00,000, point (b) is held and answered accordingly.      10. Re:  Contention (c):  So far  as the tree-growth is concerned, it is trite proposition that where land is valued with reference to its potentiality for building-purposes and on  the  basis  of  prices  fetched  by  small  sites  in  a hypothetical lay-out,  the tree-growth on the land cannot be valued independently on the basis of its horticultural value or with  reference to  the value  of  the  yield.  But  this principle does not 1041 come in  the way of awarding the timber-value or the salvage value of  the tree-growth  after providing  for the  cost of cutting and removing. The evidence shows that there were 471 fruit-bearing trees  and plants:  13  timber  trees  and  12 Bamboo clusters.  Though there  is some  evidence as  to the value of the yield, this may not be a relevant factor having regard to  the principles  of valuation  appropriate to  the case. There  is no  evidence about  the timber value and the fuel value  of the trees. Learned District Judge has awarded a sum of Rs.355.85 for the entire tree-growth. Having regard to the  large number  of trees  and to the fact that some of them were  timber trees, we think we should award lumpsum of Rs.7,500 under this head.      Accordingly,  compensation   for  the   tree-growth  is enhanced from Rs.355.85 to Rs.7,500.      11. Re: Contention(d)      This leaves us with the question whether the benefit of Section  23(2)   introduced  by   the  UP  Land  Acquisition (Amendment) Act  1972 (Act  No. 28  of 1972) providing for a solatium is  available to  the appellant  on the ground that the proceedings  in appeal  were pending as on the date when that provision  was introduced. It is to be recalled that by

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U.P. Land  Acquisition (Amendment)  Act (Act No. 22 of 1954) Section  23(2)  had  been  deleted  from  the  statute.  The preliminary  notification   was  long   subsequent  to  this deletion. The  question is  whether the  introduction or re- introduction of  Section 23(2)  in 1972  would enure  to the benefit of  the appellant  on  the  premise  that  rules  of construction appropriate  to such  remedial  measures  would require their benefit to be extended to pending proceedings. Appellant has  also  claimed  the  benefit  of  the  further enhancement of  the solatium and the rates of interest under Central Amending  Act 68  of 1984.  Shri Mukharjee submitted that these amendments, both by the State Law and the Central Law, were  remedial legislations  and would apply to pending actions.      Shri Prithviraj,  on the contrary, submitted that these changes in the law, brought in by the amended provisions are presumptively prospective except to the extent that they are made expressly or by compelling implication retrospective in the extension  of their  benefits. Learned Counsel said that application of  these provisions even to pending proceedings envisages a principle of retro-active application which must expressly be  enabled by the statute or is to be inferred as an inevitable implication. 1042      Shri Mukharjee relied upon certain observations of this court in the case of Bhag Singh & Ors. v. Union Territory of Chandigarh, (See  1985 Suppl.  2 SCR  949). There  are  some observations at 958 of the report which tend to lend support to Shri Mukharjee. But the matter is pending decision at the hands of a larger bench.      12. In the circumstances, learned counsel on both sides submitted that the appeal be disposed of on the other points leaving it  open to  the appellant to agitate Contention (d) after a  final pronouncement in Bhag Singh’s case, if in the light of  the said  judgment, this  claim or  any part of it survives. We  accept this  submission and reserve liberty to the appellant accordingly.      13.  Shri  Mukharjee  sought  to  raise  another  point concerning  compensation   to  be   awarded  for  change  of residence under  Clause ’fifthly’ in Sec. 23(1); but as this point does  not appear  to have been raised and urged before the High Court. We think, we should not permit the appellant to re-agitate  this question over again in this court. It is also to be observed that no specific ground is taken in this behalf in this appeal either.      14. In  the result,  this appeal is allowed in part and while the  compensation determined  and awarded for the land is  left  undisturbed,  the  compensation  awarded  for  the building and  tree-growth  is  enhanced  from  Rs.57,660  to Rs.2,00,000 and  from Rs.355.85  to  Rs.7,500  respectively. Appellant shall  be  entitled  to  interest  at  6%  on  the enhanced amount  of compensation  from the date of taking of possession till  realisation. Liberty  is  reserved  to  the appellant to  seek such  additional relief on Contention (d) depending upon  the ultimate  decision in Bhag Singh’s case. The appeal  is disposed  of accordingly. The appellant shall be entitled  to the costs in this appeal. The advocate’s fee fixed at Rs.2,500. N.V.K.                                       Appeal allowed. 1043