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PETITIONER: GANGA DEVI & ORS.  ETC.

       Vs.

RESPONDENT: STATE OF U.P.

DATE OF JUDGMENT11/02/1972

BENCH: RAY, A.N. BENCH: RAY, A.N. BEG, M. HAMEEDULLAH

CITATION:  1972 AIR  931            1972 SCR  (3) 431  CITATOR INFO :  R          1981 SC1215  (6)

ACT: U.P.  Zamindari Abolition and Land Reforms Act, 1950, s.  39 (1)   (e)   (i)   and  (ii)--Average   annual   income   how determined--Forest  income,  if includes income  derived  by processing wood.

HEADNOTE: The forests of the appellants vested in the respondent-State as  a  result of the notification under the  U.P.  Zamindari Abolition  and Land Reforms Act. 1950, and the  Compensation Officer determined the basis of compensation. In  appeal  by the respondent the High Court held  that  the Compensation  Officer  in determining the  compensation  was wrong in arriving at the iverage annual income by adding the annual income, under s. 39(1) (e)  (i)  on  the basis  of  a period of 25 years and the appraisement of the annual yield, under s. 39(1)(e)(ii), on the date of vesting. In appeals to  this Court, HELD  : (1) The High Court Was correct in holding  that  the average  annual income from forest under s. 39(1)(e) of  the Act  could not be computed by arithmetical addition  of  the figures arrived at on the basis of cl. (i) and on the  basis of  cl. (ii).  The section speaks of computation of  average annual income from forest, (i) on the basis of income for  a period of 20 to 40 agricultural years immediately  preceding the date of vesting as the Compensation Officer may consider reasonable, and (ii) on the appraisement of the annual yield of  the  forest  on the date of vesting.   Under  the  first clause.  the  actual income derived from the  forest  for  a number  of  years  before the date of vesting  as  the  Com- pensation Officer may consider reasonable is to be taken and the average calculated.  Under the second clause the  annual yield  as on the date of vesting is to be  appraised.   This should be done, inter alia, by taking into consideration the number  and  age of trees, the area of cultivation  and  the produce.  Therefore, the compensation officer has to compute the  ’average annual income’ by taking recourse to both  the methods  but not by adding the figures on the basis  of  cl. (i) and on the basis of cl. (ii) [435 D-H; 436 A-B] (2)  The  High  Court rightly held that  forest  income  was referable to price of the standing timber.  Hence any income

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which the appellants derived by processing wood, was  income in the nature of trade and would not be forest income.  [436 E-G]

JUDGMENT: CIVIL  APPELLATE JURISDICTION : Civil Appeals Nos. 41 to  46 of 1967. Appeals from the judgment and order dated September 1, 1965 of  the  Allahabad High Court in First Appeals Nos.  513  of 1955 etc. L887upCI/72 432 M.   C.  Chagla, S. R. Agarwala, A. T. M. Sampath and E.  C. Agarwala, for the appellants (in all the appeals). L.   M.  Singhvi and O. P. Rana, for the respondent (in  all the appeals). The Judgment of the Court was delivered by Ray,  J.  These  six appeals are  by  certificate  from  the judgment  dated  1  September, 1965 of  the  High  Court  at Allahabad, Lala Triloki Nath and Lala Digambar Prasad  filed four appeals and the State two in the High Court against the order  dated 6 September, 1955 of the Compensation  Officer. During  the pendency of the appeals the Lalas died  and  the appellants  were brought on record.  The High Court  allowed the  appeals  filed  by the State and allowed  in  part  the appeals  filed by the appellants.  The appellants have  come up by certificate in these six appeals. Each  of the Lalas held equal one half share in each of  the forests  in the villages of Chharba and Prithipur  in  Dehra Dun  District.  By a notification dated 1 July,  1952  under the  U.P.  Zamindari Abolition and Land  Reforms  Act,  1950 (hereinafter called the Act) the entire forest vested in the State of Uttar Pradesh. On  2  May, 1953 the Lalas received the  Draft  Compensation Assessment Rolls under section 46 (1 ) (b) of the Act  which showed annual compensation to be paid to the Lalas as nil. The Lalas thereafter on 20 May, 1953 filed their  objections against the draft compensation roll and claimed compensation under the provisions of the Act. With regard to village Chharba the Lalas claimed that it was a  valuable  sal  forest comprising 225  acres.   The  Lalas assessed  the  worth of the forest at  Rs.  3,40,000.   They claimed  that sayar income during the 10 agricultural  years immediately preceding the date of vesting should be computed separately  and added to the gross income from the  forests. They further claimed that income by selling poola grass  was to be within sayar income.  The next head of claim was  that they  did not have accounts of the income of the forest  for the  previous  20  years  ’but they  were  able  to  produce accounts  for four years from 1944 up to 1947 and the  share of each of the Lalas on the basis of the income derived  for the  said four years came to Rs. 1274-12-0 and on the  basis of  the  appraisement  of the annual yield on  the  date  of vesting  it came to Rs. 5457/-.  On this basis each  of  the Lalas  claimed  Rs.  46740/as  compensation  in  respect  of village Chharba. With  regard to the Prithipur forest the Lalas claimed  that they had worked the forest during the years 1945 to 1952 and that the 433 average  annual  income  of each of  their  share  from  the Prithipur  forest  on  the basis of  20  agricultural  years immediately  preceding  the  date of  vesting  came  to  Rs.

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5106/-.  The Lalas stated that on the basis of  appraisement of  the  annual yield on the date of vesting of  the  forest Prithipur  the  share of each came to Rs. 7955/-.   On  this basis  each of the Lalas claimed a sum of Rs. 101 1  14  and odd as compensation for the forest Prithipur. The  Compensation Officer decided that the income  from  the poola  grass,  was not sayar income but  forest  income  and disallowed  income  from  poola  grass  in  entirety.    The Compensation  Officer however allowed some sayar  income  in each  forest and decided that the average annual  income  of the  forest  under section 39(1) (e) of the  Act  should  be calculated   on  the  basis  of  the  period  of  25   years immediately  preceding the date of vesting and not 20  years as  the  Lalas had claimed.  With regard to  the  forest  in village  Chharba  the Compensation Officer  arrived  at  the figure  of  Rs. 55292/- consisting of Rs.  4300/-  as  sayar income and Rs. 50992/- as the forest income for  computation of  average annual income on the basis of the period  of  25 years and thus arrived at the annual income of Rs.  2211-8-0 under  section  39(1)(e)(i) of the Act. With regard  to  the computation of average annual income on the appraisement  of the  annual  yield of the forest on the date of  vesting  as contemplated  in  section  39 (1) (e) (ii) of  the  Act  the Compensation  Officer held that the representative area  was not specified by the Lalas with enumeration or location  and the enumeration figures of the Lalas were based on estimated and presumed calculations. The  Lalas appraised Rs. 11000/- as the annual yield on  the date  of vesting.  The Compensation Officer found  that  the forest had been felled about 6 to 8 years before vesting and the age of the crop for that reason could not be more than 8 years for coppice.  The Compensation Officer thus  appraised Rs.  800/- as the annual yield and determined  Rs.  2211-8-0 and Rs. 800/- aggregating Rs. 3011-8-0 as the average annual income  to  be added to the gross assets for  assessment  of compensation. With  regard  to the forest in village Prithipur  the  Lalas claimed  Rs. 5106/- as the annual income for a period of  20 agricultural  years immediately preceding the  date  vesting and appraised the annual yield on the date of vesting at Rs. 7955/-.  The Lalas claimed one tenth of the sayar income for 10  agricultural  years at Rs. 2007-8-0.   The  Compensation Officer disallowed income from poola grass but allowed sayar income  of  Rs.  23550/- and added the same  to  the  forest income of Rs. 113914/- aggregating Rs. 137464/- on the basis of  a  period of 25 years and thus arrrived at  the  average annual income of the forest under section 434 39(1)  (e)  of the Act at Rs.  5496-8-0.   The  Compensation Officer  appraised the annual yield at Rs. 1650/-  add  thus arrived  ,it ’the total sum of Rs. 7146-8-0 to be added  as. gross assets of forest income. In the High Court the State contended that the  Compensation Officer  was  in error in adding the annual  income  on  the basis  of a period of 25 years and the appraisement  of  the annual yield in order to arrive at the average annual income under  section 3 9 (1) (e) of the Act.  The  contentions  of the  Lalas in the High Court were these : First, the  income from  poola  grass  was sayar income and  should  have  been allowed  and added separately to the average annual  income. With  regard  to  Prithipur  forest it  was  said  that  the Compensation-Officer  wrongly rejected the sayar income  for the  Fasli years 1352 and 1353 amounting to Rs.  4600/-  and Rs.  4500/-  respectively.   Secondly,  the  average  annual income from forest should have been determined on the  basis

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of income for a period of 20 and not 25 years.  Thirdly, the Compensation Officer was in error in not accepting the whole income  of  the Prithipur forest for the Fasli  years  1352, 1356, 1357 and 1358 by holding that the income during  those four years had been derived by processing wood and therefore the income was made by activities in the nature of trade and was  not forest income.  Fourthly, the Compensation  Officer should have accepted the appraisement of the annual-yield of the forest on the date of vesting as claimed by the Lalas. The  High Court came to the conclusion that the  Lalas  were entitled to income from poola grass as sayar income and thus allowed the appeals of the Lalas in part.  The sayar  income is  not to be clubbed with the average annual income but  is to be dealt with separately. Sayar  income is dealt with in section 39(1)(c) of the  Act. Sayar is not defined in the Act but in section 3 (26) of the Act  the word ’sayar’ is to have the meaning assigned to  it in  the  United Provinces Tenancy Act, 1939.   In  the  1939 Tenancy  Act  sayar  includes  whatever is  to  be  paid  or delivered  by  a lessee or licensee on account of  right  of gathering  produce. forest rights, fisheries and the use  of water for irrigation from artificial sources.  Therefore the income  derived by ’the landlord from persons who have  been given licences to cut an remove poola grass from forest  has been held by the High Court to be sayar.  We agree with  the reasoning of the High Court.  The High Court was correct  in holding  that the sayar income during 10 agricultural  years immediately  preceding the date of vesting should  be  taken into  consideration  in determining the gross  assets  under section 39 of the Act. 435 Counsel for the appellants submitted that the High Court did not  deal with the finding of the Compensation Officer  with regard  to income from poola grass for the Fasli years  1352 and 1353 in respect of Prithipur forest.  The Lalas  claimed for  the  Fasli year 1352 a sum of Rs. 4600/-  and  for  the Fasli  Year  1353 a sum of Rs. 4500/- as income  from  poola grass.  The Compensation Officer gave the additional  reason for  rejecting  the income from poola grass  for  these  two years  that in the extract of khatauni it was not  mentioned as to what the source of income was.  Exhibit P-3 being  the extract  from  khatauni for the Fasli year 1352  would  show that  Rs.  4600/- was the rent for clause  13  sawai  items. Again,  Exhibit P-10 for the Fasli year 1353 in  respect  of Prithipur  forest  would  show the sum  of  Rs.  45001/-  on account of rent for sayar.  Therefore when the  Compensation Officer  will  deal  with sayar income  he  will  take  into consideration Exhibits P-3 and P-10 for the Fasli years 1352 and 1353. In  the  High Court it was contended that  the  Compensation Officer was wrong in taking 25 years to be the period on the basis of which annual average income of the forest was to be computed under section 39(1)(e) of the Act.  The High  Court did not accept that contention.  This contention was not re- peated in this Court. The High Court held that the Compensation Officer was  wrong in  arriving  at  the average annual income  by  adding  the annual income on the, basis of a period of 25 years and  the appraisement  of  the annual yield on the date  of  vesting. The  High Court said that the two clauses in section 39  (1) (e)  of the Act were independent methods of finding out  the average  annual income from forest and it was  not  intended that  the  average  annual income should be  arrived  at  by adding the two methods.  Section 39(1)(e) of the Act  speaks of  computation of average annual income from forest (i)  on

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the  basis of income- for a period of 20 to 40  agricultural years  immediately  preceding  the date of  vesting  as  the Compensation Officer may consider reasonable and (ii) on the appraisement  of the annual yield of the forest on the  date of  vesting.   The two are separate matters.  It  cannot  be said that the Compensation Officer will adopt either of  the clauses.  The Compensation Officer has to refer to both  the clauses  in order to compute the average annual income  from forest.   The  High  Court is correct in  holding  that  the average annual income from forest under section 39(1)(e)  of the  Act cannot be computed by arithmetical addition of  the figures  arrived  at on the basis of clause (i) and  on  the basis of clause (ii).  It is the average annual income  from forest which is to be computed.  The words of importance are ’average ,annual income’.  Under the first clause the actual income de- 436 rived from the forest for a number of years before the  date of   Vesting  as  the  Compensation  Officer  may   consider reasonable is to be taken and the average calculated.  Under the second clause the annual yield as on the date of vesting is  to be appraised. The Compensation Officer is to  compute the  average income by taking recourse to both the  methods. The second clause which speaks of appraisement of the annual yield  will be done inter alia by taking into  consideration the number and age of trees, the area of cultivation and the produce. In the present appeals the High Court found on the materials that the forest had been felled almost completely during the last  9  or  10 years preceding the date  of  vesting.   The evidence further established that there were no mature trees for  felling and that the bulk of the crop that had  existed had  grown  within a period of 8 years.   It  was  therefore clear  that the whole of the forest’s income derived  during those  9  or 10 years for which accounts of the  Lalas  were available represented the whole growth of the forest  during the last 40 years and even if the forest had been  gradually cut  during the last 40 years the income derived  would  not have  been  substantially more than what have  been  derived during the last 9 or 10 years preceding the date of vesting. The  High Court assessed the evidence.  We do not find  that there  is  any  error  in  regard  to  the  appreciation  or assessment of evidence by the High Court and the  conclusion that under section 3 9 (1) (e) of the Act the annual average income  of  Prithipur  forest came to  Rs.  4396.56  and  of village Chharba at Rs. 2039.68. Counsel  for the appellants contended that the  Compensation Officer  did not consider the entire forest income  for  the Fasli  years  1352, 1356, 1357 and 1358  for  the  Prithipur forest on the ground that the entire income was not the sale price  of forest but that the Lalas worked the forest and  a portion  of  the income was from the sale of the  timber  of that  forest.  The High Court rightly held that  the  forest income was referable to the price of the standing timber and income which the Lalas derived by processing wood would  not be within forest income. For  these reasons we uphold the judgment and order  of  the High Court with this modification that when the Compensation Officer will deal with the income from poola grass as  sayar income as derived by the High Court the Compensation Officer will  also  take into consideration the  income  from  poola grass  for the Prithipur forest for the years 1352 and  1353 Fasli. In  the facts and circumstances of the case the appeals  are dismissed.  The parties will pay and bear their own costs.

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V.P.S.                                               Appeals dismissed. 437