REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS. 92-105 OF 2004

NAVANATH & ORS.      … APPELLANTS

Versus

STATE OF MAHARASHTRA     … RESPONDENT

WITH  

{C.A. No. 106/2004, C.A. Nos. 107-113/2004, C.A. Nos. 114-118/2004, C.A.  No.  119/2004,  C.A.  Nos.2591-2597/2009(@  SLP[C]  Nos.2804- 2810/2004}

J U D G M E N T

S.B. SINHA, J.

1. Leave granted in Special Leave Petition (Civil) Nos 2804-2810 of

2004.  

2. These appeals by special leave arise out of a common judgment and

order  dated  20th/21st March,  2002  passed  by  a  Division  Bench  of  the

Bombay High Court allowing the appeals preferred by the State in part

from a judgment and award dated 24.07.1995.

3. The  Government  of  Maharashtra  intended  to  undertake

construction of a medium irrigation project on the Uthala River at Patoda

Taluka in  the  District  of  Beed commonly known as  “Uthala  Irrigation

Project”. For the said purpose, lands situated at village Tagadgao were

acquired. The total land sought to be acquired measured 182 Hectares and

belonged to 274 individual land owners.  A notification under Section 4

of the Land Acquisition Act, 1894 (for short, “the Act”) was issued on

6.10.1988.   A  declaration  under  Section  6  of  the  Act  was  made  on

6.7.1989.  An award was published on 29.06.1990.

4. The acquired lands were classified in two categories; (1) Bagayat

lands (irrigated lands); and (2) Jirayat lands (non-irrigated lands but are

otherwise cultivable).   

In these appeals, we are not concerned with the question as regards

classification of the acquired lands as also the amount of compensation

computed therefor.  

5. Claimants – appellants, however, contend that the lands had fruit

bearing trees, wells, pipe lines, structures of cow-shed/Gotha and Bandh

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etc.  Indisputably, the Special Land Acquisition Officer classified the said

lands into following six categories:

Grou p No.

Total Survey Numbers under Acquisitio n  

Total Area Acquired  

Hec. Are

Total  Pot- Kharab  

Hec. Are

Area Cultivable

Hec. Are

Compen-- sation Rate  paid (per  Are) Rs.

I 8 36.24 0.89 35.35 130.00 II 19 87.06 1.81 85.25 150.00 III 13 47.71 0.82 46.89 170.00 IV 4 10.36 - 10.36 190.00 V - - - - - VI 2 1.13 - 1.13 230.00 Total 46 182.50 3.52 178.98

6. The Special Land Acquisition Officer in his award fixed the market

value of the said lands from Rs.130/- to Rs.230/- per Acre.  In addition

thereto, however, compensation was, inter alia, granted for fruit bearing

trees, wells, pipe lines, structures of cow-shed/Gotha and Bandh etc. inter

alia  holding that  some of the lands  under acquisition  were Jirayat  and

some were Bagayat  lands but  not notified as such.   Most  of the lands

having dry cultivation  are  found to  be of  medium to  superior  quality.

Relying on the 7/12 extract entered in the revenue record for the last three

years, it was held that though the lands had been shown as wetlands but

they  are  in  fact  seasonally  irrigated,  and  hence  cannot  be  treated  as

bagayat  lands.   The  valuation  of  the  said  lands,  therefore,  was  made

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treating them as Jirayat lands. Statutory allowance at the rate of 30% over

the amount of compensation was also granted as provided by Section 23

(2) of the Act.  Additional compensation at the rate of 12 per centum per

annum of the market value from the date of publication of notification

i.e., 28.10.1998 till the date of award, i.e., 27.7.1990, was also granted.  

7. Reference  in  terms  of  Section  18  of  the  Act  was  made  by  the

Collector at the instance of appellants herein to the Reference Court.    

Dr. Mukund Ramrao Gaikwad (PW2) was examined.   He was a

Horticulturist.  Appellants  also  examined  one  Ramhair  Bayaji  Ghodake

(PW3) a Consulting Engineer.   

The  State  on  its  behalf  examined  Ramkrishna  Ganpatrao

Chaudhari,  Horticulture Inspector  working in the Office of the Deputy

Director  of  Horticulture,  Sangli  and  Kisan  Amrutrao  Widekar,  sub-

Divisional  Engineer  in  the  office  of  Executive  Engineer,  Aurangabad

Irrigation Division on its behalf.  

8. The Reference Judge examined all the matters referred to him on a

case  by  case  basis.   Indisputably,  out  of  182  reference  cases,  in  108

matters witnesses were examined and documents were proved.  However,

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in 74 matters neither any witness was examined nor any document was

proved.  

9. The  Reference  Court  classified  the  lands  principally  in  two

categories.  It  disagreed  with  the  opinion  of  the  Land  Acquisition

Collector  that  only  the  entries  made  in  the  revenue  records  of  right

particularly the registers 7 and 7/12 were to be considered for the purpose

of determining the market value of the lands acquired opining that the

land revenue assessment only is one of the factors but together therewith,

comparable sale instances, quality and fertility of the lands acquired, their

potential value, location, etc. were also relevant.  

10. Upon considering the materials  brought  on record by the  parties

and  having  regard  to  the  depositions  of  witnesses  with  regard  to  the

quality of the soil, the potential value of the lands, nature of cultivation,

i.e.,  whether  they  were  Bagayat  or  Jirayat,  the  nature  of  crops  raised

therein, i.e. like Sugarcane, Groundnut, Tamarind, Chilly, Cotton, Wheat,

etc.;  whereas  a  sum of  Rs,1,00,000/-  per  hectare  was  fixed  as  market

value  for  the  Bagayat  lands;  a  sum  of  Rs.  75,000/-  per  hectare  was

determined for the Jirayat lands besides other statutory dues.  

11. The  learned  Reference  Judge  in  its  judgment,  furthermore,

considered  the  question  as  to  whether  the  appellants  were  entitled  to

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additional  amount  of  compensation  towards  the  value  of  fruit  bearing

trees or not holding that different varieties thereof like Mango, Lemon,

Guava,  Pomegranate,  Coconut,  Custard  apple,  Borr  Mosumbi,  etc.  had

also been standing on the said lands at the time of their acquisition and

having regard to the fact that no evidence was adduced rebutting the same

on behalf of the State, awards on that basis were passed.   

12. As  regards  the  potentiality  and  fertility  of  lands,  the  learned

Reference Court held that the existence of irrigation facility in the form of

wells and development of orchards on the acquired lands shows that they

had huge potential value and no evidence in rebuttal was adduced by the

respondents on this point.   

It was furthermore held that sale instances from Village Tagadgaon

itself and the sale instances in respect of the lands situated in the vicinity

of  the  acquired  lands,  which  took  place  on  or  about  the  date  of

notification under Section 4 of the Act, can be considered as comparable

sale instances for arriving at adequate market value of the acquired lands.

As regards Bagayat and Jirayat lands, the learned judge held the

sale instance dated 25.4.1985 having been executed three years prior to

the  date  of  publication  may also  be  taken  into  consideration  in  terms

whereof the Bagayat land was sold at Rs.1200/- per Are.  Similarly, sale

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instances dated 3.9.1983 executed three to five years prior to the date of

publication was also taken into account whereby Bagayat Land was sold

at  Rs.750/-  per  Are.   Considering  the  above  two  sale  instances,  the

learned Reference Court awarded Rs.1000/- per Are for Bagayat Land.

The  post  sale  instances  dated  18.8.1990  and  1.4.1993  were  moreover

taken into account for fixing the market value for Jirayat Lands, in terms

whereof  said  lands  were  sold  at  the  rate  of  Rs.1375/-  per  Are  and

Rs.1562/- per Are.  The learned Reference Judge fixed the market value

for Jirayat Lands at the rate of Rs.750/- per Are.  It was also noticed that

the possession was taken on 1.8.1990.  

As regards fruit bearing trees, it held that no reliance can be made

either on the evidence adduced by the Respondents or claimants.  It was

observed that as it is difficult to arrive at exact figure of damages, some

guess work was necessary.  The valuation report was prepared as per the

Guidelines issued by the department.  It was furthermore held that unless

exact  age  of  the  trees  as  well  as  their  fruit  bearing  capacity  was

ascertained, it was not possible to fix the exact value of the damages with

regard thereto.

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13. The State preferred an appeal thereagainst before the High Court

questioning  the  correctness  of  the  said  award  of  the  Reference  Court,

inter alia, on the following grounds:

i. The  sale  instances  relied  upon  by  the  Land  Acquisition

Collector  being  genuine  and  comparable;  the  Reference

Court was not justified in discarding the same.

ii. The  sale  instances  which  were  being  relied  upon  by  the

Reference  Court  involved  transactions  between  two  real

brothers and therefore not genuine.

iii. No additional amount of compensation for the fruit bearing

trees  and  for  building  of  ‘Bundhs’  etc.  could  be  awarded

because the amount of compensation was determined on the

basis that the nature of the lands was Bagayat.  

14. By reason of  the impugned judgment and order,  the High Court

allowed the said appeals in part upon re-classifying the entire land under

acquisition into four groups,  namely, (i)  Pot-Kharab land;  (ii)  dry land

under cultivation; (iii) land under seasonal irrigation; and (iv) land under

perennial irrigation.   

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On the basis of the aforementioned sub-classification, the market

value was determined at (i) for perennially irrigated land at Rs.1,00,000/-

per hectare; (ii) for dry land at Rs.50,000/- per hectare, (iii) for land under

seasonal irrigation at Rs.75,000/- per hectare and (iv) for Pot-Kharab land

at Rs.10,000/- per hectare.   

In support of the said conclusion, the learned judge opined:-

i. both  the  parties  agree  that  the  comparable  sales

instances  method  of  valuation  as  adopted  by  the

Reference Court has been rightly adopted.   

ii. 7/12 extracts show the cultivation in different seasons,

plantation of fruit bearing trees as well as the seasonal

and perennial  nature of irrigation available either by

well water or by lift irrigation.   

iii. The  Land  Acquisition  Collector  had  set  out  in  the

award  E-Statement  of  three  types  of  lands  viz.  dry,

seasonally irrigated and perennially irrigated lands.  In

addition,  number  of  fruit  bearing  trees  had  been

counted which was not disputed.   

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iv. Land  Acquisition  Officer  granted  compensation  for

the  fruit  bearing  trees  on  the  basis  of  capitalization

method in  addition  to  the market  value  of  the  land.

The Reference Court had also done the same thing on

the basis of evidence of Expert.

v. Compensation granted separately for the land as also

on the basis of valuation of the fruit  bearing trees is

impermissible in law.

vi. When  the  potential  of  the  land  is  taken  into

consideration the irrigation facilities available and the

crop pattern, the acceptable method of fixing market

value should be only comparable sale instances.

vii. Plantation  of  fruit  bearing  trees  having  commenced

from  the  year  1986-1987,  no  compensation  was

payable thereto.

viii. When  the  Section  4(1)  Notification  was  issued  the

trees planted were of the age of two to three years and,

thus, possibility of obtaining undue advantage therefor

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by the land-owners by planting trees cannot be ruled

out.   

ix. Acquired lands should be reclassified into four groups.

x. Reference Court while fixing the market value of the

Bagayat  Land  at  Rs.1,00,000/-  per  Hectare  wrongly

decided  the  market  value  of  Jirayat  Land  at

Rs.75,000/-, and reduced the value of Jirayat Land at

Rs.50,000/- per hectare.

xi. The  Land  Acquisition  Officer  did  not  step  into  the

witness box and none of the sale instances relied on by

the State was brought on record.

xii. It is appropriate to hold that the perennially irrigated

land could be valued at Rs.1,00,000/-.

xiii. No additional compensation is payable for well, fruit

bearing trees and the pipe line etc.

xiv. The claimants would be entitled for loss of structure

like cow shed or storage facility and compensation for

the big trees like tamarind, Mango and Neem Trees on

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the basis of the value of the timber wood or fire wood,

as the case may be.

xv. The Correct value for the timber wood for these trees

could  be  fixed  at  Rs.500/-  for  Babool,  Neem  and

Tamarind  trees.   So  far  as  the  Mango  trees  are

concerned, the value of fire wood would be Rs.200/-

per each tree.   

xvi. No extra compensation is payable on account of fire

wood or timber wood in respect of fruit bearing trees.

xvii. Compensation for structures like Cow-shed/Gothas be

paid  as  per  the  Report  at  Ex.96  made  by  Kisan

Amrutrao Wadekar (Horticulturist Inspector).

Aggrieved  by  and  dissatisfied  with  the  impugned  judgment,

appellants are before us.

15. Mr. Shyam Divan, learned Senior Counsel appearing on behalf of

appellants would contend:

i. The  State  could  not  have  questioned  the  classification  of

land or  valuation  of  the  fruit  bearing  trees  in  view of the

award made by the Land Acquisition Collector.   

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ii. In view of the findings of fact arrived at by the High Court

itself  though  the  sale  instances  brought  on  record  by

appellants  before  the  Reference  Court  were  genuine  and

there was no evidence brought on record by the respondent-

State to rebut the same, it must be held to have committed a

serious error in passing the impugned judgment.  

iii. The High Court committed a serious error in re-classifying

the acquired lands into four categories although no material

had  been  brought  on  record  contradicting  the  evidence

adduced on behalf of appellants.

iv. The State,  having accepted the amount of compensation at

the rate of Rs.75,000/- per hectare in respect of land of an

adjoining village, namely, Padali, could not be permitted to

question the rate of compensation awarded in respect of the

Jirayat  land  situated  in  the  village  in  question,  namely,

Tagadgao.   

v. The  High  Court  furthermore  committed  a  serious  error  in

interfering with the amount of compensation awarded by the

Reference Court in respect of fruit bearing trees, well, pipe,

lines, structures of cow-shed/Gotha and Bandh etc.  

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16. Mr. Chinmoy Khaladkar,  learned counsel  appearing on behalf of

the respondent, on the other hand, would contend:

i. The Special Land Acquisition Officer having proceeded to

classify the land as also the amount of compensation payable

in respect of the trees on the basis of the revenue records and

in  particular  7/12  extracts,  the  impugned  judgment  is

unassailable.  

ii. The High Court cannot be said to have committed any error

in holding that a survey was conducted prior to issuance of

the  notification  under  Section  4  of  the  Act,  it  can  be

presumed that the land owners planted fruit bearing trees for

obtaining  higher  amount  of  compensation  as  has  been

observed by this Court  in  K.A.A. Raja & ors.  vs.  State of

Kerala & anr. [(1994) 5 SCC 138].   

iii. Amount of compensation cannot be determined for the land

both on the basis of its classification as also on the basis of

fruit bearing trees separately.

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iv. The  Land  Acquisition  Officer  having  considered  the  7/12

extracts for determining the age of the trees, the Reference

Court committed a serious illegality in interfering therewith.

17. The  purpose  for  which  the  lands  have  been  acquired  is  not  in

dispute.  We have noticed hereinbefore that a large tract of lands situate

in different villages were acquired.  Evidently, they belong to different

categories. Some of the lands were Pot – Kharab lands, i.e., waste lands.   

A holder of a land has a statutory right to ask the Collector by a

written application that  the matter  be referred for determination  of the

court in regard to amount of compensation in terms of Section 18 of the

Act while taking objection to the amount of compensation awarded by the

Collector.  The owner of the land may raise various contentions including

the measurement of the land, the amount of compensation, the persons to

whom it is payable, etc.   

For the purpose of getting the amount of compensation determined,

the applicant may furthermore raise contentions as regards classification

of  land,  non-grant  of  compensation  under  different  heads,  non-grant

and/or inadequate grant of compensation under different Heads, etc.  

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18. The  Reference  Judge,  thus,  has  a  duty  to  consider  all  such

objections.  For  the  said  purpose,  opportunities  must  be  given  to  the

applicants to establish that the findings arrived at by the Collector in his

award  in  respect  of  grant  of  compensation  were  based  on  a  wrong

classification of land and/or ignoring the relevant materials therefor.   

19. At least in 108 cases, applicants examined themselves.  Their oral

depositions as  regards  classification of land,  the number and nature of

fruit  bearing trees, the age of the trees and other relevant  factors  were

brought  on  record.   Apart  from  examining  the  owners  of  the  lands

individually,  common evidence by examining a Horticulturist,  namely,

Dr.  Mukund  Ramrao  Gaikwad  and  a  Consulting  Engineer,  namely,

Ramhair Bayaji Ghodake was adduced.   

20. The  State,  however,  did  not  examine  any  witness  except  one

Ramkrishna Ganpatrao Chaudhari, Horticulture Inspector and one Kisan

Amrutrao Widekar, Sub-Divisional Engineer.   

The Reference Court gave detailed reasons as to why the amount of

compensation  awarded  by  the  Collector  should  be  enhanced  having

regard to the classification of lands as also on the ground that there were

fruit bearing trees thereupon.  The learned Reference Judge found that in

the matter of the number and nature of trees as also value thereof, there

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does  not  exist  much  difference  between  the  opinion  of  the  experts

examined on behalf  of appellants and those examined on behalf of the

State.  

21. The  High  Court,  however,  while  accepting  that  there  were

comparable sale instances and as regards the quality of the land, crops

pattern  and  the  irrigation  facilities  as  well  as  the  development  of

orchards/sericulture, observed:

“They show the cultivation in different seasons, plantation of fruit  bearing trees as well  as the seasonal  and  perennial  nature  of  irrigation available  either  by  well  water  or  by  lift irrigation.   The cultivation  pattern  of different crops has not been seriously disputed and they are  Jowar,  Bajari,  Onions,  wheat,  sunflower, turmeric and sugarcane (though in selected few cases).  So far as the fruit trees are concerned, undoubtedly  there  are  some  claims  which involved  the  trees  like  tamarind  and  mangos which  have  grown on their  own but  there  are some orchards which were developed and they contained the trees like mangos, pomegranates, Guava, Paper Lemon and Sweet Lime.  Out of these  fruits,  it  is  of  common  knowledge  that only  the  plantation  of  sweet  lime  trees  may require  irrigation  facility  round  the  years, whereas  all  other  fruits,  including chikoo fruit trees,  do  not  require  such  round  the  year irrigation facility.  Similarly, amongst the crops it  is  only  sugarcane  which  requires  irrigation facility round the year.  Even if there is water source available by way of a well in a particular land,  it  could  be  a  source  of  irrigation

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seasonally and there is no guarantee that it could be a perennial source of income.”

22. The High Court despite noticing that the Land Acquisition Officer

had  also  granted  compensation  on  the  market  value  as  also  separate

compensation  for  the  fruit  bearing  trees  on  the  basis  of  the  valuation

made  by the  Horticulture  Inspector,  opined  that  compensation  granted

separately  for  the  land  and  valuation  of  the  fruit  bearing  trees  is

impermissible in law.  The High Court, however, accepted that while the

award  of  the  Reference  Court  can  be  set  aside  having  regard  to  the

provisions  contained  in  Section  25  of  the  Act,  the  amount  of

compensation  awarded  by  the  Land  Acquisition  Officer  in  terms  of

Section 11 of the Act should not have been interfered with.   

23. The opinion of the High Court that saplings varying from 1 to 3

years of age are available for plantation from the Government as well as

private horticulture nurseries is based on surmises and conjectures.  The

State does not appear to have raised such a contention, nor any material

for formation of such an opinion was brought on record.   

24. In certain cases, the conduct of a person claiming higher amount of

compensation by taking recourse to certain acts to show development of

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the lands for obtaining better compensation may be a subject matter of the

judicial notice as has been done by this Court in K.A.A. Raja (supra), but

even therein some materials were available for arriving at a conclusion as

would appear from the following observation:

“This  case  itself  establishes  from the  record that, but for the report of the Forest Officer, the report given by the Subordinate Officers of the Revenue Department would have persuaded the courts  to  accept  the  report  of  the  Revenue Officers  that  the  plantation  was maintained  of high  standards  and  in  good  conditions  which was belied by the report of the Forest officials, as  accepted  by  the  High  Court.  Therefore,  it would  be  necessary  in  every  case  to  place  a correct report before the reference court the true state  of  affairs  regarding  the  number  of  trees, their  ages,  their  yield,  in  particular  where capitalisation  method  is  to  be  adopted  to determine  the  market  value  of  the  acquired land.”

It is on the aforementioned premise, this Court opined that it would

be necessary in every case to place a correct report before the Reference

Court, the true state of affairs regarding the number of trees, their age,

yield,  in  particular  where  capitalization  method  is  to  be  adopted  to

determine the market value of the acquired land.  Relying upon its earlier

decision  in  Periyar  and  Pareekanni  Rubbers  Ltd.  vs.  State  of  Kerala

[(1991) 4 SCC 195] it was held:-

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“In  Periyar  and  Pareekanni  Rubbers  Ltd.  v. State of Kerala [(1991) 4 SCC 195] this court held that it is the duty of the court to determine just and fair market value and the conduct of the Land Acquisition Court or officer in that behalf, if  found  to  be  a  misconduct  the  officer  was amenable  to  disciplinary  proceedings  for misconduct.  That  apart  the  claimants  should produce necessary evidence on the value of land since the burden of proof is on them to establish the  higher  compensation  claimed.  Equally  the Officer-in-Charge has responsibility and duty to place  all  material  and  relevant  evidence  in rebuttal of the enhanced claim. As a part thereof the condition of the trees, the ages of the trees their  number  and  the  total  yield  derived  from the  trees  being  material  and  relevant  facts  to adjudge not only the value of the produce, but also to apply suitable multiplier to determine the market  value  as  compensation.  The  court equally has duty, on an overall consideration of the  facts  and  circumstances  available  in  the particular case on hand,  while determining the number  of  trees,  their  ages,  the  yield  and  the price  fetched  or  likely  to  fetch  in  the  open market  should  apply  appropriate  multiplier  in determining  the  market  value  of  the  grove  or plantation  etc.  In  any  case  for  want  of appropriate  evidence  as  to  multiplier  adduced by either party, we take seven years' multiplier for  purpose  of  capitalisation  of  net  income, though  income  may  vary  depending  on evidence.

25. Each case, however, must be considered on its own facts.  Whereas

in  K.A.A. Raja (supra) a proposal  was made to acquire 52.88 acres of

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cardamom plantation, in Periyar and Pareekanni Rubbers Ltd. (supra), the

proposal  was  to  acquire  land  where  rubber  trees  were  grown.   It  is,

therefore, in our opinion, impermissible to take recourse to surmises and

conjectures across the board that even the agriculturist of a remote village

whose  lands  are  being  acquired  for  undertaking  an  irrigation  project,

would take recourse thereto.  

26. No  rule  in  absolute  terms,  in  our  opinion,  can  be  laid  down

therefor.   In the instant  case,  the learned Reference Judge had made a

scrupulous enquiry in regard to each and every claim.  It had taken into

consideration  the evidences  adduced on behalf  of  both  the parties  not

only with regard to the classification of the land but also the number of

trees, their age, the quality, etc.  

27. We may notice  that  the  learned Reference Judge  determined the

question  in  regard  to  the  classification  of  land  on  the  basis  of  the

evidences  adduced  before  it  by  individual  land  owners;  by  way  of

example, having regard to the fact that claimants had failed to prove that

the  land  had  any  irrigational  facility,  the  learned  Reference  Judge

classified the lands as Jirayat lands.  If the State was aggrieved thereby, it

was bound to show that the findings arrived at by the Reference Court is

not  sustainable having regard to the materials  brought  on record.   The

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finding of fact arrived at by the learned Reference Judge on the basis of

the  materials  brought  on  record,  in  our  opinion,  could  not  have  been

interfered with by the High Court on the surmises and conjectures.  Apart

from the fact that the State had not examined any witness in support of its

case, no oral or documentary evidence other than the revenue entries was

adduced.  We may notice that even the Horticulturist examined on behalf

of the State made its report in terms of the guidelines issued by the State

itself.   

It is  one thing to say that  any circular  letter  issued by the State

allowing certain guidelines are not applicable but it is another thing to say

that  when the officers  of  the  State  themselves  prepare a report  on the

basis  thereof,  the  High  Court  would  interfere  therewith  on  certain

assumptions.  In short, if the Reference Court had considered the matters

on case by case basis, the State should have pointed out before the High

Court as to on what basis it intended to question the correctness of the

said finding.   

28. Reliance has been placed by Mr. Khaladkar on P. Ram Reddy and

Ors.  vs. Land  Acquisition  Officer,  Hyderabad  Urban  Development

Authority, Hyderabad and Ors.   [(1995) 2 SCC 305], wherein one of the

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questions  formulated  was  the  effect  of  non-cross-examination  or

ineffective cross-examination of witnesses for the claimant.  It was held:

“It  is,  no  doubt  true,  that  whenever  oral evidence  is  adduced  by  parties  on  certain matters in controversy, it may become difficult for Court to overlook such evidence, if it is not shown  by  effective  cross-examination  of  such witnesses who have given such evidence or by adducing contra-evidence that the oral evidence was unreliable or the witnesses themselves are not  credit  worthy.  But,  in  land  acquisition references before Civil Courts, when witnesses give oral  evidence in  support  of the claims of claimants  for  higher  compensation  the  in- effective cross-examination of such witness, is not an uncommon feature if regard is had to the manner  in  which  claims  for  enhanced compensation  in  land  acquisition  cases  are defended  in  courts  on  behalf  of  the  Stale, Indeed, when a question arose before this Court whether  the  Court  is  bound  to  accept  the statement of witnesses only because they have not been effectively cross-examined or evidence in rebuttal has not been adduce, it was observed by this Court in Chaturbhuj Pande and Ors. vs. Collector; Raigarh AIR (1969) S.C. 255, thus :

‘It is true that the witnesses examined on behalf  of  the  appellants  have  not  been effectively cross-examined. It is also true that  the  Collector  had  not  adduced  any evidence  in  rebuttal;  but  that  does  not mean  that  the  court  is  bound  to  accept their  evidence.  The  Judges  are  not computers......they are bound to call  into aid  their  experience  of  life  and  test  the evidence on the basis of probabilities.’”

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The said decision would not,  however,  apply in cases where not

only there had been effective cross examination but also where evidence

had been adduced in rebuttal of the evidences adduced by the claimant.  It

is  furthermore  not  a  case  that  there  had  been  no  effective  cross

examination of the witnesses and in fact no such ground had been taken

before the High Court.   The High Court has also not arrived at such a

finding.  We, therefore, fail to appreciate as to why the said decision has

been relied upon.   

29. Determination  of  compensation  of  lands  on  the  basis  of

capitalization method in relation to fruit bearing trees is well known.  It

has  been  so  held  in  Kerala  State  Electricity  Board  vs.  Livisha  & ors.

[(2007) 6 SCC 792], stating:-

“11. So far as the compensation in relation to fruit bearing trees are concerned the same would also depend upon the facts and circumstances of each  case.   We  may,  incidentally,  refer  to  a recent  decision  of  this  Court  in  Land Acquisition  Officer,  v.  Kamandana Ramakrishna Rao [(2007) 3 SCC 526] wherein claim on yield basis has been held to be relevant for  determining  the  amount  of  compensation payable under the Land Acquisition Act,  same principle  has  been  reiterated  in  Kapur  Singh Mistry v.  Financial  Commission  and  Revenue Secretary  to  Govt.  of  Punjab  and  Ors. 1995 Supp.  (2)  SCC  635,  State  of  Haryana v. Gurcharan Singh and Anr. 1995 Supp. (2) SCC 637, para 4, and Airports Authority of India v.

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Satyagopal Roy (2002) 3 SCC 527. In Airport Authority (Supra), it was held: (SCC p.533 para 14)

‘14.  Hence,  in  our  view,  there  was  no reason for the  High Court  not  to follow the  decision  rendered  by  this  Court  in Gurucharan  Singh's  case  and  determine the  compensation  payable  to  the respondents on the basis of the yield from the trees by applying 8 years' multiplier. In this view of the matter, in our view, the High Court  committed  error  apparent  in awarding  compensation  adopting  the multiplier of 18.’

In  State of J & K vs.  Mohammad Mateen Wani & ors.  [(1998) 6

SCC 233], it was categorically held:

“10. As regards the compensation in respect of fruit bearing trees and tubewells the High Court had relied upon the Government circular which allows compensation in respect of fruit bearing trees and tubewell separately. Nothing contrary has been brought  to  our notice  and,  therefore, we do  not  think  it  proper  to  disturb  the  said finding.”

30. It  is  of  some  significance  to  notice  that  the  ‘Horticulturist’

examined on behalf of the State itself had referred to the table which is

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considered  to  be  an  authority  for  the  purpose  of  determining  the

compensation payable in respect of the fruit bearing trees.

Not only the authority of the said table has been resorted by the

Horticulturist examined on behalf of the State but also acknowledged by

the Horticulturist examined on behalf of appellants.   

31. Our attention, however, has been drawn to a decision of this Court

in State of Haryana vs. Gurcharan Singh and another etc. [1995 Suppl. (2)

SCC  637]  by  Mr.  Khaladkar  to  contend  that  the  determination  of

compensation for land on the basis of its valuation and again on the basis

of the fruit bearing trees should not be done separately.   

32. Indisputably,  valuation  of  agricultural  land on the one hand and

valuation  of  orchard  and  forest  on  the  other  would  stand  on  different

footings.   Whereas  in  the  former  case,  the  known  legal  principles

particularly with reference to the exemplars will have to be applied, in the

latter a different principle, namely, multiplier of eight or ten, as the case

may be, on the basis of the multiplicand, namely, yield from the trees or

plantation would be applicable.  [See  Kerala State Electricity Board  vs.

Livisha & ors. (2007) 6 SCC 792, where multiplier of eight was used and

Assistant  Commissioner-cum-Land  Acquisition  Officer,  Bellary  vs.  Sri

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S.T. Pompanna Setty [(2005)  9 SCC 662] where multiplier of ten was

used]

In some decisions of this Court even higher multiplier was used.

33. The legal principle laid down in this behalf in a catena of decisions

of this Court is that the market value of the land cannot be determined

both  on  the  basis  of  sale  instance  as  also  on  capitalization  method

keeping in view the fact that it had fruit bearing trees.  But, in this case,

nothing has been pointed out before us that the fruit bearing trees in large

numbers were existing in the agricultural  land itself  and the Reference

Court had valued the same land by adopting two different methods.  Had

such  a  position  been  existing,  the  Land  Acquisition  Officer  himself

and/or the Horticulturist and the Consulting Engineer appointed on behalf

of the State would not have taken recourse thereto.  They are experts in

their own fields.   The Land Acquisition Officer is presumed to know the

legal  principles  governing  valuation.  Furthermore,  as  noticed

hereinbefore, recourse to the determination of amount of compensation of

fruit bearing trees have been taken keeping in view the guidelines issued

by the State itself.   

34. It is furthermore not a case where the same land has been valued

twice  once  as  an  agricultural  land  and  again  as  an  orchard  or  forest.

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When an orchard is  acquired the nature thereof can be found from the

revenue  records  of  right  and  similarly  when  an  agricultural  land  is

acquired the nature thereof can be ascertained from the revenue records.

If, however, on an agricultural or other categories of land including the

other categories referred to by the Reference Judge or by the High Court

in which a few trees stand, the question as regards the valuation of the

said trees as such must be ascertained for the purpose of finding out the

actual market value of the land acquired.  The Land Acquisition Collector

and the learned Reference Judge had merely taken recourse to the said

procedure.  A distinction must further be borne in mind where common

evidences  are adduced in respect  of a large number of parties  by both

sides and,  in particular,  the principle of valuation having regard to the

peculiar features of the village in question and acquisition of land which

belongs to one or two persons and specific features of the land for the

said purpose may have to be taken into consideration.  

35. Indisputably,  for  the  purpose  of  computation  of  amount  of

compensation  a  large  number  of  factors  have  to  be  taken  into

consideration,  namely,  nature  and quality of  land,  whether  irrigated  or

unirrigated, facilities for irrigation like existence of well etc., presence of

fruit  bearing  trees,  the  location  of  the  land,  closeness  to  any  road  or

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highway,  the  evenness  thereof  whether  there  exists  any  building  or

structure.  [See Union of India vs. Ranchod (AIR 2008 SC 938).    

36. Recently, in Kerala State Electricity Board (supra), this Court held

that  so  far  as  the  compensation  in  relation  to  fruit  bearing  trees  are

concerned, the same would also depend upon the facts and circumstances

of each case; in support whereof it, inter alia, noticed the decision of this

Court in  Airports Authority of India  vs.  Satyagopal Roy [(2002) 3 SCC

527], wherein it was stated:

“Hence, in our view, there was no reason for the High Court not to follow the decision rendered by  this  Court  in  Gurcharan  Singh  case  and determine  the  compensation  payable  to  the respondents  on the basis of the yield from the trees  by applying  8  years’  multiplier.   In  this view of the matter, in our view, the High Court committed  error  apparent  in  awarding compensation adopting the multiplier of 18.”

The manner, in which the High Court has dealt with the issue, in

our opinion, cannot be appreciated.

37. A court of law must base its decision on appreciation of evidence

brought on record by applying the correct legal principles.  Surmises and

conjectures alone cannot form the basis of a judgment.   

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38. We, for the foregoing reasons, are not in a position to agree with

the judgment of the High Court.  It is set aside accordingly and that of the

Reference Court restored. The Appeals are allowed with costs.  Counsel’s

fee assessed at Rs.25,000/-.   

……………….…..………….J. [S.B. Sinha]

...………………..………..…J.    [Cyriac Joseph]

New Delhi; April 15, 2009

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