Supreme Court Enhances Compensation for Pomegranate Trees in Land Acquisition Case: Nelatur Sampoornamma vs. Special Deputy Collector (2017)

Introduction

Date of the Judgment: July 19, 2017

Citation: 2017 INSC 664

Judges: Kurian Joseph, J., R. Banumathi, J. (authored the judgment)

How should the value of fruit-bearing trees be determined when land is acquired by the government? The Supreme Court of India recently addressed this question in a case involving the acquisition of land with pomegranate trees. This case clarifies the method for calculating compensation for such trees, ensuring fair recompense for landowners. The Supreme Court, in this case, enhanced the compensation awarded to the appellant for the pomegranate trees on her acquired land.

Case Background

The case revolves around the acquisition of land in Dachur Village, Andhra Pradesh, for the Telugu Ganga Project. The appellant, Nelatur Sampoornamma, owned 0.15 acres of land containing 45 pomegranate trees. On March 30, 1990, a notification was issued under Section 4(1) of the Land Acquisition Act, 1894, for the acquisition of this land. The Land Acquisition Officer initially valued the pomegranate trees at a very low rate, leading the appellant to seek a higher compensation. The initial award was passed on September 14, 1992, fixing the market value of the land at Rs. 7,500 per acre and the pomegranate trees at Rs. 42.17 per tree. Dissatisfied with this valuation, the appellant sought a reference to the Civil Court for enhancement of compensation.

Timeline:

Course of Proceedings

The matter was initially referred to the Senior Civil Judge, Gudur, Nellore District. The Reference Court enhanced the market value of each pomegranate tree to Rs. 65, applying a multiplier of ‘2’ based on G.O.Ms. No.601 dated 19.06.1992. Dissatisfied, the claimant appealed to the High Court of Judicature at Andhra Pradesh. The High Court upheld the income estimate of Rs. 65 per tree but increased the multiplier to ‘9’, considering the fruit-bearing period of the trees. The High Court based on the evidence on record arrived at a conclusion that the pomegranate trees existing on the land at the time of acquisition were three years old and as per G.O. Ms. No.601 dated 19.06.1992 marked as Ex.A2, fruit bearing period being 12 years, the relevant multiplier adopted should have been “9” and not “2”.

Legal Framework

The case primarily involves the interpretation and application of the Land Acquisition Act, 1894, specifically concerning the determination of compensation for acquired land and the fruit-bearing trees on it. The court also considered the relevant government orders (G.O.Ms. No.601 dated 19.06.1992) and circulars issued by the Department of Horticulture regarding the valuation of pomegranate trees.

Section 4(1) of the Land Acquisition Act, 1894, deals with the publication of a notification for the acquisition of land.

Section 18 of the Land Acquisition Act, 1894, allows a person who has not accepted the award to seek a reference to the Civil Court for enhancement of compensation.

Arguments

Appellant’s Submissions:

• The appellant contended that the High Court should have considered the revised net valuation of pomegranate trees at Rs. 300 per tree per annum, as per the letter No. F(3) 2164/89 dated 26.11.1989 of the Director of Horticulture, Government of Andhra Pradesh.
• The appellant argued that the fruit bearing period should be considered as 12 years and that the High Court ought to have awarded a higher compensation.
• The appellant relied on the decision of the Supreme Court in Civil Appeal Nos. 11404-405 of 2016, where a compensation of Rs. 3,000 per pomegranate tree was awarded, and prayed for the same amount of compensation.
• The appellant also argued that the reduction of market value by 10% on the ground that there are no optimum irrigation facilities is unsustainable as there exists a well in the adjacent land and the acquired land was being irrigated from the said well.

Respondent’s Submissions:

• The respondent argued that the High Court correctly applied the multiplier of ‘9’ as the pomegranate trees were three years old and the fruit-bearing period was twelve years, as per the evidence on record.
• The respondent submitted that the judgment in Civil Appeal Nos. 11404-11405 of 2016 cannot be applied to the present case as the award in that case was of the year 1999.

The innovativeness of the argument by the appellant was in relying on a previous judgment of the Supreme Court where a higher compensation for pomegranate trees was awarded.

Issues Framed by the Supreme Court

The Supreme Court considered the following issues:

1. What is the correct method for determining the compensation for fruit-bearing trees in land acquisition cases?
2. Whether the High Court was correct in applying the multiplier of ‘9’ for the pomegranate trees?
3. Whether the High Court was correct in fixing the rate of pomegranate trees at Rs. 65 relying on the subsequent G.O.No.601 dated 19.06.1992?
4. Whether the appellant is entitled to the same compensation of Rs. 3,000/- per pomegranate tree as awarded in Civil Appeal Nos. 11404-405 of 2016?

Treatment of the Issue by the Court:

Authorities

Judgment

Authorities Viewed by the Court:

✓ Kerala State Electricity Board v. Livisha and Ors. (2007) 6 SCC 792*: The court followed this authority to determine that compensation for fruit-bearing trees depends on the specific facts and circumstances of each case.

✓ Land Acquisition Officer v. Kamandana Ramakrishna Rao AIR 2007 SC 1142*: The court referred to this case to state that claim on yield basis has been held to be relevant for determining the amount of compensation payable under the Land Acquisition Act.

✓ Kapur Singh Mistry v. Financial Commission and Revenue Secretary to Govt. of Punjab and Ors.*: The court referred to this case to state that claim on yield basis has been held to be relevant for determining the amount of compensation payable under the Land Acquisition Act.

✓ State of Haryana v. Gurcharan Singh and Anr. [1995] 1 SCR 408*: The court referred to this case to state that claim on yield basis has been held to be relevant for determining the amount of compensation payable under the Land Acquisition Act.

✓ Airports Authority of India v. Satyagopal Roy [2002] 2 SCR 505*: The court referred to this case to state that claim on yield basis has been held to be relevant for determining the amount of compensation payable under the Land Acquisition Act.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the need to provide fair compensation to the appellant, considering the cost of planting and raising fruit-bearing trees. The court emphasized that the compensation should be determined based on the facts and circumstances of each case. The court also took into account the time gap between the award in the relied upon case and the present case.

The Supreme Court held that the High Court and the Reference Court erred in fixing the rate of the pomegranate trees at Rs. 65. The court observed that the correct rate should be Rs. 75 per tree as per the Notification of the year 1989.

The court also considered the judgment in Civil Appeal Nos. 11404-11405 of 2016, where a compensation of Rs. 3,000 per pomegranate tree was awarded. However, the court distinguished the present case from the previous one, noting that the award in the previous case was of the year 1999, and a period of about seven years is a considerable period to be taken note of while computing the cost of planting and raising fruit-bearing trees.

The court’s reasoning was that the value of fruit-bearing trees should be assessed based on the prevailing market rates and the cost of planting and raising the trees. The court also emphasized that the compensation should be fair and just, considering the loss suffered by the landowner due to the acquisition.

The court considered the alternative interpretation of relying on the subsequent G.O. but rejected it because the relevant date for valuation was the date of notification under Section 4(1) of the Land Acquisition Act, 1894.

The court concluded that the appellant was entitled to a compensation of Rs. 2,000 per pomegranate tree, along with statutory benefits like solatium and interest.

“Planting, raising and making commercial use of fruit bearing trees is a painstaking affair and cost of the same is consistently on rise as the years are passing by which is to be kept in view.”

“Award of compensation in relation to fruit bearing trees depends on facts and circumstances of each case.”

“A period of about seven years is a considerable period to be taken note of while computing cost of planting and raising fruit bearing trees.”

Key Takeaways

• Compensation for fruit-bearing trees in land acquisition cases should be based on the specific facts and circumstances of each case.
• The valuation should consider the cost of planting, raising, and making commercial use of the trees.
• The relevant date for valuation is the date of notification under Section 4(1) of the Land Acquisition Act, 1894.
• Subsequent government orders or notifications cannot be applied retrospectively to determine the value of trees.
• The multiplier method can be used to calculate compensation, considering the age of the trees and their fruit-bearing period.

Directions

The Supreme Court directed that the appellant be awarded compensation of Rs. 2,000 per pomegranate tree, along with all statutory benefits like solatium and interest.

Specific Amendments Analysis

No specific amendments were discussed in this judgment.

Development of Law

The ratio decidendi of this case is that the compensation for fruit-bearing trees in land acquisition cases should be determined based on the specific facts and circumstances of each case, considering the cost of planting, raising, and making commercial use of the trees. The court also clarified that the relevant date for valuation is the date of notification under Section 4(1) of the Land Acquisition Act, 1894. This judgment reaffirms the principle that compensation should be fair and just, reflecting the actual loss suffered by the landowner. There is no change in the previous positions of law.

Conclusion

The Supreme Court partly allowed the appeal, enhancing the compensation for the pomegranate trees from Rs. 65 to Rs. 2,000 per tree. The court emphasized the importance of considering the specific facts of each case when determining compensation for fruit-bearing trees. This judgment ensures a more equitable approach to compensating landowners for the loss of their trees during land acquisition.