Land Acquisition Act, 1894:
Sections 23 and 24 - Pair market value - Of acquired land - In compulsory acquisition - Determination of - Grant of compensation - Held: For determining the market value, the relevant consideration would be the value of land with its peculiar advantages and disadvantages with reference to commercial value. Other consequential rights, legal or commercial, which remotely flow from an agricultural activity will not be treated as a relevant consideration. The computation of compensation has to be in terms of Sections 23 and 24. Only statutory benefits in terms of Sections 23 (1-A) and 23 (2) would be available to the claimant. Manufacture of silk, which is the result of the silk worm fed by mulberry leaves, is not an agricultural activity but sericulture. This activity would fall in the domain of manufacturing and commercial activity and is not directly covered under Section 23.

Sections 23 and 24 - Interpretation of - Held: The court should apply the principle of literal or plain construction to these provisions. In view of the scheme of the Act, it will not be appropriate either to apply the rule of strict construction or too liberal construction to the provisions of the Act.

Sections 4 and 48 - Land acquisition - Land taken in possession prior to issuance of notification under Section 4 - Grant of interest for the period prior to the notification - Held: Grant of interest for the period prior to notification not permissible. However, for such period, the court can direct the Collector to examine the extent of rent or damage. Section 48 would come to the aid of claimants.

Land Acquisition:
Compensation for land acquisition - Methodology for computation of - In compulsory acquisition - High Court adopting Capitalization of Net Income Method, negating the Sales Statistics Method by taking instances of adjacent villages adopted by the Land Acquisition Officer - Held: Adoption of the method of Capitalization and multiplying the same by 10 is without the support of evidence, hence inconsequential. Sale instances of adjacent villages can be made the basis for determining the fair market value. On facts, the instances considered by the Land Acquisition Officer are relevant instances. Claimants are entitled to increase at the rate of 15% per annum compounded, in view of the increasing trend in sale price and since the land was used for the production of mulberry crops, which had restrictive use in the manufacturing, commercial, or industrial activities. The Court is entitled to apply some reasonable guesswork to balance the equities and fix just and fair market value in terms of parameters under Section 23 of the Land Acquisition Act. In the peculiar facts of the case, claimants are given higher compensation. What could be capitalized was the value of mulberry leaves used for sericulture and not the value of silk cocoons. Land Acquisition Act, 1894 - Sections 23 and 24.

Compulsory acquisition - Power of compulsory acquisition has an inbuilt duty and responsibility on the State to pay just and fair compensation without delay.

Interpretation of Statutes:
Legislative intent - Held: Legislative intent needs to be noticed for beneficial and proper interpretation of the provisions in the light of the scheme underlying the provisions of the Statute.
Literal/Plain construction - The plain words require no construction. However, whether the words are plain or ambiguous can be determined by studying them in their context.
Interpretation - Guiding principles - Held: Interpretation can be literal or functional. Literal interpretation not to go beyond the letter of the law. Functional interpretation can make some deviation from the letter of law. The interpretation is best which makes the textual interpretation match the context. A statute is best interpreted when the purposes of enactment are known. Where statutory provision confers rights and also states mandatory or implied conditions, such conditions are relevant for interpretation. Exercise of statutory power in breach of the express or implied conditions will be illegal if the conditions breached are mandatory.

Evidence:
Onus to prove - Land acquisition - Entitlement to receive higher compensation - Held: Onus to prove entitlement to receive higher compensation is on the claimants. But it cannot be said that there is no onus on the State.

Administration of Justice:
For proper administration of justice, the State is advised to act fairly and for the benefit of the public at large. Decisions of the State should be such as to avoid unnecessary litigation.

Maxim:
Boni judicis est lites dirimere, ne lis ex lite oritur, et interest reipublicae ut sint fines litium - Applicability.

The questions for consideration before this Court were whether manufacturing or commercial activity carried on by the agriculturist, either himself or through a third party, as a continuation of the agricultural activity, that is, using the yield for the production of some other final product, can be the basis for determining the fair market value of the acquired land, within the parameters specified under Section 23 of the Land Acquisition Act, 1894, in the facts of the present case; and whether the claimants were entitled to interest for the period before the date of notification under Section 4 of the Act, as the possession of the land was taken over before the acquisition notification.