ivil Appeals Nos
312 to 314 of 1972
Appeals by Special Leave from the Judgment and Order dated the 19 3 71 of the Orissa High Court in CW Nos 325 to 32770
Appellant No 1 in person and D N Misra for the Appellants
921 Gobind Das and G section Chatterjee for the Respondent
KRISHNA IYER J Three civil appeals stemming from three revision petitions to the High Court of Orissa under the Orissa Estates Abolition Act 1951 Orissa Act I of 1952 for short the Act have reached this Court thanks to special leave granted to the appellant who is common in all the cases
The High Court after deciding various issues remanded the cases to the Compensation Officer under the Act after over ruling most of the contentions pressed before it by the appellant
Shri Achutananda Purohit appellant was the intermediary in respect of vast forests and other lands comprised in the estate of Jujumura in the district of Sambalpur
This estate vested in the State on April 1 1960 by force of the Act and the crucial question agitated before us consequentially turns on the quantum of compensation awardable under Chapter V of the Act
The appellant has received around Rs 300000 but much more according to him is due and this controversy can be settled by examining his specific points
Shri Purohit appellant is an Advocate by profession and is 83 years old
He has argued in person and with passion
We have listened with patience to all his submissions good bad and indifferent
If we may anticipate ourselves none of the nine submissions has appealed to us save to the extent the High Court has upheld
Even so a minimal narration of the facts and a brief consideration of each argument is necessary and we proceed to do so
While his arguments did not impress us we were touched by his concluding words that he had been born and had grown in an adivasi village in the only brahmin family and in his evening years of life proposed to give a substantial part of the compensation the State would give him for adivasi welfare
Although he waxed sentimentally on this note he did not convince us on his contentions
With these prefatory observations we proceed to formulate the many points urged and give our findings and reasons one after the other
We are directly concerned with the issue of compensation which is dealt with as earlier stated in Chapter V of the Act
The Compensation Officer is charged with fixing the quantum in the prescribed manner
A compensation assessment roll containing the gross asset and net income of each estate together with the compensation payable in respect of such estate has to be prepared by him
Of course when there is joint ownership section 24 stipulates that the compensation shall be determined for the estate as a whole and not separately for each of the shares therein
Section 26 has great relevance as it lays down the method of arriving at the gross asset and section 27 has like significance as it focuses on the manner in which the net income from an estate shall be computed by deducting certain items from the gross asset of the estate
Section 28 states how the amount of compensation is to be determined and the methodology of payment
There are a few other sections in Chapter VI which deal with payment of compensation
The Act also provides for appeal second appeal and 922 revision the last being to the High Court and the earlier ones being to the Collector and a Board constituted under section 22
The rule making power is vested in the government under section 47 and there is a routine removal of difficulties  clause contained in section 50
These furnish in bare outline the provisions with which we are directly concerned
Against the background of law just projected we may set out Shri Purohit s points which if we may say so are substantially the same as have been argued by him in revision before the High Court with partial success
For convenience of reference we may extract the statement by the High Court of the contentions urged before it and repeated before us by the appellant 1 The provisions of section 373 read with section 262 b v of the Act make it clear that the date of vesting is the last date by which the calculation of compensation should have been made
As admittedly compensation had not been calculated by the date of vesting the Compensation Officer lost his statutory jurisdiction to do so
It is this Court which by its order dated 10 4 1969 in Civil Revisions 201 202 and 203 of 1968 conferred new jurisdiction on the Compensation Officer to deal freshly with the case and therefore notwithstanding anything contained in the Act the compensation has to be calculated according to the directions given by the Court 2 The Court was fully aware of the statutory provision in section 262 b v of the Act but in spite of it the direction was that the Divisional Forest Officer should make the appraisement
There was no direction that this report of the DFO should be further subject to the approval of the Chief Conservator of Forests
The calculation made by the Chief Conservator of Forests therefore has no statutory force but could be just a piece of evidence
But as the Court directed that no further evidence on behalf of the State should be received Ext
A1 is inadmissible in evidence
3 Assuming that in spite of the directions of the court the Compensation Officer is entitled to follow the procedure laid down in Section 262bv the expression subject to the approval of the Chief Conservator of Forests  does not refer to the appraisement made by the DFO but refers to his appointment
4 Assuming that section 262 b v would have full force what it contemplates is that the appraisement must be made by the DFO and it is subject to the approval by the Chief Conservator of Forests
But what has happened here is that the Chief Conservator himself made the appraisement without referring to the appraisement made by the DFO and as such the appraisement made by the Chief Conservator is invalid
5 The report of the Chief Conservator of Forests is also invalid because of the fact that the appraisement is made 923 only with reference to the area of the disputed forests without taking into consideration the density of growth therein 6 Unlike in case of fisheries etc where the actual income is to be included in the gross assets in the case of forests the assumed income and not the actual income is to be included
During the agricultural year immediately preceding the abolition the petitioners had not actually derived any income from the forests and as such they were under no obligation to pay any income tax on such income
Therefore deduction of income tax from the gross assets is illegal and unwarranted
7 The slab system of calculation of compensation in the Act providing smaller multiples for estates yielding larger income is unconstitutional
8 Compensation money should be so calculated that the purchasing power of the amount of compensation to be paid on the date of actual payment will not be less than its purchasing power on the date of vesting and 9 Interest should be calculated at not less than 12 per annum from the date of vesting till payment
 The meat of the matter the primary question agitated in the appeal lopping off the fringe issues of lesser import consists in the statutory methodology and functionaries prescribed by the Act for quantifying the compensation and the compliance therewith by the statutory machinery in the case of the appellant
But before examining this essential issue we may dispose of the minor points pressed so that the deck may be cleared for dealing with what deserves to be dealt with
Point No 9 in the catalogue already given relates to the claim for 12 interest on the amount of compensation as against the statutory rate of 2 12
The policy of the law of agrarian reform postulates the extinguishment of ancient privileges and cornering of land resources and the socio economic yardstick is different from what applies to ordinary purchases of real estate and this is manifest in the special provisions contained in article 31A and article 31B of the Constitution
A similar principle applies to the award of interest which may sometimes be notional when feudal interests are puffed out
We cannot import the notion of prevailing bank rates in such situations
The dynamic rule of law with a social mission makes a meaningful distinction between rights steeped in the old system and compensation for deprivation of those interests on the one hand and the ordinary commercial transactions or regulation of rights untinged by social transformation urges on the other
This gives rationality to the seeming disparity
Holmes once commented It is revolting to have no better reason for a rule of law than that so it was laid down in the time of Henry IV 
Here there is good reason to depart from the old rule of full compensation and it perhaps legitimates the reduced rate of recompense
Moreover the High Court has rightly pointed 924 out that the validity of section 373 of the Act which fixes a small rate of interest on the compensation amount has been upheld by the Supreme Court in Gajapati Narayan s Case1
Point No 8 has only to be stated to be rejected
The contention is that on the date of vesting which was well over two decades ago the purchasing power of the rupee was much higher than its present value
It is more or less a world phenomenon that the erosi on in value of the unit of currency has been taking place but this invisible devaluation owing to the inflationary spiral does not affect the quantum of monetary compensation prescribed by statute
For the purposes of the law the rupee of long ago is the same as the rupee of today although for the purposes of the market place and cost of living the housewife s answer may be different
Law is sometimes blind
The next point in the reverse order is equally unsubstantial and may be disposed of right away
The appellant challenges the slab system of compensation provided in the Act which awards smaller multiples for estates yielding larger incomes on the score of violation of the fundamental rights under the Constitution
The short answer is that article 313 read with article 312 bars any challenge to the amount of compensation on acquisition by the State subject to compliance with the prescriptions in the said sub Articles on the ground that the amount so fixed or determined is not adequate
Presidential assent has been accorded to this State Act and so the ban operates
Moreover article 31A repels the applicability of articles 14 19 and 31 to the acquisition by the State of any estate or of any rights therein etc
This provision directly demolishes the contention of the appellant
Point No 6 in the list of contentions earlier reproduced is also bereft of force and we may make short shrift of it
The argument is that for certain reasons the appellant could not derive and actual income from the forests taken over by the State from him and therefore there was no income tax payable on any agricultural income from these forests
The contention is that therefore in arriving at the next income the deduction of income tax is not permissible
Here again the flaw in the submission consists in mis reading section 27 of the Act which expressly states that the net income from an estate shall be computed by deducting from the gross assets of such estate any sum which was payable by the intermediary as income tax in respect of any income   derived from such estate for the previous agricultural year 
No income therefore no income tax and therefore no deduction is the syllogism of Shri Purohit
He forgets that in the case of forests it is the assumed income and not the actual income that forms the basis of calculation of compensation
Indeed if the actual income were to be the foundation for computation of compensation on the premise that not actual income has accrued the compensation might be zero
On the other hand statutory compensation is provided for on the formula of assumed income in the previous year
Similarly an assumed income tax also has to be worked out and deducted
If 925 a notional income on the assumed basis can be used for fixing compensation a notional income tax can be calculated and deducted
The confusion that vitiates the argument is prompted by a circular letter of government regarding non deductability of income tax due to the State from the amount of compensation lying to the credit of estateholders
We have examined the circular letter and are satisfied that it has no relevance to a situation like the present and it deals with a totally different matter
In short section 27 properly construed can not lend itself to the meaning imputed to it by the appellant
The serious question that survives for consideration is covered by the remaining points which more or less overlap
The statutory scheme of compensation for forest lands consists of a machinery for assessment of the net income which is multiplied on a sliding scale and the method of challenge to the determination by the aggrieved owner of State
Section 262 b v is relevant here and may be set out 262 gross asset  when used with reference to an estate means the aggregate of the rents including all cesses which were payable in respect of the estate for the previous agricultural year b by the raiyats or any other persons cultivating the land other than the land settled with the intermediary or intermidaris under Sub section 1 of Section 7 and includes v gross income from forests calculated on the basis of the appraisement made of annual yield of the forests on the date of vesting by a Forest Officer subject to the approval of the Chief Conservator of Forests such Forest Officer being not below the rank of a Divisional Forest Officer to be appointed in this behalf by the State Government
 The expression Forest Officer  used here has been explained in section 26
So the first step is for the Government to appoint Forest Officers from out of DFOs
in the Forest Department for the purposes of the Act
Those Officers ascertain the income from the forest concerned and the figure so fixed is subject to the approval of the CCF Chief Conservator of Forests presumably the top expert in the department
The power to approve implies the power to disapprove or modify but not to report or arrive at an income de hors the Forest Officer s Report altogether
The section is clear that the gross income from forests must be calculated on the basis of appraisal of the annual yield on the date of vesting firstly by a Forest Officer and secondly by the Chief Conservator of Forests screening it and approving it
Indeed preliminary to the appraisal operation the intermediary receives a notice in Form D  rule 13 and he is expected to furnish a return of the relevant particulars and supporting information to enable correct appraisement
In the present case the appellant did submit the D  return to the Compensation Officer and adduced some evidence to substantiate it
The Compensation Officer passed an order adverse to the appellant where upon he filed an appeal to the Collector which was rejected
A Second 926 Appeal followed before the Board of Revenue which was dismissed
Later revision petition were filed before the High Court and G K Misra J set aside the order disallowing the inclusion of the income from forests for ascertainment of compensation and directed a remand to the Compensation Officer
The said order the relevant portion of which we are concerned runs thus He would immediately call upon the Divisional Forest Officer to make appraisement within three months from the receipt of the record
The appraisement can be scientifically done by looking to the age of the trees as they stand now
It is open to the petitioners to give evidence that after the date of vesting many of the trees and forest produce have been removed
Besides the evidence already on record would be taken into consideration
The Divisional Forest Officer who would make the appraisement will be examined as a witness for the Compensation Officer and would be subjected to cross examination
No other evidence would be permissible as the State has not chosen to give any other evidence
Under Rule 131 c of the Orissa Estates Abolition Rules 1952 the compensation officer may rely upon such other materials as may otherwise be ascertained by him
But in such a case the materials must be brought to the notice of the petitioners who would be entitled to cross examine the witnesses connected therewith and may give rebutting evidence
The compensation case is to be disposed of by the compensation officer within six months from today 10 4 1969 with intimation to this Court
 Strictly speaking the statutory requirement is for initial appraisal of the annual income by the Forest Officer
The use of the expression Divisional Forest Officers is erroneous although Forest Officers are appointed from among Divisional Forest Officers
Equally clearly a slight error has crept into the Judge s order because he does not make any reference specifically to the statutory requirement of approval of the Chief Conservator of Forests of the appraisement made by the Forest Officer
However what followed is interesting though erroneous
The District Forest Officer who incidentally happens to be a Forest Officer under the Act having been appointed as required thereunder made his appraisal of the annual income and submitted to the Chief Conservator who altered the annual yield and reduced it substantially
But he pointed out that the Forest Officer had omitted to include the income from kendu leaves and added that sum to the income from forests
Even so the total figure was less than what the Divisional Forest Officer had recommended
The Compensation officer accepted the report of the Chief Conservator and made the statutory calculation on that date
Both the State and the appellant filed appeals to the Collector which were dismissed
A second appeal was filed by the appellant before the Board of Revenue without success
Then followed three revision petitions to the High Court which led to the order of remand now attacked before us in the present appeals
927 From this narrative what follows is that the Chief Conservator had substituted his appraisement which was accepted by the statutory tribunal
Indeed there was a fundamental difference in the basis adopted by the Forest Officer and the Chief Conservator in the matter of assessing the income of the forests in question
We need not go into this detail except for the purpose of noticing that what the Chief Conservator did was not to approve wholly or in a modified form what the Forest Officer did but to make his own appraisal independently and without reference to the report of the statutory functionary viz the Forest Officer
This was wrong and contrary to section 26 as was contended by the appellant and in a way accepted by the High Court
We are in agreement with the course adopted by the High Court and the reasoning which has prevailed with it
The direction given by the learned Judge in the remand order is correct although it may require a little clarification
Having heard the appellant at some length we see no flaw in the High Court s order on this aspect of the matter
It is astonishing that anyone should urge as the appellant did that the date of vesting is the last date by which the calculation of compensation should have been made and since that had not been done the Compensation Officer had become functus officio in awarding compensation
Before the date of vesting the State never can nor does fix the compensation through the Compensation officer in any of the agrarian reform laws and these compensation operations are poststatutory exercises
Therefore there is no substance in the functus officio argument
If the officer had no jurisdiction the land would be gone because of the vesting provision and no compensation would be forthcoming for want of jurisdiction a consequence the appellant never wants
Technicality can be frightened away by technicality
Nor is it right to contend as the appellant did that the Compensation Officer s jurisdiction was created by the order of remand by the High Court
No it was created by the statute and canalised by the order of remand
It follows that after the present second remand the re appraisal of the annual net income cannot be done solely by the Forest Officer without securing the approval of the Chief Conservator
Nor can the Compensation Officer by pass the Chief Conservator on the misunderstood strength of the High Court s first order of remand
The true legal drill is and this holds good after the second remand order that the Forest officer will do the appraisement of the annual income forward his report to the Chief Conservator of Forests who will take the said report into consideration and if necessary make modifications therein or approve it with such changes as he deems fit
Certainly the Chief Conservator cannot be ignored by the Compensation Officer nor can the Chief Conservator ignore the assessment made by the Forest Officer and go through an independent exercise
The integrated process has already been explained by us and will be followed in the proceedings to ensue on remand
We may make it clear that now that a Forest officer has made an appraisement the Chief Conservator of Forests will apply his mind to it and approve it as a whole or with such modifications as he thinks necessary and forward it to the Compensation Officer
This will among other things save time
Thereafter the appropriate statutory course will follow
Substantially this 928 is what has been done by the learned Judge when allowing the revisions and remitting the case back to the Compensation Officer
The take over of the forests of the appellant was effected as early as 1960 and 16 years have passed without the intermediary being out of the litigative woods
The High Court has stated that a large part of the delay has been due to laches committed from time to time by the Officers who have been charged with the duty to calculate the compensation
It is again due to mistakes committed by the authorities concerned that the matter is being remitted back to the Compensation Officer for disposal 
The force of these observations constrains us to direct that the proceedings before the Compensation Officer shall be completed within six months from today
In this context it is perhaps not irrelevant to remember that the appellant a freedom fighter is an 83 year old man and at this stage of his life the State should show commisseration not merely in quickly disposing of the proceedings but also in not being cantankerous in awarding and disbursing the balance compensation
With these directions and observations we affirm the orders under appeal but while dismissing the appeals direct the parties to bear their costs in this Court
PHP Appeals dismissed


Summary:
The appellant was the intermediary in respect of vast forest and other lands in the State of Orissa
The estates vested in the State in April 1960 by force of the Orissa Estates Abolition Act 1951
The appellant submitted necessary return for compensation as provided by the Act
The Compensation Officer passed an order adverse to the appellant whereupon the appellant filed an appeal to the Collector which was rejected
A second appeal filed before the Board of Revenue was dismissed
Later on Revision Petitions were filed in the High Court
The High Court set aside the order and directed remand to the Compensation Officer
Thereafter the District Forest Officer made his appraisal of the annual income and submitted to the Chief Conservator of Forests who altered the actual yield and reduced it substantially
Both the State and the appellant filed appeals to the Collector which were dismissed
A second appeal was filed by the appellant before the Board of Revenue without success
In the Revision Applications filed before the High Court which led to the remand now challenged in the present appeals the appellant contended before this Court 1 The interest ought to have been awarded at 12 per cent as against the statutory rate of 2 12 per cent from the date of the vesting till payment
2 Compensation money should be so calculated that the purchasing power of the amount of compensation to be paid on the date of actual payment will not be less than the purchasing power on the date of vesting
3 The slab system of calculation of compensation in the Act providing smaller multiples for estates yielding larger income is unconstitutional
4 Unlike in case of fisheries etc where the actual income is to be included in the gross assets in the case of forests the assumed income and not the actual income is to be included
During the agricultural year immediately preceding the abolition the petitioners had not actually derived any income from the forests and as such they were under no obligation to pay any income tax on such income
Therefore deduction of income tax from the gross assets is illegal and unwarranted
5 The compensation has not been computed in accordance with the scheme of the Act
6 The date of vesting is the last date by which the calculation of compensation should have been made and since that had not been done the Compensation Officer had become functus officio in awarding compensation
Dismissing the appeals  HELD 1
The policy of the law of agrarian reforms postulates the extinguishment of ancient privileges and cornering of land resources and the socio economic yardstick is different from what applies to ordinary purchases of real estate and this is manifest in the special provisions contained in Article 31A and 31B of the Constitution
A similar principle applies to the award of interest which may sometimes be notional when feudal interests are puffed out
The 920 dynamic rule of law with a social mission makes a meaningful distinction between rights steeped in the old system and compensation for deprivation of those interests on the one hand and the ordinary commercial transactions on the other
923 F G 2
It is more or less a world phenomenon that the erosion in value of the unit of currency has been taking place
But this invisible devaluation owing to the inflationary spiral does not affect the quantum of monetary compensation prescribed by statute
For the purposes of the law the rupee of long ago is the same as the rupee of today although for the purposes of the market place and cost of living the housewife s answer may be different
924B C 3
Article 313 read with Article 312 bars any challenge to the amount of compensation on acquisition by the State subject to the compliance with the prescriptions in the said sub articles on the ground that the amount so fixed or determined is not adequate
Presidential assent has been accorded to this State Act and so the ban operates
924C D 4
The submission of the appellant proceeds on a misreading of section 27
In the case of forests it is the assumed and not the actual income that forms the basis for calculation of compensation
Similarly an assumed income tax also has to be worked out and deducted
924F G 5
The scheme of the Act is that the compensation must be calculated on the basis of appraisal of the annual yield of the forests on the date of vesting firstly by a Forest Officer and secondly by the Chief Conservator of Forestsscreening it and approving it
In the present case the Chief Conservator had substituted his appraisement which was accepted by the statutory Tribunal
There was a fundamental difference in the basis adopted by the Forest Officer and the Chief Conservator of Forests in the matter of assessing in the income of the Forest in question
What the Chief Conservator did was not to approve wholly or in a modified form what the Forest Officer did but to make his own appraisal independently and without reference to the report of the statutory functionary
This was wrong and contrary to section 26
This Court is in agreement with the course adopted by the High Court and the reasoning which has prevailed with it
925C 927A B 6
Before the date of vesting the State never can nor does fix the compensation through the Compensation Officer in any of the agrarian reform laws and these compensation operations are post statutory exercises
Therefore there is no substance in the funtcus officio argument
If the officer had no jurisdiction the land would be gone because of the vesting provision and no compensation would be forthcoming for want of jurisdiction a consequence the appellant never wants
Technicality can be frightened away by technicality
927D E 7
After remand the Forest Officer will do the appraisement of the annual income forward his report to the Chief Conservator of Forests who will take the said report into consideration and if necessary make the modifications therein or approve it with such changes as he deems fit
Certainly the Chief Conservator cannot be ignored by the Compensation Officer nor can the Chief Conservator ignore the assessment made by the Forest Officer and go through an independent exercise
The take over of the forest of the appellant was effected as early as in 1960
The High Court has stated that a large part of the delay has been due to laches committed from time to time by the officers charged with the duty to calculate the compensation
It is therefore directed that the proceedings before the Compensation Officer shall be completed within six months from today
927F H 928A B