State of Gujarat Vs. Vakhtsinghji
Sursinghji Vaghela & Ors  INSC 95 (8 April 1968)
08/04/1968 BACHAWAT, R.S.
HIDAYATULLAH, M. (CJ) MITTER, G.K.
CITATION: 1968 AIR 1481 1968 SCR (3) 692
E 1969 SC 270 (9) D 1976 SC1721 (7,11) RF
1986 SC1272 (99)
Bombay Taluqdari Abolition Act 62 of 1949.
ss. 7 and 14- Right to pay jama or land revenue at reduced rates-Whether a
right for which compensation is payable under s. 14-15% solatium whether
payable in addition to compensation for lands under s. 7-Method of working out
compensation for irrigation bunds, tanks and wells-Right to compensation for
river. river beds. Bhathas.
Constitution of India, Art. 227-Scope of High
Court's-power to interfere with Tribunal's order and to give directions.
The respondents filed claims before the
Collector Ahmedabad for compensation under ss. It and 14 of the Bombay
Taluqdari Abolition Act, 1949. Against the Collector's awards they appealed to
the Revenue Tribunal and thereafter filed petitions under Art. 227 before the
High Court. From the High Court's orders the State of Gujarat appealed to this
Court. The matters in dispute were : (i) whether the right to pay only 60% of
the full jama or revenue assessment on their lands which the respondents had
been enjoying was a right for the extinguishment of which compensation under s.
14 of the Act was payable; (ii) whether under the provisions of the Act the
respondents were entitled to 15% solatium in addition to the compensation which
they were awarded for their lands; (iii) what was the proper method of working
out the value of irrigational bunds, tanks and wells for the purpose of
compensation; (iv) whether compensation was payable to the respondents in
respect of river and river beds. The Court had also; to consider the scope of
the High Court's power under Art. 227 of the Constitution in the context of the
HELD : (i) The taluqdari estates were liable
to payment of jama. As a matter of concession the jama was generally 60% of the
survey assessment. The taluqdars had no legal right to claim the concession on
the expiry of their current settlements, and at the next revisional settlement
the Government had the right to withdraw the concession and impose full
assessment. The right of the taluqdars to pay the jama at the concessional rate
till the expiry of the current settlement was preserved by s. 5 of the
Abolition Act. The enhanced assessment which they had to pay thereafter did not
affect any contractual or statutory right vested in them. Even assuming that it
modified or extinguished any right, such modification or extinguishment did not
amount to transference to public ownership of land or any right in or over land
within the meaning of s. 14 of the Abolition Act. The Collector, the Revenue
Tribunal and the High Court therefore rightly rejected the claim of the
respondents for compensation for the difference in the jama and the full
assessment. [698 C, 699 H, 700 A] Rao Bahadur Kunwar Lal Singh v. The Central
Provinces and Berar,  F.C.R. 284. applied.
Nawab Sardar Narharsinghji Ishvarshinghji v.
The Secretary of State for India, 43 Bom.L.R. 167. referred to- 693 (ii) The
Collector is required by s. 7(1)(b) to make an award in the manner prescribed
in s. 11 of the Land Acquisition Act, 1894. The Collector has to make an award
under s. II and having regard to s. 15 in determining the amount of
compensation, he is guided by the provisions of s.
23 and s. 24. Section 23(1) requires an award
of the market value of the land. Section 23(2) requires an additional award of
a sum of fifteen per centum on such market value, in consideration of the
compulsory nature of acquisition.
It follows that under s. 7(1)(b) of the
Abolition Act read with s. 11 of the Land Acquisition Act the taluqdars ate
entitled to receive as compensation the market value of all rights in any
property extinguished under s. 6 and in addition a sum of 15 per cent on such
market value. The right is subject to the conditions and exceptions enumerated
in sub-cls. (i), (ii) and (iii) of s. 7(i)(b). [701 C-F] (iii) In regard to
irrigational bunds, tanks and wells the High Court rightly rejected the claim
for compensation based on reinstatement value. This method should not be adopted
when the market value deduced from the income derived from the lands would
fairly compensate the owner and in no case can reinstatement value be given
unless reinstatement in some other place is bona fide intended. In the present
case the High Court found that there was no intention to reinstate the bunds.
1703 C-D) The value of irrigational bunds, tanks and wells is not what they
cost but what they yield in annual income, The High Court rightly adopted the
yield basis: of valuation. The Himayat assessment and the water rates adopted
by the Collector and the, Tribunal did not give the correct yield.
The High Court therefore rightly directed
further inquiries into this claim. [7O3 E] Raja Vyricherla Gajapatiraju v. The
Revenue Divisional Officer, Vizagapatam, 66 I.A. 104, Harish Chandra Neogy v. Secretary
of State for India, 25 C.W.N. 875 and Province of West Bengal v. Raja Jhargram,
A.I.R. 1955 Cal. 392, referred to.
(iv) In regard to river and river beds,, the
taluqdars had no property in running water. They were the owners of the river
beds but the submerged river beds were of no value to them. They could rightly
claim compensation only for the Bhathas formed in the rivers and other portions
of the river beds where crops could be raised during some parts of the year.
[7O3 F-G] (v) Article 227 of the Constitution gives the High Court the power of
superintendence over all courts and tribunals throughout the territories in
relation to which it exercised jurisdiction. This jurisdiction cannot be
limited or fettered by any Act of the State Legislature. The High Court had
jurisdiction to revise the decision of the Tribunal in respect of the solatium
and irrigational bunds tanks and wells, when the Tribunal on a misreading of
ss. 7 and 14 of the Abolition Act declined to do what was by those provisions
incumbent on it to do. The High Court could not only set aside its decision,
but also direct it to make further inquiries after taking evidence. [705 B-G]
Hari Vishnu Kamath v. Syed Ahmed Ishaque,  1 S.C.R.
1104, relied on,
CIVIL APPELLATE JURISDICTION : Civil Appeals
Nos. 517 to-534 of 1965.
Appeals from the judgment and decree dated
January 12, 1961 of the Gujarat High Court in Special Civil Applications Nos.
78 to 83 and 96 to 101' of 1960.
694 N. S. Bindra and S. P. Nayar, for the
appellant (in C. A. Nos. 517 to 528 of 1965) and for respondent-State of
Gujarat (in CAs. Nos. 529 to 534 of 1965).
A. K. Sen, Bhuvanesh Kumari, J. B.
Dadachanji, O. C. Mathur, Ravinder Narain and M. H. Chhatrapati, for respon-
dent No. 1 (in C.As. Nos. 517 and 524 of 1965).
A. K. Sen, M. H. Chhatrapati, and Bhuvanesh
Kumari, for respondent No. 1 (in C.As. Nos. 518 to 522 of 1965) and the
appellant (in C.A. No. 530 of 1965).
M. H. Chhatrapati and Bhuvanesh Kumari for
respondent No. 1 (in C.As. Nos. 523, and 526 to 528 of 1965) and appellant (in
C.A. No. 529 and 531 to 534 of 1965).
N. A. Palkhivala, M. H. Chhatrapati and
Bhuvanesh Kumari, for respondent No. 1 (in C.A. No. 525 of 1965).
The Judgment of the Court was delivered by
Bachawat, J.-These appeals are directed against the orders of the Gujarat High
Court passed under Art. 227 of the, Constitution revising the appellate orders
of the Bombay Revenue Tribunal modifying certain awards of the Special Deputy
Collector, Ahmedabad. Claims for compensation under secs. 7 and 14 of the
Bombay Taluqdari Abolition Act, 1949 (Bombay Act LXII of 1949) were filed
before the Collector by the Taluqdars of certain villages in the district of
Ahmedabad. The Collector made his awards of compensation under secs. 7 and 14.
The claimants filed appeals before the Revenue Tribunal and later petitions
under Art. 227 of the Constitution to the High Court. The present appeals are
filed by the State of Gujarat and some of the claimants.
The principal matters in controversy in these
appeals, relate to the award of compensation under the heads : (i) difference
in Jama and full assessment, (ii) solatium of 15% on the market value, (iii)
irrigational bunds tanks and wells and (iv) river and river beds.
Excellent accounts of the history and
incidents of the taluqdari tenures are given in Dr. Govind D. Patel's Agrarian
Reforms in Bombay, 1950, Mr. J. B. Peile's Report, Government Selection No. CVI
New Series, p. 13, Mr. L. Robertson's Report on the conditions, of the
taluqdars of the Ahmedabad district, 1903, statement of objects and reasons for
Bill No. 6 of 1885 printed in Bombay Government Gazette, dated the 26th
December, 1885, Part V, at p. 65 and Nawab Sardar Narharsinghji Ishvarsinghji
v. The Secretary of State for India(1). The origin of the Gujarat taluqdars may
be traced to Moghul and pre-Moghul times. They are found mainly in the
districts of (1) 43 Bom. L. R. 167.
695 Ahmedabad, Kaira, Broach and the
Panchmahals. The leading characteristics of the taluqdari tenure is that the
taluqdari estate is neither alienated nor unalienated but is proprietary. Until
1862 the taluqdars were legally though incorrectly regarded as mere lease
holders. From 1862 till 1888 they were full proprietors with unlimited powers
of alienation. From 1888 onwards they were full proprietors with restricted
powers of alienation. Their estates were subject to payment of a jama to the
Government. Originally the jama was regarded as a tribute but later it became a
roughly calculated tax on the rental, then a land tax and finally land revenue.
Acts were passed from time to time for ameliorating the conditions of the
taluqdars. Since 1888 the taluqdari villages and estates were governed by the
provisions of the Gujarat Taluqdars' Act, 1888 (Bom. Act VI of 1888). Under
sec. 2(1)(c) of this Act Jama meant land revenue payable by the taluqdars to
the Government. Section 4 empowered the Government to direct a revenue survey
of a taluqdari estate under the provisions of the Bombay Land Revenue Code,
1879. Sections 22 and 23 deal with the taluqdar'sjama :
"22(1). If a taluqdar's estate, or any
portion thereof is not wholly or partially exempt from land-revenue and its
liability to payment of land revenue is not subject to special conditions or
restrictions, the jama payable to (the Provincial Government) in respect of
such estate or portion thereof shall, if a survey settlement has been extended
thereto, be the aggregate of the survey assessment of the lands composing such
estate or such portion thereof minus such deduction, if any, as (the Provincial
Government) shall in each case direct.
(2) The (Provincial Government) may declare
the amount of jama so ascertained fixed for any term not exceeding thirty
23(1) Nothing in this Act shall be deemed to
affect the validity of any agreement, heretofore, entered into by or with a
taluqdar and still in force as to the amount of his jama nor of any settlement
of the, amount of jama made by or under the orders of the (Provincial Government)
for a term of years and still in force.
(2) Every such agreement and settlement shall
have effect as if this Act had not been passed." The jama was usually
fixed (uddhad) in respect of the estates in Kaira and Broach but those in
Ahmedabad and Panchmahals 696 were liable to revision at every revisional
settlement. The fluctuating jama in respect of these latter estates could under
s. 22 be fixed at an amount equal to the full survey assessment of all the
lands comprised within the estate. In practice the jama of the claimants'
estates in Ahmedabad was -limited to about 60% of the full assessment. As a
measure of agrarian reform the Government decided to abolish the taluqdar
tenures altogether. Accordingly the Bombay Taluqdari Tenure Abolition Act, 1949
was passed on January 24, 1950. It came into force on August 15, 1950. It
extends to the districts of Ahmedabad, Kaira, Broach and Panchmahals. It
repealed the Gujarat Taluqdars' Act of 1888 and certain other special Acts
relating to taluqdars.
Section 3 abolished the taluqdari tenure and
extinguished all incidents of the tenure attached to any land comprised in a
taluqdari estate save as provided in the Act. Under sec. 4 all revenue surveys
and settlements made under sec. 4 of the Gujarat Taluqdars Act, 1888 are deemed
to have been made under Chapters VIII and VIIIA of the Land Revenue Code.
By section 5(1)(a) all taluqdari lands are
henceforth liable to the payment of land revenue in accordance with the
provisions of the Land Revenue Code and the rules made theretinder. But this
provision does not affect the right of any person to hold any taluqdari land
wholly or partially exempt from the payment of land revenue under a special
contract or any other law for the time being in force [s. 5 (2) (a) 1 nor the
right of any person to pay jama under any agreement or settlement recognised
under sec. 23, or under a declaration made under section 22 of the Gujarat
Taluqdars' Act so long as such agreement, settlement or declaration remains in
force [s. 5(2)(b)]. Section 5 (1) (b) provides that a taluqdar holding any
taluqdari land shall be deemed to be an occupant within the meaning of the Land
Revenue Code or any other law for the time being in force. Section 6 provides
that all public roads, lanes etc., not situate within the limits of the wantas
belonging -to a taluqdar in a taluqdari estate shall vest in the Government and
all rights held by a taluqdar in such property shall be deemed to have been
extinguished. Section 7 provides for payment of compensation to taluqdars for
extinguishment of rights under section 6. Section 14 provides for payment of
compensation for extinguishment or modification of any other right in any land
where such extinguishment or modification amounts to, transference to -public
ownership of such land or any right in or over such land. Section 17 makes
applicable provisions of the Land Revenue Code to all taluqdari lands with
certain modifications. Sections 8, 9 and 10 provide for appeals from the
Section 12 provides that the award made by
the Collector and the decision of the Bombay Revenue Tribunal on appeal shall
be final and conclusive and shall not be questioned in any suit 697 or
proceeding in any court. The Act is protected by Art 31B of the Constitution.
It was amended from time to time.
Clause. (a) of section 5 (2) was deleted by
Bombay Act 42 of 1953. Section 5A was inserted by Bombay Act 1 of 1955.
Section 5A made a permanent tenant and an
inferior holder in possession of any taluqdari land an occupant in respect of
such land on payment of compensation to the taluqdar.
In these appeals the taluqdars claim
compensation for the loss of benefit of the difference between the jama and the
full assessment. The jama payable under the settlements made before the Abolition
Act was 60% of the total assessment. Their right to Ray the jama only under
those settlements were not affected in view of section 5 (2) (b).
They have obtained the full benefit of the
concessional jama while the settlements remained in force. The period of those
settlements have now expired and they are now liable to pay full assessment.
They have thus suffered a loss of 40% of the land revenue of the villages. They
claim compensation for this loss under s. 14(1) of the Abolition Act which
reads :- "14.(1). If any person is aggrieved by any of the provisions of
this Act as extinguishing or modifying any of his rights in any land other than
those in respect of which provision for the payment of compensation has been
made under section 7 and if such person proves that such extinguishment or
modification amounts to the transference to public ownership of such land or
any right in or over such land, such person may apply to the Collector for
compensation within a period of twelve months from the date on which this Act
comes in-to force." Any person" in sec. 14(1) includes a taluqdar. To
get com- pensation under the section the claimant must establish firstly that
his rights in any land other than those for which provision for compensation is
made under s. 7 has been extinguished or modified and secondly that such
extinguishment or modification amounts to the transference to public ownership
of such land or G any right in or over such land. The taluqdars contend that
they had the right to pay a jama not exceeding 60% of the survey assessment of
the lands comprised in the estate. According to them the Government had issued
directions under section 22(1) of the Gujarat Taluqdars' Act, 1888 so limiting
the jama. They say that such direction is to be found in the memorandum of the
Government of Bombay issued on October 2, 1914 with reference to the
recommendation made by the Commissioner, Northern Division, in his letter dated
April 13, 1914. The High Court has referred to these documents in some detail.
It appears 698 that the Gujarat Taluqdari
Bill was then pending before the, Legislative Council. The memorandum shows the
Government's willingness to incorporate in the Bill suitable provision
regarding the fixation of the jama. In our opinion, the memorandum was not a
direction under see. 22(1) nor did it create a legal right in the taluqdars to
pay a jama of 60% of the survey assessment.
The taluqdari estates were always liable to
payment of jama or land revenue. As a matter of concession the jama was
generally 60% of the survey assessment of the lands comprised in the estate.
The taluqdars had no legal right to claim the concession on the expiry of their
current settlements. At the next revisional settlement the Government had the
right to withdraw the concession and to impose full assessment on the taluqdari
lands. Section 5(1)(a) of the Abolition Act by imposing full assessment on the
taluqdari lands after the expiry of the period of the current settlements did
not extinguish or modify any vested right of the taluqdars.
Mr. Palkhiwala argued that section 5 effected
a transfer of the proprietary rights of the taluqdars in their lands to the
Government together with the advantage of paying reduced revenue and a
re-transfer of the occupancy rights in those lands' to the taluqdars and
consequently there was extinguishment or modification of their rights amounting
to transference to public ownership of rights in and over such lands. The
argument, though ingenious, does not bear scrutiny Before the High Court the
taluqdars made no claim for compensation generally for any loss of proprietary
right. Mr. Palkhiwala therefore said that he did not make any claim for
compensation for the loss of proprietary right other than the loss arising from
the liability to pay full assessment. We have therefore to consider only the
claim for compensation for the difference between the jama and the full
In Rao Bahadur Kunwar Lal Singh v. The
Central Provinces and Berar(1) the appellant Rao Bahadur Kunwar Lal Singh held
in Zamindari rights certain estates in the Central Provinces.
The land revenue in respect of the estates
was settled in 1921 under the Central Provinces Land Revenue Act, 1917 for a
period of 19 years from July 1, 1919 and July 1, 1920 and thereafter until a
fresh settlement was made. Section 88 of the Act provided that if the
assessment of an estate, had been accepted under the Act, the proprietors would
be bound to pay the land revenue assessed thereon from such date and for such
term as the Provincial Government might appoint in that behalf and if at the
expiry of such term no new assessment had been made, until a (1)  F. C.
699 new assessment was made. The Central
Provinces Revision of the Land Revenue of Estates Act, 1939 enacted that with
effect from July 1, 1938 notwithstanding anything contained in the Act of 1917
the land revenue payable to the Government in respect of the estates would be
enhanced to the amounts mentioned in the Schedule to the Act of 1939.
By an Amending Act of 1941 it was provided
that those amounts would be deemed to have been assessed, offered and accepted
under the Act of 1917. The appellant contended that as no new settlement had
been made, the Act of 1939 extinguished or deprived him of his contractual as
well as statutory right to hold his estates subject only to the payment of the
takoli fixed in 1921 and thus amounted to an acquisition of his right in land
in contravention of section 299(2) of the Government of India Act, 1935. The
Federal Court repelled this contention. Spens, C.J. observed :- "It is, we
think, impossible to hold that the mere increase of an assessment for land
revenue involves any acquisition of the land or any rights in or over immovable
It further seems to us that the word
'acquisition' implies that there must be an actual transference of, and it must
be possible to indicate some person or body to whom is or are transferred, the
land or rights referred to. It is impossible, in our view to suggest that when
the land revenue is increased, there is any transference to the Provincial
Government or any other person of any land or rights in or over immovable
property, which remain in the same possession or ownership as immediately
before the increase of the assessment. In our judgment, the attempt to bring
the case within s. 299(2) must fail." It will be noticed that the Zamindar
in that case was bound to pay only the fixed land revenue for the period of 19
years and thereafter until a new settlement was made. The increase in land
revenue made by the 1939 Act affected this right. Nevertheless it was held that
the increase in land revenue did not involve any transference to the Government
of any right in or over any immovable property. The case of the taluqdars in
the present case is weaker. Their right to pay the jama only while the old
settlements remained in force was not affected by section 5. The increase in
land revenue on the expiry of those settlements was not due to any change in
ownership. The enhanced assessment did not affect any contractual or statutory
right vested in them.
Even assuming that it modified or
extinguished any right, such modification or extinguishment did not amount to
transference to public ownership of land or any 700 right in or over land
within the meaning of sec. 14 of the Bombay Taluqdari Tenure Abolition Act. The
Collector, the Revenue Tribunal and the High Court therefore rightly rejected
the claim of the taluqdars for compensation for the difference in the jama and
the full assessment.
The next claim is for payment of a solatium
of 15 per centum on the market value awarded under section 7 of the Abolition
Act. The Collector and the Revenue Tribunal rejected this claim. The High Court
partially allowed it and directed that an amount of 15% should be added to the
market value awarded under section 7(1)(b)(iii). This ruling is challenged by
both the State of Gujarat and the taluqdars.
Section 7 1 reads : - 7.(1) Any taluqdar
having any rights in such property shall be entitled to compensation in the
man= provided in the following paragraphs namely : - (a) within a period of
twelve months from the date on which this Act comes into force, the taluqdar
shall apply in writing to the Collector stating the nature of Ms right, the
ground of his claim and the amount of compensation claimed by him for the ex-
tinguishment of his right;
(b) the Collector shall hold a formal inquiry
in the manner provided in the Code and if the Collector is satisfied that the
applicant had any rights in the land and that such rights have been
extinguished under the last preceding section, shall make an award in the
manner prescribed in section 11 of the Land Acquisition Act, 1894 (1 of 1894),
subject to the following conditions :- (i) if the property acquired is waste or
uncultivated but is culturable land the amount of compensation shall not exceed
three times the assessment of the land;
Provided that if the land has not been
assessed, the amount of compensation shall not exceed such amount of assessment
as would be leviable in the same village on the same extent of similar land
used for the same purpose;
(ii) if the property is land over which the
public has been enjoying or acquired a right of way or any individual has any
right of easement, the amount of compensation shall not exceed the amount of
the annual assessment leviable in the village for unculti- 701 vated land in
accordance with the rules made under the Code or if such rules do not provide
the levy of such assessment, such amount as in the opinion of the Collector
shall be the market value of the right or interest held by the claimant;
(iii) if there are any trees or structures on
the land, the amount of compensation shall be the market value if such trees or
structures, as the case may be;
Explanation-For the purpose of this section
the "market value" shall mean the value as estimated in accordance
with the provisions of sections 23 and 24 of the Land Acquisition Act, 1894 (1
of 1894), in so far as such provisions may be applicable." Section 7(1)
gives compensation to taluqdars for extinguish ment of rights in any property
under sec. 6. The Collector is required by sec. 7 (1 ) (b) to make an award in
the manner prescribed in section 11 of the Land Acquisition Act, 1894. The
Collector has to make an award of compensation under sec. 11 and having regard
to sec. 15 in determining the amount of compensation, he is guided by the
provisions of sees. 23 and 24., Section 23(1) requires an award of the market
value of the land. Section 23(2) requires an additional award of a sum of
fifteen per centum on such market value, in consideration of the compulsory
nature of acquisition. It follows that under sec. 7 (1 ) (b) of the Abolition
Act read with section 1 1 of the Land Acquisition Act, the taluqdars are
entitled to receive as compensation the market value of all rights in any
property extinguished under sec. 6 and in addition a sum of 15 per centum on
such market value. This right is subject to the conditions and exceptions
enumerated in sub-clauses (i), (ii) and (iii) of section 7(1)(b). In cases
falling under clause (i) and in some cases under clause (ii) the amount of
compensation is limited. In cases falling under clause (iii) and in some cases
under clause (ii) the amount of compensation is the "market value"
which according to the explanation to sec.
7(1) means the value estimated in accordance
with sections 23 and 24 of the Land Acquisition Act, 1894. The value so
determined includes the solatium of 15 per centum payable under sub-section (2)
of s. 23. Where the legislature intended to exclude the application of
sub-section (2) of sec. 23, it has said so, as in section 14(2) under which
compensation is determined in accordance with the provisions of sub-section (1)
of sections 23 and 24. It follows that the taluqdar is entitled to the solatium
of 15 per centum on the market value, (1) under the main part of sec. 7(1)(b)
subject to the provisions of the several sub-clauses thereof : (2) in cases
falling under clause (iii) of section 7 (1 ) (b) and (3) in cases under clause
(ii) of section 7 (1) (b) where 702 market value is awarded. The direction of
the High Court is modified accordingly.
The, next claim is with regard to
irrigational bunds, tanks and wells. The Collector awarded compensation ,on the
basis of Himayat and water rates of assessment. The Revenue Tribunal confirmed
his award. The High Court set aside this award and directed the Collector to
award compensation after further inquiry on the basis of twenty-five times the
annual profits derivable from the properties. This ruling is challenged by the
State of Gujarat and also by the Taluqdars. Mr. Bindra contended that the
Tribunal's award should be restored. Mr. A. K. Sen contended that the
compensation should be awarded on the basis of reinstatement value. In our
opinion, both these contentions should be rejected. The duty of the Collector
is to award the "market value". The market value is the amount which
the land if sold in the open market by a willing seller might be expected to
realise. In the case of land the market value is generally ascertained on a
consideration of the prices obtained by sale of adjacent lands with similar
Where there are no sales of comparable lands,
the value must be found in some other way. One method is to take the annual
income which the owner is expected to obtain from the land and to capitalise it
by a number of years purchase.
The capitalised value is then taken as the
market value which a willing vendor might reasonably -expect to obtain from a
willing buyer. In some special cases awards have been given on the basis of the
reinstatement value which is assessed according to the cost of acquiring an
equally convenient land or premises. Cripps on Compulsory Acquisition of Land,
11th ed., Arts. 4-203, p. 907 explains this method thus --- "Before the
Acquisition of Land Act, 1919, re- instatement value, instead of market value,
was sometimes given so as to give proper effect to the principle of
compensation on the basis of value to the owner. Generally it was only given in
respect of property which was of such a nature (for example, a school, church,
hospital, house of exceptional character, business premises in which the
business could be carried on under special conditions or by means of a special
licence) that there was no market or general demand for such property;
and a market value deducted from the income
derived would not constitute a fair basis in assessing the value to the
owner." The measure of compensation for lands or premises taken under the
Lands Clauses Act, 1845 was their value to the owner. In special cases
reinstatement value enabling the owner to 703 replace the lands or premises
taken from him was taken to be the correct measure of this value. This
principle was later enacted in Rule 5 of section 2 of Acquisition of Land (assessment
of compensation) Act, 1919 which is now replaced by Rule 5 of section 5 of the
Land Compensation Act, 1961.
In Raja Vyricherla Gajapatiraju v. The
Revenue Divisional Officer, Vizagapatam(1) Lord Romer said that the general
principles for determining compensation under section 23 of the Land
Acquisition Act, 1848 did not differ in any material respect from those upon
which compensation was awarded under the Lands Clauses Act of 1845. In Harish
Chandra Neogy v. Secretary of State for India ( 2 ) and Province of West Bengal
v. Raja Jhargram(3) it was suggested that in special cases the reinstatement
value may be awarded as compensation under section 23 of the Land Acquisition
Act. For the purpose of this case it is sufficient to say that this method should
not be adopted where the market value deduced from the income derived from the
lands would fairly compensate the owner and in no case can reinstatement value
be given unless reinstatement in some other place is, bona fide intended. The
High Court, found that there was no, intention to reinstate the bunds. The
owners could be fairly compensated by giving the market value deduced from the
estimated yield., The High Court rightly rejected the reinstatement method. The
value of irrigational bunds, tanks and wells is not what they cost but what
they yield in annual income. The High Court rightly adopted the yield basis of
valuation. The Himayat assessment and water rates did not give the correct
yield. The High Court therefore directed further inquiries into this claim.
The next claim for compensation is with
regard to river and river beds. The Collector and the Tribunal rejected this
claim but the High Court allowed it and directed further inquiries. The State
of Gujarat challenges this ruling., Now the taluqdars had no property in
running water. They were the owners of the river beds but the submerged river
beds were of no value to them. Counsel for the taluqdars therefore, conceded
that the High Court's ruling cannot be supported. Before us they confined their
claim under this head to Bhathas formed in the riven and other portions of the
river beds where crops could be raised during some parts of the year
particularly during summer. Counsel for the State did not oppose further
inquiries into this limited claim for compensation. We therefore set aside the
directions of the High Court in respect of river and river beds. We direct the
Special Deputy Collector to inquire into the claim for compensation for
Bhathas, if any, formed in the rivers, and other portions, if any, of the river
beds where crops could be raised.
(1) 66 1. A. 104 at 113.
(3) A. ].R. 1965 Cal. 392.
(2) 25 C. W. N. 875.
704 Counsel for the taluqdars sought to
challenge the findings of the High Court with regard to compensation for unbuilt
village, -sites, trees, sim road and non-irrigational tanks and wells. We find
no error of principle in the award of compensation under these heads. There is
no ground for our interference in respect ,of these claims.
Mr. Bindra submitted that section 12 of the
Abolition Act makes the decision of the Tribunal final and conclusive and the
High Court had no jurisdiction to interfere with this decision, particularly in
respect of solatium of 15 per centum and non-irrigational bunds, tanks and
wells. We are unable to accept this contention. Article 227 of the Constitution
gives the High ,Court the power of superintendence over all courts and
tribunals -throughout the territories in relation to which it exercises juris-
diction. This jurisdiction cannot be limited or fettered by any Act of the
State Legislature. The supervisory jurisdiction exfends to keeping the
subordinate tribunals within the limits of their authority and to seeing that
they obey the law. It was the duty of the Revenue Tribunal to award compensation
to the Taluqdars in accordance with the provisions of sees. 7 and 14 ,of the
Act. The High Court had jurisdiction to revise the decision of the Tribunal
where the Tribunal on a misreading of the provisions of sees. 7 and 14 declined
to do what was by those provisions of law incumbent on it to do. Tested in this
light it does not appear that the High Court exceeded its jurisdiction under
Art. 227 in revising the decision of the Tribunal in respect of the solatium
and irrigational bunds, tanks and wells. Numerous cases were pending before the
Revenue Tribunal in respect of compensation payable to the taluqdars under the
Bombay Taluqdari Tenure Abolition Act. To prevent miscarriage of justice it was
necessary for the High Court to lay down general principles on which
compensation should be assessed so that the Tribunal may act within the limits
of their authority. On finding that the Tribunal had misconceived its duties
under sees. 7 and 14, the High Court could not only set aside its decision, but
also direct it to make further inquiries after taking evidence. As pointed out
in Hari Vishnu Kamath v. Syed Ahmed Ishaque(1) the High Court in the exercise
of its supervisory jurisdiction under Art. 227 cannot only annul the decision
of the Tribunal but ,can also issue further direction in the matter.
In the result, in modification of the High
Court's decision in respect of solatium of 15 per centum on the market value,
we direct that in all these cases the taluqdars be awarded solatium in
accordance with this judgment. We set aside the High Court's ,decision with
regard to river and river beds.
Instead, we direct -that the Special Deputy
Collector will inquire into the claim for (1)  1 S. C. R. 1104 at 1120.
705 compensation for Bhathas, if any, formed
in the river and other portions of the river beds, if any, where crops could be
raised during some Parts of the year, particularly during the summer. The
Special Deputy Collector will make awards under these two heads after giving
opportunity to the parties to adduce evidence Subject to these modifications,
the appeals are dismissed and the decision of the High Court in other respects
is confirmed. As -success is divided, there will be no order as to costs.
G.C. Appeals dismissed with modifications.