Ramachandraiah Vs. Land Acquisition
Officer, Sagar [1973] INSC 5 (10 January 1973)
SHELAT, J.M.
SHELAT, J.M.
CHANDRACHUD, Y.V.
CITATION: 1973 AIR 701 1973 SCR (3) 261 1973
SCC (1) 352
ACT:
Land acquisition-Lands under personal
cultivation of owner and lands under cultivation of tenants-Principles of
compensation.
HEADNOTE:
The respondent acquired the lands of the
appellants. Some of the lands were cultivated by the appellants themselves and
others by tenants. As a result of the Mysore Tenancy Act, 1952, which was
amended by Mysore Acts 16 of 1957, 24 of 1962 and 12 of 1963, and, the Mysore
Tenants (Temporary Protection From Eviction) Act, 1961, the tenants, though
they were inducted originally as annual tenants, they got as deemed tenants, a
fixed and secured tenure for additional periods.
The respondent fixed compensation at Rs. 600
per acre for tank-fed lands and Rs. 500 per acre for rain-fed lands. On a
reference under s. 18 of the Land Acquisition Act. 1894, the compensation' was
increased to Rs. 2500 per acre for tank-fed lands and Rs. 2000 for rain-fed
lands.
On appeal, the High Court fixed a uniform
rate of compensation at Rs. 1250 for all lands, whether tank-fed or rainfed,
and whether self-cultivated or cultivated by tenants.
On the question whether the High Court
followed a correct principle, this Court, in appeal,
HELD : The matter should be remanded to the
High Court for a fresh calculation of the compensation.
(1) The High Court was in error in equating
lands cultivated by the tenants and those under the personal cultivation of the
appellants and applying to both a uniform measure. The two kinds of lands ought
to have been separately treated and even if the rent in the case of tenant
occupied land was taken as a measure for such land, that could not properly be
the measure for arriving at the market value of the land under the appellants'
personal cultivation, because, the net return to the appellants from each of
the two kinds of lands is bound to differ. The annual rent paid by the tenant may
not be the correct or real income obtainable by the appellants, the rent agreed
upon several years ago may not be the fair rent by reason of several factors
and the lands themselves may not be equal in quality, situation or
productivity. [265 C] (2) in view of the provisions of the Mysore Act, it
should have been ascertained whether the tenants had any interest in the land
and whether they were entitled to any share in the compensation payable in
respect of lands under their cultivation, subject to any bar of limitation
under s. 18 of the Land Acquisition Act. If the tenants are entitled to any
share of the compensation, it should be allocated to them. If this were to be
done, the annual income of the lands will have to be ascertained afresh from
the evidence on record or otherwise to arrive .it the correct market value.
[266 F]
CIVIL APPELLATE JURISDICTION: Civil Appeal
Nos. 1353 to 1355 of 1967.
263 Appeals by certificate from the judgment
and Award dated 15th September 1966 of the Mysore High Court at Bangalore in
Misc. First Appeals Nos. 199 to 201 of 1963.
R. B. Datar, for the appellants.
M. Veerappa, for the respondent.
The Judgment of the Court was delivered by
SHELAT, J. These three appeals, by certificate, are by three Khatedars, whose
lands were acquired for the submersion area of the Linganmakki reservoir in
Mysore State. The areas so acquired were all wet lands and measured 29 acres
and 37 guntas, 3.32 acres and 8.20 acres respectively. The Special Land
Acquisition Officer classified these lands into rainfed and tank-fed lands,
i.e. one crop and two crop lands, and adopting the method of valuation of
capitalising the annual rent paid to the appellants fixed Rs. 600 per acre for
the tank-fed, i.e., perennially irrigated wet lands, and Rs. 500 per acre for
the rain-fed wet lands. He arrived at these figures on, a finding: that the
average annual rent in respect of these lands was 1-1/2 pallas of paddy per
acre which meant that the gross rent was Rs. 37.50 at the rate of Rs. 25 per
palla. Deducting land revenue and bad debts he found that the net annual income
was Rs. 30 per acre. On a reference by the appellants under sec. 18 of the Land
Acquisition Act, 1894, the District Judge increased the valuation to Rs. 2500
per acre for tank-fed lands and Rs.
2000 per acre for the rain-fed lands. The
District Judge also adopted the method of valuation by capitalising the income
by 20 years. But what he did was to take the whole of the net income arising
from the lands instead of capitalising, only the rent payable to the appellants
by the tenants of some of, the lands.
In appeals filed by the Acquisition Officer
against the awards by the District Judge, the, High Court of Mysore reduced the
compensation to Rs. 1250 per acre for all the lands, irrespective of whether
they were tank-fed or rain fed lands or whether they were self-cultivated or
cultivated by tenants. This. the High Court did on the footing that the income
from the land was represented by the rent paid by the tenants. in respect of
some of the lands, that such rent on an average came to 2-1/2 pallas of paddy
and that at the rate of Rs. 25 per Dalla, by capitalising the rent by 20 years,
the compensation would come to Rs. 1250 an acre. The High Court., in addition,
awarded interest at 6% per annum on the amount of compensation awarded by it.
In modifying the District Judge's award and reducing the rate, of compensation
to Rs. 1250 an acre. the High Court rejected the measure adopted by the
District Judge, viz,., "that the geni (rent) plus the quantity which the
tenant would retainfor himself would be the net average in 264 come of the
land". According to the High Court, the District Judge overlooked the fact
that the tenant who get some income by cultivating the land did so because he
and the members of his family had to expend labour thereon, and that therefore,
both the expenses of cultivation as, also the value of such labour expended by
the tenant ought to be taken into consideration. The High Court, held "In
assessing compensation for lands acquired, on the basis of capitalisation of
annual income the usual method adopted is to capitalise the annual rent on the
basis of certain number of years purchase." The High Court also rejected
the argument that the land measuring 7 acres 10 guntas, which is the
subject-matter of Civil Appeal No. 1354 of 1967 and part of the lands which are
the subject matter of C.A. No. 1353 of 1957 were not cultivated by any tenant
and were in fact under the Khatedars' personal cultivation and that therefore
compensation in regard to them could not be fixed by capitalising the annual
rent only. The High Court held that if the measure of capitalised annual rent
"is good in respect of the lands leased, it is equally good in respect of
the lands personally cultivated by the claimants". On this basis, the High
Court allowed the Land Acquisition Officer's appeals, reduced the compensation
to Rs. 1250 per acre in respect of all the lands, irrespective of whether they
were under tenants' cultivation or under the personal cultivation of the
claimants.
The question raised before us is whether the
High Court followed a correct principle while awarding an uniform rate of
compensation for all the acquired lands. It may be that resort may be had to
fair rent as a true measure of income derived from a particular land by its
proprietor for fixing the compensation by multiplying it by 20 years as has
been done here by the High Court where no other method of valuation is
Dossible. But where the acquired land has been under the personal cultivation
of a claimant, the annual rent obtained by him from a tenant from another land
may not be the correct or real income obtainable by the claimant.
The rent of the land under a tenant's
cultivation' may have been agreed upon several 'years ago or may not otherwise
be the fair rent by reason of several factors. Quite apart from that, the two
lands may not be equal in quality, situation and productivity and therefore the
rent obtained for one cannot be the same for the other. Obviously therefore,
the annual rent obtained by a claimant from his tenant for one acquired niece
of land cannot be applied as, a measure for another niece of land which is
personally cultivated by the claimant. The net return to the claimant from each
of the two lands is bound to differ. Ordinarily rent payable by a tenant would
be fixed after calculating approxi265 mately the gross income less the tenant's
cost of cultivation, cost of labour expended by him and a certain amount of
return for all the labour thrown in by him. In the case of land personally
cultivated by a claimant, on the other hand, the income derived by such a
claimant is arrived at by taking the gross income and deducting therefrom his
expenses of cultivation, other expenses and outgoings. The net income thus arrived
at is usually multiplied by 20 years purchase and the amount so calculated
would be considered as equivalent to market value. In our view, the High Court
was in error in equating the lands cultivated by the tenants and those under
the personal cultivation of the claimants and applying to both a uniform
measure, viz., the annual rent obtained from the former for fixing
compensation. The two kinds of lands ought to have been separately treated and
even if the rent in the cases of tenant-occupied land was taken as a measure
for such land, that could not properly be the measure for arriving at the
market value of the land under the claimant's personal cultivation.
Even in respect of lands cultivated by
tenants, no notices appear to have been issued to them either by the Special
Acquisition Officer or by District Judge though some of them did appear as
witnesses for the claimants for deposing to the income of the land. Presumably,
no such notices were issued to them on the ground that they were annual tenants
and had, therefore, no alienable interest in the lands cultivated by them. We
do not know whether by the expression 'annual tenants' we meant that their
tenancy was for one year only and would lapse on the expiry of the year. Even
if it were so, by the time the notifications under secs. 4 and 6 of the Act
were issued, (in April and August 1960), the Mysore Tenancy Act XIII of 1952
had come into force. Sec. 4 of that Act provided that a person lawfully
cultivating any land belonging to another person shall be deemed to be a tenant
if the conditions there set out are satisfied. Under s. 5 (1), there can be no
tenancy for less than five years and all tenancies in force on the date of the
commencement of the Act shall be deemed to be tenancies for a further period of
five years from such date of the commencement of the Act. Under sub-s. 2 of s.
5, no tenancy is terminable before expiry of the period of five years except on
the grounds set out in s. 15, e.g., default by such a tenant in paying rent or
the fair rent fixed under the Act as the case may be.
The Mysore Tenancy Act, '13 of 1952 was
amended first by Mysore Act, 16 of 1957, and again by Mysore Acts 24 of 1962
and 12 of 1963. See. 4 of Act 16 of 1957 provided that every tenancy in respect
of which the period of five years specified in s. 5 of Act 13 of 1952 was due
to expire during, 1957 shall be deemed to be a tenancy for a further period of
one year from the date on which the said period of five years was due to
expire. Sub266 sec. 3 of sec. 4 further provided that notwithstanding anything
contained in any law, notices given before the 11th day of March, 1957 by
landlords to tenants terminating their tenancies at the expiry of the said
period of five Years referred to in sub-sec. 1 on the ground of such expiry or
on the ground that the landlord required the land for his personal cultivation
shall be deemed to have been cancelled and shall have no effect and all
applications made by landlords for possession of lands in pursuance of rent
notices shall on the 11th March, 1957 stand dismissed. In 1961, the Mysore
Legislature passed the Mysore Tenants (Temporary Protection From Eviction) Act,
37 of 1961. The Act was to remain in force till March 31, 1962 or such other
date not later than one year after that date as the State Government may by
notification specify. Sec. 3 of the Act provided that notwithstanding any thing
contained in any law or agreement, decree or order of a civil or revenue court
or a tribunal, no tenant shall be evicted from the land held by him as a tenant
during the period that the Act remained in force. Sec. 4 of the Act staved
during the operation of the Act all suits and proceedings in execution of
decree or orders and other proceedings for the eviction of tenants from the
lands held by them as such. The result of these provisions would appear to be
that though the tenants of the lands in these appeals were inducted thereon
originally as annual tenants, they got a fixed and secured tenure for
additional periods and as deemed tenants they ceased to be persons entitled to
possession only for one year as provided by their original leases. The point,
therefore, is whether they acquired as a result of these provisions any share
in the compensation.
In view of these provisions the Special Land
Acquisition Officer and the District Judge ought to have ascertained (which
neither of them did) whether the-tenants had any interest in the land and
whether they were entitled to any share in the compensation payable in respect
of lands under their cultivation. In the absence of the tenants before us, we
find it difficult to into these questions. Nonetheless, we do feel that in
fairness to the tenants (if they are still on the land) their interests ought
to have been ascertained and if they are entitled in law to any bare.
compensation according to the market value of
the land should be ascertained afresh and their, bare. if allowable:
to them, should be allocated to them. If this
were to be done, the annual income of the, lands in question will have, to be
ascertained afresh from the evidence on record or otherwise and the net total
income after deducting, the costs of cultivation and other outgoing ascertained
in order to arrive if the correct market value. If the position of the tenants
as a result of the operation of the Tenancy Act has changed so as to make them
entitled to a part of the compensation that also will require to be
ascertained. This is, of-course. Subject to the bar of limitation under s. 18
of the Act-, for, it would prima facie appear that the tenants by appearing as
witnesses for the claimants knew of the acquisition and the award and yet had
made no application to be made parties to the reference before the District
Judge. Even if it is found that the tenants are not entitled to. any share in
the compensation, the lands under tenant's cultivation and those personally
cultivated by the, claimants cannot be. valued on the same footing for the
grounds set out earlier. A fresh calculation of compensation in any event of
lands under the claimants' cultivation is called for on the principles set out
hereinabove.
We, therefore, allow the appeals, set aside
the judgment of the High Court and remand these, appeals to the High Court for
a fresh calculation of compensation in the light of the observation,-,
hereinabove made and in accordance with law.
If for that purpose it may become necessary
in the opinion of the High Court for fresh evidence to be led, parties may be
given liberty to adduce such further evidence. Costs of these appeals will abide
by the result in the High Court.
V.P.S. Appeals allowed.
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