Shri Inder Parshad Vs. Union Of India & Ors.
EmailAppeal: Civil Appeal No.2582 of 1981
Petitioner: Shri Inder Parshad
Respondent: Union Of India & Ors.
Apeal: Civil Appeal No.2582 of 1981
Judges: K. RAMASWAMY & N. VENKATACHALA
Date of Judgment: Jan 13, 1994
Head Note:
LAND ACQUISITION
Land Acquisition Act, 1894
Section 11, 16, 30 – Compensation – Determination – Land on lease, with permission to build – Later land acquired for public purposes – Collector determining compensation for lease hold rights of lessee as well as of lessor – Apportionment made by Civil Court, upheld with partial modification by High Court – Compensation, if determined only in respect of leasehold interest and to be paid wholly to lessee. Held that compensation was for both and apportioned between lessee and lessor. Hence, no inter-ference called for.
Held:
The Land Acquisition Officer in his award under s.11 has fixed the compensation payable not only for the pre-existing right, title and interest of the lessee but also of the lessor the Government. In this case admittedly, the Government being the owner of the land, the appellant held the demised land as lessee with super-structure built thereon and was in possession and enjoyment of the same on the date of acquisition. The contents of the award extracted herein before clearly indicates that the Land Acquisition Collector could not determine compensation payable towards the leasehold interest held by the appellant. Being an owner the Govt. is not enjoined to acquire its own interest in the land or land alone for public purpose. When its land is granted on lease in favour of the lessee its power to resume the land is subject to non-fulfilment of the terms and conditions of the lease by the lessee. (Para 4 & 5)
On the facts in this case, it is seen that since the Land Acquisition Collector had determined the compensation of the sum total of the interests held by the lessor and the lessee in the land under acquisition but being not able to decide on the appor-tionment of such compensation between Govt. and the appellant, reference was made to the civil court to determine the apportion-ment. The civil court decided apportionment of compensation fixed in the award of the Land Acquisition Collector between the lessee-claimant and the Govt.-landlord . Under these circumstanc-es, it cannot be said that the Land Acquisition Collector had determined the compensation only towards the leasehold interest held by the appellant and that, therefore, the appellant is entitled to the entire compensation determined by the Collec-tor.(Para 7)
Cases Reffered:
1. The Collector of Bombay v. Nusserwanji Rattanji Mistri & Ors. ((1955) 1 SCR 1311).
JUDGEMENT:
O R D E R
1. The appellant admittedly was a lessee of Nazul land measur-ing 3.1 acres or thereabout situated at Block No.160 in Delhi having a perpetual lease from the Government of India on June 14,1934 on payment of premium of Rs.10,850/- and annual rent with stipulations that “and of the land hereinafter reserved and of the covenants on the part of the lessee hereinafter contained, the lessor doth hereby demised unto the lessee all the plot of land containing…………….”. He was also entitled to retain the demised land in perpetuity subject to the right of the lessor to enhance the rent and the right to re-entry upon the demised land on breach of the covenants. The appellant with permission of the lessor constructed a building on the demised land and was in its quiet enjoyment, complying with the covenants. By a notifica-tion dated march 5, 1967 published in the Gazette under s.4(1) of the Land Acquisition Act, 1894, for short the Act, the demised land together with the building; along with other lands was acquired for public purpose. The Land Acquisition Collector by an award dated March 26. 1973 awarded compensation with the following observations:
“Thus the land under acquisition is a leasehold held at present on lease by the claimant Shri Inder Prasad. The land is Nazul which was given on a perpetual lease by Chief Commission-er, Delhi on a yearly rent of Rs. 542/8/- (Rs. 542 and 8 Annas, i.e. Rs.542.50 p.) per annum. The perpetual lease is subject to the performance of certain covenants” including prior permis-sion of the lessor to assign the land to third parties………
“All urbanisable land in Delhi is covered by the master plan which was framed under the Delhi Development Act, 1957. The total compensation payable in respect of interest of lessor and lessee is not, however, arrived at by separately calculating the interest of the lessor and the lessee. It is necessary that the amount should be divided between them in such proportion as represents the value of their respective shares.”
2. After determining the compensation the Collector, who was not able to decide at what proportion the appellant and the Government were entitled to receive the compensation, made a reference under s.30 of the Act to the Civil courts. The District Court by Judgment dated November 15,1976 held that the Government and the appellant were entitled to compensation at the proportion of 33% and 67% respectively. On further appeal by the appellant, while upholding the title to the compensation by the Government and the appellant, the High Court altered the proportion to 75% and 25% between the appellant and the Government respectively. The Government did not question the said proportion at which the compensation was payable to the appellant and the respondent. The appellant being aggrieved for apportionment of 25% of the compen-sation in favour of Govt. filed this appeal by special leave.
3. Sri Kailash Vasudev, learned counsel for the appellant, contended that the Government being the owner of the land, cannot acquire its own interest therein. What was acquired is only of the sum total of the right and interest held by the appellant in the perpetual lease and, therefore, the appellant is entitled to the total compensation determined by the award. In support there-of he placed reliance on The Collector of Bombay v. Nusserwanji Rattanji Mistri & Ors. ((1955) 1 SCR 1311). With a view to appre-ciate the contention it is necessary to see the relevant provi-sions of the Act.
4. It is seen that after making the award under s.11 and depos-it of the compensation, the Land Acquisition Collector is enti-tled under s.16 of the Act to take possession of the land for that provision says that “the land shall thereupon vest absolute-ly in the Government free from all encumbrances”. Thus by exer-cise of the power of eminent domain Government has divested the pre-existing right, title and interest held by the lessee of the land which stood vested absolutely in the Government free from all encumbrances thereafter. But, the Land Acquisition Officer in his award under s.11 has fixed the compensation payable not only for the pre-existing right, title and interest of the lessee but also of the lessor the Government.
5. In this case admittedly, the Government being the owner of the land, the appellant held the demised land as lessee with super-structure built thereon and was in possession and enjoyment of the same on the date of acquisition. The contents of the award extracted herein before clearly indicates that the Land Acquisi-tion Collector could not determine compensation payable towards the leasehold interest held by the appellant. Being an owner the Govt. is not enjoined to acquire its own interest in the land or land alone for public purpose. When its land is granted on lease in favour of the lessee its power to resume the land is subject to non-fulfilment of the terms and conditions of the lease by the lessee. So long as the lessee acts and complies with the coven-ants contained in the lease or the grant, the right to resumption in terms of the lease or grant would not arise. But when the land is required for public purpose, the Govt. should get absolute title thereof free from all encumbrances. Compensation becomes payable for the lease hold right or interest held by the lessee or grantee when the land is acquired. The point becomes clear from the following illustrations. Take a case where the Govt. granted lease of agricultural land on the annual payment of rent with a covenant that the Govt. is entitled to resume the land when needed for public purpose or as when the Govt. finds that the land is required for public purpose. In terms of the coven-ants, the Govt. is entitled to exercise its option to determine the lease though the lessee has been complying with the condition of payment of annual premium or rent and resume the land in accordance with terms of the grant. In that event the need to take recourse to acquisition and to make compensation does not arise. Take a case where the Govt. granted the lease of the open land with permission to the lessee to construct a building for his quiet enjoyment with appropriate covenants and the lessee with permission constructed the building and by complying with the covenants of the lease was in quiet enjoyment. The self-same property, when required for public purpose, the Govt. cannot unilaterally determine the lease and call upon the lessee to deliver the possession. Therefore, the Govt. is required to exercise the power of eminent domain by invoking the provisions under the Land Acquisition Act for getting such land. The Collec-tor shall have to determine the compensation towards the lease-hold interest held by the lessee, if assessable separately and determine the compensation. The lessee being the owner of the super structure and the Govt. being the owner of the land, if compensation is determined for both the components, then the same has to be apportioned between them. At what proportion the lessor and the lessee are entitled to receive the compensation has to be determined. In the absence of any covenant in the lease for payment and in the absence of any specific data available to him, the Collector has to determine the respective shares at which the compensation is to be apportioned between the Govt. and the lessee, the course open to the Land Acquisition Collector is to determine the total compensation, make an award and make a refer-ence to the Civil Court under s.30 for decision on apportionment. Exactly that is the situation on the facts of this case. Take another illustration. The Govt. grants a patta of its land sub-ject to payment of land revenue. Later, the land is required for public purpose. The payment of land revenue is at par with the payment of land revenue payable by a private owner to the state. By grant of patta, the title has been vested in the grantee. Therefore, the grantee is entitled to the full compensation of the acquired land.
6. The Land Acquisition Collector determined the compensation for the sum total of the right, title and interest held by the lessor and the lessee together and made a reference to the Civil Court under s.30 to determine the proportion in which the lessor and the lessee are entitled to receive the compensation. In a given case where it is possible to determine the compensation payable towards leasehold interest, it could also be done and the compensation payable towards the interest held by the lessee could be deposited in the court and paid, subject to the provi-sion in the Act. Since the Land Acquisition Collector was not in a position to determine the proportion in which the said compen-sation had to be paid to the appellant and the lessor , Govern-ment made a reference to the Civil Court under s.30.
7. In Nusserwanji Rattanji Mistri’s case the facts are as under :
In the island of Bombay certain lands were held on a tenure known as “Foras”. Under s.2 of Bombay Act VI of 1851 the occup-ants were entitled to hold the lands subject only to the payment of revenue then payable. Between 1864 and 1867 the Govt. of India acquired these lands under the provisions of the Land Acquisition Act (VI of 1857). On 22.11.1938 the Governor-General sold them to certain persons under whom the present respondents claimed. In April 1942 the appellant acting under the Bombay City Land Reve-nue Act (Bombay Act 11 of 1876) issued notices to the respondents proposing to levy assessment on the lands at the rates mentioned therein. The respondents thereupon instituted two suits disputing the right of the appellant to assess the lands to revenue. They contended that under the Foras Land Act the occupants had ac-quired the right to hold the lands on payment of revenue not exceeding what was then payable, that the right to levy even that assessment was extinguished when the Govt. acquired the lands under the Land Acquisition Act, that the Governor-General having conveyed the lands absolutely under the sale deed dated 22.11.1938, the respondents were entitled to hold them revenue free and that even if revenue was payable it could not exceed what was payable under the Foras Land Act. On those facts this court held that if the Govt. has itself an interest in the land, it has only to acquire the other interests outstanding therein, so that it might be in a position to pass it on absolutely for public user. And the Act primarily contemplates all interests as held outside Govt. and directs that the entire compensation based upon the market value of the whole land must be distributed among the claimants. When the Govt. possessed an interest in land which is the subject matter of acquisition under the Act, that interest is itself outside such acquisition, because there can be no question of Govt. acquiring what is its own, an investigation into the nature and value of that interest will no doubt be necessary for determining the compensation payable for the inter-est outstanding in the claimants but that would not make it the subject of acquisition. In that case since the claimants are entitled to pay only land revenue and thereafter since sale of the land was made, the pre-existing right in the land which the Govt. had ceased and claimants became owners. Therefore it was held that the claimants alone were entitled to the full compensa-tion. But on the facts in this case, it is seen that since the Land Acquisition Collector had determined the compensation of the sum total of the interests held by the lessor and the lessee in the land under acquisition but being not able to decide on the apportionment of such compensation between Govt. and the appell-ant, reference was made to the civil court to determine the apportionment. The civil court decided by its award that appor-tionment of compensation fixed in the award of the Land Acquisi-tion Collector between the lessee-claimant and the Govt.-landlord shall be in order of 67 per cent and 33 per cent. The High Court by its judgment and decree under the present appeal has modified the apportionment of compensation payable for land as 75 per cent for the lessee and 25 per cent for the lessor. Under these cir-cumstances, it cannot be said that the Land Acquisition Collector had determined the compensation only towards the leasehold inter-est held by the appellant and that, therefore, the appellant is entitled to the entire compensation determined by the Collector. Therefore, the judgment and decree under appeal does not call for interference and the appeal is, accordingly dismissed. But in the circumstances, the parties are directed to bear their own costs.
1. The appellant admittedly was a lessee of Nazul land measur-ing 3.1 acres or thereabout situated at Block No.160 in Delhi having a perpetual lease from the Government of India on June 14,1934 on payment of premium of Rs.10,850/- and annual rent with stipulations that “and of the land hereinafter reserved and of the covenants on the part of the lessee hereinafter contained, the lessor doth hereby demised unto the lessee all the plot of land containing…………….”. He was also entitled to retain the demised land in perpetuity subject to the right of the lessor to enhance the rent and the right to re-entry upon the demised land on breach of the covenants. The appellant with permission of the lessor constructed a building on the demised land and was in its quiet enjoyment, complying with the covenants. By a notifica-tion dated march 5, 1967 published in the Gazette under s.4(1) of the Land Acquisition Act, 1894, for short the Act, the demised land together with the building; along with other lands was acquired for public purpose. The Land Acquisition Collector by an award dated March 26. 1973 awarded compensation with the following observations:
“Thus the land under acquisition is a leasehold held at present on lease by the claimant Shri Inder Prasad. The land is Nazul which was given on a perpetual lease by Chief Commission-er, Delhi on a yearly rent of Rs. 542/8/- (Rs. 542 and 8 Annas, i.e. Rs.542.50 p.) per annum. The perpetual lease is subject to the performance of certain covenants” including prior permis-sion of the lessor to assign the land to third parties………
“All urbanisable land in Delhi is covered by the master plan which was framed under the Delhi Development Act, 1957. The total compensation payable in respect of interest of lessor and lessee is not, however, arrived at by separately calculating the interest of the lessor and the lessee. It is necessary that the amount should be divided between them in such proportion as represents the value of their respective shares.”
2. After determining the compensation the Collector, who was not able to decide at what proportion the appellant and the Government were entitled to receive the compensation, made a reference under s.30 of the Act to the Civil courts. The District Court by Judgment dated November 15,1976 held that the Government and the appellant were entitled to compensation at the proportion of 33% and 67% respectively. On further appeal by the appellant, while upholding the title to the compensation by the Government and the appellant, the High Court altered the proportion to 75% and 25% between the appellant and the Government respectively. The Government did not question the said proportion at which the compensation was payable to the appellant and the respondent. The appellant being aggrieved for apportionment of 25% of the compen-sation in favour of Govt. filed this appeal by special leave.
3. Sri Kailash Vasudev, learned counsel for the appellant, contended that the Government being the owner of the land, cannot acquire its own interest therein. What was acquired is only of the sum total of the right and interest held by the appellant in the perpetual lease and, therefore, the appellant is entitled to the total compensation determined by the award. In support there-of he placed reliance on The Collector of Bombay v. Nusserwanji Rattanji Mistri & Ors. ((1955) 1 SCR 1311). With a view to appre-ciate the contention it is necessary to see the relevant provi-sions of the Act.
4. It is seen that after making the award under s.11 and depos-it of the compensation, the Land Acquisition Collector is enti-tled under s.16 of the Act to take possession of the land for that provision says that “the land shall thereupon vest absolute-ly in the Government free from all encumbrances”. Thus by exer-cise of the power of eminent domain Government has divested the pre-existing right, title and interest held by the lessee of the land which stood vested absolutely in the Government free from all encumbrances thereafter. But, the Land Acquisition Officer in his award under s.11 has fixed the compensation payable not only for the pre-existing right, title and interest of the lessee but also of the lessor the Government.
5. In this case admittedly, the Government being the owner of the land, the appellant held the demised land as lessee with super-structure built thereon and was in possession and enjoyment of the same on the date of acquisition. The contents of the award extracted herein before clearly indicates that the Land Acquisi-tion Collector could not determine compensation payable towards the leasehold interest held by the appellant. Being an owner the Govt. is not enjoined to acquire its own interest in the land or land alone for public purpose. When its land is granted on lease in favour of the lessee its power to resume the land is subject to non-fulfilment of the terms and conditions of the lease by the lessee. So long as the lessee acts and complies with the coven-ants contained in the lease or the grant, the right to resumption in terms of the lease or grant would not arise. But when the land is required for public purpose, the Govt. should get absolute title thereof free from all encumbrances. Compensation becomes payable for the lease hold right or interest held by the lessee or grantee when the land is acquired. The point becomes clear from the following illustrations. Take a case where the Govt. granted lease of agricultural land on the annual payment of rent with a covenant that the Govt. is entitled to resume the land when needed for public purpose or as when the Govt. finds that the land is required for public purpose. In terms of the coven-ants, the Govt. is entitled to exercise its option to determine the lease though the lessee has been complying with the condition of payment of annual premium or rent and resume the land in accordance with terms of the grant. In that event the need to take recourse to acquisition and to make compensation does not arise. Take a case where the Govt. granted the lease of the open land with permission to the lessee to construct a building for his quiet enjoyment with appropriate covenants and the lessee with permission constructed the building and by complying with the covenants of the lease was in quiet enjoyment. The self-same property, when required for public purpose, the Govt. cannot unilaterally determine the lease and call upon the lessee to deliver the possession. Therefore, the Govt. is required to exercise the power of eminent domain by invoking the provisions under the Land Acquisition Act for getting such land. The Collec-tor shall have to determine the compensation towards the lease-hold interest held by the lessee, if assessable separately and determine the compensation. The lessee being the owner of the super structure and the Govt. being the owner of the land, if compensation is determined for both the components, then the same has to be apportioned between them. At what proportion the lessor and the lessee are entitled to receive the compensation has to be determined. In the absence of any covenant in the lease for payment and in the absence of any specific data available to him, the Collector has to determine the respective shares at which the compensation is to be apportioned between the Govt. and the lessee, the course open to the Land Acquisition Collector is to determine the total compensation, make an award and make a refer-ence to the Civil Court under s.30 for decision on apportionment. Exactly that is the situation on the facts of this case. Take another illustration. The Govt. grants a patta of its land sub-ject to payment of land revenue. Later, the land is required for public purpose. The payment of land revenue is at par with the payment of land revenue payable by a private owner to the state. By grant of patta, the title has been vested in the grantee. Therefore, the grantee is entitled to the full compensation of the acquired land.
6. The Land Acquisition Collector determined the compensation for the sum total of the right, title and interest held by the lessor and the lessee together and made a reference to the Civil Court under s.30 to determine the proportion in which the lessor and the lessee are entitled to receive the compensation. In a given case where it is possible to determine the compensation payable towards leasehold interest, it could also be done and the compensation payable towards the interest held by the lessee could be deposited in the court and paid, subject to the provi-sion in the Act. Since the Land Acquisition Collector was not in a position to determine the proportion in which the said compen-sation had to be paid to the appellant and the lessor , Govern-ment made a reference to the Civil Court under s.30.
7. In Nusserwanji Rattanji Mistri’s case the facts are as under :
In the island of Bombay certain lands were held on a tenure known as “Foras”. Under s.2 of Bombay Act VI of 1851 the occup-ants were entitled to hold the lands subject only to the payment of revenue then payable. Between 1864 and 1867 the Govt. of India acquired these lands under the provisions of the Land Acquisition Act (VI of 1857). On 22.11.1938 the Governor-General sold them to certain persons under whom the present respondents claimed. In April 1942 the appellant acting under the Bombay City Land Reve-nue Act (Bombay Act 11 of 1876) issued notices to the respondents proposing to levy assessment on the lands at the rates mentioned therein. The respondents thereupon instituted two suits disputing the right of the appellant to assess the lands to revenue. They contended that under the Foras Land Act the occupants had ac-quired the right to hold the lands on payment of revenue not exceeding what was then payable, that the right to levy even that assessment was extinguished when the Govt. acquired the lands under the Land Acquisition Act, that the Governor-General having conveyed the lands absolutely under the sale deed dated 22.11.1938, the respondents were entitled to hold them revenue free and that even if revenue was payable it could not exceed what was payable under the Foras Land Act. On those facts this court held that if the Govt. has itself an interest in the land, it has only to acquire the other interests outstanding therein, so that it might be in a position to pass it on absolutely for public user. And the Act primarily contemplates all interests as held outside Govt. and directs that the entire compensation based upon the market value of the whole land must be distributed among the claimants. When the Govt. possessed an interest in land which is the subject matter of acquisition under the Act, that interest is itself outside such acquisition, because there can be no question of Govt. acquiring what is its own, an investigation into the nature and value of that interest will no doubt be necessary for determining the compensation payable for the inter-est outstanding in the claimants but that would not make it the subject of acquisition. In that case since the claimants are entitled to pay only land revenue and thereafter since sale of the land was made, the pre-existing right in the land which the Govt. had ceased and claimants became owners. Therefore it was held that the claimants alone were entitled to the full compensa-tion. But on the facts in this case, it is seen that since the Land Acquisition Collector had determined the compensation of the sum total of the interests held by the lessor and the lessee in the land under acquisition but being not able to decide on the apportionment of such compensation between Govt. and the appell-ant, reference was made to the civil court to determine the apportionment. The civil court decided by its award that appor-tionment of compensation fixed in the award of the Land Acquisi-tion Collector between the lessee-claimant and the Govt.-landlord shall be in order of 67 per cent and 33 per cent. The High Court by its judgment and decree under the present appeal has modified the apportionment of compensation payable for land as 75 per cent for the lessee and 25 per cent for the lessor. Under these cir-cumstances, it cannot be said that the Land Acquisition Collector had determined the compensation only towards the leasehold inter-est held by the appellant and that, therefore, the appellant is entitled to the entire compensation determined by the Collector. Therefore, the judgment and decree under appeal does not call for interference and the appeal is, accordingly dismissed. But in the circumstances, the parties are directed to bear their own costs.
