Full Judgment Text
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PETITIONER:
STATE OF GUJARAT ETC.
Vs.
RESPONDENT:
VAKHTSINGHJI SURSINGHJI VAGHELA & ORS. ETC.
DATE OF JUDGMENT:
08/04/1968
BENCH:
BACHAWAT, R.S.
BENCH:
BACHAWAT, R.S.
HIDAYATULLAH, M. (CJ)
MITTER, G.K.
VAIDYIALINGAM, C.A.
HEGDE, K.S.
CITATION:
1968 AIR 1481 1968 SCR (3) 692
CITATOR INFO :
E 1969 SC 270 (9)
D 1976 SC1721 (7,11)
RF 1986 SC1272 (99)
ACT:
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.
HEADNOTE:
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 case.
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
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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, [1944] 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]
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(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, [1955] 1 S.C.R.
1104, relied on,
JUDGMENT:
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
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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 years.
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
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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 Collector’s award.
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
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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
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assessment. We have therefore to consider only the claim
for compensation for the difference between the jama and the
full assessment.
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) [1944] F. C. R. 284.
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 property.
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
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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;
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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 advantages.
Where there are no sales of comparable lands, the value must
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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
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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.,
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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
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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) [1955] 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.
706