Full Judgment Text
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PETITIONER:
INDER PRASHAD
Vs.
RESPONDENT:
UNION OF INDIA
DATE OF JUDGMENT13/01/1994
BENCH:
RAMASWAMY, K.
BENCH:
RAMASWAMY, K.
VENKATACHALA N. (J)
CITATION:
1994 SCC (5) 239 1994 SCALE (2)553
ACT:
HEADNOTE:
JUDGMENT:
ORDER
1. The appellant admittedly was a lessee of Nazul land
admeasuring 3.1 acres or thereabout situated at Block No.
160 in Delhi having had 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 demise
unto the lessee all the plot of land containing...... He was
also entitled to retain the demise 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
notification dated March 5, 1967 published in the Gazette
under Section 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 a 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 Parshad. The land is
Nazul which was given on a perpetual lease by
Chief Commissioner, Delhi on an 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 permission 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
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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 Section 30 of the Act to
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the civil court. 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 compensation in favour of
Government 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 thereof he placed reliance on
Collector of Bombay v. Nusserwanji Rattanji Mistri 1. With
a view to appreciate the contention it is necessary to see
the relevant provisions of the Act.
4. It is seen that after making the award under Section 11
and deposit of the compensation, the Land Acquisition
Collector is entitled under Section 16 of the Act to take
possession of the land for that provision says that "the
land shall thereupon vest absolutely in the Government free
from all encumbrances". Thus by exercise 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 Section 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 superstructure built thereon and was in possession and
enjoyment of the same on the date of acquisition. The
contents of the award extracted hereinbefore clearly
indicate that the Land Acquisition Collector could not
determine compensation payable towards the leasehold
interest held by the appellant. Being an owner the
Government 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 a 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 covenants 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 Government should get
absolute title thereof free from all encumbrances.
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Compensation becomes payable for the leasehold right or
interest held by the lessee or grantee when the land is
1 (1955) 1 SCR 1311 : AIR 1955 SC 298
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acquired. The point becomes clear from the following
illustrations. Take a case where the Government granted
lease of agricultural land on the annual payment of rent
with a covenant that the Government is entitled to resume
the land when needed for public purpose or as when the
Government finds that the land is required for public
purpose. In terms of the covenants, the Government 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 Government 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 Government
cannot unilaterally determine the lease and call upon the
lessee to deliver the possession. Therefore, the Government
is required to exercise the power of eminent domain by
invoking the provisions under the Land Acquisition Act for
getting such land. The Collector shall have to determine
the compensation towards the leasehold interest held by the
lessee, if assessable separately and determine the
compensation. The lessee being the owner of the
superstructure and the Government 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 Government and the lessee, the
course open to the Land Acquisition Collector is to
determine the total compensation, make an award and make a
reference to the civil court under Section 30 for decision
on appointment. Exactly that is the situation on the facts
of this case. Take another illustration. The Government
grants a patta of its land subject 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 Section 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
provision in the Act. Since the Land Acquisition Collector
was not in a position to determine the
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proportion in which the said compensation had to be paid to
the appellant and the lessor-Government, he made a reference
to the civil court under Section 30.
7. In Nusserwanji Rattanji Mistri case’ the facts are as
under:
8. In the island of Bombay certain lands were held on a
tenure known as "Foras". Under Section 2 of Bombay Act VI
of 1851 the occupants were entitled to hold the lands
subject only to the payment of revenue then payable.
Between 1864 and 1867 the Government of India acquired these
lands under the provisions of the Land Acquisition Act (VI
of 1857). On November 22, 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 Revenue 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 acquired 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 Government acquired the
lands under the Land Acquisition Act, that the Governor-
General having conveyed the lands absolutely under the sale
deed dated November 22, 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
Government 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 Government and directs that the
entire compensation based upon the market value of the whole
land must be distributed among the claimants. When the
Government 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 Government 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 interest 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 Government had
ceased and claimants became owners. Therefore it was held
that the claimants alone were entitled to the full
compensation. 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 Government and the appellant reference
was made to the civil court to determine the apportionment.
The civil court decided by its award that apportionment of
compensation fixed in the award of the Land Acquisition
Collector between the lessee-claimant and the Government-
landlord shall be
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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
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lessor. Under these circumstances 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 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.
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