TMI Blog1975 (9) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... ble properties were acquired. On account of advancing age and loss of eye-sight, Govinda Reddiar was unable to attend to the business completely and he, therefore, constituted a partnership in 1940 with his sons for conducting the said business. This partnership continued up to June, 1954, when, because of differences among the parties, it was dissolved. The parties were given liberty to carry on their separate businesses thereafter. The parties had then agreed in writing to effect division of the immovable properties belonging to the family. The parties thus became divided in status in 1954 and started living separately and were since then enjoying the joint family properties as separated members. There were differences among the parties regarding the actual division of the properties. Parthasarathy filed O.S. No. 752 of 1957 in the City Civil Court for taking accounts of the dissolved partnership. He filed also O.S. No. 2793 of 1959 for setting aside the sale of a property in Maharaja Surya Road, Pithapuram Nagar, Alwarpet, Madras, effected in 1959 by Govinda Reddy on the footing that it was his (Govinda Reddy's) self-acquired property. Parthasarathy's stand was that it was joint ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... controversy between the parties in this reference depends to some extent on the construction of the clause and its legal effect. In part 3 of schedule " A " the description of this property is given. This property is bounded on 3 sides by other properties belonging to the same parties which had been acquired by the Government at that time. This property will, hereafter, be referred to as the Saidapet property for convenience. It may be seen that in clause 3 extracted above, there is reference to the consequence of the acquisition of the property by the Government. It is provided that if, during the lifetime of Govinda Reddiar, the said property was acquired by the Government or any public or local authority, the net compensation amount, which might be awarded for it, should be divided into four equal shares, and each of the parties would be entitled to an absolute interest therein. The apprehension of the parties was justified by the later events. As regards this property a notification under section 4(1) of the Land Acquisition Act was published on 23rd May, 1962. Declaration under section 9 of that Act was notified on 5th November, 1962, and an award was passed under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l shares with absolute rights therein. " The dates of the proceedings preceding the award are not available on record, but they are not really material. The award in this case under the Land Acquisition Act was made on 14th September, 1962, fixing a sum of Rs. 10,662.90. It may be seen that this date fell within the lifetime of Govinda Reddiar, the deceased. It was clear to the Assistant Controller that the deceased had an interest for life over this property known as " Reddithottam " and that the life interest extended to the compensation amount also. He considered that " the distribution of this amount in September, 1962, amongst the three sons of the deceased was clearly caught by the provisions of section 11 of the Act which roped in limited interest disposed of within a certain period before death. " The accountable person appealed against the inclusion of these two amounts, viz., Rs. 1,27,653 and Rs. 10,663 relating to the Saidapet and Reddithottam properties in the estate duty assessment. The Appellate Controller confirmed the inclusion of the aforesaid two amounts by reference to sections 7 and 11, respectively. On further appeal, it appeared to the Tribunal that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hare of the compensation amount and that the share in the compensation amount alone was dutiable. A brief reference may now be made to the relevant provisions and the proceedings under the Land Acquisition Act. Section 4 of the Act contemplates publication of preliminary notification whenever it appeared to the appropriate Government that land in any locality was needed or was likely to be needed for any public purpose. On such notification any officer either generally or specially authorised in this behalf had power to enter upon and survey the property, to dig or bore into the sub-soil and to do all other acts specified in section 4(2) of the Act. In this case, the State Government considered the lands covered by the Saidapet property to be needed for an industrial estate. Any person interested in any land notified under section 4(1) may object to the acquisition of the land or of any land in the locality to the Collector. The Collector would then submit a report after making due enquiry. The decision of the Government on such a report is final (see section 5-A). When the appropriate Government is satisfied after considering the report under section 5-A that any particular lan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion is taken, to withdraw from acquisition of any land in exercise of the powers conferred by section 48 of the Land Acquisition Act. It is, therefore, not the award of the Collector which is the source of the right to compensation ; the award quantifies the offer of the appropriate Government, which is made because the Government has taken over, or intends to take the land of the owner under the authority conferred by the Land Acquisition Act. (Underlined by us). In Sarju Prasad Saha v. State of U.P. AIR 1965 SC 1763, 1765, the Supreme Court again observed as follows : " The scheme of the Act is that after notifying that land is needed or likely to be needed for a public purpose, the Government directs the Collector to hold an enquiry into the objections which may be raised by persons interested in the land notified, and it is after the enquiry is made and the objections of persons interested in the land are considered, that the notification that the land is needed for a public purpose may issue. The right of the owner of the land is extinguished when Government takes possession of the land after an award of compensation is made. " (Underlining ours). This court in State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , where it was observed that even at the stage of section 9 the analogous relationship of purchaser and vendor was established and that only if the acquisition was proceeded with there would be the right of compensation. This decision is inconsistent with the decision of Dr. G. H. Grant v. State Of Bihar AIR 1966 SC 237 ; [1965] 2 SCJ 404. The relevant passage, as already extracted from page 409 of that decision, would clearly go to show that the award by the Collector was strictly speaking only an offer made to the persons interested in the land notified for acquisition. When once the offer itself emanated at the stage of the award, the notice to the interested persons under section 9 cannot give the persons the status of vendors of the property. As the relevant passage to which our attention was drawn by the counsel is inconsistent with the decision of the Supreme Court, we do not think it proper to follow it. There is no dispute that except in the case of the contingency of the acquisition, Govinda Reddiar had a life interest in the said property. He was in a position to occupy himself or to let out the family bungalow. Only in case he allowed one of the sons to occupy, the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h absolute right. As the property was acquired even during the lifetime, the question that arises is whether the clause regarding the life operated even with reference to the substituted property. In Ravu Janardhana Krishna Ranga Rao v. State of Madras AIR 1953 Mad 185 this court, which dealt with the question as to whether the impartibility of the estate extended to the compensation payable under the Madras Estates (Abolition and Conversion into Ryotwari) Act, 1948, pointed out that the principle that conversion would not alter the quality or nature of the estate was of universal application. Section 7 of the Act deals with an interest ceasing on the death with reference to any property. The property has been defined in section 2(15) of the Estate Duty Act as including the sale proceeds and also any property converted from one species into another by any method. Even though this is not a case of a sale as such, still it would come within the scope of the expression " any property converted from one species into another by any method " in section 2(15). The interest of Govinda Reddiar would, on the facts herein, attach to the compensation payable under the Land Acquisition Act. Whe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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