TMI Blog1958 (2) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... reements the second claimant acquired no interest in the lands under acquisition and accordingly the second claimant could not claim a share in the compensation. It was further urged that the third claimant was claiming a derivative interest, if any, from the second claimant, and if the second claimant was not entitled to any share in the compensation, the third claimant also was not entitled to any compensation. 2. In order to appreciate this argument it may be necessary to determine the legal relation between the parties on October 1, 1947, the date on which the notification for acquisition under Section 4 of the Land Acquisition Act was issued. Under the agreements, dated June 2, 1947, and June 12, 1947, respectively, exhs. 324 and 325, the first claimant had put the second claimant in possession of the lands agreed to be demisd by her, and in pursuance of the agreements claimant No. 2 was in occupation of some of the lands, and the remaining lands were in the occupation of the third claimant under agreements exhs. 326, 327 and 328. It is undisputed that the second claimant had paid the rent which was agreed to be paid by him, and the second claimant was ready and willing to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... within the meaning of Section 53A of the Transfer of Property Act, as against the first claimant. It was urged by Mr. Gupte that the possession contemplated by Section 53A of the Transfer of Property Act is actual physical possession and not legal possession. In our judgment there is nothing in Section 53A of the Transfer of Property Act which either expressly or by necessary implication supports the view that the possession contemplated to be protected thereby is actual physical possession and not legal possession. Under para. 2 of Section 53A of the Transfer of Property Act, provided the transferee has taken possession of the property, or, being already in possession, has continued in possession, and the other conditions are fulfilled, he is entitled, notwithstanding that the transfer has not been completed in the manner prescribed therefor by the law for the time being in force, to remain in possession, and the transferor is debarred from enforcing against the transferee and persons claiming under him any right in respect of the property of which the transferee has taken or continued in possession. The section was enacted with a view to partially introduce in India the doctrine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sation, even though they may have no interest in the land itself. Section 5A enables any person interested in the land notified for acquisition under Section 4(1) to object to the acquisition of the land, and by Sub-section (3) of that section it is provided that a person shall be deemed to be interested in land who would be entitled to claim an interest in compensation if the land were acquired under the Act. Section 9 by the first sub-section requires the Collector to give notice stating that the Government intends to take possession of the land and that claims to compensation for all interests in such land may be made to him. By Sub-section (2) of Section 9 the notice is required to state the particulars of the land needed and to require all persons interested in the land to appear personally or by agent before the Collector. By Sub-section (3) it is provided that the Collector shall also serve notice upon persons known or believed to be interested therein, and by Sub-section (4) it is provided that in case any person so interested resides elsewhere, and has no such agent, the notice shall be sent to him by registered post. By Section 10(1) the Collector is entitled to require a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has, without having any interest, a right to remain in occupation or possession of land of the ownership of another, compensation for extinction of that right by compulsory acquisition will be payable to the person having the right of occupation or possession. For instance, a person who has a licence which is irrevocable will be a person interested, even though the licence does not amount to an interest in the land. The owner of a dominant tenement, having an easement over a servient tenement, even though the easement does not amount to an interest in the land, is by the definition declared expressly to be a person interested in land. In our judgment, the right to receive compensation for compulsory acquisition of land is not restricted to those persons who have a legal or proprietary interest or estate in the land and is available to all persons who have a right or claim to land, even if such right or claim does not amount to legal or proprietary estate or interest in the land. 7. The view we are expressing is amply supported by authority. In Chhuttan Lal v. Mul Chand [1917] A.I.R. Lah. 40, a Division Bench of the Lahore High Court held that a person who has entered into a val ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aim for apportionment of compensation. Mr. Justice Phillips, who delivered the principal judgment of the Court, observed that a person may be 'interested' within the meaning of the Act without holding any legal estate in the land and that an attaching decree-holder was a person 'interested' in the land within the meaning of the Act. The learned Judge observed (p. 40): This definition of 'person interested in Section 3(b) of the Land Acquisition Act does not seem to contemplate that a person interested need have a legal interest in the land, because it specifically alludes to interest in the compensation to be made, and it has frequently been held that a person may be interested within the meaning of the Act without holding any legal estate in the land,... 10. In In re Pestonji Jehangir (1911) 14 Bom. L.R. 507, Mr. Justice Macleod observed that a person may be interested, within the meaning of Section 3(6) of the Land Acquisition Act, in the compensation money without having an interest in the land. In that case, one Pestonji, who was in occupation of the land under acquisition, under an agreement with the Improvement Trust, with a right to obtain a lease f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Collector of Bombay v. Nusserwanji Mistri decided by their Lordships of the Supreme Court. In that case no question directly arose about assessment or apportionment of compensation. The question which fell directly to be decided by the Court was about the prerogative right of the State to levy assessment on lands which had not been previously assessed, and the Supreme Court held that the State had such a right. It appears that in that case certain Foras lands governed by Bombay Act VI of 1951 were, between the years 1864 and 1867, compulsorily acquired under the Land Acquisition Act, 1857, for a railway. Thereafter the lands were sold by the Government of Bombay in 1938 to certain purchasers who conveyed the same in trust to the plaintiffs. In 1942, the Collector of Bombay, treating the plaintiffs as superior holders, proposed to levy assessment on the lands at the rates prescribed by the Bombay City Land Revenue Act, 1876. Thereupon the plaintiffs sued the Collector for a declaration that he had no right to levy the assessment; and it was urged in support of the claim that the Government's right to assess the land had, by reason of the acquisition between the years 1864 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... At first sight, this judgment may appear to support the contention raised on behalf of the first claimant, but when the facts are examined, it does not appear that it was intended by the Court to lay down any such proposition. The property in dispute in that case was agreed to be sold by the owner to one Mahomad Abdul Sattar for ₹ 10,000. As the owner failed to convey the property, Mahomad Abdul Sattar filed a suit for specific performance of the agreement of sale. During the pendency of the suit, the land was compulsorily acquired, and evidently the suit for specific performance became infructuous. It was contended on behalf of the plaintiff that he was entitled to the compensation money lying with the Collector, and the Court negatived his contention. But evidently if the plaintiff was entitled to the benefit of the contract, he had to make an application in acquisition proceedings, to the Collector and claim apportionment; he could not ask the civil Court to pass an order against the Collector or against the defendant whereby the amount of compensation may be paid over to him. In our judgment, this case also does not support the contention raised by Mr. Gupte. 14. We ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ortions of the said land comprised in the said agreements dated 2nd June 1947 and 12th June 1947 and hereby agreed to be demised were acquired by the Government of Bombay for public purposes and possession thereof was taken by the Housing Commissioner on behalf of the Government of Bombay AND WHEREAS negotiations between the Lessee and the Government of Bombay for derequisitioning the said piece of land so acquired as aforesaid are still pending AND WHEREAS the said Trivedi, the said Bharucha and the Lessee have requested the Lessor to grant to the Lessee for the present a lease of the pieces of land being portions of the said land comprised in the said recited agreement to lease dated the 2nd day of June 1947 which portions are more particularly described in the schedule hereunder written which the Lessor agreed to in the manner hereinafter appearing.... It is evident from this recital that there was no abandonment, even at the time of execution of exh. 84, of the rights acquired under the original agreement of lease. In our view, there is no substance in the contention that the rights acquired under exhs. 324 and 325 were by mutual agreement abandoned. It may be noted that bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im apportionment of compensation which has been awarded for the lands. 18. It was urged by Mr. Gupte that even if the second claimant is entitled to compensation, that compensation must be something less than the compensation awardable to a tenant who has obtained a registered lease in his favour. In our view, that contention also cannot be sustained. When land is compulsorily acquired, the interest of every person therein is extinguished, and the Court is required to ascertain the market value of the land and also of the interest of the parties interested therein which is extinguished by compulsory acquisition, and in so ascertaining the market value the Court must take into account the circumstance that it is only on account of the fortuitous intervention of the Government that the contract, which both the parties honestly desired to complete and which would have been completed but for such intervention, has not been completed. It is undisputed that at the date of the notification the first claimant was willing to grant the lease and the second claimant was willing to accept the lease. For the purpose of apportionment of compensation, we do not think, therefore, that any disti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the two amounts. If reasonably precise valuation of the competing interests is not possible, the Court may proceed to evaluate the interests of the claimants in terms of fractions of the total amount of compensation regarded as a single unit. That is the third method. Theoretically the aggregate value of the interests acquired must be equal to the amount of compensation to be distributed. But in the valuation of competing interests, which from its very nature is dependant upon indefinite factors and uncertain data, considerable difficulty is encountered. Indisputably, in apportioning compensation the Court cannot proceed upon hypothetical considerations but must proceed as far as possible to make an accurate determination of the value of the respective interests which are lost. The Court must, in each case, having regard to the circumstances and the possibility of a precise determination of the value having regard to the materials available, adopt that method of valuation which equitably distributes the compensation between the persons entitled thereto. As observed by Mr. Justice Macleod in In re Pestonji Jehangir (p. 510): ...Again, even if the market value of the various inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unts proportionate to their respective interests. The second claimant, however, claims the balance remaining after paying to the first claimant capitalised value of the annual rental at 4 per cent. But the circumstance that the parties have given up the original stand which was adopted by them in the trial Court cannot, in our judgment, have any bearing in ascertaining the method for equitable distribution. We must proceed to adopt that method which, having regard to all the circumstances, gives to each of the parties interested in the compensation a share which may be equitably regarded as equal in value to the interest lost by him in the land acquired. 22. In our judgment, it is not possible precisely to value either the interest of the first claimant or of the second claimant or the third claimant in the compensation. There are diverse rights which each has against the other, and we do not think that it is possible to devise any method by which separate valuations which may be regarded even as reasonably precise can be arrived at. If we turn to the terms of the agreement of lease exh. 324 between the first and second claimants, it is apparent that there are several rights gi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dispose of the same. The second claimant was also given an option of pre-emption in respect of Survey Nos. 2, 3, 4, 5 and 148 and the Gowthan lands west of Ghodbunder Road or any part thereof in the event of the first claimant being willing to sell or give a lease of those lands. A proviso for re-entry was reserved in favour of the first claimant in the event of the second claimant failing to pay the rent agreed within three months from the date on which it was due and payable or on a breach or non-performance of any of the conditions or covenants of the lease. 23. It is evident from a resume of the important covenants, options and rights which were to be included in the proposed lease that there were numerous restrictions both on the first claimant and on the second claimant and neither in the evidence nor in the arguments at the bar has any method been suggested which would enable the Court to evaluate precisely the conditions, covenants, options and rights reserved to the respective parties. In exh. 325, which is the agreement in respect of lands in group B, similar covenants as are contained in exh. 324 are by reference incorporated. Analysing the rights and obligations of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the rental at ₹ 1,200 he arrived at the present value of ₹ 329 and gave for reversion after 198 years a value of ₹ 2; and the total figure of ₹ 11,674 was thus arrived at, and the value of the restrictive covenants taken at one anna per sq. yard i.e. ₹ 363 was added making thereby an aggregate of ₹ 12,037. 26. This method of calculation, in our judgment, proceeds upon numerous assumptions and must be regarded as wholly artificial. There is no justification whatever for assuming that the reversion of land value after 198 years can be calculated by finding out how much amount may be invested at present at 5 per cent, which on the expiry of 198 years will give an amount equivalent to the value of the land at ₹ 5-8-0 per square yard. There is no justification also for the assumption that the value of the land after 198 years will be ₹ 5-8-0 per square yard, nor is there any justification for the assumption that the rate of interest will continue to be 5 per cent. In assessing the value of the reversion, the Court cannot treat it as a mathematical problem, but must take a broad and practical view. The Court must ask itself the questio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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