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CASE NO.: Appeal (civil)  6493-6494 of 1998

PETITIONER: Kiran Tandon

RESPONDENT: Allahabad Development Authority & Anr.   

DATE OF JUDGMENT: 23/03/2004

BENCH: S. Rajendra Babu, Dr. AR Lakshmanan & G.P. Mathur.

JUDGMENT: JUDGMENT

(with Civil Appeal No.1831/2004 @ R.P. (C) No. 408/99 in S.L.P. (C)  No.10943/98)

G.P. MATHUR,J.  

1.      These appeals  are directed against the judgment and decree dated  19.12.1997 of Allahabad High Court by which two First Appeals preferred  by Allahabad Development Authority were partly allowed and the award  made by the Additional District Judge was modified.  

2.      At the instance of  Allahabad Development Authority (hereinafter  referred as ADA) the State Government took steps to acquire  property  bearing No.2 Circular Road, in the city of Alllahabad having an area of  about 4 bighas.  The preliminary notification under Section 4(1) of the Land  Acquisition Act (hereinafter referred to as ’the Act’) was published in the  Gazette on 7.1.1987 and it was recited therein that the land is being acquired  for a public purpose namely for construction of residential flats by ADA and  in view of urgency, the  provisions of Section 17 were being invoked.  The  Special Land Acquisition Officer (hereinafter referred to as ’SLAO’) made  an award for the acquired land on 15.6.1987 and further directed that the  compensation payable for the building and the trees standing thereon shall  be determined subsequently after their valuation had been ascertained.  The  question of apportionment of the compensation for the acquired land was  referred for determination by the Court in accordance with Section 30 of the  Act.  The ADA thereafter took possession of the land on 16.6.1987.  It is the  admitted case of the parties that the land in dispute, namely,  2 Circular  Road was owned by the State Government which had been given on lease.  According to the claimant Ravindra Kumar Tandon (husband of the  appellant Smt. Kiran Tandon) the lease in his favour was to expire on  7.7.1987.  The SLAO gave a supplementary award  with regard to the  building  and the trees on 4.3.1989.  In the awards the market value of  the  land was fixed as Rs. 72.50 per square yard,  the value of the building   (exclusive of land) at Rs.3,48,000/-  and the value of the trees as   Rs.23,100/-. Being  dissatisfied with the amount of compensation awarded to  him the claimant sought references to the Court which were made by the  SLAO and accordingly  three references were registered, namely, reference  no.126 of 1987, no. 23 of 1988 and no. 34 of 1989.  The references were  decided  by VIIIth Additional District Judge, Allahabad  on 8.12.1992 by  separate orders.  The ADA  then preferred two appeals namely, First Appeal  no. 368 of 1994 and First Appeal no. 439 of 1994  before the High Court in  which  the State of U.P. was impleaded as proforma respondent no.2  but  subsequently it was  transposed  as appellant no.2.  The Addl. District Judge  had held that the market value of the land was Rs. 500/- per square yard and  that the claimant was entitled to the entire amount even though possession of  the land was taken only 21 days before the expiry of the lease.  He, further  assessed the value of the building at Rs.10,96,842/- and value of the trees at

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Rs. 50,000/-.  The High Court upheld the finding of the Addl. District Judge  regarding  the market  value of the land  but directed that a deduction of 20  per cent  should  be made towards the cost of  internal development which  would be incurred by ADA.  The   High Court further held that in view of  the fact that the claimant had only lease hold rights and the period of lease  expired within a few days of taking over possession, the compensation  amount with regard to the same had to be apportioned equally amongst the  claimant and the State Government and therefore claimant was entitled to  only 50 per cent of the compensation amount.  It further held that the value  of the building was Rs. 60,000/- and the value of trees was Rs.23,000/-.   

3.      Feeling aggrieved by the judgment and decree of the High Court  the  claimant as well as the ADA  preferred special leave petitions in this Court.   The special leave petition preferred by ADA was summarily dismissed  without assigning any reason.  After leave was granted in the special leave   petitions filed by the claimant, the ADA preferred a review petition in which  notice was issued on 3.8.1999.   Having heard counsel for the parties at some  length,  we are of the opinion that there is substance in the special leave  petition preferred by the ADA as discussed hereinafter.  Accordingly review  petition is allowed and leave is granted.  

4.      Shri Sunil Gupta, learned senior  counsel for the claimant has at the  very outset assailed the order of the High Court whereby the application  moved by the State of U.P. for transposing it as appellant in the appeals  preferred by ADA was allowed.  In the appeals preferred by the ADA  against the judgment and award of the Addl. District Judge Smt. Kiran  Tandon (widow of the original claimant Ravindra Kumar Tandon) was  arrayed as respondent no.1 and State of U.P. was arrayed as proforma  respondent no.2.  The applications for transposition were supported by the  affidavit of Tehsildar Sadar, Allahabad wherein it was averred that an  objection had been raised on behalf of State of U.P.  before the Addl.  District Judge that the acquired land was State land and therefore the entire  compensation amount should be awarded to State of U.P.  The land had been  acquired for construction of residential flats by ADA which is a State within  the meaning of Article 12 of the Constitution and is therefore competent to  raise any or all of the objection on behalf of the State Government.  Therefore, in order to avoid any technical objection and in the interest of  justice it was expedient that the State of U.P. may be transposed as appellant  no. 2 in the appeal.  The High Court held that as the ADA and State of U.P.  were disputing the title of the claimant to receive the entire amount of  compensation and State of U.P. having already been impleaded as proforma  respondent in the appeal, the interest of justice required that it should be  transposed as  appellant in the appeal.   Sub-rule 2 of Order I Rule 10 lays  down that the Court may at any stage of the proceedings, either upon or  without the application of either party, and on such terms as may appear to  the Court to be just, order that the name of any party improperly joined,  whether as plaintiff or defendant, be struck out, and that the name of any  person who ought to have been joined, whether as plaintiff or defendant  or  whose presence before the court may be necessary in order to enable the  Court effectually and completely to adjudicate upon and settle all the  questions involved in the suit, be added.  It is well settled that the Court has  power under Sub-rule (2) order I Rule 10 CPC to transfer a defendant to the  category of plaintiffs and where the plaintiff agrees, such transposition  should be readily made.  This power could be exercised by the High Court in  appeal, if necessary, suo motu to do complete justice between the parties.   This principle was laid by the Privy Council in Bhupendra Narayan Sinha v.  Rajeshwar Prosad AIR 1931 PC 162 and has been consistently followed by  all the Courts.  In fact the pleas raised by the ADA and State of U.P. were  identical and  in order to affectuate complete adjudication of the question  involved in the appeal it was in the interest of justice to transpose State of  U.P. as appellant no.2 in the appeal.  We are, therefore, of the opinion that  no exception can be taken to the course adopted by the High Court in  transposing the State of U.P. as appellant in both the appeals.    

5.      Shri Sunil Gupta has next submitted that there were three references

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before the Addl. District Judge and the finding recorded by him in reference  no.126 of 1987 that the claimant was entitled to entire amount of  compensation having not been challenged  either by the ADA or by the State  of U.P. by filing an appeal, the said finding would operate as res judicata and  it was not open to the High Court to apportion the  compensation amount  and to hold that claimant would get only half and remaining half would go to  the State Government.  In order to examine the contention raised it is  necessary to mention the relevant facts.  In reference no. 126 of 1987 the  State Government was shown  as applicant-plaintiff and (1)  Lalji Tandon  (2)  Ravindra Kumar Tandon (3) Officer Incharge Estate Institution,  Allahabad and (4) Allahabad Development Authority  were shown as  defendant-opposite parties.   Lalji Tandon claimed that he was the sole  lessee of the land in dispute and, therefore, he was entitled to entire amount  of compensation.  Ravindra Kumar Tandon also made a similar claim that he  was entitled to entire amount of compensation as he was  the sole lessee of  the plot in dispute.  The State Government on the other hand claimed that  Lalji Tandon was not the lessee of the land and the lease having  expired and  the same having not been renewed it was  entitled to receive the entire  amount of compensation.  The Addl. District Judge held that as the lease of  Ravindra Kumar Tandon had been renewed, the State Government was not  the owner of the property and was not entitled to any compensation.   Similarly, the claim of  Lalji Tandon was also rejected and Smt. Kiran  Tandon was held entitled to receive the compensation amount as her  husband Ravindra Kumar Tandon. the original claimant, had died during the  pendency of the reference. In Reference no.123 of 1988 which  was sought  by Ravindra Kumar Tandon  (1) State of U.P. and (2) ADA were arrayed as  opposite parties and his case was that he was the sole owner of the property  and he alone was entitled to receive the compensation amount.  He further  pleaded  that at the time of  publication of the  notification under Section  4(1) of the Act the lease in his favour  had not expired and had been  subsequently renewed  and therefore the State of U.P. was not entitled to  receive any compensation. The prayer made in the application moved under  section 18 of the Act seeking reference to the court clearly shows that he  wanted determination of his title to receive the compensation amount as  against the State of U.P.   It is being reproduced below: "It is, therefore, most respectfully prayed that your  honour may be pleased to refer the matter to court for the  determination of proper and adequate amount of   compensation for the applicant’s above property as well  as the title to receive the same under law and oblige."  

       The State of U.P. filed written statement  claiming the entire amount of  compensation being owner of the property.  It was specifically pleaded that  the lease in favour of Ravindra Kumar Tandon had expired and the same had  not been renewed and therefore he was not entitled to any compensation.  It  was also pleaded that the  amount of compensation determined by SLAO  was correct.  The ADA filed a separate written statement and denied the  claim of Ravindra Kumar Tandon.  On the pleadings of the parties the Addl.  District Judge framed six issues and issue nos. 1 and 2 read as under : (1)     Whether the claimant is entitled to receive the  compensation in respect of the land ?

(2)     Whether the awarded compensation is inadequate ?  If  yes, then what is the proper  compensation ?                          

6.     After referring to the terms of the lease deed and some documents  regarding renewal of  lease filed by the claimant, the Additional District  Judge noticed the contention raised on behalf of State of U.P. in the  following manner: "On behalf of the State of Uttar Pradesh and Allahabad  Development Authority it was argued that  the period of  lease had expired and Sri Ravindra Kumar Tandon was  not the owner of the said leased land.  They also argued

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that even if it may be assumed that at the time when the  property was acquired, the rights of Sri Ravindra Kumar  Tandon were existing in the property at that time, then he  can get compensation for that period alone.  For the  period for which the lease was still subsisting and  not for  the entire period.  On the basis of the said two arguments  they argued that Sri Ravindra Kumar Tandon was not the  owner of the property and he is not entitled to receive the  amount of compensation and the Estate Department of  Govt. of  Uttar Pradesh should get the said compensation.   I do not find any force in the aforesaid arguments of the  opposite parties."

       Thereafter, he observed that it is settled law that nobody can acquire  his own property and if the State of U.P. was the owner there was no  necessity for it to  acquire the property.  He further held that the Court is not  supposed to take into consideration what will happen in future but should  base its decision on the present state of affairs  and therefore the situation  which would have happened after 7.7.1987 i.e. after expiry of the lease,  cannot be taken into consideration.  The finding recorded on issue no.1 reads  as under: "The evidence adduced  by the parties and the evidence  available on record, leads to conclusion that the  lease  was still  subsisting at the time when the  property was  acquired.  Sri Ravindra Kumar Tandon and after his  death his wife Smt. Kiran Tandon was the owner of the  property.  Even after the said period and after the expiry  of the period of lease the said lease was in fact subsisting  even  after the year 1987 as the renewal of lease had  taken place.  For the said reason I hold that Estate  Department of Government of Uttar Pradesh or any other  person had no interest in the said property and for the  said reason I hold that the referencee alone is entitled to  receive the amount of compensation for the said property.   This issue is decided accordingly."          

7.      After recording the aforesaid findings and findings on other issues,  reference no.123 of 1988 was decided by the judgment and order dated  8.12.1992.  It is important to note here that even though  an application had  been made on behalf of the claimant to consolidate all the three  references  but the Addl. District Judge, for  reasons which are not understandable,  decided  them by separate orders which were all passed on the same date i.e.  8.12.1992.  The ADA preferred  appeals against the judgment and awards in  reference nos. 123 of 1988 and 34 of 1989. The effect of filing the appeals  was that  the finding that the State of U.P. or any other person had no  interest in the property and that the claimant (Ravindra Kumar Tandon)  thereafter his wife Smt. Kiran Tandon alone is entitled to receive the amount  of compensation became subject matter of challenge.   

8.      The principle of res judicata as contained in Section 11 CPC bars any  Court to try any suit or issue in which the matter directly and substantially in  issue has been directly and substantially in issue in a former suit between the  same parties, or between parties under whom they or any of them claim,  litigating under the same title, in a Court competent  to try such subsequent  suit or the suit in which such issue has been subsequently raised, and has  been heard and finally decided by such Court.  A finding which has attained   finality  operates as res-judicata.  In view of the fact that appeal had been   preferred against the award decree made in reference no.123 of 1988 it was  always open  to ADA or the State of U.P. to contend in the appeal that the  claimant was not entitled to receive the amount of compensation as held by  the learned Addl. District Judge and that the State of U.P. alone  was entitled  to receive  said amount.  Sh. Gupta has relied upon two decisions of this  Court in Badri Narayan Singh v. Kamdeo Prasad Singh & Anr. 1962 (3)  SCR 759  and Premier Tyres Ltd. v. Kerala Road Transport Corp. 1993

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Supp (2) SCC 146 in support of his submission that no appeal having been  preferred against the judgment and award in reference no.126 of 1987, the  same became final and the issue regarding the entitlement of the claimant to  receive the entire amount of compensation could not be examined in the  appeal preferred against the judgment and award in reference no. 123 of  1988. The authorities cited by learned counsel are  clearly distinguishable on  facts.  In the case of Badri Naryan Singh  an election petition was filed by  the respondent wherein  a declaration was sought to declare the election of  the appellant as invalid and to declare the respondent as the elected  candidate.  The Tribunal granted only one relief that the election of the  appellant was invalid.  The appellant and respondent both preferred appeals  in the High Court.  The appellant’s appeal was dismissed but that of the  respondent was allowed. The appellant challenged the order passed in favour  of the respondent in his appeal.  It was held that so long as order in the  appellant’s appeal confirming the order setting aside his election on the  ground that he was  holder of an office of profit under the Bihar Government  and therefore could not have been properly nominated as a candidate stands,  he cannot question the finding about his holding an office of profit, in the  present appeal. which is founded on the contention that that finding is  incorrect.  In   Premier Tyres Ltd. v. Kerala State Road Transport  Corporation (supra) reliance was placed upon Badri Narayan Singh (supra)  and similar view was taken. As shown earlier there is no such finding here  which on account of it having attained finality may debar the High Court to  examine the question regarding  the right claimed by the claimant to receive  the entire amount of compensation or the right of the State of U.P. to receive  the compensation amount.

9.      The learned counsel for the ADA has submitted that the amount of  compensation awarded to the claimant is highly excessive as the market  value of the land has not been correctly determined.  Learned counsel has  submitted that the SLAO had determined the market value of the land at  Rs.72.50 per square yard and the Reference Court has erred in enhancing the  same to Rs. 500/- per square yard which finding has been erroneously   upheld by the High Court.  Learned counsel has also submitted that in view  of expiry of the lease within a short period of  declaration under Section 6(1)  of the Act, the claimant was not entitled to half portion of the total amount  of compensation as directed by the High Court.   

10.     Before examining the merits of the contentions raised it will be useful  to bear in mind the legal principle in the matter of  determination of  compensation. The Collector’s award  under Section 11 is nothing more than  an offer of compensation made by the Government to the claimants whose  property is acquired.  The burden of proving that the amount of compensation  awarded by the Collector is inadequate lies upon the claimant and he is in a  position of  plaintiff. The Court has to treat the reference as an original  proceeding before it and determine the market value afresh on the basis of the  material produced before it.  The claimant is in the position of a plaintiff who  has to show that the price offered for his land in the award is inadequate on  the basis of the materials produced in the court.  The material produced and  proved by the other side will also be taken into account for this purpose. (See  Chimanlal Hargovind Das  v. Special Land Acquisition Officer AIR 1988 SC  1652 and Periyar Pareekanni Rubbers v. State of Kerala AIR 1990 SC 2192).

11.     A question which arises here is as to what method for determining the  value of the property should be adopted when the land is comprised of  buildings, trees or some other additions of like nature.  In Principles &  Practice of Valuation by J.A. Parks (published by Eastern Law House 1998  Edn.) the following paragraph on page 332 illustrates the different aspects of  the problem : "Land with buildings is viewed in a different perspective  than bare  land as such.  Land and buildings once married  become one unit, and neither land nor building can  thereafter be valued separately.  A building once erected  on or married to the site, as it is technically often termed,  takes unto itself a value which may be either greater or

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less than the cost of erection depending upon the market  situation.  If the building properly and economically  develops the land, the total value of the complete entity  may be worth more than the sum of the individual valuer.    In such cases, the excess of the composite value over the  sum of the individual values is ascribable as the builder’s  profit.  But there may also be instances to the contrary.  It  is generally impossible to arrive at the true value of the  whole by addition of the parts."

12.      In  Abdullah Jan Mohammad Ganjee v. The State of Bihar 1967 (1)  SCWR 214 it was observed that a building standing on the land and the land  on which it stands may not for the purposes of the Land Acquisition Act,  ordinarily be regarded as separate units capable of being separately valued  and the Reference Court in the normal course should have valued the land  and building as composite property by the evidence furnished by the value  of similar and comparable properties in the neighbourhood or by  capitalisation of rent or other income received out of the property.

13.     This principle was reiterated in  State of Kerala v. P.P. Hassan Koya  AIR 1968 SC 1201 wherein it was  held as under : "In determining compensation payable in respect of land  with buildings, compensation cannot be determined by  assessing the value of the land and the "break-up value"  of the buildings separately.  The land and the building   constitute one unit and the value of the entire unit must  be determined with all its advantages and its  potentialities.

14.     In O Janardhan Reddy  v. Spl. Dy. Collector 1994 (6) SCC 456 it was  held that where there are irrigation wells in the land, estimated construction  cost of the wells cannot be separately assessed apart from assessment of  market value of the land and the value of the land  has to be assessed having  regard to the availability of irrigation facility on the land as a prime factor.   This view has been reiterated in State of  Bihar v. Madheshwar Prasad  1996  (6) SCC 197 and State of Bihar v. Ratanlal Sahu 1996 (10) SCC 635.  But  there is no hard and fast rule that land and building must be valued as one  unit. They can be separately assessed if the large portion of the land is lying  vacant and is capable of better use as stated by Venkatachaliah, J. (as His  Lordship then was) in  Administrator General of West Bengal v. Collector,  Varanasi AIR 1988 SC 943 and it will be useful to extract the relevant part   para 8 of the reports: "Usually land and building thereon constitute one unit.   Land is one kind of property, land and building together  constitute an altogether different kind of property.  They  must be valued as one unit.  But where, however, the  property comprises extensive land and the structures  thereon do not indicate a realisation of the full  developmental potential of the land, it might not be  impermissible to value the property estimating separately  the market value of the land with reference to the date of  the preliminary notification and to add to it the value of  the structures as at that time.  In this method, building  value is estimated on the basis of the prime-cost or  replacement-cost less depreciation.  The rate of  depreciation is generally, arrived at by dividing the cost  of construction (less the salvage value at the end of the  period of utility) by the number of years of utility of the  building.   The factors that prolong the life and utility of  the building, such as good  maintenance, necessarily  influence and bring down the rate of depreciation."

15.     In the case in hand the value of the land, building and trees has been

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assessed separately by the SLAO, Reference Court and  the High Court.  The  claimant had filed a copy of the sale deed by which 3808 square feet area in  plot No.11/3 situate at Hastings Road was sold  at the rate of Rs.425/- per  square yard and a certificate to show that the Collector had fixed the circle  rate of land at Circular Road at Rs.300/- per square yard.  Besides this he  also filed a copy of judgment of L.A. Case No. 125 of 1987 (Sri Lalji  Tandon v. State) which shows that for plot No.81  on Hastings Road  measuring 4 acres 3 bighas which had been acquired in the year 1985  compensation was paid at the rate of Rs.250 per square yard.  The Reference  Court also relied upon the evidence of a witness examined by the claimant  who deposed that the ADA had constructed 66 flats on the acquired property   and the price of each flat was fixed between Rs.2,73,255/- and Rs.2,82,039/-  depending upon the floor.  On the basis of the aforesaid evidence, the  Reference Court has held that the market value of the land at the time of the  acquisition  was not less than Rs.500/- per square yard.  The High Court has  accepted the value of the land determined by the Reference Court.  The  exemplars relied upon by the Reference Court are of  Hastings Road which   is the prime locality of Allahabad.  The acquired land is situate at some  distance from Hastings Road and its market value could not be  same.  It,  therefore, appears that the market value of the land has been fixed at a higher  value.  However, as the High Court has agreed  with the view taken by the  Reference Court, we do not consider it proper to interfere with the said  finding.

16.     Shri Gupta has submitted that when the Reference Court had not made  any deduction in the compensation amount on account of internal  development, there was no justification for  the High Court to allow 20 per  cent deduction on that account. According to the learned counsel the land is  situate  in a developed area where electricity supply, road and sewer lines  were already in existence and as such there was no occasion for any further  deduction from the market value of the land. Normally,  the principle is that  when a large area is acquired and the area is not fully developed a deduction  of about 33 per cent from the market value is made.  This view has been  taken in Vijay Kumar Motilal v. State of Maharashtra AIR 1981 SC 1632,  Sahib Singh Kalha v. Amritsar Improvement Trust  AIR 1982 SC 940 and  Special Tehsildar Land Acquistion v. A. Mangla Gowri AIR 1992 SC 666.   The evidence on  record indicates that the acquired land is situate in a  developed area and approach road to the land and also power lines are  available.   However, in construction of multi-storeyed residential flats a  considerable portion of the land has to be left out for internal roads, sewer  line, open space  etc. In such circumstances the High Court was justified in  directing deduction of 20 per cent from the market value of the land.

17.     Shri Gupta has submitted that the finding recorded by the Reference  Court was perfectly correct that the  claimant was entitled to entire amount  of compensation and the High Court has erred in  directing that the  compensation amount shall be shared half and half by the claimant and the  State Government.  Learned counsel for ADA  has, on the other hand,  submitted that the period of lease had already expired on 10.5.1987 prior to  taking over of possession and consequently the claimant had no legal interest  left in the property and he was not entitled to any compensation.  It is stated  in the Review Petition that the State Government had on 10.5.1887 granted  leasehold rights in the  land in question in favour of  one Mr. W.C. Walsh  for a period of 50 years which was upto 10.5.1937 and which could be  renewed for a further period of 50 years i.e. upto 10.5.1987. A fresh lease  deed  was executed in favour of  Lalji Tandon on 20.2.1945 for a period of  42 years 2 months and 20 days which expired on 10.5.1987.  Copies of these  lease deeds have also been filed. The claimant has filed  copy of a lease deed  dated 20.2.1945 wherein it is mentioned that the earlier lease had expired on  8.6.1937 and a fresh lease for 4 acres 1 rod  and 12 poles  land situate in  Mauza  Nasibpur Bakhitiara Paragana Chail, Allahabad   is being granted in  favour of Lalji Tandon for a  term of  42 years 3 months and 48 days.  If   calculated from this document the lease expired on 7.7.1987. Accordingly to  Ravindra Kumar Tandon this property came into his share in a compromise  which  was filed in First Appeal No. 7 of 1968 (Lalji Tandon v. Smt. Munni

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Bibi and Other) in Allahabad High Court. Learned counsel for the ADA has  submitted that this document does not relate to the property in dispute but  for some other property.  He has further submitted that the period of 42 years  3 months and 48 days carries no sense as in the event days were more than  thirty, they should have been counted in months. It is true that a perusal of  this document does not show that it relates to the land in question namely, 2  Circular Road, Allahabad.  However, as only this deed was filed before the  Reference Court and was relied upon both by the Reference Court and also  by the High Court, we consider it proper to decide the controversy on the  assumption that the copy of   the   lease deed filed by the claimant relates to  property in dispute.  

18.     The certified copy of the lease deed executed in favour of Lalji  Tandon, which has been filed by the claimant, does not appear to be a  correct copy.  The first sentence of this document mentions "this lease made  the 20th day of one thousand nine hundred and forty five between the  Government of the United Provinces\005\005.".  Here the month is missing  though at a later stage, there is a recital  "to hold unto the lessee from the  20th day of Feb. 1945 for the terms of 42 years 3 m. 48 ds." Mention of 48  days does not carry any sense and looks wholly illogical as in the event  the  days were exceeding 30, they would have been  counted in month.  It is  mentioned in the document itself that the earlier lease had expired on 8th   June, 1937.  It appears that the figure "48" has been  wrongly written  for  "18".   If the period of 42 years 3 months and 18 days is counted from 20th  Feb. 1945, it will end on 8th June, 1987.  As mentioned in this very  document the earlier lease had expired on 8th June, 1937 and therefore  a  fresh lease had been granted for a period of 50 years expiring on 8.6.1987.  This shows that when ADA  took possession of the land on 16.6.1987 the  lease  in favour of the claimant had already expired. Further this document  does not contain any renewal clause.     

19.     The Reference Court has relied upon two letters in order to hold that  the lease in favour of Ravindra Kumar Tandon had been renewed and he  continued to be the owner of the property even after 7.7.1987.  The first  letter is dated 28.7.1987  bearing no. 2877/9 Nazul-33/N/87 sent by Sri  Janardan Prasad, Joint Secretary  U.P. Government to the Collector,  Allahabad   wherein it is mentioned that the Government has agreed to  execute a new residential lease in place of the expired lease in favour of Sri  Ravindra Kumar Tandon regarding Nazul Plot No.81M, Bungalow No.2,  Circular Road, Allahabad  on deposit of a  premium of Rs.10,03,500/- and   annual rent of Rs.25,087.50  for a period of first 30 years with effect from  25th May, 1987 which  shall contain a clause for two further renewals.  The  second letter is dated 14.9.1987 bearing no. 4423/9-Nazul-33/N/87 sent by  the same authority to the Collector, Allahabad  and it is stated therein that in  continuation of the Government Order dated 28.7.1987 regarding execution  of a new lease deed in favour of Ravindra Kumar Tandon the Government  had agreed that  the premium  amount  may be deposited in six monthly  instalments. These letters were not accepted by the ADA or by the State  Government and their specific case was that the lease had already expired  before taking possession and the same had not been renewed.

20.     The original claimant Ravindra Kumar Tandon died during the  pendency of the reference and his wife Smt. Kiran Tandon was substituted in  his place.  The claimants examined only one witness namely, Rajesh Kumar  Tandon holding power of attorney on behalf of Smt. Kiran Tandon who  made an attempt to prove the aforesaid letter in his oral statement. The  original letters have not been filed but merely photo copies have been filed.   They do not bear seal of U.P. Government.  The letters were not  exhibited.  If the Government took a decision to renew the lease the same  could be  established by the production of relevant records by some responsible  government servant.  No attempt at all was made by the claimant to summon  the relevant records of the Government.  The endorsement at the end of the  letters shows  that copies thereof were sent to (1) Accountant General, Uttar  Pradesh, Allahabad (2) The Commissioner, Allahabad Division, Allahabad  (3) The Director, Board of Revenue, Uttar Pradesh (4) The Administrator,

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Nagar Mahapalika, Allahabad.  The claimant could have easily summoned  anyone from the aforesaid departments, some of whom were in Allahabad  itself, who could produce the relevant records or even the communication  received from the Government to the effect that a decision had been taken to  renew the lease.  But nothing of the sort was done.  A decision taken by the  Government can only be proved by production of relevant records by  some   authority or officer of the concerned  department of the  Government and not  in the manner attempted to be  done in the present case.  The plea raised by  the claimant that the Government had taken a decision to renew the lease in  his favour is therefore not established by the evidence on record.

21.      There are other circumstances which also throw great doubt upon the  genuineness of the aforesaid letters.  In the first letter of 28.7.1987 it is  mentioned  that "the Government after having due consideration had agreed  to execute a new residential lease in place of the expired lease with effect  from 25th May, 1987".  According to the claimant his lease expired on  7.7.1987 or even if it treated as 8.6.1987 as  discussed earlier there was no  occasion for the Government to execute a new lease with effect from  25.5.1987 as mentioned in the letter.  That apart. the process of renewal of  lease of such a large area is an extremely complicated one.  The Nazul  Department and  also the Collector in the District where the land is situate  have to take various steps like survey and measurement of the plot,  preparation of map and have to make several reports which in turn have to  be sent to the Government at Lucknow, where the proposal  is examined at  various stages by different sections.  It is almost impossible to believe that  even though the notification under Section 4(1) and 6 to acquire land had  been published on 7.1.1987 and 6.3.1987 respectively,  the said fact was not  noticed by anyone dealing with the matter and the Government took a  decision to execute a fresh lease.  Various steps which have to be taken in  the matter of renewal of lease are quite cumbersome  and as the   Government machinery moves,  it is an unduly long time taking process.   The earlier lease which had expired in 1937 was renewed  almost after 8  years in the year 1945. Though the lease expired in June, 1987, the claimant  wants us to believe that in his case the Government took the decision within  a month to execute a  new lease  in his favour and that too for a huge area of  10920 square yards. It is therefore not at all possible to believe that any  order was passed by the Government to renew the lease.   

22.     The Reference Court taking into consideration the fact that the  Government had passed an order for renewal of the lease has held that  Ravindra Kumar Tandon was the owner of the property even after 7.7.1987  and he was entitled to receive the entire amount of compensation.  The  learned Addl. District Judge, it seems, lost sight of Chapter V of Transfer of  Property Act which deals with leases of immovable property.  In view of  Section 105 of the said Act the lease of immovable property is a transfer of  right to enjoy such property, made for a certain time, in consideration of  price paid or promised.  The rights and liabilities of lessor and lessee are  given in Section 108.  Section 111(a) clearly lays down that a lease of  immovable property shall determine by efflux of the time limited thereby.   Therefore, the claimant can in circumstances be treated to be the owner of  the land and his right to receive compensation has to be determined treating  him to be the lessee of the property.

23.     The question which,  therefore, arises is having regard to the fact that  the claimant was only a lessee of the acquired land, whether he would be  entitled to entire amount of compensation. Leasehold rights being limited in  nature and entirely different from ownership right, a lessee is not entitled to  the entire amount of compensation for the acquired land.  The High Court  has held that claimant would be entitled to 50 per cent of the amount and  balance would be payable to the State Government..   

24.     Radha Charan v. Secretary of State AIR 1943 Allahabad 238  is a case  from Allahabad city itself where a considerable area on the Bank Road was  acquired by the Government for Allahabad University in the year 1930.  The  Division Bench held that it is a full owner of land who normally gets the

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entire amount of compensation and there is no reason why a person who   holds a lease should get compensation as an owner.  It was further held that  the amount of compensation he would get would depend upon the terms of  the lease and the length of time that he might be expected to remain in  possession of the property.  In Inder Parshad v. Union of India 1994 (5) SCC                239  the appellant had obtained a perpetual lease of  Nazul land from the  Government.  The High Court had apportioned the compensation as 75 per  cent for the lessee and 25 per cent for the Government.  In appeal to this  Court it was contended that the Government being the owner of the land, it  could not acquire its own interest therein and it was only the appellant’s  right and interest in the perpetual lease that was acquired therefore he was  entitled to the entire amount of compensation.  It was held that where the  Government leases its land and in terms of the covenants cannot unilaterally  determine the lease and take back possession and the land is required for a  public purpose, it has to exercise the power of eminent domain by invoking  the provisions under the Act for getting such land.  It was further held that  where the land is granted on lease the Government’s power to resume the  land is subject to non-fulfilment of the terms and conditions of the lease by  the lessee and so long as the lessee acts and complies with the covenants  contained  in the lease or 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  and compensation becomes payable for the lease hold right or interest held  by the lessee or grantee.  Having regard to the  fact that the appellant had  perpetual lease the order made by the High Court awarding 75 per cent of  the compensation amount to the appellant was affirmed.  In Ratan Kumar  Tandon & Ors. v. State of Uttar Pradesh AIR 1996 SC 2710 keeping in view  the fact that acquisition was made 7 years prior to the expiry of the lease, the  High Court directed the apportionment of the compensation amount in the  ratio of 50:50.  The State of U.P. did not challenge the  apportionment of  compensation by preferring an appeal to this Court and the claimant alone  preferred an appeal.  Having regard to the features of the case and also the  fact the State did not file an appeal, it was held that it was not a fit case to  reverse the judgment of the High Court.  

25.     In the present case, as per our finding, lease expired on 8.6.1987 and  possession was taken over on 16.6.1987.  However even according to the  case set up by the claimant, the possession of the land was taken over just 21  days before the expiry of the lease.  In such circumstances, we are of the  opinion that the claimant should get 20 per cent of the compensation amount  and the balance 80 per cent is payable to the State Government.

26.     Shri  Gupta has also assailed the finding of the High Court regarding  the amount of compensation fixed for the building.  The High Court has held  that the report of the consulting engineer filed by the claimant shows that  while assessing the value of the building he had also taken into consideration  the land underneath the same which was more than 400 square meters and  consequently the value of the land had been assessed all over again.  There is  another fallacy in his report.  He has assessed the age of the building from  the time of its renovation.   There is no evidence that the foundation, walls  and roof had been made all over again when renovation was done, nor it  appears logical.    So, the whole method of calculation was faulty.  We are of  the opinion that the view taken by the High Court that the value of the  building which was more than 90 years old is Rs.60,000/- is perfectly correct  and calls for no interference.  Similarly  we find no ground which may  warrant interference with the assessment made by the High Court regarding  the value of the trees.

27.     Shri  Gupta has also submitted that the  award of cost to the ADA by  the High Court was not justified.  In our opinion, the High Court having  accepted the appeal of the ADA and modified the award of the Reference  Court the direction regarding cost made by it was perfectly justified.

28.     In view of discussion made above, the Civil Appeals preferred by  Smt. Kiran Tandon are dismissed  and the Appeal filed by ADA is allowed.  

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The judgment and order of the High Court is modified to the extent that the  compensation determined for the land shall be apportioned 20 per cent for  the claimant and 80 per cent for the State Government.  The statutory sum  under sub-section (1-A) and the solatium under sub-section (2) of section 23  shall be modified accordingly.

29.     Before parting with the case we want to place on record that the  learned counsel for the State of U.P. did not argue even a single word and  only said that the brief was entrusted to him only 2 or 3 days earlier.  The  High Court has also made some comments in the impugned judgment as to  how the case was conducted on behalf of State of U.P.  The office is directed  to send a copy of the judgment to the Chief Secretary, U.P. Government for  his information and appropriate action in this regard.