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PETITIONER: RATAN KUMAR TANDON & ORS.

       Vs.

RESPONDENT: STATE OF UTTAR PRADESH

DATE OF JUDGMENT:       01/08/1996

BENCH: RAMASWAMY, K. BENCH: RAMASWAMY, K. G.B. PATTANAIK (J)

CITATION:  1996 SCALE  (6)176

ACT:

HEADNOTE:

JUDGMENT:                          O R D E R      Leave granted.      We have  heard  learned  counsel  for  the  parties  in extenso.      Notification under Section 4(1) of the Land Acquisition Act, 1894  (1 of  1894) (for short, the ’Act’) was published in the  State Gazette  on February  14,  1986  acquiring  an extent of  4 acres  2 rods 21 poles equivalent to 22,528 sq. yd. situated  in Allahabad  city for public purpose, namely, planned development  of the urban area. The Land Acquisition Officer determined  by his award under Section 11 on October 28,   1987   a   total   compensation   of   Rs.4,57,750.88. Dissatisfied therewith, the appellants sought reference. The Additional District Judge by his award and decree dated July 20, 1989  determined compensation  @ Rs.500/-  per sq.yd. He also  awarded   Rs.50,000/-  towards  the  value  of  trees, Rs.8,33,700/- towards  the value  of the  building  together with the  statutory solatium  and interest.  On appeal,  the High Court reversed the valuation of the trees and confirmed the award  of the  land Acquisition  Officer, namely, Rs.23, 219.97. High  Court also confirmed the value of the building as awarded  by the  reference Court but as regards the value of the  land the  High Court disagreed and determined market value @  Rs.423/- per sq. yd. by the impugned judgment dated October 22,  1992 in First Appeal No.149 of 1990. Thus, this appeal by special leave.      Shri Satish  Chandra, learned senior counsel, contended that though  the value  of the trees given by the appellants was Rs.1,40,000/-,  the reference  Court on  appreciation of evidence determined compensation therefor @ Rs.50,000/-. The Land Acquisition  Officer relied  upon the  valuation report given by  the Forest Department, OPW-I examined on behalf of the land  Acquisition Officer  admitted that  the  valuation report did  not bear  the  seal  of  the  office  of  Forest Department nor  it was  signed in  his presence. None of the officers who  prepared the valuation report was examined for

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its proof.  Therefore, the valuation report is inadmissible. The High  Court, therefore,  was not  right in reversing the decree of  the reference  Court  in  that  behalf.  He  next contended that  when the  building consists  of more than 17 rooms situated  in a posh locality in the heart of Allahabad city, determination  of the  compensation @ Rs.500/- per sq. yd. by the reference Court is not arbitrary. The view of the High Court  in determining  compensation at Rs.423/- per sq. yd. is  based on  no evidence. Therefore, the High Court was not right  in reversing  the decree. As regards the value of the building, it is contended that the appellants had valued it at  Rs.25,00,000/- (Rupees  twenty five  lacs only).  The Land Acquisition Officer awarded Rs.3,18,429/-. The District Judge and  the High  Court were  not right  in confining the valuation to  Rs.8 lacs and odd, as referred to earlier. The appellants, therefore,  are entitled  to higher compensation on proper consideration.      He  further   contended  that   the  direction  to  the appellants given by the learned Judges to file returns under Section 6(1)  of the  Urban Land (Ceiling & Regulation) Act, 1976 (for  short, the  ’Ceiling Act’)  is illegal. Since the possession of the land was already taken from the appellants dispensing with  the enquiry  under Section 5-A, after their dispossession and  vested in  the Government  free from  all encumbrances, the  appellants did  not  have  possession  of excess vacant  land. The  entire land  having been  acquired under the Act, the appellants are entitled to compensation @ Rs.500/-, as  determined by  the reference Court. Though the State pleaded  in the  written statement  filed  before  the reference Court  that the Ceiling Act would be applicable to the lands  in question,  neither an  issue was  raised nor a finding recorded by the reference Court nor there appears to be a ground taken in the grounds of appeal in the High Court nor the  standing counsel  for  the  State  argued  in  that behalf. The  High Court, therefore, was not right to go into that question.      He further  contended that  the Government having given the acquired  land on  lease on October 1, 1892 for 50 years and having  renewed it  in September  30, 1942 for a further period of  to years  on the  same  covenants  as  originally envisaged, the  appellants are  entitled to  further renewal from time  to time.  Thus the  lease is a perpetual one. The High Court  was in error in restricting the apportionment of the compensation between the Government and the appellant in the ration of 75:25.      He also  contended that  the competent  authority under the Ceiling  Act had  not determined  the  surplus  land  in accordance with the procedure prescribed under Sections 8, 9 and 10.  It was decided only after the direction of the High Court. On  appeal under  Section 33  of the Ceiling Act, the District Judge  had further  calculated the  land within the ceiling limit.  According to the appellants, the entire land is not in excess of the ceiling limit under the Ceiling Act. The three  writ petitions  which came  to be  filed  by  the petitioners are  pending. Therefore,  as on date there is no surplus  land.   The  State,   therefore,  cannot  determine compensation in  respect of the excess land under Section 11 (6) of  the  Ceiling  Act.  The  claimants,  therefore,  are entitled to  the entire  compensation  for  entire  land  at Rs.500/- per sq.yd. Shri D.V. Sehgal, learned senior counsel appearing for the respondent, resisted the contentions.      Having regard  to  the  rival  contentions,  the  first question that  arises  for  consideration  is:  whether  the decree of  reversal pertaining  to the value of the trees is sustainable in  law? It is seen that when OPW-I was examined

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on behalf  of the  Land Acquisition  Officer. His  statement that he  was present at the time of inspection by the Forest Officer and  taking measurement  of existing trees and their height etc.  was not  disputed. It  is true,  as admitted by him, that  the report  does not  bear the seal of the forest Office nor does it bear the name of the officer who prepared the report.  It is  seen from  the evidence of the claimant, Rajesh Kumar Tandon examined on behalf of the claimants that he merely  had given  the estimate  of Rs.1,40,000/- towards the  value   of  the   trees  without  any  data.  the  Land Acquisition Officer  relied upon  the report  given  by  the Forest Officer  who admittedly  inspected the  trees etc. No dispute as  regards the  proof of  the trees existing in the compound was  raised. The  report would  indicate  that  the officer who estimated the value has given the details of the estimate of  the trees,  heirs age  and size,  girth and the value of  each tree. It would have been prudent on behalf of the Land  Acquisition Officer,  to have officer examined but the estimate  and details as such were not questioned in the cross-examination.  Under   these  circumstances,  the  only inference that  could be  drawn  is  that  when  the  forest officers who  are the  experts in this behalf, estimated the value of  the trees, unless there is contra evidence in that behalf, it  cannot be said that the award of compensation of Rs.23,000/- and  odd given  by  the  Collector’s  award  was without any  evidence. On  the other  hand, the claimant did not place  any evidence  to the contra. The burden is always on the  claimant to establish the proper market value of the trees or  land or  building. Since  they have not discharged their burden,  the evidence  is not  sufficient to hold that the value  of the trees would be Rs.50,000/-. The Additional District Judge  accepted the  ipse dixit of the claimant and gave arbitrary  amount  on  mere  asking.  The  High  Court, therefore, was  right,  though  for  different  reasons;  in reversing the  award of  the reference  Court in that behalf and confirming that of the Land Acquisition Officer.      The next  question is: as to what would be the value of the building  to which the appellants are entitled to? It is well settled law that when land and building are acquired by a notification,  the claimant  is not  entitled to  separate valuation of the building and the land. They are entitled to the compensation  on either of the two methods but not both. If the  building is  assessed, it  is settled  law that  the measure of  assessment be  based on either the rent received from the  property with  suitable multiplier or the value of the building  is the  proper method  of valuation.  In  this case, since  the land  is separately  valued,  the  building cannot again be separately assessed and compensation awarded except the  value of  debris. However,  since State  has not come in  appeal, we  need not  go into  the legality  of the award of the Additional District Judge and of the High Court in that  behalf. It  would, therefore,  be unnecessary to go into that  question and  we confirm  of the  compensation in respect of building at Rs.8,33,000/- and odd.      The next  question is:  what would  be the value of the land? It  is seen  that the  appellants have  relied upon  a solitary sale  deed dated  January 1, 1985 with reference to an extent  of Rs.  434/- per  sq. yds.  which worked  out  @ Rs.423/- per  sq.yd. The  appellants, on  the basis  of  the report given  by the valuation officer who was not examined, claimed @  Rs.500/- per  sq. yd.  They have also relied upon the paper  cutting  in  respect  of  the  prevailing  prices notified in  the newspapers.  It is  settled law that either the vendor  or vendee  of a  sale deed should be examined in proof of the circumstances in which the sale deed came to be

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executed and  the consideration  passed  thereunder  and  in respect of  the value etc. The said sale deed is a free-hold small piece  of land  as compared  to encumbered  lease-hold land of 4 acres and odd. The vendor of the sale deed by name Jai Prakash Singh was not examined. Therefore, the sale deed cannot be  relied upon  as proof  of valuation prevailing in the area.  The High  Court has relied upon that document and granted the  compensation @  Rs.423/- per  sq.yd. Since  the State had not come up in appeal, nor filed cross-objections, we need  not  go  into  the  correctness  of  the  award  of compensation on  that rate.  The paper  cutting  as  to  the publication of  the prices  in the  local newspapers  is not evidence and the reference Court, therefore, committed clear error in  relying upon  those transactions  and in  proof of document of  the sale deed executed by Jai Prakash Singh. If those documents  are excluded, there is no other evidence to further enhance the compensation. The High Court granted the maximum compensation  as reflected in unproved solitary sale deed  of   small  extent   of  land.   Accordingly,  we  are constrained to  uphold the  valuation of the land @ Rs.423/- per sq. yd.      The  next  question  is:  whether  the  appellants  are entitled to the compensation in respect of the entire extent of the  land? It  is not  in  dispute  that  the  lands  are situated in the urban agglomaration and 1500 sq.meter is the urban vacant  land ceiling  limit in  Allahabad to which the holder is  entitled under  the Ceiling  Act. Admittedly, the declaration under  Section 6  was made as early as on August 14, 1976.  The procedure  prescribed  under  Section  8  the preparation of  the draft  statement,  inviting  objections, consideration thereof  and making the draft statement; under Section 9,  publication  thereof,  inviting  objections  and publication;  and   determination  of   the  surplus  lands. Procedure under  Section 10(1) of the Ceiling Act prescribed inviting objections, consideration thereof under sub-section (2) and  making the  final publication  under Section  10(3) fixing a  date of vesting are required to be followed and on and from  that date  the excess  urban land stands vested in the State, The appellants have placed before us the order of the competent  authority that determined the excess land and on appeal, confirmation by the District Judge declaring that the appellants  are entitled  to retain 9585.14 sq. meter of land as  permissible limit  and 9157  sq. meters  of land as vacant land which stands vested in the State. The details of the procedural  steps taken  are not  on record.  It appears that the  appellants have  filed three writ petitions in the High Court  which are  pending disposal  on the  question of surplus lands.  It is,  therefore, unnecessary  for us to go into the question of the actual extent of the surplus land.      The contention  of Shri Satish Chandra is that once the notification under  Section 4(1)  was  published,  the  Land Acquisition Officer was enjoined to pass an award for entire land under  Section 11.  Since possession  was already taken and it  vested in  the State free from all encumbrances, the acquired land  is situated within agglomeration and is found to be  in excess  of the  ceiling limit.  The appellants are entitled to full compensation. In support thereof, he placed reliance on  M/s. Majas  Land Development Corporation & Ors. vs. State of Maharashtra & Ors. [AIR 1983 Bombay 188]; State of M.P. V. Surinder Kumar & Anr. [(1995) 2 SCC 627]; and The Govt. of  Andhra Pradesh v. H.E.H., the Nizam, Hyderabad [JT 1996 (3)  SC 629.  The question,  therefore, is: whether the Land Acquisition  Officer  is  enjoined  to  pass  award  in respect of  the excess land? This controversy was considered in  H.E.H.   Nizam’s  case   after  surveying  the  relevant

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provisions of  the Ceiling  Act.  It  is  not  necessary  to traverse the  ground once  over. It  was held that it is not necessary for  the Government  to determine the compensation under Section 23(1) of the Act in respect of the excess land found under  the Ceiling  Act since Ceiling Act is a special Act, notwithstanding  any contrary law. In that case, it was noticed that  the Government have exempted the acquired land from the  purview of  the Ceiling  Act, the determination of the compensation  in respect of that land by Civil Court was upheld with  modification. Far  from helping the appellants, the ratio  therein is  against the appellants. This question was also  considered in  another judgment  of this  Court in State of  Gujarat &  Ors. vs.  Parshottamdas Ramdas  Patel & Ors. [(1988)  (1) SCR  997]. It  was held  therein that  the provisions of the Ceiling Act have over-riding effect on all other lands.  In Surinder  Kumar’s  Case,  the  purchase  of vacant land  within ceiling  limit pending  determination by competent authority  came up for consideration. Therein this Court had pointed out the procedure to be adopted in dealing with the  situation. The  Bombay case, with due respect, was not  correctly   decided.  The   principle  of   withdrawing notification under  Section 48(1)  of the  Act need  not  be followed for  the reason  that  compensation  for  the  land within ceiling  limit be  determined under  Section  23  and excess land  is covered My Section 11(6) of the Ceiling Act. Until ceiling  area and excess land are determined, it would be difficult to postulate as to what extent of excess vacant land would  be available  to pay  compensation either  under Section 23(1)  of the  Act or  Section 11(6)  of the Ceiling Act. The  excess urban land covered under the Ceiling Act is not required  to be  de-notified as  it  statutorily  stands vested in  the Government  land  and  Government  cannot  be compelled to  acquire the  excess urban  vacant land covered under the  provisions of  the Ceiling  Act, and compensation paid under  the provisions contained in the Land Acquisition Act. Shri  Satish Chandra  also referred  to us instructions issued by  the Government of U.P. dated January 31, 1986. He placed reliance  on paragraph  6 of  the instructions. It is seen that  the Government  has  given  instructions  to  the respective authorities  under Section  35 of the Ceiling Act that where  the authorities  were not able to dispose of the matter under the Ceiling Act and land is required for public purpose, it would be necessary to drop the proceedings under the Ceiling  Act and  to proceed  under the Land Acquisition Act. These are only administrative instructions. They do not have any  statutory effect  on the operation of law. In case of yearning  gaps, they  may guide  the officers. In view of the law  laid down  by this  Court, the  instructions do not have any  over-riding effect oh the operation of the Ceiling Act and  the law  declared by  this Court under Article 141. Therefore, it is not necessary for the State to proceed with the determination of the compensation under Section 23(1) of the Act  to the  extent of  the excess  land found under the Ceiling Act.  Compensation shall be paid only as per Section 116 of the Ceiling Act.      The question  then is:  what is the proportion in which the  appellants   and  the   State  are   entitled  to   the compensation for  the land  within ceiling  limit. As stated earlier, the  main contention  of  Shri  Satish  Chandra  is reference under  Section 18(3),  as  amended  by  the  State Legislature of  U.P. is  available  to  the  State  claiming apportionment in a particular proportion but was not availed of. The  reference Court  has  recorded  finding  only  with regard to  the apportionment  not under  the Ceiling Act but with regard  to the  determination of the value of the land.

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In the  grounds cf  appeal  filed  in  the  High  Court,  no arguments were  addressed by  the  counsel  for  the  State. Therefore, the  High Court  was not right in going into that question. We  find no  force in  the contention.  It is seen that sub-section  (3) of Section 18 of the Act as amended by the Land  Acquisition (Uttar  Pradesh Amendment)  Act 22  of 1954 reads as under:      "(3)  Without   prejudice  to   the      provisions of  sub-section (1)  the      Land  Reforms   Commissioner   may,      where he  considers the  amount  of      compensation allowed  by the  award      under Section  11 to  be excessive,      require  the   Collector  that  the      matter be referred to by him to the      Court  for   determination  of  the      amount of compensation.      Explanation.- In  any case  of land      under Chapter  VII the  requisition      under this  sub-section may be made      by the Land Reforms Commissioner at      the request  of the  Company on its      undertaking to  pay  all  the  cost      consequent upon such requisition.      (4) The requisition shall state the      grounds on  which objection  to the      award is  taken and  shall be  made      within six  months from the date of      the award."      A reading  of sub-section  would indicate  that without prejudice to  the provisions  in sub-section  (1), the  Land Reforms  Commissioner  where  he  considers  the  amount  of compensation allowed  by the  award under  Section 11  to be excessive, may  require the Collector that the matter may be referred to  the Court  for determination  of the  amount of compensation. It  is settled  law  that  the  award  of  the Collector is  an offer  and it  binds the Government without objections thereto.  The State  Legislature felt  that where the  Collector   under  Section  11  made  excess  award  of compensation for  the land which was not capable of fetching that value, the Land Reforms Commissioner has been empowered to seek  a reference  to the  Court for determination of the compensation. The  limited right  given to the State is only in respect  of excess compensation awarded by the Collector. Therefore,  in   respect  of   the  apportionment   of   the compensation covered under the Ceiling Act, there is no need for reference  under Section  18(3). Moreover,  it could  be seen that  on a  reference made  under Section  18(1) to the Court, as  required under  Section 20  (c) of  the Act,  the Court is  enjoined to  give notice to the Collector when the objection relates  to the  area of  the land  or Section  21 restricts the  scope of the proceedings envisaging that "the Court  shall   restrict  the   scope"  ok  consideration  of "interests of  the persons affected by the objection". Thus, it could  be seen  that the Court is enjoined to go into the acquisition of  the land  of the  persons  entitled  to  the compensation. On a reference made, the compensation would be restricted to  the interest in the land held by the claimant and the court should enquire as to the extent to which the claimant will  be entitled to get compensation under Section 23(1) of  the Act towards his interest in the acquired land. The  interest   consists  of   right  and   title   to   the compensation.  Admittedly,   the  appellants  had  lease  of Government land  for 50  years on  October 1,1892  obviously under Crown Grands Act with a right to a renewal for further

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period of  50 years. Admittedly, further renewal was granted on September 30, 1942 for a further period of 50 years which stood expired  on 30th September, 1992. It would, therefore, be clear  that the  term of  the lease  as  granted  by  the Government was upto September 30, 1992. It is then contended by Shri Satish Chandra that it was a licence since the appellants were  permitted to  construct permanent  building under the  lease and,  therefore, it  is  in  perpetuity  by operation of  Section 60  of the  Easement Act.  We find  no force in the contention. The lease itself expressly mentions demising the  vacant land  to the  appellants with exclusive possession but  subject  to  construction  of  the  building within the  specified period  and be  in peaceful  exclusive possession and enjoyment thereof subject to paying the lease amount to the Government under the Act. Therefore, it cannot be treated to be a licence but a lease.      Lease having  been given  for a  specified period  upto September 30,  1992, the question is: whether the appellants are entitled  to full  compensation?  In  this  behalf,  the contention of  Shri Satish  Chandra is  that since the first renewal contained  the same  covenant as  contained  in  the first lease,  the appellant  are entitled to further renewal of lease  of in  property. In  support  thereof,  he  placed reliance on  the judgment  of  the  Division  Bench  of  the Allahabad High  Court as  confirmed by  this  Court  in  the special leave  petition, namely,  Purshottam Dass  Tandon  & Ors. vs.  State of  U.P. Lucknow  & Ors. [AIR 1987 Allahabad 561]. It  seems that  Tandons are  having  large  extent  of lease-hold lands from the Government and one such lease-hold land is  under acquisition. We are not concerned with regard to the  legality of the mandamus or directions issued in the above case.  Suffice it  to state  that since  the State had acquired  the  property  before  the  expiry  of  the  first renewal, we  are constrained to go into the language used in the first  lease. It expressly mentions that lease initially was granted  for a period of 50 years and a right of another renewal for another 50 years, i.e., upto September 30, 1992. Before its  expiry, the Government have already acquired the lands for  public purpose and taken possession. The question of further renewal would not arise in this case. Under these circumstances, residuary period of lease is hardly 7 years.      The question, therefore, is: whether the appellants are entitled to  the entire  compensation in respect of the land within the  ceiling limit  under the Ceiling Act. In support thereof,  Shri   Satish  Chandra   placed  reliance  on  two judgments of  this Court in India Parshad vs. Union of India & Ors [(1994) 5 SCC 239] and Sri Piedade Fernandes vs. Union of India [(1994) 3 SCALE 860]. In Inder Parshad’s case, land was sought  to be  acquired for  public purpose but the Land Acquisition Officer  was unable  to decide the proportion in which the  lease-holders and the Union of India are entitled to the  compensation. On  reference under  Section  30,  the reference  Court   had  determined  the  compensation  at  a particular rate  ultimately the  High Court  determined  the proportion at  75% and 25%. Since the Union of India had not filed appeal, this Court upheld the proportion to the lease- holders and  the Government  of India.  It was  a  perpetual lease. In  that back-drop, this Court had upheld the view of the High  Court granting apportionment in the ratio of 75:25 to the  lessee and  the Government. In Sri Piedade Fernandes case, the covenant expressly gave power to the Government to get the  land for  a public  purpose without  payment of the compensation. That  was not  covered under  the Ceiling Act. Instead of invoking the clause thereunder, proceedings under Land Acquisition Act were initiated. It was, therefore, held

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that the  State is enjoined to pay full compensation for the land acquired.  The ratio  of either  case does not help the appellants in  this case.  As seen,  the appellants have got hardly 7  years lease-hold  right in the land and thereafter the lands would stand revested to the State. Thereafter, the State would  be entitled  to resume the land after ejectment of the  appellants. Under  those circumstances, they are not entitled to  the full  compensation. The High Court directed that compensation  should be  apportioned for  the extent of land within  the limit  in the  ration of 50:50 to the State and the appellants. It is also to be seen that the State has not questioned  at least  the apportionment  granted by  the High Court.  Considered from  this perspective, we hold that it is not a fit case to reserve the judgment.      The  appeal  is  dismissed  but  in  the  circumstances without costs. The State is directed to pay the compensation in respect  of the extent of excess vacant land as now found by the District Judge under Section 11(6) of the Ceiling Act and the  Land within  ceiling limit  in the  proportion  now upheld within a period of 3 months from today. Since we have stated that  we are  not concerned with regard to the extent of the excess vacant land under the Ceiling Act, our finding may not  be construed  to  have  been  given  as  conclusive finding on the excess land under the Ceiling Act.