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PETITIONER: STATE OF MADRAS

       Vs.

RESPONDENT: K. N. SHANMUGHA MUDALLAR & ORS.

DATE OF JUDGMENT04/03/1976

BENCH: KHANNA, HANS RAJ BENCH: KHANNA, HANS RAJ GOSWAMI, P.K.

CITATION:  1976 AIR 1057            1976 SCR  (3) 536  1976 SCC  (2) 406

ACT:      Land Acquisition  Act, 1894-Sections  23 and 24 Quantum of compensation  -Madras Estates Abolition Act, 1948-Whether compensation under  Land   Acquisition Act can be claimed if the estate  is  abolished-Interest  of  compensation  to  be allowed, from what date.

HEADNOTE:      The State  of Madras  acquired land  belonging  to  the respondent landlords.  The Land Acquisition officer gave his award determining  the compensation  payable. On a reference made to  the Subordinate  judge certain  compensation    was determined. Interest  was awarded  to the respondents on the compensation amount  from 1st  December, 1949 because in the opinion of  the Subordinate   Judge,  possession of the land had been taken on that date.      On an  appeal, the  High Court affirmed the decision of the Subordinate  Judge   regarding the rate of compensation. The High Court also rejected the contention of the appellant that the  land had vested in the Government under the Madras States Abolition  Act, 1948, and, therefore, the respondents were not entitled to compensation under the Land Acquisition Act. The  High Court  found that  there was  no material  on record to  show that  the possession  of the  land had  been taken prior to the date of the award by the Land Acquisition officer. Interest  was accordingly  directed to run from the date of the award, i.e. November, 1951.      In an appeal by certificate, the appellant contended:           (1)  The  land   in  question   vested  under  the                Abolition  Act   in   the   State   and   the                respondents were,  therefore, not entitled to                compensation under the Land Acquisition Act.           (2)  The quantum  of compensation  awarded by  the                High Court was excessive.           (3)  Interest should  have been  allowed from  1st                December, 1949. ^      HELD: (  1 )  There were . two alternative courses open to the  State either  to proceed  under the Land Acquisition Act or  to take  over the  land  under  the  Abolition  Act. Although the  estate was  notified under  the Abolition Act, the proceedings  under that  Act were  stayed and the matter

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proceed l under the Land Acquisition Act. It was not open to the appellant  in  the  particular  reference  made  at  the instance of  the respondents to the Subordinate Judge to set up a  claim adverse  to the interest of the respondents. The High Court  rightly rejected the contention of the appellant in this behalf. [538D-E, G-H]      (2 )  Both the  High Court  as well  as the Subordinate Judge  awarded  the  compensation  in  accordance  with  the previous decisions  which laid  down a  formula.  No  cogent grounds  have  been  shown  to  us  to  interfere  with  the concurrent findings in this respect. [539B-C]      (3) There  is no reason to disagree with the High Court judgment regarding the date on which the interest should run on the amount of compensation. [539-G]

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil Appeal No. 1425 of 1968.      From the  Judgment and  Decree dated  the 5-8-74 of the Madras High Court in Appeal No. 448 of 1960.      A. V. Rangam and Miss A. Subhashini for the Appellant.      K. Jayaram and R. Chandresekhar for Respondent No. 1      Ex-parte for Respondents 2-8. 537      The Judgment of the Court was delivered by      KHANNA, J.  This appeal  on certificate is by the State of Madras,  now Tamil  Nadu, against  the judgment of Madras High  Court   affirming  on  appeal  the  award  of  learned Subordinate  judge   Salem  in  respect  of  the  amount  of compensation payable  to the  respondents for acquisition of land  under  the  Land  Acquisition  Act  (Act  1  of  1894) (hereinafter referred  to  as  the  Act).  The  High  Court, however, directed  that the  interest on  the amount awarded shall run  from November  19, 1951, the date of the award by the Land  Acquisition officer  and not from December 1, 1949 as ordered by the Subordinate Judge.      On July  12, 1949  notification under  section 4 of the Act was  issued for‘the  acquisition of 19 acres 45 cents of dry land  situated in  Alegapuram Mitta  for the  Salem Fair Lands  Co-operative  Society  Ltd.  On  December  19,  1950. Alegapuram Mitta  was  notified  under  the  Madras  Estates Abolition Act  (Act 26  of 1948) (hereinafter referred to as the Abolition  Act). A  writ petition  was filed in the High Court to challenge that notification. Further proceedings in pursuance of  the notification were stayed by the High Court by order  dated January.  1, 1951.  The  Society  for  which acquisition was  being made  deposited in  the meantime  the probable cost  of  the  land  on  September  13,  1950.  On, November 19, 1951 the Land Acquisition officer announced his award.      The  respondents,   it  may   be   stated,   were   the Melevaramdars  (land  holders)  of  the  land  in  question. Kudiwaramdars   (cultivators)   were   also,   besides   the respondents, parties  to the  proceedings  before  the  Land Acquisition officer.  The Land  Acquisition officer  by  his award dated  November 19,  1951 awarded  compensation to the cultivators at  the rate  of Rs.  1,500 per acre for part of the land near the road and at the rate of Rs. 1,300 per acre for the  rest  of  the  land.  Rs.  520,  11  As,  1  P  the capitalised value  of the  net rental  income was held to be the amount  payable to  the respondents.  The  Kudiwaramdars were content  with the compensation awarded to them, but the respondents  who   were,   as   already   mentioned   above,

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Melavaramdars asked  for a  reference to court under section 18 of  the Act for claiming enhanced compensation. According to the  respondents, they  were entitled to one-third of the value of the totality of the interest in the land. According further to  the respondents, compensation for the total land should be  awarded at the rate of Rs. 3,000 per acre Learned Subordinate Judge held that the respondents were entitled to 50 percent  of the  compensation awarded  in respect  of the Melawaram   interest in  the land.  The Subordinate Judge in this context relied r upon an earlier decision of the Madras High Court  wherein it  had been  held that  the  rights  of Melavaramdars were  not confined  only to rent from land and that they  had other  recognised rights and were entitled to compensation for  those rights.  The respondents  were  thus held  entitled   to  compensation   for  their  Melavaramdar interest at  the rate of Rs. 750 per acre in respect of land near the  road and  Rs. 650  per  acre  in  respect  of  the remaining land.  Interest was  awarded to the respondents on the compensation amount from December 1, 1949 2-608SCI/76 538 because, in the opinion of the Subordinate Judge, possession of the land had been taken from that date.      On appeal  the High  Court affirmed the decision of the Subordinate Judge  regarding the  rate of  compensation. The contention advanced  on behalf  of the appellant that as the land had  vested in  the Government under the Abolition Act, the respondents  were not entitled to compensation under the Land Acquisition  Act, was rejected. It was observed that in the land acquisition proceedings the Government was estopped from denying  the absence  of any  interest in the claimants whom the  Government had  made parties  to the  proceedings. Regarding the  date from  which interest  on the  amount  or compensation should  accrue, the High Court found that there was no material on the record to show that possession of the land had  been taken  prior to  the date of the award by the Land Acquisition  officer. Interest was accordingly directed to run from the date of the award.      In appeal  before  us  Mr.  Rangam  on  behalf  of  the appellant-state has  urged that  as the land in question has vested under  the Abolition Act in the State the respondents are not  entitled to compensation under the Land Acquisition Act. We  find it difficult to accede to this submission, for we are  of the opinion that in case the State wanted to take over the  land under  the Abolition  Act it  should not have proceeded to  acquire the interest of the respondents in the land in  dispute under  the Land Acquisition Act. There were two alternative courses open to the State, either to proceed under the  Land Acquisition  Act or  to take  over the  land under the  Abolition Act.  Although the  estate was notified under the Abolition Act, the proceedings under that Act were stayed and  the matter  proceeded under the Land Acquisition Act. As  the proceedings which were continued were under the Land Acquisition Act the compensation payable had also to be paid in  accordance with  the provisions  of that  Act.  The reference which  was made by the Land Acquisition officer to the  Subordinate   Judge  under   section  18  of  the  Land Acquisition  Act   was  with   respect  to  the  quantum  of compensation  payable   to  the   respondents  because   the respondents had felt dissatisfied with the amount awarded to them as  compensation by  the said  officer. The  underlying assumption of those proceedings was that the respondents had an interest in the land. If it was the case of the appellant that the  respondents had been divested of their interest in the land and the same had vested in the appellant State, the appellant should have taken appropriate steps to make such a

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claim in  accordance with  law. No  such claim seems to have been made.  The High  Court expressly left open the question of the  claim of  the State  Government  to  the  amount  of compensation  deposited   on  the   score  that  Melwaramdar respondents were not entitled to it by reason of having lost all their  interest in  the land  at the  relevant point  of time. We  agree with  the High Court that it was not open to the appellant-State  in the particular reference made at the instance of  the respondents to the Subordinate Judge to set up a claim adverse to the interest of the respondents. There is also  we  find  nothing  in  the  award  of  the  learned Subordinate Judge  to show  that  any  question  was  raised before him  that the  amount of compensation was not payable to the 539 respondents in  accordance with  the provisions  of the Land Acquisition    Act.  This  question  appears  to  have  been agitated for  the first  time only  in the appeal before the High Court.  The High  Court rejected the contention in this behalf. We find no cogent ground to take a different view.      As regards  the quantum of compensation, the High Court has referred  to the  previous decisions which show that the formula gene- rally adopted is to pay one-third of the total compensation  to   Melavaramdars  and   two-thirds  of   the compensation  to  Kudiwaramdars.  In  accordance  with  that formula, the  respondents would  be entitled  to one-half of the  compensation   payable  to   Kudiwaramdars.  Both   the Subordinate Judge and the High Court awarded compensation in accordance with  this formula.  No cogent  ground  has  been shown  to  us  as  to  why  we  should  interfere  with  the concurrent finding  in this  respect. We also find no reason to disagree  with the  High Court  regarding the  date  from which interest should run on the amount of compensation.      The appeal fails and is dismissed with costs.                   P.H.P. Appeal dismissed. 540