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PETITIONER: STATE OF MAHARASHTRA

       Vs.

RESPONDENT: BABU GOVIND GAVATE ETC.

DATE OF JUDGMENT01/11/1995

BENCH: RAMASWAMY, K. BENCH: RAMASWAMY, K. KIRPAL B.N. (J)

CITATION:  1996 AIR  904            1996 SCC  (1) 305  1995 SCALE  (6)447

ACT:

HEADNOTE:

JUDGMENT:                           W I T H                CIVIL APPEAL NO.10421 OF 1995          (Arising out of SLP (C) No. 3746 of 1979)                          O R D E R                     C.A. NO.3009 OF 1983      The facts  are very  brief. Notification  under Section 4(1) of  the land  Acquisition Act,  1894 (for  short,  ‘the Act’), acquiring  land for  a  public  purpose,  namely,  to establish Electricity  Sub-Station for the Maharashtra State Electricity Board as published in the State Gazetle on April 19,  1966.   The  Land  Acquisition  officer  in  his  award determined  the  compensation  at  Rs.5,000/-  per  acre  in respect of  an extent of 7 acres 9 gunthas of land in Survey No.124-A situated  in Airavali  Village in Thane District of State  of   Maharashtra,  but  deducted  1/3rd  towards  the interest of  the Government.  The respondent  had challenged the Government’s  power to  deduct 1/3rd  compensation.  The appellate court  confirmed the  same. On  appeal,  the  High Court, while  increasing the  compensation to Rs.6,000/- per acre, had  directed payment  of the deducted 1/3rd amount to the respondent  by its  judgment and  decree dated 10.9.1976 made in F.A. No.574/70. Thus this appeal by special leave.      Learned counsel  appearing for  the State has contended that the  Government in  its circular  dated April  26, 1972 issued by  Revenue and Forests Department in Letter No. LON- 4767-H, directed  deduction of  1/3rd of the market value of the  land  for  the  interest  in  such  land  held  by  the Government and  that, therefore,  the  High  Court  was  not justified in  interfering with  the order. He also contended that Section 43 of the Bombay Tenancy and Agricultural lands Act, 1948  (for  short,  ‘the  Tenancy  Act’)  empowers  the Collector to grant sanction. It is also empowered thereunder to fix consideration, as condition to alienate the land when the Collector  has the  power to  determine the compensation when the  land was  acquired for  a public  purpose. We  are

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wholly  unable   to  appreciate   the  stand  taken  by  the Government. The object of the Tenancy Act, is to protect the "rights of  the tiller  of the  soil", namely, the tenant or who later  became owner  so as  to remain  in possession and enjoyment of the land as part of economic justice assured in the  preamble   and  the   directive   principles   of   the Constitution. Under  the tenancy  Act the  tenant  has  been given right  to purchase  the lands from the erstwhile owner as provided  in different sections of the said Act. Sections 43(1) and 43(1A) provide that :      "43(1) No  land or  any interest therein      purchased  by  a  tenant  under  Section      17(B), 32,  32F, 32-I,  32-O, 32U, 43-1D      or 88E  or  sold  to  any  parson  under      Section 32P  or 64  shall be transferred      or shall  be agreed  by an instrument in      writing  to  be  transferred,  by  sale,      gift,  exchange,   mortgage,  lease   or      assignment,   without    the    previous      sanction of  the Collector and except in      consideration of  payment of such amount      as the  State Government  may by general      or special  order determine; and no such      land or  any interest  therein shall  be      partitioned   without    the    previous      sanction of the Collector.      (1A) The  sanction under sub-section (1)      shall be  given by the Collector in such      circumstances  and   subject   to   such      conditions, as  may be prescribed by the      State Government." Other sub-sections  are not relevant for the purpose of this case. Hence omitted.      A reading thereof clearly indicates that Section 43 was enacted to  protect the  right, title  and interest  of  the tenant who  purchased the  property and became owner thereof with a view to see that he is not deprived of his ownership, right to possession and enjoyment thereof as a tiller of the soil to  perpetuate the  object of  the Tenancy  Act. As its scheme previous  sanction is  a condition  precedent for any transfer except  when the  land  is  being  mortgaged  to  a cooperative bank  or a lending institution envisaged in sub- section (1AA) and the Explanation appended thereto amplifies such institutions  so as  to enable  him to obtain loans for improving the  land for  better cultivation  and to  augment economic empowerment. The consideration mentioned thereunder was also  to protect the tiller from exploitation, indigence or compelling dire necessity to alienate the loans and under a fictitious  and colourable  transaction or  for inadequate consideration. That,   under no circumstance, gives power to the Government,  when it  acquires the  land exercising  the power of  eminent domain  to  deduct  any  amount  from  the compensation payable  to the owner of the land as determined under Section 23(1) of the Act.      The sanction  required under  Section 43  is only  when there is a bilateral valid agreement between the owner and a third party  purchaser or  a lessee  or a  mortgagee etc. as envisaged under  Section 43(1). But when the State exercises its power  of eminent  domain and  compulsorily acquires the land, the  question of  sanction under  Section 43  does not arise. Section  23(2) of  the Act off sets the unwillingness on the  part of  the owner paying time scheme. The question, therefore, is  whether the  Government under the aforestated notification  is   entitled  to   deduct  1/3rd   from   the compensation determined  under Section  23(1) of the Act. We

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have seen  the notification  and we are unable to accept the validity  of  the  said  notification.  When  the  Collector exercises the  power to  grant sanction under Section 43(1), he does  it as a statutory authority to protect right, title and interest of the erstwhile tenant who subsequently became the owner  to see  that he  remains  to  be  the  owner  and continues to be in possession and enjoyment of the same. But that condition  to grant  sanction is  not headed  with  any right to  the Government to deduct 1/3 when it exercises its power of  element domain  for a  public purpose.  The  owner under Section  23(1) is entitled to the full compensation of the market value prevailing as on the date of publication of the notification under Section 4(1). Therefore, the circular relied on  is clearly ultra vires of the power of Section 43 or any other power.      The appeal  is accordingly  dismissed and  the order of the High  Court is  sustained. Since  the respondent  is not appearing, there is no order as to costs. C.A. NO.10421  /95 @ SLP (C) NO.3746/79      Leave granted. The appeal dismissed. No costs.