Skip to content


In Re: Esufali Salebhai - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtMumbai
Decided On
Case NumberReference No. 2 of 1906
Judge
Reported in(1908)10BOMLR994
AppellantIn Re: Esufali Salebhai
Excerpt:
.....percentage for compulsory acquisition-land to be acquired must include all interests in the land-value of tenant's interest has no tearing-allowance for government taxes-apportionment of the compensation money-offer to be made to the claimants as a body-questions of title between government and claimant cannot be tried by collector.; under the land acquisition act (i of 1894), section 23, sub-section 1, in determining the amount of compensation to be awarded for the land the court shall take into consideration, first, the market value of the land, to which may be added various other sums for damage and expenses under headings secondly to sixthly in that sub-section. under sub-section 2, fifteen per centum for compulsory acquisition are to be added only to the market value of the..........published in the local government gazette of the 6th november 1902, under section 6 of the land acquisition act, the local government notified their intention of acquiring certain land fronting on parel road for a public purpose. notices dated the 19th november 1902 were served addressed to salebhai heptoola and ebrahim jiva calling upon them to appear at the collector's office on the 8th december and prove by document the nature of their interest in the land and building referred to and the amounts of their claims. on the 8th december esufaly salebhai the surviving administrator of salebhai heptoola appeared before the collector as the only claimant. ebrahim jiva who had leased the greater portion of the property from salebhai for the purpose of bullocks stables attended by his.....
Judgment:

Macleod, J.

1. By a declaration published in the Local Government Gazette of the 6th November 1902, under Section 6 of the Land Acquisition Act, the Local Government notified their intention of acquiring certain land fronting on Parel Road for a public purpose. Notices dated the 19th November 1902 were served addressed to Salebhai Heptoola and Ebrahim Jiva calling upon them to appear at the Collector's office on the 8th December and prove by document the nature of their interest in the land and building referred to and the amounts of their claims. On the 8th December Esufaly Salebhai the surviving administrator of Salebhai Heptoola appeared before the Collector as the only claimant. Ebrahim Jiva who had leased the greater portion of the property from Salebhai for the purpose of bullocks stables attended by his partner Ahmed Moosa and stated that as his lease had expired he had no claim.

2. The enquiry was proceeded with by the Collector on the footing that Salebhai had an a absolute interest, in the property to be acquired until the 3rd June 1903 when it was adjourned sine die as Ibrahim Jiva had obtained a 'Rule in the High Court against the Municipality to shew can se why a license should not be issued to enable him to continue the use of the premises as a stable and cattle market. The value of the premises according to the claimant's valuation depended entirely on the license being renewable.

3. On the 14th May 1904, a notice was issued by Government addressed to the claimant (Ex. 52) calling on him to quit and deliver up possession of the land by the 1st January 1905 etc. The inquiry was resumed, in spite of this notice, on the 29th June 1904, when the Government solicitor asked the Collector to decide that Salebhai was merely holding from Government as a tenant on sufferance, that the land belonged to Government, and that Salebhai's estate was only entitled to that portion of the compensation which might be awarded for the buildings.

4. In my opinion the Collector should then have stopped the inquiry under the Land Acquisition Act.

5. By Section 3 (a) the expression 'land' includes benefits to arise out of land and things attached to the earth or permanently fastened to anything attached to the earth.

6. The Collector is the officer deputed by Government to fix the amount which Government are prepared to offer for compensation for the land. By Section 18 the Collector is to be guided by the provision of Section 23 in determining the amount of compensation By Section 23 Sub-section (1) in determining the amount of compensation to be awarded for the land, the Court shall take into into consideration first the market value of the land, to which may be added various other sums for damage and expenses under headings secondly to sixthly in that sub-section. Under Sub-section (2) fifteen per centum for compulsory acquisition are to be added only to the market value of the land and not to that part of the compensation which may be payable under the other heads. When there are no claims for compensation under these heads the compensation payable is the market value of the land. There is therefore no provision for the acquisition of anything less than permanent interests in the land and 'land' in the Act must mean land irrespective of any interests which have been created in it.

7. In the case of lands let out by Government from year to year there is no difficulty in Government resuming possession within a year by giving notice; but in the case of lands let out for a term of years it is difficult to see how the Government can take action under the Land Acquisition Act if it desires to put an end to the term, unless the words 'the compensation payable for the land' in Section 11 canbe paraphrased into compensation for those interests in the land which are not vested in Government. I do not see how the words can be read in that way. Take the case of a lease of land for ninety-nine years fifty years of which have still to run when Government wish to acquire the land. How is the Collector to arrive at the value of the lessee's interest in the remainder of the term The market value of the land by which under Section 23(1) he is to be guided in fixing the compensation has nothing to do with the value of the tenant's interest and that is the only section by which he can be guided in fixing thecompensation. It would be different if the market value of each interest in the land had to be ascertained as under the Land Clauses Act in England. Land in Bombay held in perpetuity on payment of a fixed rent to Government is property in the nature of freehold : Naoroji Beramji v. Rogers (1867) 4 Bom. H.C. 1: and passes from hand to hand without the Government demand influencing the price paid. In such cases the market-value of the freehold subject to the Government demand can be ascertained from the prices paid and that is the amount of compensation to be paid by Government. If the market value has to be ascertained from the income of the land, the Government demand, whether it be called pension tax, quit and ground rent or toka provided it be permanent, must be treated as an outgoing before the net income is capitalized. The Government demand is a tax on the land and not an interest in the land. Having fixed the compensation payable for the land, the Collector has to apportion it amongst the persons interested and he has to satisfy himself that the claimant or claimants can produce a prima facie title to receive the compensation. In case of dispute between claimants he can refer them to the Court under Section 30 of the Land Acquisition Act 1894.

8. Instead of stopping the proceedings however the Collector continued the inquiry regarding the market value of the land, without any objection taken by the claimant, and made his award on the 5th March 1905. He found by Clause (2) that the compensation payable, that to is say, the market-value of the land and buildings was for land Rs. 2,00,083 26 and for buildings Rs. 36254.91 and added Rs. 543823 fifteen per centum compulsory acquisition on the value of the buildings only. He then proceeded, for the reasons given in his decision, to apportion the compensation between Government and the claimant apparently under Section 11 (3), apportioning Bs. 2,00,183-4-1 to Government as the value of the land and Rs. 41,693-2-2 to the claimant for the buildings.

9. On the 10th March 1903 the claimant's Solicitor wrote to the Collector saying that the claimant did not accept the award; (1) because the amount of compensation awarded for land and buildings was inadequate (2) because the Government were not entitled to the full value of the land, and requesting him to refer the matter for the determination of the HighCourt. The Collector did not make the reference until the 25th January 1906.

10. When the reference came on for hearing before me on the 2nd July 1908, Mr. Jardine for the claimant did not contest the market-value of the land as found by the Collector but raised issues under two main heads; first, that the claimant was the owner of the land and was, therefore, entitled to the whole of the compensation awarded; second, that the Collector having arrived at the amount of compensation to be awarded tinder Section 11 had no right to apportion it between Government and the claimant. Under Section 25 the claimant could not get less than the compensation awarded.

11. Mr. Robertson for Government admitted that Government were not interested in the compensation payable within the meaning of the Act but he contended that the Court should only look to the amount actually offered by the Collector, namely, Rs. 41,693-2-2.

12. There can be no doubt that the Collector's functions are limited to making an offer of the compensation payable for the land. If there are several claimants he can apportion the compensation amongst them, but the offer has to be made to the claimants as a body, there is not a separate offer to each claimant of the amount apportioned to him.

13. This is clear from the fact that any claimant who is dissatisfied with the aportionment only can ask for a reference to the Court and if the Court altered the apportionment it follows that one or more of the claimants must get less than the amount apportioned by the Collector, whereas under Section 25 the claimant cannot get less than the amount of compensation awarded by the Collector. Claimant, therefore, must include a body of claimants in whom are vested all the lesser interest which make up the permanent interest in the land to be acquired. See Fink v. Secretary of State for India ILR (1907) Cal. 599.

14. The Collector has no jurisdiction to try questions of title between Government and the claimant. See Imdad Ali Khan v. The Collector of Farakhabad ILR (1885) All. 817. That case was decided under Act X of 1870 but the principle remains the same in proceedings under Act I of 1894. 'It seems a contradiction in terms to speak of the Collector as seeking acquisition of land when he asserts that the land is his own and that no other person has any interest in it '. This decision was approved of in The Crown Brewery, Mussoorie v. Collector of Dehra Dun ILR (1897) All. 339.

15. If the Collector proceeds with the inquiry he is directed to make under the Act, that amounts to a confession of title in the claimant or claimants ; and having arrived at the compensation payable for the land under Section 11 he ought if he makes an offer at all to offer that to the claimant, he has no right whatever to retain any of it on behalf of Government. If I strike out from the Collector's proceedings all those portions which deal with the question of title between Government and the claimant as being irrelevant to the inquiry the Collector was directed to make and beyond the powers vested in him, what remains is an offer of Rs. 41,693-2-2 as compensation payable to the claimant for the land. That is not the market value of the land as found by the Collector and therefore the offer was inadequate. The Court, therefore, is entitled to decide what the Collector should have offered. Mr. Jardine in opening his case merely contended that as the Collector had awarded Rs. 2,41,876-6-3, as compensation payable under Section 11 and as Government was not a person interested in the apportionment of the compensation and as the claimant under Section 25 could not receive less than the amount awarded, his client was entitled to the whole compensation. The question of jurisdiction was not directly referred to The argument, therefore, did not at that time strike me as forcibly as it might have done and Mr. Robertson seemed to be under the impression that I had disposed of it by some remarks made during Mr. Jardine's address. Though I may have suggested that I was not then inclined to agree with Mr. Jardine's contention I certainly did not arrive at any decision upon it. Thereafter the other issues on the title of claimant as against Government to the land were gone into very fully evidence was led and an enormous n ass of documents were put in without either side suggesting that the Court had no jurisdiction to decide this question of title in this reference. Mr. Robertson did not attempt to answer the claimant's first contention until I reminded him at the close of his address in reply that he had not dealt with it. He then referred to the cases I have just cited, but even then he did not question my jurisdiction to decide whether the claimant had a good title to the land as against Government. The situation thus became complicated) as the Collector having no jurisdiction to try the question of title between Government and the claimant, that question could not form the subject matter of a reference, but should be tried in a regular suit which should originally have taken the form of an action in ejectment by Government against the claimant. But the Government have taken possession of the land three years ago and it isimpossible to put the parties in the same position as they would have been if the Collector had stopped the proceedings under the Land Acquisition Act. The only possible course is to consider what the Collector has actually offered in the award and treat the Collector's award as an offer of Rs. 41,693-2-2 to the claimant as compensation payable for the land and it will then be possible in this reference to decide what is the proper amount that he should have offered. Though the point is not free from doubt, I think the amount offered in the award must be the amount awarded and that under Section 25 the claimant cannot get less than the amount offered. The amount offered should be the same amount as the compensation which the Collector thinks should be allowed for the land under Section 11 but the fact that the two amounts do not correspond is a technical fault which should not affect the operative part of the award.

16. By the notice of the 19th November 1902 the claimant was called upon to state and prove by document the nature of such interests in the land or building under acquisition and the Collector was therefore entitled to ascertain whether the claimant had a prima facie title to receive the compensation excluding, as I have stated above, any claim on behalf of Government.

17. I shall, therefore, deal with all the evidence which has been adduced regarding the claimant's title on this footing.

18. [After going at great length into the history of the land in question, His Lordship went on as follows:-] Though it was not strictly necessary for the purposes of the judgment I have summarized the history of the land in reference and the contentions of the claimant regarding his title at considerable length from the numerous documents which had been put in and the oral evidence as it may prove useful in the event of this case being taken to a higher Court.

19. But, in my opinion, I have no jurisdiction to decide the question of title as between the Government and the claimant. As far as the proceedings under the Land Acquisition Act are concerned, the claimant has proved that he is the person to receive the compensation payable for the land. The Collector has found the present value of the whole property under acquisition to be Rs. 2,36,498-17 on the rental basis. This total has not been disputed. But as far as I can gather the rent paid to Government has not been treated as an outgoing and deducted before the net rents were capitalized. The rent of the houses at the N.W. and S.W. corner have been capitalized at 16 2/3 years' purchase and the rent of the stable at 11 1/4 years' purchase. The ground rent amounts to Rs. 90-4-7. It is impossible to apportion this accurately but it will be near enough if it is capitalized at 13 years' purchase. This will amount to Rs. 1173-11-7. The compensation therefore payable for the land is Rs. 2,35,264-7-1 plus 15 per cent for compulsory acquisition. The difference between this and the amount received by the claimant under protest must be paid to him with interest at six per cent from the. date the Collector took possession. The Government must pay the claimant's costs.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //