1. By this appeal, the State of Maharashtra makes a grievance with regard to the order made by the Land Acquisition Court (i.e. Civil Judge, Senior Division. Kolhapur), holding that for the acquired land, the State was liable to pay all the compensation as was determined by the Land Acquisition Officer and directing the Government to refund the amount of Rs. 18,312.33 p.
2. Brief facts are that the respondent is the owner of Revision Survey Nos. 607 and 608 of Ichalkaranji, Taluka Hatkanangale, District Kolhapur. For the purpose of construction of tenements for the benefit of industrial workers, proceedings to acquire the lands were initiated with regard to 2 gunthas from Survey No. 607 and 7 acres and 15 gunthas from Survey No. 608. The Section 4 Notification was issued on October 31, 1961 followed by the proceedings by the Land Acquisition Officer to make an award under Section 11 of the Land Acquisition Act, 1894. Upon the evidence, he found that the lands were inam lands and, therefore, out of the compensation fixed, the claimant was not entitled to one-third of the market value determined by him and so he directed the payment less by that amount. A reference was sought and when the matter came up before the Land Acquisition Court, after hearing the evidence tendered by the parties the Land Acquisition Court came to the conclusion that as far as the value was concerned, there was fair assessment by the Land Acquisition Officer, but the direction with regard to Rupees 18,312.33 p. was unsustainable. The learned trial Judge rejected the argument that such a direction in reducing the compensation was available to the Land Acquisition Officer because the property was held on a restricted tenure. Rejecting that view, the trial Court has held that it was improper to deduct a particular amount of compensation. The trial Court has further pointed out that even to lift the restriction, the claimant would have been required to pay a sum of Rs. 370/-and that could have been deducted if at alt by the Land Acquisition Officer. The reasons for deduction having been negatived in this manner, the trial Court directed the further payment of Rs. 18.312.33 p. to the respondent-claimant.
3. A short and narrow question, therefore, arises to be determined in the present appeal as to whether this order by the Land Acquisition Court is or is not in accordance with law.
4. Mr. Kotwal, the learned Government Pleader, has argued that the nature of the property being that of inam lands, it is inscribed with the statutory right of Government and in the matters of fair assessment of the market value, that right will have to be quantified in terms of money. The learned Government Pleader has contended that the value of that right cannot be allowed to be made the part of compensation payable to the claimant, for that value belongs always to the Government. The result of acquisition, in the submission o the learned Government Pleader, is that the right of the holder or occupant is acquired and its value will have to be determined deducting the value of the right of the Government in such property. Reliance is placed on the provisions of the Bombay Merged Territories Miscellaneous Alienations Abolition Act, 1955 and the scheme of conferring rights in restricted tenures. The learned Government Pleader points out that upon regrant of occupancy rights under Section 7 of the Bombay Merged Territories Miscellaneous Alienations Abolition Act, 1955, the occupancy itself is restricted, in that it is not ipso facto transferable or partible without the previous sanction of the Collector and except on payment of such amount as the Slate Government may by general or special order determine (Section 7 (3) of Bombay Act No. XXII of 1955). Relying on these provisions. Mr. Kotwal drew my attention to the Manual of Land Acquisition for the State of Maharashtra dealing with the right of Government and its assessment by the Land Acquisition Officers for the purpose of determining the value payable to the occupants. Heavy reliance is placed on paragraph 241 of the said Manual, which lays down certain principles so as to protect the right of Government in such restricted tenures. According to the learned Government Pleader, therefore, the nature of property that is being acquired, being the one of restricted kind, it could not fetch the same value as is available to the properly free from restriction. In this view, the learned Government Pleader submits that the deduction from the amount of compensation to the extent of one-third by the Land Acquisition Officer was entirely justified and the trial Court was not right in giving a contrary direction.
5. Now, as far as the rights to compensation are concerned, these are statutory rights and Section 23 of the Land Acquisition Act, 1894 lays down the matters to be considered in determining compensation. It directs the Court to take into consideration firstly the market value of the land at the date of the publication of the notification under Section 4(1) of the Land Acquisition Act. In all such types of cases, the first and primary consideration, therefore, is what would be the market value of the land whether under restricted or unrestricted tenure. If the market value can be fairly determined of such land, there is hardly any scope to deduct any amount from that value so as to compensate the restrictions with regard to transferability. The provisions of Section 7 (3) of Bombay Act No. XXII of 1955 arc hardly relevant. They do not apply firstly to acquisitions at all. They would operate only when lands are being subjected to voluntary transfers or partitions. In no other case, Sub-section (3) would operate as a restriction upon the occupancy rights in respect of lands within the contemplation of Section 7. In other words, there is no bar to surrender the lands in acquisition in favour of the State. Qua the acquisition, therefore, the property cannot be treated as the one of restricted rights. In terms of statutory injunction available in Section 23(1) firstly of the Land Acquisition Act, the claimant is entitled to get the market value of the entire acquired land and nothing less than that. No doubt, the Manual of Land Acquisition, on which reliance is placed, does give directions to the acquiring authorities how to protect the rights of Government in the matters of restricted tenures. It is significant to observe that these are the matters of guidelines to the Acquisition Officers so as to make an offer to the person while making an award under Section 11 of the Land Acquisition Act. These are not the matters strictly of statute nor are they matters that will pre-empt the statutory rights of the parties to receive the just and fair compensation.
6. It is interesting to refer to para. 241 of the Manual of Land Acquisition for State of Maharashtra, on which reliance is placed, only to indicate that even there, there is no fixed principle laid down and the matter will have to be determined under the facts and circumstances of each case. That paragraph is a part of the guidelines beginning with paragraph 238 with regard to the rights of Government, which directs and Acquisition Officer as the agent of the Government to protect the rights of Government and not to pay money for what already belongs to the Government. This is the primary purpose for which the guidelines are laid down by Government Resolutions. If some property or interest in the property belongs to the Government, then the direction is that for that interest, compensation need not be paid. In the light of this guiding principle, if the directions in paragraph 241 are considered, it will show that restricted tenures are directed to be valued keeping in view that the same were given at much lower rates by the Government and wherein the Government bad an equitable claim to pay less while acquiring such lands. The principle is based not on the market value but on the equitable claim of the Government to settle the properties in restricted tenures at much lower rates. It is further clarified in the paragraph following that initially by Government Resolution of 1953, the value of the land held on the restricted tenure was generally held to be equal to two-thirds of the value of similar land held on the old tenure in the same locality. That question was entirely reconsidered and further guidelines were laid down from April 26, 1972. With regard to agricultural lands, it has been observed that restrictions on tenure do not much affect the market value of agricultural lands held on restricted tenure as compared to the market value of agricultural lands held without any restrictions. Then the paragraph goes on to refer to the lands having non-agricultural potentiality and there gives a direction that for such lands having non-agricultural potentiality, the market value of lands held on restricted tenure should be considered less by about one-third of that of similar lands held without such restrictions. The direction further provides that when it is feasible for the Acquisition Officer to arrive, directly at the market value of the lands held on restricted tenure from the data in respect of similar lands, the question of market value as per the Government Resolution will not arise.
7. As stated above, these are mere guidelines and thus also are of limited efficacy so as to give direction to the Acquisition Officer in making awards under Section 11 of the Land Acquisition Act. While giving these directives by the Government Resolution, it has been made clear that in the case of agricultural lands, restrictions on tenure do not much affect the market value.
8. This paragraph, therefore, is not conclusive of the right of the claimant, nor is conclusive with regard to the working out of the value of the interest of Government in a given restricted tenure. As indicated above, there are no restrictions with regard to statutory acquisitions by the State in the matters of tenure governed by Section 7 (3) of Bombay Act No. XXII of 1955. The restrictions arc on voluntary transfers and voluntary partitions and that too can be lifted by taking the permission of the Collector and paying such amount as the State Government may, by general or special order, determine. At the most, the right of the Government would depend in the matters of transfers and partitions, when they arise, to receive such amounts as may have been determined by special or general order. When the Land Acquisition Officer made the award, he was not dealing with a case either of transfer or partition. The entire purpose of paras. 238 to 241 of the Manual is to protect the rights of Government in the land acquired. It follows from these paragraphs that the rights preexist in the property under acquisition and the directions are being given to the acquiring officer not only to protect the rights of Government but also not to pay any compensation to the claimant as against those rights. The scheme, therefore, is no doubt reasonable. The question, however, of application of these paragraphs would always arise and that will have to be determined with regard to the land in question. The words 'restricted tenure' do not by themselves mean that even in the matters of acquisition, the Government has retained any right in property. The restrictions in each case upon the tenures will have to be understood and appreciated. The tenure which may not be transferable voluntarily, unless certain conditions are fulfilled, including the payment against such transfer, may not have any restrictions with regard to its acquisition by the Government itself which in law is the authority that settles such a tenure. If in the matters of acquisition, no restrictions are imposed upon the tenure by virtue of the settlement of the tenure itself or by the law or Rules that govern the same, it would follow that while acquiring the land, the land cannot be treated under restricted tenure so as to reduce the compensation itself. The controversy herein does not admit of any doubt, for it is only the acts of transfer or partition which are in restricted category. As far as species of extinguishing titles of persons holding tenures are concerned, these are not all exhaustive matters. Acquisition by the paramount State for public purpose also leads to extinction of the title. Advisedly, the Legislature has not put a restriction in that regard in the body of the statute. Even, therefore, taking into account these paragraphs, the question of payment of any amount to the Government would not arise. Only to the extent as to whether the market value of such property is or is not affected the restriction imposed by Section 7 (3) of the Bombay Act No. XXII of 1955 is relevant and not otherwise. Therefore, if the evidence or the material gathered by the Land Acquisition Officer, while making the award in the nature of offer under Section 11 of the Land Acquisition Act, tends to indicate that with regard to such lands the normal market price by a willing purchaser was not payable, to that extent the claimant would be entitled to be paid less and not on the basis of any strict formula of reducing the compensation by one-third, as is being submitted. Under the provisions of the Land Acquisition Act, what has to be reached is the market price a willing purchaser is willing to pay to the claimant as a just and fair price for the piece of property under acquisition. Once that price is ascertainable with or without restrictions, the question of reducing the same does not arise in the matters of the tenure of the present kind.
9. A similar argument was advanced with regard to obligations imposed Upon abolition of Jagirs before a Division Bench of this Court at the behest of the State in First Appeal No. 502 of 1969 with First Appeal No. 702 of 1969, decided on September 2, 1976, and this Court there observed in the context of the controversy that for the purpose of conversion of land to non-agricultural use, the Jagir was liable to pay 50% of the price and that should be deducted from the compensation. After noticing the facts, the Court pointed out:--
'The restriction or the obligation imposed under the order of re-grant can only be attracted if the claimant wants voluntarily to convert his land to N. A. purposes. If Government by statutory exercise of powers wants to acquire a claimant's land for using it for non-agricultural purposes like construction of a filter house, it cannot be said that the terms of the re-grant would be attracted in such a case.'
The principle applied there would equally apply when we come to the matters of restriction imposed by Section 7 (3) of Bombay Act No. XXII of 1955. That restriction is of restricted character and only operates with regard to the voluntary transfers and voluntary partitions and to no other. Needless to observe that when the statute carves out restrictions, the provisions have to be strictly interpreted and the impositions are to be strictly construed. The provisions themselves do not apply to the acquisitions and the compensation for the acquired land in the occupancy rights of a person will have to be determined, as it laid down by Section 23(1) 'firstly' of the Land Acquisition Act.
10. That being the position, it has to be concluded that the grievance of the State in this appeal is without any merit.
11. In the result, the appeal fails and is dismissed with costs.
12. Appeal dismissed.