M.L. Chaturvedi, J.
1. This is an appeal against the judgment of the Improvement Trust Tribunal of Allahabad dismissing the appellant's reference to the Tribunal for assessment of proper compensation of a piece of land which has been acquired by the Improvement Trust, Allahabad.
2. On the 13th August, 1938 a notification was published in the U.P. Gazette under Section 36 of the U.P. Town Improvement Act (Act VIII of 1919). The notification was to the effect that the improvement scheme had been framed with respect to the area which was mentioned in the notification and it also mentioned the place at which the particulars could be seen. As a consequence of this notice, the acquisition of the appellant's piece of land having an area of 616 sq. yards was made and possession was taken over from the appellant.
There was no dispute as far as the actual acquisition of the piece of land was concerned. The Land Acquisition Officer then considered what compensation the appellant and a tenant of a small portion of the said land were entitled to get. He came to the conclusion that the appellant was entitled to compensation at the rate of Re, 1/- pen sq. yard of land and the tenant was separately granted compensation amounting to the sum, of Rs. 120/-.
The tenant appears to have been satisfied with the amount of compensation but, on an application made by the appellant, the question of his compensation was referred to the Improvement Trust Tribunal for adjudication. The reference was under Section 18 of the Land Acquisition Act, but, in view of certain provisions, of the U.P. Town Improvement Act, it was sent to the Improvement Trust Tribunal instead of to a civil court.
It may be stated here that the Land Acquisition Act applies to the acquisitions made for the Improvement Trust with certain modifications, which have been detailed in the schedule attached to the Town Improvement Act. The claim of the appellant was for the grant of a sum of Rs. 8,000/-as compensation for the land and for the award of Rs. 1,200/- as additional compensation, on account of compulsory acquisition of the land.
The tribunal considered the appellant's case but was of the opinion that the appellant was not entitled to any increase in the amount of compensation awarded by the Land Acquisition Officer and dismissed the reference. The appellant was also ordered to pay the costs of the reference. This is the order against which the present appeal has been filed.
3. In order to appreciate the controversy between the parties it is necessary to mention certain provisions of the Town Improvement Act and of the schedule attached to the Town Improvement Act containing the amendments made in the Land Acquisition Act by the U.P. Town Improvement Act. Section 23 of the Land Acquisition Act lays down certain principles according to which compensation has to be awarded for the acquisition of land.
Sub-section (2) of that section requires that, apart from the market value of the land which is to be determined according to the provisions of Section 23, the claimant is to be awarded an additional sum amounting to 15 per cent of the market value, in lieu of the compulsory nature of the acquisition. Paragraph No. 10 of the schedule attached to the Town Improvement Act enumerates the amendments made in Section 23 of the Land Acquisition Act.
Sub-paragraph (2) of paragraph 10 has added a proviso to Sub-section (2) of Section 23, which is to the effect that the provisions of Sub-section (2) of Section 23 of the Land Acquisition Act shall not apply to any land acquired under U.P. Town Improvement Act, except where the land has been anquired under Sub-section (4) of Section 29 of the Act or the acquisition is of certain types of build' ings and gardens.
Sub-paragraph (3) of paragraph 10 of the sche-due makes further amendments in Section 23 of the Land Acquisition Act by adding a number of provisions at the end of Section 23, which lay down further principles for the determination of the market value, where the acquisition is under the Town Improvement Act. I am concerned in the present case with the first of these additions which is as follows :--
'(a) The market value of the land shall be the market value according to the use to which the land was put at the date with reference to which the market value is to be determined, under this clause (first clause to Sub-section (1) of Section 23 of the Land Acquisition Act).'
4. Coming now to the facts of the case before me it may be stated at the outset that the land which was acquired had no constructions upon it and it was an open piece of land. The case of the appellant was that the appellant owns all the houses within the area of 200 sq. yards on either side of the land in dispute and he was using this open piece of land for storing clay, stones and bricks etc. which were needed from time to time in connection with the repair of the house belonging to the appellant and situated in the locality. The main witness produced by the appellant is Sooraj Narain who has been a servant of the appellant for the last 27 years or 28 years.
He has stated that the land in question lies at a distance of 50 or 60 paces from the residential Kothi of the appellant. Apart from the stones and bricks other building material were also kept on the land and there was a small shop also on a portion of the land. According to this witness, the value of the land in dispute was approximately Rs. 10/- or Rs. 12/- per sq. yard. The appellant has also filed certain documents to prove the mar-ket value of the land. No evidence has been pro-duced on behalf of the Improvement Trust.
5. The first submission of the learned counsel for the appellant is that the Tribunal should have awarded compensation to the appellant at the rate of Rs. 8/- per sq. yard instead of Rs. 1/-, as awarded by the Improvement Trust Tribunal. He says that the examplars filed by him and the statement of the witness prove that the market value of the land is more than Rs. 3/- per sq. yard, but he has confined his claim to the award of Rs. 8/- per sq. yard.
Under the Land Acquisition Act, the courts are to determine the market value of the land according to the principles laid in Section 23 of that Act, but Clause (a) added by Sub-paragraph (3) of paragraph 10 of the schedule to the U.P. Town Improvement Act further provides that the market value shall be the market value according to the use to which the land is being put at the date with reference to which the market value is to be determined. It is agreed on all hands that the market value is to be determined with reference to the date on which the notification under Section 36 of the U.P. Town Improvement Act is publish-ed in the Gazette,
This notification was published on the 13th August, 1938 and the market value is to be determined according to the valuation on that date. The further limitation imposed by the addition of Clause (a) is that the market value should be determined according to the use to which the land was being put at that date. Learned counsel for the appellant says that the land was being put to use to which only a vacant land can be put and, therefore, he is entitled to compensation according to the market value of vacant land in the locality. The contention of the learned junior Standing Counsel is that it cannot be said that the land was put to any use and therefore the award of compensation at the rate of Re. 1/- per sq. yard was adequate.
6. The question of assessing compensation under Clause (a) mentioned above came up for consideration before a Full Bench of this Court in the case of Secretary of State v. Makhan Das : AIR1928All147 . The Full Bench held that the correct interpretation of Section 23, Sub-section (1) Clause (a) of the Land Acquisition Act, as amended by paragraph 10, Sub-paragraph (3) of the Schedule to the Town Improvement Act, is that the market value of the land to be acquired is to be calculated exclusively in accordance with the use to which the Jand was put on the date on which the notice under Section 29 or 36 of the U.P. Town Improvement Act was issued. It was also held that the land in question in that case had not been used even for agricultural purposes. They came to the conclusion that it was under no use at all. The Full Bench observed:
'The basis of compensation should be the value to the owner of the date of die notification, and prima facie this would depend upon the profit which on that date the owner is deriving from the land, and that profit could be estimated from the use to which at that point of time, the land was actually being put.'
Jn the case before them, they were of the opinion that the land was not put to any use and therefore they held that no compensation at all should be awarded for the acquisition of that land by the Improvement Trust. The learned Judges remarked that the legal position was not satisfactory and came to the conclusion that where the owner was not making any profits from the land he was not entitled to any compensation. The Improvement Trust Tribunal appears to have acted according to the above decision.
But, soon after their Lordships of the Privy Council considered the decision of the Full Bench and did not accept it as correct. The Privy Council case of Kailash Chandra v. Secretary of State was also a case where they had to consider Section 23 of the Land Acquisition Act as amended by the U.P. Town Improvement Act. The Full Bench decision referred to above was brought to their notice and their Lordships have said that they were unable to agree with the said decision.
They held that where a plot of land was being used by the owner as a garden or agricultural land at the relevant date, the land is being put to use as a garden or agricultural plot. Compensation should be awarded according to the use irrespective of the fact whether the owner was making any profits from the use of the land or not. They held that the effect of Section 23 of the Act, as amended by Clause (a) of paragraph 10(3) of the schedule attached to the Town Improvement Act, is that the possibility of a garden or agricultural plot being used in future for building purposes should be disregarded, but the value of the land should be determined according to whether it was being used as a garden or agricultural land.
7. The question, therefore, whether the ap-pellant was earning any profit from this land is to be disregarded and the market value of the land in dispute is to be determined according to the use to which it was being put at the date of the notification. The use to which it was being put on that date was that clay, stones, bricks and other building materials were kept on it. The market value of such use is therefore to be determined.
I confess it is not easy to determine the market value of the land in view of the peculiar use to which the land was being put at the date oi the notification. No profit or rent from the land, excepting from a tenant of a small portion of it, was being earned. But in the instant case, the position has been made somewhat easier by the fact that we know that the appellant was owning a number of houses in the vicinity up to a distance of 200 yds. from the land.
In view of the number of houses that he owned in the locality, he must have found it necessary to have a piece of vacant land for storing building material for occasional repairs. The question is what is the market value of the land which is being put to such a use. I think it can be no other than the market value of a vacant piece of land in that locality.
8. If some private individual wanted to purchase land for putting it to the use of storing house-building material, he would have had to pay the price which, in this locality, vacant land used to fetch on the date of the notification. The Privy Council has said that if the land was used as a garden it should bo valued as a garden, if it was used as an agricultural plot, it should be valued accordingly, and the only effect of the insertion- of 'Clause (a), by the U.P. Town Improvement Act, is that the land should not be valued as a possible building site.
It also held that it could not be said that the land was not being put to any use simply because the owner was deriving no profit therefrom. The question as to what profit the appellant was earning from the land is, therefore, not relevant for determining the market value of the land. The value of the land, according to the purpose for which it was being used has to be determined and I think the value for this purpose was the price of vacant land in the locality, at the date of the notification.
9. I have next to determine what the market value of the vacant land in the locality about the time of the notification was. The important ex-amplar on this point is the one which bears the date the 29th June, 1934. A plot of land measuring 10 ft 6' x 25 ft. was sold by one Debi Ramji for Rs. 175/- at the rate of Rs. 6/- per sq. yard. P. W. Suraj Narain has stated that this land is situate at a distance of about 200 paces from the land in suit.
The sale was 4 years prior to the date of the notification. But it is nobody's case that the price of land after 1934 went down in this locality. It is true that the area of the land sold was very small, but, after looking at other exemplars, it appears that it did not fetch any higher price because of the smallness of the area.
10. The other document filed is a sale deed dated 9th July, 19,32. The sale in this case was by the Municipal Board and the rate works out at Rs. 4/- per sq. yard. This land is about 100 paces from the land in question. The land appears to have been sold for a lower price because the Municipal Board imposed a lot of conditions on the vendee, as to the manner of the user of the land. It further appears from the boundaries of the land, which was sold, that it was situate in a lane. It was sold 2 years prior to the sale deed mentioned by me above and I think it fetched a lower price because of the conditions imposed by the Municipal Board.
11. Apart from the above two sale deeds, the appellant has filed a number of Qabuliats executed by the tenants who took permanent leases from the owners of the land. Five such rent notes have been filed beginning from the 11th December, 1937 and ending with 30th September, 1939.
The premium paid by the lessees ranges from-Rs. 5/4/6 per sq. yard to Rs. 7-10 per sq. yard. But in the majority of leases the premium is very much less than Rs. 7-10-0 per sq. yard.
Apart from the premium, the lessees had agreed to pay annual rents. Adding the capitalised value of the rents reserved, the evidence afforded by the rent notes would go to show that the rate of Rs. 6/- per sq. yard cannot be considered too high, P. W. Suraj Narain has stated that the value was Rs. 10/- to Rs. 12/- per sq. yard, but he is rrobably exaggerating the price in the interests of is master, namely, the appellant.
It is true that the rent notes show that the lands were taken for constructing houses and that was probably the object also of the vendees under the sale deeds, but that would not make any difference to the value of the land, in accordance-with the user to which it was being put.
12. The respondent did not produce any evidence in rebuttal. I, therefore, fix the market value of the land acquired by the Improvement Trust at Rs. 6/- per sq. yard according to the use to which it was being put at the date of the notification. The area of the land is 616 sq. yards, and at the rate of Rs. 6/- per sq. yard the price comes to Rs. 3,696/-.
13. I accordingly award a sum of Rs. 3,080/-more to the appellant on account of the market value of the land acquired by the respondent. In addition to the above sum of Rs. 3,080/-, I further award, under Section 28 of the Land Acquisition Act, interest to the appellant at the rate of Rs. 6/- per cent, per annum on Rs. 3,080/- from the date on which the respondent took possession of the land to the date of payment of the money into court.
14. As regards the costs, the award of the Collector has not been upheld by me and Sub-sec. (2) of Section 27 provides that in such a case the cost shall ordinarily be paid by the Collector, unless the court thinks that the claim was so extravagant or that the appellant was so negligent in putting his case before the Collector that some deduction from his cost would be made. I do not think that it can be said in this case that the appellant was so extravagant that he should be deprived of his cost or that he was in any way negligent.
15. The appeal is accordingly allowed and the award of the Improvement Trust Tribunal is modified in the manner indicated above.
16. The appellant will be entitled to his costs from the respondent of both the courts.