N.U. Beg, J.
1. This is an appeal by the Union Sugar Mills Company. It arises out of certain acquisition proceedings taken under the U. P. Town Improvement Act (Act No. 8 of 1919).
2. It appears that the appellant was claiming to be the permanent lessee of 15 bighas, 19 biswas and 19 biswansis of land under leases dated the 18th December, 1919, the 20th April, 1921, the 8th July 1921 and the 22nd February 1925. The Improvement Trust Kanpur took acquisition proceedings in respect of this land under the U. P. Town Improvement Act (Act No. 8 of 1919) hereinafter called 'the Act.' Thereafter, three notifications were issued in respect of this land under Section 36 of the Act.
The first notification was issued on the 17th of January, 1920, the second was issued on 24th of January, 1920, and the third was issued on the 31st of January, 1920. On the 18th of January 1921, a notification under Section 42 of the Act was issued. On the 3rd of August, 1944, the land Acquisition officer made an award allowing Rs. 641-15-5 as compensation to the appellant. On the 16th of December, 1944 the appellant made an application before the land Acquisition officer for reference to a Tribunal. The matter was accordingly, referred to the Tribunal.
On the 28th of May, 1946, the Tribunal passed its order dismissing the reference on the ground that the interest claimed by the appellant having been acquired after the issue of notifications in respect of it, the appellant could not get any compensation in respect of it.
3. Aggrieved with the said order, the appellant has filed this appeal in the High Court.
4. Having heard the learned counsel for the parties we are of opinion that this appeal should be allowed. At the very outset the learned counsel for the appellant argued that the Tribunal was not justified in throwing out the claim of the appellant on a preliminary ground and not dealing with the matter on merits. In this connection his argument was that the view of the Tribunal that any party acquiring any interest subsequent to the date of the notification is not entitled to claim compensation under the Act is an erroneous one. No doubt the Tribunal have not clearly expressed themselves on this point. The observations of the Tribunal do however, indicate that they had taken that view, and therefore they did not consider the case of the appellant on merits. In their order, the Tribunal made the following observations:
'We are not sure if any of leases refer to the land in question, taut if they do they do not help the Mills as they were written after the notification.'
The Tribunal further observed as follows:
'We do not find any proof that the Mills had any rights in this land before the notifications were published. They cannot, therefore claim any compensation and they were lucky to get even Rs. 640/-. We dismiss the application with costs.'
5. The order is a brief one and the merits of the case have not at all been discussed by the Tribunal in its order. In support of his contention, the learned counsel for the appellant invited our attention to a number1 of sections of the Act as well as the Land Acquisition Act, 1894 (Act No. 1 of 1894). The sections relating to notifications under the Act are Section 36 and 42.
A perusal of these sections indicates that there is no prohibition of transfer of his interest by the owner of property in favour of any person under any of these sections nor do they contain any restriction on the right of transfer possessed by the owner. Further, Section 40 of the Act would indicate that even after the publication of a notice under Section 36 of the Act it is open to the acquiring authority to abandon the scheme. Sections 56 and 58 of the Act show that the provisions of the land Acquisition Act (Act 1 of 1894) apply to the proceedings under the Act as modified by the Schedule appended thereto.
Under Section 16 of the land Acquisition Act, which would apply to the present case by virtue of the above provisions, the land would vest in the acquiring authority only after the Collector has taken possession of the same after making an award. Till that stage, therefore the title in the property remains in the owner of the property and he can transfer it or create any interest in it. The transferee or the person in whose favour the interest is created is therefore not barred from claiming compensation merely on the ground that his interest was created subsequent to the date of notification.
Further in the present case one of the leases was alleged to be of a date prior to the notification and in a case in respect of it the enquiry could not be shut out.
6. A reference to the above mentioned Schedule further indicates that Section 23 of the Land Acquisition Act (Act No. 1 of 1894) would be applicable to the present proceedings with certain modifications. These modifications relate to the first and sixth clauses of Section 23. Learned Counsel for the appellant argued that he had based his claim for enhanced compensation also on the basis of third and fourth clauses of Section 23 of the Land Acquisition Act (Act No. 1 of 1894). It is no doubt true that in computing the market value of the land the relevant date under Sub-section (1) of Section 23 of the Land Acquisition Act (Act No. 1 of 1894) would be the date of the publication of the notification under Section 36 of the Act.
However, for the purpose of claiming damages under Clauses (3) and (4) of Section 23 of the Land Acquisition Act, the relevant date would be the date of the Collector's taking possession of the land. The appellant had filed four leases in the present case. The first lease was of the 18th December 1919 the second was of the 20th April, 1921, the third was of the 8th July, 1921 and the fourth was of the 22nd February, 1925. In computing therefore the amount of compensation which is due to the appellant the Tribunal should have gone into the merits of the matter and also considered how far the appellant was entitled to claim damages under the third and fourth clauses of Section 23 of the Land Acquisition Act (Act No. 1 of 1894).
The Tribunal should have further considered the market value of the land at the date of the publication of the notice under Section 36 of the Act. There were also a number of other objections taken on behalf of the appellant which would appear from a perusal of his application. All these objections should have been considered and disposed of on merits. It is not necessary for us to mention them in detail at this stage as we have decided to remand the case to the tribunal for a reconsideration of the matter and for passing an order on merits.
7. On behalf of the respondent it was argued before us that the tribunal was also doubtful as to whether the property conveyed by these leases was the subject matter of acquisition. We are not expressing any opinion on this point, but we have no doubt that when the matter goes back to the Tribunal they would consider this matter on merits along with other points.
8. For the above reasons we are of opinion that this appeal should be allowed. We, accordingly, allow this appeal, set aside the order passed by the Tribunal and remand this case to them for passing a proper order according to law in the light of the observations made by us above. The appellant will be entitled to its costs of this appeal.