T. Ramaprasada Rao, J.
1. In these four appeals preferred by the Government, common questions arise. The properties which are the subject-matter of these four appeals are comprised in Survey Numbers 29, 30/1, 30/2, 31, 32 and 34. The Extents acquired in each of the above survey fields can be catalogued thus:
In S. No. 29 Ac. 2 34 cents
In S. No. 30/1 Ac. 2 33 cents
In S. No. 30/2 Ac. 2 33 cents
In S. No. 31 Ac. 0 72 cents
In S. No. 32 Ac. 9 91 cents
In S. No. 34 Ac. 1 79 cents.
The above properties were acquired for the purpose of extending the Industrial Estate at Guindy. Notification under Section 4(1) of the Land Acquisition Act was made on 29th September, 1965 the declaration under Section 6, on 18th July, 1966 and on 3rd April, 1967 the properties were taken possession of by the State Government. The Land Acquisition Officer, who enquired into the market value of the properties, the superstructures, the wells and the interests of other affected parties, gave a compensation of Rs. 1,500 per ground and varied amounts in respect of the superstructures and the wells found in the properties. Whilst arriving at the net amount of compensation payable to the persons interested, the Land Acquisition Officer deducted a sum of Rs. 100 per ground in certain survey numbers as above which expense, according to the acquisition officer, was necessary to raise the level of the land by one foot. In one case, which is the subject-matter of appeal in A.S. No. 565 of 1970, there was a lessee who was in occupation of Survey No. 30/1 and Survey No. 34 pursuant to a lease entered into between him and the landlord under Exhibit C-16 dated 9th December, 1964 which is admittedly an unregistered lease deed in relation to immovable property which he obtained from the landlord. Under the lease the lessee who is one of the claimants in L.A.C. No. 108 of 1967 (subject-matter of appeal in A.S. No. 566 of 1970) claims that he levelled the land and manured it so as to raise jasmine plants, roses, marudhani, Rangoon malli etc., and that after having spent such considerable sums for reclamation of the land for using it for a particular purpose for which the lease of the land was taken, the lessee claimed that he was, on the average, earning a sum of Rs. 5,000 per year as and towards his income and that he has been deprived of such income during the unexpired period of the lease and on that ground, he claimed a compensation of Rs. 2,42,366. The Land Acquisition Officer awarded damages at the rate of Rs. 500 for eight years towards the loss of income for the unexpired period of the lease. The learned City Civil Judge, however, after considering the oral evidence, was satisfied that for the unexpired period of the lease, the lessee was entitled to damages at the rate of Rs. 1,000 per year for the eight years of lease to follow after acquisition. The State Government is aggrieved by the grant of Rs. 3,000 per ground as such to the vanous owners of the lands which were the subject-matter of compulsory acquisition and they are equally aggrieved by the quantum of compensation given by the Court below with regard to the superstructures and the wells in the acquired lands and in particular, they would attack the grant of a sum of Rs. 1,000 per year as damages to the lessee for the un-expired period of eight years in L.A.C. No. 108 of 1967 (subject-matter of Appeal No. 566 of 1970) and they would also contend that the deduction of Rs. 40 per ground by the Court below as the amount required for raising the level of the acquired land by one foot wherever it is necessary, is not fair and just and that the Land Acquisition Officer's estimate of Rs. 100 per ground to raise the level of the land would be reasonable. Learned Counsel for the claimants would sustain the judgment of the Court below in all its aspects. With regard to the reduction of the reclamation charges from Rs. 100 to Rs. 40 by the Court below, it is said that the said sum of Rs. 40 per ground was the scale adopted by the High Court in similar circumstances in 1958 and that there being no reasonable hypothesis to interfere with such a quantification, the award of the Court below has to be sustained. On the contrary the learned Government Pleader would say that even taking into consideration the normal increase attendant upon such reclamation process such as the cost of labour, cost of material etc., the reduction made by the Court below on such reclamation charges from Rs. 100 to Rs. 40 is not justified. The bone of contention, however, is about the grant of Rs. 8,000 to the lessee of the land comprised in Survey No. 30/1 and 34. Whilst the Government Pleader would say that the lessee is not entitled to any amount at all, after the Land Acquisition process was undertaken by the State, Mr. Kumaraswami, learned Counsel for the lessee (the affected or interested person) would urge that the grant of Rs. 1,000 as the estimated loss of the lessee who took over the land for the specific purpose of raising flower plants in it and for exploiting the same in that direction, is a necessary concomitant which has to be considered by the Courts vested with the jurisdiction to grant compensation to interested persons, and, so viewed, the lower Court was right in granting such compensation to him. The Government Pleader, however, would urge that, once the landlord was given compensation by reason of the compulsory, acquisition, then the land is no longer available to the lessee for him to utilise the same and exploit the same for his business purposes, and in the absence of such land, the claim for profits by use and occupation of the nonexistent land is a myth and ought not to be, therefore, countenanced. His further case is that if the lessee is also paid damages as awarded by the Court below, it would be tantamount to the award of double compensation for a single acquisition under two different heads, which grant cannot be made either under Section 23 of the Land Acquisition Act or otherwise.
2. We have heard arguments and looked into the relevant papers. We are not inclined, for a moment, to disturb the grant of compensation made by the Court below in relation to the huts or superstructures, samadhis, kavalawari cement tub and the other small structures in the lands acquired. We confirm the valuations made by the Court below as regards the said huts etc.
3. A vague argument, however, was addressed before us regarding the increased valuation of the wells granted by the Court below in Survey Nos. 30/1 34 and 32. The claimants however, examined an expert on their side who visited the site and deposed as C.W. 6 that in T.S. No. 30/1 there is a well with 16 foot diameter and its construction is pucca and its age could be predicted as ten years only. He also spoke about the well in T.S. No. 34 which is of 10 feet diameter. Similarly, he referred to the valuation of the other wells in the other survey numbers. This categorical evidence has not been squarely repudiated or corrected by the State. Except for filling of the report, Exhibit R-4 made by one of their officers who speculated about the age of the wells and who was not sure about the value thereof, no clinching evidence has been placed before us to find that the valuation of the wells as given by the Court below is excessive or unjustified. The well in T.S. No. 30/1 is 16 feet in diameter. The Land Acquisition Officer fixed the value of the well at a ridiculously low amount of Rs. 1,233. Having regard to the evidence of C.W. 6, and accepting his evidence as regards the construction and the age of the well, the Court below revised it to Rs. 4,000. Nothing has been placed before us to disturb this re-evaluation made by the Court on the evidence of C.W. 6. The Departmental Officer would say that the age of the well could be about fifty years. But, on what basis he says so is not clear. When at sight the well is pucca and C.W. 6 who is also a responsible person says that the well was in a proper condition at the time when the land was acquired and when he scraped the well it was so hard and he was satisfied that there was cement plastering over the brick construction, we are not inclined to interfere with the valuation of the. Court below. Similarly, the values fixed by the Court when it increased the value of the well in Section No. 34 from Rs. 300 to Rs. 1,000 and the value of the well in Survey No. 32 from Rs. 300 to Rs. 750 were fixed by the Court below after appreciating the evidence let in. As we said already, the only contrary evidence let in by the State is the report of the Officer, which is not only perfunctory, but appears to be based on opinion evidence. Taking all these circumstances into consideration, we are not inclined to disturb the value of the wells as granted by the Court below.
4. This leaves us to the two contentions which are practically the bone of contention as between the interested parties before us. We shall now take up the first question. According to the Government Pleader, the reduction of the reclamation charges from Rs. 100 to Rs. 40 made by the Court below in order to raise the level of the land is neither justified nor based on any acceptable data. The lower Court thought that since the High Court fixed such reclamation charges in the vicinity in or about 1958 at Rs. 40 per ground per one foot, such a valuation has to be adopted even in the year 1965 when the properties under consideration were the subject-matter of compulsory acquisition. We do not. agree. The Land Acquisition Officer has deducted the sum of Rs. 100 per ground so as to raise the level of the land by one foot. Equally there is no basis for this. The Government Pleader however, would rely upon the value adopted by the State Housing Board which is about Rs. 192 per ground for raising one foot in one ground of land. The State has filed Exhibits R-6 to R-10 showing the level of the lands and the extent of the low-lying area in each of the survey numbers acquired. Whilst the reclamation charges, therefore, are based on pure estimate the case of the claimants in that in the absence of any scientific method by which the actual level of the land could be gauged and measured, it is said that, the evidence of the witnesses examined on the side of the State ought not to be relied upon. That some of the lands under consideration are low-lying cannot be disputed, since the case of the claimants is that the earth has been removed because of the fall of some trees in the land. It is a far-fetched story. On the other hand the contention of the State through its officers that the earth has been removed for the purpose of brick-making appears to be acceptable and true. We therefore find that the lands are low-lying since mud has been deliberately removed from the lands and the claimants should suffer reclamation charges by reason of the undisputed low level of the lands acquired. Having regard to the fact that the High Court fixed a sum of Rs. 40 per ground whilst similar lands were acquired in the neighbourhood but in the year 1958, we are of the view that, noting the increase in the cost of such earth and in the cost of labour, a sum of Rs. 75 per ground to raise the level of the lands set out below by one foot would be the reasonable expense which the claimants should bear. We therefore raise the reclamation charges from Rs. 40 to Rs. 75 and such reclamation charges have to be borne by the claimants who own the lands described below, to the extent of the low-lying areas mentioned as against each of the survey numbers:
T.S. No. Extent covered by the low lying portion
Gr., Sq ft Average depth
29 12-0984 6 feet
17-1375 2 feet
30/1 14-1758 4 feet
30/2 15-0646 4 feet
31 2-1200 3 feet
32 8-1240 3 feet
3-1760 2 feet
4-0640 1 feet
5. The next point that arises in these appeals is whether P.W. 5 the lessee of properties in T.S. No. 30/1 and 34 had an existing right in the property acquired on the date of acquisition and whether he would be entitled to compensation in relation to such vested right in him. It is common ground that on the date of acquisition, the lessee could remain in the property for a period of 8 years after the date of the acquisition. The claim of the lessee is that during the unexpired period of 8 years he has a right to occupy the land, exploit the same for the purposes of his business and for which he took the land on lease from the lessor-owner. His claim is that he was getting a net income of Rs. 5,000 to Rs. 6,000 per year. Though he purported to produce a so-called lease deed, Exhilt C-16 as evidence of his right as lessee as above, yet as the same was an unregistered document, the Court below as well as the Land Acquisition Officer could not rightly place any reliance on it. But as the facts are not in dispute it could safely be taken that there was still a period of 8 years to go before the owner could dislodge the lessee from his occupation of the land. We have referred to the fact that the lessee is said to have spent large amounts towards reclaiming the land and for raising are plants like jasmin, rose, marudhani, Rangoon Malli, Lilly etc. He also produced certain accounts, to prove the income which he was obtaining by exploiting the land for the above purposes. Exhibits G-12 and G-13 prima facie show that the lessee was earning about Rs. 5,000 and more during the years 1963-65. On the basis of this and as his business has entirely been snapped on account of the compulsory process, the lessee claimed a total compensation of Rs. 2,42,366. The Land Acquisition Officer in his award conceded that the lessee had a right which was marketable and he felt that a sum of Rs. 500 per annum towards loss of income to the lessee (though he called in damages) for the unexpired period of 8 years would be sufficient. He also awarded a sum of Rs. 150 towards the value of the structures, Rs. 100 towards value of the trees and a sum of Rs. 25 towards shifting charge and he reckoned the compensation on that basis. The learned City Civil Judge, on reference also accepted on principle that the lessee was entitled to compensation for the snapping of his business for a continous period of 8 years during which period he could have earned his livelihood by exercising his profession as above. After considering the evidence which was not quite satsifactory, but without eschewing the same in to to, the learned Judge came to the conclusion that a sum of Rs. 1,000 per year to the lessee towards loss of his business and the cessation of his right as lessee over the property would, in the circumstances be reasonable. He therefore awarded a sum of Rs. 8,000 as and towards the value of the right of the lessee as above and a further sum of Rs. 25 towards shifting charges (shifting the motor from the acquired land) Rs. 250 towards the value of the structure and Rs. 100 for trees. He have in addition, the usual solatium of 15 per cent, on the amount awarded. The State has preferred A.S. No. 566 of 1970 challenging the allowance of compensation to the lessee at the above rates as also the grant of the solatium on the amount of compensation given.
6. In the course of the arguments, the learned Government Pleader raised the contention that the lessee has only an incomplete or an inchoate interest in the land and once the entirety of the property is acquired under the Land Acquisition Act the lessee's interest permanently disappears and he cannot therefore claim any compensation under any head whatsoever. On the other hand, Mr. Kumara-swami, learned Counsel for the respondent-lessee would say that the interest of the lessee is a computable interest and is not an unpredictable one. He would refer to the fact that the Land Acquisition Officer himself conceded that the lessee in so far as the unexpired period of the lease is concerned has interest in the land and has to be treated as an interested person within the meaning of the provisions of the Land Acquisition Act and in that context the right of the lessee has been correctly evaluated by the Court below and the compensation granted by it is not in any way excessive. The question arises that in the case of such evaluation of leasehold interest what Would be the normal principle which ought to be applied while evaluating inter se the rights of a lessor and that of a lessee. The question would not present any difficulty if the lease is a permanent lease. In such cases, the totality of the property has to be evaluated and its market price ascertained and the lessee granted a portion of it in accordance with the principles governing such land tenure, but in a case where the lease is for a particular duration and the land acquisition process is set in motion whilst the period of lease is still subsisting, then the problem becomes rather difficult to solve.
7. The lessee of the demised land, which is subject, to the process of compulsory acquisition has undoubtedly an interest in the land which is conceivable and which has to be evaluated for the purposes of reckoning compensation payable to him as a result of such acquisition. A lease like a mortgage is an encumbrance on the land. When the land acquisition process is complete, the acquired land vests in the Government free from encumbrance. See Section 16 of the Land Acqusition Act. If, therefore, a lease is an encumbrance, then it has a value which is popularly understood and construed as market value. If the lease is for a defined period, then the right of the lessee to remain in the land without any let or hindrance by the lessor for the unexpired period of the lease is also a right in jurisprudence, which has a value and which has to be computed in the given situation. In fact, the principle appears to be that in assessing the lessee's interest, he will be entitled to compensation for the loss of the right of occupancy of the acquired land and towards its value of the unexpired term. In Halsbury's Laws of England, Third Edition, Volume 10, paragraph 286, the following passage occurs:
The extent of the disturbance to the lessee will be affected by the length of his term. It may also be difficult on occasions to distinguish between the value of the lessee's interest and the disturbance... If the tenant is entitled to a renewal that right must be taken into account.
That a lessee is entitled to compensation appears to be a well-recognised rule of equity. The Supreme Court in Ramachandriah v. Land Acquisition Officer, Sagar : 3SCR262 , was considering a case where the tenants were not represented in a land acquisition proceeding. The Supreme Court said that 'The District Judge ought to have ascertained whether the tenants had any interest in the land and whether they were entitled to any share in the compensation payable in respect of lands under their cultivation...' We do feel that in fairness to tenants, their interests ought to have been ascertained and if they are entitled in law to any share, compensation according to the market value of the land should be ascertained afresh and share, if allowable to them, should be allocated to them '. We have already referred to the fact that a lessee who is having a right of renewal is also entitled to come to Court as a person interested and seek for compensation on the ground that he has such a right of renewal and that is being destroyed by the compulsory process of acquisition. Such a right of renewal, however, should be a certain right and not a vague one and if on adjudication, by the Tribunal it is found that it is an existing enforceable right, then the covenant of option of renewal also has to be taken into account for assessing the lessee's proportion of compensation money. Each case has to be decided on its own merits on appreciating the true value of such relative and respective rights as between the lessor and the lessee.
8. In the instant case, however, the question of renewal does not arise. The lessee undoubtedly has the right to occupy the acquired land for a period of 8 years after the date of acquisition which is the unexpired period of the lease. In such cases, considerations of justice require that some useful aid should be found for reckoning the value of the interest of the lessor as well as the lessee. Broadly speaking, the property acquired should be evaluated as one unit whereby both the interests of the lessor and the lessee are evaluated and by the adoption of a reasonable yardstick the total compensation money could be apportioned between the two interests, namely the lessor and the lessee. The other alternative method is by evaluating each of the interests of the lessor as well as the lessee if cogent and acceptable evidence is available to value them. As we said which method is to be applied in a given case will depend upon the circumstances and principles of ordinary canons of justices.
9. The principle of apportionment of compensation as between the lessor and the tenant may arise in a case where there is no evidence regarding the market value of the interest of the tenant and the land individually. We have already noticed that apportionment of compensation as between the landlord and the tenant would become necessary if the property is evaluated as a whole and as one unit. But in cases where there is available evidence which would assist the Court not only to evaluate the lessor's interest but also the lessee's interest, the question of apportionment of compensation after reckoning the totality of compensation payable for the acquired land would not arise. In the case under consideration, there is independent evidence regarding the interest of the in tenant as well as the land. In the interests of justice therefore we prefer in the instant case to adopt the alternative method as was done by the Land Acquisition Officer himself and ascertain the value of the right to which the lessee is entitled in the instant case.
10. There is no serious challenge in the case before us in the matter of the profits which the lessee could have reasonably obtained from his business or to be more specific in the matter of exploitation of the land for the purpose of his flower business. The account books though not kept regulates in the strict sense of the term have gained acceptance with the Court below. Though the State has appealed it has not produced a title of evidence to show that the lessee could not have derived any income from the land. The estimate of income made by the Court below appears to be reasonable. This was based on the evidence let in by the tenant and not the result of a whim or fancy made by the trial Judge. In the presence of such-acceptable evidence it is easy therefore to compute the right of the lessee in terms of money as was done by the Land Acquisition Officer and the Court on reference. We accept in the circumstances of this case, that a sum of Rs. 1,000 per year as compensation to the lessee is a reasonable grant. In these circumstances and as independent evidence is available and as such evidence cannot lightly be brushed aside or totally eschewed we adopt the alternative method of valuation and find that the right of the lessee who has been disturbed from occupying the land for the unexpired period of 8 years, in the instant case, be evaluated at Rs. 8,000 in all We are not, however, disturbing the grant made by the Court below in the matter of the shifting charges of Rs. 25, the value of the superstructure to be Rs. 250 and the value of the trees found at Rs. 100. On the aforesaid amount, the lessee would be entitled to the usual 15 per cent solatium. This appeal therefore has to fail.
11. The only other question that remains for consideration is whether the Court was right in fixing a sum of Rs. 3,000 per ground as the value of the lands which were acquired for the scheme in question. The notification under Section 4(1) was made on 29th September, 1965 and this is therefore the date on which the properties have to be evaluated. In the absence of values of similar lands in the vicinity as was stated by the Land Acquisition Officer, a certain amount of guesswork has to enter into the computation. In such cases no exactitude could be expected in the valuation of the lands acquired. The claimants relied on Exhibit C-1 dated. 14th April, 1965, which was a sale deed under which one half of a ground of land was sold for Rs. 1,900 which makes the market value of the land which was the subject matter of sale under Exhibit C-I as Rs. 3,800 per ground. The State relied upon Exhibit R-5 dated 15th August, 1964. Exhibit R-5 relates to a sale of land of an extent of 2200 sq. ft: in S.No. 42 which is far to the west of the acquired land and the sale price of that land works out to Rs. 1,900 per ground. The evidence let in on the side of the claimants discloses that the property acquired is within city limits, to wit, 100th Division of the Corporation of Madras and that it has the facility of good water, air and has the potentiality of being developed into a building site. It is in the midst of an industrial area and the contention is that it could be used even as an industrial site. There is the Hindustan Teleprinter Colony to the west of this property and the King Institute Pump Water Works on the south and also the Industrial Estate Colony around this property. The case of the Government as evidenced in the award is, that the property is undeveloped and that there are no roads around this property and there is no such potential as is spoken to by the claimants. The Land Acquisition Officer evaluated the property at Rs. 1,500 per ground ignoring in part Exhibit R-5 as according to him, 25 per cent of the value under Exhibit R-5 has to be deducted from the sale price for providing roads inside this colony. Normally the cost of improvement is deducted in a case where there is a well-laid plan and there is evidence about such contemplated improvements by providing roads therein. In the absence of any evidence to that effect, an automatic deduction of 25 per cent from the price disclosed in Exhibit R-5 is not normally justified. The question is whether Exhibit R-5 is a safe guide for fixing the market value of the property. In any view, it is not. The land comprised in Exhibit R-5 is situate beyond the City limits whilst the property acquired is within the City limits. It has certain advantages which are very similar to those in the vicinity of the area. One such land which is close by is the land covered by the sale deed Exhibit C-1. The price paid under Exhibit C-1 for a land similarly situated and having similar potential is Rs. 3,800 per ground. But having regard to the fact that the land covered under Exhibit C-l was in the midst of a fully developed area, the Court below reduced the price by Rs. 800 and fixed the market value of the land at Rs. 3,000 per ground. We do not see any particular reason why we should interfere with such fixation of the price as no contrary evidence which is acceptable by us has been placed before us to disturb the evaluation made by the Land Acquisition Officer.
12. In the result therefore the appeals filed by the Government questioning the grant of compensation at Rs. 3,000 per ground to the lands acquired for the purpose of the extension of the Industrial Estate, Gundy fail. We have already dealt with the other aspect. All the appeals excepting A.S. No. 482 of 1970 are dismissed with costs, except in regard to the raising of the reclamation charges from Rs. 40 to Rs. 75 as pointed out by us already, which shall of course be deducted from the total compensation. A.S. No. 428 of 1970 is dismissed. No costs.