Posted On by &filed under Calcutta High Court, High Court.

Calcutta High Court
K.S. Banerjee vs Jatindra Nath Paul And Ors. on 5 January, 1928
Equivalent citations: AIR 1928 Cal 475, 108 Ind Cas 253


1. Appeal No. 144 is on behalf of the claimant 2. His learned advocate after the arguments were heard in the other two connected appeals, did not think it proper to press this appeal. It is, therefore, dismissed but without, costs.

2. Appeals Nos. 77 and 78 are by claimant 1. Two questions were pressed with reference to appeal No. 77. The first is as to on what basis the apportionment of the compensation should be made as between claimant 1 who is the landlord, and claimant 2, the tenant. The learned President capitalized the rent payable to the landlord for the unexpired portion of the lease which had to run for about 85 years from the date at the acquisition on a 6 per cent, basis and the reversion was valued on the basis of 6f per cent. The contention on behalf of the appellant is that the basis taken by the learned President is against the evidence given by the experts on both sides. Mr. Johnston was examined on behalf of claimant 2, the tenant, and his evidence was that if the whole of the leasehold property had to be valued with reference to the interest, of claimant 1, the rent which the landlord was entitled to get for the leasehold as well as the reversion would have been valued on the 4 per cent, basis as regards the land. The real fact on the evidence may be shortly stated thus, basing it on the evidence of Mr. Johnston : He said that the rent of the landlord on the 4 per cant, basis on the market value awarded for the land itself would be about Rs. 2,240. The rent allocated with regard to this price of land as payable to claimant 1 is Rs. 720. The margin of profit to the lessee would, therefore, be something like Rs. 1,500 a month. The security for the rent which claimant 1 was entitled to get under the circumstances is more than satisfactory. Therefore, the value of the lessor’s interests cannot be held to be as low as the President has put it. Any purchaser, however cautious he may be, would gladly pay 25 years’ purchase money for the interest of the landlord. In addition to this our attention has been drawn by the learned advocate for the appellant to the provisions of the lease under which the lessee not only deposited with the lessor sufficient security to the extent of one lakh of rupees, for payment of the rent but kept in deposit three months rent in advance over and above the security deposit of one lakh of rupees. Under these circumstances the rent reserved is protected by unquestionably valuable security and the lessee is certainly entitled to claim that he should be paid a higher price than what has been given to him by the learned President.

3. The learned President has in valuing the reversion valued it at a rate less than he valued the bare land with regard to the contiguous property which was No. 123/1 which was also acquired. The contention on behalf of the appellant is that the reversion in the case of the land in question No. 123 should not be taken to be of less value than the bare land because there are buildings on it. It seems to us that the proposition is quite reasonable. The value of land does not deteriorate if there is any building upon it. The buildings may no doubt deteriorate, but when the reversion of bare land is valued on the 4 4per cent, basis there does not seem to be any good reason why the land with building on it should be valued at less than the value of the land. The evidence given by Mr. Johnston may again be referred to in this connexion. He says:

The ground rent of No. 123 would have been 4 per cent. The value of the structures on it was Rs. 9,000 odd as standing structures.

4. The value of the land itself was Rs. 56,400 and there is no reason why the 4 per cent, basis should not be taken with regard to the land as well as with regard to the reversion on this evidence. It is, however, contended on behalf of the respondent that it would be very hard on them to take the 4 per cent. basis thereon, because there has been some misapprehension with regard to the agreement as to the rent fixed at Rs. 60 per month as well as the increase at the rate of 12 per cent, at the end of every ten years as provided in the lease. The argument is that claimant 2 understood that he had agreed to Rs. 60 as being the rent payable for the whole period. We are, however, unable to accept this statement having regard to the clear statement of the facts in the judgment of the learned President. We think, however, that in these matters it is very difficult to come to a definite conclusion as regards the valuation to be put on the interest of the landlord so as to apportion the compensation quite equitably. The standards given in English text-books are hardly of much use with regard to the valuation of the land in Calcutta. It would have been much better if there had been any direct evidence as to what a willing purchaser would pay for the interest of the landlord in such a case as this. In the absence of such evidence the apportionment can be made only in a rough and ready way, as has been done in various reported cases. The one thing which we can say is that we are unable to agree with the manner in which the learned President has calculated the value of the reversion of the land.

5. We, therefore, modify the order of the learned President in this way : that the capitalization value should be calculated at Rs. 60 as the basis at the rate of 5 per cent, for 85 years and for subsequent increment in the same way as the learned President has done, but 5 per cent, should be taken as the basis for calculation. The reversion should also be valued at 5 per cent, basis. We modify the order of the President accordingly.

6. The appellant is entitled to his costs with regard to these appeals against claimant 2. We assess the hearing-fee at ten gold mohurs consolidated for the two appeals.

7. With regard to claimant 4 who is the mortgagee of one of the beneficiaries of the trust estate of which claimant 1 is the trustee, claimant 1 as appellant, contends that the President was wrong in awarding to him any portion of the compensation on the basis of his mortgage. He contends that this is not a matter which can be taken into account in apportioning compensation awarded for acquisition of land which is the subject of a trust. Claimant 4 is the mortgagee from only one of the beneficiaries whose interest has been found by the President to be only 1/36th part of the premises. In dealing with the point whether a beneficiary is entitled to have any share of the compensation the learned President in deciding issues 6 and 7 held that the entire compensation which represents the value of the interest of claimant 2, the Pals, as the purchasers of the interest of some of the beneficiaries should be awarded to the trustee. Questions which may arise between the trustee and the beneficiaries land their assignees must be left to be debated before the Court having jurisdiction to administer the trust estate. This proposition appears to us to be incontestable.

8. But the learned President has taken a quite different view from what he has taken with regard to this question with reference to the beneficiaries and their assignees when he came to consider the master as between the beneficiaries and their mortgagees. He ought to have according to the contention of the appellant made the same order as he has done with reference to the Pals interest as assignees of the beneficiaries. It is very difficult to understand why the learned President has made this difference in the case of the mortgagee claimant 4. He says first that the issue was not raised by claimant 1, but the learned advocate of claimant 1 points out that he made an application to raise the question before the case was taken up by addition of an issue which was rejected by the President. Next it appears that the President thought that he was bound to award a share of the compensation to the mortgagee by reason of the decision of the High Court dated 30th January 1926, in which this very mortgagee was a party, the case being with reference to another property included in the trust estate. The judgment of this Court is reported as Surendra Nath Tagore v. K.S. Bonnerjee A.I.R. 1925 Cal. 680. What happened there was that although Surendra Nath Tagore was described as a claimant in the proceeding before the Collector he was not allowed to be heird on reference being made under Section 18, Land Acquisition Act, by the Collector. What the High Court directed was that his name being, entered as one of the claimants the mortgagee was entitled to appear before the tribunal and make such representation as he might desire to make with regard to the apportionment of compensation to the beneficiaries. The High Court did1 not rule that either he or the beneficiary through whom he claimed was entitled to any share of the compensation. What this Court directed was that he was entitled to be heard. The President in the previous ease was not justified in refusing to hear him. That case, therefore, does not in any way support the present order made by the President and the learned advocate for claimant 4 is unable to support it. The order, therefore, of allowing a share of the compensation to claimant 4 must be struck out and the whole of the money should be apportioned as between the trustee, claimant 1 and claimant 2, the lessee, leaving it to claimant 1 to-make such application to the proper Court as he might be advised. We are not concerned with the other claimants in this case who are not interested in. these appeals. They have got their moneys without any objection by any of the parties. In Appeal No. 78 the only-question, that arises is the question with regard to the compensation given to claimant 4, the mortgagee of the beneficiaries. That question has been dealt with in the previous appeal and the order will be the same, i.e., the learned President’s order will be set aside. In this appeal the appellant, claimant 1, will get his costs from claimant 1/D. We assess the hearing-fee at ten gold mohurs. There will be no separate costs. against claimant 4 in Appeal No. 77.

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