{"id":213516,"date":"2011-10-11T00:00:00","date_gmt":"2011-10-10T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/rajendra-vs-dy-collector-anr-on-11-october-2011"},"modified":"2019-03-06T22:53:51","modified_gmt":"2019-03-06T17:23:51","slug":"rajendra-vs-dy-collector-anr-on-11-october-2011","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/rajendra-vs-dy-collector-anr-on-11-october-2011","title":{"rendered":"Rajendra … vs Dy.Collector & Anr on 11 October, 2011"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Rajendra … vs Dy.Collector & Anr on 11 October, 2011<\/div>\n
Author: R.V.Raveendran<\/div>\n
Bench: R.V. Raveendran, A.K. Patnaik<\/div>\n
                                                                                           Reportable \n\n                      IN THE SUPREME COURT OF INDIA\n\n\n                       CIVIL APPELLATE JURISDICTION\n\n\n                        CIVIL APPEAL NO. 8539 OF 2011\n\n                       (Arising out of SLP (C) No. 982\/2009)\n\n\nRajendra Vassudev Deshprabhu (dead)\n\nThrough Lrs. & Ors.                                                    ... Appellants\n\n\nVs.\n\n\nDeputy Collector (Retd.) & Land\n\nAcquisition Officer, Panaji                                            ... Respondents\n\n\n\n\n\n                                    J U D G M E N T\n<\/pre>\n
R.V.RAVEENDRAN, J.\n<\/p>\n
       Leave granted.\n<\/p>\n
2.     An extent of 1,06,864 sq.m. of land including 5070 sq.m. of land in <\/p>\n
Survey   No.   284   (Part)   in   Pernem   village   of   which   the   appellants   are   co-\n<\/p>\n
owners   was   acquired   in   pursuance   of   preliminary   notification   dated <\/p>\n
12.1.1990   (Gazetted   on   1.2.1990).   By   award   dated   27.3.1991,   the   Land <\/p>\n
Acquisition Officer awarded compensation for the acquired land at the rate <\/p>\n
of   Rs.17   per   sq.m.   As   there   were   three   tenants,   namely,   Krishna   Arjun <\/p>\n
Kauthankar,   Keshav   Bhikaji   Kauthankar   and   Harischandra   Bhikaji <\/p>\n
                                                     2<\/span><\/p>\n
Kauthankar and as the co-owners had admitted their tenancy rights, the Land <\/p>\n
Acquisition Officer directed that the compensation to be divided between the <\/p>\n
owners   and   the   tenants   at   the   rate   of   50%   each.   The   reference   court,   by <\/p>\n
judgment   daed   22.11.2002,   increased   the   compensation   from   Rs.17   per <\/p>\n
sq.m. to Rs.175 per sq.m. The appeal by the State was allowed by a division  <\/p>\n
bench   of   the   Bombay   High   Court,   by   the   impugned   judgment   dated <\/p>\n
14.11.2008.   The   High   Court   set   aside   the   judgment   and   award   of   the <\/p>\n
reference court, thereby restoring the award of Rs.17\/- per sq.m. by the Land <\/p>\n
Acquisition Officer, on the following reasoning:\n<\/p>\n
        “….. the Applicants’ acquired  portion was garden land but tenanted  and <\/p>\n
        the   tenants   had   become   deemed   purchasers   of   the   same   and   the   only <\/p>\n
        interest   which   the   applicants   had   in   the   said   land   was   to   receive   the <\/p>\n
        purchase   price,   and   in   such   a   case   no   willing   purchaser   would   have <\/p>\n
        ventured to purchase such a land for building purposes or for that matter <\/p>\n
        for   any   other   purpose   from   the   applicants.   The   said   Krishna   Arjun  <\/p>\n
        Kauthankar   and   others   were   in   possession   of   the   land   and   had   become <\/p>\n
        deemed owners of the same. The learned reference court was not right in <\/p>\n
        assessing the value of the acquired land as having building potential based <\/p>\n
        on   several   awards\/sale   instances   which   were   of   land   dissimilar   to   the <\/p>\n
        acquired land.”\n<\/p><\/blockquote>\n
\n<\/blockquote>\n
3.      The said judgment is challenged in this appeal by special leave.   At <\/p>\n
the  outset   the  appellants  submitted  that  Late  Rajinder  Vasdev   Deshprabhu <\/p>\n
(of   whom   appellants   are   the   LRs.)   and   his   brother   late   Raghuraj   Vasdev <\/p>\n
Deshprabhu   were   the   co-owners   of   the   property,   and   on   their   death   their <\/p>\n
respective   legal   heirs   have   become   the   owners   thereof;   that   the   land   was <\/p>\n
tenanted and is in occupation of Krishan Arjun Kauthankar and two others <\/p>\n
                                              3<\/span><\/p>\n
and vested in the tenants on the Tiller’s day in terms of section 18A of the  <\/p>\n
Goa,   Daman   and   Diu   Agricultural   Tenancy   Act,   1964   (`Tenancy   Act’   for <\/p>\n
short).   They   submitted   that   they   do   not   dispute   the   award   of   the   Land <\/p>\n
Acquisition Officer apportioning 50% of the compensation to the landlords <\/p>\n
and   50%   to   the   tenants;   and   that   out   of   50%   payable   to   landlords,   the <\/p>\n
appellants are entitled to one half as the LRs. of Rajendra V.Deshprabhu and <\/p>\n
the remaining half is payable to the legal heirs of Raghuraj V.Deshprabhu.\n<\/p>\n
In other words the appellants restrict their claim to 25% of the award amount <\/p>\n
and submitted that even in regard to any increase in compensation, they are <\/p>\n
entitled to only 25%.\n<\/p>\n
4.     The appellants contend that in regard to the remaining extent of land <\/p>\n
acquired   under   the   same   notification,   the   High   Court   by   judgment   dated <\/p>\n
14.11.2008   in   FA   No.   123\/2003   (The   Deputy   Collector   (Dev.)   &   LAO,  <\/p>\n
Panaji   vs.   Smt.   Sita   Devi)   had   determined   the   compensation   as   Rs.78   per <\/p>\n
sq.m. and therefore the compensation should have been the same in regard to <\/p>\n
their   land   also.   Therefore   question   for   consideration   is   whether   the <\/p>\n
compensation for the acquired land should be increased to Rs.78\/- per sq.m.\n<\/p>\n
5.     Respondents   do   not   dispute   that   in   regard   to   the   adjoining   lands <\/p>\n
compensation has been determined by the High Court at Rs. 78\/- per sq.m.\n<\/p>\n
                                               4<\/span><\/p>\n
in Deputy Collector vs. Sita Devi (FA No.123\/2003 decided on 14.11.2008) <\/p>\n
and that order not having been challenged, has attained finality. They also do <\/p>\n
not dispute the position that if the acquired land had not been subject to any  <\/p>\n
tenancy right, the land owners would have been entitled to compensation at <\/p>\n
the   said   rate   of   Rs.78   per   sq.m.   They   however   contend   that   the   land   in <\/p>\n
question was different from the other acquired lands for which Rs.78\/- per <\/p>\n
sq.m. has been awarded as compensation. They supported the judgment of <\/p>\n
the High Court on the following grounds:\n<\/p>\n
    (i)     As   the   land   was   in   the   occupation   of   tenants,   the   appellants   as <\/p>\n
            owners   would   not   have   been   able   to   sell   the   said   land   to   any  <\/p>\n
            willing   purchaser   and   obtain   the   market   value.   Even   the   tenants <\/p>\n
            had obtained a purchase certificate under section 18H, they could <\/p>\n
            not have sold the property, as there was a restriction on transfer of <\/p>\n
            the land purchased by the tenant in section 18K of the Tenancy Act <\/p>\n
            which required previous sanction of the Mamlatdar for sale.<\/p>\n<\/blockquote>\n
    (ii)    Section 3 of the Tenancy Act provided that when a request is made <\/p>\n
            by   the   owner   of   an   agricultural   land   to   convert   it   to   non <\/p>\n
            agricultural purpose, the authority concerned can grant conversion, <\/p>\n
            or   in   public   interest   prohibit   the   conversion.   There   was   thus   no <\/p>\n
            absolute right to get the land converted to non agricultural use and <\/p>\n
            develop it for other non-agricultural purposes.\n<\/p><\/blockquote>\n
\n                                                  5<\/span><\/p>\n<\/blockquote>\n
      (iii)    Section 2 of the Goa Land Use (Regulations) Act, 1991 (`Land Use <\/p>\n
               Act’   for   short)   provides   that   no   land   which   vested   in   the   tenant <\/p>\n
               under the provisions of the Tenancy Act shall be used or allowed <\/p>\n
               to be used  for any purpose other than agriculture. As the land in <\/p>\n
               question had vested in the tenants on the Tiller’s Day (8.10.1976), <\/p>\n
               the   land   had   to   be   used   only   for   agricultural   purposes.   The   land <\/p>\n
               therefore did not have the potential for development for any non-<\/p>\n
               agricultural purpose and therefore will have to be valued only as an <\/p>\n
               agricultural land. Even as agricultural land, the market value will <\/p>\n
               not be the normal market value as it was tenanted.\n<\/p><\/blockquote>\n
\n<\/blockquote>\n
6.        We are not required to decide in this appeal, either the entitlement of <\/p>\n
the   landlords\/owners   for   compensation   or   the   extent   of   share   in   the <\/p>\n
compensation. It is an admitted position that the land is tenanted and vested <\/p>\n
in the tenants under section 18A of the Tenancy Act on the Tiller’s Day (that <\/p>\n
is, 8.10.1976) and the tenants are deemed to have purchased the land. The <\/p>\n
purchase price under section 18D of the Tenancy Act was not however paid <\/p>\n
to the landlords and no purchase  certificate had been issued  to the tenants <\/p>\n
under section 18H of the Tenancy Act. According to the appellants, where <\/p>\n
land is acquired under the Land Acquisition Act, 1894, before payment  of <\/p>\n
the purchase price to the landlords under section 18D of Tenancy Act and <\/p>\n
before the issue of purchase certificate to the tenants under section 18H of <\/p>\n
the Tenancy Act,  inspite  of the  vesting under section  18A of the Tenancy <\/p>\n
                                                6<\/span><\/p>\n
Act,   the   compensation   will   be   divided   equally   between   the   landlord   and <\/p>\n
tenant   as   per   standing   instructions   of   the   government.   The   appellants <\/p>\n
contend that the said procedure had been followed by the Land Acquisition <\/p>\n
Officer in making the award by holding that 50% of the compensation was <\/p>\n
payable   to   the   landlords   and   50%   of   compensation   was   payable   to   the <\/p>\n
tenants. The appellants submitted that neither the landlords, nor the tenants, <\/p>\n
have   disputed   the   said   apportionment   and   therefore   this   appeal   does   not <\/p>\n
involve any issue relating to entitlement to compensation or apportionment <\/p>\n
thereof. It was further submitted that the only issue in this appeal relates to <\/p>\n
the quantum of compensation. In view of the said submission, we have only <\/p>\n
considered the question of quantum in this appeal, and have not examined  <\/p>\n
the rights of the landlord vis-`-vis the tenants.\n<\/p>\n
7.      We   may   first   deal   with   the   contention   of   the   respondents   with <\/p>\n
reference to the regulation of land use under the Land Use Act.  Section 2 of  <\/p>\n
the   said   Act   provides   that   no   land   which   is   vested   in   a   tenant   under   the <\/p>\n
provisions of the Tenancy Act shall be used or allowed to be used for any <\/p>\n
purpose   other   than   agriculture.   If  the   Land   Use   Act   was  applicable   to   the <\/p>\n
land   at   the   time   of   acquisition,   then   the   land   could   be   used   only   as <\/p>\n
agricultural land and could be valued only as an agricultural land. But the <\/p>\n
Land Use Act, came into force with effect from 2.11.1990. The relevant date <\/p>\n
                                            7<\/span><\/p>\n
for the purpose of determination of compensation is the date of publication <\/p>\n
of preliminary notification under section 4(1) of the Land Acquisition Act, <\/p>\n
1894 which is 1.2.1990. On that day the Land Use Act was not in force and <\/p>\n
consequently there was no restriction that the use land vested in the tenant <\/p>\n
should be used only for agricultural purposes. Therefore the market value of <\/p>\n
the land could be determined with reference to the development potential for <\/p>\n
non agricultural purposes.\n<\/p>\n
8.     The next contention of the respondents is that a land purchased by a <\/p>\n
tenant under Chapter IIA of the Tenancy Act, could not be sold without the <\/p>\n
previous sanction of Mamlatdar, under section 18K of the Tenancy Act. The <\/p>\n
mere  fact  that the sanction  has to be obtained  from Mamlatdar  for sale  of <\/p>\n
such land would not depress the price of the land, nor affect its potential for <\/p>\n
being developed as residential or industrial use.\n<\/p>\n
9.     The next contention of the respondents was based on Section 3 of the <\/p>\n
Tenancy   Act.   Section   3   provides   that   if   any   owner   of   agricultural   land <\/p>\n
applies for conversion thereof for non-agricultural use, the Government may, <\/p>\n
instead of granting conversion, prohibit such conversion in public interest.\n<\/p>\n
The risk not being permitted to convert the land should also be taken note of <\/p>\n
while assessing the market value with reference to development potential of <\/p>\n
                                                  8<\/span><\/p>\n
the land.  Such a contingency exists in regard to all agricultural lands and is <\/p>\n
not   specific   to   the   appellants.   Inspite   of   section   3   of   Tenancy   Act, <\/p>\n
compensation   has   been   determined   as   Rs.78\/-   per   sq.m.   for   neighbouring <\/p>\n
agricultural lands and we see no reason why the said rate should not apply to <\/p>\n
the land in question also.\n<\/p>\n
10.    The High Court committed an error in holding that the compensation <\/p>\n
for the land in question should be lesser than the compensation  for a land <\/p>\n
which is not subject to tenancy. It relied upon the decision of this Court in <\/p>\n
M.B. Gopala Krishna & Ors. v. Special Deputy Collector, Land Acquisition<\/a> <\/p>\n
(1996) 3 SCC 594 wherein this Court observed :\n<\/p>\n
       “A   freehold   land   and   one   burdened   with   encumbrances   do   make   a   big <\/p>\n
       difference   in   attracting   willing   buyers.   A   free   hold   land   normally <\/p>\n
       commands   higher   compensation   while   the   land   burdened   with <\/p>\n
       encumbrances   secures   lesser   price.   The   fact   of   a   tenant   in   occupation <\/p>\n
       would be an encumbrance and no willing purchaser would willingly offer <\/p>\n
       the same price as would be offered for a freehold land.”<\/p>\n<\/blockquote>\n
The said principle will apply only where a property subject to encumbrances <\/p>\n
is to be sold to a private purchaser or is acquired subject to the tenancy. The  <\/p>\n
decision   of   this   Court   made   those   observations   when   upholding   the <\/p>\n
compensation   that   was   payable   to   the   landlord,   without   reference   to   the  <\/p>\n
tenant’s rights, where the tenant did not claim any compensation. But in this <\/p>\n
case,   the   landlords   have   been   awarded   only   50%   of   the   compensation <\/p>\n
                                                 9<\/span><\/p>\n
amount and remaining 50% has been awarded to the tenants. The High Court <\/p>\n
has mixed up a sale subject to encumbrances with an acquisition free from <\/p>\n
encumbrances   under   the   Land   Acquisition   Act,   1894.   The   two   are <\/p>\n
conceptually different. If a property subject to a lease and in the possession <\/p>\n
of   a   lessee   is   offered   for   sale   by   the   owner   to   a   prospective   private <\/p>\n
purchaser, the purchaser being aware that on purchase he will get only title, <\/p>\n
but   not   possession   and   that   the   sale   in   his   favour   will   be   subject   to   an  <\/p>\n
encumbrance,   namely   the   lease,   will   offer   a   price   taking   note   of   the <\/p>\n
encumbrances.   Naturally   such   a   price   would   be   less   than   the   price   of   a <\/p>\n
property without any encumbrances. But when a land is acquired free from <\/p>\n
encumbrances, what is acquired is not only the landlord’s right, but also the <\/p>\n
lessee’s rights. In such a case compensation awarded is for the property free <\/p>\n
from   encumbrances,   which   includes   the   lessee’s   rights   also.   We   may <\/p>\n
illustrate by the following example:\n<\/p>\n
        Let us assume  the value of a property which is not subject  to  <\/p>\n
        any lease is Rs.Ten lakhs. If that property was subject to a lease <\/p>\n
        and if the possession was with the lessee, a purchaser will offer <\/p>\n
        only Rs.Five lakhs as he will be purchasing a property with an <\/p>\n
        encumbrance  and  will not  be getting  physical  possession.  But <\/p>\n
        when the property subject to a lease is acquired, under the Land <\/p>\n
        Acquisition   Act,   1894,   what   is   acquired   is   not   only   the <\/p>\n
        landlord’s right, title and interest, but also the lessee’s right and <\/p>\n
        interest. In other words the property with all rights, free from <\/p>\n
                                               1<\/span><\/p>\n
       encumbrances is acquired and the compensation is determined <\/p>\n
       and paid for the property as one free from encumbrances. The <\/p>\n
       rights   of   lessor   as   well   as   lessee   are   extinguished.   Therefore <\/p>\n
       compensation   payable   will   be   the   entire   market   value   that   is <\/p>\n
       Rs.Ten lakhs which may be shared by the lessors and lessee at <\/p>\n
       the   rate   of   Rs.Five   lakhs   each   or   such   other   ratio   as   may   be <\/p>\n
       determined   with   reference   to   the   extent   of   their   respective <\/p>\n
       rights. The Land Acquisition Officer issue notice to all persons <\/p>\n
       interested and hears them before making the apportionment of <\/p>\n
       the   compensation   among   the   persons   interested.   The   `market <\/p>\n
       value’ of the property free from encumbrances acquired by the <\/p>\n
       State   will   not   therefore   be   the   same   as   the   price   a   purchaser <\/p>\n
       may pay to buy the property subject to a lease (encumbrances).<\/p>\n<\/blockquote>\n
11.    As   the   High   Court   has   already   determined   Rs.78   per   sq.m.   as   the <\/p>\n
compensation   in   regard   to   the   adjoining   lands   acquired   under   the   same <\/p>\n
notification   vide   its   judgment   dated   14.10.2008   (Dy.Collector  <\/p>\n
(Development) and Land Acquisition Officer, Panaji v. Smt. Sitadevi & Ors.\n<\/p>\n
in FA No.123\/2003) and the said judgment has attained finality, there is no <\/p>\n
reason why the same compensation should not be awarded for this land also.\n<\/p>\n
The appellants have no grievance in regard to the apportionment  made  by <\/p>\n
the Land Acquisition Officer at the rate of 50% for the landlords and 50% <\/p>\n
for the tenants. The tenants apparently have not raised any dispute in regard <\/p>\n
to   the   apportionment.   It   is   made   clear   that   if   any   dispute   regarding <\/p>\n
                                        1<\/span><\/p>\n
apportionment   is   pending,   this   decision   shall   not   be   construed   as <\/p>\n
determining the percentage of entitlement of appellants or other co-owners <\/p>\n
(not before us) or the tenants (not before us).\n<\/p>\n
12.    In view of the above, this appeal is allowed and the order of the High <\/p>\n
Court is modified by increasing the compensation for the acquired land from <\/p>\n
Rs.17 per sq.m. to Rs.78 per sq.m. All statutory benefits are also granted.\n<\/p>\n
                                                   ……………………….J.<\/p>\n
\n\n                                                   (R V Raveendran)\n\n\n\n\n\nNew Delhi;                                         ............................J.\n\nOctober 11, 2011.                                  (A K Patnaik)\n\n\n<\/pre>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Rajendra … vs Dy.Collector & Anr on 11 October, 2011 Author: R.V.Raveendran Bench: R.V. Raveendran, A.K. Patnaik Reportable IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 8539 OF 2011 (Arising out of SLP (C) No. 982\/2009) Rajendra Vassudev Deshprabhu (dead) Through Lrs. & Ors. … Appellants Vs. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-213516","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nRajendra ... vs Dy.Collector & Anr on 11 October, 2011 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/rajendra-vs-dy-collector-anr-on-11-october-2011\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Rajendra ... vs Dy.Collector & Anr on 11 October, 2011 - 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