Piare Lal vs Col. His Highness Raja Sir Harinder Singh Brar Bans Bahadur Ruler of The Former Faridkot, State, Faridkot and another

G.C. Mital, J.—By notification dated July 24, 1963, issued u/s 4 of the Land Acquisition Act (hereinafter referred to as the Act), land was acquired in village Ballabgarh, District Gurgaon, for the construction of an Industrial-cum-Housing Estate. The Land Acquisition Collector made three belts, namely, A. B and C, and awarded compensation at the rate of Rs. 3/- Rs. 2/- and Rs 1/ for each belt respectively, belt ''A'' being within 500 feet, belt ''B'' being 501 to 1300 feet and belt ''C'' being beyond (sic) feet, from Delhi-Mathura road. It is worthwhile to mention here that Col. H.H. Raja Sir Harinder Singh Brar, respondent, is the land-owner whereas Piare Lal, appellant, is the tenant No compensation was awarded to Piare Lal for his tenancy rights.

Against the award of the Land Acquisition Collector, the Land owner sought reference u/s 18 of the Act for enhancement of compensation whereas the appellant-tenant claimed reference u/s 30 of the Act for the apportionment of the compensation between him and the land owner. Both the references were disposed of by the Additional District Judge, Gurgaon, by award dated December 16. 1967, whereby he enhanced compensation for the belts A, B & C to Rs. 4/-, Rs. 3/- and Rs. 2/- respectively, but declined to apportion the compensation in favour of the tenant on the ground that he had so marketable title or interest in the land which for all intents and purposes vested absolutely in the State on account of acquisition, by virtue of the provisions of section 16 of the Act. He also held that the application filed by the tenant u/s 18 of the Punjab Security of Land Tenures Act, had been dismissed and, therefore, he had no right to purchase the land under that Act. It was further held that no copy of Wajib-ul-arz had been brought on the record to show that in case of acquisition of land, be would be entitled to compensation as a tenant-at-will.

The land-owner filed a separate appeal for enhancement of compensation, which has already been enhanced by this Court. This appeal is by the tenant for claiming apportionment of compensation which has been awarded to the land owner on the ground that being a tenant, he had interest in the property and, therefore, had a just claim to get apportionment of compensation, which, according to him, had been wrongly denied to him by the Court below.

The admitted facts are that 41 Kanals and 4 Marias of land were in possession of Piare Lal, appellant as a tenant-at-will, under Col. H.H. Raja Sir Harinder Singh Brar, respondent. In this appeal we are only concerned with ''he apportionment of compensation between the landlord and the tenant with regard to the above mentioned land as besides this, the land owner owned 2/7th share in the Shamilat Deh as well. It is admitted by both sides that the appellant is not entitled to apportionment of compensation with regard to the Shamilat land, the compensation of which will entirely belong to the respondent-landowner.

The appellant tenant has appeared as P.W. 10 and stated that he was a tenant of the respondent landowner for the last 30 years and has thus interest in the land and was entitled to compensation. Dayal Dass Patwari of the village has also appeared as P.W. 9, and has proved that the appellant was a tenant at-will till the date of acquisition. Balbir Singh, P.W. 7, has appeared as Mukhtiar-i-am of the landlord and has not controverted the aforesaid statements. Therefore, unchallenged position which emerges from the record is that the appellant is a tenant at will for the last about 30 years Even the Court below accepted the position that the appellant was a tenant, but did not award compensation to him for the reasons already recorded above.

The point which now remains to be determined is whether the appellant is entitled to any compensation, and if so, what should be the basis for apportionment of compensation? In our opinion, the Court below was wrong in holding that after the acquisition of land by the State and on taking over its possession the land vested, free from all encumbrances, in the State and, therefore, the tenant-at-will was not entitled to any compensation. He took support of section 16 of the Act for taking the above view. There is a basic flaw in this reasoning as after the acquisition, neither the landowner nor the tenant was left with any interest in the property in dispute. What has to be determined is the respective interests of the two claimants at the time of acquisition and award compensation on that basis. We reverse the aforesaid view of the Court below which is supported neither by law nor by, any principle or authority.

As regards the order dated April 30, 1965 (Exhibit P 17), passed u/s 18 of the Punjab Security of Land'' Tenures Act, it docs not stand in the way of the appellant as a reading of the said order shows that purchase application filed by the appellant was declined solely on the ground that on acquisition of land by the State no order for purchase can be pasted u/s 18. The order Exhibit P. 17 is well based, hut that does not lend support to the findings in the acquisition proceedings for declining apportionment of compensation to the erstwhile tenant. We also do not find any merit in the reasoning of the Court below that in the absence of the Wajib-ul-arz, ho payment of compensation can be allowed to a tenant at will after acquisition by the State. The right of a tenant for apportionment of compensation flows from his tenancy rights which he holds in the property in dispute. There is ample authority for the proposition that a tenant-at-will is entitled to claim compensation for which reference may be made to the latest judgment of this Court in Behari Lal v. Col. His Hjehness Raja Sir Harinder Singh Brer Bans Bahadur and others. Accordingly we hold that the appellant, as a tenant-at-will, is entitled to compensation for his tenancy rights in the acquired land.

The question which now remains to be determined is, what should be the basis for apportionment., For this, matter reference has been made by the counsel for the appellant, to various authorities, but we find that out of them, Bihari Lal''s case (supra) is the only one, which is applicable to this case as all other authorities cited by the counsel, related to perpetual lease or occupancy tenants In Bihari Lal''s case (supra), O. Chinnappa Reddy, J., apportioned compensation between the landlord and the tenant at-will at the ratio of 3 : 1, that is, 3/4th share to the landlord and 1/4th share to the tenant. While accepting the aforesaid ratio, Mr. Ashok Bhan has argued that the provision of section 18 was not correctly brought to the notice of the learned Judge in the aforesaid case, as a reading of that judgment shows that out of the total market value of the land which it to be determined in the land acquisition proceedings, 3/4th has to be paid to the landowner and 1/4th to the tenant. According to him, this is not in accordance with the provisions of section 18 of the Punjab Security of Land Tenures Act. He has brought to our notice section 18 (2) and (3) of the said Act, which are reproduced below for facility of reference :--

18 (2). A tenant desirous of purchasing land under sub-section (1) shall make an application in writing to an Assistant Collector of the First Grade, having jurisdiction over the land concerned, and the Assistant Collector, after giving notice to the landlord and to all other persons interested in the land and after malting such inquiry as he thinks fit, shall determine the value of the, land which shall be the average of the prices obtaining for similar land in the locality during 10 years immediately preceding the date on which the application is made.

(3) The purchase price shall be three fourth of the value of land as so determined.

A reading of sub-section (2) shows that the value of the, land which has to be determined for purposes of section 18, is the value of the land which shall be the average of the prices obtaining for similar land in the locality during 10 years immediately preceding the date on which the application is made and according to sub section (3), 3/4th of the value of the land so determined has to be paid to the landowner. Hence the interest of the landowner in the acquired land is only to get the aforesaid amount to be calculated in the manner provided by section 18 (2). As such in the land acquisition proceedings he would be entitled to only the aforesaid amount and the entire balance of compensation would go to the tenant-at-will.

After hearing the learned counsel for the parties, we find merit in the contention of Mr. Ashok Bhan that according to section 18(2), the landlord is entitled to 3/4th compensation not out of the total market value fixed by the Land Acquisition Collector, but of the average of the prices obtaining for similar land in the locality during 10 years immediately preceding the date of notification u/s 4 of the Act which would be the last date on which the application for purchase could be made by the tenant. This distinction was not pointed out to the learned Judge in Bihari Lal''s case (supra) and that is why it was held therein that 3/4th of the compensation is to be paid to the landlord and 1/4th to the tenant. Had this distinction been specifically pointed out, the compensation would have been ordered to be apportioned as pointed out before us. Mr. K.C. Puri, counsel for the landowner, at the first instance, argued that the appellant is entitled to no compensation as a tenant-at-will and when we were not impressed by this argument of his, he argued that at best the 1/4th of the total compensation awarded by this Court could be ordered to be paid to the tenant and 3/4th to his client, but he could not controvert the argument of the learned counsel for the appellant and the plain interpretation placed by him on section 18(2). He could not advance any argument worth the name to support the decision in Bihari Lal''s case (supra). With all I respect we, therefore, hold that Bihari Lal''s case is not correctly decided and is directly opposed to the plain reading of section 18 (2). Accordingly we decide that the landowner would be entitled to 3/4th value of the land determined on the basis of the average of the prices obtaining for similar land in the locality during 10 years immediately preceding the date of acquisition, that is, July 24. 1963, out of the compensation fixed in the land acquisition proceedings and the whole of the remaining compensation would go to the appellant-tenant.

Since neither the Collector nor the Additional District Judge looked at the case from proper perspective, and failed to take notice of section 18 (2) of the Punjab Security of Land Tenures Act, there is no option with us but to remand the case to the Additional District Judge, Gurgaon, to determine the value of the land measuring 41 Kanals and A Marlas on the basis of average of the prices obtaining for similar land in the locality during 10 years immediately preceding July 24, 1963, in accordance with section 18 (2) of the Punjab Security of Land Tenures Act. After this is done, 3/4th of the value so determined by him would be paid to the respondent landowner out of the compensation assessed under the land acquisition proceedings and the entire balance amount of compensation to the appellant-tenant. Besides the respective compensations which would be payable to the tenant and the landlord on apportionment, they would be entitled to 15 per cent solatium and interest at the rate of 4 per cent from the date of taking possession tilt June 30, 1967, and thereafter till the date of payment at the rate of 6 per cent The appellant would be entitled to costs from respondent No. 1 Counsel fee Rs. 200/-.

S.S. Sandhawalia, C.J.

I agree.