Sk. Fakir Mohammad vs State of West Bengal

P.N. Mookerjee, J.—The Appellant Sk. Fakir Mohammad was the lessee of premises No. 86 Phears Lane under the owner Purna Chandra Chandra. The lease was dated September 8, 1947, and it was to run for 20 years. This lease is ex., 4 in the present case.

In or about the year 1949, this premises along with three other premises Nos. 87, 87/1 and 87/2, Phears Lane, was acquired by the Calcutta Improvement Trust under C.I.T. Scheme No. LVII (Chittaranjan Avenue Blackburn Lane). The relevant notification (No. 6519 L. A), is dated August 18, 1948. It was published in the Calcutta Gazette on August 26, 1948. The relative declaration is dated July 27, 1949, and it was published in the Calcutta Gazette of August 4, 1949.

Belying upon the terms of the lease, ex. 4, the owner Purna Chandra Chandra claimed the entire compensation money for land and structures under the first clause of Section 23(1) of the land Acquisition Act together with the statutory allowance under Sub-section (2) of the section. The lessee, Appellant Sk. Fakir Mohammad, claimed a part (Rs. 12,000) of the said compensation. He also claimed independently Rs. 52,265 as compensation for loss of earnings. This was claimed apparently under the clause "fourthly" of Section 23 and it was calculated on the basis of the unexpired term of the lease, ex. 4, namely, 17 years, and it was made up as follows:

Rs.

Loss of rents for the unexpired term of the lease 64,600

Less (i) rent payable to the landlord (owner 11,280

(ii) occupier''s share of municipal rates payable by the lessee Sk. Fakir Mohammad 1,055

12,335

Net 52,265

The lessee''s claims were rejected by the Collector who made a Nil award in his favour, awarding the entire compensation for land and structures to the owner Purna Chandra Chandra under the first clause of Section 23(1) read with Sub-section (2) of the said section and refusing further any compensation to the lessee-Appellant Sk. Fakir Mohammad for alleged loss of earnings under the clause "fourthly" of Section 23(1).

The lessee then applied for a reference to the Calcutta Improvement Tribunal u/s 18 of the Act. This reference, as is clear from the above statements, consisted of two parts-(i) apportionment, where the contest was between the lessee and the owner and which related to the award of the entire compensation for land and structures (with statutory allowance) to the owner and (ii) Valuation, raising his (lessee''s) independent claim for compensation under the clause "fourthly" of Section 23(1) for loss of earnings, as set out above. The apportionment part was allowed by the Tribunal in favour of the lessee to the extent of Rs. 4,000 but on appeal to this Court by the owner (F.A. No. 11 of 1954) that decision was reversed and the lessee''s claim was rejected on August 13, 1954. The second part of the lessee''s reference was also decided by the Tribunal against the lessee and his claim was rejected on the ground that no compensation was claimable by him in the present case under the separate head "loss of earnings" under the clause ''''fourthly" of Section 23(1) of the Land Acquisition Act. The present appeal is directed against this decision.

It is not disputed before us that the market value of the acquired property (Premises No. 86 Phears Lane) has already been correctly determined and that the award of the whole thereof to the owner Purna Chandra Chandra cannot be questioned in view of the decision of this Court in First Appeal No. 11 of 1954, referred to above. It is contended, however, that the lessee-claimant Sk. Fakir Mohammed is entitled to compensation for loss of earnings under the clause "fourthly" of Section 22(1) and the acquiring authority must pay the same over and above the market value of the property assessed under the first clause and awarded to the owner. This contention of the lessee has been rejected by the learned President and, in our opinion, his decision must be affirmed.

The loss of earnings pleaded in the present case arises from alleged deprivation of the income from sub-letting. The lessee sub-let the disputed property and used to earn income from that sub-letting. This income yielded him profit after meeting the landlord''s (lessor''s) rent and the Corporation taxes (the occupier''s share) payable by him. By reason of the acquisition, so complains the lessee, he has been deprived of this profit and for this loss he claims compensation from the requiring authority, not out of the market value of the acquired property payable under the first clause of Section 23(1) but under the clause "fourthly" of that Sub-section which provides for compensation for injurious affection or loss of earnings.

We are unable to accept the lessee''s contention. To us it seems to be somewhat misconceived. The income which the claimant-lessee complains to have lost is the income of the acquired property itself. It is income derived from the said property itself. It is income derived from the said property and it arises out of it directly and exclusively. This income may well be a factor to be taken into consideration in determining the market value of the property under the first clause of Section 23(1), but in the matter of determination of compensation payable for the acquisition, this income or the loss of it has no relevance under any of the other clauses of the section. Loss of earnings under the clause "fourthly" does not include loss of income of the property acquired. Such loss to the extent that it is relevant falls to be compensated under the first clause of the section (Section 23(1)) and such compensation must come out of the market value of the property which is payable under that clause. This market value which represents not merely the actual but also the potential value of the acquired property within well recognised limits includes compensation not merely for the corpus but also the income of the said property and no claim for compensation for this last mentioned item can arise or exist apart from the market value of the property or can claim recognition outside the first clause of the section. It is unfortunate that in the present case the lessee (the claimant) has been held disentitled to claim any share of the market value, awarded under the first clause of Section 23(1) because of a special term in the lease, ex. 4, but that position being no longer open to challenge and when it is no longer contended by the lessee that the market value of the acquired property has been under-assessed under the first clause, or that he is entitled to a part thereof, the lessee cannot claim any compensation and his claim for further or additional compensation for loss of earnings under the clause ''''fourthly" on account of deprivation of profit from sub-letting of the property must stand rejected. It is true that in the lease, ex. 4, the lessee''s relinquishment of claim for compensation vis-a-vis the lessor is accompanied by a saving provision to the effect that it shall be without prejudice to his (the lessee''s) claim for compensation as against the Government or any local authority. That however, would not assist the Appellant unless the claim is admissible under any of the clauses of Section 23(1) and open to him in law. The Appellant releases, and, indeed, he had accepted the position, that the decision in First Appeal No. 11 of 1954 precludes him from making any claim under the first clause of the section and he has, accordingly, felt constrained to make his present claim under the clause "fourthly" which, however, is hardly applicable for reasons we have already discussed. We would, accordingly, hold in agreement with the learned President that the present claim of the Appellant must fail.

Before concluding we would refer briefly to the cases, cited during argument. The Appellant relied very strongly upon the decision of this Court in the case of Narain Chandra Boral v. The Secretary of State for India in Council ILR (1900) Cal. 152. It is enough to say that that case was entirely different. The real dispute there was as to whether the claimant, who was the yearly tenant of the acquired tank and carried on a fishery business with fish reared in the said tank, was a person interested within the meaning of Section 23 and entitled to compensation under that section. His claim had been negatived by the court below on the ground that he was not a person interested within the meaning of the section (Section 23). This decision was reversed by this Court and the claimant was held entitled to some compensation for determination whereof the case was remitted to the court below. In the judgment of this Court there is no doubt reference to the clause "fourthly" of Section 23(1) as having some application to the case, but that is clearly explainable having regard to the earning or income which was the subject-matter for consideration there. Income from fishery is certainly not exclusively referable or attributable to the tank as income from sub-letting in the case of land or building. The claimant in the case of Narain Chandra Boral v. The Secretary of State for India in Council (Supra) might have been entitled to some compensation under the first clause of Section 23(1) for the acquisition of his interest as lessee of the tank and also under the clause "fourthly" for loss of earnings which were not exclusively referable or attributable to the property acquired, namely, the tank, but depended on other factors as well, e.g., fish reared in the tank. It was not a case of loss of income of the tank strictly so called. We do not think that the position is similar in the case of sub-letting of the acquired premises. To hold otherwise would mean that where there are various grades of sub-tenants they would all be entitled to compensation under the clause "fourthly" over and above the market value of the property assessed under the first clause of the section. That would hardly be a proper view of the statute. The incomes derived by these sub-lessees are all directly and exclusively referable to the acquired property itself and must be fully represented by the same and the compensation, if any, for loss of such income must come out of the compensation for the said acquired property or, in other words, out of its market value as assessed under the first clause of Section 23(1) which includes also its potential value in the present set up. Mr. Sen concedes that that would be the position so far as the owner landlord is concerned, but he submits that the cases of the lessees and sub-lessees would be different. We are unable to appreciate the argument or the distinction on which it is sought to be founded. Each has an interest in the property which has a market value as the exclusive source of his income from letting or sub-letting. That market value is a part of the value of the property and compensation for its loss or the loss of relative income must come out of the market value of the acquired property awarded under the first clause of Section 23(1) and it cannot be claimed under any of the other clauses of that section.

A further point was sought to be made by Mr. Sen that the Appellant''s lease was for the purpose of earning profit or income by sub-letting which meant that he intended to carry on the business of sub-letting there and his earnings being from this business would properly come under the clause "fourthly". We do not think that the mere introduction of this conception of business would alter the nature of the income or the earnings which would still remain the income of the property, the Appellant''s property, or the acquired premises as held by him under the lease.

The other cases cited during argument, namely, Madhab Gobinda Hay v. Secretary of State for India in Council ILR (1928) Cal. 819, Secretary of State Vs. Rawat Mull Nopany, , and Governor-General in Council, New Delhi v. Sm. Indar Mani Jatia (1950) 5 D.L.R. (Simla) 180, appear to be in the Respondent''s favour and of them the decision in Secretary of State Vs. Rawat Mull Nopany, is definitely against the Appellant''s contention. The same view also appears in the case of AIR 1947 192 (Nagpur) . As we have already given our reasons for rejecting the Appellant''s contention, we do not deem it necessary to discuss any of the above cases.

In the result, this appeal fails and it is dismissed. There will, however, be no order for costs in this Court.

Renupada Mukherjee, J.

I agree.