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Atchi Appelareddi & ... v. Special Tahsildar, L...

Andhra Pradesh High Court
Aug 25, 1978
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Structured Summary of the Legal Opinion

Factual and Procedural Background

This appeal concerns compensation payable under the Land Acquisition Act, 1894 for an extent of 21 acres in T.S. No. 46, Block No. 4, Visakhapatnam Municipality. The land originally formed part of the Maddulapalem Zamindari estate and was held as a darmilainam granted to the Mosalaganti family. In 1908 the Mosalaganti family granted a permanent lease to predecessors-in-interest of the appellants, conferring what is described as the "Kudivaram" right. Subsequently, the appellants' predecessors lost and reacquired interests by sale and registered transactions and ultimately sold their right to the Maharaja of Pithapuram in 1921, receiving a lease back from him. The zamindari estate was abolished under the Madras Estates Abolition Act, 1948 (effective 12-1-1951). Proceedings under the Abolition Act resulted in a patta initially granted to the Mosalaganti family, which was set aside on appeal by the Tribunal; the Tribunal left undecided the rights inter se between the appellants and the 2nd respondent. Before those rights were finally determined, the land was acquired under the Land Acquisition Act.

Three sets of persons applied for compensation in the reference proceedings: (i) members of the Mosalaganti family (who later withdrew their claim), (ii) the 2nd respondent (first claimant in the original petition), and (iii) the appellants (claimants 2 and 3 in the petition). The Civil Court resolved the inter se dispute in favour of the 2nd respondent, holding that she was the Kudivaramdar (owner) and that the appellants were sub-tenants/sub-lessees and therefore not entitled to any share of the compensation. The appellants appealed.

Legal Issues Presented

  1. Whether a tenant in respect of agricultural land (in the factual position of the appellants) is entitled to any share of the compensation awarded on acquisition of the land.
  2. Whether statutory protection conferred on tenants (specifically under the Andhra Tenancy Act) creates or enhances any right to share in compensation for acquisition.

Arguments of the Parties

Appellants' Arguments

  • The appellants contended that they were tenants (not mere sub-tenants) and enjoyed permanent occupancy rights in the land, entitling them to exclusive compensation.
  • Alternatively, even if they were only sub-tenants, the appellants argued that they are "persons interested" in the land and therefore entitled to some share of the compensation because their interest was among the rights taken by acquisition.

2nd Respondent's Arguments

  • The 2nd respondent maintained that the appellants' predecessors originally held only the Kudivaram right, which was sold to the Maharaja in 1921, making the Maharaja (and later the 2nd respondent as successor) the Kudivaramdar/owner.
  • According to the 2nd respondent, the appellants were only sub-tenants (lessees under the owner) and therefore could not claim ownership or a share in the compensation; their status did not warrant any portion of the award.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court in This Opinion
Jagadishwar Sanyal v. Collector of Goalpara (AIR 1925 Calcutta 197) Supports the proposition that a tenant or sub-tenant who has an interest capable of valuation is entitled to be heard on adequacy of compensation and to some compensation for the interest lost by acquisition. The Court relied on this decision to demonstrate that a sub-tenant/tenant with an interest in land is entitled to compensation and to be heard as a "person interested".
Shama v. Brakoda (1901) 28 Calcutta 146 Cited as part of the long line of authorities supporting tenant/sub-tenant entitlement to compensation. Used as one of the supporting authorities (via the Jagadishwar Sanyal discussion) that tenants' interests are compensable.
Narain v. Secretary of State (1900) 28 Calcutta 152 Cited among authorities that recognize tenant/sub-tenant interests for compensation purposes. Referenced as supporting authority for the principle that tenants/sub-tenants have compensable interests.
Dunne v. Nabo (1889) 17 Calcutta 144 Cited among authorities establishing tenant entitlement to compensation. Referenced in support of the general proposition affirmed in Jagadishwar Sanyal.
Jogendera v. Rajendra (1911) 13 CLJ 262 (I.C 923) Listed as authority supporting tenant/sub-tenant claim to compensation. Included among cases relied upon for the principle that tenant interests warrant compensation.
Khetter v. Dinnendra (1897) C.W.N 202 Part of the line of authorities cited for tenant entitlement to compensation. Referred to as supporting authority for tenant/sub-tenant rights to be compensated.
Godadhar Dass v. Dhunput Singh (1881) 7 Calcutta 585 Held that a tenant or sub-tenant has an interest entitling him to be heard on adequacy of compensation. Cited (via Jagadishwar Sanyal) to establish the right of tenants/sub-tenants to be heard and compensated.
Jagat Chandra Dat v. Collector of Chittagong (1913) 40 Calcutta 64 Authority recognizing tenants' rights to compensation proceedings. Used among precedents showing compensability of tenant interests.
Sadhu Charan Roy Chowdhury v. Secretary of State (1919) 31 C.L.J. 63 Indicated that even a tenant with a precarious interest may be entitled to compensation. Cited to support the proposition that even less secure tenancies attract compensation entitlement.
Perry v. Clissold (1907) A.C. 73 Judicial Committee held compensation payable to every person deprived of land resumed for public purposes even if title was permissive. Referenced to show that even permissive or non-absolute rights can attract compensation on compulsory acquisition.
Re: Pestonji Jehangir Modi (1913) 37 I.L.R (Bombay) Explains the Collector's duty to inquire into values and apportion compensation among persons "known or believed" to be interested; persons interested include those claiming interest in compensation. Cited to underline the Collector's apportionment duty and to show that "persons interested" may include persons interested only in compensation money.
Hitkarini Sabha v. Jabalpur Corporation (AIR 1961 Madhya Pradesh 324) Discussed apportionment between landlord and tenant by reference to respective rights — e.g., capitalized value of remaining lease term to determine tenant's share. The Court used the case as an example of how apportionment may be carried out (capitalization/annuity method) and to support the principle that apportionment should reflect relative rights.
Laxmanrao v. Jagannath (AIR 1942 Nagpur 32) Cited (in Hitkarini) as part of authorities bearing on apportionment between landlord and tenant. Referenced indirectly through the Hitkarini discussion as supporting proportional apportionment based on relative rights.
Shama Prosunno Bose v. Brakoda Sundari Dasi (I.L.R. 28 Calcutta 146) Authority cited on tenants' entitlement to compensation; appears in multiple citations in the opinion. Relied on as part of the line of cases establishing tenant interest to compensation.
Dinender Narain Roy v. Tituram Mukerjee (I.L.R. 30 Calcutta 801) Referred to among decisions indicating how apportionment and tenant entitlement have been treated. Cited as part of the jurisprudential background for apportionment based on relative rights and incomes.
Raghavan Unni v. A. Rowther (AIR 1959 Kerala 8) Set out principles for apportionment under the Malabar Tenancy Act, including rules allocating improvements, trees, quarries and proportionate division based on incomes and rights. The Court adopted the set of practical apportionment principles from this case as illustrative guidance for apportioning compensation where statutory tenancy rules apply.
Krishna Anjar v. Kuthira Vattath Nayar (ILR. 1958 Kerala 1404) Held that apportionment should be in proportion to the respective income each party derived from the property. Used to support the proposition that income-derived proportions are a legitimate basis for apportionment.
Raja Krishna Menon v. Raman Unni (AIR 1961 Kerala 140) (Full Bench) Affirms the general rule that compensation should be apportioned between landlord and tenant according to the respective values of their interests, ascertainable by evidence in the particular case. Cited to endorse the general factual inquiry approach to determining apportionment between landlord and tenant.
State of Bihar v. Kameswar Singh (AIR 1952 Supreme Court 252) Explains the concept of eminent domain and distinguishes compulsory acquisition from ordinary alienation; emphasizes obligation to make good loss by compensation. Quoted to show that compulsory acquisition is a sovereign act distinct from private alienation and to refute the argument that acquisition should be treated as equivalent to ordinary alienation preventing tenant compensation.
Brown v. Ministry of Housing (1953 (2) All E.R. 1385) English decision considering the nature of statutory tenancy and holding a statutory tenant to be an "occupier" for purposes of English acquisition procedure; used to discuss statutory tenants' rights. Cited to illustrate that statutory tenants may be treated as occupiers/eligible persons for acquisition procedures and to support the Court's treatment of statutory tenancy as giving a compensable right.

Court's Reasoning and Analysis

The Court proceeded in discrete analytical steps, each grounded in material expressly contained in the opinion:

  1. Examination of title history and tenurial character: The Court found, on the uncontroverted facts, that the appellants' predecessors had been the holders of the Kudivaram right but sold that right to the Maharaja in 1921 and thereafter held the land under a lease from the Maharaja. Consequently, prior to abolition the appellants were sub-lessees; after abolition the special tenurial nomenclature (Melvaram/Kudivaram) ceased to have operative relevance and the relationship became landlord-and-tenant under ordinary law.
  2. Legal characterization of appellants' position post-abolition: The Court concluded that the appellants were yearly tenants entitled to the protection of the Andhra Tenancy Act, 1956 (even though the appellants had not formally relied on that statute). The Court took judicial notice of the Act and treated the appellants as statutory/yearly tenants for the purposes of adjudicating their claim to compensation.
  3. Principle that tenants' rights have monetary value: The Court explained the general legal principle that leases and tenancy rights confer valuable rights to enjoy property for a period and that such rights can be monetarily valued. The Court emphasized that the right of a tenant (statutory or contractual) may be substantial and therefore compensable when acquisition deprives him of that right.
  4. Statutory definition and provisions: The Court relied upon Clause (b) of Section 3 of the Land Acquisition Act (definition of "person interested"), Section 11 (apportionment), and Section 23 (damages for crops, etc.) to show statutory support for the proposition that tenants and others with interests fall within the Act's protective and compensatory ambit.
  5. Use of comparative jurisprudence and authorities: The Court surveyed English and Indian authorities (including Jagadishwar Sanyal and others) to demonstrate that both common law and statutory schemes recognize that tenants can be persons entitled to compensation. The Court drew from decided cases to illustrate practical approaches to apportionment (e.g., capitalization of future tenant rights, proportioning on income derived or capitalized annuities, allocation of improvements).
  6. Rejection of the acquisition-is-aliénation argument: The Court rejected the argument that acquisition should be equated with an ordinary alienation so as to deny tenants any share, relying on State of Bihar v. Kameswar Singh to distinguish eminent domain from private alienation and to underscore the compensatory obligation of the State.
  7. Practical conclusion about apportionment: The Court held that there is no universal formula for apportionment; the inquiry is essentially factual and depends on the content of the tenant's right (terms of lease or statutory terms). The Court noted that the lower court had not determined the content or value of the appellants' rights and therefore remitted the matter for enquiry according to law to ascertain the appellants' rights and the proportionate compensation payable.
  8. Disposition as to costs and deposits: The Court allowed the appeal, remitted the matter for enquiry, ordered no costs, directed refund of the appellants' court-fee, and directed that Rs. 50,000 be retained in court from the enhanced compensation deposit while the balance could be withdrawn by respondents.

Holding and Implications

Holding:

The appeal is allowed.

The Court's core rulings, expressed in the opinion, are:

  • The appellants, as yearly tenants entitled to the protection of the Andhra Tenancy Act (and therefore "persons interested" within clause (b) of Section 3 of the Land Acquisition Act), have a right to object to acquisition and to claim a share of the compensation.
  • The tenant's right has monetary value and must be ascertained and compensated; apportionment between owner and tenant depends on the content and value of their respective rights and is essentially a question of fact.
  • Because the court below did not determine the content or value of the appellants' rights, the matter is remitted to the lower court for enquiry and apportionment according to law.

Direct consequences and directions given in the opinion:

  • The matter is remitted to the Court below to determine the content and value of the appellants' rights and to apportion compensation accordingly.
  • There shall be no order as to costs of this appeal.
  • The appellants are entitled to a refund of the court-fee paid on this appeal.
  • The Court directed that Rs. 50,000 be retained in court from the enhanced compensation deposit (to the credit of the suit) while the respondents may withdraw the balance.

Broader precedent-setting: The opinion reiterates and applies established principles that tenants (including statutory tenants) are "persons interested" under the Land Acquisition Act and that their compensable interest must be determined on a fact-specific inquiry. The Court emphasized that no single formula can be prescribed for apportionment and that the statutory and contractual content of the tenant's right must guide valuation and division of compensation.

Show all summary ...

Jeevan Reddy, J.:— The question that arises in this appeal is whether a tenant in respect of an agricultural land is entitled to any share in the compensation and further, whether the statutory protection given to him, creates or enhances any such right.

2. An extent of 21 Acres in T.S No. 46, Block No. 4, Visakhapatnam Municipality, has been acquired under the provisions of the Land Acquisition Act, 1894. Three sets of persons applied for compensation, namely, (i) members of Mosalaganti family (who are respondents 4 to 9 in O.P 139/1967, from which this appeal arises); (ii) Smt. Rao Padma (first claimant in the said O.P). Each of the said parties claimed the compensation exclusively. The Land concerned herein is situated in the erstwhile Maddulapalem Zamindari estate. The said land constituted a Darmilainam, not burdened with service, and it was granted in favour of Mosalaganti family with favourable rate of ‘Kattubadi’. Mosalaganti family granted a permanent lease on 13-6-1908 (Exs. A-2 and A-3), in respect of this land, in favour of the predecessors-in-interest of the appellants herein for agricultural purposes, in accordance with section 15 of Regulation XXX of 1802. In other words, by virute of the permanent lease, the Kudivaram right, came to be vested in the appellant's family. In O.S No. 272 of 1912, on the file of the Court of District Munsif, Visakhapatnam, the right and interest of the appellant's family was sold under a decree obtained against the family, and one Duwa Appadu became the auction purchaser thereof; but, the latter sold the land again to the appellant's family under a registered sale-deed dated 4-8-1919 (Ex. B26). Thereafter, the appellant's family sold its interest to the Maharaja of Pithapuram, the prodecessor-in-interest of the 2nd respondent herein (first claimant in the O.P), under a registered sale-deed dated 26-9-1921 (Ex. B24). The land was, however, immediately teased back to the appellant's family by the Maharaja. The appellant's family has, therefore, been in possession and enjoyment of the land since 1921, by virtue of the lease granted by the Maharaja, and prior thereto under the various transactions referred to herein-before. The said Zamindaii estate was abolished and taken over under the provisions of the Madras Estates Abolition Act, 1948, with effect from 12-1-1951. After the abolition, proceedings were taken under Sec. 15 of the Act, and a patta appears to have been granted in favour of Mosalaganti people thereunder. Against that order, both the 2nd respondent herein and the appellant's family filed appeals before the Tribunal, which were allowed setting aside the patta granted in favour of Mosalaganti family. At the same time, the Tribunal made it clear that it was not going into or deciding the rights inter se between the 2nd respondent herein and the appellants' family. The matter was left open for decision by an appropriate Tribunal. In other words, the question whether the 2nd respondent is entitled thereto, was left open for decision in appropriate proceedings. Before, however, the said issue could be settled under the provisions of the said Act, the land came to be acquired under the provisions of the Land Acquisition Act.

3. We are not concerned herein with the claim for compensation put forward by the Mosalaganti family, since they gave up their claim in the O.P and are therefore, not parties to this appeal. The contest is between the 2nd respondent herein (first claimant in the O.P and the appellants herein (claimants 2 and 3 in the O.P). The 2nd respondent's claim is that what was originally acquired by the appellant's family and has since then been the subject-matter of suits and alienations, is only the Kudivaram right in the land. Under the permanent lease contained in Exs. A-2 and A-3, the appellants' family became the Kudivaramdar, and it is that right which was ultimately sold to the Maharaja under Ex. B-24, in 1921. Therefore, the Maharaja became the Kudivaramadar, and the appellants' family which is a lessee under the Maharaja can only be called a sub-tenant and, cannot claim any right to the property or share in the compensation. On the other hand, the claim of the appellants' family is that they themselves are the Kudivaramdars and, therefore, entitled to a ryotwari patta in respect of the said land under the provisions of the Estates Abolition Act. In other words, their claim was that they have got occupancy rights in the land by virtue of their long and undisturbed possession and that, therefore, they alone are entitled to the compensation exclusively. The dispute was referred to the Civil Court, which has now decided in favour of the 2nd respondent here in. The Civil Court has upheld the 2nd respondent's contention that she is the Kudivaramdar and that, the appellant's family is only a sub-tenant and therefore not entitled to any portion of the compensation.

4. In this appeal, Mr. Koka Raghava Rao, the learned counsel for the appellants, raised the following contentions: (i) that, the appellants herein are tenants, and not sub-tenants as held by the lower court and that, they have got permanent occupancy rights in the land acquired: and (ii) even if the appellants art only sub-tenants even then they are entitled to some share in the compensation, inasmuch as they are persons interested in the land, and their interest in the land was also the subject-matter of acquisition.

5. So far as the first contention raised by the learned counsel is concerned, we find it wholly without any substance. The facts stated hereinbefore, regarding the correctness of which there is no dispute, make it clear that what was throughout dealt with was only the Kudivaram right. In other words, the appellants family was Kudivaramdar, which right they sold to the Maharaja under Ex. B. 24, dated 26-9-1921. Having sold their right to the Maharaja they obtained a lease back from him, but that cannot clothe them with the Kudivaram right. A Kudivaramdar—it is not disputed—is entitled to sub-lease the land. The appellants' family would, therefor, be only a sub-lessee as on the date of the taking over of the estate. With the takink over of the estate, however, the Melvaramdar's interest stood abolished. On and after the date of abolition, there is no question of the 2nd respondent being called the Kudivaramdar or a permanent leasee, and the appellant's family being called sub-tenants or sub-lessess under her. The distinction between Melvaram and Kudivaram rights became equally irrelevant, from the date of abolition of the estate. The position from the said date is, the 2nd respondent is the owner of the land concerned herein, and the appellants' family is the tenant under her. The Court below proceeded on the assumption that the 2nd respondent is a permanent occupant and the appellants' family is a sub-tenant under her; but this was the position as pointed, out above, only prior to the abolition of the estate. With the abolition of the estate they became landlord and tenant respectively governed by the ordinsry law of the land and not by the special tenure peculiar to the said area.

6. We have, therefore, to approach the second question not from the angle whether a sub-lessee or sub-tenant is entitled to any portion of the compensation amount but whether a tenant, situated as the appellants' family is, entitled to any share. Now, the appellants have not even filed the lease-deed under which the Maharaja had leased out the land to them in 1921. It is not averred, nor is there any material to held that the lease is for any fixed period. Merely on account of their possession since the date of abolition, the appellants are not clothed with any permanent occupancy rights. At the most, they are entitled to the protection of the Andhra Tenancy Act, 1956. In other words, the appellants are yearly tenants, entitled to the protection of the Tenancy Act. We should however point out at this state that though the appellants have not claimed the protection or, benefit of the Andhra Tenancy Act, we, have in the interests of justice taken judicial notice of the said fact and shall proceed to consider their claim on that footing, viz., that, they are yearly tenants and that, they are entitled to the protection of the statute aforesaid.

7. Now, lease of an immovable property is a transfer of the right to enjoy such property, for a certain period, for consideration. The lease may be for a year, a couple of years, or for such long periods as 10, 20, or 50 years, or in perpetuity. The right to enjoy a property is a valuable right. The lessor parts with the possession and the right to enjoy the property, for consideration, and the lessee pays the same because he is assured of the enjoyment of the property for the agreed period. In some cases, the right of tenant may turn out to be more valuable than that of the landlord himself as in case of leases for long periods, or say, in case of certain statutory tenancies. By way of illustration, we may notice the position obtaining under the Andhra Pradesh (Telangana Area) Tenancy & Agricultural Lands Act. A protected tenant under the said Act is not liable to be evicted except on the grounds specified in section 19, i.e for persistent default in payment of rent, damage to the property, etc. His right is heritable, though only by wife and lineal descendants. He can also mortgage it for certain specified purposes. In fact, after 1957, the right of the landlord to resume the land for personal cultivation is taken away completly. The Act goes further and says that the interest of the protected tenant and the landlord in the land held by a protected tenant, shall be 60% and 40% respectively, and in cases of acquisition of such lands, 60% of the compensation is being paid to the protected tenants. Of course the rights of statutory tenants depend upon the terms of a given statute governing them, and may differ from place to place. But the fact remains that the tenant's right too has some content—the content varying from lease to lease, or place to place. We may now give an illustration of a non-statutory lease. Take the case of a land given on lease for a period of 50 years, the landlord obtaining a substantial sum by way of premium at the inspection of the contract itself, with smaller amounts payable periodically, and the land being acquired in the second year of the lease. Can it be said that the tenant has no right to or interest in the land which the has been deprived of by acquiring the land, and can it fee said that the is not a person interested in the matter of acquisition and the compensation relating to such land? It, therefore, cannot be denied that where a land, which is in the occupation of a tenant, is acquired, the tenant, is acquired, the tenant has a right to be heard both on question of acquisition as well as com-compensation. His right also has a value, and he has to be compensated for the right, which he is deprived of by acquisition. The principle is that every person whose right or interest is taken away by acquisition, has to be compensated.

8. In fact, the definition of the expression “person interested” occurring in Clause (b) of section 3 of the Land Acquisition Act, vide as it is, supports this view. According to the definition, the expression includes all persons claiming an interest in compensation to be paid on account of the land under the Act, and even a person interested in an easement affecting the land is included within the scope of the said expression. A reading of section 23 too leads us to the same conclusion. The second paragraph in section 23(1) says that “the damage sustained by the person interested by reason of the taking of any standing crops on trees, which may be on the land at the time of the Collector's taging possession thereof” has to be taken into consideration, while determining the quantum of compensation. The other paras in section 23(1) too tend to support the same view. Section 11 of the Act also speaks of apportioning of compensation between various persons interested. Of course, what is the value of the right of the tenant in a given case would be a question of fact in each case; to be decided having regard to the content of the right. The terms of the lease have to be examined in each case to ascertain the content of the right of the tenant. In the case of a statutory tenant, the value of his right may depend upon the content of the right as discernible from the terms of the relevant statute.

9. In Halsubry's laws of England (Third Edition) volume 10, at page 9, it is stated:—

“A person having no greater interest in the land than as a tenant for a year or from year to year, if required to give up possession, before the expiration of his term, is therefore entitled to compensation for his loss”.

10. Of course, the position there is governed by the Lauds Clauses Consolidation Act, 1845, and the subsequent enactments, and in particular the Acquisition of Land (Authorisation Procedure) Act, 1946, which provides:—

before submitting the order to the confirming authority, the acquiring authority shall:—

xxxxxxxx

(b) except in so far as the conforming authority directs that this provision shall not have effect in any particular case, serve on every owner, lessee and occupier except tenants for a month or any period less than a month) of any land comprised in the order, a notice in the prescribed form stating the effect of the order and that it is about to be submitted for confirmation, and specifying the time (not being less than 21 days from the service of notice) within which and the manner in which objections thereto can be made……”.

11. But, in our opinion, the procedural provisions of the English Acts have no bearing on the substance and content of the tenant's right in the land, in our country. The tenants right in the land arises on account of the lease, or under the terms of a statute as the case may be and not on account of the above procedural provisions. The said provisions merely recognise an existing right. They do not created a right, where there was none. Thus the above statement of English Law in Halsbury's Laws of England supports our view.

12. We shall now refer to certain decisions relevant on this question. Jagadishwar Sanyal v. Collector of Goalpara (1) AIR 1925 Calcutta, 197 is a case where a land was held by a tenant under the Mechpara Wards Estate. The appellant was a sub-tenant whose subtenancy was created by a document dated 5-7-1916. Under it, the appellant was permitted to construct a permanent house on an extent of land granted to him on an annual rent of Rs. 15/-. It was stated that the landlord or his heirs would not be entitled to evict him, as long as the house is there, but the tenant was not entitled to alienate the same without the permission of his immediate landlord. A portion of the land so leased out was acquired. The dispute between tenant and sub-tenant was referred to Civil Court. On appeal, if was observed by a Bench of the Calcutta High Court:

“On the present appeal it has been argued by the sub-tenant that he was interested in the land and his interest was capable of valuation. He was consequently a persons entitled to have an adjudication upon the question of the inadequacy or otherwise of the compensation awarded. This proposition is supported by a long line of authorities and can be seriously controverted: Shama v. Brakoda (1901) 28, Calcutta, 146); Narain v. Secretary of State (1900) 28, Calcutta 152) Dunne v. Nabo (1889) 17 Calcutta, 144); Jogendera v. Rajendra (1911) 13 CLJ, 262-9 I.C 923); Khetter v. Dinnendra 9 (1897) C.W.N 202). It has further been held in this Court that a tenant or sub-tenant even though his interest is not transferable except with the sanction of the superior landlord, has an interest which entitles him to be heard upon the question of adequacy of compensation. Godadhar Dass v. Dhunput Singh (1881) 7 Calcutta, 585,-9 CLR 227, Jagat Chandra Dat v. Collector of Chittagong (1913) 40 Calcutta, 64-17, CWN 1001-18 I.C 551-17, C.L.J 61; In a later case Sadhu Charan Roy Chowdhury v. Secretary of State (1919), 31, C.L.J, 63-24 C.W.N 184-55 I.C 150), it was pointed out that even a tenant with a precarious interest in land was entitled to compensation Besides this, the Judicial Committee in Perry v. Clissold (1907) A.C 73-76 L.J.P.C 19-95 L.T 890-23 TLR 232) held confirming the decision of the High Court of Australia in Clissold v. Perry (1, Com L.R 363), that compensation was payable to every person deprived of the land resumed for public purposes even though his title was merely permissive and had not been prefected by adverse possession for the statutory period. In the present case, the appellant was undoubtedly a tenant of the land. It is not necessary to consider whether his tenancy was heritable or permanent or for life. Nor is it necessary to discuss, whether the insertion of the covenant against alienation without a clause for re-entry, would entitled the grantor to terminate the lease and to re-enter on the ground of for feiture. Whatever view is taken of the nature of the tenancy, it is plain that the appellant was entitled to some com-pensation in respect of his interest which was destroyed by reason of the acquisition of the land. He was accordingly entitled to be heard upon the question of the adequacy of the award…”

13. To the same effect are the observations of a learned single Judge of Bombay High Court in The Land Acquisition Act Re-Pestonji Jehangir Modi. In the Matter of (2): (1913) 37, I.L.R (Bombay).

“The Collector has under Section 11 to inquire into the value of the land and into the respective interests of the persons claiming the compensation and after awarding a sum of compensation he has to apportion the said compensation among all the persons known or believered to be interested in the land of whom or of whose claims he has information. Under Section 3(b) the expression ‘persons interested’ includes all persons claiming an interest in compensation to be made on account of the acquisition of land-under the Act. It is quite possible that a person may be interested in the compensation money without having an interest in the land in the legal sense of the term. The Act does not indicate how the Collector is to effect the apportionment, and, section 20 to 28 which deal with the proceedings of the Court when a reference has been made under Section 18, are also silent on the question.

It was suggested in argument that in apportionment the market value of each interest has to be ascertained but with only a fixed sum to apportion. This would obviously lead to difficulties. The various rights of female members of a Hindu undivided family in the joint family property have no market value though such members would be persons interested in the compensation money. Again, even if the market value of the various interests could be assertained, their total value would not be likely to concide with the sum to be apportioned. I think that the Collector and Court have to do is to apportion the sum awarded amongst the persons interested as far as possible in possible in proportion to the value of their Interests, and it is impossible to lay down any general rule which can be followed. The market value of an interest, if ascertainable may afford some guide towards ascertaining the amount to be apportioned in respect of that interest, but that can only be considered in reiarion to the total sum awarded as compensation.”

14. An elaborate discussion of the issue is found in Hitkarin Sabha v. Jabaplur Corporation (3) AIR, 1961, Madhya Pradesh, 324. There the Jabalpur Corporation, the owner of the land, had granted a lease to the Hitkarini Sabha in 1940, for locating a College therein. The land along with the buildings thereon, were acquired by a notification dated 2-3-1955. According to the terms of the lease, 15 more years were to run for the lease to come to an end and the land to revert to the corporations. The contention of the Corporation was that the Subha was not entitled to any share in the compensation for the land and that on account of the acquisition it had become impossible to carry on the purpose of the lease and hence the land must be treated as having reverted to the Corporation. On the other.

hand. It was contended on behalf of the Sabha that by virtue of the lease deed that Corporation practically retained no interest in the property and could not derive any profit from the land, except of course the rent stipulated. The Court, after referring to the decisions in Laxmanrao v. Jagannath (4) AIR 1942 Nagpur 32; Shama Prosunno Bose v. Brakoda Sundari Dasi (5) I.L.R 28 Calcutta, 146; and Dinender Narain Roy v. Tituram Mukerjee (6) I.L.R 30 Calcutta, 801 observed as follows:—

“There can be no doubt that the ratio in which the compensation money should be divided between the landlord and the tenant should be the ratio between their respective rights in the land acquired. An effort should therefore be made to ascertain their respective interests as far as possible and then to divide the compensation money proportionately. In the instant case, the Sabha was entitled to retain the lands for 15 years and thereafter they were to revert to the landlord (Corporation.)

The Sabha was thus to derive a certain profit annually from the land for the remaining period of the lease during which period the Corporation would get practically nothing therefrom. Thereafter, the Corporation would be entitled to enter on the land. The interest of the Sabha would be equal to the capitalized value of an annuity running for 15 years and the interest of the Corporation would be the present value of the capitalized value payable 15 years hence

Capitalization of values is usually made at the rate of interest at 5 percent per annum which is the fair return expected of immovable properties leased out on rent. The value of an annuity of Re. 1/- per annum for 15 years allowing interest on capital at 5 percent comes to 10.380 This would be the value of the interest of the Hitkarini Sabha. The Corporation would get twenty-times the rent of the property, that is Rs. 20/- after 15 years. The present value of Rs. 20/- payble after 20 years at 5 per cent per annum interest comes to 20 × 4810 equal to 9.62

These calculations have been made on the basis of annuity tables printed on pp. 90 to 98 of the land Acquisition Manual of Madhya Praesh, First Edn. 1951. It is thus found that the compensation money should be apportioned between the Sabha and the Corporation in the ratio of 1038.962 Although the learned Additional District Judge did not give any reasons for dividing the amount equally between the two claimants, it appears on the basis of the calculations made above that the apportionment was roughly correct.”

15. The case in Raghavan Unni v. A. Rowther (7) AIR 1959, Kerala 8 was the case of tenancy governed by the Malabar Tenancy Act. In the absence of satisfactory evidence regarding the market value of the interests of the tenant and the landlord, the Court evolved the following principles in the matter of apportionment of compensation between them:

“(1) If the tenant has constructed any building, made any well or tank, or put up permanent protective works, such as bunds, culverts etc., he alone will be entitled to the value of such improvements.

(2) If there are any trees or other improvements reserved under the contract of tenancy to the jermi exclusively or any trees or plants in respect of which he has the rights mentioned in section 56(3) of the Malabar Tenancy Act the value of such trees, plants, and improvements should be given to the jermi.

(3) If the jermi was working any quarries by virtue of the right under section 56(2) of the Malabar Tenancy Act and if separate compensation has been awarded for the same not merely on the basis of land value, the amount awarded in respect of them should also be given to jermi.

(4) Subject to the above special rights the entire compensation amount including any amount awarded in respect of trees and plants planted by the kanomdar after the kanom demise should be divided between the jermi and the tenant in the proportion of what they were deriving from the entire kanom holding of which the acquired property formed a part the annual rent which the jermi was entitled to get under the provisions of the Malabar Tenancy Act at the time of the acquisition being treated as that the jermi was deriving from the proprerty; and the gross income of the property less the expenses of cultivation, cost of maintenance of the property. Government list, and dues payable to the jermi being treated as what the kanomdar was getting from the property.

(5) If there was any tank in the property which was dug before the kanom was granted and which was included in the kanom and given to the kanomdar along with the rest of the kanom holding such tank also should be treated as part of the kanom holing and the compensation amount awarded in respect of it should be apportioned between the jermi and the kanomdar in the same proportion as the compensation amount awarded for the rest of the kanom holding; and

(6) The right to the solatium follows the right to the com-pensation amount, and the share of the solatium which the jermi and the kanomdar are each entitled to get should be proportionate to the share he gets out of the entire compensation amount, i.e each of them is entitled to get as solatium 15 per cent of the compensation he is found entitled to………”

16. In Krishna Anjar v. Kuthira Vattath Nayar (8) ILR. 1958, Kerala 1404, it was held that the apportionment should be made on the proportion of the respective income which the parties derived from the parties.

17. To the same effect is the observation of a Full Bench of Kerala High Court in Raja Krishna Menon…Applicant; v. Raman Unni…. (9) AIR, 1961 Kerala, 140 (F.B)

“Nobody, can take exception to a general rule that com-pensation amount should be apportioned between the land lord and the tenant, according to the value of the interest which each has in the land acquired. What those inerests are is the question to be decided and that can be ascertained only by the evidence in each particular case…”.

18. But it is argued that in cases where the right of the tenant is not alienable, there is no reason why he should be held entitled to compensation when the same is acquired compulsorily Acquisition also is an alienation, no doubt a compulsory one under the law. There is no reason, it is argued, why the tenant's right should become enlarge merely because the land held by him is acquired. But there appears to be some fallacy in the said reasoningt Acquisition of a property by a State under its ‘eminent domin’ canno-strictly be called an alienation, or an alienation by operation of law. It is inherently different. As observed by Mahajan, J. in State of Bihar v. Kameswar Singh (1) AIR 1952, Supreme Court, 252 (at pp. 270-271)

“……This power is a sovereign power of the State, power to take property for public use has been exercised since olden sovereign power. As an incident of this power of the State is the requirement that property shall not be taken for public use without just compensation…… On the continent the power of compulsory acquisition is described by the term “Eminent Domain”. This term seems to have been originated in 1625 by Hugotius who wrote of this power in his work. “De Jure Belli Et pacis” as follows: “The property of subjects is under the eminent domain of the State so that the State or he who acts for it may use and even alienate and destroy such property not only in the case of extreme necessity, in which even private persons have a right over the property of others, but for ends of public utility, to which ends those who founded civil society must be supposed to have intended that private ends should give way. But it is to be added that when this is done the State is bound to make good the loss so those who loss their property……”

19. For the aforesaid reason, it would not be correct to equate the acquisition with alienation. If so, the reasoning of the learned counsel loses its validity. But this contention can be exposed by looking at the other side of the picture too. Suppose there is a tenant upon a land under a lease for 25 years, and the land is acquired in the second year of the lease, there is equally no reason why the tenant should be deprived altogether of the advantage he acquired under the said lease and why should the entire compensation be paid to the landlord, which would precisely have the same effect of enlarging his rights, or the content of his right, as the case may be in other words, there is no reason why the landlord should be rid of the obligation arising under the said lease. After all, the lease given by him operates as a limitation upon the content of his ownership and on the rights flowing from his title to the land. The true and relevant test, it may be reiterated, always is, ‘compensate the loser’.

20. It is then pointed out that, in case of acquisition of a land subject to a mortgage the law specifically recognizes the mortgagee as a person interested and as entitled to a portion of the compensation (section 73(2) of the Transfer of Property Act), but that no such provision is made in the case of a lessee. The distinction, it is argued, is not without a meaning. It is, no doubt, true that While mortgage is, according to section 58 of the Transfer of Property Act, a transfer of an interest in specific immovable property for a given purpose, the lease is only a transfer of a right to enjoy the property (see the language of section 105 of the Transfer of property Act). But, In our opinion, the distinction in the language has no relevance on the question at issue herein. Whether a person has an interest in the immovable property or a right to enjoy such property, both are equally capable of a monetary value. Both rights are created for consideration. There is no reason why the person who pays considertion in one case should be compensated, but not the person in the other case.

21. Both the Counsel have cited several other decisions, but those are the cases dealing with tenants governed by a special tenure. The incidents of tenure differ from region to region; for example, the right of a tenant in an estate governed by the Madras Estates Land Act is different from that of a tenant governed by the Tenancy Laws of Bengal or Uttar Pradesh. Having regard to the content of the respective rights of the tenants, different courts have been evolving different criteria of propositions. There are cases in which, out of the total compensation, 10 Annas was directed to be paid to the landlord and 6 Annas to the tenants and in some other cases, a different proportion is follwed. But the said proportion is integrally connected with the nature and incidents of the tenancy under a particular tenure obtaining in an area. Since we are not dealing herein with a tenancy governed by a particular tenure but only with an ordinary tenancy governed by the ordinary law of the land of course, enjoying the statutory protection of the Andhra Tenancy Act it is unnecessary for us to refer to those several decisions. They too of course, affirm the principle that tenant too is entitled to some portion in the compensation.

22. Lastly, we may notice the characteristics and nature of statutory tenancy. We have already indicated that even an yearly tenant is entitled to some portion of the compensation, may be too small the principle being that he has to be compenated for the right he is deprived of by the acquisition. Now, a statutory tenant, if at all is in a better position. For example, according to the provisions of the Andhra Tenancy Act (Sec. 10(2), the present appellants are entitled to continue in possession as tenants until the legislature of the State by law otherwise provides-so long of course as they observe the terms of lease. The right thus conferred upon them is capable of morefaty value and they should be compensated for that right. But for the acquisition, it is obvious, the appellants would have continued in possession of the land and derived advantage or profit, as the case maybe. The landlord's right was merely to receive the rent, so long as the tenants observed the terms of the lease. If the entire compensation is paid to the landlord alone, then that would be a case of enlarging the rights of the landlord on account of the acquisition while simultaneously abrogating the tenant's rights altogether, for which there appears to be no valid justification. In certain English decisions, including the one reported in Brown v. Mininstry of Housing (11) 1953 (2) All E.R page 1385, the nature of a statutory tenancy has been considered. In the said reported decision, a learned single Judge of the Queen's Bench Division, while holding that a statutory tenant is an “occupier” within the meaning of the Acquisition of Land (Authorisation Procedure) Act, 1946 and therefore entitled to a notice inviting objections to acquisition, refers to certain earlier decisions where the expression “Statutory tenant” has been criticised as being in apt. It was observed in those earlier decisions that a person holding a land or property under the terms of a statute, even after the expiry of his lease, is not a tenant in the true sense of the word and that, in fact, he is not a tenant at all. It was abserved that although he cannot be turned out of possesion so long as he complies with the provisions of the statute, he has no right or interest in the premises such as a tenant has and further that, his right is purely a personal one and, therefore unless the statute otherwise provides, his rights come to an end the moment he Darts with the possession or dies. But, as pointed out by the learned Judge in the said decision, the said distinction, if any, does not have much relevance on the question whether such a tenant is an “occupier” within the meaning of the aforementioned English Act—and similarly has no relevance on the question whether such a person is not a “person interested” within the meaning of the said expression as defined in our Act.

23. Before we conclude, we must deal with an objection raised by the learned counsel for the 1st respondent to the effect that the appellants have never put forward their claim as ordinary tenants, much less as statutory tenants and that, therefore, this court should not now give them the relief on that basis. We are unable to agree. In their claim petition, the appellants had stated that they are enjoying the land “as tanants with the occupancy rights”. This expression occurs more than once in the claim petition. They have also claimed that they have raised fruit bearing trees, cashew nut, jami and coconut trees, on a small portion of the said land. Merely because the appellants claimed to be tenants with occupancy rights, there is no reason why they should be denied the benefit of even ordinary tenancy rights. Because they have claimed higher rights and have failed to prove the same, even the lesser right should not be denied to them. So far as the statutory tenancy is Concerned, we have merely taken judicial notice of an exisiting statute viz., the Andhra Tenancy Act, and the provisions there. This we have done with a view to do full justice between the parties and to avoid multiplicity of proceedings.

24. To conclude: A tenant is a ‘person interested’ as defined in clause (b) of Section 3 of the Land Acquisition Act. He has a right to object to the acquisition and/or to the quantum of compensation. The Land Acquisition Officer or the Court, as the case may be, has to ascertain the value of his right in the property acquired and compensate him in that behalf. No hard and fast Rule can be laid down, nor can any universally applicable, formula, be evolved in the matter of apportionment between the owner and the tenant. It all depends upon the content of the tenant's right(s). The terms of the lease may have to be looked into for ascertaining the content and value of his right(s) and if he is a statutory tenant, the terms of the statute have to be looked to for the purpose. An over-all view has got to be taken and the proportion of their respective interests determined. The several decided cases do, no doubt, furnish a guide in the matter of apportionment, but the question is essentially one of fact. Since there has been no determination in the Court below of the content or the value of the rights of the appellants herein, we have no option but to remit the matter back to the Court, below, for enquiry according to law. The Court below will now ascertain the content and the substance of the right of the appellants in the land acquired, and the proportionate compensation payable therefor. The appeal is, accordingly allowed and the matter remitted with the above directions. There shall be no order as to costs. The appellants are entitled to the refund of court-fee paid on this appeal.

25. It is now stated that an amount of more than rupees one lakh is still lying in deposit being the enhanced compensation. Mr. Raghava Rao expresses the apprehesion that if the respondents are allowed to withdraw the entire amount, it may be difficult for him to realise any amount from them in case some amount is found due to him ultimately. In the circumstances of the case, we direct that an amount of Rs. 50,000/- be retained in the court to the credit of the suit and the balance of the amount may be withdrawn by the respondents.