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Structured Summary of the Opinion

Factual and Procedural Background

This is an appeal against a decree dated 24 February 1926 of the High Court of Judicature at Bombay, which varied an award dated 28 July 1924 of the Assistant Judge at Thana on a reference under Section 18 of the Land Acquisition Act, 1894. The land concerned formed part of the village of Kanjur; the area in dispute in the appeal is about 26 3/4 acres. Some portions were in the possession of sutidars who had rights of permanent occupancy in their rice fields.

In 1919 the Government resolved to acquire this and other land and, by arrangement with certain sutidars, took possession of the land. On land that included a portion in the occupation and ownership of the appellant the Government erected certain buildings before the formal notification for acquisition was served. The notification under Section 6 of the Land Acquisition Act was not served until 4 November 1920, when a declaration was made that fifty-two acres, including the land in question, were needed for a public purpose and the Collector took order for acquisition.

The Assistant Judge held that the appellant was not entitled to have the buildings erected by the Government included in the valuation for compensation, but awarded compensation for occupation by Government officials before the notification in the form of interest on the value of the land from the date when Government took possession. The High Court of Bombay confirmed that conclusion. The present appeal challenges (a) the exclusion of the value of the buildings from the compensation and (b) the High Court's reduction of the value placed on the land by the District Judge.

Legal Issues Presented

  1. Whether buildings erected by the Government on the appellant's land prior to the statutory notification dated 4 November 1920 became the appellant's property and therefore should be included in the valuation for compensation.
  2. Whether the appellant was entitled to compensation for occupation of the land by Government officials before notification, and if so, the proper form of that compensation.
  3. Whether the High Court was justified in reducing the value placed on the land by the District Judge (including whether the District Judge was correct to rely on an earlier sale of a portion of the land, Survey No. 170, as a guide to value).

Arguments of the Parties

Appellant's Arguments

  • The buildings erected by the Government on the land before the 4 November 1920 declaration had become the appellant's property and their value should be included in the compensation assessment.
  • The Government, without any pretence of right, tortiously invaded the appellant's property and treated it as their own; there was no genuine claim or belief on the Government's part that they had title.
  • In relation to valuation, the District Judge was correct to treat the April 1920 sale of Survey No. 170 (16,000 square yards sold at eight annas per square yard) as a reasonable guide to the value of the whole land, because that plot was not more favourably situated than the bulk of the land. The High Court lacked evidence to justify reducing the District Judge's estimate, particularly given the land's admitted potential as building land.

Respondents' (Government) Arguments

  • The Government officials could not be regarded as mere trespassers; they were in possession under a colour of title and by arrangement with certain sutidars and so the buildings they erected should not be treated as having become the landowner's property for valuation purposes.
  • Alternatively (as argued by respondents' counsel), if it were admitted that the English maxim did not apply, then as a general proposition a trespasser who builds may have a right to remove the structure or be paid for it, and no clear authority distinguishing degrees of trespass in this context could be found. The respondents relied on Indian authorities interpreted to allow such outcomes.
  • On the valuation point the respondents supported the High Court's reasons for not accepting the District Judge's conclusions and did not question the method of compensation awarded for pre-notification occupation (interest on the land's value from the date of possession).

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Premji Jivan Bhate v. Haji Cassum Juma Ahmed (1895) I.L.R. 20 Bom. 298 The English principle that a stranger who builds on another's land does not acquire title to the building; in India, the builder is allowed to remove the building. Quotation of Sargeant C.J.'s statement that the owner is entitled to recover the land with the building unless there is acquiescence, and that in India the builder is allowed to remove the building. Quoted by the High Court and relied on to support the conclusion that the buildings erected by Government were not to be included in the appellant's valuation.
Thakoor Ghunder Poramanick v. Ramdhone Bhuttacharjee (1866) 6 W.R. 228 Holds that buildings and improvements do not become the property of the owner of the soil by mere attachment; if the person making the improvement is not a mere trespasser but in possession under a bona fide title they may remove materials or obtain compensation; the owner has an option regarding the building. Referred to as a careful review of the applicable Indian law and used to distinguish between a "mere trespasser" and one possessing colour of title; supports the view that builders not mere trespassers have rights to remove or to be compensated.
Gobind Puramanick v. Gooroo Churn Dutt (1865) 3 W.R. 71 Earlier decision (contrasting view) that suggested a trespasser might be allowed to remove building materials; it was noted as not being overruled by the Full Bench in Thakoor Ghunder. Not overruled; cited as part of the background to the rule distinguishing mere trespassers and those with some claim or title, and as precedent that a trespasser could remove building materials in appropriate circumstances.
Narayan bin Raghoji v. Bholagir Guru Mangir (1869) 6 B.H.C.R. (A.C.J.) 80 Where a person (H) knew another (B) claimed land and nevertheless purchased from a third person and erected buildings, H took the risk; Indian doctrine allows the builder to remove materials rather than applying the English rule that buildings belong to the owner of the land. Cited to support the proposition that the Indian doctrine permits removal of materials by the builder and that the English maxim is not applied in India in the same way.
Narayan Das Khettry v. Jatindra Nath Boy Chowdhury (1927) L.R. 54 I.A. 218; s.c. 29 Bom. L.R. 1143 Approved the statement of Sir Barnes Peacock (from Thakoor Ghunder) about the non-application of the English maxim in India and that builders in many cases are allowed to remove improvements; noted that the statement seems to have been accepted for many years. Referred to as a recent authority endorsing the accepted pronouncement that supports the Indian approach to improvements on another's land.
Secretary of State for Foreign Affairs v. Charlesworth, Pilling & Co (1901) L.R. 28 I.A. 121 Referred to in argument to support a claim that the appellants might have had at the crucial date a right to call upon the respondents to remove the buildings and thus an entitlement to have that right treated as attaching to the land. The Board noted the case was cited in argument but declined to decide whether it applied because no such claim had been put forward before the Courts in India.

Court's Reasoning and Analysis

The Board proceeded by examining the facts and the applicable Indian authorities concerning buildings erected by one person on the land of another. The Board noted:

  • The Government had taken possession in 1919 and, though they did not serve the statutory notification under Section 6 until 4 November 1920, they were in a position by law at any moment to regularise their possession by such notification. This fact bears on the legal character of their pre-notification acts.
  • Indian case law (as reviewed in Thakoor Ghunder and subsequent authorities) departs from the strict English maxim "quidquid plantatur solo solo credit" and recognises that improvements do not automatically become the property of the owner of the soil; a builder not being a mere trespasser may have a right to remove materials or obtain compensation.
  • The critical question was whether Government officials who entered and erected buildings before notification were "mere trespassers" or were in possession under some colour of title or claim. The Board agreed with the view of the Courts below that, in the circumstances of this case, the Government officials were not mere trespassers but were in possession under such a colour of title that the buildings erected by them ought not to be included in the landowner's valuation.
  • Accordingly, the justice of the case was met by awarding compensation for the occupation of the lands by Government officials before the notification. The Assistant Judge's method—compensation in the form of interest on the value of the land computed from 27 November 1919, the date when the Government took possession—was accepted and left undisturbed; respondents did not question that method.
  • On the valuation point, the Board observed that the High Court had given full reasons for reducing the District Judge's valuation. The questions involved were matters of valuation (not principle), and the Board declined to speculate as to the correct quantum where the High Court's assessment was a discretionary valuation exercise supported by reasons. Therefore the High Court's reduction of the District Judge's estimate would not be interfered with.

Holding and Implications

Holding: The appeal is dismissed. The courts below were right in disallowing the appellant's claim that the buildings erected by the Government prior to the 4 November 1920 notification became part of the appellant's property for valuation purposes. The appellant's challenge to the High Court's reduction of the District Judge's valuation also fails.

Direct consequences for the parties:

  • The appellant is not entitled to have the value of the buildings erected by Government prior to notification included in the compensation assessment.
  • The appellant is entitled to compensation for occupation by Government officials prior to the statutory notification; that compensation was appropriately awarded in the form of interest on the value of the land computed from 27 November 1919 (the date of Government's possession), a method not questioned by the respondents and left intact by this Board.
  • The High Court's reduction of the District Judge's valuation stands; the Board declined to interfere with the valuation exercise.

Broader implications and precedent: The Board did not purport to lay down any novel principle; it applied existing Indian authorities distinguishing the Indian approach from the English maxim and agreeing with the view that improvements do not automatically become part of the soil and that a builder who is not a mere trespasser may have rights to remove or to be compensated. The opinion states that the questions on valuation involved no new principle and that the courts below acted within established practice. No new legal precedent was asserted by this decision beyond the application of the cited authorities to the facts.

Disposition: The Board will humbly advise His Majesty that the appeal be dismissed with costs.

    Vallabhdas Naranji v. The Development Officer

    1. This is an appeal against a decree made on February 24, 1926, by the High Court of Judicature at Bombay, varying an award dated July 28, 1924, by the Assistant Judge at Thana on a reference made under Section 18 of the Land Acquisition Act, 1894. The land in question is part of the village of Kanjur, and the area in dispute in this appeal is stated to be about 26 3/4 acres. Some of the lands were in the possession of sutidars who had rights of permanent occupancy in their rice fields. The first question which was argued before this Board on the present appeal was the claim of the appellants that certain buildings which had been erected by the Government on the land at the date of the Government's declaration of November 4, 1920, under the sixth section of the Land Acquisition Act had become and were the appellant's property, and that he should be allowed the value of the land in the state in which it then was; that is to say, with the buildings on it. The way that question has arisen is as follows:

    2. It appears that in 1919 the Government resolved to acquire the land in question and other land under the said Act, and by arrangement with certain of the sutidara they took possession of such land, including a portion which was in the occupation and the property of the appellant. Upon such land, including a portion in the possession of the appellant, they proceeded to erect certain buildings without the necessary notification, which was not served until November 4, 1920, when the Government notified, under the Land Acquisition Act, Section 6, a declaration that fifty-two acres more particularly described therein, situated in the said village and including the land in question in this appeal, were needed for a public purpose, and the Collector took order for the acquisition thereof. It is to be observed that the Government were in a position by law at any moment to regularise their position by such a notificationa fact which becomes material when it has to be considered what the nature of their trespass was under the law as applicable on the question of the right of the appellants to have the buildings which were erected on the lands before November 4 included in the valuation. The Assistant Judge held that the appellant was not entitled to have the said buildings erected by the Government in- eluded in the valuation, but that he was entitled to compensation for the occupation of the land by the officials before the notification of November 4, 1920, and he awarded such compensation in the form of interest on the value of the land computed from the date when the Government took possession. On appeal to the High Court of Appeal at Bombay that Court confirmed on Onion, this point the judgment of the Assistant Judge and refused to allow the value of the building to be considered in assessing the Lord Carton amount of compensation to be paid to the appellant. In the course of his judgment the learned Chief Justice said:

    "It is curious to have to remark that Government entered upon this area before the land was actually notified for acquisition. They seem to have done so in the belief that they could get the consent of the occupants to such possession, They not only took possession, but erected buildings on the land."
    The learned Chief Justice, however, held that the question was decided by the principles laid down in the case of Premji Jivan Bhate v. Haji Cassum Juma Ahmed ( 1895) I.L.R. 20 Bom. 298 and he quoted from the judgment of Sargeat C.J. in that case as follows (p. 300) :

    It is well-establishod law in England that if a stranger builds on the land of another, although believing it to be his own, the owner is entitled to recover the land with the building on it, unless there are special circumstances amounting to a standing by so as to induce the belief that the owner intended to forego his right or to an acquiescence in his building on the land... This is also the law in India, with the exception that the party building on the land of another is allowed to remove the building.

    Now up to a certain point there was no difference between counsel for the parties as to the law applicable to the case. It was agreed on both sides that the English law as comprised in the maxim, "quidquid plantatur solo solo credit," has no application In 1866, in consequence of a difference of opinion between certain divisions of the Courts, the law was carefully reviewed in a case referred to a Full Bench, Thakoor Ghunder Poramanick v. Ramdhone Bhuttacharjee (1866) 6 W.R. 228. In the order of reference it is stated that the question involved was "whether a person who, being in possession of land as proprietor, erects pucka buildings (of brick, &c.) thereon, has a right, on being subsequently ejected from the land as having no title, to pull down those buildings and remove the materials. In the present case, we decided that he has no such right. Since we so decided, it appears that another Division Bench...have, in the case of Gobind Puramanick v. Gooroo Churn Dutt (1865) 3 W.R. 71 decided to the contrary effect." The judgment was given by Barnes Peacock who stated as follows (p. 228) ;

    We have not been able to find in the laws or customs of this country any traces of the existence of au absolute rule of law that whatever is affixed Develop or built the soil becomes a part of it, and is subjected to the same rights property as the soil itself.

    And later on he adds (p. 229):

    We think it clear that, according to the usages and customs of this country, buildings and other such improvements made on land do not, by the mere accident of their attachment to the soil, become the property of the Owner of the soil; and we think it should be laid down as a general rule that, if he who makes the improvement m not a mere trespasser, but is in possession under any bona fide title or claim of title, he is entitled either to remove the materials, restoring the land to the state in which it was before the improvement was made, or to obtain compensation for the value of the building if it is allowed to remain for the benefit of the owner of the soilthe option of taking the building, or allowing the removal of the material, remaining with the owner of the land in those cases in which the building is not taken down by the builder during the continuance of any estate he may possess.

    3. The question is, what is meant by a "mere trespasser" as contradistinguished from possession under "any bona fide title or claim of title," In the case quoted the defendant had erected buildings on land sold to his predecessors-title by a widow during the lifetime of the widow, but which sale was held void as being improperly made by the widow, and it is to be noted that Gobind Poramanick's case referred to in the reference, was in no way overruled. It is therefore worth while to consider the view taken by the learned Judges in that case, who stated the law as follows (p. 71) : "But, in the present case, we have a trespasser who has tortiously entered upon the land of another, and built a house thereon. Without going so far as to say that, under no circumstances could acquiescence by the party injured in the act of the injury done be inferred, we are clearly of opinion that no such acquiescence was either pleaded or proved in the present case. We, therefore, think the plaintiff clearly entitled as against the defendant, a trespasser, to possession of his land, leaving defendant at liberty to remove the bricks of his house."

    4. Again, in cases of Narayan bin Raghoji v. Bholagir Guru Mangir (1869) 6 B.H.C.R. (A.C.J.) 80 where H, knowing that B claimed certain land as his own, nevertheless purchased the land from a third person and erected a bungalow thereon, which B did not interfere to prevent. Couch C.J., in giving judgment, said (p. 85):

    "Hormasji took the risk, and, as he was informed of Bholagir's claim, it was not necessary for the latter to give a notice. We cannot, however, apply to cases arising in India the doctrine of the English law as to buildings viz,, that they should belong to the owner of the land. The p. C, only doctrine which we can apply is the doctrine established in *929 India, that the party so building on another's land should be allowed to remove the materials."
    Vailabhdas

    5. In the recent case before this Board, Narayan Das Khettry v. Jatindra Nath Boy Chowdhury (1927) L.R. 54 I.A. 218, s. c. 29 Bom. L.R. 1143 the statement first quoted toobe from the judgment of Sir Barnes Peacock was cited with approval and it was added that such statement "seems to have been on accepted for many years as a correct pronouncement."

    6. It was contended, however, on behalf of the appellant that in the various eases relied upon there was at least some genuine claim or belief in the party erecting the building that he had a title to do so, even though he was eventually held to be a trespasser; and it was urged that no such claim or belief existed in the present case, in which it was said the Government, without any pretence of right, tortiously invaded the appellant's property and proceeded to deal with it as their own. The learned Counsel for the respondents, whilst contending that such was not the true state of facts, and that the respondents could not be considered mere trespassers, was prepared to argue that, even if it were so, once it was admitted that the English maxim did not apply, the logical consequence followed. that in any case of trespass by building on the lands of another, such trespasser had a right facts remove the structure or be paid the value thereof by the owner, and he relied upon the fact that no case drawing a distinction in the nature or degree of the trespass could be found. Their Lordships, however, do not think it necessary to give a decision upon this far-reaching contention, They agree with what was apparently the view of both Courts in India that under the circumstances of this case, as already set forth, by the Uw of India, which they appear to have correctly interpreted, the Government officials were in possession "not as mere trespassers" but under such a colour of title that the buildings erected by them on the land ought not to be included in the valuation as having become the property of the landowner. They considered, and their Lordships agree, that the justice of the case was met by holding that the appellant, was entitled to compensation for the occupation of the lands by the of officials before the notification of November 4, 1920, which, as before stated, was awarded in the form of interest on the value of the land computed from November 27, 1919, the date when the Government took possession. This method of compensation has not been questioned by the respondents.

    7. The case of Secretary of State for Foreign Affairs v. Charles- worth, Pilling & Co, (1901) L.R. 28 I.A. 121 was referred to in the course of the argument to support a claim that at all events the appellants had at the crucial date a right to call upon the respondents to remove the buildings, and that they were entitled to be paid for their land with such a right attaching to it. Whether that case applies or whether such a right would be of any value, their Lordships do not think it necessary to decide, as it is admitted that no such claim was put forward before either of the Courts in India. Their Lordships must therefore, that the Courts below were right in disallowing the claim of the appellants in respect of buildings, and on this point the appeal fails.

    8. The appellant has also appealed against so much of the judgment of the High Court as reduced the value placed upon the land by the District Judge. The main contentions were(1) that as the land had admittedly potentialities as building land the High Court had not the evidence before it to reduce the estimate made by the District Judge, and in fact ignored the evidence upon this point, and (2) that the District Judge, when he dealt with the transaction relating to a plot of the land, Survey No. 170, containing 16,000 square yards, and sold in the month of April, 1920, at eight annas per square yard, was right in accepting this transaction as a reasonable guide to the value of all the land in question, on the ground that this plot was not so favourably situate as the bulk of the land. The High Court has very fully dealt with these considerations and given their reasons for not being able to accept the conclusions at which the District Judge had arrived.

    9. Their Lordships are unable to find any principle involved which could lead them to say that the High Court were wrong in arriving at the decision to which they have come, and as the questions involved are ones of valuation and not of principle, their Lordships, in accordance with the usual practice of this Board, must decline to speculate as to the proper amount to be awarded under such circumstances.

    10. The appeal upon this point accordingly fails,

    11. Their Lordships will therefore humbly advise His Majesty that this appeal should be dismissed with costs.

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    Vallabhdas Naranji v. The Development Officer
    (Apr 16, 1929)