SURENDRA NATH SARKAR Vs. PYARI CHARAN LAW

JUDGEMENT

(1.) This is an appeal against a decision of the Tribunal constituted under the Calcutta Improvement Act (Bengal Act 5 of 1911), in what is described as an apportionment case. That Act provides that for the purpose of acquiring land in connexion with the operations of the Calcutta Improvement Trust, the Tribunal shall perform the functions of the "Court" under the Land Acquisition Act, and the provisions of this latter enactment are made subject to certain modifications set out therein. So far as appeals are concerned, Section 54, Land Acquisition Act, is excluded, and a separate Act has been enacted by the Indian Legislature being Act 18 of 1911 governing the right of appeal against the decisions of the Tribunal. The present appeal has been preferred under the provisions of this Act, and the only question is as to how a certain sum of money which has been awarded as the market value of the property acquired should be divided between the persons interested. The property under acquisition is a Municipal holding described as premises Nos. 1 and 1/1 Belliaghata Road, and comprising an area of 4 bighas 5 kottas 9 chittaks and 10 square. feet of land with a market known as Parsi bazar situated on the greater portion of it. At the material date, which was the date of the declaration under Section 6, Land Acquisition Act, the entire property was held under a mourashi mokarari lease which had been granted by the owners on 12 March 1924. The owners were the Sarkars, com. pendiously referred to in these proceedings as claimants No. 1. The lessee was one Nanda Lal Mallik, but he is not a party to this case, having been completely sold out, and the whole of his interest in the property is now represented by the other sets of claimants in the case, the Laws (Claimants No. 6) claiming by virtue of certain charges held by them under two decrees of this Court, and one Hrishi Kesh Shaw (Claimant No. 7) claiming to be purchaser in execution of a mortgage decree. As there is no question in this appeal as between these parties inter se, it will be sufficient to deal with their interests collectively as the interest of the lessee.

(2.) The Collector originally awarded Rs. 2,50,000 as the market value of the property, and subsequently reduced it by Rs. 3159-11-6 in respect of a small area which was found to belong to Government. The resultant award was for a sum of Rupees 2,46,840.4-6 (excluding statutory allowance), and the Collector made it jointly in favour of all the persons interested and deposited the amount in the Tribunal under Section 31 (2), Land Acquisition Act. He likewise made a reference under Section 30, and the parties also obtained reference under Section 18. No dispute was raised as to the market value and the only question was as to apportionment. The matter was dealt with by the President of the Tribunal sitting singly, as he was entitled to do under Clause (b) of Section 77 (1), Calcutta Improvement Act, and this decision must be deemed to be the decision of the Tribunal. The President has awarded Rs. 1,92,000 out of the total compensation to the lessors, and the balance is in respect of the lessee's interest. The appeal is on behalf of the lessors, the Sarkar claimants who question the basis of the apportionment adopted by the President. The President has valued the lessors interest in the property as what he describes as a 10 per cent. security, mean-ing thereby that it is valued at ten years purchase of the net annual rental reserved by the lease. The lease is Ex. 8, and is printed at pages 9 to 13 of Part II of the paper book. It contains a clause in these terms: 13. If the said land and bazar be acquired under the Land Acquisition Act, then of the compensation, etc. therefor each shall get what would be due to him according to law.

(3.) The whole question therefore is what is payable to each party according to law. It seems to be only common sense that as between lessor and lessee the acquisition should not place either party in a better or a worse position than he was before the acquisition. The acquisition transforms the property into a certain sum of money, but the rights of the parties relatively to this sum ought to be the same as they were with reference to the property. Where a property is subject to a lease, theoretically speaking, the total compensation for the property should be the sum total of the compensation payable in respect of the interests of lessor and lessee. If the total compensation is not however arrived at by Separately calculating the interests of lessor and lessee, it seems to us that the amount should be divided between them in such proportions as would represent the value of their respective interests. It must follow on this basis that whatever is obtained by one party, the other takes the balance, and this ensures to each payment of the proportionate value of his interest. In an apportionment between lessor and lessee, it ought not surely to make a difference whether the lessor's or the lessee's interest is first valued and paid for. This is sometimes overlooked, and what is often done is that instead of dividing the total compensation between the lessor and the lessee in the proportion of their respective interests, either the lessor's or the lessee's interest is first assessed and then, after deducting the amount so assessed, the balance is handed over to the other : see for instance Nibas Chandra Manna V/s. Bipin Behari (1926) 13 AIR Cal 846. Such a method however may obviously lead to unfairness and injustice as between the parties, the party getting the first slice, so to say, out of the compensation being placed in a position of undue advantage as compared with the other. So far as we can see, there is and can be no valid reason for giving the first chance to either lessor or lessee in this behalf, and making the amount of compensation payable to the one or the other depend on such accidental preference. Such an anomalous result could not of course follow if one could be sure that the total compensation represented the sum total of the values of both lessor's and lessee's interest. But the market value of the land acquired is often determined on different considerations without separate assessment of each interest. In such a case, it would be manifestly inequitable at the time of apportionment to allow the one party the real value of his interest in the land, and leave to the other the balance only of the sum which had been calculated on a different basis altogether. This cannot ensure that the balance so determined will also represent the real value of the interest of the person to whom it is paid. As was pointed out by Mookerjee Ag. C. J. in Nayan Manjuri Dasi V/s. Hem Lal Dutt (1920) 7 AIR Cal 959, the market value of the land acquired may be determined on many hypothetical considerations, but the question of apportionment of the sum awarded as between the landlord and his tenant must be based, not on hypothetical grounds, but on an accurate determination of the value of their respective interest in the land. We are not unmindful that there are dicta to be found in certain decisions to the effect that it is not always possible in apportionment proceedings, with only a fixed sum to apportion, to ascertain the market value of each interest: see, for example, the case in In Re: Pestonji Jehangir (1913) 37 Bom 76. All the same, it will be observed that Maclebd J. said in this case that what the Collector and the Court have to do is to apportion the sum awarded amongst the persons interested as far as possible in proportion to the value of their interests. The true rule, in our opinion, applicable to a case like the one before us is that which was laid down as far back as 1872 by Jackson J. in Bhageeruth Moodee V/s. Rajah Jabur Jummah Khan (1872) 18 WR 91. There, what the Courts below had done was to ascertain the approximate value of the mokararidar's interest and pay him the amount so ascertained, and to give the remainder to the zamindar out of the total compensation previously fixed. It was held that this was not a correct method, but that the rule to be followed was "that the parties should divide the money in the ratio of their respective interests in the estate." The observations of Macleod C. J. in Dinendra Narain Roy v. Tituram Mukerji (1903) 30 Cal 801 at p. 810 are worth quoting in this connexion as indicating the right principle, though this particular aspect of the question was not pointedly raised in the case: I think the Court ought to proceed on the principle of ascertaining what is the value of the interest of the zamindar on the one hand with which he has parted, and that of the tenant on the other, and to apportion the compensation money between them in accordance with those values.