STATE OF GUJARAT ETC v. VAKHTSINGH11 SURSINGHJI VAGHELA ETC & Ors.

Excellent accounts of the history and incidents of the taluq- dari tenures are given in Dr. Govind D. Patel's Agrarian Re forms in Bombay, 1950, Mr. J. B. Peile's Report, Government G Selection No. CVI New Series, p. 13, Mr. L. Robertson's Report on the conditions of the taluqdars of the Ahmedabad district, 1903, statement of objects and reasoJ!S for Bill No. 6 of 1885 printed in Bombay Government Gazette, dated the 26th Decem- ber, 1885, Part V, at p. 65 and Nawab Sardar Narharsinghji Ishvarsinghjl v. The Secretary of State for India('). The origin of the Gujarat taluqdars may be traced to Moghul and pre the / districts of Moghul times. They are found mainly in 11 (!) 43 Bom. L. R. 167. A B D E F G H GUJARAT I'. VAKHTS!NGJIJI (Bachawat, J.) 695 Ahmedabad, Kaira, Broach and the Panchmahals. The leading charac,'.eristics of the taluqdari tenure is that the taluqdari estate is neither alienated nor unalienated but is proprietary. Until 1862 the taluqdars were legally though incorrectly regarded as mere lease holders. From 1862 till 1888 they were full pro prietors with unlimited powers of alienation. From 1888 on wards ·they were full proprietors with restricted powers of aliena tion. Their estates were subject to payment of a jama to the Government. Originally th'e jama was regarded as a tribute but later it beca, me a roughly calculated tax on the rental, then a land tax and finally land revenue. Acts were passed from time to time for ameliorating the conditions of the taluqdars. Since 1888 the taluqdari villages and estates were governed by the provisions of the Gujarat Taluqdars' Act, 1888 (Bom. Act VI of 1888). Under sec. 2(1) (c) of this Act Jama meant land revenue payable by the taluqdars to the Government. Section 4 empowered the Government to direct a revenue survey of a taluqdari estate under the provisions of the Bombay Land Reve nue Code, 1879. Sections 22 and 23 deal with the taluqdar's .iama : "22(1). If a taluqdar's estate, or any portion there of is not wholly or partially exemp'. from land-revenue and its liability to payment of land revenue is not sub ject to special conditions or restrictions, the jama pay able to (the Provincial Government) in respect of such estate or portion thereof shall, if a survey settle ment has been extended thereto, be the aggregate of the survey assessment of the lands composing such estate or such portion thereof minus such deduction, if any, as (the Provincial Government) shall in each case direct. (2) nte (Provincial Government) may declare the amount of jama so ascertained fixr.d for any term not exceeding thitty years. 23 (1) Nothing in this Act shall . be deemed affect the validity of any agreement, heretofore, enter ed into by or with a taluqdar and still in force as to the amount of his jama nor of any settlement of the amoun'. -of jama made by or under the orders of the (Provincial Government) for a term of years and still i11 force. t (2) Every such agreemen: and settlement . have effect a'.s·if this Act had not been passed:" The iama was usually fixed ( uddhad) in respect of the estates in Kaira and Broach but those in Ahmedabad and Panchmahals 8SupCl/6S-l 696 StlP.IUlME COURT lUlPOllTS ('968) 3 S.C.R. It l I; revisional settlement. The A. revision at every were liable to ftuctuating jam.a in respect of these latter estates could ~ndcr s. 22 be fixed at an amount equal to the full survey assessment In practice the of all the lands comprised within the estate. jam.a of the claimants' estates in Ahmedabad was limi~ to about 60% of the full assessment. As a measure of. agrarian re form the Government decided to abolish the taluqdar tenures altogether. Accordingly the Bombay Taluqdari Tenure Aboli- tion Aot, 1949 was passed on January 24, 1950. It came into• force oil August 15, 1950. It extends to the districts of Ahmeda bad, Kaira, Broach and Panchmahals. It repealed the Gujarat Taluqdars' Act of 18 8 8 and certain other ~ial Acts !elating to taluqdars. Section 3 abolish.ed the taluqdari tenure and ex- tinguished all incidents of the tenure attached to any land com prised in a taluqdari estate save as provided in the Act. Under sec. 4 all revenue surveys and settlements made under sec. 4 of the Gujarat Taluqdars Act, 1888 are deemed to have been made under Chapters VIII and VIlfA of the Land Revenue Code. By section 5 (1 )(a) all taluqdari lands are henceforth " liable to the payment of land revenue in accordance with the provisions of the Land Revenue Code and the rules made there under. But this provision does not ,affect the right of any person to hold any taluqdari land wholly or partially exempt from the payment of land revenue under a special contract or any other law for the time being in force [s. 5(2)(a)] nor the right of any person to pay jama under any agreement or settlement re- cognised under sec. 23, or under a declaration made under sec· tion 22 of the Gujarat Taluqdars' Act so long as such agiee remains in force [s~ 5 (2 }(b )]. ment, settlement or declaration Section 5 ( 1) (b) provides that a taluqdar holding any taluqdari land shall be deemed to be an occupant within the meaning of the Land Revenue Code or any other law for the time being in force. Section 6 provides that all public roads, !!Illes etc., ndf situate within the limits of the wantas belonging to a taluqdar in a taluqdari estate shall vest in ·the Government and all rights held by a taluqdar in such property shall be deemed to have been extinguished. Section 7 proV1des for payment of compensation to taluqdars for extinguismnent of rights under section 6. Sec- . tion 14 provides for payment of compensation for extingwsh- G ment or modification of any other right in any land where such extinguishment or modification amounts to transference to pub- lic ownership of such land or any right in or over such land. Section 17 makes applicable provisions of the Land Revenue Code to all taluqdari lands with certa.in modifications. Sections 8 9 and 1 O provide for appeals from lhe Collector's award. S::Won 12 provides that the awanl made by the Collector and the decision of the ·Bombay Revenue Tribunal on appeal shall be final and conclusive and shall not be questioned in any suit , f I> E. 8 GU.JAR:'AT v. VilHTSINGHJl (Bachawat, /.) 697 A ,B or proceeding in any court. The Act is protected by Art. 31B It was amended from time to time. ClaUS6 of the Constitution. (a) of section 5(2) was deleted by Bombay Act 42 of 1953. Section SA was inserted by Bombay Act I of 1955. Section SA made a pennanent tenant and an inferior holder in possession of, any taluqdari land an occupant in respect of such land on payment of compensation to the taluqdar. In these appeals the taluqdars claim compensation for the loss of benefit of the difference between the jama and the full assessment. The jama payable under the settlements made before the. Abolition Act was 60% of the total assessment. Their right to pliy the jama only under those settlements were not affected in view of section 5 (2 )(b). They have obtained the full bene fit of the concessional jama while the settlements remained in force. The period of those settlements have now expired and they are now liable to pay full assessment. They have suffeRld a loss of 40% of the land revenue of the villages. They claim compensation for this loss under s. 14 (1 ) of the Abolition Act which reads..:~ • "14.(1). If any person is aggrieved by any of the provisions of this Act as extinguishing or modifying any of his rights in any land other than those in respect of which provision for the payment of compensation has been made under section 7 and if such person proves that such extinguishment or modification amounts to the transference to public ownership of such land or any right in or over such land, such person may apply to the Collector for compensation within a the date on which this pei-iod of twelve months from Act comes into force." "Any person" in sec. 14( 1) includes a taluqdar. To get com· pensation under the section the claimant must establish firstly that his rights in any land other than those for which provision for comJle'Ilsation is made under s. 7 has been extinguished or modified and secondly' that such extinguishment or modificati9n amounts fo .the transference to public ownership of such land or any right in or over such land. The taluqdars contend that they had the right to pay a jama not exceeding 60% of the survey assessment ·of the lands comprised in the estate. According to them the Government had issued directions under section 22 (1 ) of. the Gujarat Taluqdars' Act, 1888 so limiting the jama. They say that such direction is to be found in the memorandum of the Government of Bombay issued on October 2, 1914 with reference to the recommendation made by the Commissioner, . Northern Division, in his letter dated April 13, 1914. The ltigh Court has ref.erred to these documents in some detail. It appears C· D E F G H 698 SUPREME COURT REPORTS (1968) 3 S.C.R. that the Gujarat Taluqdari Bill was then pending before Legislative Council. The memorandum shows the Government's willingness to incorporate in the Bill suitable provision regarding In our opinion, the memorandum was the fixation of olhe jama. not a direction under sec. 22( 1) nor did it create a legal right in the taluqdars to pay a jama of 60% of the survey assess- ment. the A B The taluqdari estates were always liable to payment of jama or land revenue. As a matter of concession the jama was gene rally 60% of the survey assessment of the lands comprised in the esta1e. The taluqdars had no legal right to claim the con cession on the expiry of their current settlements. At the next revis1onal settlement the Government had the right to withdraw C the concession and to impose full assessment on the taluqdari lands. Section 5(1)(a) of the Abolition Act by imposing full assessment on the taluqdari lands after the expiry of the period of the current settlements did not extinguish or modify any vest- ed right of the taluqdars. Mr. Palkhiwala argu.ed that section 5 effected a transfer of D the proprietary rights of the taluqdars in their lands to the Gov ernment together with the advantage of paying reduced revenue and a re-transfer of the occupancy rights in those lands to the taluqdars and consequently there was extinguishment or modifi cation of their rights amounting to transference to public owner- ship of rights in and over such lands. The argument, ingenious, does not bear scrutiny. Before the High Court the faluqdars made no claim for compensation generally for any loss of proprietary right. Mr. Palkhiwala therefore said that he did not make any claim for compensation for the loss of proprietary right other than the loss arising from the liability to pay full assessmeni. We have therefore to consider only the claim for· compensation for the difference between the jama and the fn11 F assessment. though E In Rao Bahadur Kunwar Lal Singh v. The Central Provinces and Berar(') the appellant Rao Bahadur Kunwar Lal Singh held in Zamindari rights certain estates in the Central Provinces. The land revenue in respect of the estates was settled in 1921 und.cr the Central Provinces Land Revenue Act, 1917 for a period of 19 years from July 1, 1919 and July 1, 1920 and thereafter until a fresh settlement was made. Section 88 of the Act provided that if the assessmeni of an estate, had been accepted under the Act, · the proprietors would be bound to pay the land revenue assessed thereon from such date and for such term as the Pro vincial Government might appoint in that behalf and if at the expiry of wch term no new assessment had been made, until a (1) [1944! P. C. R. 284. G H < A B c D E F G H GUJARAT v. VAKHTSINGHJI (Bachawat, J.) 699 new assessment was made. . The Central Provinces Revision. of the Land Revenue of Estates Act, 1939 enacted that with effect from July 1, 1938 notwithstanding anything .contained in the Act of 1917 the land revenue payable to the Government in res pect of the estates would be enhanced to the amounts mentioned in the Schedule to the Act of 1939. By an Amending Act of 1941 it was provided that those amounts would be deemed to have been assessed, offered and accepted under the Act of 1917. The appellant contended that as no. new settlement had been made the Act of 1939 extinguished or deprived him of his con tract~al as well as statutory right to hold his estates subject only to the payment of the takoli fixed in 1921 and thus amounted to an acquisition of his right in land in contravention of section 299(2) of the Government of India Act, 1935: The Federal Court repelled this contention. Spens, C.J. observed : - there must land revenue It further seems to us that "It is, we think, impossible to hold that the mere increase of an assessment for involves any acquisition ofthe land or any rights in or over im movable property. word 'acquisition' implies that .be an actual transferenee of, and it must be possible to indi cate some person or body to whom is or are transfer red, the land or righis referred to. It is impossible, in our view to suggest that when the land revenue is increased, there is any transference to the PrOvincial Government or .any other person of any land or rights in or over immovable property, which remain in the same possession or ownership as immediately before the increase of the assessment. · In our judgment, the attempt to bring the case within s. 299(2) must. fail." . It. will be noticed that the Zamindar in that case was bound to pay only the fixed land revenue for the period of 19 years and thereafter until a new settlement was made. The increase in land revenue made by the 1939 Act affected this right. Never theless it was held that the increase in land revenue did not in volve any transference to ' the Government of any right in or over any immovable property. The case of the taluqdars in the. present case is \Yealcer. Their. right to pay the jama only while the . old settlements remained . m force was not affected by section S. The increase in land revenue on the expiry of. those settlements was not due to any change in ownership. The en hanced·. assessment did not affect any contractual or statutory right vested in them. Even assU111ing that it modified or ex· tingu~ any right, such modification or extinguishment did not amount to transference to pµblic ownership of land or any ?00 SUPllBMB COU.llT llBPORTS [1968] 3 s.c.R. right in or over land within the meaning of sec. 14 of the .Bom· A bay Taluqdari Tenure Abolition Act. The Collector, the Reve- nue Tribunal and the High Coun therefore rightly rejected the claim of the taluqdars for compensation for the difference in the jama and the full assessment. The n¢xt claim is for payment of a solatium of 15 per cen· tum on the market value awarded under .section 7 of the Aboli- B tion Act. The Collector and the Revenue Tribunal rejected this claim. The High Coun partially allowed it and directed that an amount of 15 % should be added to the market value awarded under section 7(1)(b)(ili). This ruling is challenged by both the State of Gujarat and the taluqdars. Section 7 (l) reads : - c

7.(1) Any taluqdar having any property shall be entitled to compensation manner provided namely:- following rights in such paragraphs (a) within a period of twelve months from date on which this Act comes into force, the taluqdar shall apply in writing to the Collector stating the nature of Iris right, the ground of his claim and amount of compensation claimed by him for the ex- tinguishment of his right; · ( b) the Collector shall hold a formal inquiry in the manner provided in the Code and if the Collector ia satisfied that the applicant had any land and that such rights have been extinguished under the last preceding section, shall make an award in the manner prescribed in seciion 11 of the Land Acqui- sition Act, 1894 (l of 1894). subject to the follow ing conditions : - rights in (i) if the property acquired is waste or unculti vated but is culturable land the amount of compensa tion shall not exceed three times the assessment of the land; Provided that if the land has not been assessed, the amount of compensation shall not exceed such amount of assessment as would be leviable in the same village on the same extent of similar land used. for the same purpose; (II) if the property is land over which the public has been enjoying or acquired a right of way or any individual has any· right of easement, the amount of compensation shall not exceed the amount of annual assessment leviable in the village for unculti- D E F G H GUJARAT v. VAKHTS!NGHJI (Bachawat, J.) 701 vai.ed land in accordance with the rules made under the Code or if such rules do not provide ,the levy of such assessment, such amount as in the opinion of the Collector shall be the market value of the right or interest held by the claimant; (iii) if there are any trees or structures on the land, the amount of compensation shall be the market value if such .trees or structures, as the case may be; Explanation-For the purpose of this section the "market value" shall mean the value as estimated in accordance with the provisions of sections 23 and 24 of the Land Acquisition Act, 1894 (1 of 1894), in so far as such provisions may be applicable." Section 7 ( 1) gives compensation to taluqdars for extinguish ment of rights in any property under sec. 6. The Collector is required by sec. 7 (1 )(b) to make an award in the manner pres cribed in section 11 of the Land Acquisition Act, 1894. The Collector has to make an award of compensation under sec. 11 and having regard to sec. 15 in determining the amount of com pensation, he is guided by the provisions of secs. 23 and .24 .. Section 23 ( 1) requires an award of the market value of the land. Section 23(2) requires an additional award of a sum of fifteen per centum on such market value, in consideration of It follows that under sec. the compulsory nature of acquisition. 7 ( 1 )(b) of the Abolition Act read with section 11 of the Land Acquisition Act, the taluqdars are entitled to receive as compen- sation the market value of all rights in any property extinguished under sec. 6 and in addition a sum of 15 per centum on such market value. This right is subject to the conditions and ex ceptions enumerated in sub-clauses (i), (ii) and (iii) of sec- tion 7(l)(b). In cases falling under clause (i) and in some cases under clause (ii) the amount of compensation is liniited. In cases falling under clause (iii) and in some cases under clause (ii)· the amount of compensation is the "market value" which according to the explanation to sec. 7 (1 ) means. the value estimated in accordance with sections 23 and 24 of the Land Acquisition Act, 1894. The value so determined includes the (2) of solatium of 15 per centum payable under sub-section s. 23. Where the legislature intended to exclude the applica tion of sub-section (2) of sec. 23, it has said so, as in section 14(2) und<tr which compensation is determined in accordance with the provisions of sub-section ( 1) of sections 23 and 24. It follows that the taluqdar is entitled to the solatium of 15 per centum on the market value, ( 1 ) under the main part of sec. 7 ( 1 )(b) subject to the provisions of the several sub-clauses thereof: (2) in cases falling under clause (iii) of section 7(1)(b) and (3) in cases under clause (ii) of section 7(1)(b) where B c D E iF G JI • 7 02 SUPREME COURT REPORTS (1968) 3 S.C.R. market value is awarded. The direction of the High Court is modified accordingly. /'!,, challenged by The next claim is with regard to irrigational bunds, tanks and wejls. The Collector awarded compensation .on the basis of Hirnayat and water rates of assessment. The Revenue Tribunal confinned his award. The High Court set aside this award and directed the Collector to award compensation after further in quiry on the basis of twenty-five iimes the annual profits deriv able from the properties. This ruling is State of Gujarat and also by the Taluq·dars. Mr. Bindra con tended that the Tribunal's award should be restored. Mr. A. K. Sen contended 1hat the compensation should be awarded on the basis of reinstatement value. In our opinion, both .these c:in· tentions should be rejected. The duty of the Collector is to award the "market value". The market value is the amount which the laml if sold in the open market by u willing seller might ln the case of land the market value is be expected to realise. generally ascertained on a consideration of the prices obtained by sale of adjaceni lands with similar advantages. Where there are no sales o1' comparable lands, the value must be found in some other way. One method is to take th.e income which the owner is expected to obtain from the land and to capitalise it by a number of years purchase. The capitalised value is then taken as the market value. which a willing vendor mig:ht reasonably expefa to obtain from a willing buyer. Tn some special cases awards have been given on the basis of the reinstatement value which is assessed according to the cost of acquiring an equally convenient land or premises. Cripps on Compulsory Acquisition of Land. 11th ed., Arts. 4-203, p. 907 exrlains this method thus : - annual "Before the Acquisition of Land Act, 1919, instatement value, instead of market value, was some times given so as to give proper effect to the principle of compensation on the basts ·Of value to the owner. Generally it was only given in respect of property which was of such a nature (for example, a school. church. hospital, hou~e of exceptional character, busi ness premises in which the business could be carried on under special conditions or by means of a special licence) that there was no market or general demand for such properiy; and a market value deducted from the income derived would not constitute a fair basis in assessing the value to the owner." The measure of compensation for lands or premises taken under the Lands Clauses Act, 1845 was their value to the owner. Jn special cases reinstatement value enabling the O)Vner c D E F G A B c D E F G H GUJARAT v. VAKHTSINGHJI (Bachawat, /.)

#703. replace the lands or premises taken from him was taken to be the correct measure of this value. This principle was later enacted in Rule 5 of section 2 of Acquisition of Land (assessment of compensation) Act, 1919 which is now replaced by Rule 5 of section 5 of the Land Compensation Act, 1961. In Raja Vyri cherla Gajapatiraju v. The Revenue Divisional Officer, Vii.aga patam (1) Lord Romer said that the general principles for deter mining compensation under section 23 of the Land Acquisition Act, 1848 did not differ in any material respect from those upon which compensation was awarded under the Lands Clauses Act of 1845. In Harish Chandra Neogy v. Secretary of ·State India(') and Province of West Bengal v. Raja Jhargram( 1 ) it was suggested that in special cases the reinstatement value may be awarded as compensation under section 23 of the Land Acquisi tion Act. For the purpose of this case it is sufficient to say that this method should not be adopted where the market value deduced from the income derived from the ·lands would fairly compensate the own.er and in no case can reinstatement value· be given unless reinstatement in some other place is bona fide in tended. The High Court found that there was no intention to reinstate the bunds. The owners could be fairly compensated · by giving the market value deduced from 1 the estimated yield .. The High Court rightly rejected the reinstatement· method. The value of irrigational bunds, tanks and wells is not what they cost but what. they yield in annual income. The High Court rightly adopted the yield basis of valuation. The Himayat assessment and water rates did not give the correct yield. The High Court therefore directed further inquiries into this claim. The next claim for compensation is with regard to river and river beds. The Collector and the. Tribunal rejected this claim· but the High Court allowed it a.nd directed further inquiries. The State of Gujarat challenges this ruling. Now the taluqdars had no property in running water. They were the owners of the river beds but the submerged river beds were of no value to them. Counsel for the taluqdars therefore conceded that the High C~rt's ~g canno~ be supported. Before us they con' fined their claun under thts head to Bhathas . formed rivers and other portions of the river beds where crops could be raised. during some parts . .;if the year particularly during summer. <;o?nsel foF the State dtd not oppose further inquiries into this ltmtted claim for compensation. We therefore set aside the· directions of .the High Court in respect of river and river beds. W~ direct . the Spec!31 Deputy Coll~tor to claim for comp_ensati?n for Bhathas, 1f any, formed in the rivers, And other portions, 1f any, of the river beds where crops could' be~. inquire (I) 66 J, A. 104 at 113. ' (2) 25 C. W. N. 875. (3) A. J.R. 1965 Cal. 392. 104 SUPllBME COUllT REPORTS [1968] 3 s.c.R. Counsel for the taluqdars sought to challenge the findings of the High Court with regard to compensation for unbuilt village sites, trees, siJn road and non-irrigation al tanks and wells. We find no error of principle in the award of compensation under these heads. There is no ground for our interference in respect <>f these claiJns. Mr. Bindra submitted that section 12 ·of the A\i<>lition Act makes the decision of the Tribunal final and conclusive and the High Court had no jurisdiction «> interfere with this decision, particularly in respect of solatium of 15 per centum and non irrigational bonds, tanks and wells. We are unable to accept this contention. Article 227 of the Constitution gives the High Court the power of superintendence over all courts and tribunals throughou,l the territories in relation to which it eurcises juris dictron. This jurisdiction cannot be limited or fettered by any Act of thc State Legislature. The supervisory jurisdiction ex tends to keeping the subordinate tribunals within the limits of It was the their authority and to seeing that they obey the law. duty of the Revenue Tribunal to award compensation to Taluqdars in accordance with the provisions of secs. 7 and 14 1lf the Act. The High Court had jurisdiction to revise ·the deci sion of the Tribunal where the Tribunal on a misreadipg of the provisions of secs. 7 and 14 declined to do what was by those provisions of law incumbent on it to do. Tested in this light it does not appear .that the High Court exceeded its jurisdiction under Art. 227 in revising the. decision of the Tribunal in res pect of the solatium and irrigational bunds, tanks and . wells. Numerous cases were pending before the Ravenue Tribunal in respect of corilpensation payable to the taluqdars under ·the Bom bay Taluqdari Tenure Abolition Act. To· prevent miscarriage of justice it was necessary for the High Court to lay down general principles on which compensation should be assessed so that the Tribunal may act within the limits of their authority. On find ing that the Tribunal had misconceived its duties under secs. 7 and 14, the High Court could not only set aside its decision, but also direct it to make further inquiries after taking evidence. As pointed out in Hari Vishnu Kamath v. Syed Ahmed lshaque(') the High Court in the exercise of its supervisory jurisdiction under Art. 227 cannot only annul the decision of the Tribunal but can also issue further direction in the matter. In the result, in modification of the High Court's decision in respect of solatium of 15 per centum on the market value, we direct that in all these cases the taluqdars be awarded solatium in accordance with this judgment. We set aside the High Court's Instead, we. direct -decision with .regard to river and river bedS. 1hat 1the Special Deputy Collector will inquire into the cla.tm for (I) (1955) I S. C.R. 1104 at 1120. A B c D E F G H GUJARAT v. VAKHTSINGHJI (Bachawat, !.) 705 A B compensation for Bhathas, if any, formed in the river and other portions of the river beds, if any, where crops could be raised lluring some parts of the year, particularly during the summer. The Special Deputy Collector will make awards under these two heads after giving opPOrtunity to the parties to adduoe evidence Subject to these modifications, the appeals are dismissed and the decision of the High Court in other respeots is confirmed. As success is divided, there will be no order as to costs. G.C. Appeals dimiissed with modifications. ';: ' ' "