Appeals Nos 702 and 703 of 1967
Appeals from the judgment and order dated September 28 1960 of the Madhya Pradesh High Court in Misc
First Appeals Nos 12 and 16 of 1958
M C Chagla Rameshwar Nath and Swaranjit Ahuja for the appellant in both the appeals
section T Desai and D N Mukherjee for respondent No 1 in both the appeals
I N Shroff for respondents Nos 2 and 3 in CA No 703 of 1967 and respondent No 2 in CA No 702 of 1967
The Judgment of the Court was delivered by Grover J
These appeals which have been brought by cer tificates from a common judgment of the Madhya Pradesh High Court arise out of certain acquisition proceedings
The facts may be stated
Plots Nos 670 671 and 735 situate in Madan Mahal Extension area Jabalpur were acquired by the State Government under the Land Acquisition Act 1894 hereinafter called the Act  for constructing the Home Science College
In the present appeals we are concerned mainly with Plot No 670
On August 31 1940 a deed of lease had been executed on behalf of the Municipal Corporation granting a lease free of premium to the Hitkarini Sabha Jabalpur which is the appellant before us
The laese was in respect of 10 Acres of land comprising Plot No 670 and another strip of land measuring 0621 Acres as described in the deed and delineated in the plan annexed thereto
The period of the lease was 30 years and the purpose for which the land was to be used was for locating and running the Hitkarini City College
Amongst other terms and conditions the appellant was to pay a yearly rent of Rs 5   for 1 0 acres and Re 1  for the other strip of land besides paying and discharging all rates and taxes etc
The appellant on the expiry of the lease was entitled 495 to have the same renewed on  such terms and conditions as might be agreed between the parties
The appellant had built a college hostel on the aforesaid land and had also used the attached ground as playground for students
The Collector of Jabalpur by his award dated July 18 1955 dealt with the claims filed by the appellant and the Municipal Corporation and after disposing of certain preliminary objections he assessed the compensation for the lands in all the three plots at As08 per sq
According to the Collector the appellant was not merely a lessee or tenant at will as contended by the Corporation but was a lessee for the term mentioned in the lease deed dated August 31 1940 the lease having been made for a specific purpose ie for locating and running a City College
As regards Plot No 670 the apportionment was made between the appellant The appellant and the Corporation were dissatisfied with the award of the Collector
Applications for reference were made under section 18 1 of the Act
The Additional District Judge held that the price should be 10 As
per sq
and that the appellant and the Municipal Corporation were entitled to equal compensation for plot No 670
The Corporation and the appellant filed appeals to the High Court
The decision of the Additional District Judge fixing the price of the land at As
08 per sq
ft was affirmed
As regards the dispute regarding apportionment the High Court held following a decision of a Division Bench of the same court in Dagdulal vs Municipal Committee Burhar1 that the lease deed having been executed by the Administrator during the time when the Corporation stood superseded was ineffective to convey the lease hold interest to the appellant
However the appellant had been paving refit at the stipulated rate which had been accepted for a long time by the Corporation
It amounted therefore to the creation of a tenancy by necessary implication and the relationship of landlord and tenant came into existence
On the character of tenancy whether it should be deemed to be from year to year or whether it should be on terms contained in the lease deed the High Court held that the tenancy continued on the terms contained in the lease deed
The High Court then proceeded to say  The lease deed in this case was executed on 31 8 1940 and was for a period of thirty years
It was therefore to remain in force for 15 years more after the date of acquisition
There is a renewal clause which has been already quoted above
The lessee is entitled for renewal on such terms and conditions as may be agreed to between the parties
It appears to
us that the clause 1 496 is uncertain and vague and does not form a valid contract for renewal of the lease
Normally in a covenant for renewal there is an express agreement that the lease would be continued on the same terms and conditions subject to a reservation that the rent way be enhanced under certain circumstances
In the instant case ill the terms and conditions have been left to the agreement of patties which may not take place at all
Although a renewal is contemplated no terms on which it can be granted have been fixed between the parties
Under section 29 of the Indian Contract Act such a contract cannot be enforced
 It has been held in Ramaswami vs Rjajagopala ILR I I Mad 260 that a lease whereby a tenant agreed to pay whatever rent the Landlord might fix was void for uncertainty
The apportionment was made on acturial basis between the appellant and the Corporation in the ratio of 1038  962
Before us two matters have been sought to be raised
One one relates to the quantum of compensation awarded by the learned Additional District Judge and the other to the apportionment between the appellant and the Corporation
We shall first deal with apportionment
It has been argued that since the High Court had held that the tenancy continued on the terms contained in the lease deed benefit should have been given of the renewal clause also
The High Court had taken the view that that clause was uncertain and vague and did not form a valid contract for the renewal of the lease
Our attention has been invited to a judgment of the Mysore High Court in H V Rajan vs C NGopal  Others1 There the relevant portion of the renewal clause was lessee shall have the option of five years but subject only to such terms and conditions as may be mutually agreed upon
It was observed that ordinarily the renewal clause in a lease deed was an important term of the agreement and the courts would be reluctant to ignore that clause on the ground that it was vague unless on a reasonable construction no meaning could be attached to it
An agreement to renew the lease without more must be deemed to be an agreement to renew as per the original terms
Even if the renewal provided was dependent on the agreement between the parties the clause merely provided for an agreement on reasonable terms
If the parties could not agree as to those terms the courts could step in
In our judgment it is altogether unnecessary to decide the true scope and effect of the renewal clause contained in the deed executed on August 31 1940
At the time the lease was executed 1 AIR 1961 Mys
497 there used to be a Municipal Committee in Jabalpur Aparently it became a Corporation later
The Committee was superseded in Charge of the Committee Jabalpur as also Secretary of the Municipal Committee had signed the lease on behalf of that Committee
In the decision of the Madhya Pradesh High Court in Dagdulal s1 case the view had been expressed that so long as Municipal Committee was not reconstituted the ownership of the property stood transferred by operation of law to the State Government and therefore the Administrator had no power whatsoever to sell the property which had vested in the Government
The Additional District Judge had observed that the lease deed had been executed in pursuance of a resolution which had already been passed by the Municipal Committee
The High Court however found on the evidence produced before the Additional District Judge that the final resolution passed by the Municipal Committee was only for the grunt of a license and not a lease to the appellant
The deed of lease therefore was held to be ineffective for conveying any lease hold interest to it
But still the High Court held that the tenancy was to last for a period of thirty years
We are wholly unable to comprehend how any lease could be spelt out of the deed dated August 31 1940 for a period of 30 years containing the renewal clause which has already been mentioned
If the officer who executed the lease deed had no power to lease out the property in question the grant of the lease was wholly null and void
It is true that by acceptance of the rent from the appellant the relationship of landlord and tenant came into existence between the parties but Mr Chagla for the appellant has not been able to show how a lease for a period of 30 years together with a renewal clause could be held to have been created or to have come into existence
It may be mentioned that we are not concerned with the period of 30 years which has already been taken into consideration by the High Court because no appeal has beep filed on that point by the Corporation
The only matter which requires determination is whether the High Court while deciding the question of apportionment should have given due affect to the renewal clause
In our opinion the High Court could riot have done so
If the so called deed of lease dated August 31 1940 was wholly ineffective and void for the purpose of demising the land for a period of 30 years one could only look at the provisions of the Transfer of Property Act for determining the term for which the tenancy came into existence
Under section 106 of that Act the tenancy in the present case could be only from month to month because the immovable property had not been leased out 1 498 for agricultural or manufacturing purpose in which case the lease would have been from year to year
We are therefore unable to accede to the contention that the renewal clause in the lease deed dated August 31 1940 was effective and should have been taken into consideration while making the apportionment between the appellant and the Corporation
The next question relating to quantum can be disposed of shortly
The sole criticism of Mr Chagla is that the potential value of the plot in question was not taken into consideration
It is true as pointed out in Raja Vyrigherla Marayana Gajapatiraju vs The Revenue Divisional Officer Vizagapatam1 that where the land to be valued possesses some unusual or unique features as regards its position or its potentialities the court determining the market value will have to ascertain as best as it can from the materials before it what a willing vendor might reasonably expect to obtain from a willing purchaser for the land in that particular position and with those particular potentialities
It has been urged that Plot No 670 had a special situation or position in view of its size locality nearness to business centre and the Madan Mahal Station
But the value which was fixed by the Additional District Judge and the High Court was fixed by reference to sales of plots of comparable nature
The following portion of the judgment of the High Court shows how the matter was dealt with We may observe that the two witnesses relied upon by the appellants purchased small plots at the rate of Re 1 per sq
As the map of the Wright Town Madan Mahal Extension area produced by the Corporation before us shows these plots are in a fully developed lay out having roads and drains round about
We had asked the Corporation to calculate how much area out of the acquired sites would be required to be left open for roads and drains and they have calculated that about 70000 sq
ft would have to be left open for this pur pose
Obviously therefore it is only the remaining plot which would have value as building sites
Besides leaving so much area open costs will have to be incurred in developing the roads and drains for which the Corporation has estimated the cost to be Rs 8500 
Considering all these factors and also calculating the built up area in the lay outs surroundings the acquired land we find that it is only eighty per cent of the land which can be sold as building site
On these calculations if the average price of the plots sold in the locality is taken to be 12 per sq
the 166 IA 104
499 overall price of the acquired land without roads and drains would work out to a little less than  9 per sq
To put the matter in a different way the value of  10 per sq
found by the Additional Judge would work out to a little over 12 per sq
ft if only the area which could be built upon is considered saleable as building site
Wetherefore find that the price at 10per sq
allowed by the Additional District judge is not unreasonable if anything it errs on the generous side
We have no manner of doubt that the High Court had taken all the factors into consideration while assessing the value
In the result the appeals fail and are dismissed
There will be no order as to costs
Appeals dismissed


Summary:
The Municipal Corporation of Jabalpur purporated to grant a leave of certain land to the appellant Sabha
According to the document the period of lease was 30 years
The appellant was entitled on the expiry of the lease to have the same renewed on such terms and conditions as might be agreed between the parties The appellant made a college hostel on the aforesaid land and had also used the attached ground as playground for students
A portion of the said land was sought to be acquired by the State Government under the Land Acquisition Act 1894 for constructing the Home Science College
The Collector of Jabbulpur by his award dated July 18 1955 dealt with the claims filed by the appellant and the Municipal Corporation and assessed the compensation at As
8 per sq
Apportionment was made between the appellant and the Corporation on the footing that the appellant was not merely a tenant at will as contended by the Corporation but was a lessee for the terms mentioned in lease
The appellant and the Corporation made applications for reference under section 181 of the Act
The Additional District Judge held that the price should be As 10 per
sq ft
and that the appellant and  the Municipal Corporation were entitled to equal compensation
The Corporation and the appellant filed appeals to the High Court
The decision of the Addl
District Judge fixing the price of the land As 10 per sq
ft was affirmed
As regards the dispute regarding apportionment the High Court held that the lease deed having been exempted by the Administrator during the time when the Corporation stood superseded was ineffective to convey the leasehold interest to the appellant
However the appellant was paying the rent which had been accepted for a long time by the Corporation
there was thus a tenancy by necessary implication
The High Court further held that the lease was to continue for the period of 30 years mentioned in the deed but there was no valid contract for renewal of least because the clause relating to that was vague and uncertain
The apportionment was made on acturial basis between the appellant and the Corporation in the ratio of 1038  962In appeal before the Court the quest ions relating to quantum of compensation and the apportionment between the appellant and the Corporationfell for consideration
HELD  1 No lease could be spelt out of the deed dated August 31 1940 for a period of 30 years containing the renewal clause
If th officer who executed the lease deed had no power to lease out the property in question the grant of the lease was wholly null and void
It is true that by the acceptance of rent from the appellant the relationship of landlord and tennant came into xistence
But that did not show that a lease deed for a period of 30 years with a renewal clause had come into existence
497E Since the lease deed was ineffective the lease could be under the provisions of section 106 of the transfer of Proy Act only from
mouth 494 to month because the immovable property had not been leased out for agricultural or manufacturing purpose in which case it would have been from year Lo year
Therefore the contention that the renewal clause was effective and should have been taken into consideration while making the apportionment between the appellant and the Corporation could not be accepted
The question whether the High Court was right in holding that the period of lease was 30 years was not gone into because the Corporation had filed no appeal against that portion of the decision
497H Dagdulal vs Municipal Committee Burhar 19 60 MPLJ 627 and H V Ranan vs G N Gopat  Ors
A I R 1961 Mys 29 referred to
2 The value which was fixed by the Addl
District Judge and the High Court was fixed by reference to sales of plots of comparable nature
There was no doubt that the High Court had taken all the factors into consideration while as essing the value and there was no reason to interfere in this regard
499A C Raja Vyigheria Narayana Gajapatiraju vs The Revenue Divisional Officer Vizagapatam 66 IA 104 referred to