Case: State Of Gujarat Etc Vs. Vakhtsinghji Sursinghji Vaghela &amp; Ors. Etc

2. Excellent accounts of the history and incidents of the taluqdari tenures are given in Dr. Govind D. Patels Agrarian Reforms in Bombay, 1950, Mr. J. B. Peiles Report, Government Selection No. CVI New Series, p. 13, Mr. L. Robertsons Report on the conditions of the taluqdars of the Ahmedabad district 1903, statement of objects and reasons for Bill No. 6 of 1885 printed in Bombay Government Gazette, dated the 28th December, 1885, Part V, at p. 65 and Nawab Sardar Narharsinghji Ishvarsinghji v. Secretary of State, 48 Bom LR 167 = (AIR 1941 Bom l6l). The origin of the Gujarat taluqdars may be traced to Moghul and pre-moghul times. They are found mainly in the districts of Ahmedabad, Kaira, Broach and the Panchmahals. The leading characteristics 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 proprietors with unlimited powers of alienation. From 1888 onwards they were full proprietors with restricted powers of alienation. Their estates were subject to payment of a jama to the Government. Originally the jama was regarded as u tribute but later it became 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 Section 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 Revenue Code, 1879. Sections 22 and 23 deal with the taluqdars jama(1) If a taluqdars estate, or any portion thereof is not wholly or partially exempt from land-revenue and it liability to payment of land revenue is not subject to special condition" or restrictions, the Jama payable to (the Provincial Government) in respect of such estate or portion thereof shall if a survey settlement 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) The (Provincial Government) may declare the amount of jama so ascertained fixed for any term not exceeding thirty years.23. (1) Nothing in this Act shall be deemed to affect the validity of any agreement, heretofore, entered into by or with a taluqdar and still in force as to the amount of his jama nor of any settlement of the amount of jama made by or under the orders of (the Provincial Government) for a term of years and still in force.(2) Every such agreement and settlement shall have effect as if this Act had not beenjama was usually fixed (uddhad) in respect of the estates in Kaira and Broach but those in Ahmedabad and Panchmahals were liable to revision at every revisional settlement. The fluctuating jama in respect of these latter estates could under S. 22 be fixed at an amount equal to the full survey assessment of all the lands comprised within the estate. In practice the jama of the claimants estates in Ahmedabad was limited to about 450 per cent of the full assessment. As a measure of agrarian reform the Government decided to abolish the taluqdari tenures altogether. Accordingly the Bombay Taluqdari Tenure Abolition Act, 1949 was passed on January 24, 1950. It came into force on August 15, 1950. It extends to the districts of Ahmedabad, Kaira, Broach and Panchmahals. It repealed the Gujarat Taluqdars Act of 1888 and certain other special Act relating to taluqdars. Section 3 abolished the taluqdari tenure and extinguished all incidents of the tenure attached to any land comprised in a taluqdari estate save as provided in the Act. Under Section 4 all revenue surveys and settlements made under Section 4 of the Gujarat Taluqdars Act, 1888 are deemed to have been made under Chaps. VIII and VIII-A 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 thereunder. 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 recognised under Section 23, or under a declaration made under Section 22 of the Gujarat Taluqdars Act so long as such agreement, settlement or declaration remains in force [S. 5 (2) (b) ]. 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, lanes, etc., not situate within the limits of the watans 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 provides for payment of compensation to taluqdars for extinguishment of rights under Section 8. Section 14 provides for payment of compensation for extinguishment or modification of any other right in any land where such extinguishment or modification amounts to transference to public 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 certain modifications Sections 8, 9 and 10 pro vice for appeals from the Collectors award. Section 12 provides that the award made by the Collector and the decision of the Bombay Revenue Tribunal on appeal shall be final and conclusive and shall not he questioned in any suit or proceeding in any court. The Act is protected by Article 31-B of the Constitution. It was amended from time to time. Clause (a) of Section 5 (2) was deleted by Bombay Act 42 of 1958. Section 5-A was inserted by Bombay Act I of 1955. Section 5-A made a permanent 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.

Court's reasoning:
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. Nevertheless it was held that the increase in land revenue did not involve any right in or over any immovable property.The case of the taluqdars in the present case is weaker. Their right to pay the jama only while the old settlements remained in force was not affected by Section 5. The increase in land revenue on the expiry of those settlements was not due to any change in ownership. The enhanced assessment did not affect any contractual or statutory right vested in them. Even assuming that it modified or extinguished any right, such modification or extinguishment did not amount to transference to public ownership of land or any right in or over land within the meaning of Section 14 of the Bombay Taluqdari Tenure Abolition Act.The Collector, the Revenue Tribunal and the High Court therefore rightly rejected the claim of the taluqdars for compensation for the difference in the jama and the full assessment.9.Section 7 (1) gives compensation to taluqdars for extinguishment of rights in any property under Section 6. The Collector is required by Section 7 (1) (b) to make an award in the manner prescribed in Section 11 ofthe Land Acquisition Act, 1894. The Collector has to make an award of compensation under Section 11 and having regard to Sec. 15 in determining the amount of compensation, he is guided by the provisions of Sections 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 the compulsory nature of acquisition.It follows that under Section 7 (1) (b) of the Abolition Act read with section 11 of the Land Acquisition Act, the taluqdars are entitled to receive as compensation the market value of all rights in any property extinguished under Section 6 and in addition a sum of 15 per centum on such market value. This right is subject to the conditions and exceptions enumerated in sub clauses (i), (ii) and (iii) of Section 7 (l) (b). In cases falling under clause (i) and in some cases under clause (ii) the amount of compensation is limited. 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 Section 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 solatium of 15 per centum payable under sub-section (2) of Section 23. Where the legislature intended to exclude the application of sub-section (2) of Section 23, it has said so, as in section 14 (2) under 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 Section 7 (1) (b) subject to the provisions 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 S. 7 (1) (b) where market value is awarded. The direction of the High Court is modifiedour opinion both these contentions should be rejected. The duty of the Collector is to award the "market value".The market value is the amount which the land if sold in the open market by a willing seller might be expected to realise. In the case of land the market value is generally ascertained on a consideration of the prices obtained by sale of adjacent lands with similar advantages. Where there are no sales of comparable lands, the value must be found in some other way. One method is to take the annual 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 might reasonably expect to obtain from a willing buyer.The measure of compensation for lands or premises taken under the Lands Clauses Act, 1845 was their value to the owner. In spe cial cases reinstatement value enabling the owner to 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 Vyricherla Gajapatiraju v. Revenue Divisional Officer, Vizagapatnam, 66 Ind App 104 at p. 113 = (AIR 1939 PC 98   at p. 101), Lord Romer said that the general principles for determining compensation under Section 23 ofthe Land Acquisition Act, 1894 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 for India, (1907) 11 Cal WN 875   and Province of West Bengal v. Raja Jhargram, AIR 1955 Cal 392   it was suggested that in special cases the reinstatement value may be awarded as compensation under Section 23 of the Land Acquisition 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 owner and in no case can reinstatement value be given unless reinstatement in some other place is bona fide intended. 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 the estimate 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 paid 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 thisare unable to accept this contention. Article 227 of the Constitution gives the High Court the power of superintendence over all courts and tribunals throughout the territories in relation to which it exercises jurisdiction. This jurisdiction cannot be limited or fettered by any Act of the State Legislature. The supervisory jurisdiction extends to keeping the subordinate tribunal within the limits of their authority and seeing that they obey the law. It was the duty of the Revenue Tribunal to award compensation to the Taluqdars in accordance with the provisions of Sections 7 and 14 of the Act. The High Court had jurisdiction to revise the decision of the Tribunal where the Tribunal on a misreading of the provisions of Sections 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 Article 227 in revising the decision of the Tribunal in respect of the solatium and irrigational bunds tanks and wells. Numerous cases were pending before the Revenue Tribunal in respect of compensation payable to the taluqdars under the Bombay 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 finding that the Tribunal had misconceived its duties under Ss. 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 Ishaque, 1955-1 SCR 1104 at p. 1120 -(AIR 1955 SC 233   at pp. 242-243) the High Court in the exercise of its supervisory jurisdiction under Article 227 cannot only annul the decision of the Tribunal but can also issue further direction in the matter.