Secretary of State for India in Council vs Bodhram Dubey

Scroope, J.—This is an appeal by the Secretary of State from the decision of the District Judge of Sambalpur in a reference u/s 18 of the Land Acquisition Act relating to 2-10 acres of bhogra land belonging; to the gountia Respondent and the first contention is that the learned District Judge took an incorrect view of the nature of the gountihai tenure in disallowing Government any share of the compensation money. The facts of the gountia''s position are not disputed but it is on the legal interpretation of them that the contest in this case centres: The assessment of a gountihai village is fixed by taking a fourth of the raiyats rents and balancing this against the valuation of the gountia''s bhogra or home-farm land. If this valuation is less than the fourth, the difference is made up to the gountia by a puraskar or cash drawback, and if it exceeds one-fourth of the rents the gountia pays the difference as a zabti or excess assessment (Dewar''s Settlement Report, para. 144), The contention for appellant then is that this method amounts to an assessment of the whole village and that every inch therein can be said to be assessed entitling Government to get a share on the foot of such assessment. The learned District Judge rejected this view on the strength of para. 8 of Mr. Fuller''s letter 226S dated 12th June, 1884, (printed at the commencement of Russell''s Settlement Report) which runs as follows:

It seems profitless to describle in detail the discussions and changes of policy which resulted from different interpretations of these facts by different opinions. Stated very briefly they were as follows:

Under the order of Sir Richard Temple in 1862 gountias were to be constituted proprietors of their villages, the ryots were to be given rights of occupancy, village areas were to be measured, the gountia''s home-farm (called his bhogra) assessed to revenue, and settlement made on the system followed in other districts under which Government took a proportion of the annual assets and left the rest to the malguzar. The objections which were raised to this system in 1864 by Colonel Cumberledge brought about the discontinuance of measurement operations, and ended in the deputation of an officer (Mr. Chisholm) in 1868 to report as to the system which could best be followed. Mr. Chisholm reported in favour of a summary settlement without land measurements; the gountias were to be made proprietors (malguzars) but their rights were to be limited by giving ryots who had held for 20 years or over, the position of plot-holders (malikmakbuzas) and those who had held for less than 20 but more than 12 years the position of occupancy tenants. It fell to Mr. (now Sir John) Morris to issue orders upon this report in 1370. In them Mr. Chisholm''s views were, generally speaking, adopted, except in so far as the maintenance of the gountia''s bhogra was concerned, This was to be assessed to revenue, and the gountias were given in its place a percentage of gross assets of the village. The declaration of this policy, however elicited strenuous protests from Col. Cumberledge and his successor, Major Bowie, both of whom remonstrated against the, limitation of the gountia''s authority by the bestowal of subordinate rights upon cultivators. The correspondence was forwarded to the Government of India by the officiating Chief Commissioner, Col. Keatinge, with recommendations of his own which involved an entirely new departure. He was in favour of making what was in substance a ryotwari settlement under which the gountias would be merely village headmen and revenue collectors, and the proprietary rights which were conferred upon them in 1862 would be limited to their bhogra land or home-farms. The orders of the Government of India upon this reference are contained in letters No. 487, dated 28th October, 1871, and No. 425, dated 1st May 1872. With certain modifications of detail the recommendations of Col. Keatinge were approved of.

It should be explained that the discussions referred to in the two preceding paragraphs were merely concerned with the Khalsa portion of the district, and bore no reference to the part of the district held in zemindari right.

The learned District Judge states that the view now put forward by the appellant is the view which raised the "strenuous protests" referred to in this letter and was eventually abandoned. This is not correct. A perusal of this letter shows that what the two officers objected to was not the actual assessment of the bhogra lands but the limitation of the gountia''s authority by the bestowal of subordinate rights upon cultivators, because at that time there was controversy about the gountia''s position, as to whether the gountias had proprietary rights or were merely rent collectors, whether what the tenants paid in a gountia village was rent or revenue or whether they were Government raiyats or tenants of the gountia. Any how as a result of the discussions which took place between 1864 and 1872 prior to the first Settlement of the Sambalpur District the Government of India, issued orders in their letter No. 425, dated 1st May, 1872, recognising the gountias'' proprietorship of their bhogra lands including right of transfer, and granting them exemption from payment of revenue on their bhogra up to a maximum of one fourth of the revenue paid by the raiyats "leaving the Government free at a future Settlement to prescribe what shall be their share on the higher assessment then probably assessable."

At the subsequent Settlements by Nether sole in 1883 and Dewar in 1906 this principle was adhered to. In Nethersole''s Settlement, however, it may be noted that (she gountia''s assessment was based on the revised raiyati rental, not on that of the expiring Settlement, his right to share in any increase in raiyati rent was thus recognised.

It is true as stated by the learned District Judge that the gountias were not assessed to revenue in respect of bhogra lands which fell within the 25 per cent, limit, but it is clearly wrong to say that the village assessment does not include the bhogra lands up to the 25 per cent limit of the raiyati revenue assessed on the village. It is really owing to the peculiar method of assessment described above that the present difficulty has arisen. It is obvious that the less raiyati land there is in the village the higher will be the assessment of the gountia. It is not disputed that when the raiyati land of a gountia village is acquired, the gountia gets a share of the compensation though he is mere collector on behalf of the Government in respect of raiyati land. Similarly the less the bhogra land in the village the less the gountia has to pay by way of zabti or if he receives puraskar the higher that will be and in that way Government is a loser. This argument however, was met by the learned District Judge and by the learned Advocate for the respondent by pointing out that during the period of Settlements the gountia cannot claim remission and that the engagement in respect of the bhogra land enures for the entire period of settlement and cannot, be revised under law. The answer to this argument is that at the next Settlement of land revenue, the gountia will benefit in respect of this acquisition either in the shape of reduced zabti or increased puraskar to the extent of the land acquired.

The learned Advocate for the respondent contends, however, that at the next Settlement the fact that the gountia has received compensation for this loss of his bhogra land will be taken into consideration. No provision to this effect has been shown in the Land Revenue Act of Sambalpur or any of the rules thereunder and the argument overlooks the fact that the gountia''s interest may have changed hands, for the gountias have a free right of transfer of the proprietary interest as well as of their bhogra lands and the fact that gountia A has walked out with compensation for the loss of bhogra land will not affect gountia B his successor when the new assessment comes to be made, Nor do I see any force in the contention based on a note in the Central Provinces Land Revenue Manual, Vol. I, page 10 to the effect that the quantity of bhogra land cannot be increased or diminished. This simply implies that the gountia himself has no power of increasing the quantity of bhogra land not that the land in spite of the acquisition remains bhogra, Once the land is acquired it vests in Government free from all incumbrances and entirely loses its bhogra character.

Another ground on which the learned District Judge held that the whole village was not assessed was that the gountia had the right of receiving rent from all uncultivated or unoccupied land that may be brought under cultivation during the currency of the settlement without any alteration in his jama. That is one of the prerequisites to the gountias office and has nothing to do with this question. Here we are concerned with the actual assessment of bhogra lands and whether when such land is acquired under the Land Acquisition Act the Government is entitled to any share of the compensation. We have seen that the gountia''s actual assessment is based on two factors and on none other, namely, the quantity or raiyati lands and the quantity of bhogra lands. We have seen that if I may put it mathematically the gountia''s payment to Government varies inversely with the former and directly with the latter. On these facts there is no getting away from the position that Government is a person interested within the meaning of Section 14 of the Land Acquisition Act in the amount of compensation paid for bhogra land and is entitled to a share of the compensation.

The learned District Judge has relied on the Central Provinces Government Rule 45 as amended in 1904 that the compensation from bhogra lands should go alone to the gountia but that position has never been definitely accepted by this Government. See the Government Circular No. 37 R.T., dated the 10th May, 1923, which was referred to at the hearing by both sides. There has never been any statutory relinquishment by this Government of its right to compensation when bhogra lands are acquired and there is no case for the respondent based on estoppel or waiver.

As regards the actual amount of compensation both sides have appealed, respondents in the form of a cross-objection. The assessment is in accordance with para. 9 of Government Circular No. 37 R.T. Revenue Department, dated the 10th May, 1923, according to which 80 times the total rental value, which in this case comes: to Rs. 2-0-2, should be allowed as compensation, and the petitioner claims Rs. 1,000, as against the Rs. 483 ordered by the Subordinate Judge. Government pressed for restoration of the Collector''s award. Both sides call evidence as to the value of the land. The first witness for the respondent, Ramdin Dubey, valued the lands at Rs. 400 to Rs. 450, per acre on the ground that it yielded 12 or 13 purugs of paddy per year. The next witness Brindaban Nand puts it down at Rs. 350 to Rs. 400 an acre, and in support of it he produced a kabala showing that six acres of berna land which is inferior to bahal lands (the land in suit is bahal) were sold for Rs. 2,000. The third witness Harihar Guru deposed that 120 acres of all kinds and six annas maliki right had been sold for Rs. 11,000, some 10 or 12 years ago.

Of the Government witnesses two produced kabalas. Gopal Das sold 43 acres of bhogra with 8 annas gountia share for Rs. 4,000 and Natabar Gartia sold two annas gountia and six acres of bhogra land for Re. 2,000. It is clear, therefore, that there is a considerable lot of evidence in the shape of kabalas showing the price at which land is sold, whereas the award of the Deputy Collector is based apparently on 4 years'' purchase of 20 times the annual rent. Dewar''s figures of the net profit of bahal given in para. 116 of his Settlement report are about twenty times the annual rent, and thus the respondent has only got about 4 years'' purchase of the annual profit. The learned District Judge in coming to his conclusion on the evidence available as to value was guided by the evidence of D.W. No. 4 and he appears to have arrived at his conclusion in the following way: he noted that the Government witness D.W. No. 4 deposed that the annual yield of six acres of bhogra land of berna quality which he had sold was 8 purugs an acre. The land in dispute is bahal and more fertile than berna. Nevertheless the same witness deposed that the yield of the bahal land in suit was only 4 or 5 purugs an acre which admittedly could not be the case when he deposed that his own inferior land yielded a higher produce, The learned District Judge decided that the outturn must be at least double the amount given by this witness, namely 8 or 10 purugs. Now allowing Rs. 10 per purug and deducting half as cultivation costs, the result works out at between Rs. 40 and Rs. 50 per annum as annual profit, and the learned District Judge allowed the respondent Rs. 420. This was rather a rough and ready method. The kabalas even from the Government side do not bear out their own valuation of 4 years'' purchase of the net profit, for their own witness Natabar Gartia sold 2 annas gountia right and 6 acres of berna (inferior to bahal) for Rs. 2,000. Of course, the figures here are complicated by sale of a fractional share of the gountia''s own right, but even so the superior right must represent a small fraction of the total consideration, as it is the bhogra land which is the real perquisite of the gountihi right. There was no suggestion that the kabala statements of value were inflated and the appellant has shown 6 acres of berna were sold for Rs. 2,000. This bears out what I say regarding the small value in Natabar''s kabala that is to be attached to the share of the gountia right. Government, it would seem, accept Dewar''s figures as to net annual profit per acre, but would only give 4 years'' purchase of it; I consider this inequitable in principle and the value thereby arrived at bears no relation to the actual evidence in the kabalas. It is usual to allow from 16 year''s to 20 years'' purchase when buying out a landlord and I fail to see why the same principle should not apply to a tenant. Allowing sixteen years purchase, as I think we should in this case, the actual value then would work out at Rs. 368 per acre. I do not consider that this is an unreasonable amount having regard to Dewar''s figures and the kabalus that are produced on both sides and I assess compensation accordingly at Rs. 368 per acre or Rs. 772 in all. To this must be added the statu tory 15 per cent. On the finding that Government are entitled to a part of the compensation there arises the question of the method of division of the landlord''s share which will be 16 years'' purchase of the annual rent of Rs. 2-0-2 between Government and the gountia. The ideal method of apportionment probably would be to treat them as nominally co-proprietors and divide this amount in proportion to their shares in the assets of the village. In the case of Government the total raiyati rents plus the zabti or minus the puraskar would represent the assets; whilst in the case of the gountia the assets would be the nominal rental value of the rent-free bhogras plus the puraskar or minus the zabti; but this method involves factors which if not unknown certainly are difficult of ascertainment. The simple method, however, is to adopt the proportion of one-fourth as the gountia''s share and three-fourth as the Government share. This being the statutory proportion in which they divide the raiyati rents, the same principle is fairly applicable in the case of bhogra lands, the raiyati in this case being the gountia who thus gets the tenant''s share plus one-fourth of the landlord''s share, the remaining three-fourth of the landlord''s share going to Government. The appeal is, therefore, decreed in these terms. The value of the land is assessed at Rs. 368 per acre or Rs. 722-12-0 for the 2 10 acres in suit. To this will be added the statutory compensation of 15 per cent. Out of the total amount three fourth of 16 times the annual rent Rs. 2-0-2, that is Rs. 24-2-0 is awarded to the appellant, the Secretary of State. The balance is awarded to the respondent whose cross-objection, therefore, succeeds in part and he will get half costs only. u/s 28 of the Land Acquisition Act the excess compensation is to carry interest at 6 per cent, calculated from the date on which possession was taken by the Collector up to the date of payment into Court.

As the appellant has succeeded in part I would allow him half costs.

Ross, J.

I agree.