The ratio of apportionment of compensation between the owner and the tenant in a land acquisition case depends on the nature of the lease, the rights of the tenant, and the circumstances of the case.

( 1 ) THIS is an appeal under the provisions of the Land Acquisition Act arising as a result of the reference made under S. 18 of the Land Acquisition Act to the Additional District Judge. The appellant before us is M/s. Indraprasthan Ice and Cold Storage, which was running its business in a large plot of land belonging to Surender Dev Gaur and another, respondents 2 and 3. A part of the land, which was leased out to the appellant, was acquired by the Government under the Land Acquisition Act which resulted in an award by the Land Acquisition Collector dated 28th Oct. , 1961. The compensation was assessed at Rs. 4,625 per sq. yard. The appellant had claimed compensation for cost of boundary wall, cost of levelling the plot, taxes and damages for the remaining portion of the lease i. e. 32 years and additional claim for loss of goodwill. In any event, what the Land Acquisition Collector found was that some portion of the compensation had to be given to the appellant and he observed that the general practice was to give compensation in the ratio of 7 : 1 between the owners and the tenant. Accordingly l/8th of the compensation was directed to be paid to the appellant. A reference was taken to the Land Acquisition Court under S. 18 of the Act which resulted in the impugned judgment, which, in fact, has merely upheld the award of the Land Acquisition Collector.

( 2 ) THE interesting fact is that against the decision, only the lessee has appealed both regarding the rate of compensation as well as the apportionment whereas the landlord has filed no appeal or cross-appeal. So, we have to consider in this appeal (a) whether there has to be an increase in the proportionate share to be given to the appellant and (b) rate of compensation has to be enhanced from that given by the learned Court and the Land Acquisition Collector. A further question is also involved inasmuch as there has been an amendment in the Land Acquisition Act, 1894 in 1984 which gives extra benefit to the person entitled to compensation.

( 3 ) TAKING up the question of how the compensation is to be divided between the owner and the tenant, we are intrigued with the fact that there are very few cases of this type reported in the law books. The reason perhaps is that in the case of land there is an occupancy tenant or statutory tenant or a Bhumidar or some such other person who has more or less a recognised right which practically abolishes the original owner s right but in the case of urban land the right of the tenant is likely to be much more limited. In this case, the lease was for a period of 40 years which consists of four periods of ten years each renewable on an enhanced rent for a further period of ten years at a time. While the tenancy consists of a large plot of land with built up portions but the lessee has a right to demolish everything and build his own building and run his own business as he pleases. It is not an ordinary lease where a house or other property is let out which has to be renewed at the end of the lease. Also, the acquisition in this case is only of the open land and the remaining portion of the land is at the disposal of the lessee. It is just like taking away a part of the garden from a big house. Now, the question arises how the compensation of this acquired land is to be apportioned between the owner and the tenant or lessee. If we feel that the tenant is a kind of permanent fixture then perhaps he can get more compensation but if we treat him as a transitory property then a very small proportion of the compensation has to be paid to the lessee. The actual proportion will depend on the nature of the right of the lessee/tenant. The cases, which are few in number, show that in the case of a permanent lease such as that mentioned in Saraswati v. Bharatkhand Textile Mfg. Co. , AIR 1967 Guj 36, the compensation was mainly payable to the lessee and the owner got a small proportion. The reason was that by creation of permanent l