# STATE OF MADRAS v. K. N. SHANMUGHA MUDALIAR & ORS

- **Citation:** [1976] 3 S.C.R. 536
- **Court:** Supreme Court of India
- **Decided:** 1976-03-04
- **Case number:** Civil Appeal No. 1425 of 1968
- **Bench:** H. R. Khanna, P. K. Goswami
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/state-of-madras-v-k-n-shanmugha-mudaliar-ors-6777
- **Pages:** 4

## Headnote

1.And Acquisition Act, 1894--Sections 23 and 24--Quantum of compensation
-Madras Estates Abolition Act, 1948-Whether compensation under .Land
k
Acquisition Act can be claimed if the estate is aboli.shed-/Lnterest on compen-
· j
sation to be allowed, from what date.
The State of Madras acquired land belonging to the respondent landlords.
The Land Acquisition Officer gave his award determining the compensation
payable.
On a reference made to the Subordinate Judge certain cvmp..!nsation
C
was determined. Interest was awarded to the respondents on the compensation
amount from 1st December, 1949 because in the opinion of the Subordinate
Judge, possession of the land had been taken on that date.
D
E
F
G
H
On an appeal, the High Court affirmed the decision of the Subordinate Judge
regarding the rate of compensation. The High Court also rejected the r.onten·
tion of the appellant that the land had vested in the Government ui1der the
Madras Estates Abolition Act, 1948, and, therefore, the respondents were not
entitled to compensation under the Land Acquisition Act. The High Court
found that there was no material on record to sho_w that the possession of the
land had been taken prior to the date of the award by the Land Acquisition
Officer. Interest was accordingly directed to run from the date of the award,
i.e. Noven1ber~ 1951.
ln an appeal by certificate, the appellant contended :
( 1) The land in question vested under the Abolition Act in the State
and the respondents were, therefore, not entitled to compensation
...,•
under the Land Acquisition Act.
{2) The quantum of compensation awarded by the
High Court was
excessive.
(3) Interest should have been allowed from 1st December, 1949.
HELD : ( 1) There were two alternative courses open to the State either
to proceed under the Land Acquisition Act or to take over the land under
the Abolition Act. Although the estate was notified under the Abolition Act,
the proce~dings under that Act were stayed and the matter proceeded under
the Land Acquisition Act.
It was not open to the appellant in the particular
reference made at the instance of the respondents to the Subordinate Judge
to set up a claim adverse to the interest of the respondents.
The High Court
rightly rejected the contention of the appellant in this behalf. [538D-E, G-H]
(2) Both the High Court as well as the Subordinate Judge awarded the
con1pensation in accordance with the previous decisions which laid down a
formula.
No cogent grounds have been shown to us to interfere with the
concurrent findings in this respect.
[539B-C]
(3) There is no reason to disagree with the High Court judgment regarding
the date on which the interest should run on the amount of compensation.
[539-G]
C!vIL APPELLATE JURISDICTION: Civil Appeal No. 1425 of 1968.
From the Judgment and Decree dated the 5-8-74 of the Madras
High Court in Appeal No. 448 of 1960
A. V. Rangam and Miss A. Subhashini for the Appellant.
K. Jayaram and R. Chandresekhar for Respondent No. 1
E:i:-parte for Respondents 2-8.
I
..
MADJl,AS STATE v. SHANMUGHA MUDALIAR (Khanna, J.)
53 7

## Text

A
B
536
STATE OF MADRAS
v.
K. N. SHANMUGHA MUDALIAR & ORS.
\
March 4, 1976
•
(H. R. KHANNA AND P. K. GOSWAMI, JJ.]
1.And Acquisition Act, 1894--Sections 23 and 24--Quantum of compensation
-Madras Estates Abolition Act, 1948-Whether compensation under .Land
k
Acquisition Act can be claimed if the estate is aboli.shed-/Lnterest on compen-
· j
sation to be allowed, from what date.
The State of Madras acquired land belonging to the respondent landlords.
The Land Acquisition Officer gave his award determining the compensation
payable.
On a reference made to the Subordinate Judge certain cvmp..!nsation
C
was determined. Interest was awarded to the respondents on the compensation
amount from 1st December, 1949 because in the opinion of the Subordinate
Judge, possession of the land had been taken on that date.
D
E
F
G
H
On an appeal, the High Court affirmed the decision of the Subordinate Judge
regarding the rate of compensation. The High Court also rejected the r.onten·
tion of the appellant that the land had vested in the Government ui1der the
Madras Estates Abolition Act, 1948, and, therefore, the respondents were not
entitled to compensation under the Land Acquisition Act. The High Court
found that there was no material on record to sho_w that the possession of the
land had been taken prior to the date of the award by the Land Acquisition
Officer. Interest was accordingly directed to run from the date of the award,
i.e. Noven1ber~ 1951.
ln an appeal by certificate, the appellant contended :
( 1) The land in question vested under the Abolition Act in the State
and the respondents were, therefore, not entitled to compensation
...,•
under the Land Acquisition Act.
{2) The quantum of compensation awarded by the
High Court was
excessive.
(3) Interest should have been allowed from 1st December, 1949.
HELD : ( 1) There were two alternative courses open to the State either
to proceed under the Land Acquisition Act or to take over the land under
the Abolition Act. Although the estate was notified under the Abolition Act,
the proce~dings under that Act were stayed and the matter proceeded under
the Land Acquisition Act.
It was not open to the appellant in the particular
reference made at the instance of the respondents to the Subordinate Judge
to set up a claim adverse to the interest of the respondents.
The High Court
rightly rejected the contention of the appellant in this behalf. [538D-E, G-H]
(2) Both the High Court as well as the Subordinate Judge awarded the
con1pensation in accordance with the previous decisions which laid down a
formula.
No cogent grounds have been shown to us to interfere with the
concurrent findings in this respect.
[539B-C]
(3) There is no reason to disagree with the High Court judgment regarding
the date on which the interest should run on the amount of compensation.
[539-G]
C!vIL APPELLATE JURISDICTION: Civil Appeal No. 1425 of 1968.
From the Judgment and Decree dated the 5-8-74 of the Madras
High Court in Appeal No. 448 of 1960
A. V. Rangam and Miss A. Subhashini for the Appellant.
K. Jayaram and R. Chandresekhar for Respondent No. 1
E:i:-parte for Respondents 2-8.
I
..
MADJl,AS STATE v. SHANMUGHA MUDALIAR (Khanna, J.)
53 7
The Judgment of the Court was delivered by
A
KHANNA, J. This appeal on certificate is by the State of Madras,
now Tamil N adu, against the judgment of Madras High Court affirming on appeal the award of learned Subordinate judge Salem in
respect of the amou'nt of compensation payable to the respondents for
acquisition of land under the Land Acquisition Act (Act 1 of 1894)
(hereinafter referred to as the Act). The High Court, however,
B
directed that the interest on the amount awarded shall run from
November 19, 1951, the date of the award by the Land Acquisition
Officer and not from December 1, 1949 as ordered by the Subordinate Judge.
On July 12, 1949 notification under section 4 of the Act was
issued for the acquisition of 19 acres 45 cents of dry land situated in
c
Alegapuram Mitta for the Salem Fair Lands Co-operative Society
Ltd. on December 19, 1950. Alegapuram Mitta was notified under the
Madras Estates Abolition Act (Act 26 of 1948) (hereinafter referred
to as the Abolition Act). A writ petition was filed in the High Court
to challenge that notification.
Further proceedings in pursuance of
the notification were stayed by the High Court by order dated January
1. 1951.
The Society for which acquisition was being made depositD
cd in the meantime the probable cost of the land on September 13,
1950.
On November 19, 1951 the Land Acquisition Officer announced his award.
The respondents, it may be stated, were the Mclevaramdars (landholders) of the land in question.
Kudiwaramdars (cultivators) were
also, besides the respondents, parties to the proceedings
before
the
E
Land Acquisition Officer.
The Land Acquisition Officer by his award
dated November 19, 1951 awarded compensation to the cultivators at
the rate of Rs. 1 ,500 per acre for part of the land near the road and
at the rate of Rs. 1,300 per acre for the rest of the land.
Rs. 520,
11 As, 1 P the capitalised value of the net rental income was held to
be the amount payable to the respondents.
The Kudiwaramdars were
content with the compensation awarded to them, but the respondents
F
who were, as already mentioned above, Melavaramdars asked for a
reference to conrt under section 18 of the Act for claiming
enhanced compensation. According to the respondents,
they
were
entitled to one-third of the value of the totality of the interest in the
land.
According further to the respondents, compensation for
the
total land should be awarded at the rate of Rs.
3,000 per acre
-Learned Subordinate Judge held that the respondents were entitled to
G
50 percent of the compensation awarded in respect of the Melawaram
interest in the land.
The Subordinate Judge in this
context relied
upon an earlier decision of the Madras High Court wherein it had
been held that the rights of Melavaramdars were not confined only to
rent from land a>,1d that they had other recognised rights and were entitled to compensation for those rights. The respondents were thus held
entitled to compensation for their Melavaramdar interest at the rate
H
of Rs. 750 per acre in respect of land near the road and Rs. 650 per
acre in respect of the remaining land.
Interest was awarded to the
respondents on the compensation amount from Decemlxr
1,
1949
2-608SCl/76
538
SUPREME COURT REPORTS
[1976] 3 S.C.R.
A
because, in the opinion of the Subordinate Judge, possession of the
land had been taken from that date.
B
c
D
E
F
G
H
On appeal the High Court affirmed the decision of the Subordinate
J uuge regarding the rate of compensation.
The contention advanced
on behalf of the appellant that as the land had vested in the Government under the Abolition Act, the respondents were not entitled
to
compensation under the Land Acquisition Act, was rejected. It was
observed that in the land acquisition proceedings the Government was
estopped from denying the absence of any interest in t!he claimants
whom the Government had made parties to the proceedings. Regarding the date from which interest on the amount or compensation should
accrue, the High Court found that there was no material on the record
to show that possession of the land had been taken prior to the date
of the award by the Land Acquisition Officer.
Interest was
accordingly directed to rnn from the date of the award.
In appeal before us Mr. Rangam on behalf of the appellant-state
has urged that as the land in question has vested under the Abolition
Act in the State, the respondents are not entitled to compensation
under the Land Acquisition Act. We find it difficult to accede to this
submission, for we are of the opinion that in case the State wanted
to take over the land under the Abolition Act it should not have proceeded to acquire the interest of the respondents in the land in dispute under the Land Acquisition Act.
There were two
alternative
courses open to the State, either to proceed under the Land Acquisition
Act or to take over the land under the Abolition Act.
Although the
estate was notified under the Abolition Act, the proceedings under that
Act'were stayed and the matter proceeded under the Land Acquisition
Act.
As the proceedings which were continued were under the Land
Acquisition Act the compensation payable had also to be paid in
accordance with the provisions of that Act. · The reference which was
made by the Land Acquisition Officer to the Subordinate Judge under
section 18 of the Land Acquisition Act was with respect to the quantum of compensation payable to the respondents because the respondents had felt dissatisfied with the amount awarded to them as compensation by the said officer.
The underlying assumption of those
proceedings was that the respondents had an interest in the land. If
it was the case of the appellant that the respondents had been divested
of their interest in the land and the same had vested in the appellantState, the appellant should have taken appropriate steps to make such
a claim in accordance with law.
No such claim seems to have been·
made.
The High Court expressly left open the question of the claim
of the State Government to the amount of compensation deposited on
the score that Melwaramdar respondents were not entitled to it by
reason of having lost all their interest in the land at the relevant point
of time.
We agree with the High Court that it was not open to the
appellant-State in the particular reference made at the instance of the
respondents to the Subordinate Judge to set up a claim adverse to the
interest of the respondents.
There is also we find nothing in the award
of the learned Subordinate Judge to show that any question was raised
before him that the amount of compensation was not payable to the
\
"
, ..
i
MADR,AS STATE V, SHANMUGHA MUDALIAR (Khanna, J.)
53 9
fespondents in accordance with the provisions of the Land Acquisition
Act.
This question appears to have been agitated for the first
time
/
only in the appeal before the High Court.
The High Court rejected
the contention in this behalf.
We find no cogent ground to
take a
different view.
••
As regards the quantum of compensation, the. High Court has
referred to the previous decisions which show that the formula generally adopted is to pay one-third of the total compensation to Melavaramdars and two-thirds of the compensation to Kudiwaramdars.
In
accordance with that formula, the respondents would be entitled to
one-half of the compensation payable to Kudiwaramdars.
Both the
Subordinate Judge and the High Court awarded
compensation
in
accordance with this formula.
No cogent ground has been shown to
us as to why we should interfere with the concurrent finding in this
respect.
We also find no reason to disagree with the
High Court
regarding the date from which interest should run on the amount or
~ compensation.
The appeal fails and is dismissed with costs.
~ ;!:'.H.P .
Appeal dismined.
A
B
c