STATE OF MAHARASHTRA versus BABU GOVIND GAVATE ETC.

Citation: [1995] SUPP. 4 S.C.R. 694 · Decided: 01-11-1995 · Supreme Court of India · Bench: K. RAMASWAMY, B.N. KIRPAL · Disposal: Dismissed

Judgment (excerpt)

A 
B 
c 
STATE OF MAHARASHTRA 
v. 
BABU GOVIND GAVATE ETC. 
NOVEMBER 1, 1995 
[K. RAMASWAMY AND B.N. KIRPAL, JJ.] 
Land Acquisition Act, 1894/Bombay Tenancy and Agricultural Land; 
Act, 1948: 
Sections 4( 1), 23/43-Compensation-Award of-Deduction of one-
third Compe11satio11 in exercise of power u11der eminent domain-Validity 
of-Held, it is ultra vires the power a11d owner entitled to full compensation 
of the market value. 
For the purpose of establishing an Electricity Sub-station, certain 
D lands were acquired under the Land Ac11uisition Act. Compensation was 
awarded at Rs. 5,000 per acre, but one thirds towards interest of Govern-
ment was deducted. Respondent challenged the Government's power to 
deduct one-third compensation, but the appellate Court confirmed the 
same. 
E 
On appeal, the High Court increased the compensation to Rs. 6000 
F 
per acre and also directed payment of the deducted one third amount to · 
the respondent. 
In this appeal, it was contended that the Government in its circular 
dated April 26, 1972 directed the deduction of one-third of the market 
value of the land for the interest in such land held by Government and 
that there was no justification in interfering with the same; and that S.43 
of the Bombay Tenancy and Agricultural Lands Act, 1948 empowers the 
Collector to grant sanction and to fix consideration as condition to 
alienate the lands when the Collector has the power to determine the 
G compensation when the land was acquired for a public purpose. 
Dismissing the appeal and the connected appeal, this Court 
HELD : 1. Section 43 of the Bombay Tenancy and Agricultural Lands 
Act, 1948 was enacted to protect the right, title and interest of the tenant 
H who purchased the property and became owner thereof with a view to see 
69" 
STATEv. ll.G.GAVATE 
695 
that he is not deprived of his ownership, right to possession and enjoyment 
A 
thereof as a tiller of the soil to perpetuate the object of the Tenancy Act. 
As per its scheme previous sanction is a condition precedent for any 
transfer except \\.'hen the land is heing mortgaged to a cooperative bank or 
a lending institution envisaged in suu-section (lAA) and the Explanation 
appended there to amplifies such institutions so as to enable him to obtain 
loans for improving the land for uetter cultivation and to augment 
econon1ic empo\verment. The consideration mentioned there under was 
also to protect the tiller from exploitation, indigency or compelling dire 
necessity to alienate the loans and under a fictitious and colourable 
transaction or for inadequate consideration. That, under no circumstan-
B 
ces, gives power to the Govern1nent, "'hen it acquires the land exercising C 
the prl\ver of eminent domain to deduct any amount front the compensation 
1iayable to the owner of the land as determined under Section 23(1) of the 
Land Acquisition Act. [697-E-G] 
2. The sanction required under Section 43 is only when there is a D 
. bilateral valid agreement beh\·een the o~er and a third party purchaser 
or a lessee or a n1ortgagee etc. as envisaged under Section 43(1). But when 
the State t!xercises its po\ver of t!lninent domain and compulsorily ac-
<1uires the land, the <JUestion of sanction under Section 43 does not arise. 
Section 23(2) of the Land Acquisition Act off sets the unwillingness on the 
part of the owner. When the Collector exercises the power to grant sanction E 
under Section 43 (1), he does it as a statutory authority to protect right, 
title and interest of tht! t!rstwhile tenant who subsequently becan1e the 
owner to see that he ren1ains to be the owner and continues to be in 
possession and enjoyment of the same. But that condition to grant sanc-
tion is not h~dgecl vt'ith any right to the Government to deduct 1/3 \\!hen it 
exercises its po"'er of eminent domain for a public purpose: The owner_ 
under Section 23(1) of the Land Acquisition Act is entitled to the full 
compensation of the market value prevailing as on the date of' publication 
of the notification under Section 4(1). Therefore, the circular relied on is 
clear ultra vires of the power of Section 43 or any other power. 
F 
[697-H, 698-A-D] G 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3009 of 
1983 Etc. 
From the Judgment and Order dated 10.9.76 of the Bombay High 
Court in F.A. No. 574 of J07n 
H 
696 
SUPREME COURT REPORTS (1995] SUPP. 4 S.C.R. 
A 
S.M. Jadhav for the Appellant. 
D.M. Nargolkar for the Respondents. 
The following Or

Excerpt shown. Read the full judgment & AI analysis in Lexace.