WKEKASOORIYA, J.—Ponnambalatn v. The Municipal
1957Present :Weerasooriya, J., and Sansoni, J.POXNTAMBALA3I ct al., Appellants, and THE MUNICIPAL COMMIS-SIONER, COLOMBO, Respondent
S. G. 1—Land Acquisition
Lana Acquisition Act, A ~o. 3 of I960—Land subject to right of icay—Method of assessingits marled value—Assessment of compensation—Sections 1G (1) (e), 37 (a),42 (7), 03..
Tho market value of a land which is sought to bo .acquired under the T^andAcquisition Act No. 9 of 1950 should be ascertained as though nil tho ownersof the separate interests in the land have combined to sell it, for what is acquiredis tho aggregate of rights in that land and not merely the soil rights in it." Accord-ingly, where the land winch is sought to be acquired is subject to a right of wayin favour of adjoining lands, it should bo valued on the assumption that allpersons owning interests in it, including tho owners of the adjoining lands whoenjoyed a right of way of over it, have joined together in selling it to the acquiringauthority. In such a case, under sect ion 4'2 (1) of the Act, persons having alimited interest in the land will be entitled to only a share of tho marketvalue proportionate to their interest.
tiPPEAl against a decision of the Board of Review constitutedunder section 17 of the Land Acquisition Act No. 9 of 1950.
H. V. Perera, Q.C., with Sunil K. Rodrigo, for the appellants..
K.F. .V. Graliaen, Q.C., with N. Fadaraaa, for the respondent.
Cur. adv. vult.
September 26, 1957. Weerasooriya, J.—..
I Lave seen the judgment of my brother Sansoni, with which I agree.But as an important question arises of the correct method of assessing-
88..SANSOSiT, J'^-r-Ponnatnbalatn v. •The Municipal
..• Commissioner, Colombo.
the market value of a land (as distinct from a limited interest in thatland) which is sought to be acquired under the Land Acquisition Act,No. 9 of 1950,1 wish to add a few words myself.- •.-
Although we are not referred to any previous decision of this Courtwhich supports the submission of Mr. H. V. Percra who'appeared for theappellants that the market value in such a case should be ascertained asthough all the owners of the separate interests in the land had combinedto sell it, ample authority for that view is to be found in the decisionsof the Indian Courts on a like question under the Indian Land AcquisitionAct (Ho. 1 of 1894). The earliest case is Collector of Belgaum v. BhimraoPatel1 where the rule laid down was that in ascertaining the marketvalue of the land “ the Court must proceed on the assumption that it isthe particular piece of land that has to be valued including all interestsin it In Bombay Improvement Trust v. Jalbhoy 2 it was held that themarket value of the land should be ascertained on the footing that allthe separate interests combine to sell. These cases were followed inRajah of Pittapuran v. Revenue Divisional Officer, Coconada3 andCollector of Dacca v. Alt4.
Another matter that should not be overlooked in this connection isthat section 37 (re) of the Land Acquisition Act, Ho. 9 of 1950, providesthat when an order of the Minister in regard to the taking possession of aparticular land is published under section 36 the land shall by virtueof the order vest absolutely in the Crown free from all encumbrances.It follows, therefore, that the market value should be ascertained as fora land that is free from all encumbrances. For otherwise the Crownwould be acquiring a land free from all encumbrances without, in effect,paying the full compensation for that land.
As regards the assessment of Es. 1,000 per perch, being the rate agreedupon by counsel at the hearing of the appeal in the event of the methodof assessment contended for by the appellants being upheld, it does notfollow that the full amount of the market value so assessed is payable tothe appellants. Under section 42 (1) of the Act the appellants, as personshaving a limited interest in the land, will be entitled to only a shareof the market.value proportionate to their interest. That interesthas been valued at Es. 850. The interests of the two adjoining landowners in Lot 2 have been valued at Es. 100. As a basis of apportionmentthese figures were accepted by appellants’ counsel. The appellants will,therefore, be entitled to be paid as compensation such proportion of themarket value (assessed at Es. 1,000 per perch) as the sum of Es. 850 bearsto the sum of Es. 950.
This is an appeal against a decision of the Board of Beview constitutedunder section 17 of the Land Acquisition Act No. 9 of 1950.
1 (190S) 10 Bom. B. It. Co7.* I. L. B. 33 Bom. 433.
3 A. I. It. 1919 Madras 22$.« A. I. It. 1933 Cal. 312.
SA2XS02fI, <T.—Ponnambalam v. The Municipal
The subject matter of the acquisition proceedings is Lot 2 in Prelim-inary Plan Ho. A 3,701 containing in extent 16-S7 perches. This lot isbounded on the West by 37th Lane, and on the East by a cart road. Onthe Horth of it there is a Jot 19 "GS perches in extent and on the Souththere are two lots 17 *5 perches and 27 -43 perches in extent respectively.Lot 2 and the lot in extent 27-43 perches belong to the appellants, whilethe other two lots belong to third parties, but those two lots have a rightof way over lot 2.
When the matter came up in appeal before the Board of Beview, itseems to have been argued for the appellants that the market value oflot 2 had to be assessed without reference to the fact that it was subjectto a right of way. The argument on behalf of the acquiring authorityseems to have been that the light of way should not be disregarded,because what a willing purchaser would pay for Jot 2 would be influencedby the right of way existing over it.
The Board of Beview took the view that the market value of lot 2could only be arrived at by giving the fullest regard to the fact that noportion of lot 2 could be built upon without violating the right of wayof the adjoining owners. The Board accordingly held that the lot shouldnot be valued as land which could be used for building purposes : thisfinding necessarily reduced considerably the market value of the lot, andthe figure arrived at was Bs. 950 for the entire lot.
The question of law argued before us was whether the correct methodof valuing lot 2 had been adopted by the Board of Beview. hlr. H. V.Perera who appeared for the appellants submitted that the land acquiredunder the Act is the physical entity represented by lot 2 and not thelimited interests in that physical entity which the appellants had. Hefurther argued that the market value of the lot should therefore beascertained as though all the separate interests in it were combined.Mr. Gratiaen for the respondent arguedthatwhile such a mode of valuation. would apply where there were several co-proprietors of the land to beacquired, it would not be appropriate where some persons own the soilrights in it and other persons are entitled to servitudes over it.
It seems to me that the Board of Beview in arriving at the market valueof lot 2 regarded what was being acquired in this case as though it werethe soil of lot 2 alone. They have ignored the benefits or rights whichpersons interested in lot 2, in this case the owners of the adjacent lots tothe north and south, could have claimed. But such a mode of valuationignores the definition of “ land ” in the Act. “ Land ” is there definedas including “ any interest in, or any benefit to arise out of any landI take this to mean that all interests in the land of all persons interestedin it must be considered in arriving at the market value. The words“ persons interested ” are defined in the Act as meaning persons “ havingan interest in the land as owner, co-owner, mortgagee, lessee, orotherwise. …. or persons having a servitude over the land
When the different sections of the Act are considered, it becomesapparent that the word “ land ” is used to denote a particular physicalthing, whereas an “ interest in the land ” denotes a particular right or
90 .. . Ukkii v. Sidoris
benefit arising out of that thing. When the market' value of the land,—the physical entity including all interests, rights and benefits arisingput of it—has to be ascertained, the correct method is to regard all personswho owned separate interests in the land as having combined to sell it,for what is acquired is the aggregate of rights in that land and not merely.a limited right in it. The figure thus arrived at represents the compen-sation payable for the land, which is thereafter apportioned among thevarious persons who have claimed interest in it proportionate to theirrespective interests, as required by section 16 (1) (e). This new is in•accordance with the decisions of the Indian Courts to which my brotherhas referred, and which I follow with respect.
The Board of Review has erred in valuing lot 2 as though only theappellants’ limited interest in the lot was being acquired. It shouldhave valued lot 2 on the assumption that all persons who owned interests •in that lot, including the owners of the adjoining lots who enjoyed a rightof way over lot 2, joined together in selling lot 2 to the acquiringauthority. This answers the question of law raised on this appeal.
I agree to the order proposed by my brother. The appellants havingsucceeded on this appeal are entitled to their costs.
PONNAMBALAM et al., Appellants and THE MUNICIPAL COMMISSIONER, COLOMBO, Respon
WKEKASOORIYA, J.—Ponnambalatn v. The Municipal