Government Need Not Pay ‘Land-Value‘, as such, if (Leasehold) Plantation Land Acquired;

Tenant cannot ‘Sell’ Plantation Land as his absolute property.

Saji Koduvath, Advocate, Kottayam.

Who is the OWNER of Exempted (Leasehold) Plantation Lands in Kerala?

It is Government itself, though by virtue of Chapter II (Sec. 13) of the Kerala Land Reforms Act, 1964, the tenant has ‘Fixity’. Reasonings:

• 1. Plantation (lease) lands VEST in GOVT, automatically
• Because,
• Sec. 72 provides for- 
  • mandatory and involuntary vesting in Government–
  • of leasehold lands that is held by cultivating tenants entitled to fixity of tenure under Sec. 13 (even if the extent exceeds ceiling limit).
• 2.  ‘Vesting’ in Govt. is ‘Vesting of Ownership‘
• It is for the reasons –
  • Declared to be ‘vested’ in Government (Sec. 72).
  • Such a tenant is liable to pay ‘rent’ to the Government (Sec. 72E).
• 3. ‘Exemption’ in Chapter III Cannot be read into Sec. 72B(2)
• Sec. 72B(2) specifies that the provisions of Section 82 (as to ceiling limit) shall apply for a limited purpose. It reads-
  • (2) The provisions of Section 82 shall, so far as may be, apply to the calculation of the ceiling area for the purposes of the proviso to Sub-section (1)
• The exemption provision (that exempts plantation lands etc. from ceiling limit) in Sec. 81 (Chapter III) cannot be brought-forth or read-into Sec. 72B (provision for assignment/purchase-certificate) in Chapter II.
• Because,
  • Proviso to Sec. 72B(1) shows – Sec. 72B(1) is an an independent provision. (It says as to assignment to a cultivating tenant within the ceiling limits.)
  • When a provision (here, ceiling limit in Sec. 82) in Chapter III is referred in a section in another Chapter (here, Sec. 72B), to state the limit in area, it cannot be said – the colour or smell reflected on the first provision (here, Sec. 82), by virtue of another section (here, Sec. 81, the exemption provision) is reflected also on the latter section (here, Sec. 72B).
• Further:
  • Chapter II of the KLR Act (dealing with ‘Tenancy’) is exclusive and exhaustive as to ‘fixity’, and ‘vesting’ of land in Government.
  • It is not stated anywhere in the Act – the right and title of the (leased-plantation) land vested in Government under Sec. 72, will be divested in any manner (to the previous owner, or to the tenant or to anybody else), in any circumstance.
  • Sec. 72E provides for collection of ‘rent‘ from the holders of the plantation. It is for the reason that (ownership of) the land vests in Govt.
  • Proceedings initiated by Taluk Land Board under Chapter III (in respect of plantation) do not confer title.
• 4. Government Need Not Pay ‘Land-Value‘, as such, if Acquired
  • For the above (plantation land vest in Govt.), the Government Need Not Pay ‘Land-Value‘, as such, to the tenant, or the former owner, if such Lands are Acquired.
• 5. Tenant cannot ‘Sell’ Plantation Land as his Absolute Property
  • A tenant who got ‘fixity’ over such land cannot ‘sell’ this land as his absolute (ownership) property.

What is the legal right attached to former ‘tenants’ of Plantations, after vesting the land with Govt. under Sec. 72?

• It is not Tenancy – For no landlord-tenant relation with the Govt.
• Not Grant or Licence/Permission – For Grant as well as Licence/Permission arise from a contract (express or implied).
• Therefore, it can termed only as a “Legal Right conferred by Statute“, that is, the KLR Act.

• What are the Stipulations attached to that “Legal Right”?
  1. Liable to pay ‘Rent’ (under Sec.72E).
  • 2. Subject to the condition – not to “convert” it for any other use, other than the specific plantation (Sec. 87).
• When Such a land is Required for Govt., Should it be Acquired?
  • The ownership being vested in Govt. it need not be ‘strictly’ “acquired”.
  • But no provision In Sec. 72 for ‘resuming’, if and when Govt. needs it.
• Sec. 112 of the KLR Act
  • But, Sec. 112 of the KLR Act says as to ‘Apportionment of land value in cases of acquisition’.
  • Because of the “Legal Right conferred by Statute“ upon the former tenants of the plantation, they are entitled for certain compensation, when that land is required for the Govt..
  • In cases falling under Chapter II (pertaining to, tenants entitled for fixity, issuance of purchase certificate etc.) Section 72 deals with the right, title and interest of the land owners and intermediaries in respect of the holdings held by the cultivating tenants; and says -the land will be free from encumbrances created by the land-owners and intermediaries.
  • However, insofar as the cultivating tenant is concerned, an absolute right is vested with him to seek assignment (within ceiling limit) subject to the payment of purchase price – as stated in Section 72D. (See: Glen Leven Estate (P) Ltd. v. State of Kerala, 2022-6 Ker LT 439.)
  • No ‘authority’ is also named in any law to fix the compensation to be given to the former tenants, when the Govt. requires it.
• Therefore, it is said – Apportionment of land value in cases of ‘acquisition’.
  • Note:  It makes no difference (SUBSTANTIALLY, IN DETERMINING COMPENSATION) whether such a plantation land is “acquired” or not. Because, even if the land is not ‘acquired’, Govt. has to pay compensation for improvements to the former tenants (who holds the land by virtue of the “Legal Right conferred by Statute“, the KLR Act).

Apportionment’s of land value in cases of Acquisition

Sec. 112 of the KLR Act reads-

• “112. Apportionment’s of land value in cases of acquisition – (1) Where any land is acquired under the law for the time being in force providing for the compulsory acquisition of land for public purposes, the compensation awarded under such law in respect of the land acquired shall be apportioned among the landowner, intermediaries, cultivating tenant and the kudikidappukaran in the manner specified in this Section.
• (2) The compensation for any building or other improvements shall be awarded to the person entitled to such building or other improvements.
• (3) The kudikidappukaran shall be entitled to the value of the land occupied by his homestead or hut subject to a minimum of-
  • three cents in a city or major municipality; or
  • five cents in any other municipally; or
  • ten cents in a panchayat area or township.
• (4) The difference between the value of three cents or five cents or ten cents, as the case may be, and the value of the extent of the land occupied by the homestead or hut shall, notwithstanding anything contained in the Kerala Land Acquisition Act, 1961, be borne by the Government or the local authority or the company or other person on whose behalf the land is acquired.
• (5) The balance remaining after deducting the compensation referred to in Sub-section (2) and the value of the land occupied by the homestead or hut shall he apportioned among the landowner, the intermediaries and the cultivating tenant in proportion to the profits derivable by them from the land acquired immediately before such acquisition.
  • Explanation. – “Profits derivable from the land” shall be deemed to be equal to (i) in the case of a landowner, the rent which he was entitled to get from the tenant holding immediately under him; (ii) in the case of an intermediary, the difference between the rent which he was entitled to get from his tenant and the rent for which he was liable to his landlord; and (iii) in the case of a cultivating tenant, the difference between the net income and the rent payable by him; and the rent payable by the cultivating tenant and the intermediary for the purposes of this Explanation shall be as calculated under the provisions of this Act.
• (5A) Notwithstanding anything contained in Sub-sections (2) and (5), where there the right, title and interest of the landowner and the intermediaries in respect of the land acquired have vested in the Government under Section 72, –
  • the compensation for any building or other improvements belonging to such landowner and intermediaries shall be awarded to the Government; and
  • the balance remaining after deducting the compensation referred to in clause (a) and the value of the land occupied by the homestead or hut, if any, shall be apportioned between the cultivating tenant and the Government in proportion to the profits derivable by them from the land.
• Explanation. – “Profits derivable from the land” shall be deemed to be equal to-
  • in the case of the cultivating tenant, the difference between the net income immediately before the acquisition and the rent which he was liable to pay immediately before the date on which the right, title and interest of the landowner and the intermediaries have vested in the Government; and
  • in the case of the Government, such rent.
• (7) In this Section, “homestead” includes a dwelling house occupied by a person who is deemed to be a kudikidappukaran under Explanation IIA to clause (25) of Section 2.”

Apportionment depends upon rights on the date of acquisition

• Valia Raja v. Veeraraghava Iyer, 1961 Ker LT 103, it was held that the question of apportionment of compensation has to depend upon the rights of the parties on the date of the acquisition. Referred to in: Varkey Thomas Vs. Annamma Abraham,  1969 Ker LT 903.

Glen Leven Estate (P) Ltd. v. State of Kerala, 2022-6 Ker LT 439

• In Glen Leven Estate (P) Ltd. v. State of Kerala, 2022-6 Ker LT 439, the question as to ‘rival claims raised by the cultivating tenant and landlord for compensation on acquisition’ arose. The land was leased out by landlords. The lease-rights came in the cultivating tenants by transfer. The Government contended that the tenant was a cultivating tenant and the land vested upon the Govt. under Sec. 72 KLR Act. Hence tenant alone would be entitled to get compensation for the improvements to be determined under the Kerala Compensation for Tenants Improvements Act, 1958, in view of Section 20(1) of the KLR Act.
• The landlords argued that the land was a plantation (over 30 acres) when it was (originally) leased, and therefore, they are entitled to claim exemption and benefits in the light of the exemption under clause (viii)  of Section 3 (1) of the KLR Act. Since there would be no fixity of tenure, it being a plantation, there would not be vesting of rights of the land owner in the Government. Hence, there should be the apportionment of the compensation between the lessor and the lessee and it should be decided in the acquisition proceedings.
• The single Judge dismissed the writ petition, ‘leaving open the liberty of the lessee as well as the landlords, to approach the civil court seeking relief against the Government, and also to resolve the inter se dispute by and between the tenant and the landlords’.
• The Division Bench, in appeal held that ‘land acquisition’ proceedings are to be initiated. It is pointed out that (even if it is a land vested in Govt.) there is no provision in Sec. 72 for ‘resuming’ if and when Govt. need it. The court also observed as under –
  • “31. On an analysis of the provisions of Section 72(1) of the Act, 1963, it is clear that when the Government notified the said provision with effect from 01.01.1970, all right, title and interest of the landowners and intermediaries in respect of holdings held by cultivating tenants (including holders of kudiyirippus and holders karaimas) entitled to fixity of tenure under Section 13, and in respect of which certificates of purchase under sub-Section (2) of Section 59 have not been issued, vested in the Government.
  • 32. Therefore, it is clear from Section 72 that what is vested with the Government is the right, title and interest of the land owners and intermediaries in respect of the holdings held by the cultivating tenants. It is nothing but a legal fiction by which the interest held by a cultivating tenant in a property of a landlord or intermediary is protected from 01.01.1970 .
  • 34. On a conjoint reading of Sections 72 and 72A, it can be seen that vesting of rights in the Government contained under Section 72 is the rights held by the landlord and the intermediary in respect of holdings held by the cultivating tenants. However, the same will not, in any manner, interfere with the rights enjoyed by a cultivating tenant in contemplation of the provisions of the Act, 1963.”
  • 42. Therefore, we have no doubt in our mind to hold that Section 72 of Act, 1963 would only deal with the right, title and interest of the land owners and intermediaries in respect of the holdings held by the cultivating tenants free from encumbrances created by the land owners and intermediaries. However, the legal provisions discussed above would make it clear that insofar as the cultivating tenant is concerned, an absolute right is vested with him to seek assignment subject to the payment of purchase price in contemplation of Section 72D of the Act, 1963.
• While considering the right of landlord, it is pointed out (basing on the principle, or scheme of the KLR Act*^*) that the landlord may have right for compensation under Section 72BB. The Division Bench said-
  • “36. So also, sub-Section (1) of Section 72BB dealing with ‘the right of landlord to apply for assignment and compensation’ specifies that any landowner or intermediary, whose right, title and interest in respect of any holding have vested in the Government, may apply to the Land Tribunal for the assignment of such right, title and interest to the cultivating tenant and for the payment of the compensation due to him under Section 72A.”
• *^{*Note: 1. If plantation-lease-(leasing a land when plantation existed)-above-30-acre-}
  • ^{Sec. 72, 72 BB etc. will not apply (such land being excluded from Chapter II, under Sec. 3(1)(viii), KLR Act).}
• ^{2. In case of a plantation-lease-above-30-Acre-}
  • ^{on termination of the lease period, the land lord can resume the land, on the basis of his title; for, the tenant will not have fixity in such case, the land being exempted from the benefits of Chapter II (as per Sec. 3(1)(viii) of the KLR Act).}
• ^{3. The landlords of such plantation will get the benefits (under Sec. 81) and protection from ceiling limit that is stipulated under the provisions of Sec. 82, 83 etc. (that is, there will be no ceiling limit).}
• ^{4. In such a case, the right of landlord may be on a higher level or footing than the tenant (to get compensation).}
• ^{5. It cannot be compared with a plantation that is put up by the tenant. The tenants of such plantation will-}
  • ^{get fixity under Sec. 13 (though they will not get Purchase Certificate)}
  • ^{get the benefits and protection (under Sec. 81) from ceiling limit that is stipulated under the provisions of Sec. 82, 83 etc. (that is, there will be no ceiling limit).}
  • ^{In such a case, the right for compensation, if any, of the landlord will be nil or negligible.}
  • The Division Bench, inter alia, on the above observations, directed ‘the State and its officials to take proceedings for the acquisition of the land’.

Balanoor Case – Cultivating Tenant Entitled to Assignment, were Obliged to Apply

• A cultivating tenant, “entitled to assignment” of the right under Sec. 72B, if failed to apply the same, will not have ‘vested right to continue’, as a cultivating tenant and he will not be entitled to the benefit of fixity under Sec. 13 of the KLR Act.
  • Note: The ‘cultivating tenant’ of a plantation has two options:
    • First, avail benefits of plantation-exemption, under Sec. 81;
    • Second, obtain purchase-certificate (under Sec. 72A, 72B or 72C), within the ceiling area.
  • The ‘cultivating tenant’ of a plantation who opts to avail benefits of plantation-exemption, under Sec. 81, cannot stand-for fragmentation (Sec. 87, Explanation II) of the plantation land and obtain purchase-certificate (under Sec. 72A, 72B or 72C), within the ceiling area.
  • The ‘cultivating tenant’ of a plantation who opts to avail benefits of plantation-exemption (and not claim purchase certificate within ceiling area) and continues as a cultivating tenant, “entitled to assignment” of the right under Sec. 72B.
• Sec. 72B provides for cultivating tenant’s rights to get assignment by purchase certificate (through LT) – within ceiling area. Tenant is “obliged to apply” for it within 2 years from 1-1-1970. Therefore, the cultivating tenants entitled to assignment of the right, title and interest were “obliged to apply” to the Land Tribunal within the time fixed for asserting the claim as cultivating tenants. This decision also says that tenants having ‘no bona fide claim’ as to cultivating-tenancy will not have the benefit of fixity under Sec. 13 of the KLR Act, and they will have ‘no vested right to continue’.

Sec. 73B(3) reads as under:

• “(3) Any cultivating tenant entitled to assignment of the right, title and interest in respect of a holding or part of a holding under Sub­section (1) may apply to the Land Tribunal within whose jurisdiction such holding or part is situate within two years from the date of vesting of such right, title and interest in the Government under Section 72, or such further time as may be allowed by the Government in this behalf, for such assignment to him.”