M. P. THAKKAR, M. U. SHAH, J. ( 1 ) A question of some complexity relating to the valuation of land held by a tenant who has become a deemed purchaser in respect of the land in question under sec. 32 of the Bombay Tenancy and Agricultural Lands Act 1948 (hereafter referred to as the Tenancy Act) in the event of the acquisition of such land has raised its head in the present matter. ( 2 ) PURSUANT to a notification under sec. 4 of the Land Acquisition Act published on May 21 1962 lands comprised in S. Nos. 437/1 to 437 437 437 and 368 situated in village Tarsali in the Baroda District were notified for acquisition for a public purpose. Before the Land Acquisition Officer compensation was claimed by the landlady in respect of her interest in the land and by respondent No. 2 Himat Mohmad in respect of tenants interest in the land held by him. By reason of the fact that the tenant had become a deemed purchaser under sec 32 of the Act the Land Acquisition Officer came to the conclusion that the landlady was entitled only to 200 times the assessment and nothing more. With regard to the valuation of the interest of Himat the Land Acquisition Officer awarded him compensation by adopting the following formula. He made the valuation of the land as if it was held on old tenure to which restrictions engrafted by sec. 43 (1) of Tenancy Act were not applicable. Thereafter he valued the interest of Himat at 2/3rd of the valuation of old tenure land on the ground that so far as Himat was concerned his land was held on the new tenure created by sec. 43 (1) of the Tenancy Act which imposed restriction in regard to sale gift exchange mortgage lease assignment or partition without payment of such amount as the State Government may by general or special order determine. ( 3 ) ). . . . . . . . . . . . . It may also be realized that so far as sec. ( 3 ) ). . . . . . . . . . . . . It may also be realized that so far as sec. 32 of the Tenancy Act is concerned a tenant holding the land under a tenancy from his landlord on April 1 1957 (subject to the other provisions of the section and of the Tenancy Act) is deemed to have purchased from his landlord the land free from all encumbrances on certain conditions. 1st April 1957 is known as the tillers day and on that day by operation of sec. 32 the tenant is deemed to have purchased the land on specified conditions. It is not in dispute that the land in question to which the present dispute relates was acquired by tenant Himat from his landlady by virtue of the deemed purchase clause embodied in sec. 32 of the Tenancy Act. And in respect of the erstwhile tenant who acquired lands under sec. 32 under the deemed purchase clause the Legislature imposed a restriction on transfer of such land under sec. 43 (1) of the Tenancy Act. The said provision in so far as is material is in the following terms:-43 (1) No land purchased by a tenant under secs. 32 32 321 320 32 or 43-1d or sold to any person under sec. 32p or 64 shall be transferred by sale gift exchange mortgage lease or assignment or partitioned without the previous sanction of the Collector and except on payment of such amount as the State Government may by general or special order determine. ( 4 ) POPULARLY lands held by erstwhile tenants under the deemed purchase provision of the Tenancy Act are known to be held on the new tenure. The expression old tenure is popularly employed in regard to lands held by persons in their own right without their having acquired the benefit under sec. 32 by reason of their being tenants. The question naturally arose before the Land Acquisition Officer as to what amount of compensation should be offered to Himat the erstwhile tenant and the deemed purchaser at the point of time of notification under sec. 4 in respect of the land held by him under the new tenure. 32 by reason of their being tenants. The question naturally arose before the Land Acquisition Officer as to what amount of compensation should be offered to Himat the erstwhile tenant and the deemed purchaser at the point of time of notification under sec. 4 in respect of the land held by him under the new tenure. The question was whether he should be awarded the same compensation at par with an owner holding similar land on old tenure which was not burdened by any such restriction as the one engrafted by sec. 43 of the Tenancy Act. What the Land Acquisition Officer did was that he first valued the land as if it was old tenure land. Having valued the old tenancy land at X he embarked upon the valuation of the new tenure land and this he did by recourse to the formula that new tenure land could be valued at 2/3rd the valuation of the old tenure land. . . . . . . . . . . . . . . . . ( 5 ) THE learned counsel for the erstwhile tenant (Himat) has then contended that even if it be so the Land Acquisition Officer was not right in valuing the new tenure land held by Himat at 2/3rd of the notional valuation of the old tenure land. The validity of this submission we now propose to examine. The problem may be brought under spotlight by formulating the question before us in a different form. Would the owner of a land held on new tenure be entitled to the same compensation as the owner of an old tenure land ? It will be recalled that so far as the new tenure is concerned the Legislature has engrafted a restriction in the matter of transfer under sec. 43 (1) of the Tenancy Act. It takes away something from the bundle of rights of ownership in the matter of alienation. In regard to the owner of land held on old tenure the restriction envisaged by sec. 43 (1) would not be applicable. And it must be realized that the restriction imposed by sec. 43 (1) carries with it an obligation not only to secure the permission of the State Government before alienation but also to pay to the Government such amount as may be determined by the State Government in this behalf. 43 (1) would not be applicable. And it must be realized that the restriction imposed by sec. 43 (1) carries with it an obligation not only to secure the permission of the State Government before alienation but also to pay to the Government such amount as may be determined by the State Government in this behalf. In other words the obligation carries with it a money content. It is an onerous condition. Would the holder of a property saddled with such an onerous condition be entitled to claim the same amount by way of compensation as the owner of the property which is not burdened with a similar handicap ? The answer to this poser is obvious. If we value the new tenure land at par with the old tenure land in fact we would be awarding to the owner of the new tenure land something more than the money equivalent of his property. An illustration will make the point clear. Suppose the old tenure land is being acquired and the trial Court values it at Rs. 100 -. If the owner of the new tenure land is also awarded Rs. 100. 00 in respect of the extinguishment of his rights the claimant will be able to exchange the compensation of Rs 100/- awarded to him by purchasing a similar plot of land. But the newly acquired land will not carry with it the statutory reststriction imposed by sec. 43. By this process of exchange he will get a property which has higher rights and a better money value than that he held previously. It is therefore clear that in such a case the claimant would get something more than the value of his property inasmuch as while previously he was the owner of the property burdened with an obligation to pay such amount as directed by the State Government in case of alienation he would not be subject to any such obligation in the case of land purchased by him in exchange with the compensation awarded to him. In our opinion therefore there is not the slightest doubt that the claimant would get something more than what he lost. This is contrary to the concept of compensation for what is visualized by compensation is making good to the person whose property is acquired money equivalent of what he has lost. In our opinion therefore there is not the slightest doubt that the claimant would get something more than what he lost. This is contrary to the concept of compensation for what is visualized by compensation is making good to the person whose property is acquired money equivalent of what he has lost. It is however argued by the learned counsel for the erstwhile tenant that though ordinarily compensation must be tested no doubt by the loss to the owner as observed by the High Court of Calcutta in Province of Bengal v. Board of Trustees for the improvenment of Calcutta A. I. R. 1946 Calcutta 416 in estimating his loss it is legitimate to disregard the restrictions on ownership which were existing at the time of acquisition. Reliance has been placed on the following passage from the said judgment:the proposition laid down in (1870) 6 Q. B. 37 (Stebbing v. Metropolitan Board) of Works) that compensation or which is the same thing as loss to the owner must be tested not by what would be its value to person acquiring it is well settled. Some passages in the second reason given by Wilde C. J. in (1850) 10 C. B. 827 (Hilcoat v. Archbishop of Canterbury and York) may at first sight appear to go against that test. The learned Chief Justice however used those expressions to emphasise the justice of the case. That observations in the later decisions which we have reviewed and in Lord Shands award do not appear to us to militate against the aforesaid test formulated in (1870) 6 Q. B 37. The compensation must be tested no doubt by the loss to the owner but in estimating his loss it is legitimate to disregard the restrictions on ownership which were existing at the time of acquisition. If restrictions on the power of the owner to alienate at the time of the acquisition be taken to be a material factor in assessing compensation payable on an acquisition under the Land Acquisition Act the amount of compensation would be different according as the property at the time of the acquisition belonged to a Hindu widow or a full owner for a Hindu widow has only a limited power of alienation. She can alienate only for legal necessity. But sec. 82 Land Acquisition Act indicates otherwise. She can alienate only for legal necessity. But sec. 82 Land Acquisition Act indicates otherwise. We accordingly hold that the Board is entitled to get compensation for the park on the same basis as building sites. ( 6 ) WE are unable to read into the judgment of the Calcutta High Court the ratio which counsel for the erstwhile tenant wants us to read. The problem before the Calcutta High Court was whether the property under acquisition should be valued at a discount by reason of the mere fact the owner could not have sold the property. The question before the Calcutta High Court was not whether the owner of a property under acquisition should be awarded the same compensation regardless of the fact that the right to alienate and partition the property carried a financial obligation to pay some amount to the State under a statute. This is the vital point of distinction. The same point of distinction operates in regard to the decision of the Nagpur High Court in Shaf kat Hussain v. Collector of Amraoti A. I. R. 1933 Nagpur 208 head note (c) of which is in the following terms :in determining compensation payable for any land under the Land Acquisition Act the element of non-transferability of the land cannot enter into consideration. The publication of the declaration under sec. 6 has the result of removing all restrictions on the rights of owner. The declaration under sec. 6 by necessary implication withdraws inam land from the purview of the grant and consequently lifts the embargo on its transferability and after the declaration under sec 6 the inam land stands on the same footing as any freehold land. IN our opinion it would not be right to value the land under acquisition at a discount merely by reason of the fact that there is a mere restriction on its alienation. So far we are in agreement with respect with the view expressed by the Calcutta and the Nagpur High Courts in the aforesaid decisions. But that principle will be of no avail when we are confronted with the question as regards the valuation of land where the transferability depends on an obligation to pay a sum of money to the State. When the obligation carries with it a money content the aforesaid principle cannot apply. But that principle will be of no avail when we are confronted with the question as regards the valuation of land where the transferability depends on an obligation to pay a sum of money to the State. When the obligation carries with it a money content the aforesaid principle cannot apply. We are therefore unable to accede to the argument of the learned counsel for the erstwhile tenant. ( 7 ) IT is however urged by the learned counsel that in the matter of valuation of a property the yield of the property is the touch stone and the statutory obligation to pay a sum of money at the time of alienation deserves to be altogether ignored. Counsel argues that a property would be worth the same to the owner regardless of whether the restriction is there or not inasmuch as it would fetch the same income to him not withstanding the handicap. Here again we find ourselves unable to endorse the proposition canvassed by counsel. The value of a property to its owner inter alia depends on two key factors (1) the right to alienate and to obtain the money equivalent of the property (2) its income. It does not depend merely on the income. If on sale of the property it would fetch less than the property of a similar nature on account of some statutory restrictions the value of the property to the owner cannot be the same. It would be contrary to principle to value the property which is burdened with the obligation to pay a portion of the sale price to the State at par with a property which does not carry any such obligation. We are unable to see any principle in awarding to the owner of a property a larger amount as compensation if acquired for public purpose under the Land Acquisition Act than he would be otherwise entitled to if he sold it in open market. The value to the owner cannot depend on whether it is sold by private negotiations or whether he is made to part with the property in exercise of the powers of eminent domain. Under the circumstances the decision of the trial Court cannot be sustained. .