Judgment :- 1. These two appeals, arising respectively out of L. A. case Nos. 330 and 334 of 1967 on the file of the Second Additional Subordinate Judge, Ernakulam, raise a common question of law relating to the apportionment between the appellant-tenant on the one hand, and the respondent-land owner on the other, of the amount of compensation awarded for the land compulsorily acquired from them under the Kerala Land Acquisition Act, 1961; and the key to the answer would lie in the proper understanding of the scope and legislative intent of S.34, 35 and 112 of the Kerala Land Reforms Act, (Act 1 of 1964,) for short the Act. 2. The facts relevant for the decision are not now in dispute. The appellant, being the pakuthivaramdar in respect of the properties acquired, had, in the year 1961, applied for the fixation of fair rent for his holdings under the provisions of the Kerala Agrarian Relations Act, 1960 (Act IV of 1961); and fair rent for the holdings was fixed by the Land Tribunal as per Ext. P-1 orders dated 28 11 1968. The compulsory acquisition was during the pendency of the fair rent proceedings, the possession of the acquired land having been taken by the State on 23 21966. The question posed before the court below, on a reference under S.32 of the Kerala Land Acquisition Act, was, whether, for the purpose of determining 'the proportion of the profit derivable from the land' acquired, as a basis for the apportionment of the compensation awarded, the contract rent by the application of S.35 of the Act (as it stood then, before being amended by S.32(1) of Act 35 of 1969) or the fair tent fixed under Ext. P1 order, by the application of S.34 of the Act, was relevant. The learned subordinate judge, accepting the contention of the respondent¬land-owner, has directed the apportionment to be made treating the contract rent to be the income derivable by the respondent from the land acquired. It is the correctness of this decision that is under challenge in these appeals. 3.
P1 order, by the application of S.34 of the Act, was relevant. The learned subordinate judge, accepting the contention of the respondent¬land-owner, has directed the apportionment to be made treating the contract rent to be the income derivable by the respondent from the land acquired. It is the correctness of this decision that is under challenge in these appeals. 3. Counsel for the appellant submitted that there is a manifest error in the approach made by the learned Subordinate Judge inasmuch as he has ignored the significance of the provision in S.34 of the Act that the order determining the fair rent shall take effect from the beginning of the agricultural year in which the application for determination of fair rent was filed. To facilitate easy reference S.34 of the Act is quoted below: "34. Date from which order determining fair rent, etc., is to take effect. The order determining the fair rent under S.3! or S.33 and the rent payable by an intermediary shall take effect from the beginning of the agricultural year in which the tenant or the landlord filed the application for such determination or the agreement under S.33, and any amount paid by the tenant in excess of the rent so determined to the landlord till the date of determination shall be adjusted towards the payment of future rent or the purchase price payable under S.55, and, where the amount of rent paid to the landlord is less than the rent so determined, the balance payable by the tenant shall be paid along with the rent payable immediately after the determination of the rent". 4. Counsel for the respondent contends that the provision in S.34 that the order fixing fair rent shall take effect from the beginning of the agricultural year in which the application for fixation of fair rent was filed presupposes the continued existence of the landlord-tenant relationship between the parties as is evident from the latter part of the Section which provides "any amount paid by the tenant in excess of the rent so determined to the landlord till the date of determination shall be adjusted towards the payment of future rent or the purchase price payable under S.55".
According to him the only remedy available to the appellant would have been to have the difference between the contract rent paid and the fair rent fixed, adjusted, had the relationship of landlord and tenant subsisted between the parties on the date of the fixation of fair rent; and that contingency does not arise here, for the acquisition stood completed, with the taking possession of the land by the State on 23 21966, long before the Land Tribunal fixed fair rent for the holdings as per the order, marked as Ext. P1, on 28 111968. It is also his argument that between the date of the filing of the application for fixation of fair rent and the date of the passing of the order determining fair rent, there is an implied obligation on the part of the tenant to continue to pay rent at the contract rate, and the court below was justified in holding that S.35 of the Act applied to the facts of the case. S.35 (before amendment by S.32 (1) of Act 35 of 1969) of the Act reads as follows: "35. Rent payable when Land Tribunal has not determined fair rent. Where in a case the rent payable in respect of a holding has not been determined by the Land Tribunal, either under S.31 or S.33, the landlord shall be entitled to receive and the tenant shall be bound to pay the rent that was payable immediately before the commencement of this Act. Explanation For the purposes of this section, 'the rent that was payable immediately before the commencement of this Act', in the case of a varamdar, shall mean the average of the share of the landlord in the produce for the three years immediately preceding such commencement, or, where the varamdar was not cultivating the land continuously for the said period of three years, the share of the landlord for the year in which the varamdar cultivated; the land last, immediately before such commencement." 5. S.35, in our view, does not apply to cases where fair rent application has already been filed, and fixation of fair rent is awaited.
S.35, in our view, does not apply to cases where fair rent application has already been filed, and fixation of fair rent is awaited. No doubt, between the date of filing of the application and the date of fixation of fair rent pursuant thereto, the tenant is liable to pay, and the landlord is entitled to receive, rent that was payable immediately prior to the commencement of the Act, which payment, in the scheme of the Act, is provisional in character, subject to adjustment towards future rent or purchase price, once the fair rent is fixed. It is beyond doubt that the legislative intent is that whatever benefit accrues out of the fixation of fair rent should be available to the concerned party from the beginning of the agricultural year during which the application was made. S.35 has to be read and understood along with S.34; and a harmonious construction of the sections would lead to the conclusion that the absolute liability to pay rent under S.35 without any right to claim adjustment of excess payment as contemplated under S.34, would arise only in cases in which neither fair rent has already been paid nor an application for fixation of fair rent was pending. The provision for adjustment of the rent paid in excess of the fair rent by the tenant towards future rent or purchase price is an enabling provision, and a speedy remedy, without need to resort to protracted litigation, to achieve the full benefit of the fixation of fair rent with retrospective effect as provided in the earlier part of the Section; and the legislature does not appear to have intended to deprive the tenant of the benefit of the fixation of fair rent on the ground that even before the fixation of fair rent, because of the acquisition of the land by the State, the landlord-tenant relationship had ceased to exist. If, as we have already seen, the income derivable from the land by the land-owner on the date of the compulsory acquisition was the fair rent subsequently fixed under S.31, by the retrospective operation of the fair rent order by virtue of the earlier part of S.34, for the purpose of determining the proportion in which the amount of compensation is to be apportioned between the landowner and the tenant, such fair rent alone, not the contract rent, is relevant. 6.
6. The proportion in which compensation for the acquired land is to be apportioned among the landowner, intermediary and the cultivating tenant is as laid down in sub-S. 4 of S.112 (now sub-S. (5) of S.112 after amendment by Act 35 of 1969); and the Explanation thereto reads as follows: "'Profits derivable from the land' shall be deemed to be equal to (i) in the case of a land owner, 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 purpose of this Explanation shall be as calculated under the provisions of this Act." We have no doubt in our mind that the intention of the legislature was to give the tenant the benefit of the determination of fair rent from the beginning of the agricultural year during which the application was made, without confining it to cases where the landlord-tenant relationship continued as contended for by the counsel for the respondent, extending it to all cases in which fair rent has been fixed; and it would include cases in which the question of apportionment of compensation of land acquired arises between the erstwhile landlord and tenant. 7. The apportionment between the respondent-landowner and the appellant-tenant ought to have been in proportion to the fair rent determined under S.31 of the Act on the one hand, and the difference between the net income (as defined in S.2 (37) of the Act) and the fair rent so determined, on the other. 8. This being the position the appellant is entitled to succeed in both the appeals.
8. This being the position the appellant is entitled to succeed in both the appeals. However, from the memoranda of appeals we find that though legally and legitimately the appellant was entitled to ask for the share of compensation in the ratio of 3:1 (subject to slight variation, if any, on account of deduction of tax or cess, if any, due to the Government or any local authority in respect of the holdings from the gross income obtained therefrom) he has claimed it only in the ratio of 3:2 between the tenant and the landlord, and the amount which he claims in A. S. No. 60 of 1973, by way of what has been disallowed is a sum of Rs. 8,233.20. We, while allowing A. S. No. 60 of 1973, restrict the relief of the appellant to receive a sum of Rs. 8, 223.20 more than what has been allowed by the court below, as that is found to be less than what would have been the claim if the amount is worked at on the ratio mentioned above. In A. S. No. 61 of 1973 the amount claimed by the appellant is a sum of Rs. 276.30 over and above what has been allowed to him by the court below. This amount, found to be less than what the appellant would have been entitled to, had the claim been in the ratio of 3:1, he will be entitled to have it added to what has been awarded by the court below, and we allow that appeal also accordingly. The appeals are disposed of as above. There will be no order as to costs. Allowed.