Limited estate compensation must be equitably apportioned, with reversionary rights and interest from possession preserved.

Acquisition of Cis Sutlej Jagir land is discussed as involving a limited estate, not absolute ownership, so the reversionary heir has an interest in compensation apportionment. The commentary states that compensation should not be kept permanently in investment for the reversioner's benefit; instead, it should be equitably apportioned between the limited holder and the reversioner. It also explains that interest on compensation may run from the date possession is taken until payment or deposit, unless the governing statute clearly excludes that equitable right.

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Issues: (i) whether the holder of the Cis Sutlej Jagir had absolute ownership or only a limited interest, with the reversionary heir entitled to contest apportionment of compensation; (ii) whether the compensation for the acquired lands could be permanently retained in investment for the benefit of the reversioner instead of being apportioned between the holder and the reversionary heir; (iii) whether interest was payable on the compensation amount from the date of taking possession.

Issue (i): whether the holder of the Cis Sutlej Jagir had absolute ownership or only a limited interest, with the reversionary heir entitled to contest apportionment of compensation

Analysis: The character of the property was determined from the historical status of the Cis Sutlej estates, the recognised rules against alienation of jagir property, and the materials showing that the holding remained in the family as inalienable estate property. On that basis, the holder was not treated as absolute owner. The property was held as a limited estate, and the reversionary heir had a sufficient interest to participate in the compensation proceedings and to claim a share in apportionment.

Conclusion: The property was held as a limited estate, and the reversionary heir was entitled to contest and share in the compensation.

Issue (ii): whether the compensation for the acquired lands could be permanently retained in investment for the benefit of the reversioner instead of being apportioned between the holder and the reversionary heir

Analysis: The principle in the land acquisition scheme permitting temporary investment of compensation where immediate reinvestment in substitute property is not possible did not justify a permanent deposit of the entire compensation amount. The equitable principle relied upon could support protection of interests, but not a continuing denial of apportionment between the parties. In the circumstances, the proper course was to divide the amount between the limited owner and the reversioner on an equitable basis.

Conclusion: The compensation could not be permanently kept in investment, and it had to be apportioned between the parties.

Issue (iii): whether interest was payable on the compensation amount from the date of taking possession

Analysis: The statutory scheme did not clearly exclude the general equitable rule that when immovable property is taken and possession is withheld before compensation is paid, interest may be awarded on the compensation amount. The application of one part of the land acquisition provisions did not necessarily exclude the equitable right to interest. The claimants were therefore entitled to interest from the date of possession until payment or deposit of compensation.

Conclusion: Interest was payable on the compensation amount at 4% per annum from the date of possession until payment or deposit.

Final Conclusion: The compensation awards were modified by directing equitable apportionment between the limited owner and the reversionary heir and by granting interest on the compensation, thereby granting substantial relief in part to the claimants while sustaining the finding that the property was not absolutely owned by the holder.

Ratio Decidendi: Where compulsory acquisition takes property held as a limited estate, compensation may be equitably apportioned between the limited holder and the reversioner, and interest on delayed payment may be awarded unless the governing statute clearly excludes that equitable right.

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