Compensation for improvement made by tenant

(1) A tenant who has made an improvement on the land held by him shall, if his tenancy is terminated under the provisions of this Act, be entitled to compensation for such improvement. For determining the amount of compensation, the tenant shall apply to the Tahsildar in the prescribed form. (2) The compensation to which a tenant shall be entitled under sub-section (1), shall be the estimated value of such improvement at the time of the termination of his tenancy. In estimating such value regard shall be had to,— (a) the amount by which the value of the land is increased by the improvement; (b) the present condition of the improvement and the probable duration of its effects; (c) the labour and capital provided or spent by the tenant for the making of the improvement; and (d) any reduction or remission of rent or other advantage allowed to the tenant by the landlord in consideration of the improvement including permanent fixtures. (3) If such land is subject to mortgage or other encumbrance created by the tenant and lawfully subsisting, the amount of compensation shall be applied first for discharging such mortgage or other encumbrance and the balance, if any, shall be paid to the tenant. The payment to the mortgagees or holders of other encumbrances shall be in the order of priority of the respective mortgages and other encumbrances.