Principles of compensation

The amount of compensation payable to a landlord under this Act shall be determined in the manner and in accordance with the principles hereinafter set out, that is to say— (a) where the rent payable by the occupancy tenant is expressed in terms of the land revenue in respect of the land, the amount of compensation shall,— (i) if the right of occupancy has been obtained on any of the grounds specified in section 5 of the Punjab Tenancy Act, 1887 (Punjab Act XVI of 1887), be equal to the annual rent (exclusive of land revenue and cesses) plus one anna for every rupee of the annual land revenue multiplied in each case by twenty; (ii) in any other case, be equal to the annual rent (exclusive of land revenue and cesses) plus two annas for every rupee of the annual land revenue multiplied in each case by twenty-five; Illustration (A).—If the annual rent (exclusive of land revenue and cesses) is Rs. 50 and the land revenue payable annually is Rs. 160, then, in a case coming under clause (i), the compensation will be (Rs. 50+Rs. 10) x 20 = Rs. 1,200. Illustration (B).—If the annual rent (exclusive of land revenue and cesses) is Rs. 50 and the land revenue payable annually is Rs. 160, then in a case coming under clause (ii), the compensation will be (Rs. 50+Rs. 20) x 25 = Rs. 1,750. (b) Where the rent payable by the occupancy tenant is not in any way expressed in terms of the land revenue in respect of the land and is paid as a share of produce, be equal to the average market value of the land as the landlord's share of the produce bears to entire produce of the land; (c) where the rent is paid partly in cash (whether a fixed amount or at a fixed rate with reference to land) and partly as a share of the produce, be equal to twenty times the average annual rent in respect of the land; Explanation.—For the purpose of determining the average market value of the land or average rent under this clause, the average of the market value of the land, or as the case may be, of the rent paid or payable and in any case where rent is a share of the produce, the average of the price of the produce, during a period of fifteen years commencing from the 1st day of June, 1935, shall be taken into account. (c) where the share in the Shamilat has also vested in the occupancy tenant, the amount of compensation for it shall be equal to five times the land revenue.