HAJI MOHAMMAD EKRAMUL HAQ versus THE STATE OF WEST BENGAL

KAl'UR, J.-This is an appeal pursuant to special leave granted by this Court against the judgment and order of the High Court of Calcutta varying the order of the arbitrator in regard to compensation for compulsory requisitioning of the premises in dispute.

p. 923

The appellant before us is the owner of the premises in dispute which at the relevant time consisted of four storeys, the ground floor and three upper floors and the respondent is the State of West Bengal which was the opposite party before the arbitrator. This building (No. 9 Chittaranja.n Avenue) was constructed before July 28, 1940, and was ta.ken on a. registered lease for three yea.rs by the Bengal Central Public Works Division on a rental of Rs. 1,950 per mensem inclusive of taxes. On the termination of the lease the building was requisitioned by the West Bengal Government and taken possession of on July 30, 1943. The Land Acquisition Officer offered Rs. 2,200 per mensem inclusive of taxes in the form of rent as eompensa.tion. As,'"' th JJ t d'd t t th' t' th

pp. 923–924

a.ppe a.n 1 no agree o 1s compensa. ion matter was referred under s. 19 of the Defence of India. Act to an arbitrator Mr. J. De. He held that Rs. 2,200 per mensem fixed by the Land Acquisition Collector was a. fair compensation. Against this order the appellant took an appeal to the High Court who set a.side the order of the arbitrator, remanded the case to the arbitrator and la.id down the following principle for the ascertainment of compensation :-

p. 924, margin E

" therefore, in deciding upon a. fair rent, for the purpose of section 23 of the Land Acquisition Act, must be a. notional fair rent of a. hypothetical tenant, and the assessment of such notional fair rent must be based upon a. consideration which does not take into account restrictions temporarily imposed by any restrictive executive ord11r or legislation like Rent Control Order, etc. The assessment in practice should be a.s if it was of a. house of like nature let out for the first time to a. tenant who is not compelled to let out. The practical method will be to assess rent as it was a. new house for the first time let out on tha.t date". On remand the a.ppella.nt who had previously claimed Rs. 3,998 a.s compensation plus Rs. 125 for working a.nd maintaining the lift, increased his demand to Rs. 7,700 per mensem exclusive of municipal taxes, a.nd a.lso Rs. 125 for the use of the lift. He stated in his application tha.t the a.mount previously claimed by him " wa.s unduly low a.nd wa.s· ma.de through mistake a.nd misca.lcula.tion a.nd misconception of things and principle a.nd moreover it wa.s due to the wa.nt of proper information a.t the time ". After the remand he examined further evidence a.nd the respondent a.Jso examined some witnesses. The new arbitrator Mr. J. C. Ma.zumda.r held that the matter must be decided according to the rent prevailing in the locality in 1943 for similar buildings with similar accommodation a.nd amenities a.nd proceeding on this basis he a.warded compensation of Rs. 2,581-8 per mensem inclusive of a.JI taxes, cost of normal a.nd essential repair, cost of the upkeep of the lift and potential value of the building in an important commercial locality having regard to the fact that the period of requisition was indefinite. This sum was to be paid as from August 1, 1943. This order did not satisfy the appellant and against it he took an appeal to the High Court who fixed the compensation at Rs. 16 per hundred sq. ft. for the ground floor and Rs. 13 per hundred sq. ft. for the 1st floor and Rs. 12 per hundred sq. ft. for the second floor and Rs. 11 per hundred sq. ft. for the third floor and thus calculating for tho total floor area i.e. 5333 sq. ft. per floor it held the compensation to be Rs. 2,773 per mensem. It rejected the additional award of 10% on account of potential value but allowed Rs. 77 per mensem on account of the lift and thus it awarded a total compensation ·of Rs. 2,850 per mensem. The High Court however observed:-

pp. 924–925, margin E

"We must make it clear further that in making the above calculation of the monthly compensation at Rs. 2,850 we have also taken into consideration the additional advantages due to the special adaptability of the disputed premises for the purposes of the Controller of the Army Factory Accounts and his possible willingness to pay a somewhat higher rent for the same (Vide 66 I.A. 104) ". Against this judgment the appellant has brought this appeal by special leave.

p. 925

It was argued on behalf of the appellant that the method adopted by the High Court for arriving at the figure of compensation was erroneous because it proceeded on wrong principles in that it-.took averages of rent paid for the premises No. 5 Chittaranjan Avenue and for No. 22 Chittaranjan Avenue and ignored the expert opinion of witness U. P. M:alik according to which the rent for ground floor should have been Rs. 23 per hundred sq. ft. and Rs. 17-8 per hundred sq. ft. for other floors and also that the potentialities of the building had not been taken into consideration.

p. 925

The High Court found that premises No. 22 Chittaranjan A venue was a little better than the premises in dispute and they (premises in dispute) were "some· what better than the premises No. 5 Chitta.ranjan Avenue ". In these circumstances it cannot be said that the High Court committed any error of principle in taking an average of the two premises No. 22 and 5 Chitta.ranjan- Avenue. The evtdence of u. P. Malik was merely an opinion unsupported by any reasons and in the circumstances of this ca8e the High Court has rightly not plac~d any reliance upon i,t.

pp. 925–926

It was then urged that the High Court had erred in taking into consideration the rent payable for the premises No. 22 Chittaranjan A venue, as recitals with regard to premises No. 22 in Ex. D, which was an award for premises No. 31 were inadmissible in evidence. This document has not been printed and we do not know what its contents'are or its language is. :No objection was ta.ken to its admissibility either before the arbitrator ur before the High, Court. It was referred to in the evidence of the witness for the respondent, Nanibhushan Sen Gupta who stated that Rs. 2,200 would be a fair rent for the premises and in coming to this conculsion he based his calculation "on the award in L. A. Case No. 61 of 1944 in respect of premises Nos. 22 and 31 Chittaranjan Avenue and Ex. D was the judgment of that case". In these circumstances no objection as to the admissibility of this document can be allowed to be raised at this stage.

p. 926

It was then argued that the High Court in arriving at the amount of compensation had ignored the potential value of the premises in dispute in an important commercial locality which the arbitrator Mr. J.C. Mazumdar had evaluated at 10% of the amount determined by him. This contention is well founded. The High Court disallowed this. award of 10% without assigning any reason. It said :-

p. 926

"and although we are not wholly accepting his additional award of 10% on account of so caJled potentialities, etc., including the lift, we are inclined to assess this further compensation on account of the lift at Rs. 77 per month". The principles on which compensation is to be ascertained under the provisions of s. 19 of the Defence of India Act are the same as those given in s. 23(1) of the Land Acquisition Act, 1894, and one of the principles of ascertaining compensation is to evaluate the potentialities of the land or the premises as the case may be which differ under different circumstances. The arbitrator in evaluating the potentialities said:-

pp. 926–927

" In 1943, when the building was first requisitioned, the Controller of Army Factory Accounts had already his office in the neighbouring house of 5 Chittaranja.n A venue. This building had, therefore, a special value to the Controller as it would certainly be more advantageous to him if he could locate his office in the premises in question. This gave greater bargaining power to the landlord and, therefore, the potential value to him was greater. It has also been conceded that the requisition is for an indefinite period. The Municipal assessment valuation (Ex. B series) was based purely upon the rental which the building was fetching prior to 1943 and did not take into account the potential value, the value which will be maintained for a long period of lease and the additional burden on the lift. For all these three factors, I allow an additional 10 p. c. compensation of Rs. 234-12 As. per mensem." The value of potentialities is to be ascertained by the arbitrator as best as he can from the materials before him. In Vyricherla Narayana Gajapatiraju v. The Revenue Divisional Officer ( Lord Romer said :-

p. 927

" The truth of the matter is that the value of the potentiality must be ascertained by the arbitrator on such materials as are available to him and without indulging in feats of the imagination."

p. 927

Another objection taken was in regard to compensation for the lift. The High Court awarded Rs. 77 but on what basis it is not clear. In our opinion this claim of Rs. 125 per mensem was not excessive considering that two departments of the Government were using this lift, which is clear from the fact that an overhead bridge had been constructed for going from premises No. 9 Chittaranjan Avenue to the other building which the Government had also requisitioned. This will work out to Rs. 3,175. In the circumstances Rs. 3,200 per mensem would be a fair compensation and we would therefore enhance the compensation to that figure and the appeal would be allowed to that extent. ·

pp. 927–928

Although the appellant has not succeeded in getting the whole of his claim decreed, there is no reason for depriving him of his costs proportionate to his success. We accordingly allow proportionate costs.

p. 928

Appeal partly allowed. ATTAR SINGH & OTHERS

p. 928

v.

p. 928

THE STATE OF U. P. R. c. J., N. H. B. P. K. and K. N. JJ.)

p. 928

ricultural .Holdings, Consoli<fation of-Constitutional validity o enactment-Procedure, if _discriminatory-U.P. Consolida-

p. 928

o Holdings Act (U.P. V of r954) as amended by Act No. XV.( of r957, 1ss. 8, 9, r4 to r7, r9 to 49-Constilution of India, Arts. r4, 3r(2).

p. 928

The petitioners challenged the constitutional validity oi the U.P. Consolidation of Holdings Act (U.P. V of 1954), as amended by the amending Acts, which was intended to encourage the development agriculture by the allotment of compact areas to tenure-holders in lieu of scattered plots so that large-scale cultivation might j)Qssible with all its attendant advantages. A notification was issued under s. 4 of the impugned Act declaring the decision of the State Government to formulate a scheme of consolidation in respect of the area where the petitioners held their lands. This was followed up by a statement of proposals under s. 19. The petitioners objected to these proposals and thereafter appealed to the Settlement Officer (Consolidation) but to no effect. It was contended, inter alia, on their behalf that

p. 928

the provisions of ss. 8, 9 and read with those of s. 49 of the impugned Act were discriminatory in that they laid down a procedure for correction and revision of revenue records for

p. 928