Research › Browse › Judgment

Supreme Court of India · body

1922 DIGILAW 34 (SC)

FORT PRESS COMPANY, LIMITED v. MUNICIPAL CORPORATION OF THE CITY OF BOMBAY

1922-05-25

LORD ATKINSON, LORD BUCKMASTER, LORD CARSON, LORD SUMNER, SIR JOHN EDGE

body1922
Judgement Appeal from a judgment and decree of the High Court in its appellate jurisdiction (July 31, 1919) affirming a decree of the Court in its original civil jurisdiction. The suit was instituted by the respondents in the High Court in the circumstances stated in the judgment of the Judicial Committee. The plaint prayed for a declaration that there was a contract binding on the defendants (the present appellants) in the terms of the letter of September 12, 1917 (referred to in the judgment), for declarations giving effect to that contract in the land acquisition proceedings, and for further relief. The suit was tried by Macleod J. who found that there was a concluded and valid agreement between the parties, and declared substantially as prayed. The appeal was heard by Martin and Heaton JJ. and was dismissed. The terms of the decree however were slightly modified and as varied declared as follows " That upon the true construction of the said agreement and as between the parties thereto (a) the defendants are not entitled to claim in the proceedings before the Collector under the Land Acquisition Act any sum for compensation other than Law Rep. 49 Ind. App. 331 ( 1921- 1922) Fort Press C ompany, Limited v. Municipal C orporation 146 Rs.1,45,517 or to proceed in the said proceedings on any other footing and (b) the defendants are not entitled to any compensation in the said Land Acquisition proceedings beyond Rs.1,45,517 after allowing thereout for deductions of the capitalized dues to the Collector and of the easements of the neighbouring properties, if any, and (c) that if the Collector awards as compensation a sum more or less than Rs.1,45,517 the excess or deficiency will have to be adjusted as between the plaintiffs and defendants on the basis of the figures and terms agreed upon in the said contract and the sum found due as the result of such adjustment will have to be paid or made good to the defendants or the plaintiffs as the case may be." 1922. May 25. G. J. Talbot K.C. and Wootten K.C. for the appellants. The procedure under the Land Acquisition Act, 1894, differs from that under the English Lands Clauses Acts. The Indian Act gives an overriding power, vested in the Government, to settle the compensation by the procedure under the Act. May 25. G. J. Talbot K.C. and Wootten K.C. for the appellants. The procedure under the Land Acquisition Act, 1894, differs from that under the English Lands Clauses Acts. The Indian Act gives an overriding power, vested in the Government, to settle the compensation by the procedure under the Act. No binding contract could be made by the parties after the proceedings under the Act had been instituted. The letters amount only to admissions between the parties as to the value of the property. If there was a binding agreement, it left the value of the easements to be determined by the Collector. [Reference was made to the Land Acquisition Act, 1894, passim; the City of Bombay Municipal Act (III. of 1888), s. 91, sub-s. 2; and Ezra v. Secretary of State for India, (( 1906) L. R. 32 I. A. 93.)] Upjohn K.C., Sir George Lowndes K.C., and E. B. Raikes for the respondents. There is nothing in the Act to prevent the parties coming to an agreement as to the price after the Collector has been called in to adjudicate. [They were stopped.] May 25. The judgment of their Lordships was delivered by LORD BUCKMASTER. In this case the Corporation of Bombay entered into negotiations during the years 1916 and 1917 with the appellants (the Fort Press Co., Ld.) for the purpose of acquiring from them by agreement certain lands that were needed for local purposes. Those negotiations were not successful, and on July 26, 1917, while they were still pending, the Government issued, under the Lands Acquisition Act, at the request of the Corporation, a notification that the lands were required to be taken by the Government for a public purpose. That notification was followed in due course by a notice on August 22, 1917, signed by the Deputy Collector of Bombay. The Collector proceeded in accordance with the powers conferred upon him by the Act to hear the dispute, but on September 12, 1917, the negotiations between the appellants and respondents were reopened and a proposal was made by the Fort Press Company stating that they were willing to accept without prejudice Rs.1,45,517, inclusive of 15 per cent, for compulsory acquisition and the cost of the chimney as the price of the property, subject to certain specified deductions. This proposal was accepted and approved on behalf of the Corporation of Bombay. This proposal was accepted and approved on behalf of the Corporation of Bombay. This alteration in the position of the parties was brought before the Collector in due course, but at an adjourned hearing on January 27, 1918, it was denied on behalf of the appellants that any agreement had been reached, and the Collector accordingly further adjourned the proceedings, in order that, as their Lordships understand the report of what took place, the parties might take the necessary steps to settle whether or not a bargain had been made. Those steps were taken with promptitude by the respondents, who instituted proceedings in the High Court of Judicature at Bombay on March 12,, 1918, asking for a declaration that there was a contract and for a very large number of points of ancillary relief. They succeeded before both Courts—namely, that exercising original and that exercising appellate jurisdiction—and from the latter this appeal has been brought. The foundation of the appellants case rests on the assertion that when once proceedings for compulsory acquisition have been set on foot, the interested parties cannot come to any binding agreement regulating the amount of the purchase price. There is nothing whatever in the Land Acquisition Act itself to negative any such right. If the parties before the institution of the proceedings contemplated by that Act chose to agree, they were perfectly competent Law Rep. 49 Ind. App. 331 ( 1921- 1922) Fort Press C ompany, Limited v. Municipal C orporation 147 to do so and there is nothing whatever in the words of the Act to suggest that this power is thereby taken away. The Act certainly does not directly affect such a result, nor can their Lordships ascertain any reason why the fact that compulsory powers have been invoked in order to secure property from unwilling vendors, should be regarded as denuding all parties of rights they possessed before the proceedings began. In the present case, the Corporation of Bombay enjoys by virtue of its Municipal Act of 1888, express power to acquire immovable property at certain terms and rates and prices as may be thought right by the Commissioner when approved by the Corporation, and consequently the Board is not faced with the consideration of the question whether there was any initial informality in the power of the respondents to do what they have done. Their Lordships think that the agreement made, which is now established beyond dispute, is an agreement which bound the parties and that the High Court, exercising their appellate jurisdiction, was right in the view they took. Their Lordships opinion is not intended to interfere with the jurisdiction of the Collector. It may be a very unusual thing that he should proceed to determine what in his view the price should be, after he had evidence of a complete contract on the point, but if he thought right to do so their Lordships judgment will not affect his taking such a course. All they decide is that the parties, who were competent before the proceedings to agree what they thought was the right price for the property, remain competent after the proceedings and an agreement so made is capable of being enforced in the Courts in the ordinary way. For these reasons, in their Lordships opinion, this appeal fails and must be dismissed with costs, and their Lordships will humbly advise His Majesty accordingly.