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1963 DIGILAW 157 (ORI)

JOACHIN SAHU v. STATE OF ORISSA

1963-11-19

MISRA

body1963
JUDGMENT : Misra. J. 1. A house standing on plot Nos. 627/1 and 627/2 in Holding No. 33 in village Hamirpur was acquired by the State under Revenue Department Notification No. 562/, dated 9-2-1955. Rs. 7,067.87 nP. was offered as compensation to the objector Joachin Sahu. Before the Special Officer, the objector claimed Rs. 32,474.00. This claim comprised Rs. 27,224.00 for the house, Rs. 5000.00 for loss of business and Rs. 250.00 for shifting of the materials. As no agreement was reached with regard to the compensation, the Competent Authority submitted a report to the State Government under Rule 9 of the rules framed under the Orissa Development of Industries, Irrigation, Agriculture, Capital Construction and Re-settlement of Displaced Persons (Land Acquisition) Act, 1948 (Orissa Act 18 of 1948), hereinafter to be referred to as the Act. The objector filed written statement before the Arbitrator claiming a total compensation of Rs. 38,124.00. The State of Orissa filed written statement adhering to the offer made by the Special Officer. The Arbitrator allowed a total compensation of Rs. 11,746.28 nP. This amount consisted of the items (i) Rs. 8496-28 nP. for the value of the main house including fencing and the back filling; (ii) Rs. 250.00 for the value of garden and ditch; and (iii) Rs. 3,000.00 for loss of earnings from his business by the acquisition. The objector has filed M.A. 87 of 1961 claiming a further sum of Rs. 11,893.00. The State of Orissa has filed M.A. 4 of 1962 against the award of the Arbitrator allowing Rs. 4,678.41 nP. in excess of Rs. 7067.87 nP. offered by the Competent Authority, The objector's claim of Rs. 11,893.00 in M.A. 87 of 1961 consisted of the items, as supplied to me by Mr. Mohapatra: (i) House Rs. 2843.00 (ii) Cost of the road Rs. 200.00 (iii)(a) cost of garden Rs. 250.00 (b) cost of fencing the garden Rs. 200.00 (iv) Cost of back filling Rs. 200.00 (v) Potential value Rs. 2,000.00 (vi) Loss of business and goodwill Rs. 7,000.00 The objector further claims Rs. 250.00 as the charge for shifting the residence and the business and a solatium at fifteen percent statutorily payable u/s 23(2) of Act I of 1894 on the total sum allowed in appeal for the compulsory nature of acquisition. The merit of the claim in each of the items requires examination in these appeals. 2. 250.00 as the charge for shifting the residence and the business and a solatium at fifteen percent statutorily payable u/s 23(2) of Act I of 1894 on the total sum allowed in appeal for the compulsory nature of acquisition. The merit of the claim in each of the items requires examination in these appeals. 2. Before entering into details, it is necessary to examine an interesting argument advanced by the learned Advocate General. To appreciate that argument, it is necessary to mention certain facts. The land on which the house stands belonged to Lazavas Khadia and Poulus Khadia who are brothers. Poulus Khadia executed a registered sale-deed (ext 2) on 18-3-1954 in favour of Joachin Sahu for Rs. 450.00 in respect of plot No. 59 in Khata No. 33 with an area of 1.44 acres. In fact, however, the vendee was in possession of plot Nos. 627/1 and 627/2 with an area of 0.87 acre. The house stands on 0.08 acre. Excepting the portion on which the house stands, the remaining area has been taken possession of by the Hindusthan Steel Limited on 27-8-1955. Before the Competent Authority in Miscellaneous Case No. 5 of 1955-56, Poulus Khadia admitted that plot No. 59 was wrongly mentioned in ext. 2 and in fact plot Nos. 627/1 and 627/2 had been sold to the vendee. He also admitted that for the land the transferee was entitled to compensation. Despite this admission, however, the Competent Authority did not pay the compensation to the transferee for the land and paid the amount to Poulus Khadia as he is an Adibasi and the vendee is a non-Adibasi and as there was no permission of the Sub-Divisional Officer sanctioning the transfer. The Competent Authority did not make a reference to the Arbitrator regarding the land despite a prayer made by the objector. On 14-10-1958 the objector filed an application to the Arbitrator asking him to pass an award with regard to the compensation payable for the land. The Arbitrator gets jurisdiction only with regard to matters referred to him by the Competent Authority and has no power under the Act to call upon the Competent Authority to make reference on matters left out. No other appropriate proceedings have been resorted to by the objector challenging the compensation paid to Poulus Khadia on 24-3-1956. The Arbitrator gets jurisdiction only with regard to matters referred to him by the Competent Authority and has no power under the Act to call upon the Competent Authority to make reference on matters left out. No other appropriate proceedings have been resorted to by the objector challenging the compensation paid to Poulus Khadia on 24-3-1956. The Competent Authority accepted the title of the objector in the house and made a reference with regard to valuation of the house. The learned Advocate-General contends that the objector has no title to the house as the sale was illegal and the compensation for the land has been paid to the transferor and that the transferee would be treated to have constructed the house as a licepsee who, on acquisition, is merely entitled to the removal of the house materials and to a compensation of the, "demolition value" of the house. This argument rests on the assumption that the title to the land prior to the acquisition still continued to vest in the transferor despite the transfer. It must again be made clear at this stage that there was no reference to the Arbitrator regarding the compensation payable for the land. So the objector did not get an opportunity in this proceeding to challenge the correctness of the finding of the Competent Authority. The arbitration has proceeded on the accepted position that the title to the house, as an owner and not as a licensee, vests in the objector. Section 2(e) of the Act defines 'land' to include benefits to arise out of land, and things attached to the earth or permanently fastened to anything attached to the earth. The learned Advocate-General is correct in his view of the law that if the ownership of the land vests in the transferor, the ownership of the house cannot vest in the transferee, and that in such a circumstance, the person who constructed the house would be entitled to remove the house and the compensation payable to him in ordinary course would be not more than what has been called the demolition value, viz., the value of the materials less the cost of removal- AIR 1927 135 (Privy Council) . This argument is, however, not available to him in view of the fact that the reference to the Arbitrator was made on the accepted position by both the parties that the title of the house vested in the objector as a full owner and not as a licensee. If the title itself would have been the subject-matter of the reference to the Arbitrator by the Competent Authority, then the Arbitrator could have gone into the question regarding the title of the land both on the ground that the transfer was invalid in law and on the ground that one of the brothers effected the transfer and the other brother was not a party to it, and as such, was not bound by the transfer. The argument regarding illegality of the transfer is based on Section 7(b)(i) of the Orissa Merged States' (Laws) Act, 1950 (Orissa Act IV of 1950). It runs: 7. Notwithstanding anything contained in the tenancy laws of the merged States as continued in force by virtue of article 4 of the States Merger (Governor's Provinces) Order, 1949: (b) an occupancy tenant shall be entitled: (i) to freely transfer his holding subject to the restriction that no transfer of a holding from a member of an aboriginal tribe to a member of a non-aboriginal tribe shall be valid unless such transfer is made with the previous permission of the Sub-divisional Officer concerned. To have a finding that the transfer is contrary to law, the state of Orissa is to establish that the transferors were occupancy tenants and belong to an aboriginal tribe, that the transferee belongs to a non-aboriginal tribe, and that the transfer was made without the previous permission of the Sub-divisional Officer concerned. Though in orders dated 2-10-1955 and 11-8-1957 the Competent Authority came to a conclusion that the transferor is an Adibasi and the vendee is a non-Adibasi and that the transfer was effected without the permission of the Sub-divisional Officer, there is no mention therein that the vendor was an occupancy tenant. The illegality of the transfer was not the subject-matter of the reference and even in the written statement no such objection was taken. In the grounds of appeal before the High Court also this point has not been raised. Apparently this point did not strike the learned Advocate-General until the stage of argument. The illegality of the transfer was not the subject-matter of the reference and even in the written statement no such objection was taken. In the grounds of appeal before the High Court also this point has not been raised. Apparently this point did not strike the learned Advocate-General until the stage of argument. Though the contention is a substantial one and might have succeeded, it is not a pure question of law but is one of mixed question of law and fact. When the reference was made on the basis that the objector has absolute title to the house, the State Government should have opposed the question before the Arbitrator on this ground. This point cannot be permitted to be raised for the first time in the High Court. Under the Land Acquisition Act, the position of law is well settled that the jurisdiction of the Courts under that Act is a special one and is strictly limited by the terms of Sections 18, 20 and 21. It only arises when a specific objection has been taken to the Collector's award and it is confined to a consideration of that objection. Once it is ascertained that the only objection taken is to the amount of compensation, that alone is the matter referred and the Court has no power to determine or consider anything beyond it. The question of title to the land acquired is not relevant in a reference on the question as to the amount of compensation, because in in inquiry as to the amount of compensation, only the question is how much more the claimant is to get and how much more is the Government to pay. It does not involve the determination of the question of right to claim or liability to pay any additional compensation (A.I.R. 930 P.C. 64 and Secretary of State Vs. Shyamapada Banerjee, . The learned Advocate-General, however, argued that there are no provisions in the Act corresponding to Sections 18, 20 and 21 of the Land Acquisition Act. This argument is not sound. The Act follows the Land Acquisition Act in its scheme and pattern though in the matter of granting compensation certain provisions have been excluded. To test the correctness of this argument, the various provisions of the Act and the Rules made thereunder need close examination. This argument is not sound. The Act follows the Land Acquisition Act in its scheme and pattern though in the matter of granting compensation certain provisions have been excluded. To test the correctness of this argument, the various provisions of the Act and the Rules made thereunder need close examination. u/s 7(1)(b) where no agreement can be reached with regard to the amount of compensation, the State Government shall appoint an Arbitrator. Section 7(1)(d) lays down that at the commencement of the proceedings before the Arbitrator, the Government and the persons to be compensated shall state what in their respective opinions is a fair amount of compensation. Section 14(1) empowers the State Government to make rules to carry out the objects of the Act. u/s 14(2)(b) such rules may prescribe the procedure to be followed in arbitration under the Act. Rule 5(1) lays down that on the day fixed for inquiry, the Competent Authority shall proceed to enquire into the objections (if any) which any person interested has stated pursuant to a notice given under Rule 4. He shall make a record in writing by an order u/s 9 of the Act of (i) the true area of the land, (ii) the compensation which he in his opinion should be allowed for the land and (iii) the apportionment of the said compensation among all the persons known or believed to be intensity in the land, or whom, or whose claims, he has information, whether or not they have respectively appeared before him. The aforesaid three items are identical with the items in respect of which Section 18 of the Land Acquisition Act makes provision. Rule 6 provides that if the person or persons do not agree to accept the compensation offered by the competent authority, or if there be any dispute as to the right to receive the compensation in whole or part, the competent authority shall deposit the amount of compensation as Revenue Deposit in his favour and refer the case to Government as provided in Rule 9 for adjudication by the Arbitrator. The underlined clause corresponds to a reference to be made to the Arbitrator under the Land Acquisition Act. Under the Land Acquisition Act, the reference is to be made by the Collector directly. The underlined clause corresponds to a reference to be made to the Arbitrator under the Land Acquisition Act. Under the Land Acquisition Act, the reference is to be made by the Collector directly. But according to the Rules under the Act, the case is to be referred to the Government which would refer it to the Arbitrator for adjudication. Rule 8 prescribes that if any person does not agree to accept the compensation offered by the competent authority or to the apportionment thereof, where there are several claimants, he shall notify his disagreement to the competent authority in writing setting forth therein the grounds of his disagreement within seven days of the receipt of the written notice under Sub-rule (2) of Rule 5. It is to be emphasised that only the grounds of disagreement would be notified. Under Rule 9, when no agreement is reached with regard to compensation, the competent authority shall submit a report to the State Government with the least possible delay. The report shall contain the following information and such other particulars as may be considered necessary in any particular case-(a) the situation and extent of the land, with particulars of any trees, buildings or standing crops thereon; (h) the names of the persons whom he has reasons to think to be interested in such lands; (c) the (sic) in such lands which he considers as entitled to compensation; (d) if the objection be to the interests entitled to the compensation, the grounds on which such interests were determined; and (e) if the objection is to the quantum of compensation, then the compensation which the competent authority thinks is reasonably payable. Thereafter the Arbitrator shall be appointed by the State Government u/s 7(1)(b). The Arbitrator shall, as soon as possible after the case is referred to him, issue notice to the competent authority and to the person or persons to be compensated to appear before him on a date and at a place fixed by him and calling on the parties to file statements relating to their respective cases and produce evidence on their behalf (Rule 12). This rule emphasises the fact that the parties before the Arbitrator shall file statements relating to their respective cases. Under Rule 13, the Arbitrator shall hear the parties and their witnesses, if any, and peruse the documents filed by them. This rule emphasises the fact that the parties before the Arbitrator shall file statements relating to their respective cases. Under Rule 13, the Arbitrator shall hear the parties and their witnesses, if any, and peruse the documents filed by them. If it is found necessary, he may inspect the land or call for further evidence. Under Rule 14, after hearing parties and making local inspection, if any, the Arbitrator shall make his award. These are the various rules under the Act which prescribe a complete procedure for determination of dispute between the parties. The Arbitrator gets jurisdiction only when a reference is made to him by the State Government and him jurisdiction is confined to determination of dispute arising out of respective cases of the parties, as mentioned in the statements filed before him. He cannot go beyond them and decide matters which are not referred to him. Essentially the scheme is the same as prescribed under the Land Acquisition Act so far as hearing of the dispute and making the award are concerned. In the written statement, filed by the State, no objection was taken to the title of the house. On the other hand, the dispute was over the quantum of compensation on the accepted footing that the objector had ownership in the house. The Government did not present a case that compensation was to be given only for the demolition value of the house. 3. I would not take up the various items in respect of which compensation is claimed. Value of the house-The competent authority offered Rs. 7,067.87 nP. in respect of an items. The Commissioner valued the house at Rs. 10,539.28 nP The compensation awarded by the Arbitrator in respect of the house is Rs. 8,496.28 nP In appeal, an additional amount of Rs. 2,043/- is claimed. This additional amount is claimed for an enhanced rate of 30 percent "over-head charges" above the Government rate regarding different items of expenses incurred in the construction of the house. The Arbitrator rejected this claim. I am not also inclined to take a different view. The rates fixed by the Government take into consideration all the factors. I accordingly reject this additional claim. Cost of road Rs. 200/- is claimed on this head though the Commissioner valued the claim at Rs. 400/- to Rs. 500/-. The Arbitrator awarded no compensation. The Arbitrator rejected this claim. I am not also inclined to take a different view. The rates fixed by the Government take into consideration all the factors. I accordingly reject this additional claim. Cost of road Rs. 200/- is claimed on this head though the Commissioner valued the claim at Rs. 400/- to Rs. 500/-. The Arbitrator awarded no compensation. According to the objector, he constructed this road on the land of P.W. 4 to have an access to his house. P.w. 4's land has been acquired and he has been paid compensation for the same. In the circumstances, the objector is not entitled to any claim on this head. Cost of garden and the cost of fencing garden-The Commissioner had valued both the items at Rs. 2,000/-. The Arbitrator awarded Rs. 250/- regarding the cost of garden and granted no compensation for the funcing on the ground that it was included in the house itself. Rs. 450/- more has been claimed in appeal on both these items. There were 132 trees in the garden and the cost of fencing had not been included in the compensation awarded in respect of the house. The learned Advocate-General concedes the claim or Rs. 450/- on both these items. I am satisfied on the materials on record that this concession is well founded. The objector is entitled to a decree forthis amount. Cost of back filling-The Commissioner valued it at Rs. 200/- and no compensation was awarded by the Arbitrator. The claim is reasonable. The objector had fined a ditch in the back of the house. The learned Advocate General also concedes this item. Potential value-Rs. 2,000/- has been claimed in appeal towards the potential value. Mr. Mohapatra does not press this item of claim and it is accordingly rejected. Loss of business and loss of goodwill-This item was not referred to the Commissioner for valuation and was never claimed before the competent authority. The Arbitrator has awarded Rs. 3,000/- for loss of business. A further claim of Rs. 7,000/- has been made in appeal. Government has filed cross-objection against this item. u/s 7(1)(e) of the Act, the Arbitrator in making his award shall have due regard to the provisions of Sub-section (1) of Section 23 of the Land Acquisition Act, 1894. Section 23 of the Land Acquisition Act, prescribes various matters to be considered in determining compensation. 7,000/- has been made in appeal. Government has filed cross-objection against this item. u/s 7(1)(e) of the Act, the Arbitrator in making his award shall have due regard to the provisions of Sub-section (1) of Section 23 of the Land Acquisition Act, 1894. Section 23 of the Land Acquisition Act, prescribes various matters to be considered in determining compensation. In determining the amount of compensation to be awarded for land acquired under that Act, the Court shall take into consideration the damage, if any, sustained by the person interested, at the time of the Collector's taking possession of the land, by reason of the acquisition injuriously affecting his other properties, movable or immovable, in any other manner, or his earnings (Section 23(1), Fourthly). There can be no dispute that the objector would be entitled to compensation for loss of business or good will under this clause if the acquisition would injuriously affect the business. The person interested must, however, sustain damage at the time of the Collector's taking possession of the land. The property in dispute, is the house and admittedly possession of the house has not been taken even till now. The objector in his deposition stated: From 1956 I closed the shop altogether as the passage was blocked and I was busy in these acquisition proceedings. This statement is a clear admission that there would be no damage in respect of business which no longer exists by the time the Collector would take possession. The objector is therefore not entitled to any compensation on this head. The compensation of Rs. 3,000/- awarded by the Arbitrator on this head is refused. Charge for shifting residence and business-The competent authority offered to shift the articles and materials in the Government truck. The expenses claimed under this head is only Rs. 25/0-. The learned Advocate-General does not contest this item. Solatium--The objector claims solatium at fifteen per cent as is payable u/s 23(2) of the Land Acquisition Act on the total sum allowed in appeal for the compulsory nature of the acquisition. There is no corresponding provision in the Act. In State of Orissa v. Banamali Babul 27 (1961) C.L.T. 164 interest was granted without there being corresponding provision as it was construed to come within the contents of compensation. There is no corresponding provision in the Act. In State of Orissa v. Banamali Babul 27 (1961) C.L.T. 164 interest was granted without there being corresponding provision as it was construed to come within the contents of compensation. The analogy cannot be extended to solatium which does not come within the ambit of compensation which is the just equivalent of what the owner has been deprived of. 4. In the result, the objector is entitled to the following amount in all: 4. Charge for shifting residence and business Rs. 250.00 (decreed in appeal). Total Rs.9,646.28 nP. M.A. 87 of 1961 is allowed for an amount of Rs. 900/-and M.A. 4 of 1962 is allowed for an amount of Rs. 3,000/-. Parties to bear their own costs of these appeals. The objector is entitled to interest at the rate of six (6) percent per annum from the date of taking possession of the house till final payment. Final Result : Allowed