STATE OF GUJARAT v. SHAH DINESHCHANDRA MOHANLAL — 1970 DIGILAW 26 (GUJ)

S. H. SHETH, J. ( 1 ) THE defendants are the owners of S. No. 2 admeasuring 5 bighas-3 Visvasis situate in the Sim of Village Kansa in Patan Taluka of Mehsana District. This land was acquired by the State Government on 24 December 1947 for a public purpose. Its possession was not taken. In course of time the State Government felt that it did not require the land for the purpose for which it was originally acquired. Therefore on 9 April 1956 it issued a notification under sec. 48 of the Land Acquisition Act withdrawing from the acquisition. ( 2 ) AFTER the land was acquired proceedings for determining compensation payable for compulsory acquisition of the said land were instituted and the Land Acquisition Officer made an award in favour of the defendants for a sum of Rs. 651-4-10. Thereafter at the instance of the defendants a reference was made to the District Court under sec. 18 of the Land Acquisition Act and the District Court enhanced the compensation to a much higher amount. Thereafter the State withdrew from the acquisition on 9th April 1956. ( 3 ) AFTER having withdrawn from the acquisition of the land the State Government called upon the defendants to refund to them the sum of Rs. 651-30 which they had paid to the defendants under the award of the Land Acquisition Officer. The defendants contended that they had suffered loss during the pendency of the acquisition proceedings and that therefore the loss suffered by them should be determined under sec. 48 of the Land Acquisition Act. The Collector who was the Land Acquisition Officer did not determine the loss suffered by the defendants. The defendants did not refund to the State Government the sum of Rs. 651-30 p. which they had received under the award of the Land Acquisition Officer. ( 4 ) THE State of Bombay therefore filed Civil Suit No. 95 of 1959 in the Court of the Civil Judge (Senior Division) Mehsana for recovering from the defendants the aforesaid sum of Rs. 651-30 p. with future interest and costs. ( 5 ) THE defendants resisted the suit on the ground that they were entitled to compensation under sec. 651-30 p. with future interest and costs. ( 5 ) THE defendants resisted the suit on the ground that they were entitled to compensation under sec. 48 (2) of the land Acquisition Act for the loss suffered by them during the pendency of the acquisition proceedings and that therefore they were not liable to refund the said amount to the State Government. ( 6 ) THE learned trial Judge framed the necessary issues and recorded the evidence and held that the plaintiff-State was not entitled to the recovery of the said amount because compensation for loss suffered by the defendants during the pendency of the acquisition proceedings was not fixed by the Collector under sec. 48 of the Land Acquisition Act. in that view of the matter the learned trial Judge dismissed the suit with costs. ( 7 ) THE State of Gujarat appealed against the decree of the learned trial Judge in the Court of the District Judge at Mehsana The learned Assistant Judge dismissed the appeal. ( 8 ) IT is against that appellate decree that the State of Gujarat has filed the present Second Appeal. ( 9 ) THE learned Government Pleader has contended before me that there is no provision in the Land Acquisition Act which provides that the determination and payment of compensation under sec. 48 of the Land Acquisition Act is a condition precedent to the refund of the amount which the defendants received under the award made by the Land Acquisition Officer. He has invited my attention to sec. 48 of the Land Acquisition Act. Sub-secs (2) an (1 (3) thereof which are material for the purpose of this appeal provide as under. (2) Whenever the Government withdraws from any such acquisition the Collector shall determine the amount of compensation due for the damage suffered by the owner in consequence of the notice or of any proceedings thereunder and shall pay such amount to the person interested together with all costs reasonably incurred by him in the prosecution of the proceedings under this Act relating to the said land. (3) The provisions of Part III of this Act shall apply so far as may be to the determination of the compensation payable under this section. A bare reading of these two sub-sections makes it clear beyond any doubt that the determination and payment of compensation under sec. (3) The provisions of Part III of this Act shall apply so far as may be to the determination of the compensation payable under this section. A bare reading of these two sub-sections makes it clear beyond any doubt that the determination and payment of compensation under sec. 48 is not a condition precedent to the refund of the amount which the defendants received under the award of the Land Acquisition Officer. Mr. Barot appearing for the defendants has not been able to show any other provision of the Land Acquisition Act by which the defendants can claim to retain the amount received by them under the award of the Land Acquisition Officer until the Collector determines the compensation under sec. 48 of the Land Acquisition Act. In that view of the matter the Courts below were in error in holding that the determination and payment of compensation under sec. 48 of the Land Acquisition Act is a condition- precedent to the refund of the amount received by the defendants from the Land Acquisition Officer under the award made by him. I must therefore set aside that finding of the Courts below. ( 10 ) THE learned Assistant Judge has in paragraph 8 of his judgment brought into play the principle of equitable set off. In my opinion the principle of equitable set off has no application to this case. In order to invoke the principle of equitable set off particulars of the claim made by the defendants must be stated to the Court. The principle of equitable set off can be invoked for an ascertained amount. In this case in paragraph 12 of the written statement Ex. 9 the defendants have stated that they have suffered the loss of Rs. 2003-7-10 on account of the compulsory acquisition of the land and the withdrawal therefrom. Therefore one of the conditions required to invoke the principle of equitable set off has been ex facie satisfied. They have also stated a number of details in the said paragraph of the written statement showing how they claim the aforesaid amount of Rs. 2003-7-10. The second condition therefore that particulars of the claim must be stated to the Court also appears to be ex facie satisfied. But the difficulty in the way of the defendants is that the determination of compensation under sec. 48 is within the exclusive jurisdiction of the Land Acquisition Officer. 2003-7-10. The second condition therefore that particulars of the claim must be stated to the Court also appears to be ex facie satisfied. But the difficulty in the way of the defendants is that the determination of compensation under sec. 48 is within the exclusive jurisdiction of the Land Acquisition Officer. Sub-sec. (3) of sec. 48 provides that the provisions of part III of the Act shall apply so far as may be to the determination of the compensation payable under sec. 48. Therefore in my opinion it is not open to the defendants to make a direct claim in the Civil Court and to claim the set off. In that view of the matter the learned Assistant Judge was in error in invoking the principle of equitable set off by which he has sustained the decree of the trial Court. ( 11 ) IN this case as far back as in 1956 the defendants made applications to the Collector of Mehsana to determine the compensation payable to them under sec. 48. On 18th June 1956 they made application Ex. 64. No attention was paid to that application by the Collector of Mehsana On 7th October 1956 the defendants made another application Ex. 67 to the Collector but the Collector did not pay any attention to that application also. The defendants have a statutory right to claim compensation under sec. 48 of the Land Acquisition Act and it is a statutory duty and obligation of the Collector to determine the amount to which the defendants may be entitled. For all these years since 1956 the Collector has chosen not to perform his statutory obligation and to determine the claim for compensation made by the defendants. It is true that the defendants could have claimed a writ against the Collector directing him to determine the amount but the defendants on their part have not done so. In this state of affairs whereas on one hand the State virtually denies to the defendants their claim to compensation under sec. 48 of the Land Acquisition Act it on the other hand claims the amount paid to the defendants under the award of the Land Acquisition Officer. ( 12 ) MR. Barot has contended before me that the defendants have lien on the monies paid by the State Government to the defendants under the award of the Land Acquisition Officer. 48 of the Land Acquisition Act it on the other hand claims the amount paid to the defendants under the award of the Land Acquisition Officer. ( 12 ) MR. Barot has contended before me that the defendants have lien on the monies paid by the State Government to the defendants under the award of the Land Acquisition Officer. The learned Government pleader in reply has submitted that there is no statutory provision which confers upon the defendant the right to retain the monies paid by the State Government to the defendants. He has also submitted that there is no equity de hors the law which obtains in this country. It is true that there is no statutory lien in cases of this type. We have as for example secs. 170 171 and 221 of the Indian Contract Act which respectively provide for (a) bailees particular lien (b) general lien of bankers factors wharfingers attorneys and policy brokers and (c) agents lien on principals property. Similarly sec. 47 of the Indian Sale of Goods Act 1930 provides for unpaid sellers lien. In the absence of any such statutory provision for lien in the cases of the present type can the principle be extended on equitable grounds ? ( 13 ) LIEN at common law is a right on the chattels of another arising by operation of law (independently of any contract) and giving the lienor a right to retain the goods until the owner has settled some debt connected with the chattels or in the case of some liens unconnected with the chattels. ( 14 ) HOWEVER lien in general has been understood to mean the right to hold the property of another as security for the performance of an obligation or in other words the right to retain property until some debt in claim is paid. ( 15 ) SUCH a lien is known to certain types of transactions. As for example an innkeeper has lien on the lodgers property until the bill for board and lodging is paid. A workman has lien to retain the thing he has been working on until his work has been paid for. A tailor has lien on the coat he has stitched until his bill for stitching has been paid. A carrier has lien to retain the goods carried until his charges have been paid. A workman has lien to retain the thing he has been working on until his work has been paid for. A tailor has lien on the coat he has stitched until his bill for stitching has been paid. A carrier has lien to retain the goods carried until his charges have been paid. ( 16 ) ALL these illustrations of lien however show that though lien does not flow directly from the contract between parties it affects the contractual right. Creditors lien for his debt on the debtors monies also affects the contractual rights of the parties and the contractual relationship between them. In no case it springs directly from a term of contract. It has been discovered and applied to protect the contractual rights and to ensure the performance of contractual obligations. Can it be extended to the realm of eminent domain ? ( 17 ) IN matters relating to compulsory acquisition of land firstly there is no statutory lien available to a claimant in case of the present type. Secondly they are beyond the realm of contract. ( 18 ) HOWEVER it cannot be gainsaid that the State Government or the Land Acquisition Officer as the case may be has statutory obligation under sec. 48 of the Land Acquisition Act to ascertain and pay the damages suffered by the claimant during the pendency of the acquisition proceedings. In this case the defendants have indisputably suffered damages. Only the quantum of damages has remained unascertained though the defendants on their part have stated a definite amount in paragraph 12 of their written statement. The jurisdiction to determine or ascertain the amount has been vested in the present case in the Collector who has very unfortunately and to the detriment of the defendants rights allowed the matter to drift for 14 years as if he is answerable to none and as if he is the monarch of all he surveys. This neglect of his statutory duty reducing the statutory right of the defendants to ransom is most lamentable and deserves to be severely condemned. ( 19 ) THE statutory obligation of the State Government to pay damages to the defendants reduces it to the position of a debtor of the defendant who in their turn become creditors. This neglect of his statutory duty reducing the statutory right of the defendants to ransom is most lamentable and deserves to be severely condemned. ( 19 ) THE statutory obligation of the State Government to pay damages to the defendants reduces it to the position of a debtor of the defendant who in their turn become creditors. The defendants as such creditors have in their hands debtors monies which they received in course of the same transaction as compensation for the compulsorily acquired land and which they are otherwise liable to refund to the State Government on account of the latter having withdrawn from acquisition. In my opinion under the aforesaid circumstances a claimant has a right to retain the amount of compensation received by him from the Land Acquisition Officer or the acquiring authority even after the Land Acquisition Officer or the acquiring authority has withdrawn from acquisition until his claim under sec. 48 sub-sec. (2) of the Land Acquisition Act if he has any is determined and paid. I apply this principle of lien on the analogy of the relationship creditor and debtor. ( 20 ) THE application of this principle to this case does not violate any statutory provision of law. Nothing which will militate against the application of this principle has been shown to me. It ensures greater protection to a citizens statutory right and prevents it from being defeated. It nullifies undue damage to a citizens statutory rights by omission of the State Government or the acquiring authority to perform its statutory obligation. It shall make the State Government or the acquiring authority as vigilant and careful about a citizens claim against it as it is for its own claims. . ( 21 ) IN this view of the matter the defendants have in my opinion lien on the amount of compensation received by them from the State Government until their claim is determined and paid by the State Government. ( 22 ) FOR the reasons stated in this judgment and not for the reasons stated in the judgment of both the Courts below I confirm the decree passed by the learned Assistant Judge and dismiss the appeal with costs. Appeal dismissed. .