ORDER Dubey, J. -- 1. This is an appeal under Section 11 of the Requisitioning and Acquisition of Immovable Property Act, 1952 (No. XXX of 1952) (for short 'the Central Act') against award of compensation, mesne profits and interest awarded vide award dated 19.9.94 made under Section 8 of the Act by learned Arbitrator Mr. Justice G.C. Jain (Retd.) in the matter of arbitration between Shri G.C. Sanghi and others and Union of India. 2. Facts giving rise to this appeal are thus : Respondents own a building Municipal No. 105 (old No. 13) situate in Napier Town, Jabalpur of which carpet area is 4274 suqare feet and plot area is 53970 sq. ft. The said building was requisitioned on 30th January, 1950 by the Deputy Commissioner, Jabalpur under Section 3 of the Central Provinces and Berar Accommodation (Requisition) Act, 1948 (Act No. LXIII of 1948) read with Section 3 of the Central Provinces and Berar Accommodation (Requisition) (Amendment) Act, 1949 (Act No. XXXIX of 1949) (for short the State Act) for the purpose of locating the office of the Delhi Special Police Establishment at Jabalpur. The Provincial Government offered Rs. 225/- per month as compensation which was not agreed by the respondents/owner. Consequently, as provided under Section 4(1)(ii) of the State Act the Provincial Government appointed as arbitrator the District Judge, Jabalpur to fix the fair amount of compensation. The District Judge awarded fair amount of compensation at Rs. 250/- per month under Section 4(1)(iv) of the State Act, vide award dated 18.11.50, which then was enhanced to Rs. 300/- per month vide order dated 2.1.1953. Out of the total area an open piece of land measuring 19903 sq. ft. was released from requisition on 17.6.1977. Thus, the open area measuring about 29763 sq. ft. of the accommodation so requisitioned consisted of front lawn, back lawn, lawn underneath, front and back verandah with open court-yard. The Central Act came into force with effect from 15.3.1987 but the possession of the property was delivered on 17.8.1988. The Central Government fixed the amount of compensation of Rs. 1875/- per month (Rs. 1500+25%) per month from 73.1985. 3. The respondents did not agree to the compensation so fixed for the period from 7.3.80 to 6.3.85 and for the period 7.3.85 onwards, therefore, claimed enhanced compensation, and on elapse of requisition till the delivery of possession mesne profits.
The Central Government fixed the amount of compensation of Rs. 1875/- per month (Rs. 1500+25%) per month from 73.1985. 3. The respondents did not agree to the compensation so fixed for the period from 7.3.80 to 6.3.85 and for the period 7.3.85 onwards, therefore, claimed enhanced compensation, and on elapse of requisition till the delivery of possession mesne profits. The Central Government did not appoint Arbitrator under Section 8(1)(b) of the Central Act. The respondents filed a civil writ petition No. 1139 of 1989 before the Delhi High Court, for appointment of the Arbitrator for assessment of compensation for damages and mesne profits payable to the respondents. By order dated 9.1.90 the Delhi High Court appointed Mr. G.C. Jain (Retired Judge of the Delhi High Court) Arbitrator. 4. The respondents filed their claim before the learned Arbitrator seeking an award for Rs. 6,77,970/- with interest at the rate of 18% per annum from the date amount became due till payment detailised at page 6 of the award. Appellant resisted the claim on various grounds and contended that the monthly compensation determined by the competent officer under the relevant statute is proper and reopening of the same is totally unwarranted, unjustified and unconscionable. Learned Arbitrator framed eight issues arising from the pleadings of the parties. After negativing the contention that the provisions of Central Act were not applicable to the building in question as the property was requisitioned under the State Act and the award dated November 2, 1950 passed by the District Judge and enhanced in appeal by order dated 2.1.53 continued to remain in force till the premises were vacated. The Arbitrator held that the respondents were entitled to the revision of recurring payment from 7.3.1980 to 6.3.1985 and then for the period from 7.3.85 onwards. The respondents were not entitled to get back any excess amount paid as a result of the revision of compensation by the Central Government after the insertion of Section 8(2-A) of the Central Act.
The Arbitrator held that the respondents were entitled to the revision of recurring payment from 7.3.1980 to 6.3.1985 and then for the period from 7.3.85 onwards. The respondents were not entitled to get back any excess amount paid as a result of the revision of compensation by the Central Government after the insertion of Section 8(2-A) of the Central Act. After appreciation of the evidence adduced by the respondents •and taking into consideration of the rent of similar property in the vicinity considering the location, types of construction, amenities, the factors for determination of fair rent, and also taking into account the construction of building in question being old determined the compensation under Section 8(1)(e) of the Central Act which appeared to be just to him for the recurring payment for the period from 17.3 .1980 to 6.3 .1985 was fixed at Rs. 4,200/- per month, total Rs. 2,52,000/- wherein deduction of Rs. 1,12,500/which respondent; have admittedly received was made, the respondents were held entitled to Rs. 1,39,500/-. The recurring payment for the constructed and open area commencing from 7.3.1985 ending on 10.3.1987 was fixed Rs. 6,105/- per month, total Rs. 1,47,334/- less the amount received Rs. 56,592/-, the respondents were held entitled to recover Rs. 90,742/-. As requisitioning period elapsed on 10.3.1987 and premises were vacated on 17.8.1988. therefore, the mesne profits for unlawful possession against the claim of Rs. 15000/- per month, in the absence of evidence, compensation/mesne profits for this period at the rate of Rs. 6,105/- per month, total Rs. 1,05,006/- was awarded, out of which amount of Rs. 40,334/- at the rate of Rs. 2,345/- per month received by the respondents was deducted, the respondents were held entitled to recover a sum of Rs. 64,672/-. The claim of Rs.
6,105/- per month, total Rs. 1,05,006/- was awarded, out of which amount of Rs. 40,334/- at the rate of Rs. 2,345/- per month received by the respondents was deducted, the respondents were held entitled to recover a sum of Rs. 64,672/-. The claim of Rs. 88,200/- for the damage of the property was not awarded holding that the building was constructed in the year 1938 with some concrete out-houses, there was no evidence of misuse or causing damage to the property and on the observations in the order dated 11.11.1950 of the District Judge who was appointed as arbitrator to fix the compensation under the State Act, that the garden had been dried up, there was no satisfactory evidence that during the entire period any repairs were made by the owner, that the damage mentioned in the report produced by the respondents was caused by wear and tear, due to user for about 38 years. Learned arbitrator also awarded simple interest at the rate of 12% per annum on Rs. 1,39,500/- from 7.3.1985 till payment, on Rs. 90,742/- from 10.3.1987 till payment and on Rs. 64,672/- from 17.6.1988. 5. After notice of appeal the respondents have filed cross-objection under Order 41 Rule 22 of the Code of Civil Procedure, read with Section 11 of the Central Act for award Rs. 88,200/- the value of the damage caused to the building. The interest at the rate of 18% per annum with quarterly rest was claimed instead of 12% as awarded by the learned Arbitrator. 6. Having heard Shri O.P. Namdeo, learned counsel for the appellant and Shri J.P. Sanghi for respondents, and on perusal of the record, we are of the opinion that appeal and cross objection have no merit and deserve to be dismissed. 7. The first ground raised in the memo of appeal is that the learned Arbitrator had no jurisdiction under Section 8(1)(e) of the Central Act to decide the legal jurisdictional issue, that the determination of the compensation by the District Judge under the State Act was final and that after enforcement of the Central Act the requisitioned property continued to be governed by the provisions of the State Act and not by the Central Act. The ground was not seriously pressed by learned counsel for the appellant.
The ground was not seriously pressed by learned counsel for the appellant. In our opinion rightly, in view of Section 23 of the Central Act, which deals with validation of certain requisition and acquisitions. The requisition of property made under the State Act, stood validated by Section 23 of the Central Act, as requisitioned property was used or occurred by Central Government for establishing its office of Delhi Special Police Establishment, which was subordinate to Central Government immediately, before 25th January, 1952. For this reason on enforcement of the Central Act the Central Government re-determined the compensation in accordance with the provisions of Section 8 of the Central Act to which the respondents did not agree. As no agreement was reached to the compensation so fixed, the Central Government ought to have appointed an Arbitrator under Section 8(1)(b) of the Act, which was not appointed, hence the respondents filed a writ petition before the Delhi High Court where no objection was raised about the applicability of the provisions of Central Act. The Delhi High Court appointed the Arbitrator under Section 8(1)(b) of the Central Act to determine the fair amount of compensation. In the written statement filed by the appellant before the learned Arbitrator, on the dispute so referred to determine the compensation, the legal questions raised to the applicability of the State Act and not of the Central Act, was decided by the learned Arbitrator after referring to the provisions of the State Act, Section 23 of the Central Act, and the order of the High Court of his appointment under Section 8(1)(b) In our opinion, the decision on the issues in view of Section 23 of the Central Act cannot be said to be illegal or without jurisdiction. 8. Learned counsel for the appellant challenged the determination of amount of compensation at different rates. Section 8(2)(a) of the Central Act provides that' 'the amount of compensation payable for requisitioning of any property shall consist of a recurring payment, in respect of the period of requisition, of a sum equal to the rent which would have been payable for the use and occupation of the property, if it had been taken on lease for that period.
From the above provision it is clear that law does not preclude the owner of the building to claim compensation for different periods when such property is requisitioned under the provisions of the Central Act. 9. The determination of the compensation at different rates for the different periods can also not said to be excessive. On the evidence adduced by the respondents and in the absence of evidence of the appellant in rebuttal, the learned Arbitrator has determined the amount of compensation which appeared to be just after considering the evidence of fair amount of rent of similar property in the vicinity, considering the location, types of construction, amenities available in the property and other circumstances which may help in determining the amount of just compensation. 10. The learned Arbitrator awarded mesne profits at the rate of Rs. 6105/- per month from the date of elapse of the period of requisitioning till the premises were vacated, as the possession of the Central Government was unauthorised and unlawful. Section 6 of the Central Act deals with the release from requisition. From a plain reading of Section 6(1), it is evident that the Central Government is under a legal obligation to release the requisitioned property and restore it in its original condition as far as possible, when the purpose for which it was requisitioned and was being used cease to exist. Sub-Section (1-A) of Section 6 is non-obstante clause to sub Section (1) of Section 6, which mandates to the Central Government to release the property from requisition on the expiry of the statutory period of requisition prescribed by sub-Section (1-A) of Section 6, unless such property is acquired under Section 7 within the period of seventeen years prescribed. On expiry of the statutory period the Central Government-is not entitled to retain possession of premises, and such possession thereafter becomes unauthorised and unlawful. Therefore, the Central Government was bound to deliver possession. See a decision of this Court in Rajendra Kumar and others v. Collector Indore ( 1988 JLJ 682 ) and a decision of Delhi High Court in Rai Dev Singh v. Union of India (AIR 1989 Delhi 238). Therefore, the learned Arbitrator awarded mesne profits on the basis of the compensation determined at the rate of Rs. 6105/- till the date of delivery of possession which cannot be said to be without jurisdiction. 11.
Therefore, the learned Arbitrator awarded mesne profits on the basis of the compensation determined at the rate of Rs. 6105/- till the date of delivery of possession which cannot be said to be without jurisdiction. 11. As to award of interest it was contended that the principle applicable to cases of acquisition under Section 8 of the Central Act cannot be applied in case of requisitioning premises and owner is not entitled to such interest as he gets compensation from the date of dispossession and cannot be said to have been deprived of the income of the property from the date of dispossession. Counsel cited a decision of Delhi High Court in Seth Sat Narain Goenka and others v. Union of India and others (AIR 1970 Delhi 232). The contention has no merit. In view of the decision of the Supreme Court in Abhay Singh Surana and others v. Secretary, Ministry of Communication and others ( AIR 1987 SC 2177 ) where the question of entitlement of interest on the amount awarded by' Arbitrator for requisition of the premises under the Central Act was in issue. The Supreme Court after referring to its earlier decision in Satendra Singh's case ( AIR 1961 SC 908 ) wherein the principle laid down in Inglewood Pulp and Paper Co. Ltd. v. New Burnswick Electric Power Commission (AIR 1928 PC 287) was reiterated that the right to receive interest takes the place of the right to retain possession and is within the rule; unless the statute clearly shows the contrary intention. It would be noticed that owner of property when loses possession of it he is entitled to claim interest in place of right to retain possession. The Supreme Court also referred to Hirachand Kothari (dead) through LRs. v. State of Rajasthan ( AIR 1985 SC 998 ), wherein the principle laid down in Satinder Singh's case ( AIR 1961 SC 908 ) was accepted, observed that the appellants in the appeal are entitled to interest for the period when the premises in question has been re-equisitioned or handed over to the owner on the amount awarded. As to how, the interest would vary, but the right of interest was well averred and should also be considered in the light of the observations of Privy Council in Inglewood Pulp and Paper Co. Ltd. case (supra). 13.
As to how, the interest would vary, but the right of interest was well averred and should also be considered in the light of the observations of Privy Council in Inglewood Pulp and Paper Co. Ltd. case (supra). 13. It takes us to the cross-objection relating to the claim of damages made under Section 8(2)(iv), i.e., for the damages (other than normal wear and tear) caused to the property during the period of requisition, including the expenses that may have to be incurred for restoring the property to the condition in which it was at the time of requisition. On the material placed on record the learned Arbitrator has recorded a categorical finding that the building being old and was requisitioned in the year 1950. The respondents did• not take steps for maintenance and repair till the property was derequisitioned. As to gardens, the District Judge, while fixing the compensation under Section 4(1)(iv) of the State Act in it's award has observed that the gardens were dried up. As to outer gate, pillars also the Arbitrator recorded a finding that the respondents owner did not make any repair during the entire period. The damage mentioned in the report was caused by normal wear and tear due to user for about 38 years. Therefore, the respondents are not entitled to claim for damages. The finding recorded is neither perverse nor manifestly illegal. In our opinion too on the material placed before the learned Arbitrator the respondents are not entitled for any amount under the claim for damage to the property. 14. As to compound interest at the rate of 18% per annum on the amount of compensation so awarded, the Tribunal has already awarded the simple interest on the difference of amount at the rate of 12% per annum which is awarded usually. The claim of compound interest at the rate of 18% per annum is exhorbitant hence cannot be allowed. 15. In the result the appeal and cross-objection are devoid of any merit and are dismissed with no order as to costs.