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2004 DIGILAW 7 (CAL)

UNION OF INDIA v. SHIB CHARAN SARKAR

2004-01-07

D.K.SETH, RAJENDRA NATH SINHA

body2004
D. K. SETH, J. ( 1 ) THESE two appeals arise out of the award and decree dated 15th of April, 1995 passed by the Arbitrator, North 24-Parganas and South 24-parganas in Arbitration Case No. 2 of 1989 (V ). F. M. A. No. 69 of 1996 has been preferred by the Union of India whereas F. M. A. No. 173 of 2003 was preferred by the referring claimant Shib Charan Sarkar. The appeal preferred by referring claimant was earlier in point of time. For the sake of convenience, these two appeals are taken up together. Submission by the respective Counsel: ( 2 ) MR. Roy Chowdhury, learned Counsel appearing on behalf of the Union of India, the appellant in F. M. A. No. 69 of 1996, assailed the award and the decree on the ground that the valuation has not been assessed in accordance with law. The compensation awarded is on the higher side. It had relied on some documents, which are not reliable and the Arbitrator had proceeded to assess the compensation capriciously and arbitrarily. The Arbitrator has not taken into account the relevant materials, which were placed before it for arriving at the valuation. The valuation made is excessively high. Therefore, the award should be set aside. ( 3 ) MR. De, learned Counsel for the appellant in F. M. A. No. 173 of 2003 opposing the contention of Mr. Roy Chowdhury as respondent in F. M. A. No. 69 of 1996 had pointed out that the Arbitrator had proceeded on the basis of exhibits 6 and 6 (a) which are awards passed by the Arbitrator in respect of some lands in the same mouza out of the same acquisition proceedings in the same area and had rightly assessed the valuation. He relied on the decision in hemanta Kumar Mallick and Ors. vs. State of West Bengal, 79 CWN 378, by a division Bench of this Court and Major Dhian Singh vs. Union of India, AIR 1992 SC 475 , in order to contend that exhibits 6 and 6 (a) are relevant materials reliable for the purpose of ascertaining valuation being awards in earlier cases as was held in the said two decisions. Therefore, the appeal being F. M. A. No. 69 of 1996 should be dismissed. ( 4 ) MR. Therefore, the appeal being F. M. A. No. 69 of 1996 should be dismissed. ( 4 ) MR. De then submits that the appeal in F. M. A. No. 173 of 2003 in which the appellant Shib Charan Sarkar the referring claimant had assailed the award and decree on the ground that the award had omitted to grant solatium and interest. In his usual fairness, he had contended that the Requisition and acquisition of Immovable Property Act, 1952 (1952 Act) does not contain any provision for grant of solatium or interest. There is nothing to indicate that under this Act while determining compensation the principle laid down in the land Acquisition Act are to be followed. But, however, referring to the factual aspect, he contended that there was an inordinate delay on the part of the union of India to appoint Arbitrator for which he had to wait for this long period and the award was made in 1995, though the land was acquired in 1973 i. e. , almost 22 years before. Therefore, on the principle laid down in the decisions in Union of India vs. Sudhangshu Kumar Mukherjee and Ors. , 2002 (3) CHN 33 , by a Division Bench of this Court and Prabhu Dayal and Ors. vs. Union of India, air 1994 SC 1451 , the referring claimant is entitled to solatium and interest. ( 5 ) ON the other hand, Mr. Roy Chowdhury had contended that when the Act does not postulate grant of any solatium or interest, the Court cannot direct grant of solatium or interest on the compensation awarded. He points out that those two decisions have not laid down any ratio for grant of solatium or interest. It has allowed solatium only on the ground that the appointment of Arbitrator was delayed inordinately. Whereas, according to him, in this case there was no delay. The award was made in 1973 and the amount was withdrawn by the appellant in that year. Therefore, the appeal being F. M. A. No. 173 of 2003 should be dismissed. F. M. A. No. 69 of 1996 : ( 6 ) WE have heard the respective learned Counsel for the parties at length. We have gone through the award. We find that in the process of acquisition several other properties were also acquired through the same process of acquisition out of which various compensation cases were registered. F. M. A. No. 69 of 1996 : ( 6 ) WE have heard the respective learned Counsel for the parties at length. We have gone through the award. We find that in the process of acquisition several other properties were also acquired through the same process of acquisition out of which various compensation cases were registered. Exhibits 6 and 6 (a) are awards in respect of acquisition of land in the same area under the same process of acquisition. In those reference cases the award was made on 11th August, 1989 and 24th June, 1977 respectively in relation to some other cases. Exhibit 6 related to plots of land at Palta mouza whereas exhibit 6 (a)related to land at Chandanpukur mouza. In both these cases, it appears that the lands were acquired on 10th March, 1973, namely the date when the land of the referring claimant was acquired. In those two exhibits the land, bastu and bagan lands were assessed at Rs. 1 lakh per acre and doba lands were assessed at Rs. 50,000/- per acre. The referring claimant had also referred to exhibits 9, 9 (a) and 9 (b), which are sale deeds between private parties effected in 1972, 1973 and 1970 respectively. In exhibit 9, one decimal of land was sold at Rs. 1,500/- whereas in 9 (a) the land sold measuring about 2 cottahs 17 sq. ft. for a price of Rs. 5,500/ -. Exhibit 9 (b) was executed in 1970. It was found that the purchaser had his own land adjacent to his land he has purchased on the ground of fancy of the purchaser. Exhibit 9 (b) was discarded and we believe it was rightly done. The other two documents were also discarded on the grounds that relates to very small fraction of land for which the purchaser has special fascination. The justification seems to be correct. Admittedly, a large tract of land fetches lesser value because there are lesser in-taker whereas the small piece of land may fetch higher value because of the particular fascination of a particular person. But at the same time, it appears that one decimal of land was sold for Rs. 1,500/- through exhibit 9. If we adhere to the principle for the purpose of differentiation between valuation of a large tract of land and a small tract of land, in that event, the valuation of Rs. But at the same time, it appears that one decimal of land was sold for Rs. 1,500/- through exhibit 9. If we adhere to the principle for the purpose of differentiation between valuation of a large tract of land and a small tract of land, in that event, the valuation of Rs. 1,50,000/- per acre cannot be the valuation of the large tract of land, which can very well be reduced to Rs. 1,00,000/- Therefore, we find no reason to interfere with the finding that these exhibits 9, 9 (a) and 9 (b) are not comparable for the purpose of assessing the valuation. ( 7 ) THE learned Arbitrator had relied upon exhibits 6 and 6 (a), which are awards passed in similar proceedings in respect of land situated in identical area as was rightly pointed out by Mr. De who relied on the decisions in Hemanta kumar Mallick (supra) and Major Dhian Singh (supra ). That a judgment though not inter-parties but relates to other lands in the vicinity is admissible as evidence, as exhibit from which the market value in question can be deciphered and that the valuation made in earlier case is required to be followed and not the rate actually awarded in that cases. These are the respective ratio by the division Bench of this Court and the Apex Court respectively in the said two decisions. Thus, we do not find any infirmity in assessing the valuation on the basis of exhibits 6 and 6 (a) respectively. The other contention that were raised by Mr. Roy Chowdhury are not necessary to be gone into. It appears that the arbitrator had refused to grant any rent compensation on the ground that the property used to fetch rent @ Rs. 25/- per month and assess any value for the structure and the trees in the absence of any proof of any existing structure and trees on the land. Therefore, we do not find that there is any infirmity in the order itself. At the same time, Mr. Roy Chowdhury has not challenged the valuation in the appeal being F. M. A. No. 173 of 2003. Therefore, we are not inclined to interfere with the award and decree so far as F. M. A. No. 69 of 1996 is concerned. At the same time, Mr. Roy Chowdhury has not challenged the valuation in the appeal being F. M. A. No. 173 of 2003. Therefore, we are not inclined to interfere with the award and decree so far as F. M. A. No. 69 of 1996 is concerned. F. M. A. No. 173 of 2003: ( 8 ) NOW turning to F. M. A. No. 173 of 2003, a simple question has been posed by Mr. Roy Chowdhury that whether in the absence of any provision in the Act any statutory relief can be granted in a form, which is not prescribed in the Act under which the relief is being sought to be granted. He had attempted to distinguish the decisions in Sudhangshu Kumar Mukherjee (supra) and prabhu Dayal (supra) by the Division Bench of this Court and the Apex Court respectively, on the ground that these decisions had not laid down any ratio but had granted the relief only on the ground that there was inordinate delay. He pointed out that in this case, there was no delay that the Arbitrator was appointed immediately after the reference was made. Admittedly, the reference was made by the referring claimant on 17th April, 1978, though disputed by Mr. De. It appears from pages 11 and 119 of the Paper Book in F. M. A. No. 69 of 1996 that Mr. S. C. Basu, W. B. H. J. S. , was appointed Arbitrator for the first time on 11th February, 1987 and on his transfer one Mr. A. K. Seth, W. B. H. J. S. , was appointed as Arbitrator on 8th December, 1988 and thereafter Mr. G. Banerjee, W. B. H. J. S. , was appointed as Arbitrator on 25th November, 1991 and then Mr. D. P. Sharma, the Arbitrator, who has passed the award was appointed as Arbitrator on 22nd September, 1992. The decision of the Apex Court in Union of India vs. Hari Krishan Khosla, AIR 1993 SCW 105 , was distinguished on the ground that there was delay of 16 years in that case. But there is nothing to show that the claim of Mr. Roy Chowdhury could be substantiated that the Arbitrator was appointed immediately and there was no delay. But there is nothing to show that the claim of Mr. Roy Chowdhury could be substantiated that the Arbitrator was appointed immediately and there was no delay. Here in this case the reference was made in 1978 whereas the arbitrator was appointed for the first time in 1987, almost 9 years after and the reference was made in 1978, on which the claimant could not have any control. It cannot be said that the claimant was responsible for the delay. The arbitrator was appointed under the Act by the Union of India. The land was acquired in 1973. The award was made on 27th July, 1973 and the notice thereof was served on the petitioner on 23nd February, 1977 in terms of order dated 13th july, 1976. However, in the meantime, pursuant to the order dated 13th July, 1976 passed by this Court, the entire amount since withdrawn by the referring claimant was deposited in the bank. 1952 Act: Solatium and Interest: Whether payable : ( 9 ) BE that as it may, we are not supposed to go into this question. The simple question we are called upon to decide is whether the referring claimant is entitled to get solatium or interest or not. In fact, the decision in Prabhu dayal (supra) proceeds on the basis that there was delay in appointing the arbitrator and relying on the decision in the case of Hari Krishan Khosla (supra), the Apex Court had granted solatium and interest on the principle that no one can withhold the money without payment of interest and compensation, whereas the decision in Sudhangshu Kumar Mukherjee (supra) by the Division Bench of this Court had clearly laid down that though under the express provision of the 1952 Act, no solatium or interest is payable, yet on the principle laid down by the Apex Court in various decisions referred to in the said decision, grant of solatium and interest should be made when special circumstance exists like delay in appointment of Arbitrator or otherwise which the State is responsible for and to deny solatium and interest in such a situation will be unfair, unjust and improper. We do not find any reason to differ with the ratio laid down by the Division Bench of this Court, which appears to have followed the decision of the Apex Court. We do not find any reason to differ with the ratio laid down by the Division Bench of this Court, which appears to have followed the decision of the Apex Court. ( 10 ) UNLIKE the provision contained in the Land Acquisition Act, 1984, 1952 act does provide any guideline for determining compensation. Neither it prescribes application of the principles of the 1894 Act for the purpose of determining compensation. It only empowers the Arbitrator to ". . . . . . . . . . . . make an award determining the amount of compensation which appears to him just. . . . . . . . . . . ". Therefore, the only scope available to the Arbitrator is to award 'just compensation'. This 'just compensation' has not been defined in the Act. This 'just compensation' when comes to be considered before a Court, the Court cannot shut its eyes to the exigencies of the situation. The Court has to find out as to what would be the just compensation. The expression used in clause (e) of sub-section (1) of section 8 of 1952 Act does not altogether exclude grant of such money comfort on account of compulsory nature of the acquisition having regard to the delay in making the award and the time consumed in between the taking possession upon acquisition and the payment of compensation. Whether the award compensates the principle of compensation as has been enunciated through various judicial decision of different High Courts and the apex Court may now be examined. ( 11 ) THE Apex Court while considering such enactments without any provision for award solatium and interest had consistently took the view that the Court can grant such solatium and interest when special circumstance exists, for example, when there has been delay in appointment of Arbitrator though asked for by the claimant at appropriate time even in case where compensation is accepted which were held to be without prejudice. In paragraph 12 of the decision in Sudhangshu Kumar Mukherjee (supra), the Division Bench of this Court had dealt with the decision cited therein and particularly referred to the decision in N. D. Jain vs. Agra Nagar Mahapalika, 1991 (4) SCC 212 , wherein the Apex court in a two Judges Bench had held that "since the award of solatium is in consideration of the compulsory nature of acquisition, it is a hanging mandate for the Court to award and simply the omission at any stage where the Court gets occasion to amend or to rectify". While referring to Kalimpong Land and building Ltd. and Anr. vs. State of West Bengal and Ors. , 1994 (6) SCC 720 , again a two Judges Bench, the Supreme Court had held that the payment of compensation without interest after a considerable delay would be unjust and unfair. ( 12 ) ON account of delay of 5 years in appointing Arbitrator, 15% on the market value was allowed as solatium by the Apex Court in Prabhu Dayal and ors. vs. Union of India, 1995 Supp. (4) SCC 221. In Union of India vs. Hari krishan Khosla, 1993 Supp. (2) SCC 149, on account of delay of 22 years, solatium @ 30% of the amount of compensation and the interest @ 9% was allowed. In Harbans Singh Shani Devi and Ors. vs. Union of India, 1995 Supp. (4) SCC 224, on account of delay of 16 years, solatium was allowed @ 15% of the market value together with interest @ 9%. The decision in Harbans Singh (supra)was followed by the Apex Court in Union of India vs. Dulal Chandra Ghosh, 1996 (7) SCC 331 . In Union of India vs. Ajaib Singh and Ors. , 1996 (9) SCC 638 , the Apex Court had held that when the State is not in any way responsible for delay in appointing the Arbitrator, the claimants are not entitled to the payment of interest. When the State is responsible in delaying the appointment of arbitrator, necessarily the State has to bear the burden of paying the interest to the claimants. The sole discordant note was sounded by the Supreme Court in Union of India vs. Sher Singh and Anr. When the State is responsible in delaying the appointment of arbitrator, necessarily the State has to bear the burden of paying the interest to the claimants. The sole discordant note was sounded by the Supreme Court in Union of India vs. Sher Singh and Anr. , 1996 (4) SCC 549 , wherein Justice K. Ramaswamy speaking for the Court had held that the claimants are not entitled to solatium and interest since the Act did not permit payment of the same. It appears that the ratio decided in Hari Krishan Khosla (supra) was relied upon by the Court in Sher Singh (supra) for holding that the claimants are not entitled to payment of solatium and interest as the Act did not permit the same, therefore, it would be without jurisdiction to award solatium overlooking the fact that in the said judgment in Hari Krishan Khosla (supra) on the ground of equity on account of delay in appointing Arbitrator, solatium was allowed @ 30% together with interest @ 9% on the amount of compensation. ( 13 ) THUS, it appears that the consistent view of the Apex Court was in favour of granting solatium and interest in cases where there were special circumstances like delay in appointment of Arbitrator or otherwise or where the State was responsible for delay in payment of compensation on the ground that denial thereof would unjust and unfair. In this case the land was requisitioned under the Defence of India Act sometimes in 1942-43 dispossessing the referring claimant and was acquired under section 8 (l) (b) of the 1952 Act, substituting the Defence of India Act permanently, acquiring the same on 10th march, 1973. Thus the deprivation of possession continued right from 1942-43 till 10th March, 1973 for which period the referring claimant would be entitled to rent compensation as payable under the respective Act. He would be entitled to rent compensation after 10th March, 1973 though he is being deprived the possession of the property. It is alleged that the award was made in 1973, which was disputed by the referring claimant and there was a litigation travelling up to this Court and on the basis of the order passed by this Court, the amount was refunded and the referring claimant was permitted to seek a reference in 1978 whereas the Arbitrator was purported to be appointed in 1987. It does not appear that the referring claimant was responsible for the delay; on the other hand, it was the State, which was responsible for the delay attracting the principles of delay laid down in the decisions by the Apex Court cited above. ( 14 ) THOUGH the Act does not postulate grant of solatium or interest even then the State is not entitled to withhold the payment for an indefinite period or delay the process depriving the claimant from his legitimate dues for indefinite period and from the benefit of enjoyment of the amount. Thus the non-payment of the amount on account of the delay and laches on its part has enabled the state to enjoy the benefit of the amount retained by it depriving the claimant from enjoying the benefit thereof. At the same time, when the laches is not attributable to the referring claimant and attributable to the State, which is outside the control of the referring claimant, then in that event the principles laid down in Prabhu Dayal (supra), H. K. Mallick (supra) and Sudhangshu kumar Mukherjee (supra) would be attracted. Following these principles herein in this case, we have found that there was delay in appointing Arbitrator at least for 9 years when the Arbitrator was first appointed then on account of transfer or other contingencies the ultimate appointment of the Arbitrator was made in 1992 which is almost 14 years after the reference was made and the award was given in 1995 which is about 17 years after the reference was made, and 22 years after the acquisition i. e. 1973. Admittedly, the erstwhile claimant had no control over the appointment of the Arbitrator and no allegation is made that the referring claimant was responsible for the delay. ( 15 ) IN the circumstances, we consider that there was a delay of 10 years at the minimum. In one case compensation was granted @ 15% in the form of solatium by the Apex Court where the delay was for 5 years whereas 30% solatium was granted in a case when there was a delay of 16 years. ( 16 ) FOLLOWING the above principle, we hereby grant solatium @ 20% from the date of making reference till the date of payment. ( 16 ) FOLLOWING the above principle, we hereby grant solatium @ 20% from the date of making reference till the date of payment. The referring claimant is also entitled to interest @ 7% from the date of making reference till the date of payment on the amount already paid and on the balance from the date of making reference till the date of payment in terms of this order. The payment in terms of this order shall be made within a period of six months from the date of communication of this order. ( 17 ) ANY amount deposited in Court or in any fixed deposit shall be released in favour of the appellant in F. M. A. No. 173 of 2003 together with the interest, if any, accrued on such deposit after deducting the legal charges by the Registrar general, Appellate Side, of this Court. ( 18 ) IN the result, the appeal being F. M. A. No. 69 of 1996 is dismissed and the appeal being F. M. A. No. 173 of 2003 is allowed as above. ( 19 ) THERE will be, however, no order as to costs. ( 20 ) LET urgent xerox certified copies of this order, if applied for, be supplied to the parties as expeditiously as possible on compliance with requisite formalities. F. M. A. No. 69 / 1996 dismissed. F. M. A. No. 173 / 2003 allowed.