1. Land acquisition for aerodrome — Dispute over compensation — Reference to arbitration under Section 19(1)(b), Defence of India Act, 1939. (Para 1 , 2 )
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1967 Supreme(SC) 239
SUPREME COURT OF INDIA
K.N. WANCHOO, C.J.I., R.S. BACHAWAT, V. RAMASWAMI, G.K. MITTER AND K.S. HEGDE, JJ.
Collector, Varanasi, Appellant
Versus
Gauri Shanker Misra and others, Respondents.
Civil Appeal No. 1040 of 1965,
D /- 29- 8-1967.
Advocates Appeared
Mr. C. B. Agarwala, Senior Advocate, (Mr. O. P. Rana, Advocate, with him), for Appellant, M/s. J. P. Goyal and Raghunath Singh, Advocates, for Respondents.
Advocates:
C.B.AGARWAL, J.P.GOYAL, O.P.RANA, RAGHUNATH SINGH
C.B.AGARWAL, J.P.GOYAL, O.P.RANA, RAGHUNATH SINGH
The High Court, when hearing appeals against an arbitrator's award under the Defence of India Act, functions as a court, making its decisions "determinations" under Article 136. Additionally, land compensation must be based on contemporaneous sale deeds of similar land.
Headnote:(A) Defence of India Act, 1939 - Section 19(1)(b), (e), and (f) - Constitution of India - Article 136 - Status of High Court - When a statute provides for an appeal to a High Court against the award of an arbitrator, the High Court functions as a court and not as a designated person (persona designata) (Paras 4, 6, 7) - Such a decision constitutes a "determination" within the scope of Article 136, making it subject to special leave to appeal (Paras 7, 8).
(B) Land Acquisition - Compensation - Determination of market value - Sale deeds produced as evidence must be contemporaneous to the date of acquisition and involve lands similar to those acquired to be reliable for fixing compensation - A sale deed executed several years after the acquisition cannot be considered a contemporaneous transaction (Para 9).
Facts of the case:
The government acquired land for the construction of an aerodrome. While most compensation was settled by agreement, a portion was referred to arbitration. The arbitrator fixed compensation based on annual profits using revenue records. On appeal, the High Court enhanced the compensation based on a sale deed executed five years after the date of acquisition. The appellant challenged this decision before the Supreme Court.
Findings of Court:
The High Court, while exercising appellate jurisdiction under the Act, functions as a court and not as a designated authority. The determination of compensation based on a non-contemporaneous sale deed was erroneous as the transaction did not reflect the market value at the time of acquisition.
Issues: Whether the High Court acting under Section 19(1)(f) of the Defence of India Act, 1939, is functioning as a court or a persona designata, and whether the compensation was correctly determined based on a sale deed from a subsequent year.
Ratio Decidendi: The High Court is the apex of the state's judicial system and a court of record; therefore, any judicial power entrusted to it is exercised as a court. Furthermore, for the purpose of determining just compensation in land acquisition, evidence of sale deeds must be contemporaneous and the lands must be similar to the acquired land.
Result: Appeal allowed.
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Table of Contents
2. Whether High Court acting under Section 19(1)(f) functions as a court or persona designata, affecting the maintainability of special leave under Article 136. (Para 3 )
3. High Court is a court of record and apex of state judiciary; appeals to established courts follow ordinary judicial procedures and exercise judicial powers. (Para 4 , 5 , 6 , 7 )
4. A High Court exercising appellate jurisdiction under a statute functions as a court, and its decisions constitute determinations subject to special leave under Article 136. (Para 6 , 7 , 8 )
5. Appeal allowed — High Court decision set aside — Case remitted for fresh determination of compensation with permission to adduce additional evidence. (Para 10 )
6. Does a High Court acting under Section 19(1)(f) of the Defence of India Act function as a court?
Yes. The High Court is the apex of the state's judicial system and a court of record. When a statute directs an appeal to an established court, it functions as a court exercising judicial powers rather than as a designated person. (Para 4 , 6 , 7 )
7. Is a decision of the High Court under Section 19(1)(f) a determination for the purpose of Article 136?
Yes. Even if the decision is not a decree, judgment, or final order under the Code of Civil Procedure, it constitutes a determination within the scope of Article 136, making it eligible for special leave. (Para 7 , 8 )
8. What is the legal effect of a statute directing an appeal to an established court?
When a statute directs that an appeal shall lie to a court already established, the appeal must be regulated by the practice and procedure of that court, and the ordinary incidents of that court's procedure attach to the proceedings. (Para 4 )
9. What criteria are used to determine if sale deeds are reliable for land compensation?
Sale deeds must evidence contemporaneous transactions of similar land. Deeds from significantly later dates or those involving vastly different land sizes are generally not reliable for determining the market value of acquired land. (Para 9 )
Judgement
HEGDE, J. :- This appeal by the Collector of Varanasi by special leave under Article 136 of the Constitution is directed against the decision dated 11-11-1963 of the High Court of Judicature at Allahabad, in First Appeal No. 60 of 1960 on its file, which in its turn arose from the award made by Shri S. B. Malik, District Judge, Varanasi, in certain land acquisition proceedings under Clause (b) of sub-section (1) of section 19 of the Defence of India Act, 1939 (to be hereinafter referred to as the Act).
2. Before considering the contentions urged on behalf of the parties, it is necessary to set out the salient facts. For the purpose of constructing the Babatpur aerodrome near Varanasi, the Government acquired in the year l946 about 500 acres of land. Compensation in respect of most of the lands acquired was settled by agreement. But in respect of the lands with which we are concerned in this appeal, 48.01 acres in extent, no settlement was arrived at. Therefore, the question of compensation in respect of those lands was referred to the arbitration of Shri S. B. Malik under Cl. (b) of sub-section (1) of Section 19 of the Act. In view of Section 19 (1) (e), the claimants were entitled to get as compensation the market value of those lands as on the date of acquisition. Before the arbitrator as well as the High Court, the parties were agreed that on the material on the record, the market value in question had to be fixed either on the basis of the sale deeds produced by the claimants or by capitalising the annual profits accruing from those lands. The arbitrator rejected the sale-deeds produced before him He adopted the method of capitalising the annual profits. On the question of annual profits also he rejected the evidence adduced on behalf of the claimants. He determined the same on the basis of the revenue records for Fasli 1355 read with the evidence of the Naib Tehsildar, Jawal Prasad. Aggrieved by the decision of the arbitrator, the claimants went up in appeal to the High Court of Allahabad under Section 19 (1) (f). The High Court differed from the arbitrator as to the value to be attached to the sale-deeds produced. It opined that the sale deeds produced were reliable and that they evidenced genuine transactions. The High Court fixed the compensation payable on the basis of Exhibit A 42 dated 3-4-1951. The arbitrator had fixed the compensation at Rs. 26454-12-0. The High Court enhanced the same to Rs. 90,446-3-0. It is against that decision that the Collector of Varanasi has filed this appeal after obtaining special leave from this Court under Article 136.
3. Shri Goyal, learned counsel for the respondents has raised the preliminary objection that no special leave could have been granted by this Court under Article 136 as the judgment appealed against was neither that of a court nor of a tribunal. According to him, the High Court while acting under Section 19 (1) (f) was a persona designata and not a court or a tribunal. His argument on this question proceeded thus: Sec. 19(1)(b) of the Act empowers the Central Government to appoint as arbitrator a person qualified to be appointed a judge of the High Court; Shri Malik who possessed the required qualifications was appointed by the Central Government to act as an arbitrator, it is true that Shri Malik was District Judge of Varanasi at the time of his appointment, but in law it was not necessary that the person appointed should have been a District Judge, and much less the District Judge of any particular District; therefore, Shri Malik acted as a designated person and not as a Court; hence, the award given by him cannot be considered either as a judgment or as a decree or order; it was merely an award; when the matter was taken up in appeal to the High Court, the proceedings did not cease to be arbitration proceedings; its original character continued even before the High Court, therefore, the decision made by the High Court should also be considered as an award and f
