JUDGMENT :

1. Premises No. 32A, Brabourne Road, Kolkata originally belonged to the respondent. The entire six storey building (excluding the ground floor and a portion of the first floor) measuring 20,093 sq. ft. had been requisitioned by the appellant under the West Bengal Premises Requisition and Control (Temporary Provisions) Act, 1947 (‘Act’ for short) for providing barrack accommodation for the police and for Traffic Police Guard Headquarters on 1.10.1958. The premises stood derequisitioned on 7.1.1994 by virtue of the provisions of Sections 10A and 10B of the Act.

2. The appellant, thus became liable to vacate and deliver vacant possession on 8.1.1994 but continued in unauthorized possession. By order dated 8.7.1994, made in a contempt petition filed by the respondent, the High Court granted three months time to the appellant to initiate acquisition proceedings if it wanted to retain the premises and the said period of three months expired on 7.10.1994. Therefore, the respondent filed a suit (CS No. 235/1996) seeking physical possession of the derequisitioned property. A learned Single Judge of the High Court decreed the said suit on 9.9.1998 holding that the occupation of the appellant was illegal with effect from 8.10.1994 and consequently directed the appellant to pay compensation at the rate of Rs. 7,230/- per month from 8.1.1974 to 7.10.1994 and mesne profits at the rate of Rs. 1,10,000/- per month from 8.10.1994 to 31.8.1998 and from 1.9.1998 to date of delivery of possession.

3. The said decree was challenged by the appellant by filing an intra court appeal. The respondent filed cross objections being aggrieved by the quantum of the mesne profits. A Division Bench of the High Court, by judgment dated 29.7.1999 upheld the decision of the learned Single Judge that appellant was in wrongful possession of premises and was liable to be evicted. Thereafter, it heard the parties on the issue of mesne profits and by further order dated 10.8.1999 set aside the decree of the learned Single Judge in so far as the determination of mesne profits for the second and third periods (that is from 8.10.1994) and referred the matter to a Commissioner (retired Judge) for quantifying the mesne profits. The said order of the Division Bench attained finality as it was not challenged by the appellant.

4. The Commissioner appointed by the Division Bench issued notice to the parties for determination of the mesne profits. In spite of repeated opportunities, the State did not participate in the proceedings. After considering the evidence placed by the respondent, the Commissioner submitted his report dated 21.2.2000 under which he determined the mesne profits at Rs. 8/- per sq. ft. from 8.10.1994 to 31.8.1998 and at the rate of Rs. 9/50 per sq. ft. from 1.9.1998 till the date of recovery of possession. The appellant challenged the said report inter-alia on the ground that it did not have an opportunity to let in evidence. The Division Bench considered and overruled the objections of the appellant by the impugned judgment dated 7.7.2000. It accepted the report of the Commissioner and directed that a final decree be prepared in terms of the report of the Commissioner (that is adopting the rate of rent and the periods for which such rates would apply). The Division Bench also directed that the respondent will be entitled to interest at 12% per annum on the arrears of rent and as also further rent. The said judgment is challenged in this appeal by special leave.

5. Learned counsel for the appellant submitted that the property was acquired in pursuance of preliminary notification dated 28.9.1994 issued under Section 4(1) of the Land Acquisition Act, 1894 (‘LA Act’ for short) and final declaration dated 11.8.1997 issued under Section 6 of the LA Act and an award was passed by the Land Acquisition Officer on 24.2.2000. Possession of the acquired premises was formally taken over under Section 16 of LA Act on 24.2.2003. The validity of the said acquisitio