The cost of acquisition for compensation under Section 6 of the Karnataka contract carriages (acquisition) Act, 1976 is based on the price of the chassis and the cost of body building. Repair and maintenance costs cannot be included in compensation, and compensation for extra fittings can be granted if there is evidence.

( 1 ) THIS appeal is by the deputy commissioner, hassan, against the order of the arbitrator, nominated by the state government under Section 6 of the Karnataka contract carriages (acquisition) Act, 1976, for short (the act),

( 2 ) THE brief facts of the case are these:the act was enacted by the state legislature providing for acquisition of contract carriages in the state and for matters incidental ancillary or sub- sidary thereto. The act came into force with effect from 30-1-1976, replacing the Karnataka contract carriages (acquisition) ordinance, 1976, which had been promulgated on the said date. Under Section 4 of the act every contract carriage owned by a private operator along with its permit and certificate of registration stood vested in the state government absolutely and free from all encumbrances. (b) such contract carriage shall be freed and discharged from any trust, obligation, mortgage, charge, lien, hire, purchase, agreement or otherwise and all other encumbrances or transactions affecting such contract carriages; (c) any attachment, injunction or decree or order of any court restricting the use of such contract carriage in any manner shall be deemed to have been withdrawn; (d) any person interested shall have no claim to or any relation to such contract carriage except a claim to the amount payable in respect of such contract carriage under this act. (2) upon the issue of a notification under subsection (1) in respect of any such operator;- (i) all rights, title and interest of the contract carriage operator in or over such lands, buildings, workshops and other places and all stores, instruments, machinery, tools, plants, apparatus and other equipments used for the maintenance repair or otherwise in connection with the service of the contract carriage as the state government may by Order, specify, in this behalf;

( 3 ) SECTION 6 of the act which provided for compensation and payment of compensation for the vehicle under Section 4, to its owner reads. 6. Determination of the amount:- (1) for the vesting of the acquired property 'under Section 4, every person interested shall be entitled to receive such amount as may be determined in the manner herein after set out and as specified in the schedule, that is to say,- (a) where the amount can be fixed by agreement shall be determined in accordance with such agreement; (b) where no such agreement can be reached, the state government shall appoint as arbitrator a person who is an officer not below the rank of a divisional commissioner or a district judge; (c) the state government may, in any particular case, nominate a person having expert knowledge as to the nature of the acquired property to assist the arbitrator and where such nomination is made, the person interested may also nominate to an assessor for the same purpose;

( 4 ) AS can be seen from the above section,subsection (1) provides for determination of the amount of compensation to be paid to the owner in respect of the acquired-property as determined in the manner provided in the said section. According to clause (a) the compensation could be fixed by agreement whereever possible, where no agreement is possible, clause (b) requires the state government to appoint an arbitrator who is required to determine the quantum of compensation payable.

( 5 ) THE principles for determination of amount of compensation payable under Section 6 have been set out in the schedule and the relevant portion of the schedule reads as under:"1. (1) in respect of any contract carriage taken over by the state government, there shall be first determined the acquisition cost of such contract carriage and for any contract carriage registered within the period mentioned in the column (1) of the table below prior to the notified date the amount to be paid shall be the percentage mentioned in the corresponding entry in column (2) of that table, of the acquisition cost;-

TABLE

Period (1)

Percentage

(2)

1.

Not more than six m