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HIGH COURT OF CALCUTTA
G. N. Das, Guha
PROVINCE OF BENGAL - Appellant
Versus
PAWN KISSEN LAW AND CO. - Respondent
A. F. O. D. 119 Of 1948
Decided On : JUNE 09, 1950
DEFENCE OF INDIA ACT - SECTION 19 - COMPENSATION FOR ACQUISITION OF LAND - INTEREST ON COMPENSATION - RATE AND PERIOD OF INTEREST - BOUNDARY WALL - VALUATION.
Fact of the Case:
The Province of West Bengal acquired premises No. 30 Ballygunge Park under Section 75 (A), Defence of India Rules, on 12th April 1945. The respondents, Pran Kissen Law and Co., filed a claim for compensation before the Land Acquisition Collector, which was referred to arbitration under Section 19 (1) (e), Defence of India Act. The Arbitrator awarded compensation for the period of requisition and for the acquisition of the land, and also awarded interest at 6% per annum for a period of two years.
Finding of the Court:
The court held that the Arbitrator was justified in awarding interest on the price of the land acquired, as the Act did not expressly exclude the payment of interest. The court also held that the rate of interest should be 6% per annum and that interest should be paid from the date of taking possession of the land until the date of the award.
Issues: 1. Whether interest is payable on the price of land acquired under the Defence of India Act? 2. If interest is payable, what is the rate of interest? 3. For what period is interest payable? 4. Whether the Arbitrator was justified in rejecting the claim for the value of the boundary wall?
Ratio Decidendi: 1. Section 19 (1) (e) of the Defence of India Act does not expressly exclude the payment of interest on the price of land acquired. The Act merely laid down the principles to be observed in fixing the amount of compensation to be paid. The plainest principle of justice requires that the acquirer should not retain the price of the land and the use thereof without paying to the person whose land has been acquired compensation in the shape of interest on the price of the land. 2. In the facts of the present case, interest should be awarded at the rate of 6% per annum on the value of the land acquired. 3. Interest should be paid from the date of taking possession of the land until the date of the award. 4. The Arbitrator was not justified in rejecting the claim for the value of the boundary wall, as the Collector had stated that Rs. 3700 was the fair value of the boundary wall and the respondents had accepted this figure.
Final Decision: The court allowed the appeal in part and modified the award of the Arbitrator. The court directed that interest be paid at the rate of 6% per annum on the value of the land acquired from the date of taking possession of the land until the date of the award, and that the respondents be paid the sum of Rs. 3700 as the price of the boundary wall.
( 1 ) THIS appeal is by the Province of West Bengal from a decision of Mr. R. S. Trivedi, Arbitrator, appointed under Section 19 Defence of India Act, and dated 16th March 1948. Premises No. 30 Ballygunge Park now numbered as No. 44 Iconside Road belonged at the relevant time to Pran Kissen Law and Co. On 15th November 1944 the aforesaid premises were requisitioned" by the Government. The sail premises were later on acquired by the Government under Section 75 (A), Defence of India Rules, on 12th April 1945. Before the Collector the respondents Pran Kissen Law and Co. , preferred a claim on 9th December 1944. The petition has been marked Ex. A. IN that petition the respondents claimed a sum of Rs. 2049 per month as compensation-for the lands on account of the requisition made by the Government. No agreement was however reached between the Government and the claimants as regards the compensation payable for the requisition of the land. Accordingly on 21st November 1946 the respondents filed a petition before the Collector for reference of the dispute to the Arbitrator under Section 19 (1) (e), Defence of India Act, hereinafter to be called the Act. In this petition the claim of the respondents in respect of the requisition was laid at Rs. 2750 per month. The price of the land was claimed at Rs. 4000 per cottah. Interest was claimed at 6 per cent, per annum. On 14th February 1947 the Land Acquisition Collector made a reference. From this reference petition it appears that possession was taken on 12th April 1945, the requisition having been made on 15th November 1944. On 21st February 1947 the reference was registered as Land Acquisition case No. 25 of 1947. On 18th April 1947 the respondents filed their statement of claim. In that petition the respondents claimed Rs. 2753 per month for the period during which the property was under requisition and they claimed the price of the land at Rs. 4000 per cotta and the value of the boundary wall at Rs. 3750. Interest was claimed at 6 per cent, per annum on the ground of unconscionable delay. On 15th December 1947 the Province of Bengal filed its statement. In that statement the Province of Bengal stated that the fair rent payable from 24th November 1944 to 11th April 1945 would be at the rate of Rs. 2049 per month. The value of the land acquired was stated to be at the rate of Rs. 3325 per cotta, the total price being stated to be Rs. 4,86,627. The price of the boundary wall was stated to be Rs. 3700. On 14th November 1948 the Land Acquisition Collector purports to have made an award. This has been marked as Ex. 5. As the learned Arbitrator points out this was really an offer made by the Collector. On 16th March 1948 (sic) the Arbitrator made his award. The Arbitrator affirmed the Collector in so far as it concerned the compensation to be paid during the period of requisition and in respect of the acquisition of the land. He awarded interest at the rate of 6 per cent, per annum for a period of two years. His conclusions may be summarised as follows:
Rent at Rs. 2049 from 24th November 1944 to 11th April 1945 Rs . 9425 Price of land at Rs. 3325. 486627 Interest on the second item for 2 years 58400 . Rs . 554452
He did not make an order for costs.
( 2 ) AGAINST the decision of the Arbitrator the Province of Bengal preferred this appeal contesting the decision in so far as it awarded interest in favour of the respondents. There was a cross-objection by the respondents. In the grounds of cross-objection the cross, objectors claimed interest at 6 per cent, per annum. They also claimed costs before the Arbitrator. They also claimed the value of the compound wall which was refused by the Arbitrator. The memo of cross-objection was valued at Rs. 26000. It has been stated before us that this sum represents interest at 6 per cent, per annum on the sum of Rs. 4,86,627 for a period of 9 months till 14th January 1948.
( 3 ) THE principal question which arises in the appeal
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