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The ScIndia Steam Navigation Co., Ltd. Vs. the Union of India and anr. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtMumbai High Court
Decided On
Case NumberFirst Appeal No. 1334 of 1966
Judge
Reported inAIR1976Bom354; 1976MhLJ700
ActsRequisitioning and Acquisition of Immovable Property Act, 1952 - Sections 8(1) and 8(2)
AppellantThe ScIndia Steam Navigation Co., Ltd.
RespondentThe Union of India and anr.
Appellant AdvocateSoli Sorabjee and ;Dara R. Zaiwala, Advs., i/b., Payne and Co., Attorneys
Respondent AdvocateRaja S. Bhonsale, Asst. Govt. Pleader
Excerpt:
the court ruled that in determining the compensation under clause (a) of sub-section (2) of section 8 of requisitioning and acquisition of immovable property act, 1952, the statutory restrictions under the relevant rent control legislation could not be ignored. - - thereafter, the appellants through their attorneys carried on correspondence and stated in one of their letters that it would be legitimate to infer from the long delay on the part of the customs to coming to any understanding with the appellants and that the customs department did not agree to the basis proposed by the appellants for fixation of rent or compensation and therefore a dispute could well be said to have arisen between the parties which, having regard to the provisions of the act, should be determined by.....1. the appellants are the owners of scindia house situate at dugali road, ballard estate, bombay. the union of india - the 1st respondent requisitioned the entire third floor of the scindia house for the customs department, bombay, in the month of april, 1964, under the requisitioning and acquisition of immovable property act, 1952 (hereinafter referred to as 'the act'). the appellants claimed compensation at the rate of rs. 2/- per sq. ft., but the 2nd respondent, by his order dated 9th april 1966, fixed the monthly compensation at the rate of 42 paise per sq. ft., with effect from 11th april 1964. the appellants being dissatisfied with the rate of compensation have filed the present appeal. 2. scindia house was built in 1938, upto the four floors. in the same year, the third and fourth.....
Judgment:

1. The appellants are the owners of Scindia House situate at Dugali Road, Ballard Estate, Bombay. the Union of India - the 1st respondent requisitioned the entire third floor of the Scindia house for the customs Department, Bombay, in the month of April, 1964, under the Requisitioning and Acquisition of Immovable Property Act, 1952 (hereinafter referred to as 'the Act'). The appellants claimed compensation at the rate of Rs. 2/- per Sq. ft., but the 2nd respondent, by his order dated 9th April 1966, fixed the monthly compensation at the rate of 42 Paise per Sq. ft., with effect from 11th April 1964. The appellants being dissatisfied with the rate of compensation have filed the present appeal.

2. Scindia House was built in 1938, upto the four floors. In the same year, the third and fourth floors were let out by the appellants to Hindustan Lever Limited for a period of about 25 years. the lease expired in October, 1963 and the possession of the 3rd and 4th floors was surrendered to the appellants. the Union of India, in the first place, requisitioned the 3rd and 4th floors, but ultimately on the representation of the appellants, the 4th floor was released for the appellant's own use. The appellants, by their letter dated 11th April, 1964, addressed to the Collector of Bombay - the 2nd respondent, placed on record that the possession of the 3rd floor of Scindia House was given to the Customs authorities on that date. By the same letter , the appellants proposed that they be paid rent at the prevailing rate of Rs. 2/- per Sq. for the carpet area of 9754 sq. ft. (Air-conditioned) including the lobby and also a monthly rent of Rs. 500/- for fixtures consisting of partitions of cabins, fans, light etc. The rest of the terms and conditions are not material for our purposes. The Collector of Bombay did not respond favourably to the offer of the appellants as according to him, implications of the requisition order were not appreciated by the appellants and that the compensation had to be fixed under section 8 of the Act. Thereafter, the appellants through their attorneys carried on correspondence and stated in one of their letters that it would be legitimate to infer from the long delay on the part of the customs to coming to any understanding with the appellants and that the Customs Department did not agree to the basis proposed by the appellants for fixation of rent or compensation and therefore a dispute could well be said to have arisen between the parties which, having regard to the provisions of the Act, should be determined by arbitration. Ultimately by a letter dated 24th April, 1965, the appellants' attorneys were informed that the District Deputy Collector, Bombay Suburb ban district, was authorised by the Collector to hear to claim of the appellants for fixing the rental compensation and requested them to call at his office on 14th May , 1965 , at 3 p.m. along with the documentary evidence in support of their claim for compensation. the appellants appeared through their attorney Mr. C. R. Jussawalla, solicitor. thereafter, various hearings took place and Mr. Jussawalla represented the appellants at these hearings and the documents referred to and relied upon by the parties were exchanged and discussed. the Assistant Collector of customs, by his letter dated 6th October, 1965, informed the Collector of Bombay that the rent paid by M/s. Hindustan Lever Ltd., to the appellants from 1938 to 1963 both for the 3rd and 4th floors was Rs. 1,950.80 per month and the air-conditioning charges which were initially fixed at Rs. 1,000/- were subsequently enhanced to Rs. 2,500/- per month. On the basis of the rent of Rs. 1,950.80 the rate of rent was worked out at 23 Paise per sq. ft. In the result, the 2nd respondent took the view that the rate of Rs. 00.42 Paise proposed to be reasonable and by the order dated 9th April, 1966, in appeal, he fixed the compensation at Rs. 4092.90 Paise per month.

3. Mr. Zaiwala, the learned Counsel for the appellants, has raised three points. Firstly, the appellants were not properly heard by the 2nd respondent, inasmuch as no evidence was recorded. The reports of the appellants' Architects and the 1st respondent's Engineers were merely exchanged between the parties. Secondly, the 2nd respondent has not given any reason for rejecting the claim of the appellants. Thirdly, the 2nd respondent has misdirected himself on law as to the basis on which the rent should have been fixed.

4. In support of the first contention, the learned Counsel took me through the record and the order and pointed out that merely reports were exchanged and no evidence was recorded. this question, however, is whether the appellants were prevented from leading evidence or denied any opportunity to cross-examine the 1st correspondent's officers. If not, their contention that they were not properly heard would be unfounded. Now, the minutes of the meetings show that though the appellants were throughout represented by a firm of Solicitors and Mr. C. R. Jussawalla, a partner of the firm, was appearing in the proceedings, he did not make any application that he desired to examine either the appellants or any witnesses on their behalf or that he desired to cross-examine any of the witnesses of the Collector of Customs, Bombay. It appears from the minutes of the meeting held on 6th August , 1965, that Mr. paranjape , Assistant Engineer Central P. W. D. produced a copy of statement showing how he had worked out the rate of 42 paise per sq. ft. Mr. Jussawalla took time to take advice of his Architects and to examine the calculations arrived at by Mr. Paranjape and to give his reactions. At the same meeting, he had orally referred to the rental rates prevailing in the nearby Marshall, Orient and Sudama Buildings and he was therefore asked to bring proof in support of the same. he stated that he would bring the necessary evidence next time. At the next hearing, Mr. Jussawalla brought copies of two letters written by M/s. Tata Industries Private Ltd. and the Central bank of India, stating that the rate of rent they were paying was Rs. 1.25 and Rs. 2/- per Sq. ft. for the floor area. This was the type of proof on which reliance was placed. During the hearing of 11-10-1965, Mr. Jussawalla was shown a letter dated 6-10-1965 written by the Collector of customs. This is the same letter in which information about the previous letting to Hindustan Lever Ltd., at the rate of 23 Paise Per sq. ft., was communicated. After perusing that letter, Mr. Jussawalla argued that the compensation was to be fixed considering the present position and not the position prevailing in 1938. The minutes show that the hearing was completed on that day and the matter was adjourned for passing a final order. The position which emerges from what transpired at the various hearings shows beyond doubt that there was no desire on the part of the appellants to lead evidence or to examine witnesses. this position is further fortified by the appellants' attorneys' letter dated 8-3-1966 addressed to the District Deputy collector, complaining about the failure or neglect on the part of the authority for not deciding the matter. In this connection, the following statements are important. :-

'You will recollect that an inquiry was held by you for fixing the rental compensation of the above requisitioned premises .................................... Our clients were represented by Mr. C. R. Jussawalla of our firm. Arguments and submissions were advanced on behalf of our clients before you and similarly they were also advanced on behalf of the customs Department.

The inequity was concluded by you nearly five moths ago. It is regretted that you have not yet given your decision in the matter. It is not understood why publication of your decision in the matter is being withheld for such a long time particularly having regard to the fact that as intimated any compensation in respect of the said premises ever since the Customs Department occupied the same ......................

We trust therefore the needful will be done in the matter as requested above.'

The above letter was addressed by the appellants' attorneys M/s. Payne and co. Its contents show that arguments and submissions of the parties to the dispute were heard and the inquiry stood concluded. From the record, the minutes of the meetings, the contents of the above letter and the conduct of the parties, It is reasonable to infer that the appellants and their attorneys were satisfied with the manner in which the evidence received. Had there been any reason to complain about the non-recording of evidence as is now sought to be made out, the same would have been in the forefront of this letter at least. On the contrary , decision was solicited on the basis of the arguments and submissions advanced on behalf of the appellants by Mr. Jussawalla. In this state of things, I do not find any substance in the first contention.

5. In order to substantiate the second contention, the learned counsel Mr. Zaiwala referred to the order in appeal and argued that the 2nd respondent has not given any reasons for rejecting the claim of the appellants. the learned counsel pointed out that there is no discussion of the report of the appellants' Architects M/s. Kora and Bhatt, nor is there any discussion of the calculations submitted by Mr. Paranjape, Assistant engineer, C. P. W. D. He submitted that the 2nd respondent did not consider the pros and cons of the two reports and he ought to have compared the two things reports and indicated his reasons for accepting Mr. Paranjape's calculations and rejecting the report of M/s. Kora and Bhatt. Now, it is true that the 2nd respondent has not given any reasons for rejecting the report of the appellants' Architects. What seems to have weighed with the 2nd respondent was the fact that the previous tenants of the appellants were paying rent at the rate of 23 Paise per sq. ft. In the light of this information the factual aspect whereof was not challenged by Mr. Jussawalla on behalf of the appellants, the 2nd respondent came to the conclusion that the rate of 42 Paise per sq. ft. In the circumstances of the case, it was not necessary, in my opinion , for the 2nd respondent to have analysed the report of the appellants' Architect or compare the same with the report of Mr. Paranjape as urged on behalf of the appellants. The order of the 2nd respondent does clearly indicate as to why he was unable to accept the claim of the appellants at the rate of RS. 1.50 per sq. ft. as worked out by their Architect. I, therefore, do not find any merit in the second contention.

6. The principal contention is the third contention based on the decision in the case of Satnarain v. Union Bank of India, : AIR1970Delhi232 . That case also arose under the Act. In determining the compensation under Section 8(2)(a) of the Act, the principles laid down for fixation of standard rent in the rent laws, according to the Delhi High Court, may furnish a useful guide for determining the recurring payment as rent, though the provisions of rent laws will not apply as such because requisition of property does not create a relationship of landlord and tenant. The recurring payment to be made to the owners-claimants as 'rent control Act. The value of the land will be the value on the date on which possession of the requisitioned premises was taken. the costs of construction of a building will be the cost of constructing the building at the time of its requisition. Mr. Zaiwala contended that the 2nd respondent ought to have followed the principles laid down for fixation of standard rent to the suit property, though the recurring payment to be made to the appellants cannot be merely the rent arrived at by the appellants' Architects. the 2nd respondent ought to have arrived at the value of the land and of the cost of construction of the requisitioned premises at the time when they were requisitioned viz., in April , 1964. On the other hand, the learned Assistant Government Pleader contended that at the highest the compensation which the appellants could get per month was Rs. 2,225.40 inclusive of air-conditioning charges being the rent recovered by them from their previous occupant M/s. Hindustan Lever Ltd. As against this, the amount of compensation fixed by the 2nd respondent is rupees 4,096.68 per month and in the circumstances, the same is just having regard to the relevant provisions of sub-sections (1) and (2) of Section 8 of the Act. It would have been unlawful for the appellants to recover rent in excess of the rent charged from Hindustan Lever Ltd., having regard to the restrictions imposed by the Bombay Rents, Hotel and Lodging House Rates control Act. 1947 (hereinafter referred to as 'the Bombay Rent Act'). In rebuttal, Mr. Zaiwala submitted that in the present case no rent is fixed under the Bombay Rent Act and, therefore, the appellants could have applied to the Court under section 11(1)(b) for fixation of standard rent. The rent agreed with Hindustan Lever Ltd., was nominal rent as the premises were given on a long lease. By agreement under section 8(1)(a) of the Act, the Government could have agreed to pay to the appellants compensation in excess of the standard rent and that could not have been unlawful and, therefore, the appellants were entitled to receive more rent than was paid by Hindustan Lever Ltd. In the alternative, the appellants could have themselves made use of the 3rd floor premises as they were in need of the same or the appellants could have given the premises on license on which event they could not have been bound by the rent charged from Hindustan Lever Ltd. did not include air-conditioning charges, nor did it include the fixture charges.

7. In order to appreciate the rival contentions, the relevant provisions of the Requisitioning and Acquisition of immovable Property Act, 1952, are reproduced:-

8. (1) where any property is requisitioned or acquired under this Act, there shall be paid compensation the amount of which shall be determined in the manner and in accordance with the principles hereinafter set out, that is to say-

(a) where the amount of compensation can be fixed by the government, it shall be paid in accordance with such agreement:

(b) ..............................................

(d) at the commencement of the proceedings before the arbitrator, the Central Government and the person to be compensated shall state what in their respective opinion is a fair amount of compensation;

(e) the arbitrator sill, after hearing the dispute, make an award determining the amount of compensation which appears to him to be just and specifying the person or persons to whom such compensation shall be paid; and in making the award, he shall have regard to the circumstances of each case and the provisions of sub-sections (2) and (3), so far as they are applicable;

(f) ................................................

(g) ...............................................

(2) The amount of compensation payable for the requisition of any property shall consists of -

(a) a recurring payment, in respect of the period of requisition, of a sum equal to the rent which would have been payable for the use and occupation of the property, if it had been taken on lease for that period; and

(b) Such sum or sums, if any, as may be found necessary to compensate the person interested for all or any of the following matters, namely:-

(i) pecuniary loss due to requisitioning ;

(ii) Expenses on account of vacating the requisitioned premises;

(iii) Expenses on account of reoccupying the premises upon release from requisition ; and

(iv) damages (other than normal wear and tear) caused to the property during the period of requisition, including the expenses that may have to be incurred for restoring the property to the condition in which it was at the time of requisition.

(3) .................................'

If the parties cannot fix the amount of compensation by an agreement, the same is required to be determined by an arbitrator. At the commencement of the proceedings before the arbitrator, the parties have to state a fair amount of compensation. After hearing the dispute, the amount of compensation which appears to be just is to be fixed and in making an award, regard is to be had to the circumstances of each case and the provisions of sub-section(2) in the present case. Now, the amount of compensation payable for the requisitioning of the property is the sum equal to the rent. such rent is to be determined on the basis if the requisitioned prorate had been taken on lease from the appellants. thus, the amount of compensation is o be worked on the basis of rent which can be fetched by leasing out the property. The words 'rent' and 'lease' are the key-notes and they are dominant for fixing the compensation. They fix the scope and limit of compensation. We have, therefore, to concentrate on the word 'rent' and the expression 'if it had been taken on lease' used in clause (a) of sub-section (2) of Section 8.

8. The words 'rent' or 'lease' are not defined in the Act though the words 'landlord' and 'tenant' are defined under Section 2 thereof. The word 'lease' is defined under Section 105 of the Transfer of Property Act. A lease of immovable property is a transfer of a right to enjoy such property. made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms. the money, share, service or other thing to be rendered is called the 'rent'. A lease is thus a transfer of immovable property for a certain period for a consideration. the lessor parts with his right to enjoy the property during the period of the lease and the lessee takes the right to the exclusion of the lessor. Lease distinguishes from license. Licensee's possession is not exclusive. By a license merely permission is given to occupy the premises for a particular time. this word 'rent' can be used in diverse sense. It may be used in the generic sense of a recompense paid by a tenant to his landlord for exclusive possession of the premises secured by him.

9. The word 'rent' also came for consideration in Karani Properties Ltd. v. Miss Augustine, : [1957]1SCR20 . the term 'rent' is not defined under the West Bengal Premises Rent Control (Temporary Provisions) Act, 1950. Their Lordships of the Supreme Court observed thus:-

'The term 'rent' has not been defined in the Act. Hence it must be taken to have been used in its ordinary dictionary meaning. If , as already indicated, the term 'rent' is comprehensive enough to include all payments agreed by the tenant to be paid to his landlord for the use and occupation not only of the building and its appurtenances but also of furnishing, electric installations and other amenities agreed between the parties to be provided by and at the cost of the landlord, the conclusion is irresistible that all that is included in the term 'rent' is within the purview of the Act and the Rent Controller and other authorities had the power to control the same.'

Under Section 7 of he Bombay Rent Act, it shall not be unlawful to claim or receive on account of rent for any premises any increase above the standard rent, unless the landlord was, before the coming into operation of the Bombay Rent Act, entitled to recover such increase under the provisions of the Bombay Rent Restriction Act, 1939, or the Bombay Rents, Hotel and Lodging House Rates (Control) Act, 1944, or is entitled to recover such increase under the provisions of the Bombay Rent Act, 1947. Under Section 18(1), if any landlord receives any consideration the than the standard rent or the permitted increases in respect of the grant, renewal or continuance of a lease of any premises, such landlord shall, on conviction, be published. Therefore, the law of the land as applicable in April, 1964, placed statutory restriction on the appellants from claiming or receiving on account of rent above the standard rent and contravention of this restriction was made panel..

Tuesday, 12th August, 1975.

10. 'Standard rent' is defined under sub-section (10) of Section 5, meaning where the standard rent is not fixed by the Court and the Controller respectively under the Bombay Rent Restriction Act, 1939, or the Bombay Rents, Hotel and Lodging House Rates (Control) Act, 1944 subject to the provisions of Section 11 of the Bombay Rent Act, 1947, the rent at which the premises were let on the first day of September 1940, or where they were not let before that day, or where they were first let after the first of September, 1940, the rent at which they were first let, or in any of the cases specified in Section 11, the rent fixed by the Court, Under this definition, subject to the provisions of Section 11, the standard rent of the appellants' premises was the rent at which the 3rd floor premises were let by the appellants, before the first day of September, 1940. It was urged by Mr. Zaiwala as stated above that the appellants could have made an application for fixation of standard rent as the 3rd and 4th floor premises were let out to Hindustan Lever Ltd., at a nominal rent in consideration was not substantiated by the learned Counsel either from the lease or any material on record. On the other hand, respondent was that he should fix the compensation on the basis of the position prevailing in 1964 and not by considering the position existing in 1938. Having regard to the provisions of the Bombay Rent Act, 1947, it is abundantly clear that if the 3rd floor premises were given on lease, the appellants could not have lawfully recovered from the proposed lessee rent higher than the standard rent and such standard rent would have been the rent at which the 3rd floor air-conditioned premises we last let before 1st September, 1940.

11. On this aspect of the matter, the learned Assistant Government Pleader has placed reliance on para, 7 of the judgment in the case of Corporation of Calcutta v. Smt. Padma Debi, : [1962]3SCR49 . In that case, their Lordships of the Supreme Court were required to consider the provisions of Section 127(a) of the Calcutta Municipal Act, 1923, for the purpose of gross annual income at which the building might reasonably be expected to let. It was in that connection the implications of the West Bengal Premises Act, 1950. In the opinion of the supreme court, a combined reading of the provisions of Sections 2 (10) (b), 3 and 33 (a) of the West Bengal Premises Rent Control (Temporary Provisions) Act, 1950, leaves no room for doubt that a contract for a rent at a rate higher than the standard rent is not only not enforceable but also that the landlord would be committing an offence if he collected a rent above the rate of the standard rent. One may legitimately say under those circumstances that a landlord cannot reasonably be expected to let a building for a rent higher than the standard rent. A law of the land with its penal consequences cannot be ignored in ascertaining the reasonable expectations of a landlord in the matter of rent. In this view of the matter, in the opinion of the supreme Court, the law of the land must necessarily be taken as one of the circumstances obtaining in the open market placing an upper limit on the rate of rent for which a a building can reasonably be expected to let. In this context, the following observations are illuminating:-

'It is said that Section 127 (a) does not contemplate the actual rent received by a landlord but a hypothetical rent which he can reasonably be expected to receive if the building is let. Hypothetical rent may be described as a rent which a landlord may reasonably be expected to get in the open market. But an open market cannot include a 'black market', a term euphemistically used to commercial transactions entered into between parties in defiance of law. In that situation, a statutory limitation of rent circumstances the scope of the bargain in the market. In no circumstances the hypothetical rent can exceed that limit.'

12. This Court in the case of Dawoodji Versey v. State of Bombay, : AIR1954Bom323 was required to construe the meaning of the expression 'market Value' in Section 23(1) of the Land Acquisition Act, 1894 in relation to the ascertainment of compensation under the Bombay Land Requisition Act, 1948. This Court held that in ascertaining the market value , the Court must have regard to the value of the property of the owner in its actual condition at the time when he is expropriated with all its existing advantages and potentialities; but the value must be ascertained in the light of circumstances existing at the time or requisition and not divorced therefrom. Any circumstances which puts statutory restrictions upon the liberty of contract or otherwise depreciate the value must be taken into consideration. In that case, 18 rooms in two chawls were requisitioned by an order D/- 30-1-1948. In determining the compensation, the compensation Officer found that the owner was charging rent from his tenants at the rate of Rs. 5/- per month in respect of each room in the year 1942-43. the compensation officer, having regard to the expenses incurred for making repairs and the amenities provided etc., declared that the fair and reasonable rate of compensation for each of the 18 requisitioned rooms was Rs. 10/- per month in respect of rent plus Rs. 3/- per month as water charges plus permissible additional Municipal General Tax. Under sub-section (1) of Section 8 of the Bombay Land Acquisition Act, 1948, the method of ascertaining compensation is provided for. After holding an inquiry, compensation is to be determined by an officer authorised in this behalf by the State Government who shall determine such amount of compensation as he deems just having regard to all the circumstances of the case, and in particular he shall be guided by the provisions of sub-section (1) of Section 23 and Section 24 of the Land Acquisition Act 1894, in so far as they can be made applicable. In this connection, Mr. Justice Saha (as he then was) observed thus:-

'........But a monthly tenancy protected by the normal rent restriction statute is the nearest equivalent to it and the rent is the nearest equivalent to it and the rent that such a monthly tenant may pay affords a fairly accurate basis for ascertaining the periodic compensation to be rendered ............ In my view, therefore, the rent which the premises would fetch, having regard to the provisions of any restriction statutes in force at the time of the requisition, must be accepted as an adequate basis for ascertaining the periodic compensation to be made to the owner.'

The learned Judge further observed:-

'It is difficult to accept the view that the 'notional fair rent' must be ascertained unaffected by the rent restrictive legislation in force at the date of requisition. The rent which a building fetches depends upon a variety of factors such as the nature of the construction, the locality, the convenience proceeded for the purpose for which the building may be used, the surroundings and the general economic conditions and the statutory restrictions imposed by legislation upon the quantum of rent which may be charged. the rent ascertained without considering all the circumstances and especially the Legislative restrictions may be my view be regarded as unreal rent. It is true that a relation of landlord and tenant does not result from requisition. But if the test for ascertaining compensation is the loss which the owner may suffer by being compelled to part with the land, the natural basis for compensation can only be that which the owner would have obtained if he had parted with his right of possession to a willing transferee at the time of expropriation. If the statute imposes a limit upon what can legitimately be regarded as rent, any attempt to ignore the provisions of the rent restriction statute would be to ascertain rent by imputing to the parties an intention to agree to an unreal rent the liability for payment of which cannot be enforced by legal proceedings.'

13. In my opinion in determining the compensation under clause (a) of sub-section (2) of Section 8, the authority has to bear in mind the relevant statutory restrictions under the Rent control Laws applicable to the requisitioned property, although there is no relationship of a landlord and tenant between the owner an the competent authority who requisitions property. In the matter of the fixing the compensation, such statutory restrictions cannot be ignored. the mode of compensation is regulated on the basis of the rent which would have been payable for use and occupation of the property, if it had been taken on lease for that period. In this context, the words, 'if it' used in the said clause are of significance. The scale of compensation is clearly defined. Moreover, it could not have been the intention of Parliament that in the matter of compensation the competent authority which requisitions property needed or likely to be needed for any public purpose should pay higher compensation than payable under the existing Rent Control Laws. the Act is different from other kindred pieces of legislation under which the provisions of sub-section (1) of Section 23 of the Land Acquisition Act, 1894 are made applicable for determining the amount of compensation. The basis of notional fair rent or hypothetical rent which can reasonably be expected in the open market is not the standard rent . It must be observed that under the Act the amount of compensation is not to be worked out only under clause (a). the owner may receive additional payment for which special provision is made under clause (b), for matters like pecuniary loss due to requisitioned premises, etc., as enumerated in sub-clause (i), (ii), (iii) and (iv) of that clause. These are specified items. The compensation may be supplemented by the Authority by having regard to the provisions of clause (a) of sub-section (1) of Section 8 which imposes a duty to 'have regard to the circumstances of each case'. the authority is enjoined upon to award compensation which appears to it to be just and in that sense equitable and fair. Thus, the amount of compensation in the aggregate will have to depend on the facts and circumstances of each case in view to the various provisions of sub-sections (1) and (2) of Section 8, as regards requisitioned premises.

14. Mr. Zaiwala relied upon a decision of full Bench of the Punjab high Court in the case of Union of India v. Roshan Lal, (FB). In that case, the property was requisitioned under the Defence of India Act. 1939. Section 19 (1) of that Act provides for mode of determining compensation and principles to be followed. the provisions of sub-section (1) of Section 23 of the Land Acquisition Act, 1894, were made applicable in determining the compensation. The earlier view of the Punjab High Court was that compensation for requisitioned premises must be equal to the fair rent fixed by the Rent controller. (See Raghbir Saran v. Punjab State, 1954-56 Pun LR 530). After considering the conflicting decisions of its own Court and other cases including 56 Bom LR 530). After considering the conflicting decisions of its own court and other cases including : AIR1954Bom323 , the Court observed:-

'Upon a careful consideration of the matter, it appears to me that there is a preponderance of authority for the view that where property is compulsorily requisitioned, the amount of compensation should not be determined solely on the basis of fair rent as fixed under the Rent Control Laws. the figure so fixed is merely a piece of evidence which may be taken into consideration as giving an indication of the market rents: other circumstances must be taken into consideration also.'

The above decision is of no assistance to the appellants. In the case, the compensation was to be determined on the basis of sub-section (1) of Section 23 of the Land Acquisition Act, 1894, whereas in the present case the method of compensation is equal to the rent which would have been payable for the use and occupation of the property, if it had been taken on lease.

15. Coming to the decision of the Delhi High Court in Satnarain v. Union of India , : AIR1970Delhi232 , when properly examined, shows that the requisitioned premises had never been let out on rent. It was therefore that the provisions of sub-section (4) of Section 8 of the Delhi and Ajmer Rent Control Act, 1952, were applied by the learned Judge. Section 8 of the said Act makes provision for cases in which standard rent may be fixed by Court. In the case before me, the requisitioned property was the subject matter of previous letting prior to 1st September 1940 and therefore, it was not a case in which the Authority was required to follow the principles governing cases in which standard rent could be fixed by Court.

16. In my judgment, the appellants could not have claimed rent higher than the rent which they were receiving from Hindustan Level Ltd. before 1st September, 1940. In the present case, the 3rd floor was let out before 1st September 1940 and therefore the question of determination of the compensation was more than simplified. although on the basis of tent of Rs. 2,225.40 inclusive of air-conditioning paid by Hindustan Lever Ltd., the amount of rupees 2,225.40 only could have been allowed, but the 2nd Respondent has fixed the amount of Rs. 4,096.68 as compensation. The amount awarded is, therefore, a just and fair compensation. It may be stated that the appellants had not made out a case of pecuniary loss being caused to them due to requisitioning and if such a case was made out, that was also required to be taken into consideration by the 2nd respondent in determining the compensation. if such a loss was in fact suffered, they would not have failed to include the same in the claim made by their letter dated 11th April, 1964 or at the subsequent hearing. I, therefore, do not find any substance in the argument of Mr. Zaiwala that the appellants' claim should have been considered under Section 8(2)(b)(i) of the Act.

17. There is also no force in the point that the air-conditioned charges have not been taken into account in fixing the compensation. apart from the fact that the air-conditioning charges are included in the letter dated 6th October, 1965, as mentioned earlier, Mr. Paranjape, Assistant engineer, C. P. W. d., in his calculations, has added 30 per cent. for extra services and air-conditioning. Therefore, the compensation awarded on the basis of 42 Paise per sq. ft. is inclusive of the air-conditioning amenity provided by the appellants.

18. On the question of the claim of Rs. 500/- Per Month for the use of fixtures, cabins etc., Mr. Zaiwala was unable to point out any material on record, on the basis of which the amount of compensation could be determined. The claim is not well founded. Firstly, there was no evidence that the fixtures , cabins etc., were provided after Hindustan Levers surrendered the third floor premises. Secondly, if the same fixtures, cabins etc., were provided to Hindustan Levers, gathers is no evidence to show that separate rent was charged for the same. the burden lay on the appellants to establish their claim by some cogent evidence. In the light of the above discussion, the third contention and the points raised in rebuttal also must be rejected.

19. No other ground having been canvassed, the appeal fails and the order passed by the 2nd respondent is hereby confirmed. The appeal is, therefore , dismissed with costs.

20. Appeal dismissed.


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