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Malik Amar Chand Kapoor and anr. Vs. the Union of India and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtDelhi High Court
Decided On
Case NumberCivil Writ Appeal No. 68D of 1961
Judge
Reported in7(1971)DLT381
ActsRequisition and Acquisition of Immoveable Property Act, 1952 - Sections 8(1)
AppellantMalik Amar Chand Kapoor and anr.
RespondentThe Union of India and ors.
Advocates: V.D. Bahtt and; Deepak Chaudhary, Advs
Excerpt:
property - compensation - sections 8 (1) (b) and 8 (2) (a) of requisition and acquisition of immoveable property act, 1952 - appellant owner of property in question and said property requisitioned by respondent no. 1 (government of india) - whether arbitrator can entertain question of recurring compensation claimed by appellant - respondent no. 1 sent two bills to petitioner one on account of recurring compensation other on account of restoration expenses - appellant neither accepted nor rejected offer under recurring compensation - under section 8 (1) (b) arbitrator to determine those items of compensation about which no agreement could be reached - held, petitioner not entitled to raise question of recurring compensation under section 8 (2) (a). - - 80.00 as was paid since the date.....t.v.r. tatachari(1) this writ petition has been filed by the petitioners, malik amar chand kapur and smt. durga devi kapur, for themselves and for the benefit of respondent no. 3, malik shiam sarup kapur, praying for the issuance of a writ of mandamus or a direction requiring the union of india (respondent no. 1) to refer to arbitration an alleged dispute relating to the petitioners' claim for recurring compensation alleged to be payable to them in respect of certain requisitioned property in accordance with the provision of section 8 of the requisitioning and acquisition of immoveable property act no. xxx of 1952. the respondents in the writ petition are (1) union of india ; (2) shri r. r. desai, additional legal adviser (arbitration), ministry of law, government of india ; and (3) malik.....
Judgment:

T.V.R. Tatachari

(1) This writ petition has been filed by the petitioners, Malik Amar Chand Kapur and Smt. Durga Devi Kapur, for themselves and for the benefit of respondent No. 3, Malik Shiam Sarup Kapur, praying for the issuance of a writ of mandamus or a direction requiring the Union of India (respondent No. 1) to refer to arbitration an alleged dispute relating to the petitioners' claim for recurring compensation alleged to be payable to them in respect of certain requisitioned property in accordance with the provision of section 8 of the Requisitioning and Acquisition of Immoveable Property Act No. Xxx of 1952. The respondents in the writ petition are (1) Union of India ; (2) Shri R. R. Desai, Additional Legal Adviser (Arbitration), Ministry of Law, Government of India ; and (3) Malik Shian Sarup Kapur. In opposition to the writ petition, an affidavit of Shri C. Balasubramaniam, Director of Estates, has been filed on behalf of respondent No. 1.

(2) The property in question is a residential house in Block No. 14 B, Plot No. 9, situate in Karol Bagh, Delhi. The said property was requisitioned by the Goverdment of India by its order No. 2062/Comp. (B), dated 23rd September, 1942, under sub-rule (1) of rule 75A of tbe defense of India Rules. It continued to be under requisition under the Requisitioned Lard (Continuance of powers) Act, 1947, and it was subsequently deemed to have requisitioned under section 3 of the Requisitioning and Acquisition of Immoveable Property Act No. Xxx of 1952. The Property, when requititioned' was owned by one Mathura Dass, son of Jyoti Ram There ifter, it changed several hands It appears that one Ratan Lal Gupta was the owner in 19^5. and one Abdul Karim Khan become the owner in 1946 under a sale deed. dated 23th March, 1946. Under a sale deed (Annexure 'A'), dated 23rd March, 1959, and supplemental deed (AnnexureA-1) dated nil, the property is stated to have been purchased by the petitioners from Abdul Karim Khan, At the instance of the petitioners, the property was de requisitioned by an order (Annexure (B), dated 15th December. 1955 with effect from 19th December 1956 It appears that possession of the property was, however, delivered to the petitioners even on 17th December, 1955 Shri Deepak Chaudhry, learned counsel for respondent No. 1 produced the relevant file which contains the delivery receipt, and it shows/that possession was delivered on 17th December 1955

(3) SUB-SECTION (1) of section 8 of the Requisitioning and Acquisition of Immoveable roperty Act No Xxx of 1952 provides inter alia, .that where any property is requisitioned or acquired under the Act. there shall he paid compensation, the amount of which shall be determined in the manner and in accordance with the principles set out in the subsection. Clause (a) of Sub-section (1) provides that where the amount of compensation can be fixed by agreement, it shall be paid in accordance with such agreement. Clause (b) provides that where no such agreement can be reached, the Central Government shall appoint as arbitrator a person who is, or has been. or is qualified for appointment as a Judge of a High Court. Sub -section (2) of section 8 provides that the amount of compensation payable for the the requisitioning of any property shall consist of:- (a) a recurring payment, in respect of the period of requisition. of a sum equal to the rent which should 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 re-occupying 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.' Thus, clause (a) of sub-section (2) of section 8 provides of recurring payment, while clause (b) thereof provides for payment of certain other sums. The Executive Engineer, ' G Divsion' Central Public Works Department. New Delhi, sent a letter, dated 28th November, 1956, to the first petitioner enclosing two bills described as 'hand receipts ' in original, the first, dated 29th June, 1956 for a sum of Rs. 385.00 being restoration charges (for maintenace-restoration repairs) for the property in question, and the second (Annexure R 1) dated 21st November, 1956, for Rs. 640-8-O being compensation for the period between 23rd March, 1955, the date of purchase the petitioners and 16th December, 1955, the date previous to the date of delivery of possession, at the rate of Rs. 80.00 per month, after deducting Rs. 62-2-0 towards maintenance and electric charges for the said period. It was stated in the said letter that the said hand receipts were on a count of compensation rent for the period from 23rd March, 1955 to 16th December, 1955 and restoration charges in respect of the property in question and that the said receipts were sent for acknowledgement on stamped receipt and early return. The petitioners sent a reply. dated 27th December, 19 6, stating that the compensation of Rs. 385.00. for de-requisitioning their house proposed to be paid to them was too low to be accepted by them, that their claim in no case was less than Rs 4,000.00 for which they could send a detailed estimate, that they desired to settle the affair amicably, and that otherwise the case may be forwarded io an arbitrator under the provisions of the Requisitoning and Acquisition of Immoveable Property Act In reply to the said letter of the petitioners, the Executive Engineer wrote letter, dated 7th May.1957 requesting that the petitioners might furnish a copy of the estimate in support of their claim for Rs. 4,000.00. the petitioners submitted a detailed estimate for Rs.4,4l8/ as damages caused to their house, along with a covering letter, Annexure R-2, dated :-rd August, 1957. In addition to the said amount, they claim in the said conveing letter a further sum of Rs. 1000.00 Under Section 8, sub-section (2), clauses (b)(i) to (b)(iii) of the Requisitioning & Acquisition of Immoveable Property Act. ft appears that the petitioners again sent a letter, dated 9th October, 1957, and also had an interview with Shri C.C. Sinha, A E.0. regarding the claim for restoration-repairs to the property in question Refferring to the said letter and the interview, the Estate Officer, wrote a letter, dated 28th March, 1958, informing the petitioners that their request for the payment of restoration charges amounting to Rs. 5,000.00 could not be acceded to, that the Government of India had already sanctioned an amount of Rs.385.00 for repairs, and that the petitioners might contact the Executive Engineer for the payment of the said amount of Rs. 385.00. True copies of the bills, dated 29th June. 1956 and 21st June 1956 and the letters dated 28th November 1956, 27th December, 7th May 1957 and 28th March 1958 which were available in the file produced by Shri Deepak Chaudhry have been filed by him and they have been placed on record then, on 3rd April, 1958, the petitioners wrote a letter (Annexure K-3) to the Estate Officer staling that the sum of Rs, 385/ offered to them as compensation was not acceptable to them and requesting that, in the circvmstances the case may be sent to arbitration. Accordingly, the Government of India passed an order, (Annexure 'C'), dated 19th May 1959. stating that whereas no agreement could be reached with the owners of the property in question with respect to certainclaims for 'terminal compensation' made by the first petitioner, consequent on the de-requisiting of the property, the Central Govrnment in pursuance of clause (b) of sub-section (1) of section 8 of the Requisitioning or Acquisitioning of Immoveable Property Act No Xxx of 1952 thereby appointed Shri G S Gaitonde Additional Legal Adviser (Arbitration) in the Office of the Director General, Supplies and Disposals, as arbitrator ' for settling the claims of the owners for terminal compensation in respect of the said property It appears that subsequently Shri G. S. Gaitonde resigned, and the Central Government appointed Shri R. R, Desai, respondent No. 2, in the place of Shri Gaitoade as arbitrator. Clause (d) of sub-section (1) of section 8 provided that 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 and clause (e) provides that the arbitrator shall, alter healing the dispute, make an award determing the amount of compensation which appears to him to be just and specifying the person or persons to whom such shall be paid and that in making the award he shall have regard to the circumstances of each case and the provisions of subsections (2) and (3) so far as they are applicable. Accordingly, the arbitrator issued a notice (Annexure 'D'), dated 25th May, 1959, to the petitioners and the Estate Officer staling (that he was appointed by the Central Government as sole arbitrator 'for determining the terminal compensation' payable in respect of the property inquestion arising out of its de-requisition by the Government with effect from the 19th December, 1955, and calling upon the petitioners and the Estate Officer to appear before him. The petitioners accordingly submitted their claim (Annexure 'E') dated 28th June, 1959. they stayed in that claim that the property in ques was requisitioned in the beginning of the year 1943, that it was said that a flat rat e of compensation was continued to bepaid to the predecessors-in-interest at the petitioners who were the present owners, that the petitioners purchased the house on 23rd March, 1955 by means of a registered sale deed, a copy of which was attached thereto, and that since then they had become entitled to every kind of compensation including recurring payment by way of compensation for the use and occupation. They further stated that since 1943 there had been considerable rise in rents, that Khan Abdul Karim Khan who was the immediate predecessor in-interest of the petitioners was paid the same monthly compensation of Rs. 80.00 as was paid since the date of requisition, that Abdul Karim Khan purchased the property by a registered sale deed dated 13th March, 1946, that for the period from 13th March, 1946, to 12th March, 1952, the monthly rent for a premises like the property in question was not less than Rs 200.00 a month, and the said rate lasted till the year 1952, and the compensation for the said period 'comes to Rs. 200.00 Rs. 80.00==Rs. 120.00 Rs. 20.00 (amount remitted) ==Rs. 100 x 12 months x 6 years=Rs. 7,200.00', that from the year 1952, there was again a rise in the rents of the premises like the one in question, and the rent was not less than Rs. 3000.00, and thereforee, the compensation for the period from 13th March, 1952, to 22rd March, 1955 (the date of their purchase) 'comes to as above Rs 300/ Rs.80.00==Rs. 220.00Rs. 20.00 Rs. 2 Ox 12 months x 3 years == Rs. 7,200.00', and that in that manner, the total amount to which the previous owner Khan Abdul Karim Khan was entitled came to Rs. 14,400.00 to which the present owners, the petitioners, were entitled as they had been authorised to realise that amount by means of assignment (Annexure A & A-1). The petitioners then stated in their claim that the Government offered rent to them at the rate of Rs 80/ per month which they had refused, that the amount of compensation for use and occupation to which the present owners (petitioners) were entitled in the years 1955, should be at notless than Rs. 400.00a month, and the amount due to them at that rate from 23rd March, 1955, the date of purchase by them, to 19th December 1955, the date of delivery of possessisn came to Rs. 3,573-5-3. They also stated that since 1947 the area in which the house in question was situate had become an important commercial locality, and consequently its rental value had become enhanced, that its potential rental value for the period of 9 months i. e. from 23rd March, 1955, to 19th Decemeber, 1955, come to Rs. 900.00 and that they were thus entitled to a total amount of Rs. l4,400.00 plus Rs. 3,573 5 3 plus Rs. 900.00== Rs. 18,874-5-3 as compensation under clause (a) of sub section (1) of section 8. They went on to state that the house in question was used in a negligent manner during the period it was under requisition and was considerably damaged, that they were entitled to an amount of Rs, 5.000.00 by way of structural pamages, that the said amount of damages did not include the damage which was not visible to an open eye, that on account of lack of repairs and neglect, the life of the premises was prematurely, shortened and they were entitled to a Bum of Rs, l,000.00 by way of damages for the same, and that they were thus edtitled to a sum of Rs.6,000.00 as damages under sub-clause (iv) of clause (b) of sub-section (2) of section 8.

(4) Thus, the petitioners claimed 5 items by way of compensation, namely, (i) Rs. 14,400.00 as compensation by way of rent from March, 1946 to March, 1955; (ii) Rs. 3,573-5-3 as compensation by way of rent from March 1955, to 19th December, 1^55; (iii) Rs. 900.00as potential rent value; (iv) Rs. 5,000.00 for structural damages and (v) Rs. 1,000.00 as damages for shortening the life of the property by neglect, making a total of Rs. 24873-5-3. They also climed interest on the said amount at the rate of Rs. I per cent per month.

(5) As already stated, the Central Government purported to appoint the arbitrator for determining 'terminal compensation' On 2nd July, 1959, the petitioners filed an application (Annexure 'F'), before the arbitrator stating that the term 'terminal compensation' did not find a place either in the Act or in the Rules farmed under the Act, that the words 'terminal compensation^ not are the same as the words 'recurring compensation' which occurred in clause (a) of sub section (2) of section 8, that by the term 'terminal compensation' the Government compensation other than compensation referred to in clause (a) of subsection (2) that the reference was not in accordance with law, and that in the interest of justice, the Government may clarify the point by stating that the reference made to the arbitrtor was in regard to all the matters covered by sub-section (2) of section 8.

(6) Respondent No. 1 filed a statement (Annexure 'G') in reply to the claim (Annexure 'E') filed by the petitioners. In that statement it was stated that the house in question was not in a good condition at the time of its requisition and that the rent for the house was fixed at Rs. 80.00 per month, and the then owers of the house accepted the said amountas recurring compensation, that the predecessors-intitle of the petitioners were receiving recurring compensation at the rate of Rs. 80.00 per month, and as such the petitioners also were offered recurring compensation for the period subsequent to their puchase at the same rate, and that the pettioners were not entitled to any of the amounts climed by them except the sum of Rs. 385/ offered to them by way of restoration charges. Respondent No. 1 also filed a reply (Annexure 'H') dated 22nd August, 1959, to the application (Annexure 'F'). It was stated in that reply that the Government appointed the arbitrator only for the purpose of determining 'terminal compensation' and not recurring compensation, and that it would be outside the jurisdiction of the aribtrator to go into the question of recurring compensation.

(7) The arbitrator considered and matter, thepassedanorder(Annexure I), dated 21 st September, 1959, stating that the terms of the reference to him and the expression 'terminal compenation' needed to be clarified by the Government. There upon, the Government of India, sent a communication (Annexure J) dated 16th February, 1960, to the arbitrator which runs as follows :-

'SIR,Further to the Government of India. Ministry of Works, Housing and Supply Order No. 4(1) / 59 E. O Lit., dated the 19th May, 1969, the Central Government makes the following amendment in the aforesaid order:- Amendment In Lines 7 to 8 of para 4 for the words 'for terminal compensation in respect of the said property' substitute 'for compensation on account of expenses incurred in re-occupying the said property upon release from requisition and on account of of damages (other than normal wear and tear) caused to the property during the period of requisition includicg that expenses that may have to be incurred for restoring the property to the condition in which it was at the time of requistion', The Central Government do not consider it necessary to refer to arbitration the claims for the owner for recurring payment on account of rent, for the said property, the same having been already determined by agreement.'

(8) The petitioner then filed an application (Annexure) dated 25/26th August, IC60 before the arbirator in which be submitted that the Government never referred to or relied upon any agreement in its reply statement (Annexure H ), dated 22nd August, 1959, that the Government did not give any perticulars of the agreement or its date in the amendment, dated 16th February, 1960, that there was absolutely no agreement of any sort between the present owners (petitioners) or their predecesors in interest and the Government, that the arbitrator had jurisdiction to determine and grant recurring compensation in spit of the aforesaid amendment or objection of the Government, and that the respondent No 1 should be directed to make discovery on oath about the said agreement. Respondent No. 1 fild several documents before the arbitrator, a list of them being AnneXure 'M', dated 28th September, 1960. But no such agreement was mentioned in the said list. The arbitrator farmed the issued which arose on the pleadings of the parties, and issue No. 1 which was treated as a preliminary issue at the request of the parties was as follows :--

''WHETHERthe arbitrator can entertain the question of recurring compenastion claimed by the claimants '

The arbitrator heard the' contentions of the partieson the said preliminary issue, and by his order (Annexure N), dated 17th January, 1961, held that the Government of clearly stated in their communication, dated 16th February, 1960, that they did not consider it necessary to refer to arbitration the claim of the owners for recurring payment on account of rent for the said property, the same having already been determined by agreement, that in the light of the order of reference-to arbitration it was cleat that the terms of reference did not include for determination by the arbitrator the question of recurring payment on account of rent, that the arbitartor was bound by the terms of reference, and it was doubtful whether he could go beyond those terms and determine the question of recurring payment by way of rent, that clause (b) of sub-section (1) of section 8 merely provides for appointment by the Central Government of an arbitrator for determining the compensation payable to the owners of the property, and that since the Government contended that the question of recurring payment had already been concluded by agreement between the parties, and since the Government did not refer the said question to arbitration, he the arbitrator, could not entertain the said claim for recurring payment, as he was governed by the terms of reference and his proceedings have to be confined to the question referred to him for arbitration, He directed the case to beposted for the bearing of the remaining issues. Thereupon, the petitioners filed the present writ petition praying for the issuance of an appropriate writ of mandamus directing respondent No. 1 to refer to arbitration the dispute relating to the petitioners' claim for recurring compensation in accordance with the provisions of section 8 of Act No. Xxx of 1952, and directing respondent No. 2 to determine and adjdicate upon the dispute relating to the claim of the petitioners for recurring compensation payable in respect of the property in question. It may be stated here that the petition was originally filed as an appeal under Section 11 of Act No. Xxx of 1952. and in the alternative as a writ petition lender Article 226 and 227 of the Constitution of India. But, it was subsequently amended by the petitioners and treated as awrit petition only. The parties' proceeded thereafter treating the petition as a writ petition and advanced arguments on the same basis

(9) The case of respondent No. 1, as stated in the affidavit of Shri C. Balasubrahmaniam, was that after the property in question was requisitioned, the recurring compensation payable under clause (ii) of subsection (2) of section 8 of Act No. Xxx of 1952 was assessed at Rs. 80.00;per month in the year 1944, and the said rate had been accepted by the owners and consequently it was paid all along to the owners including Abdul Karim Khan, and that there was, thereforee, no question of the same being paid overagain to the petitioners. It was farther the case of respondent No. 1, that alter the release of the property, respondent No 1 offered a compensation amounting to Rs. 385.00 to the petitioners on account of restoration expenditure for the requisitioned premises by way of terminal compensation i. e. compensation payable consequent on the terimination of requisition under section 8(2)(b) of the Act, that the petitioners did not accept the amount of Rs.385.00 and lodged a claim demanding a sum of Rs, 5,418.00 instead on account of the restoration expenditure, but no claim for any recurring compensation was made as would be borne out by a reference to the detailed statement of account (Annexure R.2)sent by the petitioners to the Central Government setting out the details of Rs. 5,418.00 claimed by .them. that respondent No. 1 did not admit the said claim and insisted that the compensation of Rs.385.00offered to them was the amount. payable to them, that the petitioners there upon informed the .Estate Officer by their letter, Annexure R-3, that the sum of Rs. 385.00 offered to them by the Government was not acceptable to them, and an arbitrator may, thereforee, be appointed, that consequently the Central Government, by its order (Annexure C), dated 19th May, 1959, appointed an arbitrator to decide aboat the petitioners' claim for terminal compensation that became payable consequent on the derequisitioning of the property, that the said order consuiuted the reference, and it very clearly defined the jurisdiction of the arbitrator, that the Central Government thus appointed the arbitrator to determihe only the claim falling under section 8(2)(b), and not any recurring compensation .falling under section 8(2)(a). It was stated in the affidavit that the petitioners sent only an attested copy of the registered sale deed, dated 23rd March, 1955 (Annexure A.) to the Secretary, Ministry of Works. Housing & Supply, but never sent the supplemental deed which has been filed as Annexure A-1 with the writ petition, that the factum, execution and validity of the said Annexure was not admitted by respondent No. 1, and that it was not open to the petitioners to rely on a document in the present proceedings which was never submitted by them before the Requisitioning Authority. It was further stated in the affidavit that it was incorrect to say that the previous order of reference was in any way amended, but that it was correct that the same was amplified in the terms mentioned in Annexure J, dated 16th February, 1960. It was submitted that only the claim of the petitioners for restoration expenditure was referred to the arbitrator in compliance with the petitioner's own demand contained in letter (Annexure R-3), dated 3rd April, 1958, asking for the arbitration, that with regard to recurring compensation, there was no dispule in as much as the previous owners had agreed to the compensation assessed and had consistently been receiving the same without any objection and the petitioners did not raise any dispute, that the deed of sale, Annexure A. relied upon by the petitioners simply authorised the petitioners to receive back the property on being derequisitioned and to receive the compensation for the period after the sale, that the question of appointment of the arbitrator for determining the recurring compensation under the circumstances could not arise, nor was the arbitrator intended to entertain aby sach claim in view of the terms of the reference, that the arbitrator was the sole judge, subject to the law in force for the adjudcation of the claims falling within the term? of his reference, but had no jurisdiction to enlarge the scope of his reference, that it was not open to the petitioners to raise a dispute regarding recurring compensation after the appointment of the arbitrator, and that there was no question of respondent No. 1 in any way limiting the jurisdiction of the arbitrator.

(10) Thus, the following facts emerge from the averments of the parties and the documents placed on record. According to the affidavit of Shri Balasubramanian filed on behalf of respondent No. 1, after the property was- requisitionede in 1942, the recurring compeasotion payable under Section 8(2)(a) was assessed at Rs. 80.00 per month in the year 1943, and this rate had been accepted by the owners, and it was paid all along to the owners including Abdul Karim Khan The petitioners have not adduced any evidence to controvert the aforesaid averments of Shri Balasubramanian and the averments have. thereforee, to be regarded to be true. For the period from 23rd March, 1955, the date on which the petitioners purchased the property from Abdul Karina Khan, to 17th December,1955, the date on which the property was derequisitioned ono delivered to the petitioners, respondent No. 1 sent two bills to the petitioners on 28th November, 1956. One bill (Annexure R-1), dated 29th June, 1956, was for a sum of Rs. 385.00 on account of restoration charges (maintenance-repairs) which clearly falls under section 8(2)(b) of the Act No. Xxx of 1952 The other bill was fora sum of Rs 640-8-0 on account of recurring compensation for the period 23rd March, 1955 to l6 the December, 1955, calculated at the rate of Rs. 80.00 per month, after deducting some amounts towards maintenance and electric charges. The petitioners have not produced any evidence to show that they declined to accept the amount in the second bill. They, however, refused to accept the amount of Rs. 385.00 in the first bill, and instead claimed a sum of Rs 4418/ and sent a detailed estimate (Annexure R-2) for the said amount. A perusal of the said estimate shows that it related only to various repairs etc. -They also claimed a sum of Rs 1000.00 under section 82(b) (i) to (in). Thus, they claimed only restoration expenditure filling under section 8(2)(h). and not recurring compensation under slection 82 (a) Respond? nt No. 1 did not accept the said claim for Rs 5418.00 and offered only Rs. 385/ which was refused again by the petitioners by their letter, dated 3rd April, 1958. in which they also asked the case to be sent to arbitration. The Central Government appointed an arbitrator accordingly to determine the terminal compensation i.e. the compensation payable on the termination of the requisition. Thus, prior to the appointment of the arbitrator, the petitioners claimed only compensation by way of restoration expenditure, but did not claim any recurring compensation.

(11) After the case was referred to the arbitrator, however, the petitioners claimed five items of compensation which have already been set out above, out of which items 1 to 3 consisted of recurring compensation which falls under section 8(2)(a). The order (Annexure C) appointing the arbitrator made it clear that the arbitrator was appointed to determine only 'terminal Compensation', which, as explained in the affidavit of Shri Balasubramaniam, meant compensation payable on the termination of requisition. The petitioners asked for a clarification of the meaning of the said phrase, and the Central Govenment, by their communication (Annexure J) dated 16th February, 1960, made it clear that the arbitrator was appointed for settling the claims of the owners (petitioners)'''for compensation on account of expenses incurred in re-occupying the said property upon release from requisition and on account of damages (other than normal wear and tear) caused to the property during the period of requisition including the expenses that may have to beincurred for restoring the property to the condition in which it was at the time of requisition.' The Central Government also added in the said communication that they did not ''consider it necessary to refer to arbitration the claim of the owner for recurring payment on account of rent for the said property, the same having been already determined by agreement'. It is clear from the said communication that the arbitrator was appointed to determine compensation falling under section 8(2)(b), and not recurring compensation which falls under section 8(2)(a). The arbitrator was. thereforee, justified in holding on the preliminary issue that his appointment was only to determine the restoration expenses and damages which fall under section 8(2)(b) and not the recurring compensation claimed by the petitioners which falls under section 8(2)(a).

(12) Shri N D Bali, learned counsel for the petitioners, contended that it was not necessary for the petitioners to raise a dispute before the Central Government specifically about each item of compensation prior to the appointment of the arbitrator, that under section 8(1), when no agreement could be reached about the amount of compensation, the Central Government was bound to appoint an arbitrator to determine the amount of Compensation, that it was at that stage that the petitioners were to put forward their claim about the amount of compensation before the arbitrator, that the amount of compensation contemplated by section 8' comprises both the recurring compensation payable under section 8 and the other sums payable undar section 8(2)(b), and the petitioners could, thereforee, claim both the amounts before the arbitrator even though they did not claim or raise any dispute about the recurring compensation payable under section 8(2)(a) before the Central Government prior to the appointment of the arbitrator, that the Central Government was merely to appoint an arbitrator and there was no question of the Government mating any reference to the arbitrator specifying the disputed items of claim and requiring the arbitrator to determine the same and that the determination by the arbitrator was not, thereforee limited to the particular items mentioned by the Central Government in their orders (Annexures C and); dated 19th May, 1969 and 16th February, 1960, and the arbitrator ought to have decided the preliminary issues in favor of the petitioners holding that be had jurisdiction to consider, and determine if any recurring compensation was payable to the petitioners as claimed by them before him.

(13) In my opinion the contention of the learned counsel is untenable. Section 81 of the Act No.XXX of 1952 lays down the procedure for the determination of the compensation. Section 82 lays down the sums which the amount of compensation shall consist of. Section 83 deals with compensation payable for the acquisition of a property. But. we are not concerned with this provision in the present case which js one of requisition and derequisition and not acquisition. Section 81 provides that where any property is requisitioned, there shall be paid compensation the amount of which shall be determined in the manner and in accordance with the principals set out in the section. Clause (a) of section 81 provides that where the amount of compepsation can be fixed by agreement, it shall be paid in accordance with such agreement. Clause (b) provides that where no such agreement can be reached, the Central Government shall appoint an arbitrator. These two clauses clealy contemplate aclaim by the claimants, a consideration of the 'same by by Central Government, and in case there is agreement between the claimants and the Government, the fixation of the .agreed amount as compensatioa and payment thereof. The use of the words 'where no such agreement can be reached'' in clause (b) shows that the clause implies an attempt by the claimants to sea whether the compensation could be fixed by mutual agreement, and this is possible only if the claimants put forward their claim about the amount of compensation payable to them. It is, thereforee, not correct to say that there was no necessary for the claimants to put forward or specify their claim before the Government. Further,the provision in clause (b) shows that the Government has to appoint an arbitrator only when no agreement can be reached, i.e, when there is a dispute about the compensation. It is possible that in a given case,there may be agreement between the claimants and the Government regarding some of the. items of compensation claimed, and there may not be an agreement regarding the other items of compensation claimed. In such a case, there will be no point in appointing an arbitrator to determine the agreed items. An arbitrator has to be appointed to determine only the items of compensation about which an agreement could not be reached. In such a case, the agreed items of compensation will be paid by the Government in accoldance with the agreement as provided in clause (a), and an arbitrator has to be appointed to determine the disputed items of compensation. Then, at commencement of the proceedings before the arbitrator, the claimant and the Central Government are enjoined by clause (e) to state 'what in their respective opinion is a fair amount of compensation'. These words in quotations refer, in the context, only to the items of compensation about which there could be no agreement between the claimants and the Government, and not to fresh items of compensation which were not claimed before the Government and about which there was no question of any agreement being reached. Next, clause (e) provides that the arbitrator, after hearing the dispute, shall make an. award having regard to the circumstances of each case and the provisions of sub-section (2) and (3) so far as they are applicable. The word 'dispute' used in clause (e) again is significant. Thus, under section 8(1), an arbitrator is to be appointed by the Central Government to determine only that part of a claim for compensation which was disputed and no agreement could be reached. If an item of compensation was not claimed or if some of the items of compensation could be fixed by agreement, the question of appointing an arbitrator regarding the same does not arise at all When an arbitrator is appointed, he has to know the items of compensation about which no agreement could be reached. thereforee, the disputed items have to be stated in the order appainting the arbitrator. In that sense, the order appointing the arbitrator is in the nature of a reference in which, the disputed items of .compensation which the arbitrator has to determine are set out.

(14) SUB-SECTION (2) of section 8 provides that the amount of compensation payable for the requisitioning of any property shall consist 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) other sums specified in sub-clauses (i) for('iv)ot clause (b),As stated earlier, respondent No, 1 sent two bills to the petitioners on 28th November, 1956, one on account of recurving payment for the period between 23rd March, 1955 and 17th December, 1955, ..and the other on account of restoration expenses. The petitioners replied -to respondent No. 1 claiming a larger amount only on Account of the restoration expenses and when respondent No I did not agree to it, the petitioners requested that the same may be sent for arbitration. The petitioners 'neither accepted nor rejected the offer under the first of -the aforesaid bills on account of recurring payment .under clause (a) of section 82 and flid not ask for arbitrator regarding the same. there was thus no specific claim by the petitioners put forward before respondent No 1, and consequiently there was no question of any non reaching of an agreement regarding the same as is contemplated by clause (b) of sub-section (1) of section 8. As already pointed out above, the arbitrator, appointed under clause (b) of sub-section (1) of 'section 8 was to determine only ltems of compensation about which no agreement could be reached 'i.e. about 'whlch there was a claim before the Central Government and the same was disputed prior to the appointment of the arbitrator. thereforee, it follows that the petitioners were not entitled to raise the question of recurring compensation under clause (a) of sub-section 2 of section 8 before the arbitrator, and the arbitrator rightly held on the preliminary issue that he could not entertain the question of recurring compensation claimed by the petitioners.

(15) For the above reasons, the writ petition fails and is dismissed with costs of respondent No. 1 which are fixed at Rs. 250/.


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