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Banwari Lal and Sons (Pvt.) Ltd. Vs. Union of India and anr. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtDelhi High Court
Decided On
Case NumberLetter Patent Appeal No. 88 of 1973
Judge
Reported inAIR1982Delhi366; 20(1981)DLT225; 1982(3)DRJ12; ILR1982Delhi640
ActsRequisition and Acquisition of Immoveable Property Act, 1952 - Sections 11
AppellantBanwari Lal and Sons (Pvt.) Ltd.
RespondentUnion of India and anr.
Advocates: Madan Bhatia,; Rishi Kesh,; D.P. Wadhawa and;
Cases Referred & Delhi Transport Undertaking v. Lalita
Excerpt:
.....prevented by sufficient cause from filing the appeal in time'.(12) we were pressed to hold that an appeal lies to two judges. s in name as well as in substance. the full bench decision is clearly distinguishable......court in municipal corporation of delhi v. kuldip lal bhandari 2nd : air1970delhi37 and the full bench decision of the punjab and haryana high court in shanti devi v. general manager haryana roadways . i do not regard this passage as an authoritative exposition of law on the question of competency of the appeal. this is no more than an obiter, if at all it has to be given that status. it is merely a passing referenceto the view counsel entertained an this subject. it is true that the judges express their disagreement with the view of counsel but that was not the question for their decision. the only question before the division bench was whether there was sufficient cause for condensation of delay. that an appeal lay under clause i u of the letter patent was assumed by learned judgea......
Judgment:

Avadh Behari Rohatagi, J.

(1) These appeals raise once again the question, which has been so often discussed and decided, namely, what is the meaning of the term 'judgment' as used in the Letters Patent. Ever since the Queen established the chartered High Courts in the three Presidency towns of Calcutta, Bombay and Madras in 1865 this single term has vexed the judges for these hundred years and more. Sir Richard Couch Cj of Calcutta and Sir Arnold White Cj of Madras are some of the illustrious names of judges who initiated the great debate.

(2) These are two letters patent appeals from the order of a learned single judge dated January 30, 1973.

(3) These are the facts. By an order of the Central Government dated August 27, 1942, building known as I, Aurangzeb Road, New Delhi, of the owners, M/s. Banwari Lal & Sons (P) Ltd., was requisitioned under 75-A of the defense of India Rules, 1939. Possession of the property was taken by the Central Government on September 15, 1942. After twenty two yeirs,on October 1, 1964 the property was derequisitioned and possession was handed over to the owners.

(4) During the period of requisitioning the owners were paid Rs. 418.00 per month as a recurring compensation for use and occupation of the premises. This was the standard rent fixed by the Controller. The owners accepted it without protest.

(5) Disputes arose between the parties over the payment of compensation. By an order dated December 15, 1965 Sh.V.Ramaswamylyer, Additional Legal Advisor (Arbitration) in the Ministry of Law, was appointed as arbitrator under clause (b) sub-section (1) of Section 8 read with subsection (2) of Section 24 of the Requisitioning and Acquisition of Immovable Property Act, 1952 (the Act) by the Government.

(6) Before the arbitrator the owners made a claim of Rs. 7)73,198.24 of damages and compensation together with interest at 9% per annum. The Union of India disputed the claim of the owners. The parties produced oral and documentary evidence before the arbitrator. The arbitrator made an award on February 6, 1971. He allowed Rs. 17,750.00 as compensation for damage to the building, Rs. 4,000.00 as cost of furniture. Rs. l,800.00 foruse of furniture and furnishings and Rs. 2,367.34 on account of arrears of house tax. The Government made a counter claim of Rs. 16,691.00 against the owners before the arbitrator. The arbitrator rejected the cross-claim in its entirety.

(7) From the award of the arbitrator the owners appealed to the court under s. Ii of the Act. The Government filed cross-objections against the sums awarded to the owners as well as against that part of the award by which the arbitrator had disallowed the claims of the Government. The appeal was heard by a learned single judge of this court (R.N. Aggarwal J.) He allowed the appeal of the owners. He awarded them a total sum of Rs. 61,020.34. He raised the compensation from Rs. 25,417.34 to Rs. 61,020.34 and allowed interest. Thus he enhanced the figure of compensation by Rs. 35,103.00 . On the question of enhancement of recurring payment the single judge in agreement with the arbitrator held that the owners were estopped from raising the dispute as they had accepted it without protest for 22 years.

(8) On the cross objections filed by the Government in the appeal of the owners he held that there was no provisions in the Act which gave power to the arbitrator appointed under S. 8(1)(b) of the Act to adjudge or determine the claims of the Government against the owner. He took the view that section 8 provides only for determining compensation payable on account of requisitioning of the property to the owners. He thereforee dismissed the cross objections.

(9) From the order of the learned single judge these two letters patent appeals have been brought. One is the appeal of the owners (LPA 88/73). The other is the appeal of the Union of India (LPA 92/73).

(10) The question that arises for decision is whether these appeals are competent. We heard the appeals on merits. No one raised any objection to the competency of the appeals apparently because both parties had preferred appeals. We reserved judgment. But then it appeared to us that these appeals were incompetent. We asked counsel for the parties to satisfy us if appeals lay under clause 10 of the letters patent. Counsel addressed elaborate arguments on this point.

(11) The single question is : Has the owner whose property was requisitioned a right to prefer an appeal to a division bench of this court under clause 10 of the letters Patent from the order of the single Judge Section 11 of the Act provides for appeals. It says :

'APPEALSfrom awards in respect of compensation Any person aggrieved by an award of the arbitrator made under S. 8 may, within thirty days from the date of such award, prefer an appeal to the High Court within whose jurisdiction the requisitioned or acquired property is situate. Provided that the High Court may entertain the appeal after the expiry of the said period of thirty days, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal in time'.

(12) We were pressed to hold that an appeal lies to two judges. In the section, however, nothing is said about appeal to the division bench. No provision is made, for example, for an appeal from the High Court to the Supreme Court, as has been done in S. 54 of the Land Acquisition Act; (See Bar Dial Singh v. Secy. of State 1894 1922 Lah 420 : Collector of Dacca v. Ghulam Kuddus Choudhary : AIR1936Cal688 & Siri Chand v. Union. of India Air 1963 Pun 221.

(13) Section 8 of the Act provides that the Government shall pay compensation for any property which is requisitioned. The amount of compensation shall be determined in the manner and in according with the principles set out in section 8(2)(b) of the Act. If the amount of compensation can be fixed by agreement, it shall be paid in accordance with such agreement. Where Ho such agreement can be reached, the Central Government shall appoint as arbitrator a person who is, or has been, qualified for appointment as a judge of a High Court. The arbitrator shall, 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.

(14) The provisions of the defense of India Act, 1939 were substantially similar to the provisions of the Act of 1952. Now on the defense of India Act, 1939 there are two decsions of the Supreme Court which requires a careful study before the question of competency of appeal can be answered. These are Hans Kumar v. Union of India Air 1951 Sc 947 and Collector Varanasi v. Gauri Shankar : [1968]1SCR372 . In Hans Kumar it was held that under S 19(1) (f)of defense of India Act the judgment of the High Court passed in appeal was not a judgment, decree or order within the meaning of Section 109 and 110 of the Code of Civil Procedure and accordingly appeal to the Supreme Court was incompetent. Sec..ion 19(l)(f) of the defense of India Act was in these terms : An appeal shall lie to the High Court against an award of an arbitrator except in cases where the amount there of does not exceed an amount prescribed in this behalf by rule made by the Central Government. Venkatarama Aiyer J. speaking for the court said : In our view a proceeding which is at the inception an arbitration proceeding must retain its character as arbitration, even when it is taken up on appeal, where that is provided by the statute.' This case is an authority for the proposition that the decision of the High Court in an appeal from the award of the arbitrator is not a Judgment.

(15) In Collector of Varanasi a larger bench of the Supreme Court dissented from the view taken by the Venkatrama Aiyar J. On one point, Venkatrama Aiyer J. had held that the appeal was incompetent for two reasons, viz. (a). The decision appealed against is neither a judgment, decrees or final order and (b) the decision in question was not that of a court. On ground (a) Hagde J. speaking for the court said that the decision rendered by the High Court under, 19(l)(f) of defense of India Act is adetermination. Hence it was within the competence of the Supreme Court to grant special leave under Article 136. On ground (b) he held, disagreeing with Aiyer J., that when an appeal is provided to the High Court, the High Court is not acting as a designated authority or a tribunal. It is acting as a court. 'We are unaware of any judicial power having been entrusted to the High Court except a 'Court' he said.

(16) As a result of these two decisions it can safely be concluded that the decision of the High Court in appeal under s. 11 of the Act from the decision of the arbitrator is not a 'judgment' within the meaning of clause 10 of the letters Patent. It is a determination.' Secondly the High Court acts as a court and not as a persona designata when it hears an appeal under S. 11 of the Act. Now if the decision of the High Court while hearing the appeal under s. 11 is not a 'judgment' but only a determination') as was held in Colluctor of Varanasi, no appeal will lie to the division bench under clause 10 of the letters Patent.

(17) The proceedings before the arbitrator under S. 8 of the Act are arbitration proceedings and the decision of the arbitrator is an award. The Act entrusts the task of fixing the amount of compensation to be paid to an arbitral tribunal. When a dispute regarding compensation arises and cannot be settled by agreement the Central Government appoints an arbitrator. It is true that these arbitration proceedings are not governed by the Arbitration Act because the Act saya that nothing in the Arbitration Act, 1940 shall apply to arbitrations under this Section (Section 8(1)(g). This is a statutory arbitration and is governed exclusively by its own code. The Act is a statutory code and the powers of the High Court aic to be those and only those which the statute in terms confers.

(18) These are Arbitration.s in name as well as in substance. The proceedings are 'from beginning to end ostensibly and actually arbitration proceedings', to use the words of lord. Shaw in Secretary of State for India v. Chelikani Bama Bao 43 Ind App 22. There is only an award made pursuant to the provisions of the Act. If this is the real character of these proceedings then the decision of the single judge on appeal in the High Court will take the same character as that of arbitration and award. As Venkatrama Aiyar J. put it :

'NOW,an appeal is essentially a continuation of the original proceedings, and if the proceedings under S. 19(1)(b) are arbitration proceedings it is difficult to see how their character can suffer a change when they are brought up before an appellate tribunal. The decisions in Special Officw Salsette Bldg. Sites v. Dossabhai Bezonji, 2nd 37 Born. 506, Special, Officer, Salsete Bldg. Sites v, Dossabhai Bewnji 17 CWn 421, Splciul Officer, Salsetle Bldg. Sites v. Dossabhai BeiQnjis 41 Mad 943 AIR 1919 Mad 626 Manavikiaman Tiruwuped v. Collector of Nilgiris, Sccy. of State for India v. Hindustan Cooperative Insurance Society Ltd. proceed are of the view that the appeal against an award continues to be part of, and a further stage of the original arbitration proceedings.'

This is the complexion theory or what we may call the continuation theory. An appeal is a continuation of original proceedings. If the original proceedings are arbitration proceeeding, the appellante proceedings cannot wear a different complexion. They take their colour from parent proceedings They partake the character of arbitration proceedings, and arbitration proceedings, we know resut in an award and not e. 'Judgment'.

(19) Ever since the decision of the Privy Conucil in 1912 in Rangoon Botatoung Co. Ltd. v. The collector 39 IA 197 courts in India have consistently held that appellate proceedings take their colour and complexion from the original proceedings. It was held by the Privy Council that under the Land Acquisition Act no appeal lay from the High Court to the Privy Council, the ground of the decision being that the proceedings throughout were in the nature of arbitration proceedings) and that no appeal being given in terms to Privy Council, no such appeal lay.

(20) In that case the appeal before the Privy Council was under the Land Acquisition Act, 1894 (as unamended. An amending Acts, was passed in 1921 which amended S. 54 of the Land Acquisition Act and provided for appeal to the Privy Council). The dispute was us regards the quantum of compensation. A preliminary objection was taken to the maintainability of the appeal in the Privy Council on the ground that the decision sought to be appealed against was not a judgment of court but an award and shall thereforee not be appealable. In giving effect to this objection the Board observed: Their Lordships cannot accept the argument or suggestion that when once the claimant is admitted to the High Court he has all the rights of ordinary suitor, including tile right to carry award made in an arbitration as to the value of the land taken for public purposes up to this Board as if it were a decree of the High Court made in the course of its ordinary jurisdiction.' The Bombay High Court in Special Officer, Solsette Bldg. Sites v. Dossabhai Bkzonji 37 Bom 506 followed the Privy Council's decision in Rangoon Botatoung Co. and held that the award was not a final judgment, decree or order and thereforee refused leave to appeal to the Privy Council. There was an application to the Privy Council for special leave in this matter but that was also rejected. A full report of the arguments advanced before the Privy Council is given in 17 C.W.N.421 (supra). They interpratation put by the Bombay High Court on Rangoon Botatoung's case was accepted as correct. To the same effect are the decisions in Air 1919 Mad 626. 58 IA 2 (supra) and the Kollegal Silic Filatures Ltd v. The Province of Madras, Air 1949 Mad 39,

(21) The conclusion I have come to is this. 'Arbitrations' referred to in clause (g) of Sectson 8 (1) cover the entire proceedings from their Commencement before the arbitrator to their termination in the High Court on appeal where an appeal has been preferred. Although the substitutes his own award for that the appeal is given to the High Court under S. 11 the appeal is against the award of the arbitrator, and it seems to me that the High Court in hearing and deciding the appeal is hearing an arbitration matter and its decision is as much an award as that of the arbitrator. Though the High Court, no doubt functions a court as has been held in Collector of Varanasi, the nature of the proceedings do not change. They remain arbitration proceedings) pure and unalloyed. The High Court is no less bound than arbitrator to have regard to the considerations set out in Section 8 of the Act. When the single judge varies the order of the arbitrator, what he does is that he substitutites his own award for that of the arbitrator. His assessment of compensation is also an award, If the proceedidgs throughout are arbitration proceeding it cannot be said that the decision of the single judge is a 'Judgment' within clause 10 of the LettersPalent. In S.J. Bhogilal v. Dakere Temple Committee the Judicial Committee said: The term 'Judgment' in the letters Patent of 'the High Court means in civil cases a decree -and not a judgment in the ordinary sense' (P. 156). But under the Act the arbitrator gives an award. He is not a court. The resulting decision of the single judge on appeal is a 'determination'. It is not a judgment. Every judgment is a 'determination of existing rights but every determination is not a judgment. For example, opinion given by the court, in its consultative jurisdiction is not a judgment (See Sobalal v. Anin Chand : [1974]1SCR453 ).

(22) On a review of these decisions I have come to the conclusion that the proceedings under s. 8 and 11 Act retain their character of arbitration proceeding throughout and the decision of the single judge on appeal from the arbitrator's award is not a 'Judgment'. As a consequence these appeals under clause 10 of the letters patent are incompetent.

(23) Counsel for the parties brought to our attention a division bench ruling of this court holding that appeal to a letters patent bench of this court underclause 10 is competent. This was appeal of these very owners: See Banwari Lal and Sons v. Union of India, : AIR1973Delhi24 (V. S. Deshpandy and S. Rangarajan, JJ). The main question in that appeal was about limitation. The appeal to the Letter Patent bench was filed after the expiry of limitation. The appellants made an application under s. 5 of the Limitation Act for condensation of delay in filing the appeal. The division bench dismissed the application and consequently the appeal was barred by time. In the course of their judgment they observed:

'IFSh.R.M. Lal was under the impression that judgment of the learned single judge given in appeal under s. 11 of the Reguisitioning and Acquisition of Immovable Property Act, 1952 was not appealable to a Division Bench of the High Court, then the only reason for such belief could be the decision of the Supreme Court in Hans Kumar's case, Hans Kumar v. Union of India, : [1959]1SCR1177 and perhaps the Punjab High Court's decision in Gopal Singh v. Punjab State, 2nd (1957) Pun 615 and EazilkaDabwali Transport Co. v. Madan Lal. .

'BUTthe view taken in these cases could no longer regard as correct after the decision of the Supreme Court in Collector Varanasi v. Gauri Shanicar : [1968]1SCR372 followed by Full Bench of this Court in Municipal Corporation of Delhi v. Kuldip Lal Bhandari 2nd : AIR1970Delhi37 and the Full Bench decision of the Punjab and Haryana High Court in Shanti Devi v. General Manager Haryana Roadways . I do not regard this passage as an authoritative exposition of law on the question of competency of the appeal. This is no more than an obiter, if at all it has to be given that status. It is merely a passing referenceto the view counsel entertained an this subject. It is true that the judges express their disagreement with the view of counsel but that was not the question for their decision. The only question before the division bench was whether there was sufficient cause for condensation of delay. That an appeal lay under clause I U of the letter patent was assumed by learned judgea. They do not seem this on arguments any heard>

(24) Nor do they give any reasons why an appeal is competent under clause 10 of the letters patent. The division bench simply referred to the letter patent. The division bench simply referred to the decision of the Full Bench in Delhi Municipality v. Kuldeep Lal Bhandari, : AIR1970Delhi37 But in. my opinion the reference to the Full Bench is misleading. In Kuldeep Lal Bhandri's case a full Bench of this court had held that the decision of a single judge in appeal under s. IIO-A of the Motor Vehicles Act was a 'judgment' and an appeal lay to the division bench under clause 10 of the letter patent. The Full Bench decision is clearly distinguishable. The statutory Tribunal under the Motor Vehicles Act functions as a court and its decision though called an 'award' by the Act, in fact, amounts to a decree and is executable as such (see Section 111-A of Motor Vehicles Act).

(25) The Punjab High Court in a Full Bench decision in Shanti Devi v General Manager, Haryana Roadways, has rightly held that the Claims Tribunal under the Motor Vehicle Act acts as a court and the proceedings before it are not in the nature of arbitration proceedings. This is the point of distinction between the Motor Vehicles Act and the Requisitioning and Acquisition of Immovable Property Act, 1952. The division bench in Banwari Lal & Sons v. Union of India (lupra) did not notice this difference and I say so with great respect. The full Bench in Kuldeep Lal Bandari's case has pointed out the distinction between the two Acts. They said, The difference between the jurisdiction of a Claims Tribunal under the Act and the jurisdiction of an arbitrator under s. 19 of the defense of India Act 1939 is even more marked in as much as the latter is expressly called an Arbitrator with the arguable implication that his award is final only subject to one statutory appeal given by s. 19(f) thereof', (p. 40) Banwari Lal & Sons v. Union, of India (supra) is thereforee not a definitive judgment on the question of competency of appeal. Even if it is so regarded the observation made therein run counter to the full bench in Kuldeep Lal Bhandari's case. We must follow our Full Bench in preference to the division bench, though the opinion was written in both cases by the same learned judge, Deshapnde J, as he then was. The Full Bench must be regarded as an authoritative pronouncement and is binding on us. It must claim our first allegation. Apart from this, we have the high authority of the Privy Council and the Supreme Court holding that the proceedings under the Act are arbitration proceedings from beginning to end and no appeal shall lie from the decision of the single judge because in the appeal he makes an award and does not give any Judgment.

(26) It will always depend on the nature of the adjudication whether a given decision is a 'judgment' or not. It is competent for the legislature to set up any kind of tribunal that it pleases. The question to be determined in any particular case are; What is the true nature of the tribunal which the legislature has established and what are the powers, if any, which have been conferred on it. These questions must be decided by a consideration of the statute and the true interpretation of its provisions.

(27) That the legislature can and often does set up a tribunal which is an arbitration tribunal in its nature is beyond dispute. It may make its intention clear by using the word 'arbitration' or its intention may have to be collected from the language of the statute as a whole. That the tribunal's decision is called an 'award' is not decisive is illustrated by the Motor Vehicle Act. The court has to decide the question in conjunction with other indications in the Act.

(28) The claims Tribunal under the Motor Vehicles Act acts as a court. The proceedings are not arbitration proceedings. Its adjudication is a 'judgment'. Similarly under the Workmen's Compensation Act, 1923 the Commissioner adjudicating on the disputes between the parties has been held to be a court and his decision a judgment and not an award (See Rajiyabi v. M. M. Go. : AIR1970Bom278 Go-pal Singh v. Punjab State (1957) Pun 615 contra), under the Requisitioning Act the proceedings are arbitration proceedings. The arbitrator is designated by name. He is not a court. He is just an arbitrator appointed by the Central Government. He gives an award. This arbitration under the Act begins with the arbitration and ends in an appeal to the High Court. No appeal shall thereforee lie to the division bench because the single Judge's decision is an 'award' and not a 'judgment'.

(29) The award of the arbitrator under the Requisitioning Act is not executable as a decree. Section 9 of the Act provides that the amount of compensation payabale under the award shall be paid by the competent authority to the person or persons entitled in such manner and within such time as may be specified in the award. This comptent authority is a statutory instrumentality which is entrusted with the task of paying compensation.' But the award does not have the force of a decree. In the Land Acquisition Act, the workman's compensation Act, and the Motor Vehicles Act, the award is executable as a decree. The Tribunal dealing with the question of compensation under all the three statutes as a Court. This is the underlying distinction discoverable in judicial decisions on the subject. But in the Requisitioning Act the decision of the arbitrator is a mere award. And the arbitrator is not a court. This is the main difference.

(30) Having regard to the terms in which the right of appeal to the High Court is given by Section 11 it must be held that it provides only one appeal and subject to that the arbitrator's award is final, final means final. This means no further appeal to the division bench or the Supreme Court in the matter of quantum of compensation for the property requisitioned by the Government for a puplic purpose. The force of the section is exhausted, when the appeal to the High Court is heard, (Rangoon Botatoung Co. (supra). It is unlikely that the legislature intended to provide more than one appeal from the award of the arbitrator. The arbitrator appointed under the Act is a holder of high judicial office or is qualified to become a High Court judge. That the Supreme Court can grant leave to appeal under Art. 136 of the Constitution because the single judge's decision is a determination is now firmly established after the decision of the Supreme Court in Collector of Varanasi.

(31) One other question was debated before us. It was whether the expression 'any person aggrieved' used in S. 11 would comprehend the Central Government and whether the Govt. has a right to appeal. The word person or persons interested' used in the Act refer to human beings or juristic persons who are owners or are entitled to compensation awarded by the Govt. for the property requisitioned by it for public purpose. Though this question does not strictly arise in view of the opinion that I entertain on competency' of the appeals. I think the expression any person aggrrieved should receive a liberal construction and ought to include the Central Govt. If the award is adverse to I he Central Govt. the Govt has a right of appeal to the High Court (see Bar Council Maharashtra. v. M. V. Dabholar 1975 Sc 2092 & Delhi Transport Undertaking v. Lalita : AIR1972Delhi281 ).

(32) For these reasons I hold that these appeals under clause 10 of the letters patent are incompetent and I dismiss them as such. In the circumstances I make no order as to costs.


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