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Modi Kuberdas Hargovinddas Vs. the State of Bombay (Now Gujarat) and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil;Property
CourtGujarat High Court
Decided On
Judge
Reported in(1967)8GLR370
AppellantModi Kuberdas Hargovinddas
RespondentThe State of Bombay (Now Gujarat) and ors.
Cases ReferredJeejeebhoy v. The Assistant Collector
Excerpt:
- - chhatrapati as well as mr. xvii of 1947 as well as in act no. such an objection was not taken by the petitioners before the arbitrator and the petitioners have allowed the award to be pronounced, knowing full well that the period of 60 days had expired. it is true that the rules require that the award shall be made within a particular time, but it does not declare what shall be the consequence of non-compliance with the rule, nor can it be said that the whole aim and subject of the legislature would be defeated if the provision of the rule was not strictly complied with. in such cases, therefore, when the statute requires that a particular act shall be performed within a certain time, such prescription could well be regarded as intended to be directory and not mandatory.a.r. bakshi, j.1. the petitioner in special civil application no. 958 of 1966 was the inamdar and owner of the village called saijpur bogha and the petitioners in special civil application no. 959 of 1966 were the tenants of the lands belonging to the inamdar of the village. in 1942-43 certain lands out of this village were requisitioned for the purpose of construction of an aerodrome and notifications were issued for the purpose, whereafter possession of the lands was taken. in 1949, it was decided to acquire these lands, whereupon notifications dated 16th march 1949 were published in the bombay government gazette dated 31st march 1949 whereby it was proposed to acquire the said lands for the purpose mentioned therein and it was declared that on the publication of the notifications, the.....
Judgment:

A.R. Bakshi, J.

1. The petitioner in Special Civil Application No. 958 of 1966 was the Inamdar and owner of the village called Saijpur Bogha and the petitioners in Special Civil Application No. 959 of 1966 were the tenants of the lands belonging to the Inamdar of the village. In 1942-43 certain lands out of this village were requisitioned for the purpose of construction of an aerodrome and notifications were issued for the purpose, whereafter possession of the lands was taken. In 1949, it was decided to acquire these lands, whereupon notifications dated 16th March 1949 were published in the Bombay Government Gazette dated 31st March 1949 whereby it was proposed to acquire the said lands for the purpose mentioned therein and it was declared that on the publication of the notifications, the said lands vested in the Government as mentioned therein. It may be mentioned that the original order of requisition was passed under the Defence of India Act, 1939 and as that Act had already expired, an Ordinance was issued sometime in 1946 validating the requisitions that were made and before the expiry of that Ordinance, an Act called the Requisitioned Land (Continuance of Powers) Act, 1947 i. e. Act No. XVII of 1947 was passed whereby certain powers under the Defence of India Act were continued and power to acquire property, subject to the conditions mentioned in the Act was also given. The order of acquisition passed in 1949 was passed under Act XVII of 1947 and pursuant to the provisions of that Act, the lands of the Inamdar vested in the Government concerned as from the date of the notifications. Some time in 1950, the Government made an offer of a certain amount of compensation, but as that offer was not acceptable to the owners of the property acquired, a reference had to be made to an arbitrator, according to the provisions of the Act referred to above, and it was only in December 1958 that an arbitrator was appointed to assess and award compensation according to the provisions of the aforesaid Act and the Rules then in force. The arbitrator entered upon the reference on 12th January 1959 and ordered notices to be issued to some of the interested persons and made the notices returnable in March 1959 i. e. after more than 63 days after entering upon the reference. The petitioner in Special Civil Application No. 958 of 1966 came to know that arbitration proceedings had commenced and on the application of the petitioner to be made a party, he was joined as a claimant. The arbitrator thereafter made an award on 31st August 1959 against which the petitioner in Special Civil Application No. 958 of 1966 and the petitioners is Special Civil Application No. 959 of 1966 filed several First Appeals. According to the petitioners, these appeals came up for hearing before the High Court on 19th and 20th July 1966 when the vires of the Requisitioned Land (Continuance of Powers) Act, 1947 was challenged. But under the impression that the vires of the Act could not be permitted to be canvassed in the appeals which related to proceedings under a special Act, the petitioners preferred the present two Special Civil Applications. It was on these facts that the Special Civil Applications have come to be filed. 2. At the outset, it may be mentioned that the 'admitted position according to all the parties to these petitions is that the original order of requisition was passed under the Defence of India Act, 1939, and that the order of acquision of the property was passed under Act XVII of 1947. It is also not in dispute that Act XVII of 1947 was followed by Act XXX of 1952, Section 24 whereof while repealing Act XVII of 1947 provides that any action taken under the repealed Act should be deemed to have been done under the Act of 1952 as if that Act was in force on the day on which such action was taken. It is therefore that the Arbitrator seems to have referred to the Act of 1952 in the award proceedings. Mr. Chhatrapati has challenged the validity of the relevant provisions relating to payment of compensation in both the enactments in Act No. XVII of 1947 and Act of XXX of 1952. Section 6 of the Requisitioned Land (Continuance of Powers) Act, 1947 (Act No. XVII of 1947) is as under:

(2) In respect of any acquisition of requisitioned land under this Act or the Ordinance, the amount of compensation payable shall be such sum as would be sufficient to purchase at the market rate prevailing on the date of the notice under Section 5, a piece of land equal in area to, and situated within a distance of three miles from, the acquired land, and suitable for the same use as that to which the acquired land was being put immediately before the date of its requisition, or a sum equivalent to twice the market value of the acquired land on the date of its requisition, whichever is less; and such amount shall be determined and paid in accordance with the procedure set out in the aforesaid Section 19 and the rules made thereunder.

We are here concerned with the provisions of Sub-section (2) of Section 6 and both Mr. Chhatrapati as well as Mr. Shah appearing on behalf of the petitioners have made it clear that they do not challenge the validity of the whole of Sub-section (2) of Section 6, but they challenge the validity of the provision of Sub-section (2) of Section 6 to the extent of the words, 'or a sum equivalent to twice the market value of the acquired land on the date of its requisition, whichever is less', contained in that sub-section The contention of the petitioners is that the properties in question were acquired by notifications dated 16th March 1949 and on the publication of the said notifications, the properties vested in the State and that therefore, the State became liable to pay compensation according to and in consonance with the principles laid down in Section 299 of the Government of India Act, 1935. The further contention on behalf of the petitioners is that the words 'or a sum equivalent to twice the market value of the acquired land on the date of its requisition, whichever is less' are contrary to and violate the principles laid down in Section 299 of the Government of India Act, 1935 as the market value calculated on the basis of the date of the requisition of the acquired lands could not be considered to be just compensation to which the petitioners would be entitled according to Section 299 of the Government of India Act, 1935. This according to Mr. Chhatrapati, would be the position if it was considered that the property was acquired under the provisions of Act No. XVII of 1947 and Mr. Chhatrapati urged that the same would be the position even if it was considered that the property was acquired under the provisions of Act No. XXX of 1952 because the provisions of Act No. XVII of 1947 and Act No. XXX of 1952 in respect of payment of compensation as regards acquired properties were similar.

3. Before we discuss the question of the validity of the impugned provisions, it would be necessary to refer to some of the provisions of the different legislative enactments which have preceded Act No. XVII of 1947. The first is the Defence of India Act, 1939, Section 19 whereof provides for compensation to be paid in cases where any action of the nature described in Sub-section (2) of Section 299 of the Government of India Act, 1935 has been taken. The relevant portion of this section is as under:

Compensation to be paid in accordance with certain principles for compulsory acquisition of immovable property, etc. -(1) Where by or under any rule made under this Act any action is taken of the nature described in Sub-section (2) of Section 299 of the Government of India Act, 1935, 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 agreement, it shall be paid in accordance with such agreement.

(b) Where no such agreement can be reached, the Central Government shall appoint as arbitrator a person qualified under Sub-section (3) of Section 220 of the above-mentioned Act for appointment as a Judge of High Court.

(c) The Central Government may, in any particular case, nominate a person having expert knowledge as to the nature of the property acquired, to assist the arbitrator, and where such nomination is made the person to be compensated may also nominate an assessor for the said purpose.

(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 opinions is a fair amount of compensation.

(e) The arbitrator in making his award shall have regard to:

(i) the provisions of Sub-section (1) of Section 23 of the Land Acquisition Act, 1894, so far as the same can be made applicable; and

(ii) whether the acquisition is of a permanent or temporary character.

It is noticeable that Section 19 of the Defence of India Act makes a reference to an action in the nature described in Sub-section (2) of Section 299 of the Government of India Act, 1935 and makes a provision for payment of compensation which has to be determined by an arbitrator who, while making the award, shall have regard to Sub-section (1) of Section 23 of the Land Acquisition Act. Rule 75-A of the Defence of India Rules may also be referred to here. Sub-rule (1) of Rule 75-A refers to requisitioning of property and Sub-rule (2) refers to the acquisition of requisitioned property. The relevant provisions of the rule are as under:

75-A. Requisitioning of property. -(1) If in the opinion of the Central Government or the Provincial Government it is necessary or expedient so to do for securing the defence of British India, public safety, the maintenance of public order or the efficient prosecution of the war, or for maintaining supplies and services essential to the life of the community, that Government may by order in writing requisition any property, movable or immovable, and may make such further orders as appear to that Government to be necessary or expedient in connection with the requisitioning:

Provided that no property used for the purpose of religious worship and no such property as is referred to in Rule 66 or in Rule 72 shall be requisitioned under this rule.

(2) Where the Central Government or the Provincial Government has requisitioned any property under Sub-rule (1), that Government may use or deal with the property in such manner as may appear to it to be expedient, and may acquire it by serving on the owner thereof, or where the owner is not readily traceable or the ownership is in dispute, by publishing in the official Gazette, a notice stating that the Central or Provincial Government, as the case may be, has decided to acquire it in pursuance of this rule.

(3) Where a notice of acquisition is served on the owner of the property or published in the Official Gazette under Sub-rule (2), then at the beginning of the day on which the notice is so served or published, the property shall vest in Government free from any mortgage, pledge, lien, or other similar encumbrance, and the period of the requisition thereof shall end.

(4) Whenever in pursuance of Sub-rule (1) or Sub-rule (2) the Central Government or the Provincial Government requisitions or acquires any movable property, the owner thereof shall be paid such compensation as the Government may determine:

Provided that, where immediately before the requisition, the property was by virtue of a hire-purchase agreement in the possession of a person other than the owner, the amount determined by Government as the total compensation payable in respect of the requisition or acquisition shall be apportioned between that person and the owner in such manner as they may agree upon, and in default of agreement in such manner as an arbitrator appointed by the Government in this behalf may decide to be just.

Then, there is the India (Central Government and Legislature) Act, 1946, Section 3 whereof empowers the Indian Legislature to make laws in respect of certain matters including compulsory acquisition. Section 3 of that Act reads as under:

3. -(1) Notwithstanding anything in the Government of India Act, 1935, the powers of the Indian Legislature to make laws shall extend to the making of laws:

(a) providing, in relation to land in a Province which, when the Act of the Indian Legislature known as the Defence of India Act, 1939, expires, is a subject to any requisition effected under the rules made under that Act, for the continuance, until not later than the end of the period mentioned in Section 4 of this Act, of all or any of the powers theretofore exercisable under the said Act of the Indian Legislature or the said rules; and

(b) providing, in particular, for the continuance as aforesaid of the power of the Governor-General in Council 'compulsorily to acquire any such land as aforesaid for any purposes directly and without the interposition of any Province,

and any laws made by virtue of this sub-section may contain provisions with respect to offences against the laws, enquiries and statistics for the purposes of the laws, jurisdiction and powers of all Courts, except the Federal Court, with respect to any of the matters dealt with by the laws, and fees in respect of any of those matters, but not including fees taken in any Court; and Sub-section (2) to (4) of the last preceding section shall apply in relation to any such laws as they apply in relation to laws made under that section. (2) Nothing in this section shall:

(a) prejudice any power of the Governor-General in Council to acquire land in accordance with section one hundred and twenty seven of the Government of India Act, 1935, (which enables land to be acquired by the Governor-General in Council through the intermediacy of a Province); or

(b) affect the provisions of Sub-section (2) of section two hundred and ninety-nine of that Act (which requires any law authorising the compulsory acquisition of land to make provision for the payment of compensation).

(3)In this section, the expression 'land' includes immovable property of every kind.

It will be noticeable that Sub-section (2) of Section 3 quoted above provides that the conferment of powers under Section 3 would not affect the provisions of Sub-section (2) of Section 299 of the Government of India Act. Then comes the Requisitioned Land (Continuance of Powers) Act, 1947 (Act No. XVII of 1947). That Act was the result of the expiry of the Defence of India Act, 1939. Section 3 of the Act provides for continuance of previous requisitions and is as under:

Continuance of requisitions. -Notwithstanding the expiration of the Defence of India Act, 1939, and the Rules made thereunder and the repeal of the Ordinance, all requisitioned lands shall continue to be subject to requisition until the expiry of this Act and the appropriate Government may use ordeal with any requisitioned land in such manner as may appear to it to be expedient;

Provided that the appropriate Government may at any time release from requisition any requisitioned land.

Section 4 of the Act relates to the release of requisitioned land and Section 5 gives power to the Government to acquire requisitioned land. Section 5 of the Act which runs as under may be quoted here:

Power to acquire requisitioned land-(1) Subject to the provisions of Sub-section (3), the appropriate Government may, at any time when any requisitioned land continued to be subject to requisition under Section 3, acquire such land by publishing in the Official Gazette a notice to the effect that such Government has decided to acquire such land in pursuance of this section.

(2) When a notice as aforesaid is published in the Official Gazette, the requisitioned land, shall, on and from the beginning of the day on which the notice is so published, vest absolutely in the appropriate Government free from all encumbrances and the period of requisition of such land shall end.

(3) No requisitioned land shall be acquired under this section except in the following circumstances namely:

(a) where any works have during the period of requisition been constructed on, in or over the land wholly or partly at the expense of Government and the appropriate Government decides that the value of, or the right to use, such works should be preserved or secured for the purposes of Government; or

(b) where the cost of restoring the land to its condition at the time of its requisition would, in the determination of the appropriate Government, be excessive having regard to the value of the land at that time and the owner declines to accept the release from requisition of the land without payment of compensation from Government.

(4) Any decision or determination of the appropriate Government under Sub-section (3) shall be final, and shall not be called in question in any Court.

(5) For the purposes of Clause (a) of Sub-section (3), 'works' includes buildings, structures and improvements of every description.

Section 6 of the Act provides for payment of compensation, firstly in respect of continued subjection of requisitioned land to requisition and secondly, in respect of acquisition of requisitioned land. It would be proper to quote the entire section as a portion of that Sub-section (2) of Section 6 has been challenged in these petitions:

Payment of compensation. -(1) In respect of the continued subjection of requisitioned land to requisition under this Act or the Ordinance, compensation shall be determined and paid in accordance with the provisions of Section 19 of the Defence of India Act, 1939, and of the rules made thereunder.

Provided that all agreements and awards under the said section in respect of the payment of compensation for the period of requisition before the expiry of the said Act shall continue to be in force and shall apply to the payment of compensation for the period of requisition after such expiry.

(2) In respect of any acquisition of requisitioned land under this Act or the Ordinance, the amount of compensation payable shall be such sum as would be sufficient to purchase at the market rate prevailing on the date of the notice under Section 5, a piece of land equal in area to, and situated within a distance of three miles from, the acquired land, and suitable for the same use as that to which the acquired land was being put immediately before the date of its requisition, or a sum equivalent to twice the market value of the acquired land on the date of its requisition, whichever is less; and such amount shall be determined and paid in accordance with the procedure set out in the aforesaid Section 19 and the rules made thereunder.

(3) For the purposes of Sub-section (1), all the provisions of the aforesaid Section 19 and of the rules made thereunder, and for the purposes of Sub-section (2), such of those provisions as relate to matters of procedure, shall be deemed to be continuing in force.

It may here be stated that Act No. XVII of 1947, the relevant provisions whereof have been quotted above, is repealed by Act No. XXX of 1952. Sub-section (3) of Section 8 of the Act of 1952 provides for compensation payable for the acquisition of requisitioned property. That sub-section provides that:

(3) The compensation payable for the acquisition of any property under Section 7 shall be

(a) the price which the requisitioned property would have fatched in the open market, if it had remained in the same condition as it was at the time of requisitioning and been sold on the date of acquisition, or

(b) twice the price which the requisitioned property would have fetched in the open market if it had been sold on the date of requisition, whichever is less.

Section 23 of the Act of 1952 relates to validation of certain requisitions and acquisitions and by Section 24, Act No. XVII of 1947 is repealed. Sub-clause (b) of the proviso to Section 24, provides that anything done or any action taken in exercise of the powers conferred by the repealed Act shall, in so far as it is not inconsistent with the provisions of the Act of 1952, be deemed to have been done or taken in the exercise of the powers conferred by or under the Act of 1952 as if that Act was in force on the day on which such thing was done or action was taken. Section 24 of the Act of 1952 is as under:

Repeals and savings-(1) The requisitioned land (Continuance of Powers) Act, 1947 (XVII of 1947), the Delhi Premises (Requisition and Eviction) Act, 1947 (XLIX of 1947) and the Requisitioning and Acquisitioning of Immovable Property Ordinance, 1952 (III of 1952) are hereby repealed.

(2) For the removal of doubts, it is hereby declared that any property which immediately before such repeal was subject to requisition under the provisions of either of the said Acts or the said Ordinance shall, on the commencement of this Act, be deemed to be property requisitioned under Section 3 of this Act, and all the provisions of this Act shall apply accordingly: Provided that:

(a) all agreements and awards for the payment of compensation in respect of any such property for any period of requisition before the commencement of this Act and in force immediately before such commencement, shall continue to be in force and shall apply to the payment of compensation in respect of that property for any period of requisition after such commencement;

(b) anything done or any action taken (including any orders, notifications or rules made or issued) in exercise of the powers conferred by or under either of the said Acts or the said Ordinance shall, in so far as it is not inconsistent with the provisions of this Act, be deemed to have been done or taken in the exercise of the powers conferred by or under this Act as if this Act was in force on the day on which such thing was done or action was taken.

It would be observed that the relevant provision in Act No. XVII of 1947 relating to payment of compensation is Sub-section (2) of Section 6 which has already been quoted and which contains the impugned words 'or a sum equivalent to twice the market value of the acquired land on the date of its requisition, whichever is less' and the relevant provision on the same subject of compensation in the Act of 1952 is contained in Sub-section (3) of Section 8 which has also been quoted and which contains the words, 'twice the price which the requisitioned property would have fetched in the open market if it had been sold on the date of requisition, whichever is less. ' It would thus appear that the relevant words in Sub-section (2) of Section 6 of Act No. XVII of 1947 which have been quoted above and the provision occuring in Sub-section (3) of Section 8 of the Act of 1952 are similar, and therefore, even if by virtue of proviso (b) to Section 24, if action in the present cases be deemed to have been taken in the exercise of the powers conferred by or under the Act of 1952, as if that Act was in force on the day on which such thing was done or action was taken, the same considerations would govern the question as regards the validity of the two provisions relating to payment of compensation and both the provisions will be governed by the same principles as are contained in Section 299 of the Government of India Act and there is no dispute as regards this position between the parties.

4. To revert now to the question of the validity of the impugned provision, it would be seen that Sub-sectoion (2) of Section 6 of Act No. XVII of 1947 provides for two alternative standards, one of the standards being on the basis of the market rate prevailing on the date of the notice of acquisition and the other being on the basis of a sum equivalent to twice the market value of the acquired land on the date of its requisition. The compensation that has to be determined would be according to either of the basis which would work out a lesser amount to be paid as compensation. This would be the effect of the provisions contained in Sub-section (2) of Section 6 of Act No. XVII of 1947. Sub-section (3) of Section 8 of Act No. XXX of 1952 also provides for a similar alternative basis. The effect of these provisions is that if the price which the requisitioned property would have fetched on the date of requisition was less than the price which would be the market price on the date of acquisition, the former would be considered as the compensation payable to the person whose property was acquired and it is such a provision which the petitioners have challenged as contravening Section 299 of the Government of India Act, 1935.

5. Section 299 of the Government of India Act, 1935 is as under:

(1) No person shall be deprived of his property in British India save by authority of law.

(2) Neither the Federal nor a Provincial Legislature shall have power to make any law authorising the compulsory acquisition for public purposes of any land, or any commercial or industrial undertaking, or any interest in, or in any company owning, any commercial or industrial undertaking, unless the law provides for the payment of compensation for the property acquired and either fixes the amount of the compensation, or specifies the principles on which, and the manner in which, it is to be determined,

(3) No Bill or amendment making provision for the transference to public owner ship of any land or for the extinguishment or modification of rights therein, including rights or privileges in respect of land revenue, shall be introduced or moved in either Chamber of the Federal Legislature without the previous sanction of the Governor-General in his discretion, or, in a Chamber of a Provincial Legislature without the previous sanction of the Governor in his discretion.

(4) Nothing in this section shall affect the provisions of any law in force at the date of the passing of this Act.

(5) In this section 'land' includes immovable property of every kind and any rights in or over such property, and 'undertaking' includes part of an undertaking.

Clauses 1 and 2 of Article 31 of the Constitution of India, it would be noticed, are almost similar to Sub-sections (1) and (2) of Section 299 of the Government of India Act, 1935. The word 'compensation' would ordinarily mean the making up of loss sustained by a person. What is loss to the person whose property is acquired is his right to own the property and the loss in terms of money would be the value of the property of which he is deprived. This value must be such as could be considered to be reasonable and cannot be assessed on artificial grounds. The value should be such as would be realized if the owner wanted to voluntarily sell his property and it is this amount which would represent such value that would be loss to the owner if his property was taken away from him without his consent. The award of compensation to such an owner who is deprived of his property is meant to recompensate him by neutralizing the loss that he has sustained by payment to him of such amount as he would have realized if he had, at the time of the act of deprivation sold the property to a prudent purchaser. In other words, the amount of compensation that he should receive in order to make up his loss would, be the price that his property would fetch if sold in the market on the date when his property was taken away from him i. e. the market value of the property. In order that the amount of compensation should represent the loss, it would be necessary that the amount payable to him by way of compensation should be calculated on the market value prevailing at that time when the act of deprivation occured. It is thus obvious that the market value which is calculated on any other basis which doss not reflect the current price of the property in the market on the date when the property is lost to the owner but which gives a lesser price than such market price, could not, prima facie, be considered as real compensation equivalent to the loss sustained by the owner. This would be the normal principle on which just compensation could be determined. If, however, some other date is fixed for the purpose of calculating the market price for the purpose of fixing the amount of compensation payable to the person whose property is acquired, it would be necessary to show that such a date was referable to an intelligible principle on the basis of which just compensation could be determined. In the cases before us, the date that has been fixed for the purpose of calculating the amount of compensation is the date on which the property was requisitioned and it appears that such a date has no bearing on the real value of the acquired lands. The act of acquisition having taken place on a particular date, the loss on account of deprivation of property to the owner would occur on that date and the date of requisition of that property would hardly have any bearing for the purpose of determination of compensation payable to the owner for the loss that he has sustained on a particular date. The fixation of such an arbitrary date would prima facie show that what the person whose lands are acquired would get by way of compensation would not be a true equivalent of the lands which have been acquired and it, therefore, cannot be considered as just compensation. It was urged by the learned Advocate General that the date of requisition for the purpose of fixing the value of the lands is relevant because the acquisition in those cases would be of requisitioned lands. It was urged that after requisition, what would be left with the owner would only be a busk of his rights, all his rights to the use of his property having been taken away by the prior act of requisition. It was contended that the owner, by the requisition of his property, would lose complete control over his property and by the subsequent act of acquisition, would lose the remaining rights. It was contended that by the relevant provisions, the acquisition was made a part of the continuing process started by requisition and that an indefinite taking over was converted into a permanent taking over of the property of the owner. In support of this proposition, the learned Advocate General had relied on the case of the Minister of State for the Army v. Dalziel 68 Commonwealth Law Reports, 261 at page 284, and the case of The Meandros, 1925 Probate Division, 61 at page 64. This argument of the learned Advocate General cannot be accepted. The effect of requisition is that the State can take possession of the requisitioned property and use it for the purpose for which it was requisitioned but thereby the property does not vest in the State. The property actually vests in the State by virtue of the acquisition. What is justified by an order of requisition is taking possession of the property, its ownership all the while continuing and remaining with the person whose property is requisitioned. It is because the property vests in the State that just compensation has to be given to the person whose property is acquired, and it is from the date of the notification whereby the property vests in the State that the owner of the property would be entitled to compensation which, as already stated, must be a fair equivalent of what is taken away from him. The date of acquisition, therefore, for the purpose of computing the quantum of compensation cannot reasonably be said to be referable to the date of requisition which does not result in the property vesting in the State. The fixation of the date of requisition as the basis on which the value of the property should be calculated must prima facie therefore be considered as arbitrary. The act of acquisition of the property might be much later than the date on which the requisition has taken place, with the result that according to the impugned provisions whatever the date of acquisition and whatever the market value of the property on the date of acquisition, the price prevailing on the date of requisition, if lesser, would be the price that would be claimable by way of compensation by the owner of the property. Moreover for an act of requisition, the owner of the property would get compensation for loss of its use. If the property were not requisitioned, the owner would have got the benefit of it use, or if leased, the benefit of getting the amount of rent. Instead when requisition is made, he gets compensation for such loss. But that has nothing to do with the act of acquisition whereby the totality of his rights of ownership is extinguished. Moreover, it is not made incumbent on the State to acquire all properties which are requisitioned and an act of requisition under the relevant enactment may or may not be followed by acquisition and even if so followed, there is no certainty of time within which the requisitioned property would be acquired by the State. For all these reasons we are unable to agree with the learned Advocate General that the date of the acquisition of the property bears connection with and is referable to the date of requisition for the purpose of ascertaining the compensation payable in respect of the acquired land. The fact that the legislation under which acquisition has been made is for a limited period can hardly affect the principle set out above. If the provision for payment of compensation does not conform with and is not in consonance with Section 299 of the Government of India Act, such a clause would offend the provisions of that section and therefore, would be invalid to the extent to which it offends the principle laid down in that section. Moreover, it has to be borne in mind that the provisions relating to payment of compensation in Act No. XVII of 1947 as well as in Act No. XXX of 1952 contain two alternative principles of assessment of compensation, but at the same time, it has been provided that compensation that is to be paid should be the lesser of the amounts payable according to the two alternative principles. In other words, as between the two alternative modes of assessment of compensation, the provision enjoins that the mode which results in a lesser payment should be preferred and that would indicate that a fair equivalent of the property was not being paid to the person who was deprived of his property. It is not the owner of the property who has been given the option to accept one of the two alternatives, but the provision relating to compensation prescribes and makes it compulsory that the mode of payment of compensation which would work out a lesser figure must be adopted. Therefore, the standard of computation of compensation is necessarily the lesser standard that could be worked out under the relevant provision relating to payment of compensation and in our judgment, such a provision indicates that what was paid to the person whose property was acquired was not a just or fair equivalent which would recompense him for the loss that had occurred to him on account of the deprivation of his property. This would be the position even if after the requisition, some improvement was made on the property that was acquired by the State. Until the property was acquired, the ownership of and the title to the property would not vest in the State and whatever is done to the property would always be subject to the rights of the owner. It is possible that the property once requisitioned would be subject to subsequent acquisition, but at the same time, it is equally possible that the property might be released from requisition. Such factors cannot be considered to be of substantial importance so as to enable us to hold, as was urged by the learned Advocate General, that the act of acquisition was merely an extension of the act of requisition and that the date of acquisition was referable to the date of requisition for the purpose of computing the compensation payable to the owner whose property was acquired. We must, therefore, hold that that part of the provision relating to compensation in Act No. XVII of 1947 in so far as is contained in the words, 'or a sum equivalent to twice the market value of the acquired land on the date of its requisition, whichever is less' in Sub-section (2) of Section 6 and a similar provisions contained in Clause (b) of Sub-section (3) of Section 8 of Act No. XXX 1952 do not provide for just compensation and are, therefore, invalid.

6. In this view of ours, we are supported by the decision in Kamalabai Harjivandas Parekh v. T.B. Desai reported in 67 B.L.R. 85. That was a case relating to Clause (b) of Sub-section (3) of Section 8 of the Requisitioning and Acquisition of Immovable Property Act, 1952 (Act No. XXX of 1952) and it was held that that clause was ultra vires of Article 31 of the Constitution of India and was, therefore, void. As we have already stated, the same arguments which would render Clause (b) of Sub-section (3) of Section 8 of Act No. XXX of 1952 invalid, would be valid also as regards the relevant portion of Sub-section (2) of Section 6 of Act No. XVII of 1947 and that part of the provision relating to compensation in both the enactments in so far as they make the date of requisition as an alternative basis for calculating the amount of compensation would be invalid and must be struck down. The case reported in 67 B.L.R. 85 refers to the case of the State of West Bengal v. Beta Banerjee 1954 S.C.R. 558 and also refers to the decision of the Supreme Court in State of Madras v. Nama Shivaya Mudaliar (1964) Civil Appeals Nos. 6 to 12 of 1963. Reference may also be made to the case of Jeejeebhoy v. The Assistant Collector, Thana : [1965]1SCR636 , wherein it has been held that Section 299 of the Government of India Act provided that the appropriate Legislature had no power to make any law authorising the compulsory acquisition, unless the law pro vided for the payment of compensation for the property acquired and if compensation was not so provided, it would affect the competency of the appropriate Legislature to make the said law. It was further held that both under Section 299 of the Government of India Act, 1935 and Article 31(2) of the Constitution, fixation of that amount of compensation or specification of the principles on which and the manner in which compensation was to be determined were necessary conditions for a valid acquisition and that the word 'compensation' occurring in Section 299 of the Government of India Act, 1935, should be given the same meaning which can be given to the same word occurring in Article 31 of the Constitution of India. It was also observed that the expression 'compensation' in Section 299 of the Government of India Act, 1935, would mean a just equivalent of what the owner had been deprived of, and further that on principle, in the context of ascertainment of compensation, there could not be any justification for drawing a line solely based on the distinction between a permanent Act and a temporary one.

7. The learned Advocate General had raised an objection that the present petitions should be rejected on the ground of gross delay and acquiescence on the part of the petitioners. It was contended that the act of acquisition was made so far back as 1949 and that till 1966, no steps were taken by the petitioners to challenge the legislation under which compensation was payable to them. It was contended by the learned Advocate Genesal that the petitioners invited the appointment of an arbitrator, took some amounts towards compensation and till the time the awards were given, no objection to the validity of the relevant provisions of law was taken by them. It was further contended that the petitioners filed appeals in the High Court, but even there, the petitioners did not raise the objection as regards the invalidity of the relevant provisions under which compensation was payable to them. It was, therefore, urged that it would not be proper to permit the petitioners to take stops under Article 226 of the Constitution of India when they were guilty of gross negligence and acquiescence on their part. Now, it has to be borne in mind that the acquisition was made in 1949 and till 1958, no one was appointed to act as an arbitrator to fix the compensation payable to the petitioners. After the appointment of the arbitrator, awards were given in 1959 and thereafter appeals were filed against the awards by the petitioners. It is true that till this time, such an objection as has been taken by the petitioners in the present Special Civil Applications was not taken by them, but at a subsequent stage of the appeals and before the hearing of the appeals commenced, the petitioners raised such an objection, and according to them, on account of the uncertain position of law as regards the tenability of such an objection in an appeal against awards awarding compensation, under a special Act they preferred the present writ petitions. Now a right to claim compensation is a statutory right that is available to the petitioners and the petitioners have the right to get the amount of compensation fixed as provided in the statute, according to which an arbitrator has to be appointed for the purpose of fixing the amount of compensation. But the amount fixed by the arbitrator has not been made conclusive by the statute, but has been made subject to an appeal. Therefore, it cannot be said that the amount of compensation has been fixed finally and conclusively and therefore until such compensation is finally decided, the question of compensation cannot be considered to have been closed and until that is done, that is to say, until the matter is finally closed, the claimants would have right to say that compensation should be paid to them on a real and not on an illusory basis. The appellate Court in a case such as this, can also be considered as a Court which has the power to fix the amount of compensation and therefore the appeal before the High Court can be considered as a continuation of the compensation proceedings. It could not, therefore be said that the petitioners had lost the right to challenge the validity of the provision under which compensation payable to them was to be determined. Until the appeals were finally decided, they had a right to urge that they would get a lesser compensation than what they would legitimately be entitled to if the Court resorted to a particular provision of law while determining the amount of compensation payable to them. The appeals, as stated above, were pending and in July 1966 before the appeals were heard, such a contention was raised by the appellants in those appeals. In these circumstances, it could not be said that the petitioners would be disentitled to relief on the ground of delay or acquiescence. The appeals against the award of compensation were pending and the petitioners have not by any act of theirs, placed the other party in such a position that any damage or loss would occur to them. We are, therefore, unable to accept the contention of the learned Advocate General that the present petitions should not be entertained on the ground of delay and acquiescence.

8. Another contention raised by the learned Advocate General was about maintainability of a writ petition by several of the claimants who had obtained different awards for compensation. It was urged by the learned Advocate General that a party to an award was different from a party to another award which was distinct and separate and therefore, it would not be open to the petitioners to challenge the awards by one composite writ application. Now, it appears that all the cases which are the subject matter of the different awards have been heard together and a common judgment has been given in Arbitration Case No. 9 of 1959. Not only there is a common judgment in all these cases, but the point that arises for consideration between the parties is the same as regards the validity of the impugned provision of law on the basis of which compensation has been fixed in all the awards. On this technical ground, therefore, we are not inclined to reject the writ petitions and to deny to the petitioners the right to challenge the very basis of the judgment which governs all the awards.

9. The last question which remains to be dealt with is about the validity of the awards on the ground that the awards have been given by the arbitrator after the expiry of 60 days, contrary to Rule 8 of the rules framed under the Defence of India Act, 1939. That rule is as under:

The Arbitrator shall, after hearing the parties and holding inquiries, if any, make his award, within sixty days from the date of reference made to him by the Provincial Government, and forward a copy of the award to the parties concerned.

It may be stated that this objection was raised by Mr. Chhatrapati appearing on behalf of the petitioners in Special Civil Application No. 958 of 1966, but in this objection, Mr. Chatrapati was not supported by Mr. S.M. Shah who appeared on behalf of the petitioners in Special Civil Application No. 959 of 1966. Even according to Mr. Chhatrapati, such an objection relates to the jurisdiction of the arbitrator who has passed an award after 60 days. Such an objection was not taken by the petitioners before the arbitrator and the petitioners have allowed the award to be pronounced, knowing full well that the period of 60 days had expired. Moreover, such a provision in the rule that the arbitrator shall make his award within 60 days from the date of reference cannot be construed to be mandatory. It is true that the rules require that the award shall be made within a particular time, but it does not declare what shall be the consequence of non-compliance with the rule, nor can it be said that the whole aim and subject of the Legislature would be defeated if the provision of the rule was not strictly complied with. Moreover, a strict compliance with the rule would involve general inconvenience and injustice to innocent persons and a benefit and an advantage to those who are guilty of neglect, without in any manner promoting the real object of the enactment. In such cases, therefore, when the statute requires that a particular act shall be performed within a certain time, such prescription could well be regarded as intended to be directory and not mandatory. This contention of Mr. Chhatrapati, therefore, must be rejected. 10. The result, therefore, is that on account of the alternative provision for payment of a lesser amount of compensation that could be calculated according to either of the alternative methods, the petitioners cannot be considered to get a just compensation for the loss that they had suffered on account of the acquisition of their property. Such a provision is contained in the words 'or a sum equivalent to twice the market value of the acquired land on the date of its requisition, whichever is less' occurring in Sub-section (2) of Section 6 of Act No. XVII of 1947 and in Clause (b) of Sub-section 3 of Section 8 of Act No. XXX of 1952. Therefore, to that extent both these provisions must be struck down as invalid, and the determination of compensation by the arbitrator on the basis of such an invalid provision could not be upheld and the awards based on such a calculation would also be invalid. We would, therefore, declare both the aforesaid provisions as ultra vires and invalid and quash the awards that have been passed in Arbitration Case No. 9 of 1959 and Arbitration Cases Nos. 3 to 8, 10 to 27, 29 to 32, 36, 39. 40, 42, 43, 44, 59, 93 and 94 all of 1959. We further direct that the various compensation cases will be disposed of by the Arbitrator according to Clause (a) of Sub-section (3) of Section 8 of Act No. XXX of 1952 and not according to Clause (b) of Sub-section (2) of Section 8, nor according to the provision contained in Sub-section (2) of Section 6 of Act No. XVII of 1947 and expressed in the words 'or a sum equivalent to twice the market value of the acquired land on the date of its requisition, whichever is lesser'. Looking to the circumstances in which the petitions have come to be filed, we make no order as to costs.

The learned Advocate General asks for leave to appeal to the Supreme Court under Article 133(1)(b)(c) of the Constitution, which is granted.

11. In the writ petitions, the learned Advocate General states that the operation of the order passed in these Special Civil Applications should be stated for a reasonable time to enable him to file appeals to the Supreme Court and obtain a stay order. Mr. Chhatrapati and Mr. Shah have no objection. The operation of the order, therefore, is stayed till the period of four weeks from the date on which a true copy of the judgment is supplied to the State.

12. The learned Advocate General states that the hearing of the appeals arising out of awards which have been set aside by this judgment, should be adjourned for a reasonable time to enable him to file appeals to the Supreme Court and to obtain the requisite stay order. Mr. Chhatrapati and Mr. Shah have no objection. It is, therefore directed that the hearing of the appeals should be adjourned for a period of four weeks from the date on which a true Copy of the judgment is supplied to the State.


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