1. Premises No. 37, Chandni Chawk Street, which covers an area of 6 cottas 5 chittaks and 5 square feet with the building standing thereon was acquired by the Province of Bengal for the Trustees for the Improvement of. Calcutta. The declaration under the Land Acquisition Act was published on 23rd January 1930 and the award was made by the Collector on 18th December 1936. It was in one of the most important trading, centres of the city and is just opposite an important market called the Chandni Chawk. He gave Rs. 47,765 for the land and the building, and also other sums of money as compensation for the tenant's structures and as damages under Section 23, secondly and fourthly, of the Land Acquisition Act. The joint receivers who are the respondents before us, acting on behalf of the owners accepted the amount which the Collector had awarded as damages under Section 23, secondly and fourthly, but did not accept what he had awarded for the land and building. They appeared before the Collector in pursuance of the notice published under Section 9, Land Acquisition Act, (hereafter called the Act) and claimed Rs. 80,000 as compensation for the land and the building. Being dissatisfied with the Collector's award in respect of the land and building they asked the Collector to refer the matter relating to the amount of compensation for the land and building to the Calcutta Improvement Tribunal under Section 18 of the Act, by filing a petition before him on 29th January 1937. That petition, hereinafter called the petition of reference, has been printed at p. 8 Part 1 of the paper book. Paragraph 2 of that petition is material. It runs thus :
The compensation money as awarded by your Honour is far below the market value of the property and the fair market value of the said property should have been at least Rs. 56,000.
2. Three grounds were stated in that petition in support of the reference. The second ground was that the Collector had not taken into consideration the special advantages and disposition of the land and that the award of Rs. 47,768 was too low and inadequate. The other two grounds, namely the first and the third, were that the award was too low and that the market value ought to have been assessed at least Rs. 56,000.
3. The property had three owners: (1) Mrs. Nani Bala Nun, who had 10 annas share, (2) Mrs. Harimati Hazra, who had 4 annas share and (3) Mrs. Radharani Dasi, who had the remaining 2 annas share. In a suit between them in the Original Side of this Court the respondents were appointed joint receivers of that property. The Collector duly forwarded the petition of reference to the Calcutta Improvement Tribunal, which in this case was the Court to hear the reference. It was received in that Court and was registered on 13th February 1937 as Case No. 52 of 1937 (Valuation). Leaving out an earlier application for amendment of the petition of reference, which is not material to the question of law raised in the appeal, the respondents made an application before the said Tribunal on 22nd July 1938 for amendment of their petition of reference. In that application for amendment, they stated that the sum of Rs. 56,000 had been mentioned in the petition of reference by mistake and prayed for substituting the sum of Rs. 74,666 in the place of Rs. 56,000 mentioned in Para. 2 of the petition of reference and in the first and third grounds as stated therein, and gave an explanation for the mistake they had committed. The application for amendment was opposed by the appellant (the Province of Bengal). The Tribunal accepted the explanation given by the respondents and allowed the amendment asked for by Order No. 38 dated 13th August 1938. The trial commenced on 2nd April 1940 and so the application for amendment was moved and the order thereon was made long before the trial had commenced. Before the Tribunal the respondents accepted the valuation of the building as made by the Collector (namely Rs. 2500) but led evidence to show that he had given an inadequate amount as the market value of the land. On a short review of the evidence, the Tribunal awarded compensation at the rate of Rupees 10,000 per cotta for the first belt of the land. The result was that the award of the Collector was enhanced by RS. 20,26812-0. The Province of Bengal has preferred this appeal and two grounds have been urged in support of the appeal namely : (1) that the Improvement Tribunal had no power to allow amendment of the petition of reference ; and (2) that even if it had the power, the evidence does not support the finding that on the date of the publication of the declaration (which is the material date for compulsory acquisitions for the improvement of Calcutta) the first belt of the land was worth as much as Rupees 10,000 per cotta.
4. Re: Point No. 1 -- The following propositions of law are now well established: (i) the Court hearing a reference made under Section 18 of the Act is a Court of special jurisdiction ; (ii) that Court acquires jurisdiction only on a reference being made by the Collector ; (iii) that the jurisdiction so acquired by the Court extends over the matter referred to it by the Collector under Section 18 and to no other matters ; (iv) that within the sphere of its jurisdiction it must follow the provisions of the Civil Procedure Code, unless any one of those provisions is inconsistent with the provisions of the Land Acquisition Act. (Section 53, Land Acquisition Act). As there is no provision in the Land Acquisition Act inconsistent with the provisions of O. 6, Rule 17, Civil P. C., the Court hearing a reference has the power to allow the reference petition to be amended, subject to the limitation that it cannot allow an amendment which would have the effect of introducing a new matter which had not been referred to it for decision by the Collector under Section 18, Land Acquisition Act. This limitation is a corollary to the third proposition of law formulated above. Pramatha Nath Mullick v. Secretary of State
5. Section 18, Land Acquisition Act, specifies four 'matters' which can be the subject-matter of a reference to the Court by the Collector. A person interested, who has not accepted the Collector's award, may ask the latter to make a reference to the Court on all or any of those four matters. Those matters are : (i) objection to the measurement of the land ; (ii) objection to the amount of compensation;, (iii) objection to the person to whom the compensation is made payable by the award by the Collector, and (iv) objection relating to the apportionment of the compensation awarded by the Collector. In the case before us the 'matter' referred to the Court by the Collector was the objection to the amount of compensation. The Court, which in this case is the Calcutta Improvement Tribunal, had therefore the power to allow any amendment relating to the amount of compensation, It had therefore full power to allow the substitution of any figure in place of Rs. 50,000 mentioned in the original petition of reference. This view necessarily follows from the observations made by the Judicial Committee in Pramatha Nath Mullick v. Secretary of State . The appellant's advocate, however, urges that the said sum of ES. 56,000 was an essential element--an integral part--of the 'matter' under reference, and so a change in that figure would make the matter of the reference quite different from the matter originally referred to the Court, and so the Court below had no jurisdiction to allow the amendment by reason of the corollary to the third proposition of law, which we have formulated above. The contention of the learned advocate for the appellant is supported by the judgment of a Division Bench in I. L. R. Province of Bengal v. Ram Chandra : AIR1944Cal247 , which on the facts is on all fours with the case before us. There the claimant in his statement of claim before the Collector made under Section 9 of the Act claimed Rs. 2800 as compensation for the trees standing on the acquired land. The Collector awarded Rs. 400 only. In the petition of reference under Section 18, the claimant valued his claim at Rs. 1500. The claimant thereafter applied to the Court to amend his petition of reference by substituting a higher figure for Rs. 1500. The amendment was allowed by the lower Court, but the Division Bench held that the lower Court had no power to allow that amendment. We, however, respectfully dissent from the judgment. The reason given in support of the decision is in the words of the learned Judges as follows :
In this particular case, when the question of the valuation of the trees was first raised before the Collector, the valuation suggested by the claimant was Rs. 2800, but the amount claimed was subsequently limited at the instance of the claimant to Rs. 1500. It follows therefore that the only matter that was referred to for the determination of the Court was whether the trees should be valued at Rs. 400 or Rs. 1500 and on the principles laid down by the Judicial Committee of the Privy Council in Pramatha Nath Mullick v. Secretary of State the Court has no power to consider anything beyond what had been actually referred to it.
In our judgment, the judgment of the Judicial Committee was misread and misapplied. The Judicial Committee did not lay down anything beyond the third proposition of law as formulated by us. Furthermore, if the facts in Pramatha Nath Mullick v. Secretary of State be taken into consideration and the line of reasoning adopted by the Judicial Committee be closely followed, the view that 'the matter' which had been referred to Court in I.L.R. Province of Bengal v. Ram Chandra : AIR1944Cal247 was 'whether the trees should be valued at us. 400 or RS. 1500' is inconsistent with the decision of the Judicial Committee in that case. In Pramatha Nath Mullick v. Secretary of State the claimant was dissatisfied with the amount of compensation awarded by the Collector for the land and building. At his instance a reference was made under Section 18. In the petition of reference he stated that
the award was insufficient and that it should be referred to the Judge for the determination of the proper compensation.
6. see Pramatha Nath Mullick v. Secretary of State , as also the report of the said case at an earlier stage in this Court in Promotha Nath v. Secy. of State : AIR1924Cal1036 . After the reference had been received by the Court he applied for amendment of the petition of reference by adding an objection to the measurement of the land. That amendment was disallowed by the Special Land Acquisition Judge, Alipore. The claimant moved this Court in revision against the order refusing amendment. A Division Bench of this Court (Pearson and Graham JJ.) held that the lower Court was right in refusing the amendment as it had not the power to allow such an amendment. The reason given was that the amendment asked for would introduce an objection of a 'different category' altogether--namely an objection to the measurement, which the provisions of the Land Acquisition Act, Section 18 and some other sections of that Act--had treated as distinct from an objection to 'the amount of compensation' and the two had been placed under different categories. Graham J. was very explicit when he said that
none of the cases seem to go quite so far as this, though no doubt new objections, provided they belong to the same category may be allowed to be gone into.
7. After the decision of that Division Bench the Special Land Acquisition Judge made his award on the footing of the original petition of reference. In an appeal against his award the propriety of the order refusing that amendment was again raised by reason of the provisions of Section 105, Civil P. C., and another Division Bench which heard that appeal (B. B. Ghose and Cammiade JJ.) took the same view of the question as Pearson and Graham JJ. The question was again mooted before the Judicial Committee. Sir George Lowndes noticed in his judgment at p. 103 of the report the proceedings in revision taken in this Court. His Lordship made it quite clear that the different matters which could be the subject matter of a reference under Section 18 of the Act were four in number, namely (1) objection to the measurement of the land; (2) objection to the amount of compensation; (3) objection to the persons to whom it is payable and (4) objection to the apportionment. At p. 104 of the report he made the following observations:
Once therefore it is ascertained that the only objection taken is to the amount of the compensation, that alone is the 'matter' referred, and the Court has no power to determine or consider anything beyond, namely the objection to the measurement.
8. As we have already pointed, out, in that case the claimant, Pramatha Nath Mullick, did not mention in his petition of reference any specific amount as fair compensation for his land. Still the 'matter' of reference was considered to be the 'objection to the amount of compensation.' The amount which the claimant mentions in his petition of reference in the case where he states that amount, cannot therefore be regarded as an essential element--an integral and inseparable part--of the 'matter' under reference, when the reference is directed against the amount of compensation awarded by the Collector. An analysis of the relevant provisions of the Land Acquisition Act leads to the same inference. By Section 9 the claimant is required to state before the Collector the specific amount which he claims as compensation for his interest in the land acquired. There is a significant omission in Section 18. When asking for a reference to the Court the statute does not in express terms require him to state in his petition of reference what specific amount he claims as compensation. Section 25 provides that the Court cannot award anything in excess of the amount which he had mentioned in his statement of claim before the Collector filed in pursuance of a notice given under Section 9. That is the only limitation relating to his claim in Court for more compensation. It would follow that a reference petition would be quite in order, even if no amount is mentioned therein, where the reference raises an objection to the amount of the compensation awarded by the Collector. The point came up for direct decision in Krishnammal v. Collector of Coimbatore : AIR1927Mad282 . There the statement in the petition of reference was as follows:
I would not accept the sum (what had bean awarded by the Collector), but would contest the matter in the District Court.
9. The reference was held to be a good one notwithstanding the fact that the claimant did not value his claim in the reference petition at any amount. That is also the decision in Secretary of State v. Jiwan Baksh (16) 3 A.I.R. 1916 Lah. 37, where the petition of the claimant was in the following terms 'I object to the award of the Collector and wish a reference to be made to Court' on the ground 'that the compensation given ... is too low.' We accordingly hold that the Court hearing a reference made under Section 18 of the Act has the power to allow an amendment of the nature that has been allowed in this case. A contrary view would lead to irrational results and would work injustice, for, in that case, the Court would be powerless to direct amendment, even when the mistake in the petition of reference was due to an accidental slip. A concrete illustration would make the thing clear. A piece of land is acquired. The owner claims Rs. 100,000 in the statement of his claim before the Collector filed in pursuance of the notice issued under Section 9. Thereafter the Collector makes an award for Rs. 60,000. In his petition of reference under Section 18, the owner intended to claim Rs. 80,000 as compensation for his land, but owing to the mistake of the typist the last zero was dropped, with the result that the figure Rs. 8000 appeared in his petition which was referred to the Court. A petition of reference claiming only Rs. 8000 as compensation for the land in such a case would be a meaningless one, for the Collector's award was for a greater sum. It would be going to unreasonable limits if it be held that the Court had in such a case no power to allow an amendment of that figure by the addition of the omitted zero. The reasons given by the Madras High Court in Revenue Divisional Officer, Vizagapatam v. Narayana Gajapathi Raju : AIR1937Mad902 of the report and the decision that the Court has power to amend in material particulars a petition of reference complaining of the inadequacy of the amount for compensation awarded by the Collector appears to us to be sound and we agree with them. The decree made by the Madras High Court was reversed on appeal by the Judicial Committee of the Privy Council, Narayana Gajapathi Raju v. Revenue Divisional Officer, Vizagapatam , but the important aspect is that the reversal was in favour of the claimant. That necessarily meant approval of the decision of the Madras High Court on the point discussed at those two pages (501 and 502) of the report, for if 'the statement of claim' which was filed in the original Court after it had received the reference were ruled out, the Judicial Committee would not have had before it the case put by the claimant calling for a decision as to whether he was entitled to get more compensation for his land than what the Collector had awarded on account of its special features and potentialities, by reason of the fact that there was an excellent natural spring of good drinking water and a catchment basin in it. The decision of the Madras High Court was cited before the Division Bench in I. L. R. Province of Bengal v. Ram Chandra : AIR1944Cal247 of the report that case was disposed of by saying that
that decision is merely an authority for the proposition that on a reference to Court under Section 18, Land Acquisition Act, in a proper case, the Court has jurisdiction to consider the effect of a valuation made on a different basis from that which had been adopted before the Collector.
10. In our judgment that decision went further. The decision of the Judicial Committee on appeal reported in Narayana Gajapathi Raju v. Revenue Divisional Officer, Vizagapatam was not cited at the Bar, at least it was not noticed in the judgment. We dissent from the judgment in I. L. R. Province of Bengal v. Ram Chandra : AIR1944Cal247 but at the same time do not feel bound to refer the matter to a Full Bench, as that decision goes against the two decisions of the Judicial Committee which we have noticed above. We hold therefore that the Improvement Tribunal had power to order the amendment in question. On the merits we hold that the order ought not to be set aside, as the lower Court accepted the explanation leading to the insertion of the wrong figure in the petition of reference, and there are no materials on the record which would justify us in holding otherwise.
11. Point 2.--Both the experts--Mr. Chatterjee examined by the claimants and Mr. Dutt examined by the Province of Bengal--agree that the lease of Premises No. 39, Chandni Chawk Street, can be taken into consideration for valuing the acquired land. That lease is Ex. 7. For practical purposes, the lease was of bare land, the structures existing at the time of the lease being practically useless and of very little value. The area of land demised was 93/4 cottas. The net ground rent at the time of the acquisition was Rs. 340 a month, because the lessee took upon himself the burden of all taxes and rates. The premium paid was Rs. 2500. The lessee was to erect a new building at a cost of not less than Rs. 15,000 which on the termination of the lease was to belong to the lessors. The lease was for a period of 30 years. Both the experts are agreed on the principles that must be adopted in finding out the market value of the land from this lease. They are : (i) that the annuity represented by the selami (premium) must be added to what has been mentioned in the lease as rent; (ii) that the net rent must be capitalised; (iii) that to the figure thus arrived at must be added the 'present worth' of the value of the building, after allowing for depreciation, which the lessor was to get on the termination of the lease.
12. Mr. Chatterjee calculating on 4 per cent. basis has found out the annuity to be Rs. 144, that is the sum of Rs. 12 is to be added to the monthly rent of Rs. 340 mentioned in the lease. Mr. Dutt does not give a different, figure and does not challenge Mr. Chatterjee's calculation. Mr. Chatterjee, who had not seen the building proceeds upon the basis that a building worth at least Rs. 15,000 had been constructed by the lessee. It would not, in our opinion, be an assumption to say that a building at such a cost or at a greater cost had in fact been raised by the lessee. The fact that the lessee pulled down the old structures and raised a new building in its place is not disputed by the Province of Bengal. The only question is what was its worth. The site was a shop site in a very important trading centre, and pucca shops had a good demand at good rents. That is the result of our experience of Chandni Chawk Street. It would be to the interest of the lessee to build as many shop rooms as the size of the land would allow. The site had two road frontages. If the belt of the land having road frontages were built upon with shops the cost of building would have been more than Rs. 15,000 on very moderate estimate. Even if the depreciation of that building in the course of 30 years be taken as high as 40 per cent. the 'present worth' of the building would be about Rs. 5000 on the basis of 5 per cent. table, and 5 per cent. is a reasonable rate of interest. The material difference between the two experts relates to the rate of security. Mr. Chatterjee takes the rate to be 4 per cent. but Mr. Dutt 41/2 per cent. The result is that Mr. Chatterji would take 25 years' purchase but Mr. Dutt 221/2 years' purchase.
13. It is admitted that gilt edged securities are the best securities. Next to them are ground rents. Gilt edged securities at the relevant time fetched a little over 3 per cent. per annum as interest. Seeing that the land is in an important business area where there is a great demand for shops and with no risks for vacancies for even short periods, even for a fortnight at the most--we think the security must be taken at 4 per cent. and not at 41/2 per cent. In making his calculations, Mr. Chatterjee had not taken into account the collection charges of the lessor. We accept Mr. Dutt's figure of 5 per cent. for that. That would give about Rs. 1,06,000 as the value of the land, the area of which is 93/4 cotta. The rate per cotta for the first belt would be about Rs. 11,000. An allowance of about 10 per cent. would be ample for its double frontage, as the return frontage is on a narrow lane, namely, the Chandni Chawk First Lane. The result is that on the basis of a single frontage the value of the first belt of land of that premises would work out at a figure slightly more than Rs. 10,000 a cotta. The land acquired is almost the same as the land of this premises on the basis of a single frontage.
14. Mr. Dutt had also taken the lease of premises No. 31 Chandni Chawk Street into consideration. The lease was for a term of 61 years and comprised bare land with an area of 31/4 cotta. The annual rent was RS. 1224. Deducting 5 per cent. for collection charges the amount of yearly rent comes up to Rs. 1163. Capitalised at 25 times the value of the land comes up to Rs. 29,075. The front belt works out at over Rs. 9000 per cotta. That property had a single frontage. It adjoins the premises which has been acquired. There is no such complicated calculation as for premises No. 39 Chandni Chawk Street. It is far more inferior in shape and size to the premises acquired. Mr. Dutt does not refer to it at all. On the basis of the lease of that premises the sum given by the Tribunal for the acquired land does not seem to us to be high. We accordingly affirm the decree of the Tribunal and dismiss the appeal with costs.