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Trustees for the Improvement of Calcutta Vs. Mt. Meherunnessa Khatun and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty;Civil
CourtKolkata
Decided On
Reported inAIR1932Cal178,137Ind.Cas.628
AppellantTrustees for the Improvement of Calcutta
RespondentMt. Meherunnessa Khatun and ors.
Cases ReferredImprovement of Calcutta v. Chandra Kanta Ghose A.I.R.
Excerpt:
- .....by the execution of the scheme. the declaration (ex. 7) shows that the scheme for which the land was required was a street scheme the purpose of which must be one or more of the four purposes enumerated in section 39 of the act.8. if the acquisition was for the purpose not merely of driving a street for creating new or improving existing means of communication and facilities of traffic (clause c), but also of providing building sites (clause a), the land must be regarded as has been required for the purposes of the scheme. it is true that the resolution of the board which would have shown the purpose was not proved, but the validity of the acquisition having been challenged in the written statement on the limited ground that the land in suit was not affected by the execution of.....
Judgment:

1. This is an appeal by the plaintiffs, the trustees for the Improvement of Calcutta from a decree dismissing their suit for recovery of money due under a deed of rent charge by enforcing' the charge by the sale of the mortgage premises.

2. Shortly put, the facts alleged on behalf of the plaintiffs were the following: Premises No. 12/1 Durga Road were notified for acquisition as being required for the execution of Scheme No. 8 of the trust, and on that the defendant who was the owner of the said premises applied for exemption of a portion thereof from acquisition under the provisions of Section 78, Calcutta Improvement Act. This application was refused by the trustees. subsequently, an agreement was entered into under which, the portion in respect of which the defendant had no objection was to be acquired by the trustees on payment to her of Rs. 1,130, the acquisition of the portion in respect of which exemption was asked for was abandoned on condition that the defendant paid the trust a sum of Rs. 4,500, a small plot of land out of premises No. 13 Durga Road which the trust had acquired would be conveyed by the trustees to the defendant for Rs. 1,680 and for the two amounts of Rs. 4,500 and Rs. 1,680, that is to say, for the total amount of Rs. 6,180, the defendant would execute in favour of the trustees a yearly rent charge of Rs. 280-13-0 charged upon! and payable out of the two parcels of land, which the defendant would continuo to possess, as well as on all structures which might be erected thereon. In pursuance of this agreement, the trustees abandoned the acquisition of the portion, for which exemption was asked for, and executed a conveyance in favour of the defendant in respect of the portion of premises No. 13 that she was to get, and the defendant on the other hand executed a deed in favour of the trustees creating a. perpetual yearly rent charge of Rupees 280-13-0 payable on the 1st day of April every year, the first of such payments to be made on 1st April 1923. The deed further provided that if the amount remained unpaid for 15 days after the due date, then the whole amount of Rs. 6,180 would be recoverable with interest at the rate of 6 1/2 per cent per annum and the trustees, shall be able to recover the same by getting into possession and selling the premises charged by private contract or public auction. Other provisions contained in the deed need not be detained. The defendant defaulted in paying the rent which fell due on 1st April 1924.

3. The plaintiffs asked for recovery of Rs. 280-13-0 being the amount in default and also of the said amount of Rs. 6,180 together with interest at the rate of 6 1/2 per cent per annum from 16th April 1924 to date of suit and also with further interest for the period thereafter and also for realization of the decretal amount, should the defendant fail to pay off the same within a time to be fixed, by sale of the premises charged.

4. The defendant took various pleas in defence and these gave rise to a number of issues, 16 in all. Some of these issues wore not pressed, while some others have been decided against the defendant by the Subordinate Judge. The Subordinate Judge however has dismissed the suit on the ground that the agreement, in so far as it related to the portion of premises No.12/1 the acquisition of which was abandoned was ultra vires of the powers of the trustees unless it is regarded as one falling within the purview of Section 78 of the Act; and that, treated as an agreement under that section, it could be enforced only in accordance with the provisions of Section 79 of the Act. He also held that in so far as the agreement related to the portion of premises No. 13 which was conveyed to the defendant by the trustees, the trustees 'could recover their dues in respect thereof in a suit properly framed for the purpose. The question for consideration in this appeal is whether this view is correct.

5. The question is covered by the decision of this Court in appeals from original decrees Nos. 51 and 52 of 1928 (original side) decided by Rankin, C. J. and Buck-land, J., on 8th January 1927. The learned Chief Justice in his judgment in that case in which the question arose in very similar circumstances and upon a transaction which is entirely indistinguishable from the transaction in the present case and which was evidenced by documents executed on similar lines and in similar terms, has held that the question whether the arrangement was in fact an arrangement made or purporting to be made under Section 78 of the Act must be answered in the negative. He held that the deed of rent charge is not a document of the character contemplated by Sub-section 4, Section 78, and therefore the procedure provided for by Section 79 is not the procedure for its enforcement. The reasons given by the learned Chief Justice are, in our (opinion, unassailable. It would be a superfluity to repeat the reasons which ho has given for the view that ho has taken. It would, in our opinion, be sufficient for us to deal with the arguments that have been advanced on behalf of the respondent in order to induce us to hold that the Subordinate Judge's view is correct.

6. In the first place it has been argued before us on behalf of the respondent that as the acquisition of the portion of premises No. 12/1 was abandoned it should be hold that the notification for its acquisition and all proceedings subsequent thereto were ultra vires, so that the trustees had no right to deal with the premises in question and that the arrangement on which they rely in this suit cannot be enforced. Now the validity of the intended acquisition was, no doubt challenged in the written statement, and several issues involving the question were framed for dealing with it. But all those) issues, with the exception of issue 4 were abandoned in the trial: issue 4, however may possibly include the question that has been raised and it is therefore necessary to consider it. That issue was worded thus:

Were the proceedings for the acquisition of the suit lands irregular, illegal and ultra vires Did the plaintiffs acquire any right in respect of the suit lands under such proceeding ?

7. Under that issue, the questions raised in the trial Court, as appears from the judgment of the Subordinate Judge, were as regards the proper services of the notices under the Act as regards the sanction of the Local Government, and also whether the trustees had authority in view of the provisions of the Act to notify their intention to acquire the land. It is quite true that if an acquisition of certain premises is not justified by the provisions of the Act, the trustees, a statutory body, cannot notify their intention to make the acquisition and under colour of proceedings taken under the Act enter into a transaction either for their benefit or to their prejudice. But is that the case here Sections 41 (a) and 42 (a) make it plain that every improvement shall provide for the acquisition by the Board of any land, in the area comprised in the scheme, which will in their opinion be required for the execution of the scheme, and may provide for the acquisition of any land similarly comprised, which will, in their opinion, be affected by the execution of the scheme. It has been argued that the portion of the land in question was neither required for the execution of the scheme nor affected by the execution of the scheme. The declaration (Ex. 7) shows that the scheme for which the land was required was a street scheme the purpose of which must be one or more of the four purposes enumerated in Section 39 of the Act.

8. If the acquisition was for the purpose not merely of driving a street for creating new or improving existing means of communication and facilities of traffic (Clause c), but also of providing building sites (Clause a), the land must be regarded as has been required for the purposes of the scheme. It is true that the resolution of the Board which would have shown the purpose was not proved, but the validity of the acquisition having been challenged in the written statement on the limited ground that the land in suit was not affected by the execution of the scheme,' the plaintiffs may not unreasonably have thought that it was enough for them to show that the acquisition was a Street Scheme under Section 39 and that it was not necessary for them to go further and prove the resolution of the Board which would have shown in greater detail the purpose of the acquisition. In any case, a portion of the entire plot having been admittedly required for the street that was to be driven through it, the remainder with which we are concerned here is obviously affected by the execution of the scheme, having regard to the meaning of the word affected ' which appears in Section 42 (a) of the Act, as explained by the Full Bench decision of this Court in the case of Mani Lal Singh v. Trustees for the Improvement of Calcutta [1918] 45 Cal. 343 and the decision of the Judicial Committee in the case of Trustees for the Improvement of Calcutta v. Chandra Kanta Ghose A.I.R. 1920 P.C. 51.

9. The above contention which the respondent has put forward here is diametrically antagonistic to the contention which appears to have been her main contention before the Court below and which found favour with that Court. That contention is that the acquisition having been made under the Act, the arrangement must be deemed to have been made in the exercise of the powers of the Board under Section 78 of the Act and that the deed of rent charge should be regarded as a document of the character contemplated by Sub-section 4 of that section, enforceable only in accordance with the provisions of Section 79 of the Act. On this contention the learned Chief Justice, in his judgment referred to above, observes thus:

To take first the question whether the arrangement was in fact an arrangement made or purporting to be made under Section 78, I am of opinion that the question must be answered in the negative. * * * An agreement under Section 78 could have nothing to do 'with any transaction of sale. The terms of the Indenture in no way follow the provisions of Sub-section 4, Section 78. To take one striking example, it will be seen that the first payment upon this deed was to be made in the following month of March whereas under Sub-section 4 of the first annual payment of interest is to be postponed for four years. It seems to me to be impossible to hold that the transaction in question was or was thought to be a transaction carried out by virtue of the powers conferred by Section 78 or in pretended compliance with the terms of that section. The recital in the deed to the effect that the application had been made under that section and had been rejected is, I think, a plain contradiction of this theory.

10. To show that Section 78 applies it has been argued that the portion in respect of which the deed of rent charge was executed was not required for the execution of the scheme which is the condition specified in the section, and for that purpose reference has been made to a passage in the conveyance Ex. 2, which runs in the following words:

And whereas a portion of the said premises No. 12/1 Durga Road coloured pink on the said plan not being required for the execution of the road-works in the said scheme and the purchaser as owner applied under the provisions of Section 78 (1) of the said Act, to the Board that the acquisition of the said promises should be abandoned.

11. This passage in our opinion only means that the portion in question was not required for the roads that were to be opened up, but it does not necessarily mean that it was not required for the purpose of the street scheme framed under Section 39, which may have other purposes than that of merely laying out roads. The conveyance (Ex. 2) and the deed of rent charge (Ex. l) both state the fact that is admitted, viz., the application for exemption was rejected. It has been argued that the application was. treated by the Board as one validly made under Section 78 (1) and rejected only because it was filed late. The order of rejecting is not before us, and it was the duty of the respondent to produce it in evidence if she relied on it for this purpose.. It is not necessary to assume that the rejection of the application was on the ground that it was filed too late, rather than on the ground that the application did not fall within Section 78 (1). In our opinion it is abundantly clear that the arrangement was not made upon the basis of the application entertaining it as-one under Section 78 (1) of the Act, and it cannot be disputed that it was an arrangement made subsequent to the rejection of the said application and in spite of it.

12. Then it has been argued that the Board being a statutory body, their powers are? strictly limited by the provisions of the statute: that if the Local Government has sanctioned the acquisition of any land in an area comprised in an improvement scheme and that land is not required for the execution of that scheme they may abandon the acquisition in compliance with the provisions of Section 78; and if any land has vested in or has been acquired by them under the Act they may dispose of the same in accordance with the provisions of Section 81. In other words, it has been argued that Sections 78 and 81 are the only provisions under which the Board may act. On this question the following observations of the learned Chief Justice may be usefully quoted:

As I read Section 78, it is a provision inserted in view of the wide powers of acquisition conferred upon the Trust, powers which extend not merely to land which is actually required for the execution of a scheme but to land which will in the opinion of the Trust be affected by the execution of the scheme: Sections 41 (a) and 42 (a). The section gives a right to the owner of land which is not required for the execution of the scheme. If ho comes in time and if all the owners join together, the Trust is required by the section to refrain from compulsory acquisition of the property provided that a. betterment fee, as it may be called, is either paid or secured to them in the manner set forth in the section. It is difficult to say what can be meant by the legislature when it says of the owner that ho may execute an agreement with the Board either (1) to pay the said sum three years after the date of the agreement or (2) to leave such sum outstanding as a charge on his interest in the land subject to the payment in perpetuity of interest at the rate of 4 per cent per annum and to make the first annual payment of such interest four years after the date of the agreement. This may mean that the owner has a right to free his land from acquisition provided that he is willing to execute an agreement in one or other of those senses. Perhaps however it means less than this. In any case the purpose of the section is to give a right to the owner upon certain conditions. If in this case the plaintiffs did not satisfy the conditions, and there is no evidence whatever that they did, then the Trust was in no way obliged to permit them to have the benefit of the section and I, should be very slow indeed to hold that there was anything illegal on the part of the Trust in coming to an arrangement with the owner outside the section, an arrangement the terms of which appear eminently fair. * * * *. In my judgment it would be a lamentable result of a failure on the part of the owner to comply with the conditions prescribed by Section 78 if the Trust were to be unable to deal with the matter at all except upon the basis of that section.

13. In this connexion reference may be made to Section 24 of the Act which is in these words;

The Board may cuter into and perform all such contracts as they may consider expedient for carrying out any of the purposes of the Act.

14. These words confer very wide powers and upon the basis thereof the Board must be held to be fully competent to enter into an arrangement of the present nature, there being no prohibitory provision in the Act itself or anywhere else. The arrangement, in our opinion, is a fair one and the effect of it may be summarized thus; the respondent by a redeemable rent charge is able to add to her existing irregularly shaped land a block on the now street so as to give her a compact; and good-looking plot of proper depth and frontage and the Trust gets back what is apparently a fair price for that block and a sum which apparently represents the fair value of the advantage which the respondent obtains by having her land brought up to the edge of the new road and with a frontage running along its entire length.

15. In our opinion, the view which the Subordinate Judge has taken of the case and his reasons for dismissing the suit cannot be supported. The plaintiffs, in our judgment, are entitled to a decree in the terms of their plaint. The appeal is allowed and the decree appealed from being set aside it is ordered that a mortgage decree for sale in the usual form be made in plaintiffs' favour in terms of the plaint, interest from the date of the suit being calculated at 6 per cent. per annum and the period of grace being fixed at 6 months.

16. The appellants are entitled to their costs in this Court and in the Court below.


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