G.N. Das, J.
1. This appeal is by the Province of West Bengal from a decision of Mr. R.S. Trivedi, Arbitrator, appointed under Section 19 Defence of India Act, and dated 16th March 1948. Premises No. 30 Ballygunge Park now numbered as No. 44 Iconside Road belonged at the relevant time to Pran Kissen Law & Co. On 15th November 1944 the aforesaid premises were requisitioned' by the Government. The sail premises were later on acquired by the Government under Section 75 (A), Defence of India Rules, on 12th April 1945. Before the Collector the respondents Pran Kissen Law and Co., preferred a claim on 9th December 1944. The petition has been marked Ex. A. IN that petition the respondents claimed a sum of Rs. 2049 per month as compensation-for the lands on account of the requisition made by the Government. No agreement was however reached between the Government and the claimants as regards the compensation payable for the requisition of the land. Accordingly on 21st November 1946 the respondents filed a petition before the Collector for reference of the dispute to the Arbitrator under Section 19 (1) (e), Defence of India Act, hereinafter to be called the Act. In this petition the claim of the respondents in respect of the requisition was laid at Rs. 2750 per month. The price of the land was claimed at Rs. 4000 per cottah. Interest was claimed at 6 per cent, per annum. On 14th February 1947 the Land Acquisition Collector made a reference. From this reference petition it appears that possession was taken on 12th April 1945, the requisition having been made on 15th November 1944. On 21st February 1947 the reference was registered as Land Acquisition case No. 25 of 1947. On 18th April 1947 the respondents filed their statement of claim. In that petition the respondents claimed Rs. 2753 per month for the period during which the property was under requisition and they claimed the price of the land at Rs. 4000 per cotta and the value of the boundary wall at Rs. 3750. Interest was claimed at 6 per cent, per annum on the ground of unconscionable delay. On 15th December 1947 the Province of Bengal filed its statement. In that statement the Province of Bengal stated that the fair rent payable from 24th November 1944 to 11th April 1945 would be at the rate of Rs. 2049 per month. The value of the land acquired was stated to be at the rate of Rs. 3325 per cotta, the total price being stated to be Rs. 4,86,627. The price of the boundary wall was stated to be Rs. 3700. On 14th November 1948 the Land Acquisition Collector purports to have made an award. This has been marked as Ex. 5. As the learned Arbitrator points out this was really an offer made by the Collector. On 16th March 1948 (sic) the Arbitrator made his award. The Arbitrator affirmed the Collector in so far as it concerned the compensation to be paid during the period of requisition and in respect of the acquisition of the land. He awarded interest at the rate of 6 per cent, per annum for a period of two years. His conclusions may be summarised as follows:
Rent at Rs. 2049 from 24th November1944 to 11th April 1945 Rs. 9425Price of land at Rs. 3325 . 486627Interest on the second item for 2 years 58400------- Rs. 554452
He did not make an order for costs.
2. Against the decision of the Arbitrator the Province of Bengal preferred this appeal contesting the decision in so far as it awarded interest in favour of the respondents. There was a cross-objection by the respondents. In the grounds of cross-objection the cross, objectors claimed interest at 6 per cent, per annum. They also claimed costs before the Arbitrator. They also claimed the value of the compound wall which was refused by the Arbitrator. The memo of cross-objection was valued at Rs. 26000. It has been stated before us that this sum represents interest at 6 per cent, per annum on the sum of Rs. 4,86,627 for a period of 9 months till 14th January 1948.
3. The principal question which arises in the appeal and in the cross-objection concerns the interest, if any, payable on the price of the land. There are two subsidiary questions, viz., if interest is payable, at what rate interest is to be paid and secondly for what period.
4. I shall deal with the first part of the question, viz., whether interest is payable on the price of the land which was acquired. The learned Assistant Government Pleader who has appeared in support of the appeal has contended that interest is not payable at all. His argument in short is that compensation is payable under the Act on the principle embodied in Section19 (1) (e) of the Act. Section 19 (1) (e) merely attracts Section 23(1), Land Acquisition Act, 1894. Section 23(1), Land Acquisition Act, does not provide for payment of interest on the sum awarded as compensation. The payment of interest on the sum awarded under the Land Acquisition Act is provided for in Sections 28 and 34. These sections have not been expressly made applicable to requisitions or acquisitions under the Defence of India Rules. In support of his submission he has referred us to a decision of the Madras High Court in the case of Associated Oil Mills Ltd., Katpadi v. Provincial Government of Madras I. L. R. (1948) Mad. 567 : (A. I. R. (35) 1948 Mad, 256).
5. So far as this Court is concerned there is no decision which expressly covers the point. We have, therefore, to construe Section 19 of the Act and to see whether that section debaes the Arbitrator from awarding interest on the price of the land in case of acquisition. Section 299(2) Government of India Act, 1935, lays down that any law authorising compulsory acquisition of land must provide 'for the payment of compensation for the property acquired', and 'either fix the amount of compensation or specify the price on which and the manner in which it is to be determined'.
6. Section 19, Defence of India Act, accordingly made necessary provisions for specifying the price on which the compensation has to be awarded and the manner in which it has to be ascertained.
7. Section 19(1) (a) provides for payment of compensation in terms of an agreement which. may be reached between the Government and the person whose land has been acquired.
8. Section 19 (1)(b) provides that where no such agreement can be reached, the Central Government shall appoint an Arbitrator who possesses requisite qulifications.
9. Section 19 (1)(c) provides for the appointment of Assessors in cases requiring expert knowledge.
10. Section 19(1) (d) requires that the parties may submit statements of opinion as regards the fair amount of compensation to be paid.
11. Section 19 (1) (e) then states : 'the Arbitrator in making his award shall have regard to, (i)the provisions of Sub-section (1) of Section 23, Land Acquisition Act, 1894 so far as the same can be made applicable, (ii) whether the acquisition is of a permanent or temporary character.'
12. Section 19 (a) confers on the Central Government the power to make rules for carrying into effect the provisions of the Act.
13. It is apparent that the fixation of the amount of compensation to be paid in case of acquisition whether permanent or temporary is a matter entirely within the jurisdiction of the Arbitrator.
14. As already pointed out the contention of the appellant is that the true intent of Section 19(1)(e) is to limit the amount of compensation payable under the Act to the amount of compensation which is payable under Section 28(1), Land Acquisition Act, 1894, so far as the same may be applicable.
15. Section 23(1), Land Acquisition Act, provides for payment of compensation in respect of the market value of the land, damages sustained by reason of severance or injurious affections of other properties of the person whose land has been acquired or on account of necessary change of residence or of business or diminution of profits.
16. It is, therefore, contended that payment of interest on the price of land acquired is not an item which can be paid under Section 19 (1) (e) of the Act.
17. The opening words of Section 19 (1) make it abundantly clear that Section 19 (1) (e) merely stated the principles which the Court has to consider in assessing the amount of compensation to be paid. Section 19 (1) (E) requires the Arbitrator 'to have regard' to the provisions of Section 23(1), Laud Acquisition Act, This requirement only implies that the provisions of the Land Acquisition Act must be taken into consideration. It does not mean that the Arbitrator is strictly bound by the terms of Section 23(1), Land Acquisition Act.
18. Mr. Gupta appearing for the respondents drew our attention to the case of Ryots of Garabandho v. Zamindar of Parlakimedi where a similar expression which is to be found in Section 168 (2), Madras Estates Land Act, 1908, came to be discussed. In that case under Section 164, Madras Estates Land Act, 1908, Record of Rights had to be prepared and the Revenue Officer was to settle fair and equitable rent. Section 168 provided that in settling such rents the Collector shall presume, unless the contrary is proved, that the existing rent or rate of rent is fair and equitable and shall have regard to the provisions of the Act for determining rates of rents payable by raiyats. The Board of Revenue affirmed a decision of the Revenue Officer enhancing the rent by 37 1/2% although Section 82 of the Act limited the enhancement of rent to 12 1/2%, It was contended that in fixing the fair and equitable rent, due regard to the provisions of the Act has not been paid. A question, therefore, arose as to the meaning of the expression having regard to the provisions of the, Act.' The Judicial Committee observed that the primary duty of the Revenue Officer was to fix a fair and equitable rent and though he may be guided by the provisions underlying Chap. XI of the Act in fixing the fair and equitable rent, he is not strictly bound by those provisions.
19. In my opinion Section 19 (1) (e) of the Act has not taken away the power of the Arbitrator to fix the fair amount of compensation to which the owner was entitled in case of acquisition under the Defence of India Rules. In the Case of Province of Bengal v. Board of Trustees of the Improvement of Calcutta, 50 C. W. N. 825 : (A. I. R. (33) 1946 Cal. 416), it was stated that the principle of compensation to be paid under Section 19 (1) (e) of the Act is that the amount of compensation must be tested by the loss to the owner. We have, therefore, to find out what was the loss to the owner by reason of the acquisition of the land.
20. The question whether in case of statutory acquisition the person whose land is acquired is entitled to interest on the price of the land is dealt with in Cripps on Compensation, Edn. 7 at p. 196. The learned author states that ordinary rules as to payment of interest on purchase money apply when lands are acquired under statutory powers. The Statute Law in this country as regards interest to be paid on purchase money is contained in Section 55(4)(b), T. P. Act, which states that in the absence of an agreement to the contrary, interest has to be paid on the purchase money from the date on which possession has been delivered in cases where ownership has passed to the purchaser. In the case of Inglewood Pulp and Paper Co. Ltd, v. New Brunswick Electric Power Commission, 1928 A. C. 492 at p. 498: (A. I. R. (15) 1928 P. C. 287), it is observed as follows :
'It is now well established that on a, contract for sale and purchase of land it is the practice to require the purchaser to pay interest on his purchase money from the date when he took possession : per Lord Cave L. C. in Swift & Co. v. Board of Trade, (1925) A. C. 520 at p. 532 : (94 L. J. K. B. 629. The law on the point has also been extended to cases under the Lands Clauses Consolidation Act, 1845 ....
Their Lordships see no good reason for distinguishing the present case from such cases It is true that the expropriation under the Act in question is not effected for private gain, but for the good of the public at large, but for all that the owner is deprived of his property in this case as much as in the other and the rule has long been accepted in the interpretation of statutes that they are not to be held to deprive individuals of property without compensation unless the intention to do so is made quite clear. The statute in the present case contains nothing which indicates such an intention. The right to receive interest takes the place of the right to retain possession and is within the rule.
21. As I have already discussed no such contrary intention can be spelled out of Section 19 (1) (e) of the Act. The fact that Sections 28 and 34, Land Acquisition Act, were not made expressly applicable does not also indicate a contrary intention. The Act merely laid down the principles to be observed in fixing the amount of compensation to be paid.
22. In my opinion a person whose land has been acquired under the Act is entitled to receive the full compensation for the loss of his property. The plainest principle of justice requires that the acquirer should not retain the price of the land and the use thereof without paying to the person whose land has been acquired compensation in the shape of interest on the price of the land This is fully supported by the following observations of Lord Shaw in the case of Ratanlal Choonilal v. Municipal Commissioner for the City of Bombay, 45 I. A 233 at p. 245 : (A.I.R. (5) 1918 P. C. 129) to which our attention has been drawn by Mr. Gupta appearing for the respondents. The observation runs thus :
Their Lordships are of opinion that the right to interest depends upon the following broad and clear consideration. Unless there be something in the contract of parties which necessarily imports otherwise, the date when one party enters into possession of the property of another is the proper date from which interest on the unpaid price should run. On the one hand, the new owner has possession, use and fruits, on the other, the former owner, parting with these has interest on the price. This is sound in principle, and authority fully warrants it.'
23. The decision in Associated Oil Mills, Ltd., Karpadi v. Provincial Govt. of Madras, I.L.R. (1948) Mad. 567;(A.I.R (36) 1948 Mad. 256) cited above is distinguishable on facts, That was a case of temporary acquisition and not one of permanent acquisition. In such a case the ownership in the property does not pass. The owner merely gets compensation for the loss of income. It is no doubt true that their Lordships of the Madras High Court interpreted Section 19 (1) (e) of the Act, as limiting the power of the Arbitrator to award compensation only in accordance with the provisions of Section 23(1), Land Aequisition Act. For reasons which we have already given we respectfully dissent from the view so taken by the Madras High Court.
24. The learned Assistant Government Pleader also relied on the case of Keshab Chandra v. Governor General in Council : AIR1945Cal294 . There the question arose whether under Section 19 of the Act, the Arbitrator was justified in awarding compensation for the price of moveables. Akram and Blank JJ. overruled the claim on the short ground that Section 19 merely speaks of compensation for the land, the word land obviously not including 'moveables'. This decision does not throw any light on the present question. The learned Assistant Government Pleader also referred us to the following observation of Mitter J. in the case of Pashupaty Roy v. The Province of Bengal, 53 C. W. N. 732 at p. 735 : (A.I.R. (35) 1948 Cal. 195) :
'Clause (e) says that the provisions of Section 23(1), Land Acquisition Act, may only be utilised for the purpose of assessing compensation of the property.'
This observation was not relevant for the purposes of the decision and has to be read in the light of the facts of that case. To me it seems that the observation is obiter.
25. The aforesaid discussion leads me to the conclusion that interest on the value of the land acquired under the Defence of India Act may be awarded by the Arbitrator. The view taken by the Arbitrator in the present case awarding such interest cannot therefore be assailed.
26. The next question is what is the rate of interest to be paid in the facts of the present case. In the petition of a claim filed by the respondents before the Lind Acquisition Collector (Ex. A.) the respondents claimed rent at the net annual return at 6 per cent. The rent awarded by the Collector and the Arbitrator as compensation is Rs. 2049 per month which works out at about 5 per cent, on the value of the land, Viz. Rs. 4,86,627.
27. In my opinion in the facts of the present case interest should be awarded at the rate of 6 per cent, per annum on the said sum of Rs. 4,86,627. This brings us to the question as to the period for which such interest may be paid, It is not disputed that interest will run from 12th April 1945, when the land was taken possession of. The dispute is as regards the outside limit. In the Court below the respondents claimed interest till 14th January 1948. In the memo of cross-objection the claim for interest has been laid at Rs. 26,000. This sum, we are told, represents interest on the said sum of Rs. 4,86,627 at 6 p.c.p.a. down to 14th January 1948. It appears from Ex. 5 that the Land Acquisition Collector drew up an award on that date. The Arbitrator pointed out that the Collector made an offer on 14th January 1948. The sum awarded by the Land Acquisition Collector in respect of the period under requisition and the price of the land after acquisition was affirmed by the Arbitrator. No appeal has been taken to this Court in so far as these amounts are concerned. The Act does not provide for deposit in Court of the sum awarded. If the respondents had been so minded they could have obtained payment of the sum.
28. Having regard to all, these facts and circumstances interest at the rate of 5 P. C. p. a. on the term of Rs. 4,86,627 would be payable in this case from 12th April 1945 to 11th January 1948.
29. It remains for us to consider the question as regards the value of the boundary wall. The Arbitrator gave certain reasons for disallowing the claim of the respondents. It appears, however, that in the statement made by the Collector under Section 19 (1) (d) the Collector stated that Rs. 3700 was the fair value of the boundary wall, the respondents accepted this figure as the value of the wall. In these circumstances there was no justification for rejecting this part of the claim. The respondents will, therefore, be entitled to the sum of Rs. 3700 as the price of the boundary wall.
30. No interest on Rs. 3700 was claimed in argument. It is, therefore, disallowed. the respondents also did not press for costs of the Court below. This is, therefore, disallowed.
31. It is no longer disputed before us that the shares of the partners of the firm of Pran Kissen Law & Co., are correctly set out at p. 4, Part II of the paper book. The share of Narendra Nath Law is, therefore, 1/8th in the acquired land. On 16th February 1950 Narendra Nath Law filed a petition in this Court supported by the affidavit of Madhu Sudan Roy his Secretary sworn on 16th February 1950. In that petition Narendra Nath Law stated that he would receive Rs. 62,006-8-0 in full satisfaction of all his claims in respect of his 1/8th share in the acquired premises, that is No. 30 Ballaygunge Park.
32. In view of this petition the benefit of the cross-objection or of the Arbitrator's award in, so far as he is concerned must be limited to the said sum of Rs. 62,006-8-0. 7/8%th share of the compensation money as stated above that is, Rs. 4,95,830-4-19gds. 2 kara would be paid to the persons named in items 1 (b) to 1 (i) on p. 4, Part II of the paper book in the shares mentioned against their names. Narendra Nath Law would be entitled only to Rs. 62,006-8-0. The order of the Arbitrator would be varied accordingly.
33. The result, therefore, is that the award in so far as the respondents other than N. N. Law are concerned should be for the following amounts :
Loss of income from24th November 1944 to11th April 1945 Rs. 9425less Rs. 1178 in N. N.Law's 1/8th share, thatis, Rs. 8246-14-0The price of the landacquired Rs. 486.627 less Rs. 60,828-6-0 in N. N.Law's 1/8th share, i. e.,Rs. 4,25,798.10.0Interest at 5 p. c.p. a. on the said sumof Rs. 4,86,627 lessRs. 60,828-6-0 in N. N.Law's 1/8th share i. e.,Rs. 4,25,798-10-0 from12th April 1945 to 14thJanuary 1948 Rs. 58.547-4-19 gds. 2 kara.Price of the wallRs. 3700 less Rs. 462-8-0in N. N. Law's 1/8th shareRs. 3237-8-0-----------------------Total Rs. 4,95,830-4-19 gds. 2 kara------------------------
34. As regards the costs of the appeal and of the cross objection we direct that the appellant must pay to the cross-objectors that is the persons named in items 1 (b) to 1 (i) as aforesaid costs of the appeal.
35. There will be no order for costs in the cross-objection.
36. The sums which I have directed to be paid to the different respondents must be paid by the end of August 1950.
37. The appeal and the cross-objection are disposed of at above.