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Bahadoor Vs. the Secretary of State for India in Council - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtKolkata
Decided On
Judge
Reported in6Ind.Cas.343
AppellantBahadoor
RespondentThe Secretary of State for India in Council
Cases ReferredCollector of Dinajpore v. Girja Nath Roy
Excerpt:
lind acquisition - ferry--disturbance--bridge--railway company--compensation. - .....upon the damages awarded, from the time of the acquisition of lands on both sides, under the land acquisition act; fourthly, that, as damages were admittedly caused by reason of illegal proceedings taken under colour of, but really not in accordance with, the statutory provisions on the subject, by analogy, some allowance ought to be made on account of compulsory acquisition under such exceptional circumstances; and, fifthly, that proper directions ought to be given in respect of the costs of the litigation antecedent to the present enquiry. in support of the cross-appeal, it has been argued, on the other hand, first, that the profits have been calculated upon an erroneous basis; and that no account should have been taken of those earned after the acquisition had been made;.....
Judgment:

1. This appeal is directed against a decree by which damages have been assessed for disturbance of a ferry in accordance with the directions given by this Court in its judgment in the case of Rameswar Singh v. Secretary of State for India 34 C. 470 : 11 C.W.N. 356 : 5 C.L.J. 669. It is not necessary for our present purposes to review the earlier history of this litigation. It is sufficient to state that the proceeding taken for the acquisition of lands on both sides of the river were irregular with the result that disturbance was caused in an entirely improper manner to the exercise of the franchise possessed by the plaintiff. It was suggested before us on behalf of the Secretary of State on the previous occasion that, if the suit was held to be maintainable, damages should be allowed to be assessed in the first instance by the Collector; and that the final decree might be made by, the Civil Court in view of the award made by the Collector. 'This procedure has been followed. The Collector assessed the damages at Rs. 3,000. The Subordinate Judge, upon the objection of the plaintiff, has considered the matter and raised the compensation to Rs. 5,000. The plaintiff has now appealed to this Court, and a cross-appeal has also been preferred on behalf of the Secretary of State. On behalf of the appellant, exception has been taken to the award of the Subordinate Judge on five grounds, namely, first, that the damages ought to have been assessed on the basis of the whole of the loss sustained by the plaintiff, and not merely on the footing of half that sum, secondly, that the compensation should have amounted to at least fifteen times the annual loss; thirdly, that interest ought to have been allowed upon the damages awarded, from the time of the acquisition of lands on both sides, under the Land Acquisition Act; fourthly, that, as damages were admittedly caused by reason of illegal proceedings taken under colour of, but really not in accordance with, the statutory provisions on the subject, by analogy, some allowance ought to be made on account of compulsory acquisition under such exceptional circumstances; and, fifthly, that proper directions ought to be given in respect of the costs of the litigation antecedent to the present enquiry. In support of the cross-appeal, it has been argued, on the other hand, first, that the profits have been calculated upon an erroneous basis; and that no account should have been taken of those earned after the acquisition had been made; secondly, that the compensation ought not to have been allowed at more than half of fifteen times the annual loss; and, thirdly, that interest on damages ought not to be allowed for a period earlier than the date of the actual disturbance of the ferry. In our opinion, the appeal, as also,, the cross-appeal, must succeed in part.

2. In support of the first contention of the appellant, it has been argued that the damage to be awarded ought not to have been based on one-half of the annual loss, the other half of which has been attributed to fair competition, on account of which no damages are recoverable. In our opinion, there, is no substance in this contention. As was explained in the previous judgment of this Court, the taking of property that merely injures a franchise, but does not interfere with the exercise of it, is not such a taking of property from the owners of the franchise as to require compensation, [Cooling v. Great Northern Railway Company (1850) 15 Q.B. 486 : 19 L.J. Q.B. 529 : 14 Jur. 875; Queen v. Cambrian Railway Co. (1869) L.R. 4 Q.B. 320 : (1871) L.R. 6 Q.B. 422; Hopkins v. Great Northern Railway Co. (1877) 2 Q.B.D. 224 : 46 L.J. Q.B. 265 : 36 L.T. 898]. in other words, as stated in Hammersmith v. Brand (1369) L.R. 4 H.L. 171, in so far as loss of the income of the ferry results from the user and not the execution of the works of the Railway, no compensation can be claimed. In the case before us,, therefore, the Court ought to determine how much of the annual loss is traceable to the acquisition of lands for construction of the Railway, and how much can be attributed to the user of the Railway by people who would otherwise have been obliged to have recourse to the ferry. The learned Vakils on both sides have suggested that we should, as a jury, determine the proportion. The Court below has taken the ratio as one of equality. In our opinion there is no reason to justify a departure from this conclusion. We must accordingly overrule the first contention of the appellant, and hold that the compensation ought to be assessed upon one-half of the annual loss which may be assumed as the loss of income of the owner of the ferry, due to the acquisition of the lands for the construction of the Railway bridge.

3. In so far as the second contention of the , appellant is concerned, we think that it ought to prevail. The Collector assessed the compensation at fifteen times one-half share of the annual loss. The Subordinate Judge has reduced it to ten times that sum. We think that the Collector was right, upon the analogy of the principle recognised in Section 17 of the Bengal Ferries Act, 1885, which provides that when a private ferry is taken possession of by the Government, the owner thereof may be awarded compensation up-to a limit of fifteen times the average net profits of the previous five yeas. As was explained in our previous judgment, capitalization of profits is not necessarily a conclusive test of present value, but it is a useful element to be taken into consideration. In other words, the probable future earning involves an element of uncertainty which cannot be overlooked, because franchises of the description before us, are neither exclusive nor perpetual and competition is possible, if not, as the event has shown, more than probable. Consequently it would not be right to capitalize the profits at the number of years' purchase, corresponding to the lowest rate of interest in the market. At the same time a moderate number of years purchase may be accepted as a fair test of the value of the franchise, and we think that in this matter regard may well be had to the statutory provisions on the subject. The second point, therefore, must be decided in favour of the appellant, and the compensation assessed at fifteen times the annual loss attributable to the acquisition of land for the construction of the Railway works. This also negatives the second contention of the respondent that the number of years' purchase should be taken as half of fifteen. This is obviously fallacious, because although half the annual loss is taken as the basis for damages, it does not follow by any means that the aggregate loss should again be determined upon one-half of the number of years' purchase, which would otherwise be allowed.

4. In so far as the third contention of the appellant is concerned, it may be taken along with the third contention of the respondent. The learned Subordinate Judge has allowed interest upon the compensation awarded from the date of the decree. This is clearly wrong. The appellant claims interest from the date of acquisition of the land on both banks of the river, that is, from January 1898. The respondent contends that, as there was no disturbance of the ferry till the beginning of 1901, interest ought not to be allowed for any antecedent period. It is admitted, in fact, on behalf of the plaintiff that the ferry was worked on a profitable basis during the years lb99 and 1900. Under such circumstances, we hold that interest ought to be allowed upon whatever sum is awarded as compensation, from the 1st January 1901.

5. In so far as the fourth ground urged or> behalf of the appellant is concerned, we think there is considerable force in it. The learned Government Pleader has contended that the plaintiff is not entitled to any statutory allowance, under Section 23 of the Land Acquisition Act, because such statutory allowance is decreed only upon the market-value of land, and the damages assessed on account of disturbance to a ferry cannot properly be regarded as the market-value of land. It is not necessary for us to consider the matter from this point of view, because the learned Vakil for the appellant concedes that he cannot claim additional compensation as a matter of right, under Section 23 of the Land Acquisition Act, but he claims it rather because he has been deprived of his property by arbitrary proceedings not taken in accordance with the Act, and he lays stress upon the fact that he has not succeeded in obtaining any decree for compensation at all, till' after a protracted and contested litigation, at every stage of which his title to compensation, has been strenuously denied. In our opinion, there is some force in this contention, and we consider that allowance ought to be made in his favour under the exceptional circumstances of the present case. Even if it is assumed that, as indicated by the case of the Collector of Dinajpore v. Girja Nath Roy 25 C. 346, compensation for loss of ferry, when it is awarded under the Land Acquisition Act (which is not the case here), is not the market-value of land, but is an amount awarded under Clause (4) of Sub-section (1) of Section 23. We are of opinion that, in the case before us, the plaintiff may legitimately claim some addition to the compensation assessed on the basis of the loss of annual profits. We assess such additional compensation at one-eighth of the original sum.

6. In so far as the fifth ground taken on behalf of the appellant is concerned, it is clear that the directions of this Court given in our previous judgment as to the costs, of the litigation, have been completely overlooked. On that occasion, we directed that the costs of the appeal as well as the costs of the Court below should abide the result. This did not mean that the costs would be borne by the parties, in proportion to their success-and defeat. If the plaintiff failed in his, claim after remand, no doubt, the costs, would have to be paid by him. If, on the other hand, the plaintiff entirely succeeded, the defendant would have to pay the costs But if the plaintiff succeeded in establishing his claim,--although he might not recover the entire amount demanded by him, some directions would have to be given by the Court as to the distribution of the costs. There is no controversy now that the claim of the plaintiff, which has been resisted by the defendant as wholly unfounded, was based on solid grounds, though the amount of compensation he claimed was excessive. Under these circumstances, it must be held that the appeal to this Court on the previous occasion was perfectly legitimate, and the costs which are incurred, irrespective of the amount of damages claimed, ought to be paid by the defendant to the plaintiff. This includes the costs of the paperbook and the minimum hearing fee in an appeal from original decree. These sums amount to Rs. 992-7-4. In so far as the costs of the lower Court are concerned, no exception can be justly taken to the order made. In so far as the costs of this appeal are concerned, they must be borne by the parties in proportion to their success and failure here. There remains only one other point to be considered, namely, the first point urged on behalf of the respondent. The Subordinate Judge has taken as the basis of his calculation, the average of the profits during ten years from 1890 to 1900. This includes two years, 1899 and 1900, which followed the acquisition. This, in our opinion, is not right. The method which was adopted by the Collector, namely, to take the average profits during the eight years antecedent to the acquisition, was obviously just. At the same time, we are unable to accept the contention of the respondent that the average profits during these eight years should be taken as Rs. 1,410 and not Rs. 1,450. This latter sum was undoubtedly paid to the plaintiff by the lessee of the ferry, though the latter appears to have realized on an average-'only Rs. 1,410. It is to be borne in mind, however, that he was himself an indigo planter, and had considerable business. The .receipts did not include the sums which would have been paid by him, if the ferry had been owned by a stranger. The loss of profits, therefore, must be calculated on the basis of an annual income of Rs. 1,450 at the time disturbance was caused to the ferry.

7. On these principles, the compensation, pay-'e to the plaintiff by the defendant is easily calculated. The average annual profit, before disturbance was caused to the ferry, was Rs. 1,450. From this has to be deducted an annual expense of Rs. 50, which leaves a balance of Rs. 1,400. The average reduced income, after the acquisition is Rs. 600. From this has to be deducted for expenses Rs. 50, which leaves a balance Rs. 550. The annual loss, therefore, comes to Rs. 850 Only one-half of this sum can be attributed to disturbance caused by the acquisition of land for construction of the Railway and the bridge. The loss, therefore, to be taken into account, amounts to Rs. 425. If we capitalize this at fifteen years' income, the compensation amounts to Rs. 6,375. If we add one-eighth of this sum for illegal disturbance, the total amounts to Rs. 7,171-14-0. The plaintiff is entitled to a decree for this sum with interest thereon at six per cent, per annum, from the 1st January 1901 to the date of, realization. The plaintiff is also entitled to Rs. 992-4-7 as costs of this Court at the previous hearing. He is further entitled to Rs. 714-12-3, as costs of the lower Court, inclusive of the costs incurred before and after the remand. The C03fcs of this appeal must be borne by the parties in proportion to their success. The costs of all the Courts will carry interest at 6 per cent, per annum from the date of this judgment till the date of realization.


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