http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 4  

PETITIONER: M/S.  SURAJMULL NAGARMULL

       Vs.

RESPONDENT: STATE OF WEST BENGAL

DATE OF JUDGMENT: 17/04/1962

BENCH: SHAH, J.C. BENCH: SHAH, J.C. DAS, S.K. HIDAYATULLAH, M.

CITATION:  1963 AIR  393            1963 SCR  (2) 163

ACT: Arbitration--Arbitrator appointed under the Defence of India Act,  if a court--Right to appeal against the award, if  and when, exercisable--Defence of India Act, 1939 (35 of  1939), ss.  19(1),  19 (1)(f) and (g), 19(3)(c)--Defence  of  India Rules,  1939, rr. 75A , 19, second provisio.

HEADNOTE: The  appellants were tenants of three warehouses and  vacant land,  which were used for storage of jute belonging to  the appellants.  By an order issued under r. 75A of Rules framed under  the Defence of India Act, 1939, the  warehouses  were requisitioned   by  the  Government.   An   arbitrator   was appointed under s. 19(1) (b) of the Defence of India Act  to fix  the amount of compensation payable to the  owner.   The claim of the appellants to compensation for Ion of  earning, and  for ,loss of business" was rejected by the  arbitrator. An appeal filed by the appellants against the arbitrator was dismissed   by   the  High  Court  at   Calcutta,   as   not maintainable. Held,  that  the  arbitrator appointed under s.  19  of  the Defence  of  India  Act is not a court, nor  is  a  tribunal subject to the appellate jurisdiction of the High Court.  By the  Act  a  right  to  appeal  against  the  award  of  the arbitrator is 164 conferred,  but the exercise of that right is restricted  in the manner prescribed by the rules framed under the Act.  By the  second proviso to r. 19 an appeal does not lie  against an award of the arbitrator where the amount of  compensation awarded  does  not exceed Rs. 5000 An award  dismissing  the claim  in  its entirety is one in which the  amount  awarded does not exceed Rs. 5000/-and therefore an appeal lay to the High Court.

JUDGMENT: CIVIL APPELLATE JURISDICTION : Civil Appeal No. 403 of 1959. Appeal  by special leave from the judgment and  order  dated June  27,  1955, of the Calcutta High Court in  Appeal  from

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 4  

Original Decree No. 28 1948. A.   V.  Viswanatha  Sastri and B. P.  Maheshwari,  for  the appellant. B.   Sen,  P.  K.  Chatterjee  and  P.  K.  Bose,  for   the respondent. 1962.  April 17.  The Judgment of the Court was delivered by SHAH, J.-Messrs. Surajmull Nagarmull-who will hereinafter be referred  to  as  the  apeellants  were  tenants  of   three warehouses  and  vacant land  appurtenant  there-topopularly known as the Shamnagar Jute Godown--belonging to Sri Hanuman Seva  Trust.  The warehouses were used for storage  of  jute belonging  to the appellants.  By an order dated August  17, 1943  and  issued  under Rule 75A of the  Defence  of  India Rules,   1939,   the  warehouses  were   requisitioned   and possession thereof was taken on September 21, 1943.  As  the amount   of  compensation  payable  to  the  owner  of   the warehouses could not be fixed by agreement an Arbitrator was appointed  under  s. 19(1)(b) of the Defence of  India  Act, 1939.  Before the Arbitrator, Sri Hanuman Seva Trust claimed compensation  as  owners of the warehouses.   The  appellant claimed  compensation  for loss of  earnings,  ",’damage  to business" and cost                             165 of   removal  of  18,000  maunds  of  jute  and  some   iron implements,  which the appellants claimed had to be  removed in consequence of the order of requisition.  The  appellants estimated the compensation at Rs. one lakh.  The  Arbitrator by  his  order  dated December 13, 1947  observed  that  the appellants  had failed to prove any actual loss of  business in consequence of the requisition, and rejected the claim of the appellants. Against  the  order passed by the Arbitrator an  appeal  was preferred to the High Court of Judicature at Calcutta.   The appellants  valued  the  claim at Rs.  1,50,000/-.   At  the hearing  of the appeal, the State of West  Bengal  contended that  the  appeal  was  not  maintainable  in  view  of  the provisions  of  s. 19(1)(f) and (g) and s. 19(3)(c)  of  the Defence  of  India Act and the 2nd proviso to r.  19  framed under  the Defence of India Act.  The High Court upheld  the contention raised by the State of West Bengal and  dismissed the appeal.  With special leave the appellants have appealed to this Court. Under  cl. (1) of s. 19 of the Defence of India Act,  35  of 1939, it is provided, in so far as it is material :               "Where  under section 19A or 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 :-               x             x              x               x               (f)   An  appeal shall lie to the  High  Court               against  an award of the Arbitrator except  in               cases where the amount thereof does not exceed               an amount prescribed in this               166               behalf by rule made by the Central Government.               (g)   Save as provided in this section and  in               any rules made thereunder, nothing in any  law               for  the  time being in force shall  apply  to               arbitrations under this section."               Sub-section (3), in so far as it is  material,               provides :-

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 4  

             "(3)  In particular and without any  prejudice               to  the  generality of foregoing  power,  such               rules may prescribe :-               x               x              x               (c)   the  maximum amount of an award  against               which no appeal shall lie."               By  notification dated March 22,  1945,  Rules               were   framed   under  s.   19   relating   to               arbitration  for settlement  of  compensation.               Rule 19 of the Rules provided :               "  19.   Any appeal against the award  of  the               Arbitrator shall be presented within six weeks               from the date of receipt by the Collector  the               party  by whom the appeal is preferred of  the               copy of the award sent under Rule 17 :               Provided  further  that no  appeal  shall  lie               against an award made under these Rules  where               the  amount of compensation awarded  does  not               exceed  Rs.  5,000  in  lump  or  Rs  250  per               mensem." The Arbitrator appointed under A. 19 of the Defence of India Act  is not a court or a tribunal subject to  the  Appellate jurisdiction of the High Court.  By the Defence of the India Act a right to appeal against the award of the Arbitrator is conferred,  but  that  right is  restricted  in  the  manner prescribed                             167 the rules.  It is provided by the second proviso to Rule  19 that  an  appeal shall not lie against an  award  where  the amount of compensation does not exceed Rs. 5000/-. The  claim of the appellant was rejected by  the  Arbitrator and   they   were-  not  awarded  any   compensation.    Mr. Vishwanatha  Sastri appearing on behalf of  the  appellants, contends  that by el. (f) .of... s. 19 (1)  the  Legislature provided  a  right  of appeal against  all  awards  and  has imposed  a restriction only in those cases were some  amount is  awarded  but  the amount so awarded  is  less  then  Rs. 5,000/-.  Counsel submits that the restriction limiting  the right  of appeal must be strictly construed.  He  says  that where  for any reason no compensation at all is awarded  the bar contained in el. (f) of s. 19(1) and the second  proviso to  Rule 19 would not apply.  In our judgment, there  is  no force  in  that  contention.  An appeal  is  a  creature  of statute.   The Arbitrator not being a court  subordinate  to the High Court, an appeal would lie only if it is  expressly so  provided.  The Legislature has provided that  where  the amount  of compensation awarded does not exceed Rs.  5,000/- no  appeal shall lie against the award.  The rule  does  not contemplate  that  the  bar to the  maintainability  of  the appeal will be effective only if some amount is awarded  but the  compensation go awarded is less than Rs.  5,000/-.   If the  Arbitrator  rejects  the claim  and  refuses  to  award anything  the case would, in our judgment, fall  within  the 2nd  proviso  to Rule 19 as being one where  the  amount  of compensation awarded does not exceed Rs. 5,000/-. The 2nd proviso to Rule 19 enacts a rule of which a parallel is  difficult to find.  The right to appeal does not  depend upon  the  claim  made by the  claimant  either  before  the acquiring  authority  or the Arbitrator or before  the  High Court  : it depends solely upon the amount  of  compensation awarded 168 by  the  Arbitrator.  But, however, unusual  the  rule  may, appear  to be, it would not open to the Court to extend  the right  to  appeal and to enable a claimant whose  claim  has

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 4  

been  rejected completely to appeal to the High Court.   The right  to appeal is exercisable only if the  amount  awarded exceeds Re., 5,000/. In  that view of the case, the High Court was right  in  not entertaining the appeal.  The appeal fails and is dismissed. Appeal dismissed.