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PETITIONER: COLLECTOR OF VARANASI

       Vs.

RESPONDENT: GAURI SHANKAR MISRA & ORS.

DATE OF JUDGMENT: 29/08/1967

BENCH: HEGDE, K.S. BENCH: HEGDE, K.S. WANCHOO, K.N. (CJ) BACHAWAT, R.S. RAMASWAMI, V. MITTER, G.K.

CITATION:  1968 AIR  384            1968 SCR  (1) 372  CITATOR INFO :  F          1977 SC 638  (8)

ACT: Constitution  of  India, Art. 136--High  Court--Whether  can function   in   a   capacity   other   than   that   of    a ’Court--therefore whether special leave can be granted. Defence  of  India Act, 1939, s.  19(1)(f)--Appeal  to  High Court  against  award  of  arbitrator--Whether  High   Court persona  designata  and  also  functions  as  arbitrator  or ’court’.

HEADNOTE: The  Government  acquired about 500 acres of land  from  the respondents  under  the Defence of India Act,  1939,  and  a settlement was reached in respect of the compensation to  be paid  for  all  except  about 48 acres  of  the  land.   The question of the compensation payable for the remaining  land was referred to arbitration under s. 19(1)(b) of the Act  to be determined in accordance with s. 19(1)(e) which  entitled the  respondents to compensation at the market value of  the land.  The arbitrator considered various sale deeds produced before him but rejected these and fixed the compensation  by capitalising  the  annual  profits from the  lands.   In  an appeal  against  his  award  by  the  respondents  under  s. 19(1)(f)  of  the  Act, the High  Court  differed  from  the Arbitrator  and enhanced the compensation payable by  fixing it  on  the  basis  of a  sale  deed  exhibited  before  the arbitrator. In appeal to the Supreme Court by special leave given to the appellant  Collector,  it  was contended on  behalf  of  the respondents  by  way  of a  preliminary  objection  that  no special  leave  could have been granted by the  Court  under Art. 136 as the judgment appealed against %-,as neither that of  a court nor of a tribunal; the High Court  while  acting under s. 19(1)(f) was a persona designata and not a court or a  tribunal; proceedings before the arbitrator appointed  by the  Central Government under s. 19(1)(b)  were  arbitration proceedings leading to an award made by him, when the matter was  taken  up  in  appeal to the  High  Court,  the  appeal

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proceedings did not cease to be arbitration proceedings  and their   original  character continued so that  the  decision made by the High Court should also be considered as an award and  the  High Court considered as having functioned  as  an arbitrator. Held:  (i)  While acting under s. 19(1)(f), the  High  Court functions  as  a  ’court’ and not as  a  designated  person. [378E] Hanskumar Kishanchand v. Union of India, [1959] S.C.R. 1177, disapproved. The  High  Court  of a State is at the  apex  of  a  State’s judicial  system.   It  is  a court  of  record  and  it  is difficult to think of a High Court as anything other than  a ’court’.   No judicial power was ever entrusted to the  High Court  except  as  a  ’court’ and  whenever  it  decides  or determines  any dispute that comes before it, it  invariably does  so  as  a  ’court’.   That  apart,  when  s.  19(1)(f) specifically  says  that an appeal against the order  of  an arbitrator   lies   to  the  High  Court,   there   was   no justification. for thinking that the legislature 373 said something which it did not mean.  Furthermore,  neither the  Act,  nor  the rules framed  thereunder  prescribe  any special  procedure  for  the disposal of  appeals  under  s. 19(1)(f)  and  appeals  under  that  provision  have  to  be disposed of in the same manner as other appeals to the  High Court according to its own rules of practice and  procedure. [375F-G. 377B-C] Case law referred to. (ii)  On  the  facts,  the  High  Court  was  not  right  in determining the compensation payable on the basis of the one sale deed as this could not be considered a  contemporaneous transaction;  the decision of the High Court must  therefore be  set  aside  and  the case remitted  to  that  court  for disposal  according  to  law after  giving  the  parties  an opportunity to adduce fresh evidence. [380D-E]

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1040 of 1965. Appeal  by special leave from the judgment and  order  dated November  11,  1963  of the Allahabad High  Court  in  First Appeal No. 60 of 1960. C.   B. Agarwala and 0. P. Rana, for the appellant. J.   P. Goyal and Raghunath Singh, for the respondents. The Judgment of the Court was delivered by Hegde,  J.  This  appeal by the  Collector  of  Varanasi  by special  leave  under  Art.  136  of  the  Constitution,  is directed  against the decision dated 11-11-1963 of the  High Court of Judicature at Allahabad, in First Appeal No. 60  of 1960  on  its file, which in its turn arose from  the  award made  by  Shri  S. B. Malik, District  Judge,  Varanasi,  in certain land acquisition proceedings under cl. (b) of sub-s. (1)  of  s  . 19 of the Defence of India Act,  1939  (to  be hereinafter referred to as the Act). Before  considering the contentions urged on behalf  of  the parties, it is necessary to set out the salient facts.   For the  purpose  of constructing the  Babatpur  aerodrome  near Varanasi, the Government acquired in the year 1946 about 500 acres of land.  Compensation in respect of most of the lands acquired  was settled by agreement.  But in respect  of  the lands  with  which we are concerned in  this  appeal,  48.01 acres  in extent, no settlement was arrived at.   Therefore, the  question of compensation in respect of those lands  was

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referred  to the arbitration of Shri S. B. Malik under  cl. (b)  of  sub-s.  (1) of s. 19 of the Act.   In  view  of  s. 19(1)(e), the claimants were entitled to get as compensation the  market  value  of  those  lands  as  on  the  date   of acquisition.   Before  the arbitrator as well  as  the  High Court,  the parties were agreed that on the material on  the record, the market value in question had to be fixed  either on the basis of the sale deeds produced by the claimants  or by  capitalising  the  annual profits  accruing  from  those lands.   The  arbitrator rejected the  sale  deeds  produced before  him.   He  adopted the method  of  capitalising  the annual  profits.  On the question of annual profits also  he rejected  the evidence adduced on behalf of  the  claimants. He determined the same on the basis of the revenue 374 records  for Fasli 1355 read with the evidence of  the  Naib Tehsildar,  Jawal Prasad.  Aggrieved by the decision of  the arbitrator,  the  claimants went up in appeal  to  the  High Court  of  Allahabad  under s.  19(1)(f).   The  High  Court differed from the arbitrator as to the value to be  attached to  the sale deeds produced.  It opined that the sale  deeds produced  were  reliable  and that  they  evidenced  genuine transactions.  The High Court fixed the compensation payable on  the basis of Exh.  A 42 dated 3-4-1951.  The  arbitrator had  fixed  the compensation at Rs. 26,454-12-0.   The  High Court  enhanced the same to Rs. 90,446-3-0.  It  is  against that decision that the Collector of Varanasi has filed  this appeal  after obtaining special leave from this Court  under Art. 186. Shri  Goyal, learned counsel for the respondents has  raised the  preliminary objection that no special leave could  have been  granted by this Court under Art. 136 as  the  judgment appealed  against  was  neither that of a  court  nor  of  a tribunal.   According  to him, the High Court  while  acting under s. 19(1)(f) was a persona designata and not a court or a  tribunal.  His argument on this question proceeded  thus: Sec. 19(1)(b) of the Act empowers the Central Government  to appoint  as arbitrator a person qualified to be appointed  a judge  of  the  High Court; Shri  Malik  who  possessed  the required   qualifications  was  appointed  by  the   Central Government  to  act as an arbitrator; it is true  that  Shri Malik  was  District Judge of Varanasi at the  time  of  his appointment, but in law it was not necessary that the person appointed  should have been a District Judge, and much  less the  District Judge of any particular  District;  therefore, Shri Malik acted as a designated person and not as a  court; hence, the award given by him cannot be considered either as a judgment or as a decree or order; it was merely an  award; when  the matter was taken up in appeal to the  High  Court, the proceedings did not cease to be arbitration proceedings; its original character continued even before the High Court; therefore,  the decision made by the High Court should  also be  considered  as an award and further the  High  Court  in making that award should be considered as having  functioned as  an arbitrator.  In this case, it is not necessary to  go into the question whether the decision of the High Court  is a  decree, judgment or final order.  Even according to  Shri Goyal,  the decision of the High Court is a  ’determination’ as  contemplated  in  Art. 136.  That  position  he  had  to concede   in.  view  of  the  decision  of  this  Court   in Engineering  Mazdoor  Sabha and another v. The  Hind  Cycles Ltd.(1).  In support of his contention that the  High  Court while  acting  under s. 19 (1)(f) was not functioning  as  a court,  he  placed strong reliance on the decision  of  this Court  in Hanskumar Kishanchand v. Union of India(2).   That

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case dealt with two cross appeals arising from a decision of the Nagpur High Court under s. 19(1)(f).  Those appeals were brought on the strength of the certificates issued (1) [1963] Supp. 1 S.C.R. 625(2) [1959] S.C.R. 1177. 375 by the High Court on 25th August 1949 under ss. 109 and  110 of  the  Civil Procedure Code.  In those cases it  was  con- tended  that  the  appeals were  not  maintainable  for  two reasons viz. (a) the decision appealed against is neither  a decree  judgment  or  final order and (b)  the  decision  in question  was not that of a court.  This Court  upheld  both these contentions.  On the second ground taken,  Venkatarama Aiyar, J., who spoke for the Court, observed thus:               "Under  the law no appeal would have  lain  to               the High Court against the decision of such an               arbitrator.  Thus, the provision for appeal to               the High Court under s. 19 (1)(f) can only  be               construed   as  a  reference  to,  it  as   an               authority designated and not as a court." If the conclusion that the appeal under s. 19(1)(f) is  only a reference to an authority designated and not an appeal  to a  court is correct then there is no doubt that  this  Court could  not  have  granted  special  leave  under  Art.  136. Therefore  the real question is whether that  decision  lays down  the  law correctly when it stated that  a  High  Court while  acting  under  s. 19(1)(f) is not  functioning  as  a court. There was no dispute that the arbitrator appointed under  s. 19(1)(b) was not a court.  The fact that he was the District Judge,  Varanasi,  was merely a coincidence.  There  was  no need to appoint the District Judge of Varanasi or any  other District Judge as an arbitrator under that provision.   Sec. 19(1)(f)  provides  for an appeal against the order  of  the arbitrator.  The section reads :               "An appeal shall lie to the High Court against               an  award of an arbitrator excepting in  cases               where  the amount thereof does not  exceed  an               amount prescribed, in this behalf by rule made               by the Central Government." It  is not in dispute, that in the instant case, the  amount fixed  by the arbitrator exceeded the amount  prescribed  by the  rules and therefore the claimants had a right to go  up in appeal to the High Court.  We were informed that  neither the  Act  nor  the rules framed  thereunder,  prescribe  any special  procedure  for  the disposal of  appeals  under  s. 19(1)(f).  Appeals under that provision have to be  disposed of  just  in the same manner as other appeals  to  the  High Court.   Obviously  after the appeal had  reached  the  High Court  it  had  to be determined according to  the  rule  of practice  and  procedure of that Court.  The  rule  is  well settled that when a statute directs that an appeal shall lie to  a  court already established, then that appeal  must  be regulated by the practice and procedure of that court.  This rule  was  stated  by Viscount Haldane  L.  C.  in  National Telephone Co., Ltd. v. Postmaster-General(1) thus:               "When  a question is stated to be referred  to               an  established Court without more, it, in  my               opinion, imports (1)  [1913] A.C. 546. 376               that  the ordinary incidents of the  procedure               of that Court are to attach, and also that any               general  right  of appeal  from  its  decision               likewise attaches." This  statement of the law was accepted as correct  by  this

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Court in National Sewing Thread Co., Ltd., v. James Chadwick and Bros. Ltd.(1). It may be noted that the appeal  provided in s. 19(1)(f) is an appeal to the High Court and not to any Judge of the High Court.  Broadly speaking, Court is a place where  justice  is judicially administered.   In  Associated Cement  Companies  Ltd.  v.  P.  N.  Sharma  and  another(2) Gajendragadkar, C.J., speaking for the majority observed:               "The expression ’court’ in the context denotes               a tribunal constituted by the State as a  part               of the ordinary hierarchy of courts which  are               invested  with the State’s  inherent  judicial               powers.    A   sovereign   State    discharges               legislative, executive and judicial  functions               and   can  legitimately  claim   corresponding               powers  which  are described  as  legislative,               executive  and  judicial  powers.   Under  our               Constitution,   the  judicial  functions   and               powers of the State are primarily conferred on               the   ordinary   courts   which   have    been               constituted  under  its  relevant  provisions.               The  Constitution  recognises a  hierarchy  of               courts and to their adjudication are  normally               entrusted  all disputes between  citizens  and               citizens  as well as between the citizens  and               the  State.  These courts can be described  as               ordinary courts of civil judicature.  They are               governed   by   their  prescribed   rules               of  procedure and they deal with questions  of               fact and law raised before them by adopting  a               process   which  is  described   as   judicial               process.    The  powers  which  these   courts               exercise., are judicial powers, the  functions               they discharge are judicial functions and  the               decisions   they  reach  and   pronounce   are               judicial decisions." The  hierarchy of courts in this country is an organ of  the State   through  which  its  judicial  power  is   primarily exercised. The fact that the arbitrator appointed under s. 19(1)(b)  is either a designated person or a tribunal-as to whether he is a   person   designated  or  a  tribunal   we   express   no opinion--does  not in any way bear on the  question  whether the ’High Court’ referred to under s. 19(1)(f) is a court or not.   Our statutes are full of instances where  appeals  or revisions to courts are provided as against the decisions of designated   persons  and  tribunals.   See   for   example, Advocates   Act,  Trade  Marks  Act.   Reference   in   this connection may usefully be made to the decisions in National (1) [1953] S.C.R. 1028,         (2) [1965] 2 S.C.R. 366, 377 Sewing Thread Co., Ltd. v. James Chadwick and Bros., Ltd.(1) and the Secretary of State for India in Council v. Chelikani Rama Rao and others(2) Prima  facie  it appears incongruous to hold that  the  High Court is not a ’court’.  The High Court of a State is at the apex  of  the  State’s judicial system.  It is  a  court  of record.   It  is  difficult  to think of  a  High  Court  as anything  other  than  a ’court’.  We  are  unaware  of  any judicial  power  having  been entrusted to  the  High  Court except as a ’court’.  Whenever it decides or determines  any dispute  that  comes before it, it invariably does so  as  a ’court’.   That  apart, when s. 19(1)(f)  specifically  says that  an appeal against the order of an arbitrator  lies  to the  High Court, we see no justification to think  that  the legislature said something which it did not mean.

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We may now turn our attention to the decision of this  Court in  Hanskumar Kishanchand v. Union of India(3) on which,  as mentioned  earlier,  Shri  Goyal  placed  a  great  deal  of reliance  in  support  of his  preliminary  objection.   The principal question that arose for decision in that case  was whether  the  decision rendered by the High Court  under  S. 19(1)(f)  was a judgment, decree or final order  within  the meaning of those words found in S. 109 of the Code of  Civil Procedure.   The  Court  accepted  the  contention  of   the Solicitor General appearing for the respondent, the Union of India,  that it was not a judgment, decree or  final  order, and that being so, no certificate under ss. 109 and II 0  of the  Code of Civil Procedure to appeal to the Federal  Court could have been given by the High Court.  In that case  this Court was not called upon to consider the scope of Art. 136. Therefore,  it  did  not go into the  question  whether  the decision   appealed  against  could  be  considered   as   a determination  falling  within the scope of  Art.  136.   In arriving at the conclusion that the decision in question  is not a judgment, decree or final order, this Court relied  on the  decisions  in Rangoon Botatoung Co. v.  The  Collector, Rangoon(4),  Special  Officer, Salsette  Building  Sites  v. Dossabhai  Bazonji Motiwala(5). Manavikraman  Tirumalpad  v. Collector of Nilgris(6), and Secretary of State for India in Council   v.   Hindustan  Co-operative   Insurance   Society Limited(7).   The effect of those decisions is summed up  in that very judgment at pp. 1186 and 1187, and this is how  it is put:               "The law as laid down in the above authorities               may  thus  be  summed  up:  It  is  not  every               decision  given by a Court that could be  said               to  be a judgment, decree or order within  the               provisions  of the Code of Civil Procedure  or               the  Letters Patent.  Whether it is so or  not               will depend on whether the proceeding in which               it was given came before (1) [1966] S.C.R. 1028.                  (2) 43 I.A. 192 (3) [1959] S.C.R. 1177.                   (4) 39 I.A. 197 (5) 17 C.W.N. 421.  (6) I.L.R. 41 Mad. 943. (7)  58 IA. 259. 378               the Court in its normal civil jurisdiction, or               dehors  it as a persona designata.  Where  the               dispute   is   referred  to  the   Court   for               determination  by  way of  arbitration  as  in               Rangoon   Botatoung  Company   v.   Collector,               Rangoon (39 I.A 197), or where it comes by way               of appeal against what is statedly an award as               in The Special Officer Salsette Building Sites               v.  Dossabhai  Bezonji  (ILR  37  Bom.   506),               Manavikraman  Tirumalpad v. The  Collector  of               the  Nilgris  (ILR  41  Mad.  943),  and   the               Secretary  of  State for India in  Council  v.               Hindustan   Co-operative   Insurance   Society               Limited (58 IA 250), then the decision is  not               a  judgment, decree or order under either  the               Code   of  Civil  Procedure  or  the   Letters               Patent." The  decisions relied on by this Court merely lay  down  the proposition that the decision given by the High Court in  an appeal  against  an award is neither a decree,  judgment  or final order.  None of the aforementioned decisions lays down the  ’proposition that the High Court while  exercising  its appellate  power  did  not  function  as  a  ’court’.    The observation in this Court’s judgment that the provision  for

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appeal  to  the  High Court under s. 19(1)(f)  can  only  be construed as reference to it as an authority designated  and not  as  a court, does not receive any  support  from  those decisions.   Nor  do  we  find  any  sound  basis  for  that conclusion.  With respect to the learned Judges who  decided that case, we are unable to agree with that conclusion.   In our judgment, while acting under s. 19(1)(f), the High Court functions as a ’court’ and not as a designated person.   Our conclusion in this regard receives support from the decision of the Judicial Committee in Secretary of State for India in Council  v.  Chelikani Rama Rao(1) and  others  referred  to earlier.  Dealing with the ratio of its decision in  Rangoon Botatoung Co. case(2), this is what Lord Shaw of Dunfermline observed (at p. 198 of the report):               "It  was  urged  that  the  case  of   Rangoon               Botatoung  Co.  v. The  Collector,  Rangoon(2)               enounced a principle which formed a  precedent               for excluding all appeal from the decision  of               the  District Court in such cases as the  pre-               sent.  Their Lordships do not think that  that               is  so.  In the Rangoon Case a  certain  award               had been made by the Collector under the  Land               Acquisition  Act.  This award was affirmed  by               the  Court,  which  under  the  Act  meant  "a               principal    civil    Court    of     original               jurisdiction."  Two judges sat as ’the  Court’               and also as the High Court to which the appeal               is  given from the award of ’the Court’.   The               proceedings  were however, from  beginning  to               end   ostensibly  and   actually   arbitration               proceedings.   In  view of the nature  of  the               question to be tried and the pro- (1) 43 I.A. 192. (2) 39 I.A. 197. 379               visions of the particular statute, it was held               that  there  was no right ’to carry  an  award               made  in  an arbitration as to  the  value  of               land’ further than to the Courts  specifically               set up by the statute for the determination of               that value." We  have  already come to the conclusion that  the  decision rendered   by  the  High  Court  under  s.  19(1)(f)  is   a ’determination’.   Hence,  it was within the  competence  of this Court to grant special leave under Art. 136.  But  then it was urged on behalf of the respondents that in view of r. 2,  0.13  of  the Rules of this Court, as it  stood  at  the relevant  point ’of time, this Court could not have  granted special leave as the appellant had not applied for necessary certificate under Art. 133 of the Constitution.  In  support of  this contention, reliance was placed on the decision  of this  Court in Management of the Hindustan  Commercial  Bank Ltd.,  Kanpur  v.   Bhagwan  Dass(1).   Under  Art.  133,  a certificate  can be asked for filing an appeal  against  the judgment,  decree or final order of a High Court.   As  seen earlier, this Court ruled in Hanskumar Kishanchand v.  Union of  India(2)  that the decision rendered by the  High  Court under s. 19(1)(f) is not a decree, judgment or final  order. Hence,  the provisions of Art. 133 are not attracted to  the present case.  Consequently, this case is taken outside  the scope of the aforementioned r. 2 of Order 13.  As a  measure of  abundant  caution, the appellant has filed CMP  2325  of 1967,  praying that this Court may be pleased to excuse  him from compliance with the requirements of 0.13, r. 2. In view of  the decision of this Court in Hanskumar  Kishanchand  v.

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Union of India(2), no useful purpose would have been served’ by  the  appellant’s applying for a certificate  under  Art. 133.  Hence, even if we had come to the conclusion that  the case  falls within the scope of 0. 1 3, r. 2, we  would  not have  had  any hesitation in exempting  the  appellant  from compliance with the requirement of that rule. This  takes us to the merits of the case.  The grievance  of the  appellant  is  that  the High Court  erred  in  law  in awarding  compensation  on the basis of Exh. 42.   The  sale evidenced by that deed was effected in the year 1951, nearly five  years  after  the  acquisitions  with  which  we   are concerned in this case were effected.  The sale in  question cannot be considered as a contemporaneous transaction.   The arbitrator  has  found that after the close  of  the  second world war, the price of landed property had gone up steeply. This finding does not appear to have been challenged  before the  High Court.  Further, under the deed in  question,  the land  sold  was .26 acres in extent.  The price  fetched  by such  a tiny bit of land is of no assistance in  determining the  value  of  the  lands  acquired.   On  behalf  of   the respondents, we were asked to determine the compensation  of the  lands acquired on the basis of sale deed Exh. 35  which relates to a sale that took place on 10-6-1947 (1) [1965] 2 S.C.R. 265. (2) [1959] S.C.R. 1177. 380 which  according to the respondents can be considered  as  a contemporaneous   sale.   We  are  unable  to  accept   this contention.    Exh.   35  relates  to  the  sale   of   land measuring  .28 acres.  The vendee under that deed is one  of the claimants.  There is no evidence as to the nature of the land sold under that deed.  Under these circumstances,  very little value can be attached to that document.  We are  also of the opinion that none of the sale deeds produced in  this case   can   afford  any  assistance  in   determining   the compensation  payable  to  the  respondents.   They  do  not evidence  sales of lands similar to the acquired  lands,  at about  the time of the acquisition.  The High Court did  not address itself to the oral evidence adduced in this case for finding   out  the  annual  profits  for  the   purpose   of capitalisation.   It  rejected  the evidence  of  the  Naib- Tehsildar.  For reasons not disclosed. the village papers of 1354 fasli were not produced by the appellant.  On the other hand,  the village papers of 1355 fasli were  produced.   In the first place, those records do not show the rent  payable in  the  year  in which the acquisitions  took  place.   The acquisitions  in question were made in fasli 1354.  For  the reasons  mentioned in its judgment, the High Court felt  un- able to place reliance on the village papers of fasli  1355. We  do  not think that this Court should scan  the  evidence afresh for determining the just compensation payable. to the respondents.  That question has to be gone into by the  fact finding court.  All that we need say is that the High  Court was not right in determining the compensation payable to the respondents  on  the basis of Exh. 42.  Hence  its  decision cannot be sustained. For  the reasons mentioned above, we allow this  appeal  and set aside the decision of the High Court and remit the  case back  to that Court for disposal according to  law.   Before deciding  the  case afresh the High Court  will  permit  the parties,  to adduce additional evidence on the  question  of compensation; in particular, they will be allowed to produce and prove contemporaneous sale deeds and the revenue records relating to fasli 1354.  Costs of this appeal shall be costs in the cause.

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R.K.P.S.                    Appeal allowed. 381