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PETITIONER: HARINARAYAN & ORS.

       Vs.

RESPONDENT: UNION OF INDIA & ANOTHER

DATE OF JUDGMENT23/08/1972

BENCH: RAY, A.N. BENCH: RAY, A.N. DUA, I.D.

CITATION:  1972 AIR 2464            1973 SCR  (1) 959  1972 SCC  (2) 874

ACT: Requisitioning  and  Acquisition of Immovable  Property  Act 1952. s. 8(3)-Compensation under-Requisition originally made under  Defence  of India  Act,  1939-Whether  requisitioning continued till acquisition made under 1952 Act.

HEADNOTE: The property in question was requisitioned by the Government of  India with effect from 17 July 1942 under Rule 75(A)  of the  Defence  of India Rules, 1939.  The Government  was  in possession  of the property until the Government decided  to acquire the property in 1953.  There was dispute between the Government and the appellants, in whose favour the  property was held under trust, in regard to the compensation payable. Under  s.  8(1)  of the Requisitioning  and  Acquisition  of Immovable  Property Act 1952 the Government  appointed  tile District   Judge,  Patna  as  the  sole   Arbitrator.    The Arbitrator  held that the provisions of s. 8(3) (b)  of  the 1952 Act under which the compensation payable was twice  the price which the requisitioned property would have fetched in tile  open  market  if  it had been  sold  on  the  date  of acquisition,  would apply for determination of  compensation payable for requisition of the property.  The High Court  in appeal  upheld  the award of the Arbitrator.  In  appeal  to this  Court  by  special leave the question  that  fell  for consideration   was  whether  the  compensation   would   be determined under clause (a) or (b) of sub-section (3) of  s. 8 of the 1952 Act.  Under cl. (a) the compensation shall  be the  price  which  the  requisitioned  property  would  have fetched  in the open market if it had remained in  the  same condition  as it was at the time of requisitioning and  been sold on the date of acquisition.  Another contention  raised by  the appellant was whether the Defence of India Act  1939 having  lapsed  in  February 1946 the  year  of  requisition should be 1952 when the 1952 Act came into effect. HELD  : (i) The requisitioning of the property  in  question under  the 1939 Act was continued by the Requisitioned  Land (Continuance of Powers) Ordinance 1946 and thereafter by the Requisitioned  Land  (Continuance of Powers) Act  1947,  the Requisitioning   and  Acquisition  of   Immovable   Property Ordinance  1952 and eventually by the 1952  Act.   Therefore the  contention that the year of requisition should be  1952

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when the 1952 Act came into effect, was unsound. [961F-962B] (ii) In  Parekh’s  case  this Court held that  the  mode  of determination  of compensation provided in section 8(3)  (b) of  the 1952 Act is arbitrary and bad.  The result  is  that the award which was made in the present case pursuant to the provisions  contained  in section 8(3)(b) of  the  1952  Act could  not be sustained.  The appellants would therefore  be entitled  to compensation in accordance with the  provisions contained  in section 8(3) (a) of the 1952 Act.  In 1968  by an amendment clause (b) of section 8(3) of the 1952 Act  was deleted  and section 8(a) was preserved a,; sub-sec. (3)  of s. 8. [962E-F] Union  of  India  v. Kamlabhai Harjiwandas  Parekh  &  Ors., [1968] 1 S.C.R. 463, applied. 960 (iii)     There was no substance in the contention on behalf of the Government that though s. 8(3)(b) was applied by  the Arbitrator  in substance the Arbitrator gave effect  to  the provisions  of clause (a) of section 8(3) of the  1952  Act, [962G] (iv) The  judgment of the High Court upholding the award  of the Arbitrator must therefore be set aside.  Compensation to the  appellants  must  be  given tinder s.  8  of  the  Act. [Directions given accordingly]. [962H]

JUDGMENT: CIVIL  APPELLATE  JURISDICTION.: Civil Appeal  No.  1025  of 1967. Appeal  by special leave from the judgment and decree  dated January 13, 1961 of the Patna High Court in Appeal from Ori- ginal Order No. 198 of 1956. Sarjoo Prasad, K. K. Sinha, Nand Kishore Prasad, S. K. Sinha and B. B. Sinha, for the appellants. S. P. Nayar, for respondents Nos.  1 and 2 The Judgment of the Court was delivered by Ray,  J. This appeal is by special leave from  the  judgment dated 13 January, 1961 of the High Court at Patna dismissing the  appeal filed by the appellants against the award  dated 25, May, 1956 of the Arbitrator under the Requisitioning and Acquisition  of  Immovable Property Act,  1952  (hereinafter referred to as the 1952 Act). The appellants’ mother purchased the property known as  "the Crove"  situate  on Station Road at Patna on  18  September, 1944.   The appellants’ mother thereafter made a trust  deed in the year 946 in respect of the property in favour of  the appellants. The  property was requisitioned by the, Government of  India with  effect,  from 17 July, 1942 under Rule 75 (A)  of  the Defence of India Rules.  The Government was in possession of the  property  until the Government decided to  acquire  the property  in  the year 1953.  The Central  Government  gave. notice  under  section  7 of the 1952 Act  to  acquire  the- property.  The property was acquired in 1953. The Government thereafter offered to the appellants a sum of 2.47,990/-  as  a valuation of the property  acquired.   The appellants claimed Rs. 18,00,000/- as the valuation. Under section 8(1) of the 1952 Act the Government  appointed the  District  Judge,  Patna  as  the  sole  Arbitrator   to determine   the  amount  of  compensation  payable  to   the appellants in respect of the property.  The Arbitrator  held that in view of the provisions contained in sections 23  and 24  of the 1952 Act the Provisions of section 8 (3)  (b)  of

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the  1952 Act would apply for determination of  compensation payable for acquisition of the property. 961 The  appellants  preferred  an appeal against award  of  the Arbitrator.    Section II of the 1952 Act provided for  such appeal. The  High Court held that section 8(3)(b) of the 1952 Act applied   and upheld the award of the Arbitrator. The  question  which falls for consideration in this  appeal is whether the compensation would be determined under clause (a) or (b) of subsections (3) of section 8 of the 1952  Act. The, relevant provisions are set out hereunder :- "8(3).  The compensation payable for the acquisition of  any property under section 7 shall be-- (3)  the  price which the requisitioned property would  have fetched  in the open market, if it had remained in the  same condition as it was at the time, of requisitioning and  been sold on the date of acquisition, or (b)  twice the price which the requisitioned property  would have  fetched in the open market if it had sold on the  date of acquisition. whichever is less*. Counsel  for the appellants raised these  contentions.   The Defence  of India Act, 1939 and, the Rules  made  thereunder ceased  to be effective on 14 February, 1946.  There was  no order of requisition under the 1952 Act.  For the purpose of determination of compensation of the property under the 1952 Act  the property could at best be held to be  requisitioned when the 1952 Act came into existence.  It was erroneous  to treat the property to be requisitioned under the 1952 Act. The  essence of the appellant’s contention is that the  year of  requisition should be 1952 when the 1952 Act  came  into effect.  This contention is unsound.  The Requisitioned Land (Continuance  of Powers) Ordinance, 1946 (Ordinance No.  XIX of 1946) provided in section 3 thereof that "notwithstanding the  expiration  of the Defence of India Act, 1939  and  the Rules   made  thereunder,  all  requisitioned  lands   shall continue  to be subject to requisition until the  expiry  of this  Ordinance  and the appropriate Government may  use  or deal  with  any  requisitioned land in such  manner  as  may appear to it to be expedient; provided that the  appropriate Government  may  at any time release  from  requisition  any requisitioned  land".   The  property continued  to  be  in; possession  of  the Government under orders  of  requisition dated  17  July, 1942.  The property was not  released  from requisition.  ’It is manifest from Ordinance No. XIX of 1946 that, the property which was requisitioned under the Defence of India Act continued to be subject to requisition in spite of the expiry of the Defence of India Act. 12-LI72Sup.CI/73 962 ’Thereafter  the Requisitioned Land (Continuance of  Powers) Act,  1947 came in place of Ordinance No. XIX of 1946.   The Requisitioning   and  Acquisition  of   Immovable   Property Ordinance  1952 came into effect on repeal of the 1947  Act. Finally,  the  Requisitioning and Acquisition  of  Immovable Property Act, 1952 came into existence in place of the  1952 Ordinance.   These  various  provisions  and  in  particular section 24(2) of the 1952 Act show that the property  became deemed  to be property requisitioned under section 3 of  the Act.   Just  as  Ordinance No. XIX  of  1946  continued  the acquisition of property, similarly the subsequent provisions under  the 1947 Act, the 1952 Ordinance and  eventually  the 1952 Act continued the requisition. The  power to acquire requisitioned property is to be  found

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in section 7 of the 1952 Act.  In view of the fact that  the property  was subject to requisition the Government  desired to acquire the property in the year 1953.  The property  was acquired  on  11 September, 1953 under the  1952  Act.   The appellants  became entitled to compensation under section  8 of  the  1952 Act.  The two clauses (a) and (b)  of  section 8(3)  of  the 1952 Act provide the alternative  methods  for compensation for acquisition of property. In  Union  of  India  v.  Kamlabhai  Harjiwandas  Parekh   & Others(") this Court held that the mode of determination  of compensation  prescribed in section 8 ( 3 ) (b) of the  1952 Act  is arbitratory and bad.  The result is that  the  award which  was  made  in  the  present  case  pursuant  to   the provisions  contained  in section 8(3)(b) of  the  1952  Act cannot  be  sustained.   The appellants  will  therefore  be entitled to compensation in accordance, with the  provisions contained in section 8(3) of the 1952 Act.  It may be stated that  in 1968 by an amendment clause (b) of section 8(3)  of the 1952 Act was deleted.  The 1968 Amendment has  preserved clause  (a)  of section 8 (3) of the 1952  Act  by  deleting clause (a) and numbering it as sub-section (3) of section 8. Counsel  on behalf of the Government contended  that  though section  8(3)(b)  of  the  1952  Act  was  applied  by   the Arbitrator,  in substance the Arbitrator gave effect to  the provisions  of clause (a) of section 8(3) of the 1952,  Act. The  award, does not say so.  On the contrary, the award  is expressly  made under the provisions of section  8(3)(b)  of the,  1952 Act.  The contention of the Government  therefore fails. For these reasons, the judgment of the High Court which  up- held  the  award  of  the  Arbitrator  is  set  aside.   The Government   will  have  to  act  in  accordance  with   the provisions   contained   in  section   8   for   determining compensation payable to the appellants. (1)  [1968] 1 S.C.R. 463. 963 If the parties Will Dot be able to reach an agreement as  to the  amount  of compensation the  Central  Government  shall appoint  an Arbitrator as contemplated in section 8  of  the 1952  Act  for determining the compensation payable  to  the appellants, The appellants will be entitled to costs of this appeal. G.C.                     Appeal Allowed. 964