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PETITIONER: HIRACHAND KOTHARI (DEAD) THROUGH LRS.

       Vs.

RESPONDENT: STATE OF RAJASTHAN & ANR.

DATE OF JUDGMENT09/05/1985

BENCH: SEN, A.P. (J) BENCH: SEN, A.P. (J) KHALID, V. (J)

CITATION:  1985 AIR  998            1985 SCR  Supl. (1) 644  1985 SCC  Supl.   17     1985 SCALE  (1)1131  CITATOR INFO :  F          1987 SC2177  (3)  R          1992 SC1356  (12)

ACT:      Indian Evidence  Act, 1872-Section  20 ’Information  or opinion or  matter in  dispute-Reference by party to a third person-Statements  made   by  third   person  receivable  as admission- ’Information’-What is.

HEADNOTE:      Pursuant to  a registered  deed of  exchange dated July 16,  1951   executed  between  the  parties,  the  appellant withdrew a  suit for  specific  performance  of  an  alleged contract  against  the  State  Government  under  which  the Government were  to resume  his plot  no. C/91 in ’C’ Scheme allotted to him by Improvement Trust, Jaipur for a sum of Rs 5000 in  1951 and  give in exchange another plot in the same scheme on  the same  terms. Under the terms of the deed, the State Government agreed to give in exchange plot no. O/17 in ’C’ Scheme  to the  appellant  on  resumption  of  his  plot bearing no C/91. In terms thereof, the appellant handed over possession of  his plot no. C/91 to the State Government but the State  Government on  their part did not give possession of the  exchanged plot  to  him.  Thereupon,  the  appellant brought a  suit for possession of the exchanged plot and for mesne profits  thereof. It  was revealed  in answer  to  the interrogatories served  by the  appellant that the exchanged plot had already been transferred by the State Government to Thakur Hari  Singh of  Achrol under  the orders  of the Home Minister, Government  of India dated January 8,1945 and that plot no.  C/91 which  belonged to  the appellant was then in possession of  the  Raj  Pramukh  Maharaja  of  Jaipur.  The appellant accordingly  impleaded Thakur  Harisingh of Achrol as a  party to  the suit  and  sought  permission  from  the Central  Government  under  s.  86  of  the  Code  of  Civil Procedure, 1908  to join  Maharaja Mansinghji of Jaipur as a party to  the suit. The objection raised by Thakur Harisingh of Achrol  as to the pecuniary jurisdiction of the Court was sustained and  the Civil  Judge, Jaipur  City  returned  the plaint for presentation to the proper Court.      It transpired during the pendency of the aforesaid suit that  the   Joint  Secretary,   Ministry  of  Home  Affairs,

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Government of  India had addressed a letter dated January 3, 1956 to  the then Chief Minister of Rajasthan conveying that it was  felt that  the appellant  had a  case and  should be given the  exchanged plot  and if  that was  not feasible he should be  restored back  in possession of plot no. C/91. In response to  the same, the Chief Minister addressed a letter dated February  3, 1956  to the Joint Secretary, Ministry of Home Affairs  conveying the  anxiety of the State Government to settle  the claim of the appellant and intimated that the appellant had agreed to the appointment of the Town Planning Officer, Jaipur  as the  assess or  who had  been  asked  to assess the 645 value of the land and submit his report, with a request that the  Government  of  India  should  defer  its  decision  in fairness to  the State  Government for a couple of months as it was  felt that  it might  be possible to settle the claim without any unreasonable delay. The Town Planning Officer by his  report  (Exh.  5)  dated  February  21,  1956  put  the valuation of  the disputed  land in  1951 admeasuring  5,000 square yards  at Rs. 7 per square yard at 35,000 and to this he added  Rs. 826.50p  as the  cost  of  construction  of  a boundary wall i.e. Rs. 35,826 50p. in all. [651 G-H, 652 A]      The State  Government declined to pay the compensation. The appellant  instituted the  present suit  for recovery of Rs. 47,741.50p. as damages i.e. Rs. 35,826.50p. to wards the value of disputed land and Rs. 11,915 as compensation.      The Civil  Judge held  that on  the  admission  of  the plaintiff as  P W.  6 and  his  witnesses  Secretary,  Urban Improvement Board.  P.W. 3  and the  Deputy Minister  it was clear that the Town Planning Officer was appointed merely to assess the  value of the disputed land and that it was never agreed that  whatever appraisement  or valuation that he may make would  be binding  on both  the parties,  nor  did  the Deputy Minister  make any  commitment that  such  assessment would be  binding on the State Government and that therefore the appraisement  or valuation  could not  be treated  as an ’admission of  liability’ under  section 20  of the Evidence Act, 1872  on the  part of  the  State  Government.  It  was further held  that the  correct value  on the  basis of  the notification issued  by the  Urban Improvement Board clearly showed that the part rate of the Municipal Committee was not applicable to  the disputed  land which was situated outside the walled city. The suit was decreed in part for Rs. 17,000 with damages by way of interest at 6%.      On appeal,  the High Court held, that the plaintiff had to prove that the State Government had agreed to be bound by the assessment  made by  the Town  Planning Officer,  before s.20 of  the Act, 1872 could be attracted and that there was no evidence  that the State Government had ever agreed to be bound by  the said  assessment and  that reliance  cannot be placed upon  the letter  dated February 3, 1956 of the Chief Minister, as  the Chief  Minister  was  not  examined  as  a witness. It  upheld the  finding of the Trial Court that the appraisement or  valuation made by the Town Planning Officer was not  binding on  the  State  Government,  and  that  the disputed land  was of  an inferior  type  and  affirmed  the judgment and decree of the Trial Court.      Allowing the Appeal, ^      HELD: 1. Admissions may operate as estoppel and they do so where  parties had  agreed to  abide by  them.  The  word ’information’ occurring  in s.  20 of the Evidence Act, 1872 is not  to be  understood in  the  sense  that  the  parties desired to  know something  which none of them had knowledge

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of. Where  there is  a dispute as regards a certain question and the  Court in need of information regarding the truth on that point,  any statement  which the  referee may  make  is nevertheless information’ within the purview of s. 20. S. 20 is the  second exception to the General rule laid down in s. 18. It deals with one class of 646 vicarious admissions,  that is,  admissions of persons other than the  party. Where  a party refers to a third person for some information  or an  opinion on a matter in dispute, the statements made  by  the  third  person  are  receivable  as admissions against  the person referring. The reason is that when a party refers to another person for a statement of his views, the  party approves  of his utterance in anticipation and adopts  that as  his own.  The principle  is the same as that of  reference to  arbitration. The  reference may be by express words or by conduct, but in any case there must be a clear admission  to refer  and such admissions are generally conclusive. [651 A-B; G-H; 652 A]      2. The  High Court  was not right in excluding from its consideration the  Chief Minister’s letter dated February 3, 1956 on  the ground of want of proof. The document by itself does not substantiate the plaintiff’s claim that the parties had by  mutual consent  agreed to  appoint the Town Planning Officer to  ascertain the  value of  the disputed plot as an appraiser or valuer. [653 H; 654A]      3. The  High  Court  was  justified  in  upholding  the judgment of  the Subordinate  Judge that  the report  of the Town Planning Officer making an appraisement or valuation at Rs. 35,826.50p  could not  be treated  as an admission under section 20  of the  Evidence Act,  on the basis of which the plaintiffs’ claim for damages had to be decreed. [654 B-C]      4. This  Court as  well  as  the  High  Court  and  the Subordinate Court had ample power to restitute the plaintiff by granting  him compensation  for the value of the property of which  he had been deprived in the years 1951. Taking all factors into  consideration it  is just  and proper to award the appellant  a sum  of Rs.  25,000 as compensation towards the value  of the  exchanged plot. The plaintiff having been deprived of  the property he was entitled, a reasonable rate of interest  on the amount is necessary. The Court has ample power under proviso to section I of the Interest Act 1839 to award interest  on equitable grounds. The reasonable rate of interest would be 6% per annum on the compensation amount of Rs. 25,000  from August  13, 1951, the date of dispossession till  August   31,  1959,   the  date  of  judgment  of  the Subordinate Judge  and thereafter  at 9%  per annum  thereon till realization. [654 D; 655 C; 656 BC]      Satinder Singh  v. Amrao  Singh [1961]  3  S.C.R.  676; referred to.

JUDGMENT:      CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2216 (N) of 1970.      From the  Judgment and  Order dated  18.3.1970  of  the Rajasthan High  Court in D.B. Civil Regular First Appeal No. 10 of 1960.      S.K. Jain for the Appellants.      Miss Maya Rao for the Respondents. (Not present) 647      The Judgment of the Court was delivered by      SEN, J.  The present  appeal on  certificate raises two questions, namely  (1) Whether the parties by mutual consent

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had agreed  to appoint  D.N. Gupta,  Superintending Engineer and Town  Planning Officer, Jaipur to ascertain the value of the disputed  land as  an appraiser  or valuer and therefore the appraisement  or valuation  thereof by him in his Report (Exh.5) dated February 21, 1956 at Rs. 35,826.50p. should be treated as  an admission  under s.20  of the  Evidence  Act, 1872, on  the basis  of  which  the  plaintiff’s  claim  for damages had  to be  decreed, and  (2) Whether  the plaintiff being deprived  of  property  was,  on  general  principles, entitled to payment of interest on the amount payable to him as the value of the property taken by the State Government.      The facts  bearing on the questions are briefly stated. In accordance  with the  terms of  the  registered  deed  of exchange executed  by the  parties on  July  16,  1951,  the appellant withdrew  a suit  for specific  performance of  an alleged contract  against the  State Government  being Civil Suit No.  120/50 pending  in the  Court of  the Civil Judge, Jaipur City  whereunder the  State Government agreed to give in exchange plot No. O/17 located in Scheme on resumption of his plot bearing No. C/91 in the same scheme and handed over possession to the State Government on the aforesaid plot No. C/91, but  the State  Government on  their part did not give possession of  the exchanged  plot to  him,  in  consequence whereof the  appellant instituted  a suit  for possession of the exchanged plot and for mesne profits thereof against the State Government being Civil Suit No. 270/51 in the Court of the Civil  Judge, Jaipur City. The State Government in their written statement  pleaded inter  alia that the suit was not maintainable since  the  plot  which  was  to  be  given  in exchange to  the appellant  did not  belong to them, but did not  disclose  as  to  whom  the  said  plot  belonged.  The appellant therefore  served  interrogatories  on  the  State Government. In  reply to  the said  interrogatories  it  was revealed in the affidavit filed by the State Government that the exchanged  plot had been transferred to Thakur Harisingh of Achrol  under the orders of the Home Minister, Government of India  dated January 8, 1945 and that plot No. C/91 which belonged to  the appellant was then in possession of the Raj Pramukh  Maharaja   Mansinghji  of   Jaipur.  The  appellant accordingly  impleaded   Thakur  Harising  of  Achrol  as  a defendant in the suit and sought 648 permission from  the Central  Government under  s.86 of  the Civil Procedure  Code, 1908  to join  Maharaja Mansingji  of Jaipur as  a party  to the suit. Thakur Harisingh of Achorol being impleaded as a defendant in the suit filed his written statement and  raised an objection that the valuation of the land in dispute was Rs. 40,000 and the Court of Civil Judge, Jaipur City  had no jurisdiction to entertain the suit. That objection of  his was  sustained and the learned Civil Judge by his  order dated October 15, 1955 returned the plaint for presentation to the proper Court.      It transpires  that the  Joint Secretary,  Ministry  of Home Affairs,  Government of  India addressed a letter dated January 3,  1956 to  the late  Shri Mohan  Lal Sukhadia, the then Chief  Minister of Rajasthan conveying that it was felt that the  appellant had  a case  and  should  be  given  the exchanged plot  and if  that was  not feasible, he should be restored to  his original position and therefore could claim back possession  of plot  No. C/91.  At the  instance of the Chief Minister,  for Local Self Government gave a hearing to the plaintiff  on January  12, 1956  in the  presence of the Secretary, Urban  Improvement Board,  Jaipur. On February 3, 1956, the  Chief Minister  addressed a  letter to  the Joint Secretary, Ministry  of Home  Affairs, conveying the anxiety

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of the State Government to settle the claim of the appellant and  intimated   that  the   appellant  had  agreed  to  the appointment of  D.N. Gupta,  Town Planning  Officer  as  the assessor who  had been asked to assess the value of the land and submit  his report  by February  20, 1956.  He therefore requested the  Government of  India to defer its decision in fairness to  the State  Government for a couple of months as it was  felt that  it might be possible to settle the matter without any unreasonable delay.      The aforesaid  assessor D.N.  Gupta by his report (Exh. 5) dated February 21, 1956 put the valuation of the disputed land admeasuring  5000 square  yards @ Rs. 7 per square yard amounting to Rs. 35,000 and to this he added Rs. 826.50p. as the cost  of  construction  of  a  boundary  wall  i.e.  Rs. 35,826,50p. in  all. There  ensued a  correspondence between the State  Government  and  the  appellant  as  regards  the payment of compensation. It was felt by the State Government that the assessor had wrongly taken into consideration parta rates or  the Municipal  Committee, Jaipur  which could  not form any legal basis for assessing the value of the disputed land which  admittedly was  situated outside the walled city of Jaipur,  nor could  he have  taken into consideration the rates for the sale of 649 plots of  commercial site  at a  distance from  the disputed land. The  State Government  accordingly declined to pay Rs. 35,826.50p.      The suit  out of  which the  present appeal  arises was instituted  by   the  appellant  on  February  4,  1957,  as plaintiff,  for   recovery  of   Rs.  47,741.50p.  i.e.  Rs. 35,826.50p. as  value of  the disputed  land in 1951 and Rs. 11,915 as  interest at  6% per  annum by way of damages. The State Government contested the plaintiff’s claim and pleaded inter alia  that the  State Government had never agreed that the assessment  or valuation  made  by  D.N.  Gupta  of  the disputed land  was to  be final  and binding  on them;  that there was  an  error  of  principle  in  the  assessment  or valuation made  by him based as it was on the parta rates of the Municipal  Committee, Jaipur  which admittedly  was  not applicable to  the disputed  land which  was situate outside the walled  city of Jaipur or the rate for the sale of plots of commercial  site situate  at a  distance there  from, and that since  there was  no sale  of land  in C  Scheme in the vicinity of  the exchanged  plot, the  correct value thereof had to  be assessed  on the  basis of the C Scheme rates and therefore  the  real  market  value  of  the  disputed  land admeasuring 5000  square yards on the basis of the full rate in Scheme  of the  Urban Improvement Board at Rs. 3.50p. per square yard  must work  out to  Rs. 17,000 and nothing more. The learned  Senior Civil  Judge as  well as  the High Court have however decreed the plaintiff’s claim in part for a sum of Rs.  17,500 with  interest thereon  @ 6%  per annum  from February 4,  1957, the date of institution of the suit, till realization on  the ground that the State Government was not bound by  the assessment  made by  D.N. Gupta based on parta rates of  the Municipal  Committee, Jaipur  which  were  not applicable to  lands situate  outside  the  walled  city  of Jaipur and  could not  form any legal basis for valuation of the disputed land and therefore the State Government was not bound to pay Rs. 35,826.50p. as determined by him. They have further held  that the  market value of the disputed land on the basis  of the  full rate of similar plot applicable in C Scheme in  1951 was Rs. 3.50p. per square yard and therefore the plaintiff  was entitled to recovery of Rs. 17,500 as the value thereof.  The learned  Subordinate Judge  held that on

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the admission  of the plaintiff himself as PW 6, and his two witnesses Parmanand, Secretary Urban Improvement Board, PW 3 and Shah  Alamuddin, Deputy Minister, PW 5 it was clear that D.N. Gupta  had been appointed merely to assess the value of the disputed land and that it was never agreed that whatever appraisement or  valuation he  may make  would be binding on both the parties, nor did the 650 Deputy Minister  make any  commitment on behalf of the State Government that  whatever assessment  D.N. Gupta  would make would be  binding on the State Government and that therefore the appraisement  or valuation  made by  D.N. Gupta  in  his report (Exh.5)  dated February 21, 1956 could not be treated as an  ’admission of  liability’ under  s.20 of the Evidence Act on  the part  of the  State Government.  He further held that the  correct value  on the  basis of  the  notification issued by  the Urban  Improvement Board  clearly showed that the parta  rate of  the Municipal  Committee, Jaipur was not applicable to  the disputed  land which  was situate outside the old  walled city  of Jaipur  and that  the correct value thereof could be assessed on the basis of C Scheme rates and therefore the  value of  the disputed  land Rs.  17,500. The learned Judge  however held  that the plaintiff was entitled to receive  damages by  way of  interest @  6% per annum. On appeal the  High Court  held that the plaintiff had to prove that the  State Government  had agreed  to be  bound by  the assessment made  by D.N.  Gupta before  s.20 of the Evidence Act could  be attracted  and that there was no evidence that the State Government had ever agreed to be bound by the said assessment. As  regards, the  letter addressed  by the Chief Minister to  the Joint  Secretary, Ministry of Home Affairs, Government of  India dated  February 3, 1956, the High Court observed that  the Chief  Minister was  not  examined  as  a witness and when admittedly he was not present when the talk between the  Deputy Minister  for Local  Self Government and the plaintiff  took place,  the latter would not necessarily lead to  the inference  that the  State Government agreed to abide by  the assessment  made by D.N. Gupta. It accordingly affirmed the  finding of  the learned Subordinate Judge that the appraisement  or valuation  made by  D.N. Gupta  was not binding  on  the  State  Government  and  further  that  the disputed land  was much  inferior than  land included  in  C Scheme and therefore the amount of Rs. 17,500 awarded by the learned Subordinate  Judge was quite adequate. Following the decision of  this Court  in Satinder Singh v. Amrao Singh it held that  the plaintiff was entitled to interest thereon at 6% per annum.      The main  question raised  is whether the report of the assessor (Exh.  5) was  information’ within  the meaning  of s.20 of the Evidence 651 Act and  therefore considered  to be  an  admission  of  the parties as to appraisement or valuation of the disputed land at Rs.  35,826.50p. and  such an  admission must  operate as estoppel. Admissions  may operate as estoppel and they do so where  parties  had  agreed  to  abide  by  them.  The  word ’information’ occurring  in s.20  is not to be understood in the sense  that the  parties desired to know something which none of  them had any knowledge of. Where there is a dispute as regards  a certain  question and  the Court is in need of information regarding the truth on that point, any statement which the  referee  may  make  is  nevertheless  information within the  purview of s.20. The contention on behalf of the State Government on the word ’information’ occurring in this section is  that the  parties  did  not  stand  in  need  of

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obtaining any  information from  D.N. Gupta  and that at any rate the  State Government  never agreed  to  abide  by  the valuation made  by him  and therefore they were not bound by the same  inasmuch as  the valuation  made by  him  was  not conclusive as  to the value of the subject-matter as between the parties.           S.20 of the Evidence Act reads as follows:           "20. Admissions  by persons  expressly referred to      by party  to suit-Statements  made by persons to whom a      party  to   the  suit   has  expressly   referred   for      information in  reference to  a matter  in dispute  are      admissions."                         Illustration           The question  is whether a horse sold by A to B is      sound. A  says to  B-"Go and  ask C,  C knows all about      it." C’S statement is an admission. S.20 is  the second  exception to the general rule laid down in s.18. It deals with one class of vicarious admission i.e. admissions of  persons other  than the  party. Where a party refers to  a third person for some information or an opinion on a  matter in  dispute, the  statements made  by the third person are  receivable  as  admissions  against  the  person referring. The reason is that when a party refers to another person for  a statement  of his views, the party approves of his utterance in anticipation and adopts that as his own.      The principle  is the  same as  that  of  reference  to arbitration. A  position analogous  to  that  of  agency  is created by the reference. 652 The reference  may be by express words or by conduct, but in any case  there must be a clear intention to refer, and such admissions are  generally conclusive. As Ellenbrough, L.C.J. said in  Williams v.  Innes from  which the  illustration is taken:      "If a  man refers  another upon any particular business      to a third person he is bound by what this third person      says or  does concerning it as much as if that had been      said or done by himself."      There is  nothing on  record to  show  that  the  State Government ever agreed to abide by the valuation made by the assessor D.N.  Gupta; on  the contrary, the Secretary (Local Self Government)  by his  letter dated  June  30,  1951  had conveyed to  the appellant  sanction for  allotment  of  the exchanged plot  admeasuring 5000  square yards  on condition that the terms of allotment would be the same as in the case of  the   previous  allotment,   meaning  thereby  that  the plaintiff would  have to  pay as  per the rates fixed by the Government for the sale of plots in C Scheme.      The testimony  of Shah  Alimuddin, Deputy  Minister for Local Self  Government clearly  shows that he gave a hearing to the  appellant and  had deputed D.N. Gupta, Town Planning Officer to  assess the valuation of the disputed land but he did  not  make  any  commitment  on  behalf  of  the,  State Government that whatever assessment was made by him would be binding on  the Government.  This hearing  was given  by the Minister on  January 12,  1956 at  the instance of the Chief Minister at  which  Parmanand,  the  then  Secretary,  Urban Improvement Board  was also  present. As  a result  of this, D.N. Gupta  was appointed  to determine  the market value of the disputed  land by  letter of  the Secretary to the State Government, Local  Self Government Department dated February 4, 1956 which was in these terms: From      The Secretary to the Government of Rajasthan. 653

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To      Shri D.N. Gupta through the Chief Engineer. B&R.,      P.W.D., Rajasthan, Jaipur. No. F.1 (K) (56) LSG/59 dated Jaipur the February 4, 1956. Sub: Allotment of land to Shri Heera Chand Kothari.           With reference  to the  above, I  am  directed  to      forward herewith  a full history of the case and to say      that the  case was  heard by  the Deputy  Minister  for      Local-Self-Government  on  12.1.56.  Shri  Heera  Chand      Kothari and  the Secretary,  Urban  Improvement  Board,      Jaipur, were present. Shri Kothari has agreed to accept      the compensation  of 5000  sq.  yds.  of  land  and  to      appoint you  as assessor.  I am,  therefore, to request      you kindly  to assess the value of land (5000 sq. yds.)      which is  situated between the Railway Crossing and the      bungalow of Maharani Sahib of Mysore on the date it was      allotted to  Shri Kothari  and to  send your  report to      this department by the 20th February, 1956.      Sd/-      Secretary to the Government As already  stated, the  assessor, D.N.  Gupta submitted his report (Exh.5) dated February 21, 1956 wherein he valued the land @  Rs.7 per  square yard,  that is,  at Rs.  35,000 and added the  cost of  construction of the boundary wall at Rs. 826.50p. totalling  Rs. 35,826.50p. The State Government not being satisfied  at the  exorbitant value so determined were not prepared  to accept  the valuation  made by the assessor D.N.  Gupta.   Accordingly,  the   Secretary   (Local   Self Government) by  his letter dated March 14, 1956 asked him to explain the  basis of  valuation adopted  by him.  In  reply thereto, D.N.  Gupta by  his letter  dated  March  19,  1956 disclosed that  he had  assessed the  value of  the disputed land, at the least possible price, taking the value of lands spread over  between the years 1948 and 1955 and that he had adopted the  parta rates  of the Municipal Committee, Jaipur for determining the value of the disputed land.      While we  feel that  the High  Court was  not right  in excluding from its consideration the Chief Minister’s letter dated February 654 3, 1956  on the  ground of  want of  proof, the  document by itself does  not substantiate the plaintiff’s claim that the parties had  by mutual  consent agreed to appoint D.N. Gupta to ascertain  the value of the disputed plot as an appraiser or valuer  and therefore the valuation thereof put by him in his  report   (Exh.  5)  dated  February  21,  1956  at  Rs. 35,826.50p. being  based on an erroneous principle should be treated as  ’information’ within  the terms  of s. 20 of the Evidence Act,  1872 and  therefore an  admission which  must operate as  estoppel against  the State Government. The High Court was  therefore justified  in upholding the judgment of the learned  Subordinate Judge that the report of D.N. Gupta dated February  21, 1956 making an appraisement or valuation at Rs.  35,826.50p. could  not be  treated as  an  admission under s.  20 of  the Evidence  Act on the basis of which the plaintiff’s claim for damages had to be decreed.      Nevertheless, this  Court as well as the High Court and the learned  Subordinate Judge  had ample power to restitute the plaintiff  by granting him compensation for the value of property of  which he had been deprived in the year 1951. As already stated,  the value  of the  exchanged plot had to be determined in  accordance with the terms of the letter dated June 30,  1951  addressed  by  the  Secretary,  (Local  Self Government) to  the  appellant  by  which  he  conveyed  the sanction of  the  State  Government  for  allotment  of  the

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exchanged  plot   admeasuring  5,000   square  yards  on  an application made  by him to the Urban Improvement Board. The grant was  subject to  the condition  that ’the terms of the allotment would  be the  same as in the case of the previous allotment’ i.e. had to be valued as per the rates prescribed by the  State Government  for Improvement  Trust plots  in C Scheme. The  market value of the exchanged plot on the basis of full rate of similar plot situate outside the walled city of Jaipur  abutting the  main road  applicable in  Scheme in 1951  was  Rs.  3.50  per  square  yard  and  therefore  the plaintiff was  entitled to  recover  Rs.  17,500  upon  that basis. Admittedly,  the State  Government had  not fixed any parta rates  for land  situate outside  the walled  city  of Jaipur. The  testimony of  Shiv Ram  Jain, Secretary,  Urban Improvement Board,  Jaipur (DW 2) shows that the Maharani of Mysore was  allotted a plot in the near vicinity of plot No. C/91 in C Scheme not as a concessional but on normal rate at Rs. 10,000  per acre.  If that  were to  be  the  basis  the appellant would be entitled to compensation at a much lesser rate.      The matter  however does not end there. The transaction of 655 exchange which  fell through in 1951 was entered into before the formation  of the  State of  Rajasthan.  At  that  time, Jaipur was  not the  capital of  the State, and there was no trend in  rise of  prices of  land. Once  it was  known that Jaipur would  be the capital, the value of land particularly in an  exclusive area  near and around the palatial bungalow of the  Maharani of  Mysore (which  later became Raj Bhawan) which was  extremely scarce, had naturally shot up. The land in dispute  was situate  near the railway station and which, according to  the High  Court, was lesser in value than land in C  Scheme. Taking all these factors into consideration we think it just and proper to award the appellant a sum of Rs. 25,000 as  compensation towards  the value  of the exchanged plot and  to award  him a  reasonable rate  of  interest  to offset the  spiral rise  of value  of land  in the  city  of Jaipur. We are clearly of the view that the plaintiff having been deprived  of the  property was entitled to a reasonable rate of  interest on  the amount  found to be due to him. In somewhat similar  circumstances the  Court speaking  through Gajendragadkar, J. in Satinder Singh’s case, relied upon the speech of Viscount Cave, LC in Swift & Co. v. Board of Trade and observed:           "Stated broadly  the act  of taking  possession of      immovable property  generally implies  an agreement  to      pay interest  on the value of the property and it is on      this principle  that  a  claim  for  interest  is  made      against the State. This question has been considered on      several occasions  and the  general principle  on which      the contention  is raised  by the  claimants  has  been      upheld. In Swift & Co. v. Board of Trade (supra) it has      been held by the House of Lords that ’on a contract for      the sale and purchase of land it is the practice of the      Court of  Chancery to  require  the  purchaser  to  pay      interest on  his purchase  money from  the date when he      took, or  might safely  have taken,  possession of  the      land.’ This  principle has  been recognized  ever since      the decision  in Birch  v. Joy (1852) 3 HLC 565. In his      speech, Viscount  Cave, LC  added that  "this  practice      rests upon  the view  that the act of taking possession      is an implied agreement to pay interest", and he points      out that  the said  rule has  been extended to cases of      compulsory   purchase    under   the    Lands   Clauses

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    Consolidation Act, 1845. In this connec- 656      tion is  drawn between acquisition or sales of land and      requisition of  goods by  the State. In regard to cases      falling under  the latter  category this rule would not      apply." We are  in respectful  agreement with these observations. It was further  held in  Amrao Singh’s  case that the Court had ample power  under proviso to s. 1 of the Interest Act, 1839 to award interest on equitable grounds. In all the facts and circumstances of  the case,  the reasonable rate of interest would be  6% per  annum on  the compensation  amount of  Rs. 25,000 from  August 13, 1951, the date of dispossession till August 31,  1959,  the  date  of  judgment  of  the  learned Subordinate Judge,  and thereafter  at 9%  per annum thereon till realization.  It more  or less  works out to Rs. 95,000 which is a multiple of 20 times the actual investment of the appellant in  purchasing plot  No. C/91  in C  Scheme in the city of Jaipur.      The result therefore is that the appeal partly succeeds and is  allowed with  costs. The  judgment and decree of the High Court  and those  of the  learned Subordinate Judge are modified by decreeing the plaintiff’s claim for compensation at  Rs.   25,000  with  interest  as  indicated  above.  The appellant will  be entitled  to recover and be liable to pay costs in proportion to success and failure. N.V.K.          Appeal allowed. 657