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PETITIONER: SATINDER SINGH AND OTHERS

       Vs.

RESPONDENT: AMRAO SINGH AND OTHERS.

DATE OF JUDGMENT: 02/02/1961

BENCH: GAJENDRAGADKAR, P.B. BENCH: GAJENDRAGADKAR, P.B. WANCHOO, K.N. GUPTA, K.C. DAS

CITATION:  1961 AIR  908            1961 SCR  (3) 676  CITATOR INFO :  R          1962 SC1305  (21)  R          1967 SC1030  (4)  RF         1967 SC1032  (5)  F          1968 SC 129  (10,11)  RF         1975 SC  32  (24)  RF         1975 SC1303  (15,16,17,21)  R          1976 SC1721  (15,16)  R          1985 SC 998  (5,11)  F          1987 SC2177  (3)  D          1988 SC1520  (18)  RF         1990 SC1340  (13)  RF         1992 SC 732  (10,22,23)

ACT: Land  Acquisition--Cis-Sutlej Jagir--Inalienable  Land--Com- pensation,  apportionment of--Interest,  when  payable--East Punjab  Acquisition  and Requisition of  Immovable  Property (Temporary  Powers) Act,1948 (E.  P. 48 of 1948),  s.5--Land Acquisition Act, 1894 (1 of 1894), ss. 23, 32,  34--Interest Act, 1839 (32 of 1839) SS. 1, 2.

HEADNOTE: Lands in four villages forming part of the Cis-Sutlej  jagir were compulsorily acquired under the East Punjab Acquisition and  Requisition  of"Immovable Property  (Temporary  Powers) Act, 1948.  At the time of the acquisition A was the  holder of the jagir.  Possession over one of the villages had  been given to 677 A’s  wife G in lieu of maintenance under a  consent  decree. The  matter  of payment of compensation was referred  to  an arbitrator.   A claimed that he was entitled to  the  entire compensation  amount  as he was the present  holder  of  the jagir.   A’s  son S claimed that the  lands,  acquired  were inalienable,  that A merely had a life interest therein  and that the compensation money should be deposited out of which A should get only the interest for his life.  G claimed that she  was entitled to the entire compensation in  respect  of the  lands  over  which  she was  in  possession.   All  the claimants  claimed interest on the compensation amount  from the  date of taking of possession to the date of payment  of

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compensation.   The arbitrator held: (i) the acquired  lands were  inalienable and A merely had a life interest  thereiq, (ii) S was entitled to a share in the compensation  awarded, (iii)  the  amount  of  compensation  for  the  first  three villages  should  not  be deposited but  should  be  divided between  A and S in the proportion of 3/4th to  1/4th,  (iv) the compensation for the fourth village should be  deposited and the interest thereof be paid to G and after the death of G  the amount be divided between A and S half and half,  and (v)  the claimants were not entitled to any interest on  the amount of compensation.  On appeal the High Court  confirmed the  awards in toto.  The claimants appealed to the  Supreme Court by special leave. Held,  that the acquired lands formed part of  a  Cis-Sutlej Jagir  which  was inalienable, that A was merely  a  limited owner  thereof and was not entitled to the entire amount  of compensation and that the reversioners were also entitled to a  share  therein.   The compensation amount  could  not  be permanently deposited leaving the parties the right to enjoy only its- income.  Even if the equitable principle of s. 32, Land Acquisition Act, 1894, was applied it would not justify the   permanent  investment  of  the  compensation   amount. Section  32(1)(b) was intended to be  applied  provisionally for short periods, where other lands had to be purchased out of the compensation money but were not immediately available and the money had to be invested as an interim measure  till such  lands  were  available.  It was  fair  to  divide  the compensation  money in respect of the first  three  villages half  and half between A and S. In deciding the question  of apportionment  on  equitable  grounds it  was  relevant  and material to take into account the facts that no part of  the amount  paid  to  A would reach  the  reversioners,  that  S himself had a son and that the reversionary interest had  to be safeguarded. Shri Somashekhar Swami v. Bapusaheb Narayanrao Patil  A.I.R. 1948  Bom. 176, K. C., Banerjee, Official Receive?,  In  re: A.I.R.  1928 Cal. 402, Mt.  Gangi v. Santu A.I.R. 1929  Lah. 736 and Special Deputy Collector, Ramnad v. Rajah of  Ramnad A.I.R. 1935 Mad. 215, referred to. Held, further, that the claimants were entitled to  interest at  4%  per annum on the compensation amount from  the  date when possession was taken by the State to the (late on which it deposited 678 or  paid  the amount of compensation to the  claimants’  The provision in S. 5(e) of the 1048 Act which made S. 23(1)  of the  Land Acquisition Act, 1894, applicable did not  exclude the  application  of SS. 28 and 34 of the latter  Act  which dealt with the payment of interest.  On general  principles, the act of taking possession of immovable property generally implied  an  agreement to pay interest on the value  of  the property  ; the right to receive interest took the place  of the  right  to retain possession.  The application  of  this rule  was not excluded by S. 5 of the 1948 Act.  Even  under the  Interest  Act,  1839, the power to  award  interest  on equitable  grounds was expressly saved by the proviso to  S. 1. Swift & Co. v. Board of Trade [1925] A.C. 520, Birch v.  joy (1852) 3 H.L.C. 565 and Inglewood Pulp and Paper Co. Ltd. v. New  Brunswick  Electric Power Commission [1928]  A.C.  429, applied. Surjan Singh v. The East Punjab Government A.I.R. 1957 Punj. 265, approved. Seth  Thawardas  Pherumal  v. The Union of  India  [1955]  2 S.C.R.  48 and Nachiappa Chettiar v.  Subramaniain  Chettiar

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[1960] 2 S.C.R. 209, referred to.

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 396 to  398 and 419 to 421 of 1959, and 152 of 1960. Appeals  by special leave from the judgment and order  dated November 5, 1958, of the Punjab High Court in First  Appeals from  Orders  Nos.  42  to  44, 60 to  62  and  55  of  1955 respectively. M.   C. Setalvad, Attorney-General for India, S. N.  Andley, J. B. Dadachanji and Rameshwar Nath, for the appellants  (in C.  As.  Nos. 396 to 398 of 59) and Respondent No. 2 (in  C. As.  Nos. 419 to 421 of 59 and 152 of 60). A.   V.  Viswanatha  Sastri  and  G.  C.  Mathur,  for   the appellant (In C. As.  Nos. 419 to 421 of 59), Respondent No. 1  (In C. As.  Nos. 396 to 398 of 59) and Respondent  No.  3 (In C. A. No. 152 of 60). G.   C. Mathur, for the appellant (In C. A. No. 1.52 of 60). Gopal Singh and D. Gupta, for Respondent No. 2 (In C.  As. Nos. 396 to 398 of 59) and Respondent No. 1 (In C.     As. Nos. 419 of 59 and 152 of 60). 1961.   February 2. The Judgment of the Court was  delivered by 679 GAJEMDRAGADKAR,  J.-This is a group of seven appeals all  of which  arise from the same land acquisition  proceedings  in respect  of which the Punjab Government originally issued  a notification  under s. 4 of the Land Acquisition Act,  1894, on   March  23,  1948.   By  this  notification  the   State Government  declared  its intention to acquire land  in  the Ambala District for the construction of the new Capital  for East Pun ab.  No action was, however, taken in pursuance  of this notification.  Meanwhile the Punjab Legislature  passed the East Punjab Requisition of Immovable Property (Temporary Powers)  Act, 48 of 1948.  Under the provisions of this  Act the  Government requisitioned the land in question  for  the purpose  of  resettling the persons who were  likely  to  be evicted from their fands as a result of the construction  of the new Capital.  The said land was actually acquired on May 20,1951.   This land forms part of a Jagir known  as  "Singh Purian  "  and  comprises  the  areas  of  villages  Mataur, Dhirpur, Saneta and Giddarpur in the District of Ambala.  It appears  that these villages originally formed part  of  the area  covered by the Cls Sutlej States.  S. Amrao Singh  was entered  as  owner of the land thus acquired.  His  wife  is Sardarani  Gurdial Kaur and his son is Satinder Singh.   The estate of Amrao Singh was at the relevant time being managed by  the Court of Wards.  Pursuant to the provisions  of  the Act compensation was assessed by the estate officer and  was accordingly offered by the State Government to the Court  of Wards.   The  Court  of  Wards  agreed  to  the  amount   of compensation  thus offered and Amrao Singh himself  did  not object  to it.  Satinder Singh, however, was not willing  to accept   the  said  compensation  and  he   raised   several objections  contending  that it was wholly  inadequate.   He also  objected to the compensation being paid either to  the Court of Wards or to his father Amrao Singh, and in  support of  this  contention  he urged that since  the  estate  once formed  part of Cis Sutlej States, Amrao Singh was  entitled only  to  its  usufruct for his life and  had  no  right  to alienate  or  otherwise  deal  with  its  corpus.   Satinder Singh’s plea was that after the 87

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680 amount  of compensation was finally determined it should  be deposited  in Government Securities or alternatively a  part of it should be paid to him as compensation for the land  of his  reversionary  rights.  This plea applied to  the  three villages of Mataur, Saneta and Giddarpur.  In regard to  the village  of  Dhirpur, Amrao Singh’s wife  Sardarani  Gurdial Kaur claimed that she was in possession of the said  village as  it was charged for the payment of her maintenance  by  a compromise  decree  passed  in her favour  and  against  her husband Amrao Singh.  She therefore claimed for herself  the entire  amount of compensation.  Thus the contest about  the apportionment  of the compensation amount took a  triangular form. At  this  stage  it  would be convenient  to  refer  to  the relevant  provisions of the statute under which the  present proceedings  have been taken.  In 1948 the  relevant  Punjab statute  was East Punjab Act, 48 of 1948.  Section 2 of  the said Act deals with the requisitioning of property, and s. 3 empowers  the  State  Government  to  acquire  requisitioned properties.   Section 5 prescribes the principles  according to  which compensation had to be paid in regard to  acquired properties.   Section 5(e) provides that the arbitrator,  in making  his  award, shall have regard to the  provisions  of sub-s. (1) of s. 23 of the Land Acquisition Act, 1894 (1  of 1894) so far as the same can be made applicable. This  Act  was  followed by  the  Punjab  Requisitioning  of Immovable  Property  (Amendment and  Validation)  Act,  1951 (President’s  Act No. 2 of 1951).  By s. 5 of this Act s.  5 of  the earlier Act was amended, inter alia, by  adding  one provision.  This provision provides that where any  property is acquired in connection with the new Capital of the  State of  Punjab compensation may be paid whether by agreement  or by  award of the arbitrator, either in money or in  kind  or partly  in money and partly in kind, and where there  is  no person  competent  to alienate the property, or there  is  a person  with limited interest in such property, or there  is any  dispute  as  to the persons  entitled  to  receive  the compensation  or  as  to  the  apportionment  thereof,   the arbitrator shall make an award in such a manner or 681 make an arrangement in such a way as may be equitable having regard to. the interests of the persons concerned; in  other words,  the principle of equitable apportionment  which  had been recognised by s. 32 of the Land Acquisition Act of 1894 has in effect been added by this amending Act. In  1953  the  Punjab  Requisitioning  and  Acquisition   of Immovable Property Act, 1953 (XI of 1953), came into  force. Section 24 of this Act repeals the two earlier Acts of  1948 and  1951,  and after this Act came into force  it  was  the provisions  of  this  Act  that  governed  the   proceedings relating to the requisitioning, and acquisition of immovable properties  in  Punjab.  The equitable principle  which  was inserted in the Act of 1948 by the amending Act of 1951  has been retained in the present Act under s. 8 (3).  Section 23 (1)  of this Act validates requisitions and acquisitions  of properties  there  specified, while sub-s. (2) of  the  said section provides, inter alia, that acquisition of  immovable property   purporting   to  have  been   made   before   the commencement of this Act shall be deemed for all purposes to have  been  validly made as if the provisions  of  the  said enactment  or  order had been included and enacted  in  this section,  and this section had beenin force on and from  the date  of the acquisition.  It has been held by a Full  Bench of  the Punjab High Court in Colonel His Highness  Raja  Sir

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Harindar  Singh Brar Bans Bahadur, Ruler, Faridkot State  v. The  State  of  Punjab (1) that  compensation  for  property acquired  under the Land Acquisition Act, 1894 or under  the Punjab  Act  of  1948 must be paid in  accordance  with  the principles set out in those Acts and not in accordance  with the  principles  set  out in the later Act  of  1953.   This position  is  not disputed by either party  in  the  present proceedings.  Thus it is common ground that for  determining the amount of compensation and its apportionment amongst the rival  claimants the provisions of the relevant Act of  1948 are  applicable though the proceedings were held  under  the relevant provisions of the later Act of 1953.  In fact,  the appointment of the arbitrator who conducted the proceedings (1)  (1957) 59 Punj.  L.R. 386. 682 in  the present case was made by the State Government  under s. 8(1)(b) of the Act of 1953.  We have already noticed that the  provisions of s. 8 (3) of this Act were included by  an amendment in the earlier Act of 1948 by the amending Act  of 1951. Before the arbitrator the acquisition proceedings were dealt with in four different cases, each one being related to  the lands  in  one  of the four villages in  question.   On  the contentions  raised  by  the parties  the  arbitrator  first considered  two  preliminary  issues.   They  were:  (1)  Is Satinder  Singh  competent  to  object  to  the  amount   of compensation awarded in the case, and (2) Is the appointment of  the  arbitrator  invalid on  account  of  the  agreement between the State and the Court of Wards about the amount of compensation payable by the State to the Court of Wards.  It appears  that  Amrao Singh contended that his  son  Satinder Singh  had no locus standi in the matter, and that since  he and  the  Court  of  Wards  had  agreed  to  the  amount  of compensation  offered  by the State the  arbitrator  had  no jurisdiction to hold any enquiry on the claim put forward by Satinder  Singh.   The arbitrator, however,  rejected  Amrao Singh’s  pleas, and held that he was entitled and  bound  to hold the proceedings and to consider the merits of the pleas raised by Satinder Singh. The  arbitrator then proceeded to examine the merits of  the rival contentions.  He found that the property in suit was a part  of  Cis Sutlej States and so Amrao Singh  had  only  a limited interest in it and had no right to alienate it.   As a  result  of  this  conclusion  the  arbitrator  held  that Satinder  Singh,  who  was the next heir,  was  entitled  to contest the amount of compensation and was also entitled  to claim a share in the distribution of the amount.  In  regard to  Dhirpur  land he held that Sardarani  Gurdial  Kaur  was entitled  to  retain the possession of the village  for  her maintenance  under a compromise decree and that  both  Amrao Singh and Satinder Singh were bound by the said decree.   In the   result  the  arbitrator  determined  the   amount   of compensation   and  directed  that  the  entire  amount   of compensation in regard to Dhirpur 683 should  be invested in Government Securities in the name  of the  holder  of Manauli Estate with a charge  in  favour  of Gurdial  Kaur which would entitle her to its annual  profits in lieu of maintenance.  He also directed that on the  death of  Gurdial Kaur the amount should be divided half and  half between  the then holder of the Estate and the next heir  or heirs  taken together.  In regard to the lands in the  three other  villages the arbitrator directed that the  amount  of compensation  determined  by  him should be  paid  in  cash, 3/4ths  to  Amrao  Singh and 1/4th to  the  next  sole  heir

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Satinder  Singh.   The  amount  originally  offered  by  the Government and ultimately awarded  by the arbitrator   were as follows: Village        Govt. Offer               Award Mataur (Plus   Rs. 93,309.00  Rs. 1,82,813.00 15% acquisi- tion charges) Saneta         Rs. 42,179.00  Rs. 55,377.00 Giddarpur      Rs. 15,726.00  Rs. 27,640.00 Dhirpur        Rs. 1,17,912.00Rs. 2,27,860.00 It  would  thus be seen that the contest  made  by  Satinder Singh  in respect of the amount of  compensation  originally offered  by the Government substantially succeeded  inasmuch as the total amount offered was increased by the  arbitrator by Rs. 2,24,564/-. The order thus passed by the arbitrator was recorded by  him in  the four cases tried before him in respect of  the  four villages.  These orders became the subject matter of several appeals  in  the  Punjab High Court.  The  State  of  Punjab preferred  four  appeals 67 to 70 of  1955;  Satinder  Singh preferred  three  appeals  42 to 44  of  1955;  Amrao  Singh preferred  four  appeals  59 to 62 of  1955;  and  Sardarani Gurdial Kaur preferred Appeal No. 55 of 1955.  In its appeal the  State urged before the High Court that  Satinder  Singh was  not competent to object to the compensation offered  by the State and so the proceedings held before the  arbitrator were  invalid.  It was also urged alternatively  that  Amrao Singh  and  Sardarani  Gurdial Kaur  were  not  entitled  to compensation at the higher rates directed by the arbitrator, and that the benefit 684 of the award should be available only to Satinder Singh, and it  was contended that the amount of compensation  fixed  by the  arbitrator was excessive.  All these  contentions  have been rejected by the High Court and the appeals preferred by the State have been dismissed.  The State has not challenged the correctness of the decision of the High Court, and so we are not concerned in the present appeals with the merits  of the pleas raised by the State before the High Court. In  the appeals preferred by Satinder Singh the  High  Court rejected his plea that the valuation fixed by the arbitrator in  respect of certain properties was inadequate.   It  also rejected his plea that the amount of compensation ordered to be divided between him and his father Amrao Singh should  be deposited  in  Government Securities.  The High  Court  held that  though equitable considerations would be  relevant  in deciding   the  question  of  apportionment,  it  would   be inexpedient to direct that the amount should be deposited in Government Securities because in that case no one will  ever be  absolutely entitled to it.  The High Court also  thought that since the State in whose favour the estate may  finally lapse  owing to escheat did not object to the  apportionment made by the arbitrator there was no reason to interfere with the actual order. as to apportionment between father and son which  the  arbitrator thought was reasonable.   In  dealing with  this  question the High Court took the view  that  the alleged reckless extravagance of the father on which the son relied  was not relevant.  In the result the  three  appeals filed by Satinder Singh were dismissed. The High Court then dealt with the appeal preferred by Amrao Singh,  and it confirmed the finding of the arbitrator  that the  property acquired originally formed part of Cis  Sutlej States and that in regard to the said States the rule is now well  settled that the Jagirs large or small in  Cis  Sutlej States  are  non-transferable  and  are  even  exempt   from attachment  as political pensions, the holder for  the  time

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being having only life interest in the estate, the corpus of which is to be 685 kept intact so that it may pass from heir to heir and  lapse in  favour  of the Government in the absence  of  any  legal heir.   The High Court also held that even if the  character of the property was considered from the angle of the general custom  of Punjab the same conclusion followed  because  the property  in  question was undoubtedly  ancestral  immovable property in the hands of the father qua his son and as  such the  father had no right to alienate it to the prejudice  of his  son  without legal necessity or  any  other  compelling reason.  That is how the principal point urged by the father against  the  claim set up by his son was rejected  and  his appeals  were dismissed.  The appeal preferred by  Sardarani Gurdial Kaur also met the same fate and was dismissed. It  appears  that all the three claimants urged  before  the High  Court  that  they  were  entitled  to  interest  at  a reasonable rate on the amount of compensation from the  time that  the property was acquired and they lost possession  of it.   This  contention  was likewise rejected  by  the  High Court, and it was held that under the relevant Act of  1948, it  was not permissible to award interest on the  amount  of compensation,  The  result  was that  the  decision  of  the arbitrator was fully confirmed and all the appeals preferred before the High Court were dismissed.  This decision of  the High  Court  is  challenged by special leave  by  the  three claimants Amrao Singh, Satinder Singh and Sardarani  Gurdial Kaur respectively.  The appeals preferred by Satinder  Singh are  Civil  Appeals Nos. 396 to 398 of 1959;  Amrao  Singh’s appeals  are Civil Appeals Nos. 419 to 421 of 1959,  whereas Sardarani  Gurdial Kaur’s appeal is Civil Appeal No. 152  of 1960.   That is how this group of seven appeals arises  from the same land acquisition proceedings taken by the State  of Punjab in respect of the lands situated in the four villages already  mentioned.   We would hereafter refer  to  Satinder Singh  as  the appellant, Amrao Singh as respondent  1,  the State  of Punjab as respondents, and Sardarani Gurdial  Kaur as Sardarani. Logically then the first point which we must consider is the nature of the property and the title of 686 respondent 1 in relation to it.  That is the principal point which Mr. Viswanatha Sastri sought to raise before us in the appeal  filed  by  respondent  1.  This  question  has  been considered  both  by  the  arbitrator  and  the  High  Court elaborately  and  they have concurred in  making  a  finding against  respondent  1. As the judgment of  the  High  Court points  out the fact that the lands in  question  originally formed  part  of the domain of S. Budh Singh or of  the  Cis Sutlej  States  was not seriously disputed before  the  High Court.  This implied concession naturally makes Mr. Sastri’s task  very  difficult.  Besides, we are not  satisfied  that there  is  any substance in the plea which  Mr.  Sastri  has raised before us on this point.  The history of the property has been considered by the arbitrator, and the arbitrator as well as the High Court have placed considerable reliance  on the   relevant   statements   made  in   the   Punjab   Land Administration Manual compiled by Sir James Mac.  Douie  and revised  in  1931.   Reliance has also been  placed  on  the relevant statements in the compilation known as the " Chiefs and Families of Note in the Punjab " published by the Punjab Government in 1940.  The pedigree table of the Singh  Purian family  given in this publication shows that the family  was founded  by S. Kapur Singh who held the title of Nawab.   S.

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Budh  Singh  was  his grandson and he was the  head  of  the family in 1809.  Amrao Singh is a descendant of Gopal  Singh who  was  one of the seven sons of Budh  Singh.   The  large Jagirs  owned  by the families are situated  in  Kharar  and Rupar Tehsils of Ambala District and they formed part of the area  formerly known as Cis Sutlej States.  Paragraphs  100, 101  and  102 of Douie’s Land Administration Manual  give  a detailed account of the families and the in properties.  The same  is  also  briefly mentioned in  the  Punjab  Gazetteer dealing with Ambala, District. It  appears from this material that the Sardars in  the  Cis Sutlej  States  were  independent  Rulers  whose   ancestors ultimately   came  under  the  protection  of  the   British Government in about 1809.  Between 1809 to 1847 the British- Government tried to enforce good 687 government amongst the semi-independent States; in order  to achieve   this  object  the  British  Government   gradually strengthened its hold and tightened the reins with a view to enforce  good  government.  It appears that  the  Government exercised  the  right of escheat very  freely  and  whenever there  was lapse of heirs it G.. took up the management  and government  of  the  area  in its  own  hands.   After  1846 Government  began to introduce sweeping measures  of  reform and  with that object Government reduced the privileges  and rights of the petty chieftains.  In 1849 the chieftains lost their sovereign powers and were deprived of their  criminal, civil  and fiscal jurisdiction so that they became  no  more than  Jagirdars.   Their rights in the lands  held  by  them were,  however, left untouched.  Rules regarding  succession to  these Jagirs were framed by the Central Government  from time  to  time  and  family  custom  was  respected   within reasonable  limits.   One of these rules is to be  found  in paragraph  III  of  Douie’s  Manual.   Clause  (c)  of  this paragraph  laid  down " that alienations by  a  Jagirdar  or pattidar  of  portions  of  his  holding,  whether  to   his relations   or  strangers,  shall  neither   be   officially recognised nor officially recorded." Similarly paragraph 164 emphasised  the  inalienable  character of  the  Jagirs  and referred to the opinion expressed by the Court of  Directors whereby  the  said character was clearly  and  unambiguously notified.   " We should have supposed ", said the  Court  of Directors, " that there could be no necessity for  notifying this  as a rule, since it follows from the very nature of  a Jagir,  which cannot be alienated and can only  be  attached for the life of the holder." There is thus no doubt that the statements  in the authorised publications to which we  have just referred and on which the High Court and the arbitrator have  relied conclusively show that the holder  of  property which  was  a  part of Cis Sutlej States  did  not  own  the property  absolutely  but held it as a limited  owner.   The Kaiflat  Taluka  of  Singh  Purian  family  which  has  been produced in these proceedings supports the same conclusion. 688 Mr. Sastri, however, wanted to contend that the evidence  on the  record was insufficient to justify the conclusion  that the  lands  under acquisition formed part  of  the  original estate  of  S.  Budh  Singh; but  he  fairly  conceded  that respondent  1 had not gone into the witness box and had  not purported  to  justify  his plea that any of  the  lands  in dispute have been acquired either by him or by his ancestors in  such manner that they could be treated as  the  absolute properties of the holder.  The circular issued by the Office of the Commissioner and Superintendent of Cis Sutlej  States on  February  26,  1857,  unambiguously  shows  that  "  all

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proprietary right to any part of the lands forming a part of the  Jagir  which  may  be held  by  the  Jagirdar  will  be considered  as  pertaining to the Jagir and will go  to  the holder of the Jagir for the time being." This principle  was applicable  even to houses and other buildings  standing  on the  Jagir  which  are in the nature of  forts  and  may  be considered  to appertain to the estate.  The only  exception made  was  in regard to the shops built or acquired  by  the Jagirdar  in  a  town apart from  his  place  of  residence. Therefore,  on the material as it stands it is difficult  to sustain  the plea that the concurrent findings made  by  the arbitrator  and  the High Court on the  question  about  the character  of the property and the nature of the title  held by the holder of the said property are wrong.   Incidentally it  may be added that the same conclusion has  been  reached by  the  High  Court  on the ground  of  the  customary  law prevailing  in the Punjab.  We must accordingly  proceed  to deal with the rest of the dispute between the parties on the basis that the respondent 1 is not the absolute owner of the property and that the appellant is entitled to represent the reversionary interest in the present proceedings. That  takes us to the pleas raised by the appellant  in  his appeals.   On  his behalf it has been urged by  the  learned Attorney-General  that the whole amount of  compensation  in respect  of the three villages Matsur, Sunets and  Giddarpur should be appropriately invested Pond both he and respondent 1 should 689 be  allowed  to  enjoy  the  income  coming  from  the  said investment  in  the  share which  may  ultimately  be  fixed between  them.  In support of this contention he  relies  on the provisions of s. 32 (1) (b) of the Land Acquisition  Act 1 of 1894.  This provision empowers the Court to direct that the  compensation  amount payable to the  owners  should  be invested either in Government or approved securities and the payment  of interest or other proceedings arising from  such interest  should  be directed to the person or  persons  who would  for  the  time  being  have  been  entitled  to   the possession of the lands under acquisition.  The argument  is that  since  respondent 1 was not entitled to  alienate  the property  and was under an obligation to keep the corpus  in tact  for the benefit of the reversioners  the  compensation amount  payable  in respect of the acquisition of  the  said property  should  be  similarly treated and  saved  for  the benefit  of  the reversioners; in other words, it  is  urged that  the  compensation  amount  should  be  treated  as   a conversion of the corpus of lands and the same should not be distributed as directed by the High Court.  Section 32 deals with  cases where the land acquired belonged to  any  person who had no power to alienate the same; and since  respondent 1  was not entitled to alienate the property  the  principle enunciated  by  s. 32(1) (b) is pressed into service  as  an equitable  principle which should be applied to the  present case.   In  support of this argument the  learned  Attorney- General  has  relied on decisions of different  High  Courts where  this  principle has been extended to  watan  property (Shri Somashekhar Swami v. Bapusaheb Narayanrao Patil (1) ), to  the  property belonging to an idol  (K.   C.  Bannerjee, Official  Receiver, In re (2) ), to the property held  by  a widow  (Mt.   Gangi  v.  Santu & Others  (3)),  or  to  land belonging to an impartible estate (Special Deputy Collector, Ramnad v. Rajah of Ramnad (4) ). This contention, however, ignores that the provisions of  s. 32 (1) (b) are intended to be applied only provisionally and for a short period.  The scheme of

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(1)  A.I.R. 1948 Bom. 176. (2)  A.I.R. 1928 Cal 402. (3)  A.I.R. 1929 Lah. 736. (4)  A.I.R. 1935 Mad. 215. 690 s. 32 is that in cases to which the said section applies the Court shall order the compensation amount to be invested  in the  purchase of other lands which would be held  under  the right,  title  and conditions of ownership as  the  land  in respect of which the compensation amount has been deposited. That is the plain effect of s. 32(1)(a).  Section 32 (1) (b) comes  into  operation if such purchase cannot  be  effected forthwith;  and  it has to remain in  operation  until  such purchase  is  made.   In other words,  if  the  compensation amount  cannot  be immediately invested in the  purchase  of other  lands, as an interim measure the said amount  may  be invested  in  the prescribed securities and  income  thereof distributed  to those who were entitled to  it.   Therefore, even  if the principle underlying s. 32 is extended  to  the present  case  on  equitable  considerations  it  would  not justify  the appellant’s claim that the compensation  amount should  itself be treated as corresponding to the corpus  of lands  acquired  and  should  be  permanently  invested   in suitable  securities  leaving to the parties  concerned  the right  to enjoy only its income.  Such a course  is  plainly inconsistent  with the principle recognised by s.  32(1)(a). Therefore,  we  are not prepared to accede to  the  argument that  the compensation amount should not be divided  between the parties and should be permanently deposited in the  fund set apart in proper investments. If  the said amount must, therefore, be divided between  the appellant  and respondent 1 how should it be divided?   That is  the  next question which calls for  our  decision.   The appellant  contends that the fairest way to distribute  this amount  would be to divide it half and half between him  and respondent  1. We are inclined to hold that this  contention is well founded.  As the High Court has observed, it is  not at  all  easy  to estimate the relative  value  of  the  two interests represented by the appellant and respondent 1. The High Court thought that the ratio may be 2/3 and 1/3 or  3/4 and 1/4 there being little to choose between the two; and so it confirmed the apportionment made by the arbitrator.  This decision, however, suffers from one serious infirmity.   The High Court thought that 691 the  conduct of respondent 1 which was characterized by  the appellant  as  the conduct of a reckless spend.  thrift  and squanderer  was wholly irrelevant in determining the  shares to  which the appellant and, respondent 1 were  respectively entitled.   In  our  opinion, in deciding  the  question  of apportionment  on  equitable  grounds  it  is  relevant  and material  to  take, into account the grievance made  by  the appellant that the money which would be left with respondent 1  would  be frittered away by him and no part of  it  would reach  the reversioner.  In support of this contention,  the appellant  relied  on  the past  conduct  of  respondent  1. Several  alienations made by him are cited and attention  is invited  to the fact that after respondent 1 became a  major his  estate  has been taken over by the Court of  Wards  for management  under  s. 5(2) (b) of the Court  of  Wards  Act, 1903, from 1928 to 1938, 1939 to 1947, 1948 to 1954.  It has also  been  urged  that since 1954  respondent  1  has  made several  unauthorised  alienations.  We do  not  propose  to consider  the validity of each one of these allegations  but we  have  no  hesitation in holding  that  on  the  material

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available  on the record it would be difficult to reject  as unfounded  the apprehensions which the appellant  entertains in  regard to the fate of the amount which may be  given  to respondent  1.  Besides, we are also inclined to  take  into account the fact that the appellant himself has a son and in apportioning  the  amount we have to bear in mind  the  fact that the amount is being paid in respect of the lands  which respondent  1 holds as a limited owner and the  reversionary interest  in  respect of which has to  be  safeguarded.   We would, therefore, direct that the amount of compensation  in respect of the three villages should be divided between  the appellant and respondent 1 half and half.  It is significant that  the  amount of compensation in respect of  the  fourth village  which is at present charged for the maintenance  of Sardarani  has  been ordered to be divided  half  and  half. Therefore,  we  would uphold the contention  raised  by  the learned  Attorney-General  on behalf of  the  appellant  and direct that the said amount should be divided not as 692 2/3 and 1/3 but half and half between the father and son. The next point which the learned Attorney-General wanted  to urge  was  that the increase in the amount  of  compensation directed   by   the  arbitrator  should  be  paid   to   him exclusively.   His  case  was that the Court  of  Wards  and respondent  1 had accepted the amount offered by  the  State Government,  and it was because he raised  contentions  that the proceedings were referred to the arbitrator whose  award ultimately enhanced the compensation amount to a very  large extent.   This contention was not raised either  before  the arbitrator  or before the High Court, and we have  therefore not allowed the appellant to raise it before us. That  takes  us to the question of interest which  has  been urged  before  us  by all the three  claimants  alike.   The argument  is that the amount of compensation awarded  should carry  a  reasonable  rate  of interest  from  the  date  of acquisition  when  the claimants lost  possession  of  their properties.   This  argument has been rejected by  the  High Court  principally  on the ground that the relevant  Act  of 1948 makes no provision for payment of interest and omission to make such a provision amounts in law to an intention  not to   award  interest  in  regard  to   compensation   amount determined under it.  In support of this conclusion the High Court  has  referred  to the fact that s. 5(e)  of  the  Act specifically makes applicable the provisions of s. 23(1)  of the  Land  Acquisition Act of 1894, and that,  it  is  said, inevitably leads to the inference that ss. 28 and 34 of  the Act which deal with the payment of interest are not intended to apply to the proceedings under it.  In our opinion,  this conclusion  is not wellfounded.  It would be  legitimate  to hold  that  by  the application of s.  23(1)  in  terms  the provisions   of  s.  23(2)  are  by  necessary   implication excluded.   If  the Legislature has provided that  only  one part  of s. 23 should be applied it would be  reasonable  to hold  that  the other part of s. 23 was not intended  to  be applied;  but  we do not see how it would be  reasonable  to hold 693 that  by the application of s. 23(1) the  principles  under- lying  the  provisions of ss. 28 and 34 are  also  excluded. Therefore,  it  is  necessary to examine  this  question  on general  grounds  and principles without assuming  that  the application  of these general considerations is excluded  by any of the provisions of the Act. What  then is the contention raised by the claimants?   They contend  that their immovable property has been acquired  by

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the  State and the State has taken possession of  it.   Thus they  have been deprived of the right to receive the  income from the property and there is a time lag between the taking of  the  possession  by  the State  and  the  payment  ’  of compensation  by  it to the claimants.  During  this  period they  have been deprived of the income of the  property  and they have not been able to receive interest from the  amount of compensation.    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 (1) 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 recognised ever since the decision in Birch v. Joy (2).   In his speech, Viscount Cave, L.C., 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 Consolidation  Act,  1845. In this connection distinction 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. (1) [1925] A.C. 520. 532. (2) (1852) 3 H.L.C. 565, 694 In  Inglewood  Pulp  and Paper Co.  Ltd.  v.  New  Brunswick Electric  Power  Commission (1), it was held  by  the  Privy Council  that  "  upon  the  expropriation  of  land   under statutory power, whether for the purpose of private gain  or of  good  to the public at large, the owner is  entitled  to interest  upon the principal sum awarded from the date  when possession  was  taken, unless the statute clearly  shows  a contrary  intention."  Dealing with the  argument  that  the expropriation with which the Privy Council was concerned was not  effected  for  private gain, but for the  good  of  the public  at large, it observed " but for all that, the  owner is  deprived of his property in this case as much as in  the other,  and  the rule has long been accepted in  the  inter- pretation  of  statutes  that they are not  to  be  held  to deprive individuals of property without compensation  unless the  intention to do so is made quite clear.  The  right  to receive the interest takes the place of the right to  retain possession and is within the rule." It would thus be noticed that the claim for interest proceeds on the assumption  that when the owner of immovable property loses possession of  it he is entitled to claim interest in place of right to retain possession.   The  question  which we have  to  consider  is whether  the  application  of this rule is  intended  to  be excluded  by  the  Act  of 1948,  and  as  we  have  already observed,  the  mere fact that s. 5(3) of the Act  makes  s. 23(1)  of  the Land Acquisition Act of  1894  applicable  we cannot reasonably infer that the Act intends to exclude  the application  of  this  general rule in  the  matter  of  the payment of interest.  That is the view which the Punjab High Court  has  taken  in  Surjan  Singh  v.  The  East   Punjab Government (2), and we think rightly. It  is, however, urged by Mr. Gopal Singh for  respondent  2

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that   what  the  claimants  are  entitled  to  receive   is compensation, and since the word " compensation " is used by s.   5(1)  both  in  respect  of  requisition  as  well   as acquisition it would not be fair to import the general  rule about  the payment of interest where property  is  acquired. Compensation, it is urged, should represent the price of the property and there is no (1)  [1928] A.C. 429, (2) A.I.R. 1957 Punj. 265, 695 justification for adding to the said price any amount by way of damages.  We are not impressed by this argument.  When  a claim  for  payment of interest is made by  a  person  whose immovable property has been acquired compulsorily he is  not making claim for damages properly or technically so  called; he  is  basing his claim on the general rule that if  he  is deprived  of  his  land he should be put  in  possession  of compensation  immediately;  if not, in  lieu  of  possession taken  by compulsory acquisition interest should be paid  to him  on  the said amount of compensation.  In  our  opinion, therefore,  the  fact that s. 5(1) deals  with  compensation both for requisition and acquisition cannot serve to exclude the  application of the general rule to which we  have  just referred. Mr.  Gopal  Singh then relied on some observations  made  by this Court in Seth Thawardas Pherumal v. The Union of  India (1).   Bose,  J., who spoke for the Court has set  out  four conditions  which must be fulfilled before interest  can  be awarded  under Interest Act of 1839, and observed  that  not one  of those was present in the case with which  the  Court was concerned.  That is why it was held that the  arbitrator had erred in law in thinking that he had the power to  allow interest  simply because he thought the demand  was  reason- able.   Having  come to this conclusion  the  learned  Judge proceeded  to  make certain observations in respect  of  the applicability  of s. 34 of the Code of Civil Procedure.   He added  that s. 34 does not apply because the  arbitrator  is not  a  Court within the meaning of the Code, nor  does  the Code  apply to arbitrators, and but for s. 34 even  a  Court would  not have the power to give interest after  the  suit. These   observations  were  considered  by  this  Court   in Nachiappa  Chettiar v. Subramaniam Chettiar (2), and it  was pointed  out  that they were obviously not intended  to  lay down  any  broad and unqualified proposition  like  the  one which  is urged before us by Mr. Gopal Singh in the  present appeal. In  this  connection we may incidentally refer  to  Interest Act, 1839 (XXXII of 1839).  Section 2 of this (1)  [1955] 2 S.C.R. 48. (2) [1960] 2 S.C.R. 209. 696 Act  confers power on the Court to allow interest  in  cases specified therein, but the proviso to the said section makes it  clear  that interest shall be payable in  all  cases  in which  it  is  now  payable by law.   In  other  words,  the operative  provisions  of s. 1 of the said Act do  not  mean that  where  interest was otherwise payable by  law  Court’s power  to award such interest is taken away.  The  power  to award  interest  on  equitable grounds or  under  any  other provisions  of the law is expressly saved by the proviso  to s.  1. This question was considered by the Privy Council  in Bengal  Nagpur  Railway  Co. Ltd.  v.  Buttanji  Ramji  (1). Referring  to  the  proviso to s. 1 of  the  Act  the  Privy Council,observed  " this proviso applies to cases  in  which the  Court  of equity exercises its  jurisdiction  to  allow

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interest.  " We have already seen that the right to  receive interest  in lieu of possession of immovable property  taken away  either by private treaty or by compulsory  acquisition is generally regarded by judicial decisions as an  equitable right; and so, the proviso to s. 1 of the Interest Act saves the  said  right.  We must accordingly hold  that  the  High Court was in error in rejecting the claimants’ case for  the payment of interest   compensation amount, and so we  direct that  the said amount should carry interest at 4% per  annum from  the  date  when respondent 2 took  possession  of  the claimants’  lands to the date on which it deposited or  paid the amount of compensation to them. In  the  appeal  preferred  by  the  Sardarani,  Mr.  Mathur attempted to challenge the propriety of the order passed  by the High Court directing that the amount of compensation  in respect  of Dhirpur lands should be .invested and  that  the Sardarani  should receive her maintenance from the  interest accruing from such investment.  Apart from the fact that the order made in that behalf is fair and just, it is clear that the learned counsel for the Sardarani himself had  suggested that  such an order should be passed.  Therefore, we  cannot allow  Mr. Mathur to raise any contention against  the  said order in the present appeal. (1)  (1938) L.R. 65 I.A. 66, 697 Mr.  Mathur  further  contended that if  we  were  to  award interest  on the amount of compensation his client would  be entitled  to  receive  the  whole of  the  interest  on  the compensation  amount  ordered to be paid in respect  of  the lands in Dhirpur village.  That no doubt is true, and indeed Mr. Mathur’s claim in  that behalf is not disputed either by the  appellant  or  by respondent 1.  We  would  accordingly modify the decree passed by the High Court by directing that the  amount of compensation payable in respect of the  lands in Mathur, Saneta and Giddarpur may be divided half and half between  the appellant and respondent 1, and  that  interest should  be paid on all the items of compensation  determined by  the High Court at 4% per annum.  The interest in  regard to the compensation payable for Dhirpur lands should be paid to  the  Sardarani, whereas the interest in  regard  to  the lands  in the three other villages should be paid  half  and half  to  the  appellant and respondent  1.  In  making  the payments  of compensation amounts to the respective  parties whatever  amounts  may have been withdrawn by  or  on  their behalf should be taken into account and their claims  should be  properly adjusted in that behalf.  In the  circumstances of  this case we direct that the appellant should  get  half his  costs  from  respondent  1  and  the  other  half  from respondent  2 in his three appeals.  There will be only  one set  of  hearing  costs.  The costs in  the  remaining  four appeals should be borne by the parties.                     C.   A. Nos. 396 to 398 of 1959 and                      C.  A. No. 152 of 1960 allowed in part.                    C.A. Nos. 419 to 421 of 1959, dismissed. 698