IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 4419 OF 2001

STATE OF WEST BENGAL .......APPELLANT  

Versus

BIRESWAR DUTTA ESTATE PRIVATE  LTD.

.....RESPONDENT

O R D E R

Premises  No.32A,  Brabourne  Road,  Kolkata  originally  

belonged to the respondent. The entire six storey building  

(excluding  the  ground  floor  and  a  portion  of  the  first  

floor) measuring 20093 sq.ft. had been requisitioned by the  

appellant under the West Bengal Premises Requisition and  

Control (Temporary Provisions) Act, 1947 (‘Act’ for short)  

for providing barrack accommodation for the police and for  

Traffic  Police  Guard  Headquarters  on  1.10.1958.  The  

premises stood derequisitioned on 7.1.1994 by virtue of the  

provisions of Sections 10A and 10B of the Act.

2. The  appellant,  thus  became  liable  to  vacate  and  

deliver  vacant  possession  on  8.1.1994  but  continued  in  

unauthorized possession. By order dated 8.7.1994, made in a  

contempt petition filed by the respondent, the High Court  

granted  three  months  time  to  the  appellant  to  initiate

acquisition proceedings if it wanted to retain the premises  

and the said period of three months expired on 7.10.1994.  

Therefore,  the  respondent  filed  a  suit  (CS  No.235/1996)  

seeking  physical  possession  of  the  derequisitioned  

property. A learned Single Judge of the High Court decreed  

the said suit on 9.9.1998 holding that the occupation of  

the appellant was illegal with effect from 8.10.1994 and  

consequently directed the appellant to pay compensation at  

the rate of Rs.7230/- per month from 8.1.1974 to 7.10.1994  

and mesne profits at the rate of Rs.1,10,000/- per month  

from 8.10.1994 to 31.8.1998 and from 1.9.1998 to date of  

delivery of possession.

3. The  said  decree  was  challenged  by  the  appellant  by  

filing an intra court appeal. The respondent filed cross  

objections  being  aggrieved  by  the  quantum  of  the  mesne  

profits. A Division Bench of the High Court, by judgment  

dated 29.7.1999 upheld the decision of the learned Single  

Judge that appellant was in wrongful possession of premises  

and  was  liable  to  be  evicted.  Thereafter,  it  heard  the  

parties on the issue of mesne profits and by further order  

dated 10.8.1999 set aside the decree of the learned Single  

Judge in so far as the determination of mesne profits for  

the second and third periods (that is from 8.10.1994) and  

referred the matter to a Commissioner (retired Judge) for  

quantifying  the  mesne  profits.  The  said  order  of  the  

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Division Bench attained finality as it was not challenged  

by the appellant.  

4. The  Commissioner  appointed  by  the  Division  Bench  

issued notice to the parties for determination of the mesne  

profits.  In spite of repeated opportunities, the State did  

not participate in the proceedings. After considering the  

evidence  placed  by  the  respondent,  the  Commissioner  

submitted  his  report  dated  21.2.2000  under  which  he  

determined  the  mesne  profits  at  Rs.8/-  per  sq.ft.  from  

8.10.1994 to 31.8.1998 and at the rate of Rs.9/50 per sq.  

ft. from 1.9.1998 till the date of recovery of possession.  

The appellant challenged the said report inter alia on the  

ground  that  it  did  not  have  an  opportunity  to  let  in  

evidence. The Division Bench considered and overruled the  

objections of the appellant by the impugned judgment dated  

7.7.2000. It accepted the report of the Commissioner and  

directed that a final decree be prepared in terms of the  

report of the Commissioner (that is adopting the rate of  

rent and the periods for which such rates would apply). The  

Division Bench also directed that the respondent will be  

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entitled to interest at 12% per annum on the arrears of  

rent  and  as  also  further  rent.  The  said  judgment  is  

challenged in this appeal by special leave.

5. Learned counsel for the appellant submitted that the  

property  was  acquired  in  pursuance  of  preliminary  

notification dated 28.9.1994 issued under Section 4(1) of  

the Land Acquisition Act, 1894 (‘LA Act’ for short) and  

final declaration dated 11.8.1997 issued under Section 6 of  

the LA Act and an award was passed by the Land Acquisition  

Officer on 24.2.2000. Possession of the acquired premises  

was  formally  taken  over  under  Section  16  of  LA  Act  on  

24.2.2003. The validity of the said acquisition was upheld  

by this Court in Civil Appeal No.638 of 2005 decided on  

21.10.2010 [State of West Bengal & Ors. Vs. Bireswar Dutta  

Estate Pvt. Ltd. & Ors.]. It was further submitted that in  

view of the pendency of the proceedings for acquisition,  

the appellant was under the  bona fide impression that it  

need  not  participate  in  the  proceedings  before  the  

Commissioner and the High Court ought to have set aside the  

report of the Commissioner and given an opportunity to the  

appellant  to  place  the  necessary  material  relating  to  

determination of mesne profits.

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6. We find that the appellant was given sufficient number  

of opportunities by the Commissioner to place its evidence  

in regard to mesne profits and the appellant did not do so.  

We also find from the report of the Commissioner which has  

been accepted by the High Court that the Commissioner has  

determined  the  mesne  profits  with  reference  to  the  rent  

that was being paid by the ground-floor tenant after making  

appropriate  adjustment  for  the  fact  that  the  valuation  

related to the upper floors. It is not in dispute that the  

premises  is  situated  in  the  heart  of  Kolkata  in  a  

commercial  area.  The  High  Court,  having  regard  to  these  

facts had accepted the Commissioner's report and directed  

that mesne profits should be paid at Rs.8/- per sq.ft. for  

the  period  from  8.10.1994  to  31.8.1998  and  Rs.9/50  per  

sq.ft. from 1.9.1998 to the date of delivery of possession.  

We  find  that  the  award  of  compensation/mesne  profits  as  

above  does  not  suffer  from  any  infirmity  nor  call  for  

interference.  The  appellant  has  not  been  able  to  

demonstrate any prejudice on account of the report of the  

Commissioner.

7. Learned counsel for the appellant next contended that  

the High Court was not justified in granting interest at  

the rate of 12% per annum on the amounts found due and that  

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too  without  specifying  the  date  from  which  the  interest  

will be due. He also submitted that there was no contract  

for payment of interest.  

8. On the facts and circumstances, particularly in the  

absence of any contract for payment of interest, we are of  

the view that the interest awarded should be only from the  

date of the judgment of the High Court, that is 7.7.2000,  

at the rate of 8% per annum.

9. In view of the  above, we partly allow the appeal as  

follows :  

(i) The judgment dated 7.7.2000 of the High Court in  

regard  to  the  quantum  of  mesne  profits  and  the  

period for which it is found payable, is upheld.  

(ii) The  appellant  shall  pay  compensation  and  mesne  

profits to respondent as under :  

(a) Compensation  for  the  period  from 8.1.1974 to 7.10.1994 at the rate of  Rs.7230/-  per month.

(b) Mesne profits for the period  from 8.10.1994 to 31.8.1998 at the rate of Rs.8/- per  sq. feet.  

(c) Mesne profits for the period  from 1.9.1998 to 24.2.2003 (the date of possession)  at the rate of Rs.9/50 per sq. ft.

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(iii) The respondent shall be entitled to interest at 8%  

per annum from 7.7.2000 on the amounts due as on  

that date till date of payment. Respondent will also  

be entitled to interest on mesne profits accruing  

every month after 7.7.2000 from the respective due  

dates to date of payment.  

(iv) The appellant will be entitled to adjustment of the  

payments made by it on account, on the respective  

dates of payments. Such payment shall be adjusted  

towards the principal (that is towards mesne profits  

and not accrued interest) so that interest will be  

due only on the balance.  

(v) The appellant shall also be liable to reimburse the  

respondent,  the  proportionate  property  tax  in  

respect  of  the  portion  of  the  property  in  its  

occupation, as directed in the interim order dated  

18.7.2001 of this Court.

(vi) Parties to bear respective cots.   

  ......................J.               ( R.V. RAVEENDRAN )

  ......................J. New Delhi;  ( A.K. PATNAIK ) November 18, 2010.               

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