Sh. L. Gopinath vs Union Of India (Uoi) And Ors.
2004 Latest Caselaw 1244 Del

JUDGMENT

R.S. Sodhi, J.

1. FAO 126/1985 is directed against the order dated 3rd June, 1985, of the Joint Secretary and Legal Adviser, Ministry of Law and Justice, Department of Legal Affairs, as Arbitrator in Arbitration Case No. 3/1982, awarding to the claimants a compensation for requisition of the premises at Rs.3,433.40 ps. per month with effect from 11th March, 1975.

2. Brief facts of the case as noted by the Arbitrator are as follows:-

"According to the claimants, the premises were requisitioned by order dated 27.3.1950 and the compensation payable in respect of the same is liable to be revised with effect from 11.3.1975 in terms of the provisions of the Requisitioning and Acquisition f immovable property Act, 1952 (hereinafter referred to as 'the Act'). According to the said provision, compensation is to be revised on the basis as if the premises were requisitioned afresh with effect from 11.3.75. Accordingly, the claimants sought revision of the compensation from the competent authority. By letter dated 17.2.1982, the competent authority offered compensation for the period with effect from 11.3.1975 at Rs. 20,051.00 per annum. Along with the letter, a calculation sheet showing the basis for fixing the said quantum of compensation was given. A copy of the said letter and the calculation sheet have been filed as Exhibit C/1. It is contended by the claimants that the said basis of calculation is totally incorrect wrong and arbitrary. They have challenged the rate of cost of construction, depreciation, apportionment of value of land married to the property, value of land and the annual rental vlaue at Rs. 8 5/8% fixed in the said calculation. The claimants have filed their own calculation according to the method adopted by the Respondents and according to the same the annual compensation works out to Rs.1,57,401.43. The same is detailed in the calculation sheet filed as Exhibit C/2. The claimants have further asserted that the very method of the said calculation is wrong. According to them, the only way to arrive at a reasonable and fair compensation is on the basis of rents prevailing in the area at the relevant time. On that basis the monthly rent for the requisitioned premises works out to Rs. 38,359.13. The detailed calculation has been filed as Exhibit C/3. In the alternative, the claimants alleged that as per comparative sales method the annual compensation of the requisitioned premises would work out to Rs. 2,58,259.48 as shown in the calculation sheet filed as Exhibit C/4. The claimants filed a report dated 22.12.1982 of an Architect and Registered Valuer to support their claim. The same is Exhibit C/5. Accordingly, the claimants claimed compensation at Rs.38,359.13 per month with effect from 11.3.1975 as per calculation sheet Debit C/3.

2. In its written statement the Respondents pleaded inter alia that in 1953 the compensation fixed for the premises was Rs.292.50; that in terms of section 8 of the Act, the compensation was to be re-determined with effect from 11.3.1975; that principle said down for fixation of standard rent under the Delhi Rent Control Act, 1958 were a useful guide for determining the rate of compensation; that accordingly the compensation was re-determined and fixed at Rs.1670-91 per month with effect from 11.3.1975 s per the calculation sheet Exhibit C/1; that the contention of the claimants that the basis of he said calculation was wrong or illegal was not correct; that the method of calculation for purposes of determining compensation under Section 8 of the Act could not be the market rate of rent or the comparative sales method; and that accordingly the compensation already fixed by the competent authority was adequate and justified."

3. The Arbitrator while adjudicating and applying Section 8(2) of The Requisitioning and Acquisition of Immovable Property Act, 1952 (for short ' the Act') has gone on to fix the rent of the premises with reference to the standard rent as would be worked out with reference to the Delhi Rent Control Act.

4. It is contended by counsel for the appellant that working out the rent under Section 8(2) of the Act cannot be done with recourse to the provision of the standard rent under the Delhi Rent Control Act, for the wording of the Section itself postulates that the rent has to be calculated on the basis of rent which would have been payable for the use and occupation of the property, if it had been taken on lease for that period. In other words, the prevailing rent in the market at which the property would be available, is the rent that can be taken into consideration.

5. Counsel for the respondent, on the other hand, contends that while arriving at what is the payable rent, the Arbitrator was right in referring to the Delhi Rent Control Act since it is the Delhi Rent Control Act that governs Rent lawfully payable.

6. Heard counsel for the parties and have gone through the award under challenge as also the material on record. It appears to me that while construing Section 8(2)(b) of the Act the Arbitrator has applied the formula of standard rent as applicable in the Delhi Rent Control Act. The application of such formula is not the correct approach since the Act postulates the rent as would be available on the date the premises is requisitioned.

7. Admittedly, there is no relationship of landlord and tenant, although the word 'rent' has been used, in which case, the standard rent under the Delhi Rent Control Act cannot be the basis of computing the compensation. Even in the judgment by the Supreme Court in Devan Daulat Ria Kapoor Vs. New Delhi Municipal Committee and Anr.etc. etc., , which lays a standard for arriving at the annual value of the premises under the Delhi Municipal Corporation Act, is the gross annual rent at which the building may reasonably be expected to be let out from year to year. Secondly, the Act provides for revision of rent after five years. This provision would become redundant if standard rent was fixed under the Delhi Rent Control Act. Therefore, the criteria of fixing compensation on the basis of standard rent formula provided under the Delhi Rent Control Act would not be the correct yardstick to work out rent for the purposes of Section 8(2) of the Act. What may be a better guideline is a comparative rent of comparable premises let out on or about the date of requisition. Reference may be had to a judgment of the Delhi High Court in Kali Pershad Vs. Collector and Ors., 24(1983) Delhi Law Times 28, where this aspect has been dealt with.

8. In this view of the matter, I set aside the award of the Arbitrator and direct the Arbitrator to re-hear the matter and compute the rent payable on the basis of guidelines laid hereinabove.

9. Parties are at liberty to rely upon evidence already on record and adduce further evidence if they so chose.

10. The Central Government is directed to appoint a fresh Arbitrator in the event the previous Arbitrator is not available and shall do so within a period of two months from today. The award to be made within a period of six months thereafter.

11. FAO 126/1985 is allowed and disposed of.