Smt. Shakuntala Gupta vs Union Of India & Ors.
2009 Latest Caselaw 3054 Del

*             IN THE HIGH COURT OF DELHI AT NEW DELHI

+                          F.A.O. (OS) NO.310 OF 2009

%                                         Reserved on : 4th August, 2009
                                        Pronounced on: 7th August, 2009

        SMT. SHAKUNTALA GUPTA                       ..... Appellant
                      Through: Mr. C. Mukund, Mr. Ashok Kumar
                      Jain and Mr. Pankaj Jain, Advocates.

                                  versus

        UNION OF INDIA & ORS.                    ..... Respondents
                       Through: Mr. R.V. Sinha and Mr. A.S. Singh,
                       Advocates for Respondent No. 1.
                       Mr.    Sanjay    Poddar,    Advocate    for
                       Respondents No. 2 to 4.


CORAM:
HON'BLE MR. JUSTICE MUKUL MUDGAL
HON'BLE MR. JUSTICE NEERAJ KISHAN KAUL

1.      Whether Reporters of the local newspapers may be allowed to
        see the judgment?                                      [NO]
2.      Whether to be referred to the Reporter or not?         [NO]
3.      Whether the judgment should be reported in the Digest? [NO]

                            JUDGMENT

NEERAJ KISHAN KAUL, J.

1. The present appeal arises out of the impugned order dated 16th

April, 2009 rejecting the objections of the appellant filed under

Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter

to be referred as „the Act‟) against the Award dated 9th July, 2004.

2. Briefly stated the facts of the case are as follows:-

The appellant/her predecessors is/was the owner of a portion

of a property No. 2, Under Hill Road, Civil Lines, Delhi. The said

property was requisitioned on 3rd April, 1980 under the provisions of

the Requisition and Acquisition of Immovable Property Act, 1952. It

is not in dispute that the said requisitioning lapsed on 10th March,

1987. The Government, however, on 6th March, 1987 issued a

notification under the provisions of the Land Acquisition Act, 1894

for acquisition of the said property. The said notification was

challenged by the appellant by filing a Writ Petition (Civil) No. 894 of

1987 in this Court which was allowed vide order dated 26th February,

1997. By allowing the said writ petition and directing the restoration

of possession of the property to the appellant within a period of four

weeks thereof, it was held as under:-

"The petitioner is entitled to receive from respondents damages for use and occupation of the property from 10.03.1987 till possession is restored. The same are required to be determined under the provisions of the (Requisition and Acquisition of Immovable Property) Act, (1952) by appointment of an arbitrator. Considering the facts and circumstances in Banwari Lal case that after the Act lapsed on 10.03.1987 and possession was not restored for almost four years while quashing the impugned notifications, the Court on its own proceeded to make appointment of an arbitrator. The facts of this case are also similar. The Act lapsed on 1987. For almost ten years now, the petitioner has been deprived of the amount of damages. As such, we are also of the view that it would be just appropriate that an arbitrator also appointed in this by us to avoid further delay in determination of damages payable to the petitioner. Mr. Justice P. K. Bahri, a retired Judge of this Court is appointed as arbitrator, who will enter upon a reference within a period of four weeks from the date of receipt of a copy of this order. The arbitrator will call upon the parties to submit their respective claims and will proceed to make his award in accordance with law ascertaining the amount of damages for the period from 10.03.1987 till the date the possession is restored to the petitioner."

3. Pursuant to the above order of this Court, the Arbitrator

rendered the Award dated 9th July, 2004 and the appellant preferred

objections thereto which were rejected vide the impugned judgment of

the learned Single Judge dated 16th April, 2009. It was inter alia the

case of the appellant before the Arbitrator that the property in

question was commercial, situated in a commercial locality, being

closely connected to Old Secretariat, Punjab National Bank,

Exchange Stores, Oberoi Maidens Hotel, ISBT etc.; that the property

in question was requisitioned for having public offices and was used

after requisitioning for running different public offices; that the

approved Government Valuer engaged by the appellant had

determined the value of the land as Rs.55,000/- per sq. mt. as on

September 1994. The appellant claimed damages in the total sum of

Rs.15,73,83,914/-.

4. Per contra it was contended on behalf of the respondents before

the Arbitrator that the premises were in a dilapidated condition,

residential in nature and even the zonal development plan showed

the user of the premises as residential; that the respondents had

been paying compensation to the appellant determined under the

Requisitioning Act at the rate of Rs.5,703/- per month and such

payment had been accepted by the appellant without any objection

up to 30th September, 1996. The Arbitrator came to the conclusion

that the user of the premises could not be considered to be

residential at all. Further the Arbitrator noted that the valuation

relied upon by the appellant was on the basis of a notice issued by

the Income Tax Department under Section 269 UD(1A) of the Income

Tax Act, in relation to a plot of land at Rajpur Road, Civil Lines, Delhi

but there was nothing to show that the Income Tax Department had

pursuant to the notice acquired that property at the said rates. The

Arbitrator also found that the valuer of the appellant had taken

double the rate than that in the Income Tax notice aforesaid, treating

the property in question to be commercial.

5. The appellant had also produced before the Arbitrator

documents of letting out of properties in Chandni Chowk, Bunglow

Road, Sabzi Mandi and Kamla Nagar. The Arbitrator held the said

instances to be not applicable or relatable to the property in question

for the reason of the said properties being far away and/or for the

reason of being in established commercial markets/commercial

areas, while the area where the property in question is situated is not

such. The Arbitrator held that the appellant had not given any

instances of letting of any similar property in that area and thus, the

Arbitrator came to the conclusion that the appellant had not brought

forward any evidence to show as to what rent was being fetched by

similar types of properties in the locality. The appellant had also

placed reliance on the report of the committee of three PWD

Engineers constituted by the respondents determining the market

rent of property for paying compensation to the appellant. It was the

contention of the appellant before the Arbitrator that the committee

had determined the rent treating the property as „residential‟ while

admittedly, the property was commercial and was requisitioned for

commercial purposes and was used during requisitioning for office

purposes. The Arbitrator found that the committee had determined

the rate keeping in view the fact that the property was used for office

purposes and saw no reason to enhance the rates fixed by the

committee.

6. The parties were also at issue before the Arbitrator as to the

plinth area of the property. The Arbitrator held that the appellant had

not disputed the plinth area on the basis whereof compensation was

determined under the Requisitioning Act and was thus not entitled to

contest the plinth area. It was also held by the Arbitrator that the

open area had no independent use and was meant to be an adjunct

of the main premises, so no separate rent for the same was to be

determined.

7. The Arbitrator, thus, directed the payment of damages to the

appellant at the rates as per the report of the committee constituted

by the respondents aforesaid save that from 14th December, 1997 to

11th November, 2002 for which period there was no report, the rate of

damages was enhanced by 50 per cent of the last prevalent rate.

8. The learned Single Judge, in our view, rightly relied on the

decision of the Hon‟ble Supreme Court of India in Union of India Vs.

Banwari Lal & Sons (P) Ltd.; (2004) 5 SSC 304. In the said

judgment it was held by the Apex Court that possession of the Union

of India post lapsing of the requisitioning could not be in the nature

of trespass. The Supreme Court held that in view of the permission

granted by the Court in that case, enabling the Union of India to use

and occupy the property, it could not be said that the possession of

Union of India after the requisition had lapsed was illegal and

wrongful and in the nature of trespass. It was further laid down that

in the circumstances damages were claimable not on the basis of

mesne profits but on the basis of fair rent. The basis adopted by the

Arbitrator in that case of income/profit method was thus not found

by the Supreme Court to be applicable in the facts of the case. The

Supreme Court also noted that the fair rent of the property as

determined under the Requisitioning Act was being accepted by the

owner in that case, as in this case also and the Arbitrator had erred

in not considering the said rent. The Supreme Court also held that

there was no reason for the Arbitrator to assess damages for open

spaces which formed part of the main building for which damages

had been assessed. It was also emphasized by the Supreme Court

that the factor of the age of the building was relevant.

The learned Single Judge correctly observed that the judgment

in Banwari Lal's case (supra) was on identical facts addressed most

of the issues raised in the present case. The learned Single Judge

also took note of the fact that the appellant failed to produce any

evidence of letting of any property in the locality before the Arbitrator.

The said part of the Award has not been challenged by the appellant.

The learned Single Judge rightly observed that it was for the

appellant which was claiming the mesne profits/damages for use and

occupation or fair rent as aforesaid to do so and the onus of leading

evidence in that regard was on the appellant. The learned Single

Judge thus concluded that the appellant having failed to discharge

the said onus, the Arbitrator had no option but to proceed on the

basis of the material available to him. The learned Single Judge, in

our view, also correctly relied on a decision of the Division Bench of

this Court in National Radio & Electronic Co. Ltd. Vs. Motion

Pictures Association; 2005 (122) DLT 629, wherein it was held

that the burden for proving the rate at which mesne profits are

claimed is on the person claiming the mesne profits and in the

absence of any evidence led by such person, the Court cannot award

mesne profits at any rate higher than the rate at which the rent was

being last paid, by the defendant in that case, who was earlier a

tenant in the premises. The learned Single Judge took note of the

fact that the Arbitrator had found the valuation report submitted by

the appellant to be based on a wrong premise and relied on Banwari

Lal's case (supra) to come to the said conclusion. The Arbitrator also

found the instances of letting produced by the appellant to be not

relatable to the premises in question. Accordingly, as per the learned

Single Judge no interference with such findings of the Arbitrator was

permissible under Section 34 of the Act. The findings of the Arbitrator

of what should have been the fair rent of the property at Under Hill

Road were consequently rightly upheld by the learned Single Judge.

The learned Single Judge correctly observed that the leases of

Chandani Chowk, Bunglow Road, Sabji Mandi and Kamla Nagar

produced by the appellant were rightly held by the Arbitrator to be

not capable of enabling the Arbitrator to deduce as to what should

have been the fair rent of the property at Under Hill Road.

9. The learned Single Judge also found no fault with the

Arbitrator adopting the report of the committee of engineers of PWD

constituted by the respondents itself and took note of the fact that

the damages awarded as per the report were higher than the amount

being paid to the appellant during requisitioning and to only such

amount would the appellant have been entitled to in the absence of

any evidence of letting of nearby premises having been produced by

the appellant before the Arbitrator. The said finding of the learned

Single Judge, in our view, warrants no interference. The learned

Single Judge rightly rejected the request of the appellant to consider

the documents procured by it during the pendency of the objections.

The learned Single Judge was right in accepting the contention of the

respondents that the purport of the 1996 Act was to reduce

interference of the Court in arbitration and such purport will be

defeated if the Court in exercise of powers under Section 34 of the Act

interferes with the findings as those of rate of compensation/

damages/mesne profits assessed by an Arbitrator, particularly when

the approach of the Arbitrator is not found to suffer from any

illegality. While considering the objections under Section 34 of the

Act, the Court cannot sit in appeal over the Award. The learned

Single Judge, in our view, has rightly rejected the petition under

Section 34 of the Act. When the Arbitrator has taken a plausible

view, it is not for the Court to sit in appeal over the same while

entertaining a petition under Section 34 of the Arbitration and

Conciliation Act, 1996. The Court cannot re-appreciate the evidence

or examine the correctness of the conclusions arrived at by the

Arbitrator. When the Arbitrator has applied his mind to the

pleadings, the evidence adduced before him and the relevant

material, there is no scope for the Court to reappraise the matter as if

this were in appeal and even if two views are possible, the view taken

by the Arbitrator would prevail. So long as an Award made by an

Arbitrator can be said to be one by a reasonable person, no

interference is called for. The Court is clearly precluded from

reappraising the evidence. This is not a case where the Arbitrator

had mis-conducted himself or passed an Award in absence of any

evidence which is apparent on the face of the Award or has not

followed the statutory legal position or where there is total perversity

in the Award to justify interference by the Court under Section 34 of

the Act. Hence, in our considered opinion, the objections to the

Award have rightly been dismissed by the learned Single Judge.

10. In view of the above discussion, we see no reason to interfere

with the findings of the learned Single Judge. The appeal is

accordingly dismissed.

NEERAJ KISHAN KAUL, J.

MUKUL MUDGAL, J.

AUGUST 07, 2009 sb