Delhi High Court
Ballabh Das Aggarwal (Deceased) vs Union Of India & Ors on 28 February, 2011
Author: Mool Chand Garg
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ FAO 383/1980
% Reserved on :03.02.2011
Decided On: 28.02.2011
BALLABH DAS AGGARWAL (DECD.) ..... Appellant
Through Mr. Sandeep Sethi, Sr. adv. with
Mr. Pawanjit S. Bindra, Mr. Rohit
Kumar, Mr. Sindhu Sinha, Advs
versus
UOI & ORS ... Respondents
Through Mr. Jaswinder Singh, Adv.
WITH
+ FAO 423/2000
RAJIV KUMAR AGGARWAL & ANR. ..... Appellants
Through Mr. Sandeep Sethi, Sr. adv. with
Mr. Pawanjit S. Bindra, Mr. Rohit
Kumar, Mr. Sindhu Sinha, Advs.
versus
UOI & ORS. .... Respondents
Through Mr. Jaswinder Singh, Adv.
CORAM:
HON‟BLE MR. JUSTICE MOOL CHAND GARG
1. Whether reporters of Local papers may be Yes
allowed to see the judgment?
2. To be referred to the reporter or not? Yes
3. Whether the judgment should be reported in Yes
the Digest?
: MOOL CHAND GARG,J.
*
1. Both these appeals seek enhancement of claim towards
rent/compensation of the property bearing No.4, Tolstoy Marg, New
Delhi (hereinafter referred to the „said property‟) requisitioned by the
Government for running its offices for different periods in accordance
with the provisions contained under the Requisition and Acquisition of
Immovable Property Act, 1952 (hereinafter referred to as "the Act").
2. Briefly stating the facts of this case are that the said property
measuring about 13485 sq. ft. was first requisitioned by the Delhi
Administration on 07.08.1968 for housing offices of CPWD. On
15.06.1974, the said property was de-requisitioned and to determine
the compensation to be paid to the appellants for the aforesaid
period, Shri P.L.Singla, ADJ was appointed as Sole Arbitrator. By his
award dated 30.04.1973, Shri P.L.Singla held that the appellants were
entitled to monthly compensation of ` 20,000/- along with ` 10,000/-
as charges for repairs etc. for restoring the said property to its
original shape, approximately as awarded at that time were at `1.50/-
per square ft. per month. The period of requisition was 07.08.1968 to
15.06.1974.
3. The appeals now concern to the period 15.03.1977 to
31.12.1996 though the appellants do make reference to the award of
Sh. P.L. Singhla for the purpose of contending that the rate of rent as
fixed by Sh. P.L. Singhla could be taken as a basis for fixing
reasonable compensation of the rent/compensation amount which
has not been done by the Arbitrators in their case. Hence they seek
enhancement of compensation in these two appeals. According to
the appellants they were entitled to rent/compensation for various
periods as under:
Period Rate
15.03.1977 to 14.03.1982 `7 per sq. ft. plus service charges of
`2696/-
15.03.1982 to 14.03.1987 `25 per sq. ft. interest @ 18% p.a.
15.03.1987 to 14.03.1992 `40 per sq. ft. per month
15.03.1992 to 14.03.1994 `80 per sq. ft. + `76 lacs for damages
15.03.1994 to 31.12.1996 `400 per sq. ft. as damages and same
amount for remedying the damages.
4. The rent/compensation has been fixed by the arbitrators who
were appointed in accordance with Section 8 of the Act for the use
and occupation of the aforesaid property in the relevant period. The
arbitrators have granted the rent/compensation as under:
Period Rate
15.03.1977 to 14.03.1982 `2.50 per sq. ft. plus restoration
charges of `20,000/-
15.03.1982 to 14.03.1987 `4.50 per sq. ft.
15.03.1987 to 14.03.1992 `8 per sq. ft.
15.03.1992 to 14.03.1994 `14 per sq. ft.
15.03.1994 to 31.12.1996 `20 per sq. ft.
5. It is the stand of the appellants that since user of the property
was commercial inasmuch as it was used for commercial purpose by
the Government for running its offices and the property is situated
near the commercial areas, they were entitled to compensation/rent
as was applicable to commercial property. It is submitted that they
have also led evidence in this regard.
6. Insofar as the first arbitrator, namely, Justice (Retd.) Sh.M.K.
Chawla (as His Lordship then was) is concerned, he granted
compensation of `2.50 per sq. ft. and `20,000 towards restoration. It
has been observed:
"16. It is not disputed that Shri P.L. Singla, Addl. District Judge
awarded the compensation for this very property at `20,000/-
per month from the date of the requisition till the time the
property remained under requisition with the Collector. From
the perusal of the certified copy of his award Ex.PW.10.10/D,. I
find that the petitioners have led evidence to show that the
market rate of rent of similarly situated properties in the area at
that time was `2.50 per sq. ft. per month, besides 10ps. per sq.
ft. as service charges. The learned Arbitrator after discussing
the relevant evidence on the subject fixed the rents stated
above and also awarded and amount of `10,000/- for restoring
the property to its original condition. In the present
proceedings unfortunately neither of the party have produced
any evidence in respect of the rent of the properties, the lend
use of which is residential. Almost all the witnesses appearing
on behalf of the petitioner talk about the rate of rent for the
building being used for commercial purpose which to my mind
cannot be made the basis for fixing the fair compensation in
respect of the property in dispute. It is not disputed that since
the award of Shri. P.L. Singla dated 30.04.1973 the rate of rents
or almost all types of buildings have increased, those buildings
may be situated in any part of Delhi. It is respondent‟s own
case that the Ministry of Information and Broadcasting was not
able to get any other accommodation in the vicinity of
Connaught Place area at any cost. That being the situation, the
respondent should also be prepared to pay the reasonable
increase in the rent. After careful consideration of the entire
material on record, in any opinion, the ends or justice will be
fully met if the petitioner is awarded compensation at the rate
of `2.50 per sq. ft. per month for the covered area w.e.f.
15.3.1977 till the time the property remains under requisition
with the collector. I do not propose to allow him any
compensation on account of service charges as there is no
evidence worth reliance that the open space was being used by
the office for a regular parking place. No witness has come
forward to depose that the office which is being run in the
building as in public dealings which required a number of visits
frequently visit the property in question. The small portion of
the open area, under these circumstances, can be said to form
part of the area which was requisitioned for the purpose of
locating the office."
7. The second arbitrator Justice (Retd.) P.K. Bahri (as His Lordship
then was) framed the following issues:
(1) Whether the award given by Justice(Retd.) M.K.Chawla
fixing the rent at the rate of ` 2.50 per sq.ft per month is
applicable to the period beyond five years?
(2) What should be the rate of charges in respect of the
property in question for the period 15 th April, 1982 to 14th
March 1987 and for the period 15 th March 1987 to 14th
March 1992, and for the period 18 th March 1992 to 14th
March 1994?
(3) Are the claimants and respondents 3 to 5 entitled to the
whole of the enhanced charges for the period 15 th March
1994 to 31st December 1996? If so, at what rate?
(4) Whether the respondents 3 to 5 are entitled to the whole
of the enhanced charges for the period prior to 7 th
September, 1992?
(5) What are the shares of the claimant and the respondent 3
to 5 in respect of the aforesaid periods?
(6) Whether the present proceedings are not maintainable in
view of the pendency of the appeal in Delhi High Court
against the award given by Justice (Retd.) M.K.Chawla?
(7) Whether the claimants and respondent 3 to 5 are entitled
to recover any other charges? If so, what are those
charges?
(8) Relief?
8. We are concerned with issue No.2 in this appeal. The evidence
led before the sole Arbitrator comprises of statement made by ten
witnesses examined on behalf of the appellant. However, none
appeared for the respondent.
9. The evidence comprises of rent agreements/ lease etc. showing
the rate of rent for various periods. However, the documents which
have been relied upon by the appellant pertain to the properties
which were of lesser sizes and were commercial.
10. Referring to the evidence which came on record, it has been
observed:-
(i) PW1 has relied upon a letter dated 04.02.1977
showing the rate of rent @ ` 5.50 per sq.ft. in the
year 1977. He has also deposed that rent in the year
1979 was ` 8.50 to 9 while car parking was @ ` 150
to 200 per month.
(ii) PW2 stated to have let-out out a property bearing
No. 3/90 Connaught Circus @ ` 7 per foot in 1977.
According to this witness the letting rate was ` 8 for
his house i.e. 20 Fire Brigade Lane.
(iii) PW4 was examined by the appellant to prove that
the premises in question was taken in possession by
the respondent/ Government for the purpose of
housing the offices of the employees of the Ministry
of Information & Broadcasting.
(iv) PW5 has produced a lease deed in respect of flat
No.B on 14th floor of Atma Ram house, measuring
941.52 sq.ft. The lease for the said flat was ` 3 per
sq. ft. for office and ` 1.50 for storage space.
(v) According to PW6 who is an architect the rent for
covered area towards service charge and open areas
and states that the same is based on market
conditions.
(vi) PW10 has detailed about the circumstances leading
to requisition of property as also about the rental in
the area. He also deposed that Ministry of
Information & Broadcasting has offered rent @ ` 5
per sq. ft. in the covered area. He also states that
brokers had quoted ` 6 to 7 per sq. ft. He also states
that fair rent is ` 7 per sq. ft.
11. The contention of the appellant is that rent has been increasing
progressively inasmuch as (a) ExPW5/1 dt. 14.6.74 mentions rent at `
3 plus per sq. ft. (b) ExPW3/2 dt. 11.5.76 mentions rent at ` 4.25 per
sq. ft. (c) ExPW1/1 dt. 4.2.77 shows rent being offered at ` 5.50 per
sq. ft. (d) Ex.PW2/1 (dt. 17.10.77) and ExPW2/2 (dt. 28.11.77 show
that the rent being offered was ` 6 per sq. ft. (e) ExPW2 mentions
having let out 3/90 Connaught Circus at ` 7 in the year 1978 (f) PW1
states that rentals in 1979 were in the range of ` 8.50 to ` 9 per sq. ft.
(g) PW-4 witness from the Ministry of Information & Broadcasting (for
whom the property was requisitioned) states that the Ministry was not
able to find any place in Connaught Place at any rate and the rates
being quoted in Connaught Place in 1976 were in the range of ` 5 to 6
per sq. ft. (h) PW-6 mentions in his report (PW6/1) that rental of ` 7
was on the basis of similarly located properties let out. On the other
hand the respondent along with the reply in the present appeal
annexed letter dated 24.9.76 sent by the appellant to the Secretary,
Min. of Information & Broadcasting offering the building and
mentioning the rent being between ` 4 to 5 per sq. ft. then.
12. In FAO 423/2000, for the period 15.03.82 to 14.03.87 the
evidence relied upon is a rent agreement dated 22.08.84 in respect of
Flat No. 301 in M-47 2nd Floor Connaught Place. The rent was paid @ `
18 per sq. ft. Another rent agreement which has been relied upon is
dated 29.06.84 in respect to flat No. 401 & 402 at 5 th floor of
Connaught Place comprising of 1140 sq. ft. having rent of ` 16 per sq.
ft. per month for the period 15.03.87 to 14.03.87. For the period
15.03.87 to 14.03.92 evidence relied upon is a rent agreement dated
1.8.88 in respect of flat No. 305, 1 st floor, Tolstoy Marg, New Delhi
comprising of 551 sq. ft. having rent of ` 26 per sq. ft. per month with
enhancement of 35%. Another rent agreement which has been relied
upon is dated 15.06.89 in respect of 17 Barakhamba Road, 8 th floor
New Delhi comprising of 11238 sq. ft. having rent of ` 25 per sq. ft.
per month with enhancement of 25%. Another rent agreement which
has been relied upon is dated 23.11.89 in respect of 12 th floor 17,
Barakhamba road, New Delhi comprising of 1545 sq. ft. having rent of
` 25 per sq. ft. per month with enhancement of 20%. For the period
15.03.92 to 14.03.94 evidence relied upon is a rent agreement dated
19.8.93 in respect of upper ground Floor at 15 K.G. Marg, New Delhi
comprising of 972 sq. ft. having rent of ` 50 per sq. ft. per month with
enhancement of 20%. Another rent agreement which has been relied
upon is dated 30.04.93 in respect of flat no. 201 in M-47 Connaught
place, New Delhi comprising of 795 sq. ft. having rent of ` 31.70 per
sq. per month with 9 month advance and enhancement by 15% after
3 years. For the period 15.03.94 to 31.12.96 evidence relied upon is a
rent agreement dated 4.11.95 in respect of 1 st floor at 15 Barakhamba
road, New Delhi comprising of 370 sq. ft. having rent of ` 150 per sq.
ft. per month with 18 months advance and enhancement of 25% after
3 years.
13. After discussing the evidence, the Arbitrator has made the
following observations:-
The claimants and the respondents 3 to 5 have field copies
of rent agreements n respect of the exclusively commercial
properties located either across the road or in other nearby
commercial areas. A sketch has also been placed on
record showing the location of such properties. C-1/XVII is
the copy of the rent agreement dated 27 th August, 1984
wherein flat No.301 in M-2 at the back of M-47, Connaught
Place middle circle, 11th floor was let out at the rate of ` 18
per. Sq.ft. per month to be enhanced by 20% after three
years with six months advance rent and 18 months deposit
and Ex.C-1/XVIII is the rent agreement dated 29 th June,
1984 of Flats No. 401 and 402 in the same building on 4 th
floor being let out for ` 16 per sq.ft. per month with 24
months advance rent and enhancement of 15% after every
three years. These instances are of the completely
commercial property in total commercial area. Mere user
of the property in question for office purpose would not
make the property as such a commercial property. We do
not know when these properties were constructed. The
property in question is a very old construction of the year
1940 with some renovations taking place in 1975. Still this
property was not constructed as a commercial property. So
these instances, I am afraid, would not help us in
determining the market rent of property in question for the
period from 15th March, 1982 to 14th March, 1987. Thus we
have only the fact that the compensation of this property
was fixed by Mr. justice M.K. Chawla (retired) at the rate of
` 2.50 per sq.ft. per month for the earlier period and would
have to see as to what could be reasonable enhancement
which can be given on this rate for the period from 15 th
March, 1982 to 14th March, 1987. Charts have been filed
showing the details of the properties of which the
agreements have been placed on record. One is the
property pertaining to Tolstoy Marg let out at the rate of `
7/- per sq.ft. per month for the year 1982 at No. 1.90,
Connaught Circus and a property of Gopal Das Estate, M-3,
Connaught Place let out to Daljit Singh at the same rent
and another property 202, Deep Building let out to Prof.
S.N. H at the rent of ` 22 per sq.ft. and another flat 205
205 in the same building let out to J. Karna at the same
rent in 1985 and property, Ground Floor 87, Tolstoy marg
let out at the rate of ` 32 per sq.ft. per month in 1986. All
these properties are commercial properties located in
commercial areas and thus cannot be treated as basis for
fixing market rent of the property in question which is, as
already mentioned was constructed as residential house in
the year 1940 and is having land use of residential under
the law.
Now coming to the period 14th March, 1987 to 13th march,
1992. Ex.C-1/919 is the copy of the rent agreement dated
1st August, 1988 by which first floor of 305, Tolstoy Marg
house was let out at the rent of `26 per sq.ft. per month
with enhancement of 35% after five years. C-1/20 is the
copy of the rent agreement dated 15 th June, 1989 on 8th
Floor of 17, barakhamba Road showing the rent of ` 25 per
sq.ft. per month with enhancement of 25% after five years.
Ex. C-1/21 is the rent agreement dated 23rd August, 1987
on 12th floor in the same building of barakhamba Road
having the same rent.
There is a reference to house at kasturba Gandhi Marg
house let out at the rental of `29 per sq.ft. per month in
1991 and premises let out in 606, MDC, Tolstoy Marg at the
rent of `30 per month for the year 1991. Again these
properties have no comparison with the property in
question for parity of reasons and thus cannot be seen as
basis for fixing the market rent of the property in question
for the relevant period. One can take judicial notice of the
fact that the rents have been increasing every year all over
Delhi.
now coming to the period 15th march, 1992 to 14th march,
1994 again the copy of the rent agreement dated 19 th
August, 1993 has been produced letting out flat on ground
floor, 15, kasturba Gandhi Marg at the rent of ` 50 per
sq.ft. per month with 20% enhancement after three years
and Ex.c-1/24 rent agreement dated 30 th April, 1993 of Flat
No. 201 in M-2, Connaught Place, Middle Circle at the
rental of ` 31.70 per sq.ft. per month with nine months as
advance to be adjusted in next 18 months and 12 month
rent as deposit and 15% increase after every three years.
Then reference is made to 9th floor, Gopal Das Building
letting out at the rental of `62.50 per sq.ft. per month in
1994 and area in that building let out at `70 per sq.ft. per
month in 1994. In view of the reasons already given, these
instances cannot be relied upon for fixing the market rent
of the building in question.
Now coming to the last period 15th March, 1994 to 31st
December, 1996, the copy of the rent agreement (Ex.C-
1/24) dated 4th November, 1995 showing that some portion
has been let out at `150/- per sq.ft. per month with 18
months rents in advance and 25% enhancement for every
three years. Reference is made to C-1/27, Himalaya House
let out at the rate of `100 per sq.ft. per month in the year
1996 and 11th floor area let out in Gopal Das building at the
rent of ` 75/- per sq.ft. per month in 1996. Again these are
the same commercial buildings already referred to earlier
and thus cannot be taken as the base for fixing market
rent of the property in question.
14. It has been observed by the Arbitrator that from the evidence
led by the parties it was apparent that no evidence regarding
payment of rent/compensation with respect to any residential
property was led by the appellant. They only relied upon rent
payable for commercial purposes in the vicinity of the property in
question and had been harping upon their plea that since the user of
the property was for running Government offices, they ought to have
been paid commercial rent.
15. The Arbitrator further observed that on that side of the road
where the property in question was located, adjacent buildings were
also constructed as residential houses. Though it was not disputed
that across the road on the other side commercial buildings have
come up during the last few years but the locality on that side of the
road where the said property was located remained residential, hence
according to the arbitrator there cannot be any comparison with the
rent being charged for the commercial properties in the exclusively
commercial area like across the road or in inner or outer circle of
Connaught Place and in other commercial localities. The appellants
and the respondents 3 to 5 though laid emphasis on the open area
available in the property in question for parking the vehicles but
according to the Arbitrator those open areas were left according to
the building bye laws under which the residential house was
constructed and they were part and parcel of the covered area and
were not an independent area which could be separately let out.
16. The arbitrator also observed the vital differences between the
commercial properties of which instances have been given and the
property in question. These were as follows:-
35. Those are the properties built in commercial
properties in duly sanctioned commercial places whereas
the properties in question is constructed as a residential
house as its sanctioned use is „residential‟ only.
36. The property in question is a very old construction of
1941 with some renovations done in 1975 while the
commercial properties seem to be constructed quite
recently.
37. The instances of letting are of small commercial areas
while the letting area in this house is quite large.
38. There are varied services provided in said commercial
multi-storied commercial buildings while no such services
were provided in this house.
39. The maintenance of house was not the responsibility
of the owners whereas such is not the case with letting of
other commercial properties.
40. The liability to pay house tax was again not the
responsibility of the owner while that is not the case with
owners of other commercial properties.
17. Hence the Arbitrator came to the conclusion that the rent being
fetched by such other commercial property cannot be any indication
of as to what market rent the property in question could fetch in the
relevant periods. Further the parties have not brought on record any
instance where similar type of property might have been let out for
similar purpose and is fetching rent as what appellants and
respondents 3 to 5 claim.
18. The arbitrator had also emphasized on the fact that Sh.P.L.
Singhla, Addl. District judge, who was the first arbitrator appointed to
fix the compensation for this property for the period for which Delhi
Administration had requisitioned the building, had fixed `20,000/- per
month as the compensation which comes to approximately ` 1.50 sq.
ft. The owner had not challenged the said order although the
Government had filed an appeal against that order, which appeal was
pending at the relevant time. It is informed that the said appeal has
now been dismissed.
19. Thus, keeping in view all the facts discussed above, the
Arbitrator fixed `4.50/- per sq.ft. per month as compensation for the
period 15th March, 1982 to 14th March, 1987 and `8/- per sq.ft. per
month as the compensation for the period 15th March, 1987 to 14th
March, 1992 and `14/- per sq.ft. per month as the compensation for
the period 15th march, 1992 to 14th March, 1994 and Rs `20/- per
sq.ft. per month as the compensation for the period 15th March, 1994
to 31st December, 1996.
20. Before me, the appellants are maintaining their stand as taken
before the arbitrator and submit that the arbitrator has failed not only
to consider the pleadings but also the evidence on record inasmuch
as appellants had specifically averred in para 17 (v) of the claim
petition that the rent in the locality was ` 7 per sq ft as the prevalent
rent in the adjourning buildings was at the rate of ` 6 to 7 per sq ft.
and there was no denial of that fact in the reply initially filed by the
respondents. Though, the reply was later amended but still no denial
was made. The appellants further submit that they had also led
evidence to corroborate the specific averment made in the claim
petition. However, neither the evidence was rebutted nor the
witnesses were cross-examined on that aspect.
21. The appellants submit that the most important evidence i.e PW-
4, S.Harcharan Singh - Research Officer, Ministry of Information and
Broadcasting- respondent No 2 for whom the premises were
requisitioned had stated that the rentals in Connaught Place ranged
from ` 5 to 6 per sq. ft., however there was no cross -examination of
the said witness on that aspect rather the Arbitrator ignored that
evidence.
22. The appellants also submit that the respondents have annexed
a copy of the letter along with their reply which proves the fact that
an offer had been made by the appellants to respondents to let out
the premises at ` 4 to 5 per sq. ft and that was being negotiated in
Sept. 76 before requisitioning of the property.
23. The appellant further submit that whether the premises were
residential or commercial in nature they were used for commercial
purpose by respondent No 2 and it was also on record that
modifications etc were carried out in the building to be used as an
office. Hence, it goes beyond comprehension that though the building
was used as an office but commercial rates could not be applied as
the premise was initially residential.
24. The appellants also submit that rules of natural justice have
been violated and the compensation had been fixed without regard to
the location of the building, its condition and the prevalent market
rent. Further the appellants submit that even the compensation
awarded by the Arbitrator Shri P.L.Singla was on the basis of a lease
deed for use of the premises as commercial and not residential.
25. I have heard the parties and have also perused the records, the
impugned awards as well as the written submissions and the
judgments relied upon by both the parties. The only ground taken by
the appellants in their written submission is that though the building
was residential in nature but was used for commercial purpose by the
respondents, hence appellants should be compensated in terms of
commercial rates prevalent in the adjoining areas. The appellants
have also relied upon a Single Bench judgment in Naresh Chandra
Jain & Ors Vs UOI, decided on February 9,2000 in suit No 580/77 to
further substantiate their point. However the facts of the case relied
upon by the appellants are different from the case in hand inasmuch
as in the abovementioned case the respondents had agreed with the
appellants through execution of lease agreement and in various
correspondences exchanged that they would pay the rent at
commercial rates though the building was designed and constructed
for residential purpose but the same is not the case in the instant
case. In the instant case respondents never agreed to pay rent
according to commercial rates nor did they execute any lease
agreement for the same.
26. The appellants have also argued that Section 8 of the Act states
that the amount of compensation payable should be as would be
made payable for the use and occupation of the property. Therefore,
since the property was used for commercial purpose the
compensation payable should be according to commercial rates.
However when we read through the language of the Section 8 of the
Act, the argument of the appellant does not seem correct. The
relevant Section is produced hereunder:-
"8. 1) Where any property is requisitioned or acquired
under this Act, there shall be paid compensation the
amount of which shall be determined in the manner and in
accordance with the principles hereinafter set out, that is
to say,-
(a) where the amount of compensation can be fixed by
agreement, it shall be paid in accordance with such
agreement ;
(b) where no agreement can be reached, the Central
Government shall appoint as arbitrator a person who is, or
has been, or is qualified for appointment as, a judge of a
High Court;
(c) the Central Government may, in any particular case,
nominate a person having expert knowledge as to the
nature of the property requisitioned or acquired to assist
the arbitrator and where such nomination is made, the
person to be compensated may also nominate an assessor
for the same purpose;
(d) at the commencement of the proceedings before the
arbitrator, the Central Government and the person to be
compensated shall state what in their respective opinion is
a fair amount of compensation.
(e) the arbitrator shall, after hearing the dispute, make an
award determining the amount of compensation which
appears to him to be just and specifying the person or
persons to whom such compensation shall be paid; and in
making the award, he shall have regard to the
circumstances of each case and the provisions of sub-
sections (2) and (3), so far as they are applicable;
(f) when there is any dispute as to the person or persons
who are entitled to the compensation the arbitrator shall
decide such dispute and if the arbitrator finds that more
persons than one are, entitled to compensation, he shall
apportion the amount thereof amongst such persons;
(g) nothing in the Arbitration Act,1940 shall apply to
arbitration under this section.
(2) The amount of compensation payable for the
requisitioning, of any property shall, consist of subject to
the provisions of sub-sections (2A) and (2B), consist of -]
(a) a recurring payment, in respect of the period of
requisition, of a sum equal to the rent which would have
been payable for the use and occupation of the property, if
it had been taken on lease for that period; and
(b) such sum or sums, if any, as may be found necessary
to compensate the person interested for all or any of the
following matters, namely :-
(i) pecuniary loss due to requisitioning ;
(ii) expenses on account of vacating the requisitioned
premises;
(ii) expenses on account of reoccupying the premises
upon release from requisition; and
(iii) damages (other than normal wear and tear) caused to
the property during the period of requisition, including the
expenses that may have to be incurred for restoring the
property to the condition in which it was at the time of
requisition.
(2A) The recurring payment, referred to in clause (a) of
sub-section (2), in respect of any property shall, unless the
property is sooner released from requisition under section
6 or acquired under section 7, be revised in accordance
with the provision of sub-section (2B)-
(a) in a case where such property has been subject to
requisition under this Act for the period of five years or a
longer period immediately preceding the commencement
of the Requisitioning and Acquisition of Immovable
property (Amendment) Act,1975-
(i) first with effect from the date of such
commencement, and
(ii) secondly with effect from the expiry of five years,
thirdly with effect from the expiry of ten years, from such
commencement;]
(b) in a case where such property has been subject to
requisition under this Act immediately before such
commencement for a period shorter than five years and
the maximum period within which such property shall, in
accordance with the provision of sub-section (1A) of
section 6, be released from requisition or acquired,
extends beyond five years from such commencement,-
(i) first with effect from the date of expiry of five years
from the date on which possession of such property has
been surrendered or delivered to, or taken by, the
competent authority under section 4, and
(ii) secondly with effect from the date of expiry of five
years, and thirdly with effect from the date of expiry of ten
years, from the date on which the revision made under
sub-clause (I) takes effect;]
(c) in any other case,-
(i) first with effect from the date of expiry of five years
from the date on which possession of such property has
been surrendered or delivered to, or taken by, the
competent authority under section 4, and
(ii) secondly with effect from the date of expiry of five
years, and thirdly with effect from the date of expiry of ten
years, from the date on which the revision under sub-c1. (I)
takes effect.]
(2B) The recurring payment in respect of any property
shall be revised by re-determining such payment in the
manner and in accordance with the principles set out in
sub-section (1) read with clause (a) of sub-section (2), as if
such property had been requisitioned under this Act on the
date with effect from which the revision has no be made
under sub-section (2A).]
(3) The compensation payable for the acquisition of any
property under section 7 shall be the price which the
requisitioned property would have fetched in open market,
if it had remained in the same condition as it was at the
time or requisitioning and been sold on the date of
acquisition.]
27. I would like to observe here that the term "for the use and
occupation of the property" does not mean the current use of the
property i.e the commercial purpose for which the respondents were
using the property. The meaning that the language conveys is the
initial purpose/usage for which the property was constructed and that
is residential. Hence in my view, the appellants have totally
misinterpreted the language of Section 8 of Act and therefore, cannot
take the benefit of it.
28. I would also like to make a reference of the judgment of the
Apex Court Judgment in the case of Rao Narain Singh (Dead) by L.R‟s
Vs UOI, AIR 1993 SC 1557,
7. Method of valuation to be resorted to by a court in
determining acquired land‟s just equivalent price, has to,
necessarily depend on the nature of evidence adduced by
parties in that regard. When, in a given case, the parties
produce evidence of sales relating to the acquired land or
lands in the vicinity of the acquired land and require the
concerned court to determine the compensation payable
for such acquired land, such court naturally resorts to what
is known as „the Comparable Sales Method‟ of valuation of
land. Indeed, „Comparable Sales Method‟ of valuation of an
acquired land is invariably resorted to by every7 court ever
since the Privy Council in Atmaram Bhagwant Ghadgay v.
Collector of Nagpur regarded that method as one which
furnishes „a healthy criterion‟ for determining the market
value of an acquired land. As regards the acquired land,
with the market value of which we are concerned, parties
themselves had produced evidence of sales of lands before
the arbitrator in order to enable him to determine its
market value based on prices fetched for lands under
those sales. The same sale deeds are considered by the
High Court to find as to which of them could form the basis
for determining the market value of the acquired land. It is
why, we have now to see, whether the sale deeds relied
upon by the High Court to determine the market value of
the acquired land did really furnish a proper basis to make
such determination by resorting to „the comparable sales
method‟ of valuation of land.
8. Building potentiality of the acquired land, claimed to be
possessed by the acquired land, can assume no
significance in the instant case as „the comparable sales
method‟ of valuation of land is resorted to by the High
Court. Such method is resorted to, as the acquired land
was found to be comparable in its essential features with
land(s) respecting which evidence of certain sale deed(s),
was produced. Hence, the contention of the learned
counsel for the appellant raised to establish that the
acquired land had building potentiality at the time of its
acquisition, need not engage our consideration.
9. The High Court, as is seen from its judgment, has
examined the sale deeds produced as evidence of
comparable sales with a view to find out as to which of
them could be taken to relate to a land or lands
comparable to the acquired land. Such examination was
necessary to find whether the land covered under a
genuine sale deed was basically similar to the acquired
land. If so found, it would not be difficult for the Court to
hold that the price fetched for such land could be regarded
as the price of the acquired land, although some amount
may have to be either added to sale price or deducted out
of the sale price in balancing certain factors not common
to the land(s) sold and the land acquired.
29. Thus what could be gathered from the above judgment is that
the appellants in order to seek enhancement of compensation should
have put evidences relating to the properties which had been
acquired in similar fashion in the near vicinity and the rents fixed for
such properties, so that the court can use „the Comparable Sales
Method‟ to fix the actual rent for the property. In the alternative the
appellants should have led evidence of payment of
rent/compensation in respect of a similar property which was a
residential property as the case in hand, may be used for commercial
purposes. However, the appellants have put no such evidences of
the acquired buildings in the vicinity or evidences which could match
-up appellants‟ case inasmuch as no comparable evidence of a
residential property which might have been acquired in a similar
fashion by the respondents has been let on record.
30. Thus in the absence of any such evidences which would enable
the Arbitrator to use „Comparable Sales Method‟ in computing the
compensation, the decision given in above two appeals taking into
consideration all the circumstances i.e nature and permissible user of
the property as per the sanctioned plan and giving reasonable
increase from time to time, the Arbitrator has fixed reasonable
rent/compensation which does not call for any further enhancement.
From the award given by the arbitrator it is apparent that they have
given periodical rise in the amount of rent/compensation as awarded
to the appellants inasmuch as, the rate of rent/compensation ranges
from `2.50 sq.ft. for the period 15.03.1977 to 14.03.1982 to `4.50
sq.ft. for the period 15.03.1982 to 14.03.1987, `8 per sq. ft. for the
period 15.03.1987 to 14.03.1992, `14 per sq. ft. for the period
15.03.1992 to 14.03.1994, and `20 per sq. ft. for the period
15.03.1994 to 31.12.1996.
31. Therefore, in view of the aforesaid, neither I find any infirmity in
the awards passed by the arbitrator nor I find this to be a case for
enhancement of compensation. Hence the appeals are dismissed
with no orders as to costs.
33. TCR be sent back along with a copy of this order.
C.Ms.3299/89 & 5954/009 in FAO 383/1980
C.M.2706/2009 in FAO 423/2000
Dismissed as infructuous.
MOOL CHAND GARG,J
FEBRUARY 28, 2011
„sg/anb‟
