# lt1a1iarana Shri J ayavanlsinhji, Ranmalsinhji v. Th6 Slal6 of Bombay and Others

- **Citation:** [1959] Supp. 1 S.C.R. 922
- **Court:** Supreme Court of India
- **Decided:** 1959
- **Case number:** Civil Appeal No. 191of1955
- **Bench:** Jafer Imam, S. K. Das, J. L. Kapur
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/lt1a1iarana-shri-j-ayavanlsinhji-ranmalsinhji-v-th6-slal6-of-bombay-and-others-1672
- **Pages:** 7

## Headnote

Rcquisition-Compensatioii-Potwtial vali<e • of propertyDefrnce of India Act, s. I9-Land Acquisition Act, I894 (I of
I894), S. 23.
The four storied premises in suit belonging to the appellant
were requisitioned by the respondent for the purposes of the
Controller of Army Factory Accounts who already had his office
in a neighbouring house. The arbitrator, to whom the question
of
compensation was referred,
awarded compensation of
Rs. 2,581-S-o according to the rent prevailing in the locality for
sit:nilar buildings \vith sirailar acco1nmodation and amenities.
This included an additional award of 10% for the potentialities
of the premises consisting of the special value of the premises
for the Controller, the indefinite period of the requisition and
additional burden on the lift. On appeal by the appellant the
(1) S.C.R. SUPREME COURT REPORTS
923
High Court held the compensation to be Rs. 2,773/- per mensem.
It rejected the additional award of 103 for potential value.
Held, that the High Court was wrong in ignoring the potential value of the premises which had been evaluated at 103 by
the arbitrator.. The principles for the award of compensation
are the same under s. 19 Defence of India Act as under s. 23 .
Land Acquisition Act, and one of them is to evaluate the potentialities of the premises which differ under different circumstances. Such value is to be ascertained by the arbitrator as ,
best as he can from the materials before him .
.Vyricherla Narayana Gajapatiraju v. The Revenue Divisional
Offi[er, (1939) L.R. 66 I.A. 104, followed.
p1v1L

## Text

lt1a1iarana Shri
J ayavanlsinhji,
Ranmalsinhji
v.
Th6 Slal6 of
Bombay
and Others
S11bb11 Rao ] .
z958
December I6.
922
SUPREME COURT REPORTS
[1959] Supp.
occupants with the result that they would be liable to
pay land revenue in accordance with the provisions of
the Land Revenue Code. If sub-s. (2) was not inserted
in s. 5, they would be liable to pay land-revenue under
the Code, notwithstanding the declaration made or the
agreement entered into by the Government with them
in regard to the jama payable by them. Sub-section (2)
was only enacted to preserve to them the concession
till the period fixed had expired.
We, therefore, hold
that the declaration made by the Governor in Council
in 1925-26 expired in 1955-56 and the appellants
became liable to pay the entire land-revenue according
to the settlement registers from the year 1955-56.
In the result, all the appeals and the Writ Petitions
a.re dismissed with costs, the State of Bombay and the
Collector of Ahmedabad, who are the respondents
herein, getting one set of hearing costs in all.
Petitions dismissed.
HAJI MOHAMMAD EKRAMUL HAQ
v.
THE STATE OF WEST BENGAL
(JAFER IMAM, S. K. DAS and J. L. KAPUR, JJ.)
Rcquisition-Compensatioii-Potwtial vali<e • of propertyDefrnce of India Act, s. I9-Land Acquisition Act, I894 (I of
I894), S. 23.
The four storied premises in suit belonging to the appellant
were requisitioned by the respondent for the purposes of the
Controller of Army Factory Accounts who already had his office
in a neighbouring house. The arbitrator, to whom the question
of
compensation was referred,
awarded compensation of
Rs. 2,581-S-o according to the rent prevailing in the locality for
sit:nilar buildings \vith sirailar acco1nmodation and amenities.
This included an additional award of 10% for the potentialities
of the premises consisting of the special value of the premises
for the Controller, the indefinite period of the requisition and
additional burden on the lift. On appeal by the appellant the
(1) S.C.R. SUPREME COURT REPORTS
923
High Court held the compensation to be Rs. 2,773/- per mensem.
It rejected the additional award of 103 for potential value.
Held, that the High Court was wrong in ignoring the potential value of the premises which had been evaluated at 103 by
the arbitrator.. The principles for the award of compensation
are the same under s. 19 Defence of India Act as under s. 23 .
Land Acquisition Act, and one of them is to evaluate the potentialities of the premises which differ under different circumstances. Such value is to be ascertained by the arbitrator as ,
best as he can from the materials before him .
.Vyricherla Narayana Gajapatiraju v. The Revenue Divisional
Offi[er, (1939) L.R. 66 I.A. 104, followed.
p1v1L
APPELLATE JURISDICTION:
Civil
Appeal
No. 191of1955.
Appeal by special leave from the judgment and
decree dated July 31, 1953, of the Calcutta High Court
in First Appeal No. 88 of 1950, arising out of the
judgment and decree dated May 18, 195Q, of the
Arbitrator, 24-Parganas, Alipore, in L.A. Case No. 71
of 1944.
I
.
A. V. Viswanatha Sastri and Naunit Lal, for the
appellant.
B. Sen, P. K. Ghose for P. K. Bose, for the respondent.
1958. December 16. The Judgment of the Court
was delivered by
KAl'UR, J.-This is an appeal pursuant to special
leave granted by this Court against the judgment and
order of the High Court of Calcutta varying the order
of the arbitrator in regard to compensation for compulsory requisitioning of the premises in dispute.
The appellant before us is the owner of the premises
in dispute which at the relevant time consisted of four
storeys, the ground floor and three upper floors and
the respondent is the State of West Bengal which was
the opposite party before the arbitrator. This building
(No. 9 Chittaranja.n Avenue) was constructed before
July 28, 1940, and was ta.ken on a. registered lease for
three yea.rs by the Bengal Central Public Works Division on a rental of Rs. 1,950 per mensem inclusive of
taxes. On the termination of the lease the building
was requisitioned by the West Bengal Government
and taken possession of on July 30, 1943. The Land
Haji Mohammad
Ekramul Haq
'v.
Ths State of
West Bengal
Kapur J.
924
SUPREME COURT REPOR',[S [1959] Supp.
r95B
Acquisition Officer offered Rs. 2,200 per mensem inclu-
-
sive of taxes in the form of rent as eompensa.tion. As,'"'
Haji Mohammad th
JJ
t d'd
t
t th'
t'
th
<I
Ek
ul Haq
e a.ppe a.n
1 no agree o
1s compensa. ion
e
'"':.
matter was referred under s. 19 of the Defence of India.
Th• stat• of
Act to an arbitrator Mr. J. De. He held that Rs. 2,200
West B••gal
per mensem fixed by the Land Acquisition Collector
was a. fair compensation. Against this order the
Kapur 1
appellant took an appeal to the High Court who set
a.side the order of the arbitrator, remanded the case
to the arbitrator and la.id down the following principle
for the ascertainment of compensation :-
" therefore, in deciding upon a. fair rent, for the
purpose of section 23 of the Land Acquisition Act, it
must be a. notional fair rent of a. hypothetical tenant,
and the assessment of such notional fair rent must be
based upon a. consideration which does not take into
account restrictions temporarily imposed by any
restrictive executive ord11r or legislation like Rent
Control Order, etc. The assessment in practice should
be a.s if it was of a. house of like nature let out for the
first time to a. tenant who is not compelled to let it
out. The practical method will be to assess rent as if
it was a. new house for the first time let out on tha.t
date".
On remand the a.ppella.nt who had previously claimed
Rs. 3,998 a.s compensation plus Rs. 125 for working
a.nd maintaining the lift, increased his demand to
Rs. 7,700 per mensem exclusive of municipal taxes,
a.nd a.lso Rs. 125 for the use of the lift. He stated in
his application tha.t the a.mount previously claimed by
him " wa.s unduly low a.nd wa.s· ma.de through mistake
~
a.nd misca.lcula.tion a.nd misconception of things and
principle a.nd moreover it wa.s due to the wa.nt of
proper information a.t the time ". After the remand
he examined further evidence a.nd the respondent
a.Jso examined some witnesses. The new arbitrator
Mr. J. C. Ma.zumda.r held that the matter must be
decided according to the rent prevailing in the locality
j
in 1943 for similar buildings with similar accommodation a.nd amenities a.nd proceeding on this basis he
a.warded compensation of Rs. 2,581-8 per mensem
inclusive of a.JI taxes, cost of normal a.nd essential
(1) S.C.R.
SUPREME COURT REPORTS
925
repair, cost of the upkeep of the lift and potential
value of the building in an important commercial Haji Mohammad
locality having regard to the fact that the period of
Ekramul Haq
requisition was indefinite. This sum was to be paid as
from August 1, 1943. This order did not satisfy the
appellant and against it he took an appeal to the High
Court who fixed the compensation at Rs. 16 per
hundred sq. ft. for the ground floor and Rs. 13 per
hundred sq. ft. for the 1st floor and Rs. 12 per hundred
sq. ft. for the second floor and Rs. 11 per hundred sq.
ft. for the third floor and thus calculating for tho
total floor area i.e. 5333 sq. ft. per floor it held the
compensation to be Rs. 2,773 per mensem. It rejected
the additional award of 10% on account of potential
value but allowed Rs. 77 per mensem on account of
the lift and thus it awarded a total compensation ·of
Rs. 2,850 per mensem. The High Court however
observed:-
"We must make it clear further that in making
the above calculation of the monthly compensation at
Rs. 2,850 we have also taken into consideration the
additional advantages due to the special adaptability
of the disputed premises for the purposes of the Controller of the Army Factory Accounts and his possible
willingness to pay a somewhat higher rent for the
same (Vide 66 I.A. 104) ".
Against this judgment the appellant has brought this
appeal by special leave.
It was argued on behalf of the appellant that the
method adopted by the High Court for arriving at the
figure of compensation was erroneous because it
proceeded on wrong principles in that it-.took averages
of rent paid for the premises No. 5 Chittaranjan
Avenue and for No. 22 Chittaranjan Avenue and
ignored the expert opinion of witness U. P. M:alik
according to which the rent for ground floor should
have been Rs. 23 per hundred sq. ft. and Rs. 17-8 per
hundred sq. ft. for other floors and also that the
potentialities of the building had not been taken into
consideration.
The High Court found that premises No. 22 Chittaranjan A venue was a little better than the premises
v.
1·110 Stale of
West Bengal
Kap111 ].
926
SUPREME COURT REPORTS [1959] Supp.
z9ss
in dispute and they (premises in dispute) were "some·
-
what better than the premises No. 5 Chitta.ranjan
H;J: Mohz";:~·a Avenue ". In these circumstances it cannot be said
'"':~
that the High Court committed any error of principle
Th• stat• of
in taking an average of the two premises No. 22 and 5
West Bengal
Chitta.ranjan- Avenue. The evtdence of u. P. Malik
Kapur].
was merely an opinion unsupported by any reasons
and in the circumstances of this ca8e the High Court
has rightly not plac~d any reliance upon i,t.
It was then urged that the High Court had erred in
taking into consideration the rent payable for the
premises No. 22 Chittaranjan A venue, as recitals with
regard to premises No. 22 in Ex. D, which was an
award for premises No. 31 were inadmissible in evidence. This document has not been printed and we do
not know what its contents'are or its language is. :No
objection was ta.ken to its admissibility either before
the arbitrator ur before the High, Court. It was
referred to in the evidence of the witness for the
respondent, Nanibhushan Sen Gupta who stated that
Rs. 2,200 would be a fair rent for the premises and in
coming to this conculsion he based his calculation
"on the award in L. A. Case No. 61 of 1944 in
respect of premises Nos. 22 and 31
Chittaranjan
Avenue and Ex. D was the judgment of that case".
In these circumstances no
objection as to the
admissibility of this document can be allowed to be
raised at this stage.
It was then argued that the High Court in arriving
at the amount of compensation had ignored the potential value of the premises in dispute in an important
commercial locality which the arbitrator Mr. J.C. Mazumdar had evaluated at 10% of the amount determined by him. This contention is well founded. The
High Court disallowed this. award of 10% without
assigning any reason. It said :-
"and although we are not wholly accepting his
additional award of 10% on account of so caJled potentialities, etc., including the lift, we are inclined to
assess this further compensation on account of the lift
at Rs. 77 per month".
(1) S.C.R.
SUPREME COURT REPORTS
927
The principles on which compensation is to be ascerr959
tained under the provisions of s. 19 of the Defence of Haji Mohammad
India Act are the same as those given in s. 23(1) of
Ekraniul Haq
the Land Acquisition Act, 1894, and one of the princiv.
ples of ascertaining compensation is to evaluate the
The State 01
potentialities of the land or the premises as the case
WeE Bengal
may be which differ under different circumstances.
Kapur 1.
The arbitrator in evaluating the potentialities said:-
" In 1943, when the building was first requisitioned, the Controller of Army Factory Accounts had
already his office in the neighbouring house of 5 Chittaranja.n A venue. This building had, therefore, a special
value to the Controller as it would certainly be more
advantageous to him if he could locate his office in the
premises in question. This gave greater bargaining
power to the landlord and, therefore, the potential
value to him was greater. It has also been conceded
that the requisition is for an indefinite period. The
Municipal assessment valuation (Ex. B series) was
based purely upon the rental which the building was
fetching prior to 1943 and did not take into account
the potential value, the value which will be maintained for a long period of lease and the additional burden
on the lift. For all these three factors, I allow an
additional 10 p. c. compensation of Rs. 234-12 As. per
mensem."
The value of potentialities is to be ascertained by the
arbitrator as best as he can from the materials before
him. In Vyricherla Narayana Gajapatiraju v. The
Revenue Divisional Officer (1 ), Lord Romer said :-
" The truth of the matter is that the value of the
potentiality must be ascertained by the arbitrator on
such materials as are available to him and without
indulging in feats of the imagination."
Another objection taken was in regard to compensation for the lift. The High Court awarded Rs. 77
but on what basis it is not clear. In our opinion this
claim of Rs. 125 per mensem was not excessive considering that two departments of the Government were
using this lift, which is clear from the fact that an
overhead bridge had been constructed for going from
(1) (1939) L.R. 66 I.A. lOf, u8.
1958
}Jaji Mohammad
Ekramul llaq
-V.
Tlie Slate of
IVest Bengal
J{apur ].
December z7.
928
SUPREME COURT REPORTS [1959] Supp.
premises No. 9 Chittaranjan Avenue to the other building which the Government had also requisitioned.
This will work out to Rs. 3,175. In the circumstances
Rs. 3,200 per mensem would be a fair compensation
and we would therefore enhance the compensation to
that figure and the appeal would be allowed to that
extent.
·
Although the appellant has not succeeded in getting
the whole of his claim decreed, there is no reason for
depriving him of his costs proportionate to his success.
We accordingly allow proportionate costs.
Appeal partly allowed.
ATTAR SINGH & OTHERS
v.
THE STATE OF U. P.
(S. R. DAS, c. J., N. H. BHAGWATI, B. P. SINHA,
K. SuBBA RAO and K. N. WANOHOO, JJ.)
1
ricultural .Holdings, Consoli<fation of-Constitutional validity o enactment-Procedure, if _discriminatory-U.P. Consolidatio11 o Holdings Act (U.P. V of r954) as amended by Act No. XV.(
of r957, ss. 8, 9, IO, r4 to r7, r9 to 22, 49-Constilution of India,
Arts. r4, 3r(2).
The petitioners challenged the constitutional validity oi the
U.P. Consolidation of Holdings Act (U.P. V of 1954), as amended by the amending Acts, which was intended to encourage the
development of agriculture by the allotment of compact areas to
tenure-holders in lieu of scattered plots so that large-scale cultivation might be j)Qssible with all its attendant advantages. A
notification was issued under s. 4 of the impugned Act declaring
the decision of the State Government to formulate a scheme of
consolidation in respect of the area where the petitioners held
their lands. This was followed up by a statement of proposals
under s. 19. The petitioners objected to these proposals and
thereafter appealed to the Settlement Officer (Consolidation) but
to no effect. It was contended, inter alia, on their behalf that
(1) the provisions of ss. 8, 9 and IO read with those of s. 49 of the
impugned Act were discriminatory in that they laid down a
procedure for correction and revision of revenue records for