# M/S. SURAJMULL NAGARMULL v. STATE OF WEST BENGAL

- **Citation:** [1963] 2 S.C.R. 163
- **Court:** Supreme Court of India
- **Decided:** 1962-04-17
- **Bench:** S. Jr. DAS, M. Hidayatullah, J. O. Shah
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/m-s-surajmull-nagarmull-v-state-of-west-bengal-2664
- **Pages:** 6

## Headnote

Arbitration-Arbitrator appointed und.r the Defence o/
India Act, if a court-Righl to appeal against the award, if and
when, exercisable-Defence of India Act, 1939 (35 of 1939),
"· 19(1), 19(1)(!) a7;Zd (g), J9(3)(c)-Defence of India Rules,
1939, rr. 75A, 19, second proviso.
'
The appellants were tenants of three warehouses and
vacant land, which were used for storage of jute belonging
to the appellants. By an order issued under r. i5A of the
Rules framed under the Defence of India Act, 1939, the
warehouses were requisitioned
by the Governme11t. An
arbitrator was appointed unders. 19(1)(b) of the Defence of
India Act to fix the amount of compensation payable to the
owner. The claim of the appellants to compensation for
loss of earning, and for "loss of business" was rejected by
the arbitrator. An appeal filed by the appellants against
the arbitrator was dismissed by the High Court at Calcutta
as not maintainable.
'
Held, that the arbitrator appointed under s. 19 of the
Defence of India Act is not a court, nor is a tribunal subject
f
lo to the appellate jurisdiction of the High Court. By the Act
, a right to appeal against the award of the arbitrator is
R,:rwat/, Vtrmn
·-
State of Rajast'i:mi
Wanelloo J.
/96J
April 17
1962
MIJ. Surajmul1
}( •!tm1tull
••
Slet• t1f It' 1st &ngoJ
SAoh J.
164
SUPREME COURT .REPORTS (1963)
conferred. but the exercise of that right is restricted in the
m.inner prescribed by the rules fr3med under the Act.
By
Ilic second proviso tor. 19 an appeal does not lie against an
a\\'ar<l of the :lrbitrator where the amount of compensation
awarded doe' i:ol exceed Rs. 5000/-
An award dismissing
the claim in its cntirctv is one in which the amount awarded
docs not exce.d Rs. 5000,-and therefore an appeal lay to
the High Court.
C1vn. APPELLATE JumsIHCTION : Civil Appeal
No. 403 of l!l:l!l.
Appeal by 8pecial leave from the judgment
' ~
and order <lated June 27, Hl55, of the Calcutta
High Court in Appeal from Original Decree No. 28
1!)48.
A. V. Viswanatlut Sustri· and B. P. Mohcshwari,
for the appellant.
B. Sen, P. K. Chalf£rjee and l'. K. Bose, for
the re8ponden t.
1962. April 17. The Judgment of the Court
was delivered by
.
--·
SHAH, J.--Messr~. Surajmull Nngarmull-who
will hereinafter be referred to as the appellantswere tenants of three warehouses and vacant land
appurtenant there-topopularly known as the Shamnagar Jute Godown-sbelonging to Sri Hanuman
Seva Trust. The warehouses were used for storage
of jute belonging to the appellants.
By an order
dated August 17, 1943 and issued under Rule 75A
of the Defence of India Rules, 1939, the warehouses
were requisitioned and possession t.hereof W&l! taken
on September 21, 1943.
As the amount of compensation payable to the owner of the warehouses
could not be fixed by agreement an Arbitrator was
appointed under s. 19( l)(b) of the Defence of Indi"
Act, 1939. Before the Arbitrator, Sri Hanuman
Seva TruHt claimed compensation as owners of the
· •
warehouses. The appellant claimed compensation ~
for loss of earnings, "damage to husinesa' and ooat
r
I
2 s.c.R.
SUPREME COURT REPORTS
165
of removal of 18,0llO maunds of j11te and some iron
implements, which the appellants claimed had. to be
removed in consequence of tho order of requisition.
The appellants estimated the
compensation at
Rs. one lakh. The Arbitrator by his order dated
December 13, 1917 observed that the appellants had
failed to prove any actual loss of business in conse·
quence of the requisition, and rejected the claim of
the appellants.
Against t,he order passed by the· Arbitrator
an appeal was preferred to the Hi;h Court of Judicature at Calcutta. The appellants valued the claim
at Rs. 1,50,000/-.
At the hearing of the appeal,
t.he State of West Bengal contended that the appeal
was not maintainable in view of the provisions of
s. 19(l)(f) and (g) ands. 19(3)(c) of the Defence of
India Act and the 2nd proviso to r. l!J framed
under the Defence of India Aot: The High Court
upheld the contention raised by the

## Text

2 s.c.R.
SUPREME OOURT REPORTS
163
depend on the decision of the Jaipur:Kotah scheme.
If that scheme is upheld, on re-hearm~, the exclusion will continue. But if that scheme 1s not upheld,
the position may have to be reviewed in connection
with. this portion of the Ajmer-Kotah route. In the
circumstances no relief can be granted to the appellants of the Ajmer-Kotah route at this stage ..
The appeals 1're hereby dismissed with costsone set of hearing costs.
Appeals dismissed.
M/S. SURAJMULL NAGARMULL
v.
STATE OF WEST BENGAL
(S. Jr. DAS, M. HIDAYATULLAH and J. O. SHAH, JJ.)
Arbitration-Arbitrator appointed und.r the Defence o/
India Act, if a court-Righl to appeal against the award, if and
when, exercisable-Defence of India Act, 1939 (35 of 1939),
"· 19(1), 19(1)(!) a7;Zd (g), J9(3)(c)-Defence of India Rules,
1939, rr. 75A, 19, second proviso.
'
The appellants were tenants of three warehouses and
vacant land, which were used for storage of jute belonging
to the appellants. By an order issued under r. i5A of the
Rules framed under the Defence of India Act, 1939, the
warehouses were requisitioned
by the Governme11t. An
arbitrator was appointed unders. 19(1)(b) of the Defence of
India Act to fix the amount of compensation payable to the
owner. The claim of the appellants to compensation for
loss of earning, and for "loss of business" was rejected by
the arbitrator. An appeal filed by the appellants against
the arbitrator was dismissed by the High Court at Calcutta
as not maintainable.
'
Held, that the arbitrator appointed under s. 19 of the
Defence of India Act is not a court, nor is a tribunal subject
f
lo to the appellate jurisdiction of the High Court. By the Act
, a right to appeal against the award of the arbitrator is
R,:rwat/, Vtrmn
·-
State of Rajast'i:mi
Wanelloo J.
/96J
April 17
1962
MIJ. Surajmul1
}( •!tm1tull
••
Slet• t1f It' 1st &ngoJ
SAoh J.
164
SUPREME COURT .REPORTS (1963)
conferred. but the exercise of that right is restricted in the
m.inner prescribed by the rules fr3med under the Act.
By
Ilic second proviso tor. 19 an appeal does not lie against an
a\\'ar<l of the :lrbitrator where the amount of compensation
awarded doe' i:ol exceed Rs. 5000/-
An award dismissing
the claim in its cntirctv is one in which the amount awarded
docs not exce.d Rs. 5000,-and therefore an appeal lay to
the High Court.
C1vn. APPELLATE JumsIHCTION : Civil Appeal
No. 403 of l!l:l!l.
Appeal by 8pecial leave from the judgment
' ~
and order <lated June 27, Hl55, of the Calcutta
High Court in Appeal from Original Decree No. 28
1!)48.
A. V. Viswanatlut Sustri· and B. P. Mohcshwari,
for the appellant.
B. Sen, P. K. Chalf£rjee and l'. K. Bose, for
the re8ponden t.
1962. April 17. The Judgment of the Court
was delivered by
.
--·
SHAH, J.--Messr~. Surajmull Nngarmull-who
will hereinafter be referred to as the appellantswere tenants of three warehouses and vacant land
appurtenant there-topopularly known as the Shamnagar Jute Godown-sbelonging to Sri Hanuman
Seva Trust. The warehouses were used for storage
of jute belonging to the appellants.
By an order
dated August 17, 1943 and issued under Rule 75A
of the Defence of India Rules, 1939, the warehouses
were requisitioned and possession t.hereof W&l! taken
on September 21, 1943.
As the amount of compensation payable to the owner of the warehouses
could not be fixed by agreement an Arbitrator was
appointed under s. 19( l)(b) of the Defence of Indi"
Act, 1939. Before the Arbitrator, Sri Hanuman
Seva TruHt claimed compensation as owners of the
· •
warehouses. The appellant claimed compensation ~
for loss of earnings, "damage to husinesa' and ooat
r
I
2 s.c.R.
SUPREME COURT REPORTS
165
of removal of 18,0llO maunds of j11te and some iron
implements, which the appellants claimed had. to be
removed in consequence of tho order of requisition.
The appellants estimated the
compensation at
Rs. one lakh. The Arbitrator by his order dated
December 13, 1917 observed that the appellants had
failed to prove any actual loss of business in conse·
quence of the requisition, and rejected the claim of
the appellants.
Against t,he order passed by the· Arbitrator
an appeal was preferred to the Hi;h Court of Judicature at Calcutta. The appellants valued the claim
at Rs. 1,50,000/-.
At the hearing of the appeal,
t.he State of West Bengal contended that the appeal
was not maintainable in view of the provisions of
s. 19(l)(f) and (g) ands. 19(3)(c) of the Defence of
India Act and the 2nd proviso to r. l!J framed
under the Defence of India Aot: The High Court
upheld the contention raised by the State of West
Bengal and dismissed the appeal. With special
leave the appellants have appealed to this Court.
Under cl. (1) of s. 19 of the Defence of India
Act, 35 of 1939, it is provided, in so far as it is
material :
"Where under section 19A or by or under
any rule made under this Act any action is
taken of the nature described in sub-section
( 2) of section 2119 of the Government of India
Act, 1935, 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 :-
x
x
x
x
(f) An appeal shall lie to the High Court
against an award of the Arbitrator except
in cases where the amount thereof does
pot e~ceed an amount prescribed in this
M/1. Su'4imull
Nagarmutl
..
State of W ul S.,.,11
SW 1.
J96t
M :,, S.,ojnrull
.'fogormull
••
5,... of Wm B"'f!JI
Sha/> J.
166
'
SUPREME OOURT REPORTS [1963]
behalf by rule made by the Central
Government.
;• I
(g) Save as provided in this section and in
,..
any rules made thereunder, nothing in
any law for the time being in force shall
apply to arbitrations under this section."
Sub-seotion ( 3), in so far as it is material, provides:-
"(3l In particular and without any pre· • '
judice to the generality of foregoing power,
such rules n;ay preeoribe :-
x
x
x
I
(o)
the maximum amount of an
award against which no appeal shall lie."
By notification dated March 22, 1945, Rules were
framed under s. 19 relating to arbitration for settlement of compensation. Rule 19 of the Rules
provided:
"19. Any appeal against the a.ward of
the Arbitrator shall be presented within aix
weeks from tho date of receipt by the Collector tho party by whom the appeal is preferred
of the copy of the a.ward sent under Rule 17 :
Provided further that no appeal shall lie
against an award made wider these Rules
where tho amount of compensation awarded
does not exc~ed Rs. 5,000 in lump or Re 250
per mensem."
The Arbitrator appointed under s. 19 of the Defonce
of India Act is not & court or a tribunal subject
to the Appellate jurisdiction of the High Court.
By the Defence of the India Act a right to appeal
against the award of the Arbitrat.or is conferred,
but that right iR restricted in the manner prescriue(\ , '·
2 S.O.R. SUPREME OOURT REPORTS
167
the rules. It is provided by the second proviso to
Rule 19 that an appeal shall not lie against an
a.ward whore the amount of compensation does not
exceed Rs. 5000/-.
The claim of the appellant was rejected by
the Arbitrator and they were not a.warded any
oompensation. Mr. Vishwanatha Sastri appearing
on behalf of the appellants, contends that by cl. (f) .
1 of s. ;19 (I) the Legislature provided a right of
appeal against all awards and has imposed a restriction only in those cases were some amount is
a.warded but the amount so a.warded is less then
Rs. 5,000/-. Counsel submits that the restriction
limiting the right of appeal must be strictly construed. He says that where for any reason no
compensation at all is awarded the bar contained
,in cl. (f) of s. 19(1) and the second proviso to Rule
19 would not apply. In our judgment, there is no
force in that contention. An appeal is a. creature
h
of statute. The Arbitrator not being a court subordinate to the High Court, an appeal would lie
only if it is expressly so provided. The Legislature
has provided that where the amount of compensation awarded does not exceed Rs. 5,000/- no appeal
shall lie against the award. The rule does not
contemplate that the bar to the maintainability of
the appeal will be effective only if some amount is
-\
awarded but the compensation so awarded is less
than Rs. 5,000/-. ·If the Arbitrator rejects the claim
¥
and refuses to award anything the case would, in
our judgment, fall within the 2nd proviso to Rule
19 as being one where the amount of compensation
a.warned does not exceed Rs. 5,000/·.
The 2nd proviso to Rule 19 enacts a rule of which
_.-'
a parallel is difficult to find.
The right to appeal
does not depend upon the claim made by the olaimY , ant either before the acquiring authority or the
Arbitrator or before the High Court : it depends
solely upon the amount of compensation awafded
JIJ(JB
M/1.s...; .... u
Nagmnall
••
S1ot1 of Wat B"'111I
ShaA J,
'•
l~~
SUI'RE~IE COURT REPORTS [1963) -
.
'
.
.
1112_ .
by, the Ai:bitrator; But, however, unusual the rule
,..----,-...
m.a. y · a
.. ·P· ·p· e .. ar .·.t.o be, it would not open to the Court
Jl/s~ 8wllj,,.ull. '·
Nirc•·••IF'
to ,«:~:tend ·the . right- to appeal and to enable a
o~.; >.,!· -1·•
1 / claimant whose claim has been rejected completely
··~• .,_.,." ~••:• ·t
1 t tb H. h C
Th
. b
· -.,-,- ·
. o ap.1,1e~ . .o . e
1i;
ourt.
e ng t to appeal
s~.?!·
IS exercISable only 1£ the amount awarded ·exceeds
Rs: 5,000/'.
"
·
·
1112 --
...
,
. I_n ,that ;yiew of the case, the High Court was
right i,J:l_ not . ente~taining . the appeal. The appeal
· fails .and jfl dismissed.
Appeal dismissed.
. KAPUR CHAND GODHA
v.
. ' -
,,,,;1 It.
l\IIR NAWAB HIMAYATALIKHAN AZAIIIJAH
(1
(S· l\:· ·DAS, M. HrnAYATULLAH and J. C. SIIAH, JJ.)
· · Contract-Pro•-ince accepting performance from third per&m
in full Bali•faction of claim-If can Bue promisor for ba~nce- ·
~ndi'an ContractA~t, 1872 (9_of 1872), ss. 41, 63, illustration (c),
I
'
In January 1937 · one M & Co. sold and delivered ·
jewellery vahied at about .13 lakhs to the respondent, the
Prince of Berar. The Pririce acknowledged in
writing the
purchase of the jewellery and the price thereof and passed
variOus acknowledgments in respect of the debts due · and the
last of such acknowledgments was -made. for sum of
RS. 27,79,000. In April 1948, the appellants presented their
bill and 'wer~ informed in January, 1919, that the Nizam had
passed the bill. In February, 1949,
when Hyderabad was
under military occupation, a Committee was set up by the·
Military Governor to scrutinise all debts of the Prince of Berar
and his younger brother. The claim. of the appellants was
considered by the. Committee which recommended that the
appellants should be paid a sum of Rs. 20 lakhs in full satisfaction of their claim •. The appellants were paid the sum ·or
Rs: 20 lakhs in two instalments. The appellants tried to pas•
a·r(ceipt when the}' received the second instalment r~sciving
v:e,fr ICi~h.t fo ICCO\Cf t.he bruance !'nder the pronote frOJU thy