State of Orissa vs Jemabati Dei alias Bewa and Others

Misra, J.—The dispute under appeal relates to the amount of compensation payable in respect of a building situated in Ranihat of Cuttack town, which belonged, at the time of requisition in 1942, to Respondent No. 1 and which she subsequently has gifted away in favour of her sons, the other Respondents. On 5-3-1942, the Collector requisitioned the building with the expressed purpose of securing the defence of British India and efficient prosecution of war. Since requisition, tire building wail allotted to A.R.P. until 28-3-19411, after which it came under the occupation of the Central Intelligence Office. War ended by the end of March 1946 and the life of the Defence of India Act expired six months thereafter, that is, by 30.9.1946. On that day, an officer of the Central Intelligence Office made a reference to the Collector to requisition the building in question, and the Collector passed a fresh order of requisition on 30-9-1946 mentioning that the purpose of requisition was to maintain essential services. This requisition was also made under Rule 75-A of the Defence of India Rules, which was to expire that very day. Before the expiry of the Defence of India Act, the Requisitioned Land (Continuance of Powers) Ordinance of 1946 had come into force and it provided that all lands requisitioned under the Defence of India Act shall continue to be subject to requisition until the expiry of the Ordinance. In 1947, the Requisitioned Land (Continuance of Powers) Act of 1947 was passed, which repealed the Ordinance and made provisions to similar effect. In 1931, the Requisitioned Land Orissa Amendment Act came into force, and it provided that requisitions made under the Central Act shall continue to be in force and be deemed to have been made under the Orissa Act. The 1951 Act was replaced by the Orissa Act XXIX of 1952 making similar provisions.

Sometime after the first requisition in 1942, Respondent No. 1 (sic) husband, acting on her behalf, had entered into an agreement to accept Rs. 117/- as the monthly compensation for the building. After the second requisition in 1946, higher amount of compensation was claimed on behalf of the Respondents. The matter went to arbitration. The Respondents claimed at the rate of Rs. 1020/- per month towards rent and Rs. 30/- as rent for electric fans. They further claimed Rs. 500/- on account of personal inconvenience caused by the requisition. Rs. 500/- was claimed as damages on different heads. An amount of Rs. 2400/- was also claimed as municipal rent paid by the Respondents for the house within the period of requisition. The learned Arbitrator passed an award in favour of the Respondents to the effect that they were entitled to Rs. 250/- a month from 1-11-1946 till the close of the financial year on. 31-3-1954 and Rs. 375/- a month from thereafter till the period of occupation by the Appellant, after deduction of amounts already received by the Respondents under protest. The learned Arbitrator awarded Rs. 1600/- towards damages on different scores. According to the direction in the award, the total amount adjudged in favour of the Respondents was to carry interest at 6 per cent per annum till realisation, and a consolidated cost of Rs. 100/- was also allowed to the Respondents, which was not to carry any future interest. The learned Arbitrator disallowed the claim of the Respondents on account of payment of municipal tax, personal inconvenience and use of fans.

There is no cross-appeal over the claims rejected by the learned Arbitrator. The decision of the learned Arbitrator over award of damages on different scores has not been sought to be challenged at the hearing of the appeal. The learned Standing Counsel confined his objections to two points-(1) that the agreement under which Rs. 117/- was payable towards the monthly compensation, was still effective and so, that would have the monthly compensation adjudged by the learned Arbitrator; and (2) that even if the said agreement was no longer in force, the rate of compensation fixed for the whole period of requisition should have been at one rate, and the learned Arbitrator had acted illegally in fixing a different rate for the period from 1-4-1954 afterwards.

In respect of the first point, the learned Standing Counsel takes his stand on Section I of the Requisitioned Land (Continuance of Powers) Act, 1947 (Act XVII of 1947) (to the same effect there was also a provision in the Ordinance which it repealed) which provides that all agreements, in pursuance of the provisions of Section 19 of the Defence of India Act and the rules made thereunder, shall continue to be in force and shall apply to the payment of compensation for the period of requisition after the expiry of the Defence of India Act, and similar saving clauses provided in the successive Orissa Amendment Acts of 1951 and 1952 (vide Section 24 of the 1952 Act.) The learned Standing Counsel contends that the agreement between the parties continued till the last date, on which the Defence of India Act expired and there being no order of requisition at any stage, the first requisition order continued to be in force by the subsequent Acts. According to him, the second order of requisition passed by the Collector on the date of expiry of the Defence of India Act was unwarranted in view of the provisions of the Ordinance that had already come into force, and the Collector passed the second order of requisition under a misconception that the requisition under the Defence of India Act was going to expire automatically with the expiry of the Act. In continuation of this line of argument, he urged that there had been no delivery of possession to the Respondents at any stage to signify that the first order of requisition was intended to be terminated. On the other hand, Mr. Das for the Respondents sought to urge that once the purpose, under which the first requisition was made, no longer existed by 30-9-1946 (date of expiry of the Defence of India Act), the first requisition was to automatically expire from that date and it could not be continued for a different purpose, and it is for that the second order of requisition had to be passed by the Collector. Mr. Das further contended that though there was no express order of the Collector cancelling the first requisition, the very passing of the order of the second requisition implied the cancellation of the first, and that even though the Collector might have no proper legal advice, that first requisition could continue under the Ordinance and no further order of requisition was necessary, that does not affect the legality of the second order of requisition.

I am not prepared to accept Mr. Das�s contention that the purpose for the first requisition having exhausted by 30-9-1946, the requisition could not be continued thereafter for another purpose, by virtue of the Ordinance and subsequent Acts. Unlike the provisions of Section 5 of the 1952 Act, which provides that all property requisitioned u/s 3 shall be used for such purposes as may be mentioned in the notice of requisition, there was no corresponding provision in the Ordinance or the Central Act which repealed the Ordinance. By virtue of Section 5 of the 1952 Act, a requisition made for one purpose, as indicated in the notice of requisition, could be said to have terminated when the purpose had exhausted itself; but such a stand could not be taken under the earlier statutory provisions. Mr. Das sought to contend that when a requisition is to be made for a public purpose, the person concerned must know that the public purpose is, so that he can question the propriety of requisition in a proper forum to test whether the purpose expressed is really of a public character, and if the requisitioned property is used for a different purpose subsequently, the owner of the property is likely to be put at a disadvantage, if the altered purpose, for which the requisitioned property is used, may not be a public purpose. If a property, requisitioned for one public purpose, is subsequently used for a different purpose, it will be open to the owner of the property to agitate the question in a proper forum and to indicate that the changed purpose is not of a public character and thereby may question the propriety of the continuance of the requisition. But there is nothing in the earlier legal position preventing the authorities from using a property, requisitioned for one public purpose, for a different public purpose. (In this connection, reference may be made to AIR 1955 N.U.C. (Bom) 4829). So, I am of the view that the first order of requisition did not automatically exhaust itself by the expiry of the Defence of India Act. Though the first requisition could be continued under the Ordinance, nothing prevented the authorities concerned from terminating the same at any stage they liked. The second order of requisition, though not expressly, necessarily implied the expiry of the first requisition. It is irrelevant to consider what prompted the Collector to pass the second order of requisition and whether he did it under a misconception of legal position. If there would have been a converse case, that is, if the rent agreed upon would have been considered to be very high in view of any subsequent economic depression and if the owner would have insisted upon the rent under agreement and if the stand on the side of the Government would have been that the second requisition was effective, by which the life of the previous agreement had expired and so the parties were free to tender an accept a reasonable rent after the second order of requisition, the owner could not possibly urge that the Collector�s second order of requisition was misconceived and so ineffective; it is not understandable why the Government should not stand in the same position, even though the Collector�s second order of requisition was unnecessary or ill advised. Once the first order of requisition was impliedly cancelled by the coming into effect of the second order of requisition, the agreement under the first requisition exhausted itself. The learned Standing Counsel�s contention that even if the first requisition had been terminated, the agreement could still continue in force by virtue of the provisions of the subsequent Acts, stands to no test in as much as the corresponding provisions lay down that the agreement shall be in force, provided the requisition in respect of which it was made, was continuing. An argument sought to be advanced by Mr. as was that the agreement itself had not been properly proved. Even though the agreement has not been proved according to strict formality, there is admission in Ext. C that the husband and agent of Respondent No. 1 had agreed to accept Rs. 117/- as the monthly rent. It is also established in evidence that he ungrudgingly received rent at this rate till the second requisition. In the ultimate analysis, I hold that though there was an agreement between the parties regarding the monthly compensation under the first requisition, that agreement did not survive after the second order of requisition was passed.

Coming to the next question, the learned Arbitrator has fixed the monthly rent or compensation at the rate of Rs. 250/- from 1946 upto 1-4-1954, after which he has raised the quantum to Rs. 375/- and that is in view of the fact that the municipal rent, which was at a particular rate, at the earlier period, had increased to 1 times thereof from 1-4-1954. Section 8, Sub-section (2) of the 1952 Act provides.

The amount of compensation payable for the requisitioning of any property shall 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 bad been taken on lease for that period;

(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;

x x x x

According to the contention of the learned Standing Counsel, the monthly compensation that was fixed by the Collector was not in accordance with Clause (a) of Sub-section (2) of Section 8 of the Act in as much as he fixed varying rents for different periods which is not contemplated by the said provision. Mr. Das, on the other hand, contended that Clause (a) of Sub-section (2) of Section 8 did not debar fixing different rents for different periods, and that even if it be deemed to have been so done, the learned Arbitrator was competent under Clause (b)(i) of Sub-section (2) of Section 8 to take the loss of the owner into consideration if there wag subsequent rise in house rent due to economic reasons. Clause (a) of Sub-section (2) of Section 8, as quoted above, clearly indicates that the rent to be fixed by the Arbitrator shall enure for the period of requisition and there shall be recurring payment of such rent so fixed. Obviously, such a rent is to be determined according to the circumstances, as they exist at the time of requisition. Clause (a), in its very terms, does not permit changing the rent from time to time. No doubt, there might be sometimes loss to the owner if there is subsequent rise in the rat of house rent; but such a position may also arise when there is an agreement between the parties in respect of payment of house rent for a particular period, and what the Arbitrator is intended to perform is to fix a fair rent when there is no agreed rent between the parties. The provisions under Clause (b)(i) for pecuniary loss due to requisitioning does not obviously cover cases where higher rent is subsequently demandable under fluctuating economic circumstances. If that would be the intendment of that sub-clause, then there was no necessity at all to legislate a provision as under Clause (a) of Sub-section (2) the provision under Clause (b)(i) is intended for other circumstances which need not be detailed here. So accepting the contention of the learned Standing Counsel, I hold that the Arbitrator acted in contravention of the legal position in enhancing the monthly compensation to Rs. 375/- from 1.4.1954; and that the monthly compensation from 1-4-1954 should be the same rate, that is, at Rs. 250/- per month.

The learned Counsel for the Respondents brought to my notice that the learned Arbitrator, while passing the award, has not followed the provision of Section 9 of the 152 Act, which provides that the amount of compensation payable under an award shall be paid by the competent authority to the person or persons entitled thereto in such manner and within such time as may be specified in the award. Since the award does not provide for the manner and time of payment, I consider it necessary to insert a provision to that effect. Incidentally, I am told that the house has been de-requisitioned meanwhile.

In the result, the appeal is partly allowed, and the award passed by the learned Arbitrator, while maintained in all other respects, is modified to the extent: that the monthly compensation from 1-4-1954 shall be at the rate of Rs. 250/- and not at the rate of Rs. 375/- per moth, as mentioned in the award I further direct that the compensation adjudged in favour of the Respondents shall be payable by the competent authority within six months and shall be remitted by postal money order to Mr. Das, the learned Counsel for the Respondents, at the cost of the competent authority. In view of the part success, I direct that each party to the appeal shall bear its own cost.