M/s Kalimpong Land & Building Ltd. & Anr. Vs. State of West Bengal & Ors.
EmailAppeal: Civil Appeal No. 3011 of 1990
Petitioner: M/s Kalimpong Land & Building Ltd. & Anr.
Respondent: State of West Bengal & Ors.
Apeal: Civil Appeal No. 3011 of 1990
Judges: R.M. SAHAI & N.P. SINGH, JJ.
Date of Judgment: Sep 16, 1994
Head Note:
LAND ACQUISITION
Requisitioning and Acquisitioning of Immovable Property Act, 1952
Section 8(1)(b) – Kalimpong property of appellant requisitioned under the Act in July 1964 and Rs. 834 determined as monthly rent – Compensation payable under section 8(1)(b) claimed in 1967 but the matter was pending and was decided by Supreme Court along with interest at 8-1/3% on the basis of a report by Solicitor General – Rejecting the objections to awarding of interest as recommended by Solicitor General, the Court held that interest is to make good the loss suffered by the person on delayed payment of compensation and denial of interest would not be in interest of Justice – The report of Solicitor General accepted in entirety -Interest held to be included in the expression ‘which appears to him to be just’ used in section 8(1)(e) of the Act – Claim of repair not accepted.
M/s Kalimpong Land & Building Ltd. & Anr. v. State of West Bengal & Ors. (16-09-1994) JT 1994 (6) SC (R.M. Sahai, N.P. Singh, JJ.)
Held:
Therefore, to avoid delay in determination and payment of compensation to the appellant at the same time being just to the respondents this Court in exercise of its power to do substantial justice decided to get a report from a person in whom even the respondents including the Central Government had implicit faith. The order passed by this Court, thus, was not an order appointing any arbitrator but to obtain a report to enable it to do substantial justice. The report obtained by the learned Solicitor General was for assistance of this Court. The main part of it determining compensation was not challenged as well. And rightly as it is for this Court alone to be satisfied about it. Neither party could raise any objection against the report. (Para 5)
Further, the objection to award interest was raised under misapprehension that the learned Solicitor General of India was appointed as arbitrator. In fact as is clear from the Order he was requested to look into the matter and submit the report to enable this Court to do justice. In any case, this Court does not find any good reason for not awarding interest to the appellant. Interest is to make good the loss suffered by the person on delayed payment of the compensation. As is clear from narration of facts, the appellant has been taking all possible steps for determination of compensation. The denial of interest in the facts and the circumstances of this case would not be in interest of justice. This Court, therefore, in exercise of its power to do substantial justice considers it expedient to accept the report in its entirety. (Para 6)
Although there is no provision in the Act for award of the interest, but the power to determine compensation under the Act is unlike Land Acquisition Act or Arbitration Act. Sub-clause (d) uses the expression ‘fair amount of compensation’ whereas sub-clause (e) widens it further by empowering the arbitrator to award an amount which appears to him to be just having regard to the circumstances of each case. What is just and fair in the circumstances of each case cannot be laid down with any precision. Compensation is paid to indemnify a person and it should normally be an equivalent or substitute of equal values. The payment of compensation of Rs.30,00,000/- for a three storyed building in Calcutta with 4.9 acres open space in 1994 without interest when possession was taken in 1964 would amount to being unjust and unfair to the appellant. The recommendation in the report for payment of interest would be included in the expression, ‘which appears to him to be just’ used in clause (e) of the sub-section. (Para 7)
The Act itself contemplates a procedure under which the person in possession is required to give notice to the landlord and thereafter approach the prescribed authority who is empowered to permit repair. Since admittedly the respondent never approached the appropriate authority under the Act and did not obtain any order, the claim of repair cannot be accepted. In the result this appeal is decided by directing that the report submitted by the learned Solicitor General is accepted. It shall form a part of the decree of this Court. (Paras 8 & 9)
Cases Reffered:
Union of India v. Hari Krishan Khosla (dead) by LRs., JT 1992 (5) SC 574. (Para 4)
JUDGEMENT:
R.M. SAHAI, J.:
1. The question of law raised on behalf of the respondents assailing the legality and propriety of recommendation to award interest in the report submitted on 26th April, 1994 by the learned Solicitor General of India appointed by this Court on 4th December, 1992 to determine compensation under the Requisitioning and Acquisitioning of the Immovable Property Act, 1952 ( hereinafter referred to as ‘the Act’) was little surprising as when a Bench of this Court, of which one of us was a member (R.M. Sahai,J.), after hearing the appeal for quite some time, rather on number of days, requested the learned Attorney General of India, initially to look into the matter and report, but ultimately appointed the learned Solicitor General of India, with common consent of all parties and explicit understanding that the determination by him would not be challenged, it was thought that the curtain on the long drawn and chequered history of litigation has been finally drawn.
2. Before considering the submission on merits, it may be mentioned that basic objection against the award by a retired Judge of the High Court was that the power to appoint arbitrator under the Act vested in the Central Government alone. This objection might have been taken even against the report submitted by the learned Solicitor General of India and was in fact suggested, though feebly, by the learned counsel for the State of West Bengal but the learned senior counsel Dr. Gauri Shanker who appeared for respondent no. 3 and led the arguments in his usual characteristic fairness brushed aside the suggestion as the order had been passed by this Court and the officer was no one else than the learned Solicitor General of India whose impeccable integrity and fairness was given a word of praise by him. Yet the law must take its course even when a litigant like State insists and instructs the counsel to fight it out, presumably, because the enormous expenditure involved in such exercise is public money for which no one is accountable.
3. Reverting to the facts, the premises known as “White Wool” Godown, owned by the appellant situated at 11 Mile Kalimpong comprising of a three storyed building with a total constructed area of about 53,000 sq.ft. and open space of about 4.9 acres were requisitioned under the Act in July, 1964. The possession was taken by the competent authority on 19th July, 1964 and a sum of Rs.834/- per month was determined as its rent. In 1967 the appellant filed an arbitration case before the District Judge of Darjeeling, under the provisions of Section 8(1)(b) of the Act for determining the amount of compensation to be paid to the appellant. Since 1967 to 1980 the proceedings, before arbitrator, remained pending on account of transfer of the District Judges from time to time and the delay by the Government in issuing necessary notifications in the appointment of fresh incumbents under Section 8 of the Act. In 1981 the appellant approached the High Court for the appointment of an arbitrator and expeditious disposal of the arbitration case. In March 1981 the High Court decided the writ petitions by accepting the second prayer of the appellant and directing the arbitrator to decide the dispute within six months. But the same position continued and the proceedings remained pending due to transfer of District Judges from 1981 to 1985. In September 1985 a consent order was passed directing the arbitrator to dispose of the case within 90 days. When no order was passed the appellant again approached the High Court in May 1986 and the High Court directed that the arbitrator was at liberty to proceed from the stage the proceedings had been left at by the previous arbitrator so that the proceedings may be decided expeditiously. Even though the High Court had passed the order in May 1986 the arbitrator was appointed by the appropriate Government in February 1987 who, too, was transferred in March 1987. Consequently the appellant again approached the High Court and on 7th September 1987 it, in exercise of its writ jurisdiction, appointed a retired judge of the Calcutta High Court to act as an arbitrator in terms of the provisions of Section 8(1)(b) of the Act. Before the arbitrator the Union of India and Central Tibetan Schools Administration, that is, the body for whom the premises had been requisitioned were also impleaded as respondent nos.2 and 3 apart from the State of West Bengal. The award was made and signed on 11th August 1988. The sealed cover was opened by the District Judge on 17th August 1988. Notices were issued to the parties and on 24th September 1988 the District Judge passed an ex-parte order in terms of the arbitration award. Since no payment was made by the respondents the appellant once again approached the High Court in October 1988 for necessary directions to respondents to make immediate payment. Notice on this application was issued on 11th October 1988. In the meantime the respondents had filed an application under Order 9 Rule 13 of the Code of Civil Procedure for setting aside of the ex-parte order. The ex-parte decree making the award was set aside by the District Judge on 27th February 1989. The order was recalled as the arbitrator was appointed following the provisions of the Arbitration Act, 1940 but there being a special procedure provided under the Act it was incumbent on the Court to have followed the procedure and directed the Central Government to appoint the arbitrator as under the Act the arbitrator could be appointed by the Central Government alone. It was further held that if the provisions of the Arbitration Act were applicable then it was mandatory on the Court to issue notice under Section 14(2) of the Arbitration Act, 1940. This order was challenged by the appellant in the High Court by way of revision which was dismissed by a Division Bench on 23rd June 1989. It was against this order that the appellant approached this Court by way of this petition under Article 136 of the Constitution of India in which notice was issued on 24th November 1989. It was further directed that all further proceedings in connection with the award shall remain stayed. On 11th December 1989 the Court further directed the State of West Bengal to deposit a sum of Rs.4,00,000/- in the Court within three weeks. The appeal was heard on number of days. Considering the delay which had taken place in the determination of compensation which was payable to the appellant it was considered expedient that instead of delaying the proceedings further it would be expedient if the matter was examined by the Attorney General of India. He agreed to. But later on he was not available. Consequently, on 4th December 1992 the following order was passed :
“The Solicitor General fairly agrees that he will study the question with reference to the material on record as well as any other document which may be relevant to the matter and submit his report in respect of the compensation payable for the building in question. The Solicitor General further submits that he will submit his report within two months from the date on which the relevant papers are made available to him by the parties. The parties shall make available to the Solicitor General all necessary papers within 1 week from today.”
In pursuance of this order the learned Solicitor General examined the matter and submitted a report on 26th April 1994. According to this report the appellant is entitled to a compensation of Rs.30,91,711/-. The calculation has been done as under :
PRINCIPAL AMOUNT
Period No. of Rent per Total
months month(Rs.) Amount
01.08.1964 to 31.03.1975 128 3,388 4,33,664.00
(4,222-834)
01.04.1975 to 31.03.1980 60 10,882 6,52,920.00
(11,716-834)
01.04.1980 to 31.03.1985 60 11,468 6,88,080.00
(12,302-834)
01.04.1985 to 30.04.1994 109 12,083 13,17,047.00
(12,917-834)
——
30,91,711.00
——
It has further been recommended that the respondents shall be liable to pay interest @ 8-1/3%. The amount of interest calculated thereon amounts to Rs.29,45,032.86 upto 30th April 1994. The respondents in pursuance of direction by this Court have deposited a sum of Rs.30,18,000/- which has been withdrawn by the appellant.
4. Dr Gauri Shankar, the learned senior counsel appearing for respondent no.3 did not contest the amount determined by the learned Solicitor General of India. But he vehemently urged that this Court having directed the learned Solicitor General to determine the compensation only the award of interest was contrary not only to the order passed by this Court but even statutory provisions of the Act. He urged that interest is not a right. A person is entitled to it either under an agreement or under the Statute. In absence of any, the award of interest cannot be maintained. Reliance was placed on Union of India v. Hari Krishan Khosla (dead) by LRs., 1992(5) JT 574. It was also claimed that the respondent was entitled for adjustment of Rs.4,00,000/- deposited by the State of West Bengal in pursuance of the order passed by this Court and yet another amount of approximately Rs.4,00,000/- which was spent by the respondent no.3 on the repair of the building. The learned counsel for the State of West Bengal while supporting the submission advanced on behalf of respondent no.3 further urged that since Arbitration Act did not apply to the Act the question of payment of any interest did not arise. On the other hand Shri Bobde, the learned senior counsel for the appellants urged that the dispute about the interest was never raised and it was too late in the day now to claim that the appellant was not entitled to interest and he should be paid only the compensation determined by the learned Solicitor General for a property which was acquired as far back as 1964.
5. The submission advanced by the learned counsel for the respondent is beset with insurmountable difficulties, in equity and justice of which the Court has been made as much custodian as of law. When the order dated 4th December, 1992 was passed the Court was aware of difficulties in law and, therefore, it took upon itself the responsibility to ensure that no further delay takes place and justice is done to both the parties, as the liability to pay the compensation being undisputed by the respondents, the only area of difference was whether the determination as directed by the High Court was proper or it should be got done afresh. If the appeal would have been dismissed, the entire procedure of fresh appointment of an arbitrator under Section 8(1)(b) by the Central Government and then the determination of compensation afresh would have been required to be done. On the other hand, if the appeal would have been allowed, the respondents would have been liable to pay more than a crore on award given by an Arbitrator who was not appointed by the Central Government. Therefore, to avoid delay in determination and payment of compensation to the appellant at the same time being just to the respondents this Court in exercise of its power to do substantial justice decided to get a report from a person in whom even the respondents including the Central Government had implicit faith. The order passed by this Court, thus, was not an order appointing any arbitrator but to obtain a report to enable it to do substantial justice. The report obtained by the learned Solicitor General was for assistance of this Court. The main part of it determining compensation was not challenged as well. And rightly as it is for this Court alone to be satisfied about it. Neither party could raise any objection against the report.
6. However, let us examine whether the recommendation for interest should be accepted or not. In the first instance the recommendation for the award of interest has nothing to do with the provision in the Act as it is for this Court to decide whether it would in its discretion award any interest or not. As stated earlier, when this Court requested the learned Solicitor General of India to submit a report it was clearly understood that no party shall be permitted to raise any objection. Since the submission on the report by the learned counsel for the respondent amounts to objection against the report, it is not expedient to permit it to be raised. Further, the objection to award interest was raised under misapprehension that the learned Solicitor General of India was appointed as arbitrator. In fact as is clear from the Order he was requested to look into the matter and submit the report to enable this Court to do justice. In any case, this Court does not find any good reason for not awarding interest to the appellant. Interest is to make good the loss suffered by the person on delayed payment of the compensation. As is clear from narration of facts, the appellant has been taking all possible steps for determination of compensation. The denial of interest in the facts and the circumstances of this case would not be in interest of justice. This Court, therefore, in exercise of its power to do substantial justice considers it expedient to accept the report in its entirety.
7. Even otherwise it may be examined if determination of compensation under the Act includes payment of interest, also. For this purpose, relevant part of Section 8(1) of the Act is extracted below:-
“8. Principles and method of determining compensation – (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) …….
(b) …….
(c) …….
(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) ……..
(g) ……..”
Although there is no provision in the Act for award of the interest, but the power to determine compensation under the Act is unlike Land Acquisition Act or Arbitration Act. Sub-clause (d) uses the expression ‘fair amount of compensation’ whereas sub-clause (e) widens it further by empowering the arbitrator to award an amount which appears to him to be just having regard to the circumstances of each case. What is just and fair in the circumstances of each case cannot be laid down with any precision. Compensation is paid to indemnify a person and it should normally be an equivalent or substitute of equal values. The payment of compensation of Rs.30,00,000/- for a three storyed building in Calcutta with 4.9 acres open space in 1994 without interest when possession was taken in 1964 would amount to being unjust and unfair to the appellant. The recommendation in the report for payment of interest would be included in the expression, ‘which appears to him to be just’ used in clause (e) of the sub-section.
8. So far as the claim of the respondent no.3 about the adjustment for repairs is concerned, suffice it to say that the Act itself contemplates a procedure under which the person in possession is required to give notice to the landlord and thereafter approach the prescribed authority who is empowered to permit repair. Since admittedly the respondent never approached the appropriate authority under the Act and did not obtain any order, the claim of repair cannot be accepted.
9. In the result this appeal is decided by directing that the report submitted by the learned Solicitor General is accepted. It shall form a part of the decree of this Court. The respondents are directed to pay the remaining amount within a period of two months from today. The amount which has been deposited by respondent no.1, if withdrawn by the appellant, shall be adjusted towards payment of balance amount, namely, the interest.
1. The question of law raised on behalf of the respondents assailing the legality and propriety of recommendation to award interest in the report submitted on 26th April, 1994 by the learned Solicitor General of India appointed by this Court on 4th December, 1992 to determine compensation under the Requisitioning and Acquisitioning of the Immovable Property Act, 1952 ( hereinafter referred to as ‘the Act’) was little surprising as when a Bench of this Court, of which one of us was a member (R.M. Sahai,J.), after hearing the appeal for quite some time, rather on number of days, requested the learned Attorney General of India, initially to look into the matter and report, but ultimately appointed the learned Solicitor General of India, with common consent of all parties and explicit understanding that the determination by him would not be challenged, it was thought that the curtain on the long drawn and chequered history of litigation has been finally drawn.
2. Before considering the submission on merits, it may be mentioned that basic objection against the award by a retired Judge of the High Court was that the power to appoint arbitrator under the Act vested in the Central Government alone. This objection might have been taken even against the report submitted by the learned Solicitor General of India and was in fact suggested, though feebly, by the learned counsel for the State of West Bengal but the learned senior counsel Dr. Gauri Shanker who appeared for respondent no. 3 and led the arguments in his usual characteristic fairness brushed aside the suggestion as the order had been passed by this Court and the officer was no one else than the learned Solicitor General of India whose impeccable integrity and fairness was given a word of praise by him. Yet the law must take its course even when a litigant like State insists and instructs the counsel to fight it out, presumably, because the enormous expenditure involved in such exercise is public money for which no one is accountable.
3. Reverting to the facts, the premises known as “White Wool” Godown, owned by the appellant situated at 11 Mile Kalimpong comprising of a three storyed building with a total constructed area of about 53,000 sq.ft. and open space of about 4.9 acres were requisitioned under the Act in July, 1964. The possession was taken by the competent authority on 19th July, 1964 and a sum of Rs.834/- per month was determined as its rent. In 1967 the appellant filed an arbitration case before the District Judge of Darjeeling, under the provisions of Section 8(1)(b) of the Act for determining the amount of compensation to be paid to the appellant. Since 1967 to 1980 the proceedings, before arbitrator, remained pending on account of transfer of the District Judges from time to time and the delay by the Government in issuing necessary notifications in the appointment of fresh incumbents under Section 8 of the Act. In 1981 the appellant approached the High Court for the appointment of an arbitrator and expeditious disposal of the arbitration case. In March 1981 the High Court decided the writ petitions by accepting the second prayer of the appellant and directing the arbitrator to decide the dispute within six months. But the same position continued and the proceedings remained pending due to transfer of District Judges from 1981 to 1985. In September 1985 a consent order was passed directing the arbitrator to dispose of the case within 90 days. When no order was passed the appellant again approached the High Court in May 1986 and the High Court directed that the arbitrator was at liberty to proceed from the stage the proceedings had been left at by the previous arbitrator so that the proceedings may be decided expeditiously. Even though the High Court had passed the order in May 1986 the arbitrator was appointed by the appropriate Government in February 1987 who, too, was transferred in March 1987. Consequently the appellant again approached the High Court and on 7th September 1987 it, in exercise of its writ jurisdiction, appointed a retired judge of the Calcutta High Court to act as an arbitrator in terms of the provisions of Section 8(1)(b) of the Act. Before the arbitrator the Union of India and Central Tibetan Schools Administration, that is, the body for whom the premises had been requisitioned were also impleaded as respondent nos.2 and 3 apart from the State of West Bengal. The award was made and signed on 11th August 1988. The sealed cover was opened by the District Judge on 17th August 1988. Notices were issued to the parties and on 24th September 1988 the District Judge passed an ex-parte order in terms of the arbitration award. Since no payment was made by the respondents the appellant once again approached the High Court in October 1988 for necessary directions to respondents to make immediate payment. Notice on this application was issued on 11th October 1988. In the meantime the respondents had filed an application under Order 9 Rule 13 of the Code of Civil Procedure for setting aside of the ex-parte order. The ex-parte decree making the award was set aside by the District Judge on 27th February 1989. The order was recalled as the arbitrator was appointed following the provisions of the Arbitration Act, 1940 but there being a special procedure provided under the Act it was incumbent on the Court to have followed the procedure and directed the Central Government to appoint the arbitrator as under the Act the arbitrator could be appointed by the Central Government alone. It was further held that if the provisions of the Arbitration Act were applicable then it was mandatory on the Court to issue notice under Section 14(2) of the Arbitration Act, 1940. This order was challenged by the appellant in the High Court by way of revision which was dismissed by a Division Bench on 23rd June 1989. It was against this order that the appellant approached this Court by way of this petition under Article 136 of the Constitution of India in which notice was issued on 24th November 1989. It was further directed that all further proceedings in connection with the award shall remain stayed. On 11th December 1989 the Court further directed the State of West Bengal to deposit a sum of Rs.4,00,000/- in the Court within three weeks. The appeal was heard on number of days. Considering the delay which had taken place in the determination of compensation which was payable to the appellant it was considered expedient that instead of delaying the proceedings further it would be expedient if the matter was examined by the Attorney General of India. He agreed to. But later on he was not available. Consequently, on 4th December 1992 the following order was passed :
“The Solicitor General fairly agrees that he will study the question with reference to the material on record as well as any other document which may be relevant to the matter and submit his report in respect of the compensation payable for the building in question. The Solicitor General further submits that he will submit his report within two months from the date on which the relevant papers are made available to him by the parties. The parties shall make available to the Solicitor General all necessary papers within 1 week from today.”
In pursuance of this order the learned Solicitor General examined the matter and submitted a report on 26th April 1994. According to this report the appellant is entitled to a compensation of Rs.30,91,711/-. The calculation has been done as under :
PRINCIPAL AMOUNT
Period No. of Rent per Total
months month(Rs.) Amount
01.08.1964 to 31.03.1975 128 3,388 4,33,664.00
(4,222-834)
01.04.1975 to 31.03.1980 60 10,882 6,52,920.00
(11,716-834)
01.04.1980 to 31.03.1985 60 11,468 6,88,080.00
(12,302-834)
01.04.1985 to 30.04.1994 109 12,083 13,17,047.00
(12,917-834)
——
30,91,711.00
——
It has further been recommended that the respondents shall be liable to pay interest @ 8-1/3%. The amount of interest calculated thereon amounts to Rs.29,45,032.86 upto 30th April 1994. The respondents in pursuance of direction by this Court have deposited a sum of Rs.30,18,000/- which has been withdrawn by the appellant.
4. Dr Gauri Shankar, the learned senior counsel appearing for respondent no.3 did not contest the amount determined by the learned Solicitor General of India. But he vehemently urged that this Court having directed the learned Solicitor General to determine the compensation only the award of interest was contrary not only to the order passed by this Court but even statutory provisions of the Act. He urged that interest is not a right. A person is entitled to it either under an agreement or under the Statute. In absence of any, the award of interest cannot be maintained. Reliance was placed on Union of India v. Hari Krishan Khosla (dead) by LRs., 1992(5) JT 574. It was also claimed that the respondent was entitled for adjustment of Rs.4,00,000/- deposited by the State of West Bengal in pursuance of the order passed by this Court and yet another amount of approximately Rs.4,00,000/- which was spent by the respondent no.3 on the repair of the building. The learned counsel for the State of West Bengal while supporting the submission advanced on behalf of respondent no.3 further urged that since Arbitration Act did not apply to the Act the question of payment of any interest did not arise. On the other hand Shri Bobde, the learned senior counsel for the appellants urged that the dispute about the interest was never raised and it was too late in the day now to claim that the appellant was not entitled to interest and he should be paid only the compensation determined by the learned Solicitor General for a property which was acquired as far back as 1964.
5. The submission advanced by the learned counsel for the respondent is beset with insurmountable difficulties, in equity and justice of which the Court has been made as much custodian as of law. When the order dated 4th December, 1992 was passed the Court was aware of difficulties in law and, therefore, it took upon itself the responsibility to ensure that no further delay takes place and justice is done to both the parties, as the liability to pay the compensation being undisputed by the respondents, the only area of difference was whether the determination as directed by the High Court was proper or it should be got done afresh. If the appeal would have been dismissed, the entire procedure of fresh appointment of an arbitrator under Section 8(1)(b) by the Central Government and then the determination of compensation afresh would have been required to be done. On the other hand, if the appeal would have been allowed, the respondents would have been liable to pay more than a crore on award given by an Arbitrator who was not appointed by the Central Government. Therefore, to avoid delay in determination and payment of compensation to the appellant at the same time being just to the respondents this Court in exercise of its power to do substantial justice decided to get a report from a person in whom even the respondents including the Central Government had implicit faith. The order passed by this Court, thus, was not an order appointing any arbitrator but to obtain a report to enable it to do substantial justice. The report obtained by the learned Solicitor General was for assistance of this Court. The main part of it determining compensation was not challenged as well. And rightly as it is for this Court alone to be satisfied about it. Neither party could raise any objection against the report.
6. However, let us examine whether the recommendation for interest should be accepted or not. In the first instance the recommendation for the award of interest has nothing to do with the provision in the Act as it is for this Court to decide whether it would in its discretion award any interest or not. As stated earlier, when this Court requested the learned Solicitor General of India to submit a report it was clearly understood that no party shall be permitted to raise any objection. Since the submission on the report by the learned counsel for the respondent amounts to objection against the report, it is not expedient to permit it to be raised. Further, the objection to award interest was raised under misapprehension that the learned Solicitor General of India was appointed as arbitrator. In fact as is clear from the Order he was requested to look into the matter and submit the report to enable this Court to do justice. In any case, this Court does not find any good reason for not awarding interest to the appellant. Interest is to make good the loss suffered by the person on delayed payment of the compensation. As is clear from narration of facts, the appellant has been taking all possible steps for determination of compensation. The denial of interest in the facts and the circumstances of this case would not be in interest of justice. This Court, therefore, in exercise of its power to do substantial justice considers it expedient to accept the report in its entirety.
7. Even otherwise it may be examined if determination of compensation under the Act includes payment of interest, also. For this purpose, relevant part of Section 8(1) of the Act is extracted below:-
“8. Principles and method of determining compensation – (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) …….
(b) …….
(c) …….
(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) ……..
(g) ……..”
Although there is no provision in the Act for award of the interest, but the power to determine compensation under the Act is unlike Land Acquisition Act or Arbitration Act. Sub-clause (d) uses the expression ‘fair amount of compensation’ whereas sub-clause (e) widens it further by empowering the arbitrator to award an amount which appears to him to be just having regard to the circumstances of each case. What is just and fair in the circumstances of each case cannot be laid down with any precision. Compensation is paid to indemnify a person and it should normally be an equivalent or substitute of equal values. The payment of compensation of Rs.30,00,000/- for a three storyed building in Calcutta with 4.9 acres open space in 1994 without interest when possession was taken in 1964 would amount to being unjust and unfair to the appellant. The recommendation in the report for payment of interest would be included in the expression, ‘which appears to him to be just’ used in clause (e) of the sub-section.
8. So far as the claim of the respondent no.3 about the adjustment for repairs is concerned, suffice it to say that the Act itself contemplates a procedure under which the person in possession is required to give notice to the landlord and thereafter approach the prescribed authority who is empowered to permit repair. Since admittedly the respondent never approached the appropriate authority under the Act and did not obtain any order, the claim of repair cannot be accepted.
9. In the result this appeal is decided by directing that the report submitted by the learned Solicitor General is accepted. It shall form a part of the decree of this Court. The respondents are directed to pay the remaining amount within a period of two months from today. The amount which has been deposited by respondent no.1, if withdrawn by the appellant, shall be adjusted towards payment of balance amount, namely, the interest.
