The Judgment of the Court was as follows:—

Mookerjee, J.:— This appeal is directed against an award made under the Land Acquisition Act, in respect of a piece of land in the town of Serampore acquired by the Government for the residence of the Assistant Superintendent of Police. The land covers an area of 1 cottah, 2 chattak, 40 sq. ft. (that is, one-fiftieth of an acre) and at the time of acquisition was used by the Serampore Municipality as a public drain for the discharge of water from the locality into the river of Hughli. The Collector made an award for Rs. 407-4-8, that is, Rs. 354-2-8 as the value of the land and Rs. 53-2 as the statutory allowance. In the statement of grounds on which the amount of compensation was determined, it was stated that “the land had been valued at Rs. 300 per cottah, that is, at the same rate as the adjoining land, inasmuch as the drain was shallow.” The Chairman of the Municipality objected to the award as inadequate and claimed the costs for the construction of two culverts over a new drain which would have to be constructed in place of the drain acquired which was an important outfall. The Municipality also objected that as the drain in question, which had existed since a long time, was one of the main outlets for the discharge of water of an important area, and as it would be extremely difficult to make satisfactory arrangements for drainage of the place if the drain was closed, the acquisition should not have been sanctioned upon public grounds of sanitation. The Municipality further urged that a proper diversion drain for the drainage of the place would cost much more than the amount awarded as the market value of the land. They also pointed out that the cost of the two big culverts at both ends of the drain had not been taken into account in the award, though the culverts would become useless in the absence of the drain. The Land Acquisition Judge held that the amount awarded was adequate and dismissed the claim with costs. The Municipality has now appealed to this Court and has valued the appeal at Rs. 500. In my opinion, it is manifest that the award made by the Collector and confirmed by the Judge is inadequate.

Cl. 3 of sec. 23 of the Land Acquisition Act provides that in determining the amount of compensation to be awarded for land acquired, the Court shall take into consideration the damage sustained by the person interested by reason of severing such land from his other land. The fourth clause similarly makes it obligatory upon the Court to take into consideration the damage sustained by the person interested by reason of the acquisition injuriously affecting his other property. There can be no room for controversy that the result of the stoppage of the public drain (the immediate subject-matter of the acquisition) would be, not only to render valueless the two culverts at its own ends, but also to stop the drainage of the adjoining land (for which the Municipality was under statutory obligation to make suitable provision) and thereby to depreciate its value. Consequently, the assessment of the value of the land, regardless of the user for which it is specially fitted, cannot lead to an adequate award of compensation for the loss sustained by the owner. The special adaptability of the land acquired cannot accordingly be altogether ignored in the determination of its market value. Thus, where land was acquired which had been bought by the owner for the purpose of building a school, and there was no other suitable land available in the neighbourhood, it was held that this must be taken into consideration, even though no steps had been taken towards carrying out the project; Bailey v. Isle of Thanet L.R Co. (1). The same result was reached on the basis of a special clause in a Private Act of Parliament empowering a Hallway Company to acquire land in School Board for London v. S.E Ry. Co. (2). It has also been held that where land is compulsorily acquired, the fact that it has peculiar natural advantages for a particular purpose is an element for consideration in the assessment of compensation, apart from any special value created or enhanced by the scheme of the acquisition; In re Gough & Aspatria, etc., Water Board (3). Reference may in this connection be made to the judgments of Grove and Stephen, JJ., in Ossalinsky v. Corporation of Manchester (4), where the owner of land adjoining a lake was held entitled to compensation on the basis of its special adaptability for the purpose of a reservoir; see also the judgments, of Bran well, Brett and Cotton, L.JJ, in Riddell v. New-Castle Water Co. (5) and contrast the decision in Holt v. The Gas Light and Coke Co. (6) with that in Wernicke v. Secretary of State (7).

That the compensation awarded is inadequate also becomes obvious if we invoke the aid of an important principle which has been felicitously, though perhaps not accurately, called the principle of reinstatement. There are cases where the income derived or probably to be derived from land does not constitute a fair basis in assessing the value to the owner; in such cases, the principle of reinstatement is applied. This principle is that the owner cannot be placed in as favourable a position as he was in before the exercise of compulsory powers, unless such a sum is assessed as will enable him to replace the premises or lands taken, by premises or lands which would be to him of the same value. It is not possible to give an exhaustive catalogue of all cases to which the principle of reinstatement has been or can be made applicable. But the principle may be called in aid when the land is used for some particular purpose, generally not of a commercial nature, such as Churches, Schools, Hospitals, public parks, houses of an exceptional character and premises in which the business can only be carried on under special conditions or by means of special licenses.” Reference may be made, for illustration of the principle, to the decision of the House of Lords in Metropolitan Ry. Co. v. Burrow (8); see also the opinion of Lord Shand in Corporation of Edinburgh v. North British Ry. Co. (9) where the applicability of the doctrine was restricted to cases in which land for reinstatement is available or can be obtained on reasonable terms and consequently the attempt to extend the principle to the case of acquisition of a portion of a public garden proved unsuccessful.

There is thus no escape from the conclusion that the compensation awarded in the present case is inadequate, whether we consider the value of the land from the point of view of its special adaptability as a public drain, or whether we take into account the damage sustained by reason of severance or injurious affection, or whether we treat the matter as governed by the principle of reinstatement. There can further be no doubt, from the materials on the record, that the sum of Rs. 500, claimed as additional compensation constitutes a very modest demand. We must express our regret, equally with our surprise, that a just claim of this description should have been strenuously opposed on behalf of the Secretary of State and that the time of public officers of all grades should have been wasted because of an endeavour to resist a claim which was really unanswerable.

The result is that this appeal is allowed and the compensation payable to the claimant is increased by Rs. 500. The Appellant will be entitled to costs both here and in the Court below. We assess the hearing fee in this Court at five gold mohurs.

Buckland, J.—I agree that this appeal should be allowed and the compensation increased by the sum claimed. The intention of cl. 23 of the Land Acquisition Act, taken as a whole, is to provide a complete indemnity to a person whose land is compulsorily acquired. The sub-clauses give effect to this principle by enumerating the heads under which compensation may be warded. This case presents features which tend to obscure the application of the section. The actual land acquired itself is of very little value. In fact to any person other than the Appellant Municipality or to the owners of the adjoining plots of land it would be useless and of no value at all. To the present owner, i.e, the Government, and to the Appellant Municipality it has a value in excess of if it value as a mere piece of land, to the former by reason of the use to which it will be put in conjunction with the adjoining plots which, we are informed, have also been acquired, and to the latter by reason of the use to which it has been put in connection with its drainage schemes. Any enhanced value which it may have by reason of the use to which it will be put after acquisition must of course be ignored, but it follows from the statement of its value to the Appellant Municipality, that if the Appellant Municipality is deprived of the land by compulsory acquisition it loses something over and above the actual value of the land acquired. It is the duty of the Court to enquire what it is that the Appellant Municipality so loses, whether such loss is of the nature of any one or more of the items of damage required by the sub-clauses of sec. 23 of the Act to be considered, whether it is capable of assessment in terms of monetary compensation, and if so, at what sum compensation should be assessed.

The Appellant Municipality uses the drain on this land to conduct and discharge water flowing into it from other drains, the whole forming part of its drainage scheme. Of such benefit, as it obtains from this use of the land it will be deprived. It will … have to make other arrangements to collect and discharge the water from the drains with which this drain has been connected which otherwise would cease to serve as drains. It is manifestly impossible for the Appellant Municipality to adopt the contention, which, were its undertaking of a private and commerical nature, might possibly be open to it, though with what measure of success is problematical and dependent upon Considerations foreign to this case, that deprived of this outlet its entire enterprise is rendered useless and that therefore it requires to be compensated accordingly. But the fact that owing to its being a Municipality with duties required of it by Statute and not a trading concern the Appellant cannot adopt any such attitude does not deny the application of the principles contained in sub-cls. 3 and 4 of sec. 23 of the Act. Whether or not a claim, can be justified according to these principles must be decided upon a consideration of the position at the time when the acquisition takes place, that is, when the claimant is deprived of his land. An instance where compensation was allowed for damage caused “by severing or otherwise injuriously affecting” where neither the land acquired nor the land injuriously affected were a source of profit to the claimant is to be found in Holt v. The Gas Light and Coke Co. which was a case of a rifle range. Owing to the Defendant Co. acquiring land behind the butts the range became unsafe and had to be closed. The Plaintiffs were held to be entitled to compensation. The following passage from the judgment of Blackburn, J., lays down the principle in very clear language:—“I cannot see however when the two are occupied together for a common purpose, and the possession of both is essential for that purpose why any person who has lost the benefit of the part taken away should not be compensated; and, as I have said, the words of the Act are quite wide enough to cover it, the damage not exactly arising from severance, but even if not, at all events so much ejusdem generis as to come within the general words which follow.” It is quite immaterial that in the Indian Act the covering words are to be found in two sub-sections. In my judgment the. Appellant Municipality is entitled to compensation under cls. 3 and 4 of sec. 23. The quantum of damages is another matter. As I have indicated already what a claimant may or can or will by statute or otherwise be compelled, to do to remedy his position and to restore to himself the benefits of which he has been deprived other than the benefit of ownership of the land itself is not a matter to be considered in determining the application of sec. 23, but may be, and in this case is material to be considered in determining whether the damage is capable of assessment and at what amount it should be assessed. In cases where the claimant does not trade one obvious method of assessing damages is not open to the Court. But in a case such as this, where land is used for a special purpose in conjunction with other lands of its owner which are injuriously affected by its acquisition and where it is established that the owner will be compelled by law to or can provide himself with other land capable of being adapted in such a way as to restore to his land injuriously affected its former usefulness, one measure of the damage sustained by the acquisition injuriously affecting the other property is the difference between the sum awarded for the land acquired and the costs to the owner of providing himself with other land to be used in a manner similar to that in which the land acquired was used, plus the cost of adapting it to such use. Applying this to the present circumstances the Appellant Municipality is unquestionably entitled to receive the extremely moderate sum claimed.

I entirely concur in what my learned brother Mr. Justice Mookerjee has said with regard to the propriety of contesting this claim. It does not appear that this was done on account of any principle involved nor is it the case of an exaggerated claim by a grasping landowner. From first to last the total time of the officers of Government both executive and judicial which has been occupied in dealing with it must have been out of all proportion to the amount at stake, which, if conceded in the first instance, would have made but comparatively trifling addition to the capital outlay on the residence required for the Assistant Superintendent of Police.

S.C.M