The Judgment of the Court was delivered by

Subhro Kamal Mukherjee, J.:— This is an appeal against the award dated September 18, 1971 made and published by the learned Arbitrator, appointed by the government under Section 19 of the Defence of India Act, 1939, in Arbitration Miscellaneous Case no. 2 of 1950, determining the compensation in respect of properties, which were acquired by the government under Rule 75A of Defence of India Rules.

The properties acquired consist of C.S plot Nos. 815, 816, 817, 825, 826, 827, 828, 829, 830, 831, 833 and portion of plot Nos. 813, 887 and 840 of Mouza Jogacha, J.L No. 6, Police Station Jagacha, District Howrah as well as C.S plot Nos. 914, 915, 916, 917, 918 and 919 of Mouza Santragachi, J.L No. 4, Police Station Jagacha, District Howrah.

The claimant/respondent has, also, preferred a Cross-objection being C.O.T No. 7 of 2008.

To avoid conflicting judicial opinions and by consent of the parties the appeal and the cross-objection were heard analogously.

Initially, the said properties were requisitioned on May 31, 1943. The properties were under requisition May 31, 1943 to July 30, 1946. For the said period, admittedly, rent compensation was payable.

The acquisition was made by the government on June 20, 1945 in pursuance of Rule 75-A(2) the Defence of India Rules.

It is alleged that, in effect, lands in excess of lands acquired were held and possessed by the government.

The Collector, however, made an award of Rs. 2,40,113 and 12 annas (Rupees two lakh forty thousand one hundred thirteen and twelve annas) only taking into consideration the rent payable in respect of properties acquired, as aforesaid, including that of structures, tanks, trees etc.

The claimant received the compensation under protest and prayed for reference to arbitration according to relevant provisions of Defence of India Act, 1939, and the Rules framed thereunder being aggrieved by the insufficiency of valuation made by the Collector.

The provincial government, on the basis of such prayer, by order No. 10589 Reqn. dated December 8, 1949 made the reference to arbitration in accordance with relevant provisions of the Defence of India Act, 1939. Initially, Shri S.K Neogy, the learned District Judge, Howrah, was appointed arbitrator.

Since the provincial government was not competent to appoint arbitrator in respect of properties initially requisitioned and subsequently acquired at the instance of the Government of India, the appointment of arbitrator was cancelled and 28 (twenty eight) years, thereafter, Shri G.B Ghosh, the learned District Judge, Howrah, proceeded to determine compensation payable to the claimant. The said reference was registered as Arbitration Miscellaneous Case 2 of 1950.

The claimant lodged a claim on September 19, 1956, for Rs. 60,00,000/-(Rupees sixty lakh) only. The claimant claimed Rs. 500/- (Rupees five hundred) only per cottah for the lands as the lands acquired were mill-site and non-agricultural land and a cotton mill was near completion at the said site. The necessary building was constructed and other materials were collected for completion of the cotton mills at the site. It was stated that even at the material time a cotton mill could not have been constructed at a cost less than a crore. The claimant, further, claimed the monthly rental compensation at the rate of Rs. 25,000/- (Rupees twenty five thousand) only per month.

No inventory of materials was made in presence of the claimant, who had no access to the site as the requisition was made by the military for war purpose. The land was neither agricultural nor the same was a disused cotton mill as styled by the authorities at different time. The claimant all through contended that the construction of the cotton mill was on the verge of completion with materials already collected by the claimant at the site. During the period, the site was partially utilised for storage of cinema films, which were either lost or damaged during entry by the military authorities in a hurry. The site had advantage of railway siding, internal trolley line, chimney, engine rooms, boiler-room, boundary walls and officers quarters particulars of which were specified in the statement of claims submitted by the claimant.

In connection with the said case notices were duly served upon the claimants and the provincial government.

The claimants submitted statements of claims, but the provincial government, which eventually became the State of West Bengal, though appeared and contested the case, but did not submit any statement or counter-statement. The government did not produce the record of the case in spite of repeated opportunities. No papers were available from the government. A copy of the award of the Collector was filed, but it was not even signed by any officer.

The learned Arbitrator, therefore, held that everything seems to have been done by the rule of thumb leaving the Arbitrator with the task of ascertaining compensation on the existing papers.

Shri Ranadhir Sen was appointed as the commissioner for conducting local investigation. In connection with the said survey work both the parties accepted that there should be theodolite survey. The commissioner, in course of conducting survey work, prepared plans. The plan nos. 2 and 3 made by the commissioner for local investigation revealed that in addition to the lands acquired the authorities, also, took forcible possession of C.S plot nos. 814, 835, 834, 832, 841, 842, 797, 798, 836, 800, 810, 791, 792, 895 and 838 of Mouza Jagacha and enclosed the same within boundary walls. It, further, appears from the report of the commissioner for local investigation that the main building, which was acquired, also, comprised of C.S plot no. 831 with shed arches and iron poles with sky-lights fitted above the roof and in the building printing press machinery has been installed. The plan No. 3 prepared by the commissioner, also, shows the site of dismantled chimney.

The claimant, during hearing, submitted further statements that possession of lands, other than lands acquired, were taken and these were clubbed together with acquired lands and were surrounded by boundary walls.

The following points were framed for decision by the learned Arbitrator:

i) Whether the claimant is entitled to rent compensation for the period under requisition, that is, from May 31, 1943 to June 6, 1946? If so, what should be fair and reasonable rent?

ii) What is the extent of the property? Was any land in excess of the area notified for acquisition taken possession of? If so, what is the area?

iii) What should be fair and reasonable compensation for the land so acquired?

iv) What is the value of the structures and other fixtures on the land?

v) What were the other materials such as bricks, machine, tools, trees, fits etc., on the land and their value? Is the claimant entitled to any compensation for these items?

vi) Is the claimant entitled to value of the big chimney on plot No. 834 or in the alternative damages for injurious affectation? What is the extent of the damages sustained by the claimant?

vii) Is the claimant entitled to damages by way of injurious affectation in respect of the railway siding and trolley line? If so, for what amount?

viii) Is the claimant entitled to damages for injurious affectation in respect of 12.12 acres, which was rendered unsuitable for a mill-site. If so, for what amount?

ix) Is the claimant entitled to 15% (fifteen per cent) compulsory addition to the damages? Is the claimant entitled to interest also?

x) To what further relief is the claimant entitled?

While considering point No. 1, the learned Arbitrator held that claimant is entitled to rent compensation for the period from June 1943 to July 1946 in respect of the property requisitioned, which comprises 12.48 acres with structures and other advantages as indicated by the learned Arbitrator.

While discussing point No. 1, that learned Arbitrator, however, did not consider the provisions for determination of rent. In the absence of prohibition contained in the Defence of India Rules, the provisions of State Rent Act could have been resorted to for determination of rent payable by the government to the claimant. Admittedly, cotton mills were on the verge of completion and the lands were bounded by boundary wall on three sides.

Therefore, the principles laid down under Section 8(1)(d) of the West Bengal Premises Tenancy Act, 1956, can be treated as guideline for determination of rent payable by the government to the claimants for the period under requisition, as aforesaid.

The report of the valuer was tendered in evidence and was marked as exhibit 9. The government accepted valuation as given by the valuer, who was an expert in this regard as certified by the government.

From the report of the valuer, the valuation of the land and structures comes to Rs. 29,18,732/- (Rupees twenty nine lakh eighteen thousand seven hundred thirty two) only and rent payable on the basis of annual payment of an amount equal to 6.3/4 per centum of the aggregate amount of actual amount of cost of construction at the market price and value of land etc., and other facilities and advantages would come to Rs. 25,000/- (Rupees twenty five thousand) only.

In such circumstances, claimant's claim of Rs. 25,000/- (Rupees twenty five thousand) only per month as rent is quite sustainable and monthly rent cannot by any stretch of imagination be Rs. 3,000/- (Rupees three thousand) only per month as awarded by the learned Arbitrator.

As regards point No. 2 admittedly as per notification, which has, since, been market as exhibit 5, the properties described in schedule to the notification measures altogether 12.84 acres comprises of C.S plot nos. 815, 816, 817, 825 to 831, 830 and part of C.S plot nos. 813, 887 and 840 under village and Thana Jagacha, District Howrah as well as land comprised in C.S plot nos. 914, 915, 916, 917, 918 and 919 of village Santragachi J.L No. 4 under Thana Jagacha, District Howrah.

Whether the government took possession of land in excess of acquired lands has not been decided by the learned Arbitrator, inasmuch as, the same was not the subject-matter of the reference. However, it is submitted before us that claimant has, already, taken steps for recovery of possession of land taken by the government in excess of acquired land and for recovery of mesne profits for use and enjoyment by the government of the said excess land. We, therefore, express no opinion.

Therefore, undisputedly 12.84 acres of land were acquired butted and bounded by boundary walls on three sides and three sides of acquired lands were actually abutting road near Railway Station together with completed structures, shed, reservoir, both underground and overhead, tanks. The acquired properties are utilised by the government as the Government of India Press and for other purposes. The land acquired and put to use by the government of India is, also, having facilities of railway siding, trolley-line etc.

Learned Arbitrator while deciding point nos. 3 and 4, that is, compensation for the land acquired and value of the structures and other fixtures on the land, held that the valuation of the land as claimed by the claimant was quite reasonable, that is, Rs. 500/- (Rupees five hundred) per cottah, but due to largeness of land acquired fixed the valuation of lands acquired at Rs. 300/- (Rupees three hundred) per cottah.

The Supreme Court of India in Bhagwathula Samanna v. Special Tahsildar and Land Acquisition Officer, Visakhapatnam Municipality reported in AIR 1992 Supreme Court 2298 held that in all cases of acquisition development expenses need not be deducted. In the case in hand lands were already developed and construction of a cotton mill was on the verge of completion. The lands including the structures have been put to use by the government for running of the Government of India Press without effecting much improvement. The land acquired is developed with facility of railway siding too.

In such circumstances, we hold that the claimant is entitled to get the price of Rs. 500/- (Rupees five hundred) only per cottah, which has, since, been found reasonable by learned Arbitrator as aforesaid.

So far as valuations of the structures are concerned, the report of the valuer has not been disputed. The government has accepted valuation given by the valuer and in such circumstances, compensation ought to have been awarded by learner Arbitrator accepting the valuation made by valuer in respect of the structures - finished and semi-finished and ought to have awarded compensation of Rs. 14,99,892/- (Rupees fourteen lakh ninety nine thousand eight hundred ninety two) only in favour of the claimant as the claimant was entitled to full value of the structures as mentioned in valuation report.

The learned Arbitrator adopted a rough and ready method for arriving at his decision. When the valuation report has not been disputed by the government, there was no reason as to why the report with the evidence could not be relied upon.

The Supreme Court of India in Nelson Fernandes v. Special Land Acquisition Officer, South Goa reported in (2007) 9 SCC 447 permitted the claimant to rely upon the report of the valuer as such report was not challenged. Moreover, in the case in hand the valuer was an expert certified by the government. In such circumstances, there could not be any award made by the learned Arbitrator at the reduced value.

We, therefore, hold that the claimant is entitled to Rs. 14,99,892/- (Rupees fourteen lakh ninety nine thousand eight hundred ninety two) only for finished and semi-finished structures.

The government is using the structures and facilities and the report of the valuer contain valuation of other structures, that is, Engine-room, Roof-Bungalow, Pump house, Reservoir, both overhead and underground, spindle-room, calendar-room, R.T Roofed Latrine Block and Gate with Gate pillars. Existence of such structures were never denied and disputed by the government before the learned Arbitrator. The valuation of structures, that is, Engine-room, Roof-Bungalow, Pump house, Reservoir, both overhead and underground, spindle-room, calender-room, R.T Roofed latrine block and Gate with gate pillars was assessed at Rs. 5,05,794/-(Rupees five lakh five thousand seven hundred ninety four) only and the claimant is entitled to such amount, which the learned Arbitrator not having included in his award.

Tank comprised in C.S plot no. 826 and other two small tanks were excavated for the purpose of supply of water for drinking purpose and for other purposes. It appears that valuer has given details of cost of excavation of tank comprised in C.S plot no. 826 and other small tanks. The valuation report not having been disputed rather same having been accepted by the government, the entire cost of excavation, as indicated the valuation report, should be awarded in favour of the claimant. The government did not adduce any evidence to show that excavation cost, as claimed, was excessive.

We, therefore, hold that claimant is entitled to Rs. 80,389/- (Rupees eighty thousand three hundred eighty nine) only on account of excavation cost of the said tanks.

Main structure comprised in the lands acquired not having been disputed by the government before learned Arbitrator and the report of the local investigation commissioner having been accepted by the government in course of arbitration proceeding and no evidence having been adduced by the government as to valuation of the boundary walls, no depreciation could be granted because of the fact that boundary walls were constructed in or about the time when the property was acquired. The claimant, thus, became entitled to cost of construction of the boundary walls for Rs. 48,046/- (Rupees forty eight thousand forty six) only as assessed by valuer.

It is an admitted fact that the bricks were collected by the claimant for the purpose of construction of the mill. The bricks left behind have been admittedly utilised by the government. These bricks were utilised by the government without an inventory prepared in presence of both the parties. The claimant initially mentioned about the bricks and other valuables collected/stacked on the land acquired in their statement of claim. However, with the leave of learned Arbitrator, the claimants in their written statement before the learned Arbitrator submitted number of bricks remaining unutilised at the time of acquisition and other materials, that is, sand, soorki, stonechips, khoa, cement, lime, tiles, C.I sheets, doors, windows, sashes, glass angles, tee, channel iron, joists, pipes sanitary fittings, weighing machine, bolts, nuts, tools rivets, building equipments etc., indicating value thereof totalling to Rs. 3,00,000/- (Rupees three lakh) only. The learned Arbitrator on the basis of rough and ready method allowed 10% (ten) per centum of the claimed amount, which is arbitrary and without any foundation. The copy of claimant's statement of claim and the copy of the written statement with schedule of acquired goods with value submitted before the learned Arbitrator was, also, given to the government, but, in spite of giving several opportunities, the government did not file any objection. In that view of the matter, acquisition of the said materials and value of the materials as claimed and set out in the schedule cannot but be said to have been admitted by the government.

Admittedly, for the purpose of starting cotton mill the claimant constructed chimney and construction cost of such chimney as per the valuation report was Rs. 1,64,628/- (Rupees one lakh sixty four thousand six hundred twenty eight) only. The said chimney was ultimately demolished and/or dismantled by the government for reasons not disclosed. However, it was admitted that a chimney was constructed for the purpose of running the mill. Assessment of valuation of the chimney at Rs. 75,000/- (Rupees seventy five thousand) only, as awarded, has no justification and the claimant is entitled to full cost of construction of the chimney as per valuation report. The learned Arbitrator has made comments about non-mentioning of the size and the cost of construction of chimney. In the valuation statement prepared by the valuer, the valuer stated that chimney was of 160 feet height with strong masonry construction marked “R” in the plan. The cost of construction of chimney, as indicated in the valuation report, has not been disputed by government.

We hold that the cost of construction of chimney as assessed by the valuer ought to have been awarded by learned Arbitrator. The claimant in such circumstance is entitled to an award of Rs. 1,64,628/- (Rupees one lakh sixty four thousand six hundred twenty eight) only.

Admittedly, there was a railway siding up to the proposed mill site and the said railway siding is still in existence for the benefit of the government. It appears from records that said Indra Kumar Karnani made annual payment of Rs. 400/- (Rupees four hundred) only for maintenance of the siding and he has spent Rs. 80,000/-(Rupees eighty thousand) only for construction of the railway siding. Though payment of Rs. 80,000/- (Rupees eighty thousand) only has not been admitted, but annual maintenance charges has not been denied. Acquisition of mill site injuriously affected claimant's use of his railway siding when the siding arranged for benefit of the mill has been taken over by the government. The claimant was, therefore, entitled to cost of construction of the railway siding as well as reimbursement of annual maintenance paid by Indra Kumar Karnani. Use of railway siding and trolley line by the government means loss incurred by the claimant due to the cost incurred for making arrangement for railway siding and paying annual maintenance cost. The claim is in this behalf was reasonable. The distance of railway station has not been taken into consideration by learned Arbitrator when learned Arbitrator proceeded on the basis that amount claimed was imaginary. Learned Arbitrator did not make any calculation for cost of making arrangements for railway siding and awarded lump sum Rs. 50,000/- (Rupees fifty thousand) only. Loss suffered by claimant for non-use of railway siding for which cost has been incurred, as aforesaid, cannot but be said to be reasonable as no contrary proof was adduced by the government showing that making such arrangement for railway siding would involve lesser cost.

The claimant has specified that the plot nos. 835, 813, 814 (part), 840 (part), 841, 842, 794, 798, 799, 796, 800, 835, 887 (part) 834, 837, 838, 766, 781, 826 and 843 altogether measuring 15.12 acres were lying contiguous to plots acquired have been injuriously affected, particularly, due to severance from the plots acquired thereby diminishing potentiality of lands running contiguous to land acquired. From settlement map, exhibit 2A, it appears that plots acquired are all road-side plots and in respect of some such plots there is road on both sides of such plots. Only road-side plots have been sought to be acquired and there is no in-depth acquisition. This fact will appear not only from the site map, but also form report of learned commissioner. The government only sought to acquire road-side plots conveniently situated and there has been no in-depth acquisition. Further 5 (five) plots and remaining plots outside boundary wall not acquired by the government will appear from the report of the learned commissioner as well as from evidences on record belong to the same category. These lands not only lose their potentials, but also there has been loss by reason of severity from lands taken/acquired. Such lands are otherwise injuriously affected. For this category of lands claimant is entitled to compensation for depreciation in value. Actual and prospective use of such lands must be considered on the basis of cost of land under acquisition. For lands, thus, injuriously affected would entitle the claimant to compensation equivalent to diminution in value being left out due to severance from the lands acquired being conveniently situated and such lands will not fetch it potential value. For such lands claimant is not only entitled to compensation for lesser value from remaining land, but is, also, entitled to compensation for injurious affectation. The property of the claimant, which has been left out after acquisition, is partially blocked putting the claimant to disadvantage with regard to potential utilities and diminution of value of these plots. It will appear from evidences on record that some of the plots left out of acquisition are deprived of entry through road. For the purpose of ingress and egress to plots not acquired only a narrow passage can be used, which is certainly inconvenient. Thus, the lands not only suffer from reduction in value, but, also, are injuriously affected. Total land, thus, affected due to severance and subjected to injurious affectation is measuring about 15.12 acres and due to loss of their potential value assessed at Rs. 500/-(Rupees five hundred) only per cottah at the material point of time compensation for them due to injurious affectation at the rate of Rs. 25/-(Rupees twenty five) of the value per cottah would come to Rs. 1,13,400/- (Rupees one lakh thirteen thousand four hundred) only. The learned Arbitrator awarded diminution to the extent of Rs. 45,350/- (Rupees forty five thousand three hundred fifty) only assessing value of the land at Rs. 200/- (Rupees two hundred) only per cottah and allowing 25% (twenty five per cent) compensation on such value, but same is without any foundation or basis and the same is arbitrary.

The claimant preferred cross-objection due to reasons as aforesaid. We hold that claimant shall get further sum of Rs. 28,48,544/- (Rupees twenty eight lakh forty eight thousand five hundred forty four) only as detailed hereunder:

(i) For point No. 1 Rs. 8,36,000/-

(ii) For point No. 3 And For point No. 4 Rs. 14,29,866/

(iii) For point No. 5 Rs. 3,15,000/-

(iv) For point No. 6 Rs. 89,628/-

(v) For point No. 7 Rs. 1,10,000/-

(vi) For point No. 8 Rs. 68,050/-

……………………..

Total Rs. 28,48,544/

The learned Arbitrator has awarded interest, but turned down the prayer for solatium.

The learned Arbitrator held that the claimant was entitled interest when, admittedly, the amount of compensation was not paid or deposited on or before taking possession of the land.

The claimant, therefore, shall get interest at the rate of 6% (six) per centum per annum from the time of taking possession of acquired lands, as aforesaid, on the said amount Rs. 28,48,544/- (Rupees twenty eight lakh forty eight thousand five hundred forty four) only.

The learned Arbitrator, however, denied solatium to the claimant as the acquisition was made under the Defence of India Act, 1939. Mr. Banerjee, learned senior advocate for the claimants, submits that solatium is money comfort quantified by statute and given as a conciliatory measure for compulsory acquisition of the land of a citizen by a welfare state. The importance of the award of solatium cannot be undermined by any procedural blockage. If follows automatically with the market value of the land acquired, as a shadow would to a man. It springs up spontaneously as a part of statutory growth on the determination and emergence of market value of the land acquired. If floows as a matter of course, without any impediment. That is to be awarded by the court in every case leaving no discretion with the court in not awarding it in some cases and awarding in others. Since award of solatium is in consideration of the compulsory nature of acquisition, it is a hanging mandate for the court to award and supply the same.

The Constitutional Bench of the Supreme Court of India in Union of India v. Chajju Ram (dead) by Lrs. reported in (2003) 5 SCC 568 upheld the decision in the case of Nagpur Improvement Trust v. Vasantrao reported in (2002) 7 Supreme Court Cases 657 that the provisions regarding solatium contained in the Land Acquisition Act, 1894, could not be read into the provisions of various Improvement Trust Acts. The decision in the case of Dayal Singh v. Union of India reported in (2003) 2 Supreme Court Cases 539 has, also, been approved where it was held that the provisions of Section 28A of the Land Acquisition Act, 1894, could not be read into the Defence of India Acts.

In Chajju Ram (supra) the Supreme Court of India, further, held that the classifications sought to be made for determination of the amount of compensation for acquisition of the land under the Defence of India Act, 1971, vis-à-vis the Land Acquisition Act, 1894, was a reasonable and valid one. The said classification was found on intelligible differentia and had a rational relation with the object sought to be achieved by the legislation in question.

For acquisition of land under the Defence of India Act, 1939, read with Rule 75 of the Defence of India Rules, there is no provision for payment of any solatium. The Defence of India Act, 1939, lays down the procedure as well as the machinery for determining the amount of compensation. The provision for payment of compensation under the Land Acquisition Act, 1894, would not, ipso facto, apply to the acquisition made under the Defence of India Act, 1939.

Moreover, under Section 19 of the Defence of India Act, 1939, power has been conferred upon the Central Government to appoint an Arbitrator when no amount of compensation could be fixed by agreement. The Arbitrator, appointed under Section 19(1)(e) of the said Act, while making his award, shall have regard to the provisions of Sub-section (1) of Section 23 of the Land Acquisition Act, 1894, so far as the same can be made applicable. Solatium is payable according to provisions of Subsection (2) of Section 23 of the Land Acquisition Act, 1894. The Arbitrator was not conferred with any power to award solatium as contemplated under Sub-section (2) of Section 23 of the Land Acquisition Act, 1894.

The learned Arbitrator, therefore, rightly did not award solatium to the claimant/respondent/cross-objector. Thus, we cannot accept the contention of Mr. Bidyut Kumar Banerjee, learned senior advocate, appearing for the claimants that the learned Arbitrator ought to have awarded solatium to the claimant.

Thus, the appeal is dismissed. The cross-objection is allowed in part. We hold that the claimants shall get further sum of Rs. 28,48,544/- (Rupees twenty eight forty eight thousand five hundred forty four) only. The claimants shall be entitled to interest at the rate of 6% (six) per centum per annum from the date of taking possession of the acquired lands.

We make no order as to costs.

Kalidas Mukherjee, J.:— I agree.