Union of India and Others vs Subal Chandra Kandari and Others

Indira Banerjee, J—This appeal under Section 11 of the Requisitioning and Acquisition of Immovable Property Act, 1952, hereinafter referred to as the 1952 Act, is against an award dated 30th March, 2009 passed by the learned arbitrator appointed vide Notification No. 909-Reqn./2A-7/02 dated 23rd February, 2007, under Section 8(1)(b) of the said Act, in Arbitration Case No. 15 of 2002 (v), in respect of the acquired property of the Respondents, being part of Premises No. 46, Barackpore Trunk Road, Baranagar, Kolkata.

The said Premises No. 46, Barackpore Trunk Road, Kolkata, covering total area of 8.94 acres, comprised of CS Plot Nos. 613, 614, 615, 616, 617 and 618 of Mouza - Naina, under Baranagar Police Station in District 24 Parganas, was initially requisitioned on 22nd April, 1942, for defence purposes, under the Defence of India Act, 1939.

By a notification dated 3rd March, 1987, the entire property being Premises No. 46, Barackpore Trunk Road, comprising about 8.94 acres was permanently acquired under Section 7 of the 1952 Act.

Premises No. 46, Barackpore Trunk Road was owned by two sets of owners. Plot No. 613, 614, 617 and 618 measuring about 7.16 acres was owned by Mahesh Lal Seal and others whereas Plot Nos. 615 and 616 measuring about 1.78 acres was jointly owned by the respondents in this appeal.

The compensation offered by the Land Acquisition Collector, to the owners of the said property, on the basis of his valuation, was not accepted by them.

Mahesh Lal Seal and Others, the owners of Plot Nos. 613, 614, 617 and 618 made an application under Section 8(1)(b) of the 1952 Act for appointment of Arbitrator. An arbitrator was duly appointed and the Arbitrator made an award. Union of India challenged the award in this Court. The appeals succeeded. However, Mahesh Lal Seal and Others approached the Supreme Court.

By a judgment and order dated 1st September, 2006, the Supreme Court allowed the appeal of Mahesh Lal Seal and Others and fixed the valuation of the acquired land at Rs. 70,000/- per cottah in respect of Danga and bastu classes of land and Rs. 35,000/- per cottah for land comprised in pond, without any solatia but with interest @ 9% per annum from the date of acquisition till payment, as per reducing balance. The judgment in the case of Mahesh Lall Seal and Others Vs. Union of India (UOI) and Others, AIR 2007 SC 357 : (2006) 3 ARBLR 414 : (2006) 8 JT 434 : (2006) 8 SCALE 768 : (2006) 10 SCC 227 : (2006) 5 SCR 696 Supp .

The respondents in this case being owners of 1.78 acres of land at the premises No. 46, BT Road, comprising Plot Nos. 615 and 616 of the same Mouza also did not accept the award offered by the Collector and sought appointment of an arbitrator as per the provisions of Section 8(1)(b) of the 1952 Act.

By a notification dated 16th May, 2002, stated to be issued in exercise of power conferred by Section 8(1)(b) of the 1952 Act read with Section 25 of the said Act and Government of India, Ministry of Works, Housing and Supply notification No. 1608-E-III dated 9th May, 1953, the Governor appointed Md. A.R. Shah, of the West Bengal Higher Judicial Service, as arbitrator.

The Arbitration Case was registered as Arbitration Case No. 15 of 2002 (v) before the Arbitrator. The Arbitrator entered into reference and diverse orders were from time to time passed by the Arbitrator. The Arbitrator, however, could not conclude the Arbitration proceedings.

By another Notification dated 23rd February 2007, Sri M.K. Chowdhury, West Bengal Higher Judicial Service, was appointed arbitrator. The Land Acquisition Collector appointed the Additional Government Pleader to represent the Union of India before the Learned Arbitrator.

The appellants have challenged the award inter alia contending that the appointment of learned arbitrator was without jurisdiction and as such the award was null and void.

Mr. Somnath Bose, Counsel appearing on behalf of the appellants submitted that the Notification No. 909-Reqn./2A-7/02 dated 23rd February, 2007, appointing Sri M.K. Chowdhury arbitrator, has apparently been issued in exercise of power under Government of India Notification No. 1608-E-III dated 9th May, 1953, which has been superseded by notification No. SRO 2519 dated 24th May, 1957 made and published by Central Government in Gazette of India dated 3rd August, 1957, in exercise of power conferred by Section 17(1) of the 1952 Act.

Mr. Bose submitted that the appointment of the arbitrator, was, therefore, null and void. The arbitrator patently lacked jurisdiction to make the impugned award dated 30th March, 2009. Mr. Bose argued that the award was a nullity and non est in law, as the same had been made by an authority that was coram non judice.

Mr. Bose also argued that the Land Acquisition Collector had no jurisdiction to appoint the learned Additional Government Pleader (AGP) to represent the Central Government before the learned arbitrator. Any concession and/or admission of fact or law made by the learned AGP was, therefore, not binding on the Central Government.

Mr. Bose argued that the learned AGP could not, in any case, have waived the objection to the jurisdiction of the learned arbitrator by his appearance before the learned arbitrator. The impugned award was liable to be set aside as null and void and unenforceable.

Significantly, in the case of Mahesh Lall Seal and Others Vs. Union of India (UOI) and Others, AIR 2007 SC 357 : (2006) 3 ARBLR 414 : (2006) 8 JT 434 : (2006) 8 SCALE 768 : (2006) 10 SCC 227 : (2006) 5 SCR 696 Supp the Supreme Court had upheld a similar award in respect of adjacent land, being part of the same premises. Mr. Bose argued that the Supreme Court upheld the award without addressing and deciding the issue relating to the inherent defect of jurisdiction. The question of legality and/or validity of the appointment of arbitrator was not considered. Mr. Bose argued that it was well settled, a judicial decision was a precedent for the decision and not the logical conclusion of what might be deduced from the decision. He argued that the Supreme Court, not having decided the issue relating to the inherent defect of jurisdiction in respect of the impugned award, the decision of the Supreme Court could not be construed as a binding precedent in respect of the present controversy.

It is well settled that a decision is an authority for the issue of law that it actually decides and not for every observation made therein or for what might logically follow from the various observations made therein as argued by Mr. Bose. The proposition finds support from the judgments of the Supreme Court in Union of India (UOI) and Others Vs. Dhanwanti Devi and Others, (1996) 7 AD 47 : (1996) 8 JT 306 : (1996) 6 SCALE 434 : (1996) 6 SCALE 431 : (1996) 6 SCC 44 : (1996) 5 SCR 32 Supp ; Union of India (UOI) Vs. Chajju Ram (Dead) by Lrs. and Others, AIR 2003 SC 2339 : (2003) 2 CTC 626 : (2003) 4 JT 161 : (2003) 4 SCALE 155 : (2003) 5 SCC 568 : (2003) 3 SCR 647 : (2003) AIRSCW 2322 : (2003) 3 Supreme 661 and U.P. State Road Transport Corporation Vs. Assistant Comnr. of Police (Traffic) Delhi, (2009) 2 JT 553 : (2009) 3 SCC 634 : (2009) 3 SCR 234 : (2009) 2 UJ 870 cited by Mr. Bose.

Relying on Coromandel Fertilizers Ltd. Vs. Union of India (UOI) and Others, AIR 1984 SC 1772 : (1984) 3 CompLJ 289 : (1984) 3 ECC 98 : (1984) 17 ELT 607 : (1984) 2 SCALE 282 : (1984) 1 SCC 457 Supp : (1984) SCC 457 Supp : (1985) 1 SCR 523 : (1985) 17 UJ 133 Mr. Bose argued that wrong decision in favour of any party does not entitled any other party to claim benefit on the basis of a wrong decision. Mr. Bose also argued that Article 14 which guarantees equality before the law cannot be claimed in respect of illegality.

There can be no doubt that an award made by an Arbitrator who inherently lacks jurisdiction would be null and void as argued by Mr. Bose. The question is whether the appointment of the Arbitrator was without jurisdiction, as contended by Mr. Bose.

Mr. Bose also argued that while issuing the purported Notification dated 23rd February, 2007 the State Government was oblivious of Notification No. SRO 2519 dated 24th May 1957, superseding Notification No. 1608-E-III dated 9th May, 1953 whereby the learned Arbitrator was excluded from exercising power under Section 8(2)(b) of the 1952 Act.

Mr. Bose argued that the Notification dated 9th May, 1953 did not delegate power to the State Government under Section 8(2)(b). Mr. Bose also argued that the defect of inherent lack of jurisdiction cannot be cured by waiver or concession of the learned AGP who was appointed by the Land Acquisition Collector to represent the Central Government before the learned Arbitrator. In the context of his submission that the defect of inherent lack of jurisdiction cannot be cured, Chiranjilal Shrilal Goenka (Deceased) through Lrs. Vs. Jasjit Singh and Others, (1993) 2 JT 341 : (1993) 2 SCALE 146 : (1993) 2 SCC 507 : (1993) 2 SCR 454 .

Mr. Bose further argued that concession of the learned AGP was of no effect in as much as he had no authority to represent the Central Government. Any concession made by the learned AGP to the jurisdiction of the learned Arbitrator was not binding. In any case, any concession or admission on a question of law made by counsel could not bind the Central Government. In this context Mr. Bose cited Central Council for Research in The Central Council for Research in Ayurveda and Siddha and Another Vs. Dr. K. Santhakumari, AIR 2001 SC 2306 : (2001) 1 JT 411 Supp : (2001) LabIC 2073 : (2001) 4 SCALE 9 : (2001) 5 SCC 60 : (2001) SCC(L&S) 722 : (2001) 3 SCR 519 : (2001) 2 SCT 1116 : (2001) AIRSCW 2155 : (2001) 4 Supreme 97 . Mr. Bose also cited Union of India (UOI) and Another Vs. S.C. Parashar, AIR 2006 SC 3566 : (2006) 109 FLR 228 : (2006) 3 JT 162 : (2006) 2 SCALE 527 : (2006) 3 SCC 167 : (2006) SCC(L&S) 496 : (2006) 2 SLJ 490 , where the Supreme Court held that concession on a question of law by counsel did not bind the party.

Mr. Bose argued that in the case of Mahesh Lal Seal and Ors. (supra) the Supreme Court answered the question of whether the impugned award of the Arbitrator dated 25th October, 2000 was null and void on account of absence of a referable dispute to the Arbitrator. The validity of appointment of the Arbitrator was neither in question nor required to be answered by the Supreme Court. The Supreme Court had no occasion to decide the question of inherent lack of jurisdiction of the learned Arbitrator rendering the award null and void the same having been made by coram non judice.

It is true that the Notification No. 1608 - E-III dated 09.05.1953 referred to in the notification under which the Arbitrator has been appointed was superseded by S.R.O. 2519 dated 24th May, 1957. However, it is well settled that mere reference to a wrong order or a wrong provision of law would not invalidate the act as held by the Supreme Court in State of Karnataka Vs. Muniyalla, AIR 1985 SC 470 : (1985) CriLJ 751 : (1984) 2 SCALE 1015 : (1985) 1 SCC 196 . The Supreme Court held:

"It is now well settled that merely because an order is purported to be made under a wrong provision of law, it does not become invalid, so long as there is some other provision of law under which the order could be validly made. Mere recital of a wrong provision of law does not have the effect of invalidating an order which is otherwise within the power of the authority making it."

Section 8(1) of the 1952 Act provides as follows:-

"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) where the amount of compensation ca be fixed by agreement, it shall be paid in accordance with such agreement;

(b) where no such agreement can be reached, the Central Government shall appoint as arbitrator a person who is, or has been, or is qualified for appointment as, judge of a High Court;

(c) the Central Government may, in any particular case, nominate a person having expert knowledge as to the nature of the property requisitioned or acquired to assist the arbitrator and where such nomination is made, the person to be compensated may also nominate an assessor for the same purpose;

(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) when there is any dispute as to the person or persons who are entitled to the compensation the arbitrator shall decide such dispute and if the arbitrator finds that more persons than one are, entitled to compensation, he shall apportion the amount thereof amongst such persons;

(g) nothing in the Arbitration Act, 1940 (10 of 1940)* shall apply to arbitration under this section."

Section 2(b) of the 1952 Act defines Competent Authority to mean any person or authority authorized by the Central Government, by notification in the official gazette, to perform the functions of the competent authority under the 1952 Act, for such area as may be specified in the notification. The powers under Sections 3, 4and 5 to requisition immovable property or to take possession of or to use immovable property so requisitioned is vested in the Competent Authority. By notification No. SRO 1930 dated 9th April, 1953 issued pursuant to Clause B of Section 2 of the 1952 Act, the Central Government authorised, the officers mentioned in Column 1 of the table appended to the said notification to perform the functions of Competent Authority for the areas specified in the corresponding entry in Column 2 of the said Act. The said notification was superseded by notification No. SRO 2519 dated 24th May, 1957. The notification and in particular SLIA of the table appended thereto authorized the 1st Land Acquisition Collector, Calcutta and all land Acquisition Officers of Calcutta and all other districts in the State of West Bengal, who were functioning as Collectors under the Land Acquisition Act, 1894, the Collector of the District of 24 Parganas and all other Collectors in the State of West Bengal and Deputy Commissioners of Jalpaiguri, Darjeeling and Coochbehar in the State of West Bengal to exercise powers under Sections 6, 7 and 8 [except Clause B of Sub-section (1)] and Section 13 of the 1952 Act. Column 4 provided that no power under Section 8 in so far as it relates to the fixing of amount of compensation by agreement would be exercisable except with the previous approval of the Central Government.

Mr. Bose argued that the Land Acquisition Collector had no power to appoint arbitrator in as much as the power under Clause B of Sub-Section (1) has specifically been excluded from the powers delegated to the Land Acquisition Collector, the Land Acquisition Officers, Collectors and Deputy Commissioners of the concerned districts. This notification however confers power on the State of West Bengal to exercise power under Clause 8(1)(b) i.e. the power to appoint arbitrator.

The notification dated 23.02.2007 appointing Mr. M.K. Chowdhury as arbitrator has been issued by the Assistant Secretary to the Government of West Bengal by order of the Governor. It is the Government of West Bengal who has appointed the arbitrator. There is no infirmity and/or invalidity in the appointment of arbitrator. As observed above, in the case of the same premises, the Supreme Court has determined compensation @ Rs. 70,000/- per cottah in respect of danga and bastu classes of land and Rs. 35,000/- per cottah for land submerged in water.

The arbitrator arrived at the factual finding that there was no difference between the land of the respondents, which was part of the same premises as the land belonging to Mahesh Lal Seal and others and accordingly adopted the compensation fixed/upheld by the Supreme Court. We find no infirmity whatsoever in the award, which calls for interference by this Court.

The appeal is therefore dismissed.

We are informed that pursuant to an order dated 20th April, 2012 the appellants have deposited a sum of Rs. 20,00,000/- with the Registrar General of this Court. It will be open to the respondents to withdraw the aforesaid amount, with interest accrued thereon, subject to compliance with the requisite formalities.

The balance amount along with interest shall positively be paid to the respondents within 90 working days from the date of communication of this judgment and order.

Urgent photostat certified copy of this judgment and order, if applied for, be supplied to the learned advocates appearing for the parties expeditiously subject to compliance of requisite formalities.