Hirachand Kothari (Dead) Through Lrs.
Vs. State of Rajasthan & ANR [1985] INSC 135 (9 May 1985)
SEN, A.P. (J) SEN, A.P. (J) KHALID, V. (J)
CITATION: 1985 AIR 998 1985 SCR Supl. (1) 644
1985 SCC Supl. 17 1985 SCALE (1)1131
CITATOR INFO: F 1987 SC2177 (3) R 1992 SC1356
(12)
ACT:
Indian Evidence Act, 1872-Section 20
'Information or opinion or matter in dispute-Reference by party to a third
person-Statements made by third person receivable as admission-
'Information'-What is.
HEADNOTE:
Pursuant to a registered deed of exchange
dated July 16, 1951 executed between the parties, the appellant withdrew a suit
for specific performance of an alleged contract against the State Government
under which the Government were to resume his plot no. C/91 in 'C' Scheme allotted
to him by Improvement Trust, Jaipur for a sum of Rs 5000 in 1951 and give in
exchange another plot in the same scheme on the same terms. Under the terms of
the deed, the State Government agreed to give in exchange plot no. O/17 in 'C'
Scheme to the appellant on resumption of his plot bearing no C/91. In terms
thereof, the appellant handed over possession of his plot no. C/91 to the State
Government but the State Government on their part did not give possession of
the exchanged plot to him. Thereupon, the appellant brought a suit for
possession of the exchanged plot and for mesne profits thereof. It was revealed
in answer to the interrogatories served by the appellant that the exchanged
plot had already been transferred by the State Government to Thakur Hari Singh
of Achrol under the orders of the Home Minister, Government of India dated
January 8,1945 and that plot no. C/91 which belonged to the appellant was then
in possession of the Raj Pramukh Maharaja of Jaipur. The appellant accordingly
impleaded Thakur Harisingh of Achrol as a party to the suit and sought
permission from the Central Government under s. 86 of the Code of Civil
Procedure, 1908 to join Maharaja Mansinghji of Jaipur as a party to the suit.
The objection raised by Thakur Harisingh of Achrol as to the pecuniary
jurisdiction of the Court was sustained and the Civil Judge, Jaipur City
returned the plaint for presentation to the proper Court.
It transpired during the pendency of the
aforesaid suit that the Joint Secretary, Ministry of Home Affairs, Government
of India had addressed a letter dated January 3, 1956 to the then Chief
Minister of Rajasthan conveying that it was felt that the appellant had a case
and should be given the exchanged plot and if that was not feasible he should
be restored back in possession of plot no. C/91. In response to the same, the
Chief Minister addressed a letter dated February 3, 1956 to the Joint
Secretary, Ministry of Home Affairs conveying the anxiety of the State
Government to settle the claim of the appellant and intimated that the
appellant had agreed to the appointment of the Town Planning Officer, Jaipur as
the assess or who had been asked to assess the 645 value of the land and submit
his report, with a request that the Government of India should defer its
decision in fairness to the State Government for a couple of months as it was
felt that it might be possible to settle the claim without any unreasonable
delay. The Town Planning Officer by his report (Exh. 5) dated February 21, 1956
put the valuation of the disputed land in 1951 admeasuring 5,000 square yards
at Rs. 7 per square yard at 35,000 and to this he added Rs. 826.50p as the cost
of construction of a boundary wall i.e. Rs. 35,826 50p. in all. [651 G-H, 652
A] The State Government declined to pay the compensation.
The appellant instituted the present suit for
recovery of Rs. 47,741.50p. as damages i.e. Rs. 35,826.50p. to wards the value
of disputed land and Rs. 11,915 as compensation.
The Civil Judge held that on the admission of
the plaintiff as P W. 6 and his witnesses Secretary, Urban Improvement Board.
P.W. 3 and the Deputy Minister it was clear that the Town Planning Officer was
appointed merely to assess the value of the disputed land and that it was never
agreed that whatever appraisement or valuation that he may make would be
binding on both the parties, nor did the Deputy Minister make any commitment
that such assessment would be binding on the State Government and that
therefore the appraisement or valuation could not be treated as an 'admission
of liability' under section 20 of the Evidence Act, 1872 on the part of the
State Government. It was further held that the correct value on the basis of
the notification issued by the Urban Improvement Board clearly showed that the
part rate of the Municipal Committee was not applicable to the disputed land
which was situated outside the walled city. The suit was decreed in part for
Rs. 17,000 with damages by way of interest at 6%.
On appeal, the High Court held, that the
plaintiff had to prove that the State Government had agreed to be bound by the
assessment made by the Town Planning Officer, before s.20 of the Act, 1872
could be attracted and that there was no evidence that the State Government had
ever agreed to be bound by the said assessment and that reliance cannot be
placed upon the letter dated February 3, 1956 of the Chief Minister, as the
Chief Minister was not examined as a witness. It upheld the finding of the
Trial Court that the appraisement or valuation made by the Town Planning Officer
was not binding on the State Government, and that the disputed land was of an
inferior type and affirmed the judgment and decree of the Trial Court.
Allowing the Appeal, ^
HELD: 1. Admissions may operate as estoppel
and they do so where parties had agreed to abide by them. The word
'information' occurring in s. 20 of the Evidence Act, 1872 is not to be
understood in the sense that the parties desired to know something which none
of them had knowledge of. Where there is a dispute as regards a certain
question and the Court in need of information regarding the truth on that
point, any statement which the referee may make is nevertheless information'
within the purview of s. 20. S. 20 is the second exception to the General rule
laid down in s.
18. It deals with one class of 646 vicarious
admissions, that is, admissions of persons other than the party. Where a party
refers to a third person for some information or an opinion on a matter in
dispute, the statements made by the third person are receivable as admissions
against the person referring. The reason is that when a party refers to another
person for a statement of his views, the party approves of his utterance in
anticipation and adopts that as his own. The principle is the same as that of
reference to arbitration. The reference may be by express words or by conduct,
but in any case there must be a clear admission to refer and such admissions
are generally conclusive. [651 A-B; G-H; 652 A]
2. The High Court was not right in excluding
from its consideration the Chief Minister's letter dated February 3, 1956 on
the ground of want of proof. The document by itself does not substantiate the
plaintiff's claim that the parties had by mutual consent agreed to appoint the
Town Planning Officer to ascertain the value of the disputed plot as an
appraiser or valuer. [653 H; 654A]
3. The High Court was justified in upholding
the judgment of the Subordinate Judge that the report of the Town Planning
Officer making an appraisement or valuation at Rs. 35,826.50p could not be
treated as an admission under section 20 of the Evidence Act, on the basis of
which the plaintiffs' claim for damages had to be decreed. [654 B-C]
4. This Court as well as the High Court and
the Subordinate Court had ample power to restitute the plaintiff by granting
him compensation for the value of the property of which he had been deprived in
the years 1951. Taking all factors into consideration it is just and proper to
award the appellant a sum of Rs. 25,000 as compensation towards the value of
the exchanged plot. The plaintiff having been deprived of the property he was
entitled, a reasonable rate of interest on the amount is necessary. The Court
has ample power under proviso to section I of the Interest Act 1839 to award
interest on equitable grounds. The reasonable rate of interest would be 6% per
annum on the compensation amount of Rs. 25,000 from August 13, 1951, the date
of dispossession till August 31, 1959, the date of judgment of the Subordinate
Judge and thereafter at 9% per annum thereon till realization. [654 D; 655 C;
656 BC] Satinder Singh v. Amrao Singh [1961] 3 S.C.R. 676;
referred to.
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 2216 (N) of 1970.
From the Judgment and Order dated 18.3.1970
of the Rajasthan High Court in D.B. Civil Regular First Appeal No.
10 of 1960.
S.K. Jain for the Appellants.
Miss Maya Rao for the Respondents. (Not
present) 647 The Judgment of the Court was delivered by SEN, J. The present
appeal on certificate raises two questions, namely (1) Whether the parties by
mutual consent had agreed to appoint D.N. Gupta, Superintending Engineer and
Town Planning Officer, Jaipur to ascertain the value of the disputed land as an
appraiser or valuer and therefore the appraisement or valuation thereof by him in
his Report (Exh.5) dated February 21, 1956 at Rs. 35,826.50p. should be treated
as an admission under s.20 of the Evidence Act, 1872, on the basis of which the
plaintiff's claim for damages had to be decreed, and (2) Whether the plaintiff
being deprived of property was, on general principles, entitled to payment of
interest on the amount payable to him as the value of the property taken by the
State Government.
The facts bearing on the questions are
briefly stated.
In accordance with the terms of the registered
deed of exchange executed by the parties on July 16, 1951, the appellant
withdrew a suit for specific performance of an alleged contract against the
State Government being Civil Suit No. 120/50 pending in the Court of the Civil
Judge, Jaipur City whereunder the State Government agreed to give in exchange
plot No. O/17 located in Scheme on resumption of his plot bearing No. C/91 in
the same scheme and handed over possession to the State Government on the
aforesaid plot No.
C/91, but the State Government on their part
did not give possession of the exchanged plot to him, in consequence whereof
the appellant instituted a suit for possession of the exchanged plot and for
mesne profits thereof against the State Government being Civil Suit No. 270/51
in the Court of the Civil Judge, Jaipur City. The State Government in their
written statement pleaded inter alia that the suit was not maintainable since
the plot which was to be given in exchange to the appellant did not belong to
them, but did not disclose as to whom the said plot belonged. The appellant
therefore served interrogatories on the State Government. In reply to the said
interrogatories it was revealed in the affidavit filed by the State Government
that the exchanged plot had been transferred to Thakur Harisingh of Achrol
under the orders of the Home Minister, Government of India dated January 8,
1945 and that plot No. C/91 which belonged to the appellant was then in
possession of the Raj Pramukh Maharaja Mansinghji of Jaipur. The appellant
accordingly impleaded Thakur Harising of Achrol as a defendant in the suit and
sought 648 permission from the Central Government under s.86 of the Civil
Procedure Code, 1908 to join Maharaja Mansingji of Jaipur as a party to the
suit. Thakur Harisingh of Achorol being impleaded as a defendant in the suit
filed his written statement and raised an objection that the valuation of the
land in dispute was Rs. 40,000 and the Court of Civil Judge, Jaipur City had no
jurisdiction to entertain the suit. That objection of his was sustained and the
learned Civil Judge by his order dated October 15, 1955 returned the plaint for
presentation to the proper Court.
It transpires that the Joint Secretary,
Ministry of Home Affairs, Government of India addressed a letter dated January
3, 1956 to the late Shri Mohan Lal Sukhadia, the then Chief Minister of
Rajasthan conveying that it was felt that the appellant had a case and should
be given the exchanged plot and if that was not feasible, he should be restored
to his original position and therefore could claim back possession of plot No.
C/91. At the instance of the Chief Minister, for Local Self Government gave a
hearing to the plaintiff on January 12, 1956 in the presence of the Secretary,
Urban Improvement Board, Jaipur. On February 3, 1956, the Chief Minister
addressed a letter to the Joint Secretary, Ministry of Home Affairs, conveying
the anxiety of the State Government to settle the claim of the appellant and
intimated that the appellant had agreed to the appointment of D.N. Gupta, Town
Planning Officer as the assessor who had been asked to assess the value of the
land and submit his report by February 20, 1956. He therefore requested the
Government of India to defer its decision in fairness to the State Government
for a couple of months as it was felt that it might be possible to settle the
matter without any unreasonable delay.
The aforesaid assessor D.N. Gupta by his
report (Exh. 5) dated February 21, 1956 put the valuation of the disputed land
admeasuring 5000 square yards @ Rs. 7 per square yard amounting to Rs. 35,000
and to this he added Rs. 826.50p. as the cost of construction of a boundary
wall i.e. Rs.
35,826,50p. in all. There ensued a
correspondence between the State Government and the appellant as regards the
payment of compensation. It was felt by the State Government that the assessor
had wrongly taken into consideration parta rates or the Municipal Committee,
Jaipur which could not form any legal basis for assessing the value of the
disputed land which admittedly was situated outside the walled city of Jaipur,
nor could he have taken into consideration the rates for the sale of 649 plots
of commercial site at a distance from the disputed land. The State Government
accordingly declined to pay Rs. 35,826.50p.
The suit out of which the present appeal
arises was instituted by the appellant on February 4, 1957, as plaintiff, for
recovery of Rs. 47,741.50p. i.e. Rs. 35,826.50p. as value of the disputed land
in 1951 and Rs. 11,915 as interest at 6% per annum by way of damages. The State
Government contested the plaintiff's claim and pleaded inter alia that the
State Government had never agreed that the assessment or valuation made by D.N.
Gupta of the disputed land was to be final and binding on them; that there was
an error of principle in the assessment or valuation made by him based as it
was on the parta rates of the Municipal Committee, Jaipur which admittedly was
not applicable to the disputed land which was situate outside the walled city
of Jaipur or the rate for the sale of plots of commercial site situate at a
distance there from, and that since there was no sale of land in C Scheme in
the vicinity of the exchanged plot, the correct value thereof had to be
assessed on the basis of the C Scheme rates and therefore the real market value
of the disputed land admeasuring 5000 square yards on the basis of the full
rate in Scheme of the Urban Improvement Board at Rs. 3.50p. per square yard
must work out to Rs. 17,000 and nothing more.
The learned Senior Civil Judge as well as the
High Court have however decreed the plaintiff's claim in part for a sum of Rs.
17,500 with interest thereon @ 6% per annum from February 4, 1957, the date of
institution of the suit, till realization on the ground that the State
Government was not bound by the assessment made by D.N. Gupta based on parta
rates of the Municipal Committee, Jaipur which were not applicable to lands
situate outside the walled city of Jaipur and could not form any legal basis
for valuation of the disputed land and therefore the State Government was not
bound to pay Rs. 35,826.50p. as determined by him. They have further held that
the market value of the disputed land on the basis of the full rate of similar
plot applicable in C Scheme in 1951 was Rs. 3.50p. per square yard and
therefore the plaintiff was entitled to recovery of Rs. 17,500 as the value
thereof. The learned Subordinate Judge held that on the admission of the
plaintiff himself as PW 6, and his two witnesses Parmanand, Secretary Urban
Improvement Board, PW 3 and Shah Alamuddin, Deputy Minister, PW 5 it was clear
that D.N. Gupta had been appointed merely to assess the value of the disputed
land and that it was never agreed that whatever appraisement or valuation he
may make would be binding on both the parties, nor did the 650 Deputy Minister
make any commitment on behalf of the State Government that whatever assessment
D.N. Gupta would make would be binding on the State Government and that
therefore the appraisement or valuation made by D.N. Gupta in his report
(Exh.5) dated February 21, 1956 could not be treated as an 'admission of
liability' under s.20 of the Evidence Act on the part of the State Government.
He further held that the correct value on the basis of the notification issued
by the Urban Improvement Board clearly showed that the parta rate of the
Municipal Committee, Jaipur was not applicable to the disputed land which was
situate outside the old walled city of Jaipur and that the correct value
thereof could be assessed on the basis of C Scheme rates and therefore the
value of the disputed land Rs. 17,500. The learned Judge however held that the
plaintiff was entitled to receive damages by way of interest @ 6% per annum. On
appeal the High Court held that the plaintiff had to prove that the State Government
had agreed to be bound by the assessment made by D.N. Gupta before s.20 of the
Evidence Act could be attracted and that there was no evidence that the State
Government had ever agreed to be bound by the said assessment. As regards, the
letter addressed by the Chief Minister to the Joint Secretary, Ministry of Home
Affairs, Government of India dated February 3, 1956, the High Court observed
that the Chief Minister was not examined as a witness and when admittedly he
was not present when the talk between the Deputy Minister for Local Self
Government and the plaintiff took place, the latter would not necessarily lead
to the inference that the State Government agreed to abide by the assessment
made by D.N. Gupta. It accordingly affirmed the finding of the learned
Subordinate Judge that the appraisement or valuation made by D.N. Gupta was not
binding on the State Government and further that the disputed land was much
inferior than land included in C Scheme and therefore the amount of Rs. 17,500
awarded by the learned Subordinate Judge was quite adequate. Following the
decision of this Court in Satinder Singh v. Amrao Singh it held that the
plaintiff was entitled to interest thereon at 6% per annum.
The main question raised is whether the
report of the assessor (Exh. 5) was information' within the meaning of s.20 of
the Evidence 651 Act and therefore considered to be an admission of the parties
as to appraisement or valuation of the disputed land at Rs. 35,826.50p. and
such an admission must operate as estoppel. Admissions may operate as estoppel
and they do so where parties had agreed to abide by them. The word
'information' occurring in s.20 is not to be understood in the sense that the
parties desired to know something which none of them had any knowledge of.
Where there is a dispute as regards a certain question and the Court is in need
of information regarding the truth on that point, any statement which the
referee may make is nevertheless information within the purview of s.20. The
contention on behalf of the State Government on the word 'information'
occurring in this section is that the parties did not stand in need of
obtaining any information from D.N. Gupta and that at any rate the State
Government never agreed to abide by the valuation made by him and therefore
they were not bound by the same inasmuch as the valuation made by him was not
conclusive as to the value of the subject-matter as between the parties.
S.20 of the Evidence Act reads as follows:
"20. Admissions by persons expressly
referred to by party to suit-Statements made by persons to whom a party to the
suit has expressly referred for information in reference to a matter in dispute
are admissions." Illustration The question is whether a horse sold by A to
B is sound. A says to B-"Go and ask C, C knows all about it." C'S
statement is an admission.
S.20 is the second exception to the general
rule laid down in s.18. It deals with one class of vicarious admission i.e.
admissions of persons other than the party.
Where a party refers to a third person for some information or an opinion on a
matter in dispute, the statements made by the third person are receivable as
admissions against the person referring. The reason is that when a party refers
to another person for a statement of his views, the party approves of his
utterance in anticipation and adopts that as his own.
The principle is the same as that of
reference to arbitration. A position analogous to that of agency is created by
the reference.
652 The reference may be by express words or
by conduct, but in any case there must be a clear intention to refer, and such
admissions are generally conclusive. As Ellenbrough, L.C.J.
said in Williams v. Innes from which the
illustration is taken:
"If a man refers another upon any
particular business to a third person he is bound by what this third person
says or does concerning it as much as if that had been said or done by
himself." There is nothing on record to show that the State Government
ever agreed to abide by the valuation made by the assessor D.N. Gupta; on the
contrary, the Secretary (Local Self Government) by his letter dated June 30,
1951 had conveyed to the appellant sanction for allotment of the exchanged plot
admeasuring 5000 square yards on condition that the terms of allotment would be
the same as in the case of the previous allotment, meaning thereby that the
plaintiff would have to pay as per the rates fixed by the Government for the
sale of plots in C Scheme.
The testimony of Shah Alimuddin, Deputy
Minister for Local Self Government clearly shows that he gave a hearing to the
appellant and had deputed D.N. Gupta, Town Planning Officer to assess the
valuation of the disputed land but he did not make any commitment on behalf of
the, State Government that whatever assessment was made by him would be binding
on the Government. This hearing was given by the Minister on January 12, 1956
at the instance of the Chief Minister at which Parmanand, the then Secretary,
Urban Improvement Board was also present. As a result of this, D.N. Gupta was
appointed to determine the market value of the disputed land by letter of the
Secretary to the State Government, Local Self Government Department dated
February 4, 1956 which was in these terms:
From The Secretary to the Government of
Rajasthan.
653 To Shri D.N. Gupta through the Chief
Engineer. B&R., P.W.D., Rajasthan, Jaipur.
No. F.1 (K) (56) LSG/59 dated Jaipur the
February 4, 1956.
Sub: Allotment of land to Shri Heera Chand
Kothari.
With reference to the above, I am directed to
forward herewith a full history of the case and to say that the case was heard
by the Deputy Minister for Local-Self-Government on 12.1.56. Shri Heera Chand
Kothari and the Secretary, Urban Improvement Board, Jaipur, were present. Shri
Kothari has agreed to accept the compensation of 5000 sq. yds. of land and to
appoint you as assessor. I am, therefore, to request you kindly to assess the
value of land (5000 sq. yds.) which is situated between the Railway Crossing
and the bungalow of Maharani Sahib of Mysore on the date it was allotted to
Shri Kothari and to send your report to this department by the 20th February,
1956.
Sd/- Secretary to the Government As already
stated, the assessor, D.N. Gupta submitted his report (Exh.5) dated February
21, 1956 wherein he valued the land @ Rs.7 per square yard, that is, at Rs.
35,000 and added the cost of construction of the boundary wall at Rs.
826.50p. totalling Rs. 35,826.50p. The State
Government not being satisfied at the exorbitant value so determined were not
prepared to accept the valuation made by the assessor D.N. Gupta. Accordingly,
the Secretary (Local Self Government) by his letter dated March 14, 1956 asked
him to explain the basis of valuation adopted by him. In reply thereto, D.N.
Gupta by his letter dated March 19, 1956 disclosed that he had assessed the
value of the disputed land, at the least possible price, taking the value of
lands spread over between the years 1948 and 1955 and that he had adopted the
parta rates of the Municipal Committee, Jaipur for determining the value of the
disputed land.
While we feel that the High Court was not
right in excluding from its consideration the Chief Minister's letter dated
February 654 3, 1956 on the ground of want of proof, the document by itself
does not substantiate the plaintiff's claim that the parties had by mutual
consent agreed to appoint D.N. Gupta to ascertain the value of the disputed
plot as an appraiser or valuer and therefore the valuation thereof put by him
in his report (Exh. 5) dated February 21, 1956 at Rs.
35,826.50p. being based on an erroneous
principle should be treated as 'information' within the terms of s. 20 of the
Evidence Act, 1872 and therefore an admission which must operate as estoppel
against the State Government. The High Court was therefore justified in
upholding the judgment of the learned Subordinate Judge that the report of D.N.
Gupta dated February 21, 1956 making an appraisement or valuation at Rs.
35,826.50p. could not be treated as an admission under s. 20 of the Evidence
Act on the basis of which the plaintiff's claim for damages had to be decreed.
Nevertheless, this Court as well as the High
Court and the learned Subordinate Judge had ample power to restitute the
plaintiff by granting him compensation for the value of property of which he
had been deprived in the year 1951. As already stated, the value of the
exchanged plot had to be determined in accordance with the terms of the letter
dated June 30, 1951 addressed by the Secretary, (Local Self Government) to the
appellant by which he conveyed the sanction of the State Government for
allotment of the exchanged plot admeasuring 5,000 square yards on an
application made by him to the Urban Improvement Board. The grant was subject
to the condition that 'the terms of the allotment would be the same as in the
case of the previous allotment' i.e. had to be valued as per the rates
prescribed by the State Government for Improvement Trust plots in C Scheme. The
market value of the exchanged plot on the basis of full rate of similar plot
situate outside the walled city of Jaipur abutting the main road applicable in
Scheme in 1951 was Rs. 3.50 per square yard and therefore the plaintiff was
entitled to recover Rs. 17,500 upon that basis. Admittedly, the State
Government had not fixed any parta rates for land situate outside the walled
city of Jaipur. The testimony of Shiv Ram Jain, Secretary, Urban Improvement
Board, Jaipur (DW 2) shows that the Maharani of Mysore was allotted a plot in
the near vicinity of plot No.
C/91 in C Scheme not as a concessional but on
normal rate at Rs. 10,000 per acre. If that were to be the basis the appellant
would be entitled to compensation at a much lesser rate.
The matter however does not end there. The
transaction of 655 exchange which fell through in 1951 was entered into before
the formation of the State of Rajasthan. At that time, Jaipur was not the
capital of the State, and there was no trend in rise of prices of land. Once it
was known that Jaipur would be the capital, the value of land particularly in
an exclusive area near and around the palatial bungalow of the Maharani of
Mysore (which later became Raj Bhawan) which was extremely scarce, had
naturally shot up. The land in dispute was situate near the railway station and
which, according to the High Court, was lesser in value than land in C Scheme.
Taking all these factors into consideration we think it just and proper to
award the appellant a sum of Rs.
25,000 as compensation towards the value of
the exchanged plot and to award him a reasonable rate of interest to offset the
spiral rise of value of land in the city of Jaipur. We are clearly of the view
that the plaintiff having been deprived of the property was entitled to a
reasonable rate of interest on the amount found to be due to him. In somewhat
similar circumstances the Court speaking through Gajendragadkar, J. in Satinder
Singh's case, relied upon the speech of Viscount Cave, LC in Swift & Co. v.
Board of Trade and observed:
"Stated broadly the act of taking
possession of immovable property generally implies an agreement to pay interest
on the value of the property and it is on this principle that a claim for
interest is made against the State. This question has been considered on
several occasions and the general principle on which the contention is raised
by the claimants has been upheld. In Swift & Co. v. Board of Trade (supra)
it has been held by the House of Lords that 'on a contract for the sale and
purchase of land it is the practice of the Court of Chancery to require the
purchaser to pay interest on his purchase money from the date when he took, or
might safely have taken, possession of the land.' This principle has been
recognized ever since the decision in Birch v. Joy (1852) 3 HLC 565. In his
speech, Viscount Cave, LC added that "this practice rests upon the view
that the act of taking possession is an implied agreement to pay
interest", and he points out that the said rule has been extended to cases
of compulsory purchase under the Lands Clauses Consolidation Act, 1845. In this
connec- 656 tion is drawn between acquisition or sales of land and requisition
of goods by the State. In regard to cases falling under the latter category
this rule would not apply." We are in respectful agreement with these
observations. It was further held in Amrao Singh's case that the Court had
ample power under proviso to s. 1 of the Interest Act, 1839 to award interest
on equitable grounds. In all the facts and circumstances of the case, the
reasonable rate of interest would be 6% per annum on the compensation amount of
Rs. 25,000 from August 13, 1951, the date of dispossession till August 31,
1959, the date of judgment of the learned Subordinate Judge, and thereafter at
9% per annum thereon till realization. It more or less works out to Rs. 95,000
which is a multiple of 20 times the actual investment of the appellant in
purchasing plot No. C/91 in C Scheme in the city of Jaipur.
The result therefore is that the appeal
partly succeeds and is allowed with costs. The judgment and decree of the High
Court and those of the learned Subordinate Judge are modified by decreeing the
plaintiff's claim for compensation at Rs. 25,000 with interest as indicated
above. The appellant will be entitled to recover and be liable to pay costs in
proportion to success and failure.
N.V.K. Appeal allowed.
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