Case: M/S. Surajmull Nagarmull Vs. State Of West Bengal

Shah J.1. Messrs. Soorajmull Nagarmull - who will hereinafter be referred to as the appellants - were tenants of three warehouses and vacant land appurtenant thereto- popularly known as the Shamnagar Jute Godowns-belonging to Sri Hanuman Seva Trust. The warehouses were used for storage of jute belonging to the appellants. By an order dated August 17, 1943, and issued under R. 75A of the Defence of India Rules, 1939, the warehouses were requisitioned and possession thereof was taken on September 21,1943. As the amount of compensation payable to the owner of warehouses could not be fixed by agreement an Arbitrator, was appointed under S.19(1)(b) of the Defence of India Act, 1939. Before the Arbitrator, Sri Hanuman Seva Trust claimed compensation as owners of the warehouses. The appellants claimed compensation for loss of earnings, "damages to business" and cost of removal of 18,000 maunds of jute and some iron implements, which the appellants claimed had to be removed in consequence of the order of requisition. The appellants estimated the compensation at Rs. one lakh. The Arbitrator by his order dated December 13, 1947, observed that the appellants had failed to prove any actual loss of business in consequence of the requisition, and rejected the claim of the appellants.2. Against the order passed by the Arbitrator an appeal was preferred to the High Court of Judicature at Calcutta. The appellants valued the claim at Rs. 1,50,000/-. At the hearing of the appeal, the State of West Bengal contended that the appeal was not maintainable in view of the provisions of S. 19(1)(f) and (g) and S. 19(3)(c) of the Defence of India Act and the 2nd Proviso to R. 19 framed under the Defence of India Act. The High Court upheld the contention raised by the State of West Bengal and dismissed the appeal. With special leave the appellants have appealed to this Court.3. Under cl. (1) of S. 19 of the Defence of India Act, 35 of 1939, it is provided, in so far as it is material :"Where under S. l9A or by or under any rule made under this Act any action is taken of the nature described in sub-sec. (2) of S. 299 of the Government of India Act, 1935, there shall be paid compensation, the amount of which shall be determined in the manner and in accordance with principles hereinafter set out, that is to say :* * * *(f) An appeal shall lie to the High Court against an award of the Arbitrator except in cases where the amount thereof does not exceed an amount prescribed in this behalf by rule made by the Central Government.(g) Save as provided in this section and in any rules made thereunder, nothing in any law for the time being in force shall apply to arbitrations under this section".Sub-section (3), in so far as it is material, provides :-"(3) In particular and without any prejudice to the generality of foregoing power, such rules may prescribe :-* * * *(c) the maximum amount of an award against which no appeal shall lie."By notification dated March 22, 1945, Rules were framed under S. 19 relating to arbitration for settlement of compensation. Rule 19 of the Rules provided:"19. Any appeal against the award of the Arbitrator shall be presented within six weeks from the date of receipt by the Collector or the party by whom the appeal is preferred of the copy of the award sent under Rule 17:Provided that* * * *Provided further that no appeal shall lie against an award made under these Rules where the amount of the compensation awarded does not exceed Rs. 5,000 in lump or Rs.250 per mensem".The Arbitrator appointed under S.19 of the Defence of India Act is not a court or a tribunal subject to the Appellate jurisdiction of the High Court. By the Defence of India Act a right to appeal against the award of the Arbitrator is conferred, but that right is restricted in the manner prescribed by the Rules. It is provided by the second proviso to R. 19 that an appeal shall not lie against an award where the amount of compensation does not exceed Rs. 5,000/-.4. The claim of the appellants was rejected by the Arbitrator and they were not awarded any compensation. Mr. Vishwanatha Sastri appearing on behalf of the appellants, contends that by cl. (f) of S. 19(1) the Legislature provided a right of appeal against all awards and has imposed a restriction only in those cases where some amount is awarded but the amount so awarded is less than Rs. 5,000/-. Counsel submits that the restriction limiting the right of appeal must be strictly construed. He says that where for any reason no compensation at all is awarded the bar contained in cl. (f) of S. 19(1) and the second proviso to R. 19 would not apply. In our judgment, there is no force in that contention. An appeal is a creature of statute. The Arbitrator not being a court subordinate to the High Court, an appeal would lie only if it is expressly so provided. The Legislature has provided that where the amount of compensation awarded does not exceed Rs. 5,000/- no appeal shall lie against the award. The rule does not contemplate that the bar to the maintainability of the appeal will be effective only if some amount is awarded but the compensation so awarded is less than Rs. 5,000/-. If the Arbitrator rejects the claim and refuses to award anything the case would, in our judgment, fall within the 2nd proviso to R. 19 as being one where the amount of compensation awarded does not exceed Rs. 5,000/-.5. The second proviso to R.19 enacts a rule of which a parallel is difficult to find. The right to appeal does not depend upon the claim made by the claimant either before the acquiring authority or the Arbitrator or before the High Court it depends solely upon the amount of compensation awarded by the Arbitrator. But however, unusual the rule may appear to be, it would not be open to the Court to extend the right to appeal and to enable a claimant whose claim has been rejected completely to appeal to the High Court. The right to appeal is exercisable only if the amount awarded exceeds Rs. 5,000/-.

Decision reasoning: 0[ds]In our judgment, there is no force in that contention. An appeal is a creature of statute. The Arbitrator not being a court subordinate to the High Court, an appeal would lie only if it is expressly so provided. The Legislature has provided that where the amount of compensation awarded does not exceed Rs. 5,000/- no appeal shall lie against the award. The rule does not contemplate that the bar to the maintainability of the appeal will be effective only if some amount is awarded but the compensation so awarded is less than Rs. 5,000/-. If the Arbitrator rejects the claim and refuses to award anything the case would, in our judgment, fall within the 2nd proviso to R. 19 as being one where the amount of compensation awarded does not exceed Rs. 5,000/-.5. The second proviso to R.19 enacts a rule of which a parallel is difficult to find. The right to appeal does not depend upon the claim made by the claimant either before the acquiring authority or the Arbitrator or before the High Court it depends solely upon the amount of compensation awarded by the Arbitrator. But however, unusual the rule may appear to be, it would not be open to the Court to extend the right to appeal and to enable a claimant whose claim has been rejected completely to appeal to the High Court. The right to appeal is exercisable only if the amount awarded exceeds Rs. 5,000/-.