Case: West Bengal Statewarehousing Corpn Vs. M/S. Indrapuri Studio Pvt. Ltd.

This appeal is directed against the judgment of the Division Bench of Calcutta High Court whereby it declined to entertain the appeal filed by the appellant under Section 11(1)(f) of the West Bengal Premises Requisition and Control Act, 1947 (for short, ‘theagainst award dated 1.1.2003 passed by the Arbitrator under Sectionpremises belonging to respondent No. 1 (covered area measuring 11,900 sq. feet and open space measuring 10,620 sq. feet) situated at N.S.C. Bose Road, Tollygunge, Calcutta was requisitioned by the State Government under Section 3 of the Act. After taking possession of the requisitioned premises, the State Government transferred the same to thethe amount of compensation payable to respondent No. 1 in lieu of the requisition of its property could not be fixed by agreement, the State Government appointed an Arbitrator under Section 11(1)(b) of the Act. Though, the appellant had no role to play in the matter of determination of compensation payable to respondent No. 1, on being asked by 1st Land Acquisition Collector, Calcutta, the appellant got itself impleaded as party in the arbitrationan award dated 1.1.2003, the Arbitrator held that the State Government is liable to pay as compensation Rs. 1,60,21,126/- for the covered area and Rs. 54,82,076/- for the open space with interest at the rate of 18% perthe pendency of the arbitration proceedings, the appellant represented to the State Government for appointment of a new Arbitrator by asserting that a retired judicial officer cannot be appointed to act as an Arbitrator. Thereupon, Assistant Secretary, Land and Land Reforms Department, who might not have been aware of the factum of passing of award by the Arbitrator on 1.1.2003, sent letter dated 10.1.2003 to the Managing Director of the appellant that the judicial department of the Government had already been approached for appointment of a new Arbitrator. However, no further action appears to have been taken by the State Government for appointment of newobtaining a copy of the award, the appellant filed an appeal under Section 11(1)(f), which was dismissed by the Division Bench of the High Court by observing that the appellant cannot be treated as a person interested in the compensation payable on account of requisition of the premises. The Division Bench referred to Section 6 of the Act and held that a person acquiring interest in the property does not have the right to participate in the arbitration proceedings or file an appeal against the award.

Court's reasoning:
10. An analysis of the above reproduced provisions shows that in terms of Section 3, the State Government can requisition any premises needed or likely to be needed for any public purpose. Section 6 provides for disposal of premises after the same are requisitioned under Section 3(1). Under that section, the State Government has been bestowed with the power to use or deal with the requisitioned premises for the specified public purpose. Section 11(1) postulates payment of compensation for the requisitioned premises. The amount of compensation is required to be determined by either of the two modes prescribed therein. If the parties voluntarily enter into an agreement on the quantum of compensation, the amount is to be paid in accordance with such agreement. If there is a tenant in the requisitioned premises then in terms of Section 13 the Collector is required to decide whether the agreement for payment of compensation shall be entered into with the tenant or with the immediate landlord of such tenant. In case the parties cannot agree on the quantum of compensation, the State Government is required to appoint a District Judge or an Additional District Judge as an Arbitrator and notify the same in the Official Gazette [Section 11(1)(b) and Rule 7]. Rule 8 provides that where the amount of compensation payable under Section 11 cannot be fixed by agreement, any person interested can make an application to the Collector for referring the case to arbitration. Thereupon, the Collector is obliged to refer the case to the Arbitrator and give an intimation to the person or persons interested and the State Government. Where no such application is made within a reasonable time, the Collector can suo motu refer the case to the Arbitrator and give the required intimation. In terms of Clause (c) of Section 11(1), the State Government is empowered to nominate a person having expert knowledge about the nature of the premises requisitioned to assist the Arbitrator. In that event, a corresponding right is available to the person to be compensated to nominate an assessor. At the commencement of the proceedings before the Arbitrator, the State Government and the person entitled to receive compensation are required to state their respective opinions as to the fair amount of compensation [Section 11(1)(d)]. Thereafter, the Arbitrator has to determine the amount of compensation keeping in view the matters enumerated in Clauses (a), (b) and (c) of Section 12. Once the award is made and signed, the Arbitrator has to inform the parties to the reference by sending a notice in writing and also send copies of the award to the Collector and the person or persons interested (Rule 13).11. What is most significant to note is that neither at the stage of fixing the amount of compensation by agreement nor at the time of appointment of Arbitrator, the State Government is required to consult any person including beneficiary of the requisition. The only person with whom the State Government is required to negotiate the amount of compensation is the one whose premises are requisitioned. An application for reference of the case to the Arbitrator can be made only by a person who was a party to the unsuccessful exercise undertaken for fixing the amount of compensation by agreement. If the State Government nominates a person having expert knowledge as to the nature of the requisitioned premises to assist the Arbitrator, a corresponding right is available to the person whose premises are requisitioned to nominate an assessor. In terms of Section 11(1)(d), only the State Government and the person to be compensated have the right to state their respective opinions as to the fair amount of compensation. The person to whom the requisitioned premises are transferred has no role in any one of these matters. The use of expression ‘the person to bein Clauses (c) and (d) of Section 11(1) clinches the issue. A person like the appellant certainly does not fall in the category of the person to be compensated.12. As a sequel to the above, it must be held that a person for whose benefit the premises are requisitioned or to whom the requisitioned premises are transferred does not have any locus to participate in the process of determination of compensation by agreement, or in the matter of appointment of an Arbitrator or reference of case to the Arbitrator or nomination of an Assessor. A person like the appellant can neither submit opinion under Section 11(1)(d) as to the fair amount of compensation nor the Arbitrator is obliged to give notice and opportunity of hearing to such person under Section 11(1)(e) read with Section 12(a), (b) or (c). Therefore, such person is neither entitled to copy of the award as of right nor he can challenge the award by filing an appeal under Section 11(1)(f) and the High Court did not commit any error by declaring that the appeal filed by the appellant was not maintainable.The judgment in U.P. Awas Evam Vikas Parishad v.Gyan Devi (supra) is clearly distinguishable. Thequestion which fell for consideration of the Constitution Bench was whether the appellant was entitled to participate in the proceedings of the Tribunal constituted under Section 64 of the Uttar Pradesh Awas and Vikas Parishad Adhiniyam, 1965 and lead evidence on the issue of payment of compensation to the land owners.After adverting to the definition of ‘personcontained in Section 3(b), Sections 11, 17, 18 and 50 of the 1894 Act, as amended in 1984, and making a reference to an earlier judgment in Himalayan Tiles and Marble (P) Ltd. v. Francis Victor Coutinho, (1980) 3 SCC 223 , this Court held that local authority is entitled to be impleaded as a party in the proceedings before the Reference Court and in case the amount of compensation is enhanced by the Court, the local authority can file an appeal with the leave of the Court subject to the condition that no appeal is filed by the Government. The ratio of this decision cannot be invoked for declaring that the appellant falls within the definition of the expression ‘personwithin the meaning of Section 2(d) of the Act and is entitled to challenge the award of the Arbitrator because the definition which was interpreted by the Constitution Bench was inclusive and not exhaustive. The other judgments in which Section 3(b) of the 1894 Act is interpreted are likewise not relevant for deciding the issue raised in this case.