Full Judgment Text
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PETITIONER:
COLLECTOR OF VARANASI
Vs.
RESPONDENT:
GAURI SHANKAR MISRA & ORS.
DATE OF JUDGMENT:
29/08/1967
BENCH:
HEGDE, K.S.
BENCH:
HEGDE, K.S.
WANCHOO, K.N. (CJ)
BACHAWAT, R.S.
RAMASWAMI, V.
MITTER, G.K.
CITATION:
1968 AIR 384 1968 SCR (1) 372
CITATOR INFO :
F 1977 SC 638 (8)
ACT:
Constitution of India, Art. 136--High Court--Whether can
function in a capacity other than that of a
’Court--therefore whether special leave can be granted.
Defence of India Act, 1939, s. 19(1)(f)--Appeal to High
Court against award of arbitrator--Whether High Court
persona designata and also functions as arbitrator or
’court’.
HEADNOTE:
The Government acquired about 500 acres of land from the
respondents under the Defence of India Act, 1939, and a
settlement was reached in respect of the compensation to be
paid for all except about 48 acres of the land. The
question of the compensation payable for the remaining land
was referred to arbitration under s. 19(1)(b) of the Act to
be determined in accordance with s. 19(1)(e) which entitled
the respondents to compensation at the market value of the
land. The arbitrator considered various sale deeds produced
before him but rejected these and fixed the compensation by
capitalising the annual profits from the lands. In an
appeal against his award by the respondents under s.
19(1)(f) of the Act, the High Court differed from the
Arbitrator and enhanced the compensation payable by fixing
it on the basis of a sale deed exhibited before the
arbitrator.
In appeal to the Supreme Court by special leave given to the
appellant Collector, it was contended on behalf of the
respondents by way of a preliminary objection that no
special leave could have been granted by the Court under
Art. 136 as the judgment appealed against %-,as neither that
of a court nor of a tribunal; the High Court while acting
under s. 19(1)(f) was a persona designata and not a court or
a tribunal; proceedings before the arbitrator appointed by
the Central Government under s. 19(1)(b) were arbitration
proceedings leading to an award made by him, when the matter
was taken up in appeal to the High Court, the appeal
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proceedings did not cease to be arbitration proceedings and their
original character continued so that the decision
made by the High Court should also be considered as an award
and the High Court considered as having functioned as an
arbitrator.
Held: (i) While acting under s. 19(1)(f), the High Court
functions as a ’court’ and not as a designated person.
[378E]
Hanskumar Kishanchand v. Union of India, [1959] S.C.R. 1177,
disapproved.
The High Court of a State is at the apex of a State’s
judicial system. It is a court of record and it is
difficult to think of a High Court as anything other than a
’court’. No judicial power was ever entrusted to the High
Court except as a ’court’ and whenever it decides or
determines any dispute that comes before it, it invariably
does so as a ’court’. That apart, when s. 19(1)(f)
specifically says that an appeal against the order of an
arbitrator lies to the High Court, there was no
justification. for thinking that the legislature
373
said something which it did not mean. Furthermore, neither
the Act, nor the rules framed thereunder prescribe any
special procedure for the disposal of appeals under s.
19(1)(f) and appeals under that provision have to be
disposed of in the same manner as other appeals to the High
Court according to its own rules of practice and procedure.
[375F-G. 377B-C]
Case law referred to.
(ii) On the facts, the High Court was not right in
determining the compensation payable on the basis of the one
sale deed as this could not be considered a contemporaneous
transaction; the decision of the High Court must therefore
be set aside and the case remitted to that court for
disposal according to law after giving the parties an
opportunity to adduce fresh evidence. [380D-E]
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1040 of 1965.
Appeal by special leave from the judgment and order dated
November 11, 1963 of the Allahabad High Court in First
Appeal No. 60 of 1960.
C. B. Agarwala and 0. P. Rana, for the appellant.
J. P. Goyal and Raghunath Singh, for the respondents.
The Judgment of the Court was delivered by
Hegde, J. This appeal by the Collector of Varanasi by
special leave under Art. 136 of the Constitution, is
directed against the decision dated 11-11-1963 of the High
Court of Judicature at Allahabad, in First Appeal No. 60 of
1960 on its file, which in its turn arose from the award
made by Shri S. B. Malik, District Judge, Varanasi, in
certain land acquisition proceedings under cl. (b) of sub-s.
(1) of s . 19 of the Defence of India Act, 1939 (to be
hereinafter referred to as the Act).
Before considering the contentions urged on behalf of the
parties, it is necessary to set out the salient facts. For
the purpose of constructing the Babatpur aerodrome near
Varanasi, the Government acquired in the year 1946 about 500
acres of land. Compensation in respect of most of the lands
acquired was settled by agreement. But in respect of the
lands with which we are concerned in this appeal, 48.01
acres in extent, no settlement was arrived at. Therefore,
the question of compensation in respect of those lands was
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referred to the arbitration of Shri S. B. Malik under cl.
(b) of sub-s. (1) of s. 19 of the Act. In view of s.
19(1)(e), the claimants were entitled to get as compensation
the market value of those lands as on the date of
acquisition. Before the arbitrator as well as the High
Court, the parties were agreed that on the material on the
record, the market value in question had to be fixed either
on the basis of the sale deeds produced by the claimants or
by capitalising the annual profits accruing from those
lands. The arbitrator rejected the sale deeds produced
before him. He adopted the method of capitalising the
annual profits. On the question of annual profits also he
rejected the evidence adduced on behalf of the claimants.
He determined the same on the basis of the revenue
374
records for Fasli 1355 read with the evidence of the Naib
Tehsildar, Jawal Prasad. Aggrieved by the decision of the
arbitrator, the claimants went up in appeal to the High
Court of Allahabad under s. 19(1)(f). The High Court
differed from the arbitrator as to the value to be attached
to the sale deeds produced. It opined that the sale deeds
produced were reliable and that they evidenced genuine
transactions. The High Court fixed the compensation payable
on the basis of Exh. A 42 dated 3-4-1951. The arbitrator
had fixed the compensation at Rs. 26,454-12-0. The High
Court enhanced the same to Rs. 90,446-3-0. It is against
that decision that the Collector of Varanasi has filed this
appeal after obtaining special leave from this Court under
Art. 186.
Shri Goyal, learned counsel for the respondents has raised
the preliminary objection that no special leave could have
been granted by this Court under Art. 136 as the judgment
appealed against was neither that of a court nor of a
tribunal. According to him, the High Court while acting
under s. 19(1)(f) was a persona designata and not a court or
a tribunal. His argument on this question proceeded thus:
Sec. 19(1)(b) of the Act empowers the Central Government to
appoint as arbitrator a person qualified to be appointed a
judge of the High Court; Shri Malik who possessed the
required qualifications was appointed by the Central
Government to act as an arbitrator; it is true that Shri
Malik was District Judge of Varanasi at the time of his
appointment, but in law it was not necessary that the person
appointed should have been a District Judge, and much less
the District Judge of any particular District; therefore,
Shri Malik acted as a designated person and not as a court;
hence, the award given by him cannot be considered either as
a judgment or as a decree or order; it was merely an award;
when the matter was taken up in appeal to the High Court,
the proceedings did not cease to be arbitration proceedings;
its original character continued even before the High Court;
therefore, the decision made by the High Court should also
be considered as an award and further the High Court in
making that award should be considered as having functioned
as an arbitrator. In this case, it is not necessary to go
into the question whether the decision of the High Court is
a decree, judgment or final order. Even according to Shri
Goyal, the decision of the High Court is a ’determination’
as contemplated in Art. 136. That position he had to
concede in. view of the decision of this Court in
Engineering Mazdoor Sabha and another v. The Hind Cycles
Ltd.(1). In support of his contention that the High Court
while acting under s. 19 (1)(f) was not functioning as a
court, he placed strong reliance on the decision of this
Court in Hanskumar Kishanchand v. Union of India(2). That
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case dealt with two cross appeals arising from a decision of
the Nagpur High Court under s. 19(1)(f). Those appeals were
brought on the strength of the certificates issued
(1) [1963] Supp. 1 S.C.R. 625(2) [1959] S.C.R. 1177.
375
by the High Court on 25th August 1949 under ss. 109 and 110
of the Civil Procedure Code. In those cases it was con-
tended that the appeals were not maintainable for two
reasons viz. (a) the decision appealed against is neither a
decree judgment or final order and (b) the decision in
question was not that of a court. This Court upheld both
these contentions. On the second ground taken, Venkatarama
Aiyar, J., who spoke for the Court, observed thus:
"Under the law no appeal would have lain to
the High Court against the decision of such an
arbitrator. Thus, the provision for appeal to
the High Court under s. 19 (1)(f) can only be
construed as a reference to, it as an
authority designated and not as a court."
If the conclusion that the appeal under s. 19(1)(f) is only
a reference to an authority designated and not an appeal to
a court is correct then there is no doubt that this Court
could not have granted special leave under Art. 136.
Therefore the real question is whether that decision lays
down the law correctly when it stated that a High Court
while acting under s. 19(1)(f) is not functioning as a
court.
There was no dispute that the arbitrator appointed under s.
19(1)(b) was not a court. The fact that he was the District
Judge, Varanasi, was merely a coincidence. There was no
need to appoint the District Judge of Varanasi or any other
District Judge as an arbitrator under that provision. Sec.
19(1)(f) provides for an appeal against the order of the
arbitrator. The section reads :
"An appeal shall lie to the High Court against
an award of an arbitrator excepting in cases
where the amount thereof does not exceed an
amount prescribed, in this behalf by rule made
by the Central Government."
It is not in dispute, that in the instant case, the amount
fixed by the arbitrator exceeded the amount prescribed by
the rules and therefore the claimants had a right to go up
in appeal to the High Court. We were informed that neither
the Act nor the rules framed thereunder, prescribe any
special procedure for the disposal of appeals under s.
19(1)(f). Appeals under that provision have to be disposed
of just in the same manner as other appeals to the High
Court. Obviously after the appeal had reached the High
Court it had to be determined according to the rule of
practice and procedure of that Court. The rule is well
settled that when a statute directs that an appeal shall lie
to a court already established, then that appeal must be
regulated by the practice and procedure of that court. This
rule was stated by Viscount Haldane L. C. in National
Telephone Co., Ltd. v. Postmaster-General(1) thus:
"When a question is stated to be referred to
an established Court without more, it, in my
opinion, imports
(1) [1913] A.C. 546.
376
that the ordinary incidents of the procedure
of that Court are to attach, and also that any
general right of appeal from its decision
likewise attaches."
This statement of the law was accepted as correct by this
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Court in National Sewing Thread Co., Ltd., v. James Chadwick
and Bros. Ltd.(1). It may be noted that the appeal provided
in s. 19(1)(f) is an appeal to the High Court and not to any
Judge of the High Court. Broadly speaking, Court is a place
where justice is judicially administered. In Associated
Cement Companies Ltd. v. P. N. Sharma and another(2)
Gajendragadkar, C.J., speaking for the majority observed:
"The expression ’court’ in the context denotes
a tribunal constituted by the State as a part
of the ordinary hierarchy of courts which are
invested with the State’s inherent judicial
powers. A sovereign State discharges
legislative, executive and judicial functions
and can legitimately claim corresponding
powers which are described as legislative,
executive and judicial powers. Under our
Constitution, the judicial functions and
powers of the State are primarily conferred on
the ordinary courts which have been
constituted under its relevant provisions.
The Constitution recognises a hierarchy of
courts and to their adjudication are normally
entrusted all disputes between citizens and
citizens as well as between the citizens and
the State. These courts can be described as
ordinary courts of civil judicature. They are
governed by their prescribed rules
of procedure and they deal with questions of
fact and law raised before them by adopting a
process which is described as judicial
process. The powers which these courts
exercise., are judicial powers, the functions
they discharge are judicial functions and the
decisions they reach and pronounce are
judicial decisions."
The hierarchy of courts in this country is an organ of the
State through which its judicial power is primarily
exercised.
The fact that the arbitrator appointed under s. 19(1)(b) is
either a designated person or a tribunal-as to whether he is
a person designated or a tribunal we express no
opinion--does not in any way bear on the question whether
the ’High Court’ referred to under s. 19(1)(f) is a court or
not. Our statutes are full of instances where appeals or
revisions to courts are provided as against the decisions of
designated persons and tribunals. See for example,
Advocates Act, Trade Marks Act. Reference in this
connection may usefully be made to the decisions in National
(1) [1953] S.C.R. 1028, (2) [1965] 2 S.C.R. 366,
377
Sewing Thread Co., Ltd. v. James Chadwick and Bros., Ltd.(1)
and the Secretary of State for India in Council v. Chelikani
Rama Rao and others(2)
Prima facie it appears incongruous to hold that the High
Court is not a ’court’. The High Court of a State is at the
apex of the State’s judicial system. It is a court of
record. It is difficult to think of a High Court as
anything other than a ’court’. We are unaware of any
judicial power having been entrusted to the High Court
except as a ’court’. Whenever it decides or determines any
dispute that comes before it, it invariably does so as a
’court’. That apart, when s. 19(1)(f) specifically says
that an appeal against the order of an arbitrator lies to
the High Court, we see no justification to think that the
legislature said something which it did not mean.
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We may now turn our attention to the decision of this Court
in Hanskumar Kishanchand v. Union of India(3) on which, as
mentioned earlier, Shri Goyal placed a great deal of
reliance in support of his preliminary objection. The
principal question that arose for decision in that case was
whether the decision rendered by the High Court under S.
19(1)(f) was a judgment, decree or final order within the
meaning of those words found in S. 109 of the Code of Civil
Procedure. The Court accepted the contention of the
Solicitor General appearing for the respondent, the Union of
India, that it was not a judgment, decree or final order,
and that being so, no certificate under ss. 109 and II 0 of
the Code of Civil Procedure to appeal to the Federal Court
could have been given by the High Court. In that case this
Court was not called upon to consider the scope of Art. 136.
Therefore, it did not go into the question whether the
decision appealed against could be considered as a
determination falling within the scope of Art. 136. In
arriving at the conclusion that the decision in question is
not a judgment, decree or final order, this Court relied on
the decisions in Rangoon Botatoung Co. v. The Collector,
Rangoon(4), Special Officer, Salsette Building Sites v.
Dossabhai Bazonji Motiwala(5). Manavikraman Tirumalpad v.
Collector of Nilgris(6), and Secretary of State for India in
Council v. Hindustan Co-operative Insurance Society
Limited(7). The effect of those decisions is summed up in
that very judgment at pp. 1186 and 1187, and this is how it
is put:
"The law as laid down in the above authorities
may thus be summed up: It is not every
decision given by a Court that could be said
to be a judgment, decree or order within the
provisions of the Code of Civil Procedure or
the Letters Patent. Whether it is so or not
will depend on whether the proceeding in which
it was given came before
(1) [1966] S.C.R. 1028. (2) 43 I.A. 192
(3) [1959] S.C.R. 1177. (4) 39 I.A. 197
(5) 17 C.W.N. 421. (6) I.L.R. 41 Mad. 943.
(7) 58 IA. 259.
378
the Court in its normal civil jurisdiction, or
dehors it as a persona designata. Where the
dispute is referred to the Court for
determination by way of arbitration as in
Rangoon Botatoung Company v. Collector,
Rangoon (39 I.A 197), or where it comes by way
of appeal against what is statedly an award as
in The Special Officer Salsette Building Sites
v. Dossabhai Bezonji (ILR 37 Bom. 506),
Manavikraman Tirumalpad v. The Collector of
the Nilgris (ILR 41 Mad. 943), and the
Secretary of State for India in Council v.
Hindustan Co-operative Insurance Society
Limited (58 IA 250), then the decision is not
a judgment, decree or order under either the
Code of Civil Procedure or the Letters
Patent."
The decisions relied on by this Court merely lay down the
proposition that the decision given by the High Court in an
appeal against an award is neither a decree, judgment or
final order. None of the aforementioned decisions lays down
the ’proposition that the High Court while exercising its
appellate power did not function as a ’court’. The
observation in this Court’s judgment that the provision for
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appeal to the High Court under s. 19(1)(f) can only be
construed as reference to it as an authority designated and
not as a court, does not receive any support from those
decisions. Nor do we find any sound basis for that
conclusion. With respect to the learned Judges who decided
that case, we are unable to agree with that conclusion. In
our judgment, while acting under s. 19(1)(f), the High Court
functions as a ’court’ and not as a designated person. Our
conclusion in this regard receives support from the decision
of the Judicial Committee in Secretary of State for India in
Council v. Chelikani Rama Rao(1) and others referred to
earlier. Dealing with the ratio of its decision in Rangoon
Botatoung Co. case(2), this is what Lord Shaw of Dunfermline
observed (at p. 198 of the report):
"It was urged that the case of Rangoon
Botatoung Co. v. The Collector, Rangoon(2)
enounced a principle which formed a precedent
for excluding all appeal from the decision of
the District Court in such cases as the pre-
sent. Their Lordships do not think that that
is so. In the Rangoon Case a certain award
had been made by the Collector under the Land
Acquisition Act. This award was affirmed by
the Court, which under the Act meant "a
principal civil Court of original
jurisdiction." Two judges sat as ’the Court’
and also as the High Court to which the appeal
is given from the award of ’the Court’. The
proceedings were however, from beginning to
end ostensibly and actually arbitration
proceedings. In view of the nature of the
question to be tried and the pro-
(1) 43 I.A. 192.
(2) 39 I.A. 197.
379
visions of the particular statute, it was held
that there was no right ’to carry an award
made in an arbitration as to the value of
land’ further than to the Courts specifically
set up by the statute for the determination of
that value."
We have already come to the conclusion that the decision
rendered by the High Court under s. 19(1)(f) is a
’determination’. Hence, it was within the competence of
this Court to grant special leave under Art. 136. But then
it was urged on behalf of the respondents that in view of r.
2, 0.13 of the Rules of this Court, as it stood at the
relevant point ’of time, this Court could not have granted
special leave as the appellant had not applied for necessary
certificate under Art. 133 of the Constitution. In support
of this contention, reliance was placed on the decision of
this Court in Management of the Hindustan Commercial Bank
Ltd., Kanpur v. Bhagwan Dass(1). Under Art. 133, a
certificate can be asked for filing an appeal against the
judgment, decree or final order of a High Court. As seen
earlier, this Court ruled in Hanskumar Kishanchand v. Union
of India(2) that the decision rendered by the High Court
under s. 19(1)(f) is not a decree, judgment or final order.
Hence, the provisions of Art. 133 are not attracted to the
present case. Consequently, this case is taken outside the
scope of the aforementioned r. 2 of Order 13. As a measure
of abundant caution, the appellant has filed CMP 2325 of
1967, praying that this Court may be pleased to excuse him
from compliance with the requirements of 0.13, r. 2. In view
of the decision of this Court in Hanskumar Kishanchand v.
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Union of India(2), no useful purpose would have been served’
by the appellant’s applying for a certificate under Art.
133. Hence, even if we had come to the conclusion that the
case falls within the scope of 0. 1 3, r. 2, we would not
have had any hesitation in exempting the appellant from
compliance with the requirement of that rule.
This takes us to the merits of the case. The grievance of
the appellant is that the High Court erred in law in
awarding compensation on the basis of Exh. 42. The sale
evidenced by that deed was effected in the year 1951, nearly
five years after the acquisitions with which we are
concerned in this case were effected. The sale in question
cannot be considered as a contemporaneous transaction. The
arbitrator has found that after the close of the second
world war, the price of landed property had gone up steeply.
This finding does not appear to have been challenged before
the High Court. Further, under the deed in question, the
land sold was .26 acres in extent. The price fetched by
such a tiny bit of land is of no assistance in determining
the value of the lands acquired. On behalf of the
respondents, we were asked to determine the compensation of
the lands acquired on the basis of sale deed Exh. 35 which
relates to a sale that took place on 10-6-1947
(1) [1965] 2 S.C.R. 265.
(2) [1959] S.C.R. 1177.
380
which according to the respondents can be considered as a
contemporaneous sale. We are unable to accept this
contention. Exh. 35 relates to the sale of land
measuring .28 acres. The vendee under that deed is one of
the claimants. There is no evidence as to the nature of the
land sold under that deed. Under these circumstances, very
little value can be attached to that document. We are also
of the opinion that none of the sale deeds produced in this
case can afford any assistance in determining the
compensation payable to the respondents. They do not
evidence sales of lands similar to the acquired lands, at
about the time of the acquisition. The High Court did not
address itself to the oral evidence adduced in this case for
finding out the annual profits for the purpose of
capitalisation. It rejected the evidence of the Naib-
Tehsildar. For reasons not disclosed. the village papers of
1354 fasli were not produced by the appellant. On the other
hand, the village papers of 1355 fasli were produced. In
the first place, those records do not show the rent payable
in the year in which the acquisitions took place. The
acquisitions in question were made in fasli 1354. For the
reasons mentioned in its judgment, the High Court felt un-
able to place reliance on the village papers of fasli 1355.
We do not think that this Court should scan the evidence
afresh for determining the just compensation payable. to the
respondents. That question has to be gone into by the fact
finding court. All that we need say is that the High Court
was not right in determining the compensation payable to the
respondents on the basis of Exh. 42. Hence its decision
cannot be sustained.
For the reasons mentioned above, we allow this appeal and
set aside the decision of the High Court and remit the case
back to that Court for disposal according to law. Before
deciding the case afresh the High Court will permit the
parties, to adduce additional evidence on the question of
compensation; in particular, they will be allowed to produce
and prove contemporaneous sale deeds and the revenue records
relating to fasli 1354. Costs of this appeal shall be costs
in the cause.
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R.K.P.S. Appeal allowed.
381