Full Judgment Text
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 11
PETITIONER:
MESSRS NOORULLA GHAZANFARULLA
Vs.
RESPONDENT:
THE MUNICIPAL BOARD OF ALIGARH, ALIGARH
DATE OF JUDGMENT07/02/1995
BENCH:
VENKATACHALA N. (J)
BENCH:
VENKATACHALA N. (J)
SAWANT, P.B.
CITATION:
1995 AIR 1058 1995 SCC Supl. (2) 667
JT 1995 (2) 249 1995 SCALE (1)643
ACT:
HEADNOTE:
JUDGMENT:
1.This appeal by special leave is directed against the
judgment and order dated 26.4.1982 of the High Court of
Allahabad by which Civil Misc. Writ Petition No. 12220 of
1975 filed by the petitioner therein, the appellant here,
was dismissed.
2.The appellant was a registered partnership firm. On 10.
10. 193 5 the Municipal Board of Aligarh, respondent- 1
granted to the appellant, acting in accordance with the
provisions of Section 224 and Section 224-A of the U.P.
Municipalities Act, 1916 - "the Act", ’Aligarh Water Supply
Licence, 1935’ -- "the Licence" for providing water supply
to certain areas of Aligarh by taking over the then existing
water works of respondents, subject to the condition of
paying to respondent-1 annual fee of Rs.10,000/- and of
fulfilling other conditions of the Licence. Condition 7 of
those conditions which related to the period of licence,
read thus
"7. This licence shall remain in force for a
period of 50 years from its commencement. On
the expiry of the saidperiod of 50 years the
board may at its option either renew this
licence for another period of 50 years and on
the same terms and conditions, or if the board
and the licensees agree, for a different term
and on different conditions, or may take over
the whole water works on payment of the fair
value of the properties belonging to the
Licensees to be determined in the manner laid
down in section 224-C of the United Provinces
Municipalities Act."
3. But, the appellant since found it difficult to provide
water supply for areas of Aligarh as was required of it
under the Licence even during the basic period of 50 years
of the Licence, it requested respondent-1 to revoke the
Licence by having recourse to Section 224-B(2)(a) of the
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 11
Act, so as to enable the latter to purchase the water works
as provided for under the succeeding Section 224-C of the
Act.
4. The Administrator of respondent1, responding to the
said request of the appellant made an order on 1.4.1975,
which indicated that respondent-1 had taken a decision to
revoke the Licence of the appellant according to Section
224B(2)(a) of the Act after it had obtained the previous
sanction of the State Government (respondent-2), as per
wireless message dated 30.3.1975 received by it. The mate-
rial part of that order read thus:
"(1) The licence dated 10.10.1935 granted to
M/s. Noorullah
Allahabad to supply water within Aligarh
Municipal limits is revoked with effect from
1st April 1975 and the of the Aligarh Water
works will be taken over by Aligarh Municipal
Board with effect from the same date.
(2) All property Tubewells, pumping sets,
Machinery, storage tanks, pipe lines mains,
equipments stores and other articles,
accessories & fittings Hydrants & Standposts
and office and account belonging to Aligarh
Water Works shall vest in Aligarh Municipal
Board and an powers and liabilities of the
licencee under the license to supply water
shall
252
absolutely cease and determine with effect
from 1st April, 1975.
(3) The valuation of the property belonging
to the licensee shall be determined by the
State Govt. in accordance with the provisions
of the Municipalities Act, 1916.
5. Appellant which was served with the said order on the
same date on which it was made, promptly gave its reply
therefor, again on the very same date. How, the appellant
had understood the said order and how it treated that order
was made known to the Administrator by stating in its reply
thus:
"Although, the order sent by you is not
actually a notice, but as the order also
states clearly that the revocation will take
effect from 1.4.75 presume the order is meant
by you to serve the purpose of the notice as
required under section 224C(a) of the U.P.
Municipalities Act and take it as such. We
further presum that this order is meant by you
also to serve the purpose of the notice
required to be served on the Licensees under
sub- section (b) of Section 224C requiring
Licensees to sell their assets
water supply as essential necessity, in the
city and in order to avoid any hardship to the
citizens, we have decided to hand over the
undertaking under protest and without
prejudice to our rights under section 224C of
U.P. Municipalities Act ............
With the take-over of the water works all our
responsibilities and liabilities under the
Licence shall cease except for our rights to
receive full compensation and our dues to be
realised by the Municipal Board .......
Please acknowledge and kg us have an early
reply and oblige."
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 11
Early reply, as requested for as above by the appellant does
not appear to have been given by the Administrator of
respondent1, in that, no information in that regard was made
available even though the same was required to be furnished
by an order made by us on 14.1.1994.
6. However, before the sale of properties of the
appellant in the water works envisaged under Section 224-C
of the Act which was adverted to in the appellant’s reply
given in response to the Administrator’s order dated
1.4.1975, that on 13.6.1975 Ordinance No. 16 of 1975 came to
be issued by respondent-2 substituting new section 224-B and
new section 224-C for existed sections 224-B and 224C of the
Act. The said Ordinance declared that new section 224-C
shall be deemed to have come into force on 1. 1. 1975 while
the other new sections shall be deemed to have come into
force on the date of Ordinance (ibid section 2 of the
Ordinance).
7. Later, that on 8.9.1975 Act No. 45 of 1975, enacted by
the State Legislative of respondent-2, replaced the said
Ordinance, with exactly the same text.
8. In the said situation, that on 20.10.1975, the
appellant filed Writ Petition, C.M. Writ No. 12220/75 under
Article 226 of the Constitution before the High Court of
Judicature at Allahabad, seeking from the High Court
issuance of directions to respondents 1 to 3 to pay fair
market value of the properties of the appellant in the water
works the licence of which had been revoked by respondent-1
253
on 1.4.1975, without invoking the provisions of the amended
new Section 224-C of the Act to pay the amount to be com-
puted thereunder, as the value of such properties. But,
that writ petition was dismissed by the High Court.
9. The said dismissal of the writ petition by the High
Court, made the appellant question the correctness of
the order of such dismissal in this Court by filing a
Special Leave to appeal against it. At the hearing of that
Special Leave Petition, since it was contended that the High
Court did not consider the challenge to the constitutional
validity of Act 45 of 1975 even though the same had been
raised before it, Court granted leave sought for therein,
accepted the contention and disposed of Civil Appeal
No.352/81 arising out of it by setting aside the order of
the High Court under appeal and sending the matter to the
High Court for its decision on all questions arising before
it including the constitutional validity of Act 45 of 1975,
by rehearing the writ petition.
10.The High Court which reheard the writ petition as had
been ordered by this Court again dismissed the writ petition
by its judgment dated 26.4.1982. That judgment shows that
the submissions made on behalf of the petitioner therein
(appellant here) were confined to constitutional validity of
new Section 224-C of the Act which was substituted by Act 45
of 1975 for old Section 224-C of the Act. However, the High
Court as is seen from the judgment, although examined the
challenge directed against the constitutional validity of
new Section 224-C as that which was violative of Articles
19(1)(f) and 31 of the Constitution of India, found no
substance in the challenge. Consequently, the said writ
petition was dismissed by the judgment of the High Court
dated 26.4.1982. The present appeal by special leave is
filed by the petitioner therein-the appellant, against that
judgment, as stated at the outset.
11.One important event, occurring between the date of filing
of the appeal and its final hearing, the notice of which is
required to be taken before adverting to the arguments in
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 11
the appeal and dealing with them, is of the determination of
the amount payable by respondent- 1 to the appellant for its
properties of Aligarh Water Works according to new Section
224-C of the Act as Rs.5,39,755/- and the payment of that
amount by respondent-1 to the appellant on 1.2.1989.
12.Contentions raised in support of this appeal by Shri
Harish N. Salve, the learned counsel for the appellant, in
his oral arguments and reiterated in his written submissions
could, for purposes of easy understanding and proper
consideration, be formulated thus
1. When, by his Order dated 1.4.1975the Administrator of
respondent revoked the appellant’s licence in respect of
Aligarh Water Works with effect from 1.4.1975 by stating in
that order, that all property belonging to Aligarh Water
Works shall vest in Aligarh Municipal Board (respondent-1)
and all powers and liabilities of the licensee (the
appellant) under the licence to supply water shall ab-
solutely cease and determine with effect from 1.4.1975 and
that the value of the property belonging to the licensee
shall be determined by the State Government in accordance
with the provisions of the Municipalities Act 1916, did such
property
254
of the appellant in Aligarh Water Works vest in respondent-1
on 1.4.1975 making it liable to pay its value to the
appellant and what remained with the appellant from 1.4.1975
was not its property in water works but merely the money
value or compensation payable by respondent-1 to the
appellant for such property, i.e., a chosein-action.
2. When, by Act 45 of 1975 enacted by the State
Legislature of respondent-2, property of the appellant in
the Aligarh Water Works was acquired for respondent-1,
making it liable to pay there . for an amount computed under
its provisions, was the property so acquired, a mere chose-
in action so as to make Act 45 of 1975 constitutionally
invalid by it in that, acquisition of money or chose-in-
action offended Article 19(1)(f) and Article 31 of the
Constitution.
3. Even if, it is assumed that new section 224-C of the
Act, which is substituted for the old Section 224-C of the
Act by Act 45 of 1975 is constitutionally valid and that
Rs.5,39,755/- computed thereunder is the correct amount
payable by respondent-1 to the appellant for the value of
the property of the appellant in Aligarh Water Works vested
in it under the new Section, and the same is paid to the
appellant on 1.2.1989, is respondent-1 justified in denying
to the appellant the interest payable, on that amount from
1.4.1975 - the deemed date of vesting of properties in
respondent-1 till 1.2.1989 the date on which respondent-1
paid that amount to the appellant, particularly when the
proviso to sub-section (2) of new Section 224C of the Act
required payment of such interest?
4. When a sum of Rs.2,50,000/-, ordered by this Court on
3.12-1990 to be, paid by respondent-1 to the appellant out
of the total interest payable to it on the amount of
compensation, is that sum of interest deposited by
respondent-1 with the Registrar of the Allahabad High Court,
not liable to be paid to the appellant.
13. As the above contentions raised in support of the
appeal were refuted by learned Counsel appearing for
respondents, it would be convenient to consider the merit
-of each of the said contentions seriatim.
Contention-1
14. Since this contention is founded on a statement made by
the Administrator of respondent- 1, in his Order of
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 11
revocation of the licence of Aligarh Water Works held by the
appellant which creates an impression that the property of
the appellant in Aligarh Water Works was ordered to vest in
respondent- 1 with effect from 1.4.1975, the question that
calls for our consideration, to begin with, is whether the
provision in Section 224-C of the Act, as it stood before it
was substituted by Act 45 of 1975, with a new Section 224-C,
empowered the Board (respondent-1) to order vesting of the
property of the licensee (the appellant) in the Water Works
from a date when such licensee’s licence in respect of water
supply through such Water Works, could be revoked in
exercise of the power conferred under that provision and if
that provision did not empower the Board, respondent-1 to
order the vesting of the property of the appellant in the
Water Works in itself, from the time it revoked its licence
given in respect of such water works, whether a statement
made by the Administrator of respondent-1 in
255
his order of revocation that from the date of purchase due
of revocation of licence of the water works,
the property of the licensee, the appellant vested in
respondent-1, could have had the legal effect of vesting of
such property in respondent- 1.
15. Section 224-C of the Act, as it stood before its
substitution by Act 45 of 1975 with a new Section, read
thus:
224-C. Where the licence of a licensee is
revoked under the preceding section, the
following provisions shall have effect, namely
(a) The board shall serve a notice of the
revocation upon the licensee and shall in the
notice fix a date on which the revocation
shall take effect; and on and with effect from
such date all the powers and liabilities of
the licensee under the licence shall
absolutely cease and determine;
(b) where a notice of the revocation of a
licence has been served on the licensee the
board may, within three months after the
service of such notice and with the written
consent of the Local Government, by notice in
writing require the licensee to sell, and
thereupon the licensee shall sell, to the
board the whole Of the water- works at such
value as shall be mutually agreed upon, or in
default of such agreement at such value as
shall be determined by a valuer appointed by
the’ board and the licensee and in case of
their disagreement by the Local Governments
the licensee shall however be responsible for
the establishment employed by him for the
undertaking and for any compensation or other
payments it may be necessary to incur on their
behalf-
Provided that the value of such water-works
shall be deemed to be their fair market value
at the time of purchase due regard being had
to the nature and condition for the time being
of such waterworks and to the state of repairs
thereof, and to the circumstances that they
are in such a position as to be ready fo
r
immediate working, and to the stability of the
same for the purpose of the undertaking but
without any addition in respect of
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 11
compulsory purchase or of goodwill or of any
profits which may or might have been made from
the undertaking, or of any similar
consideration;
(c) where any part of the water-works was
transferred by the board to the licensee under
section 224(d), the board may, by notice in
writing require the licensee to re-transfer
the same to the board on payment by the board
of any sum by which the market value of such
part of the water-works may have been enhanced
by reason of any arrangement made-by the
licensee, such sum to be determined in the
manner provided in clause (d) of this section.
(d).........................
16. As seen from the Preamble of the above Section 224-C,
where the licence is revoked under the preceding section by
the Board (Section 224-B), the provisions to follow, i.e.,
clauses (a) to (d), shall have effect. First part of the
provision in clause (a) requires service of notice of
revocation upon the licensee fixing a date thereunder as to
the date on which revocation shall take effect, while its
second part declares that on and with effect from such date
of revocation, the powers and liabilities of the licensee
under the licence shall absolutely cease and determine,
First part of clause (b) of the provision which empowers the
Board by notice of revocation served upon the licensee to
require -the
256
licensee to sell the water-works to the Board, by its second
part requires the licence to sell such water works only for
such value as shall be mutually agreed upon between the
licensee and the Board and if not, for the value determined
by the valuer to be appointed by both of them. The proviso
to the said provision then creates a legal fiction, when it
declares that the value of the water works for which it
would be sold shall be deemed to be fair market value on the
date of its purchase by the Board.
17. Therefore, the provision in clause (a) above makes it
clear that revocation of licence relating to water works
takes effect from the date fixed for the purpose by the
Board in the notice or order putting an end to the
licensee’s rights and duties under the licence from that
date. Further, the provision in clause (b) and its proviso,
makes it abundantly clear that water works becomes the water
works of the Board only when the value payable by the Board
to the licensee of such water works is determined as
provided in the provision and the water works is actually
sold by the licensee to the Board pursuant to its (Board’s)
notice issued to licensee to sell and not before.
18. Thus, the said provisions in Section 224-C of the
Act as they stood before they were substituted by new
Section under Act 45 of 1975, if had only empowered the
Board (respondent-1) to revoke the licence of the licensee
(the appellant) of water works from a date to be specified
by it and direct the licensee (the appellant) to sell the
water works (Aligarh Water Works) after the value of such
water works was determined either by mutual agreement or by
the valuer to be appointed by both, there is no escape for
us except holding that the Board had no power to appropriate
such water works to itself before the taking of such sale by
unilaterally stating that the properties of water works had
vested in it on the date of revocation. Accordingly, we
hold that the Board, respondent-1 was not empowered under
section 224-C of the Act, as it stood before its amendment
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 11
by Act 45 of 1975, to get the ownership of the Aligarh Water
Works or property therein transferred to itself from the
appellant from the date specified for revocation of licence
of the appellant in respect of Aligarh Water Works, nor the
statement made by the Administrator of respondent-1 in his
Order (Notice) of revocation to the effect that the
properties of the water works had been vested in respondent-
1 from the date of revocation of licence, i.e., 1.4.1975,
did bring about that result.
19.Besides, when the provisions in Section 224-C of the Act,
as they stood before they were amended by a new Section,
substituted by Act 45 of 1975 empowered the Board to obtain
sale of water works from the licensee only after the price
or value of such water works had been agreed upon or fixed,
transfer of ownership of water works, i.e., tangible immov-
able property in exchange for a price from the licensee to
the Board could not have occurred before the taking place of
such sale, inasmuch as transfer of ownership of tangible
immovable property of the value of one hundred rupees and
upwards could take place only by sale made under a reg-
istered instrument as required under Section 54 of the
Transfer of Property Act, 1882. Therefore, unless a statute
itself provides for vesting and transfer of immovable
property from one person to another
257
by acquisition or the like, the question of transfer of
ownership of property in the water works from the licensee
(the appellant) to the Board (respondent-1) could not have
taken place, even if such water works had been forcibly
taken over by respondent-1 or the possession of the same had
been given to the Board (respondent-1), voluntarily by the
licensee, the appellant.
20. Provisions of the Land Acquisition Act, 1894 -- "the LA
Act", in fact, illustrate the legal position for the
possession of the land sought to be acquired under the LA
Act whether its possession is voluntarily handed over to the
Government by its owner or its possession is taken over by
the Government as provided for under the said Act, vesting
of such land in the Government takes place because of the
provisions in Sections 16 and 17 of the Act, which declare
that the land shall vest absolutely in the Government free
from all encumbrances at a stated point of time. In other
words, but, for statutory vesting of land according to
Sections 16 and 17 of the LA Act, the vesting of such land
in the Government cannot take place, even if possession of
it is taken by the Government in one way or the other.
21. Thus, when neither the Aligarh Water Works nor its
property stood transferred to and vested in the Board
(respondent-1) so as to make it the owner thereof, the mere
fact that on 1.4.1975, the Administrator of respondent-1,
who made an order revoking the licence of the appellant in
respect of the water works, stated in his order that from
1.4.1975, the date of revocation of the licence, the
property therein vested in the Board (respondent-1), did not
make the appellant lose the ownership of it and make
respondent-1 get the ownership thereof.
22. Apart from what we have stated as to non-transfer and
non-vesting of the property of the water works in
respondent-1, the reply given on 1.4.1975 by the appellant
to the order of the Administrator of respondent-1 made on
the same date, revoking his licence from 1.4.1975, which is
excerpted by us already, would clearly show that the
appellant disputed the statement of transfer and vesting of
water works in respondent-1, made in the order and required
respondent -1 to purchase the property of the appellant as
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 11
provided for in Section 224-C of the Act, as it stood then.
23. It is no doubt stated in the said reply that the
appellant had decided to handover the undertaking (water
works) under protest, but it was unambiguously stated
therein that even if the appellant is ready to handover the
water works, the order made by the Administrator of re-
spondent-1 will have only the effect of requiring the
appellant to sell its property in the water works, as
provided for under clause (b) of Section 224-C, as it stood
then, can mean only that the vesting of appellant’s water
works or its property in respondent-1, could take place only
after the sale effected by them, as required by the
provision therein.
24. From what we have stated above, it becomes obvious that
the Aligarh Water Works or the property therein belonging to
the appellant did not vest in respondent-1 according to the
order of revocation made by the Administrator of respondent-
1, with effect from the date of revocation of appellant’s
licence in waterworks from 1.4.1975, so as to make
258
respondent-1 liable to pay to the appellant only money value
of the water-works, that is, a chose-in-action on and after
1.4.1975, as contended for by learned counsel for the
appellant.
Contention-2:
25.Among other provisions in the Act, Sections 224-B and
224-C were substituted by Ordinance 16 of 1975, which was
replaced by Act 45 of 1975. Section 224B of the Act as
substituted by Section 2 of Act 45 of 1975, reads thus:
"224B. Every licence granted under clause (c)
of section 224 shall, if not already revoked,
stand revoked with effect from June 13, 1975.
26.Section 224-C of the Act, as substituted by Section 3 of
Act 45 of 1975 in so far it becomes material for the pur-
poses of this case, reads thus:
"224-C.(1) Where the licence of a licensee is
revoked under section 224-B as it stood
immediately before the commencement of the U.
Municipalities (Amendment) Act, 1975, or where
such licence stands revoked by virtue of the
new section 224B as substituted by the said
Act, all the property pertaining to the water
works (namely, all existing water supply
services, including all plants, machinery,
water works, pumping sets, filter beds, water
mains and pipes laid down along, over or under
any public street, and all buildings and other
works, materials, stores and things
appurtenant thereto) belonging to or vested in
the licensee immediately before the date of
revocation of the licence (hereinafter in this
section referred to as ’the said date’) shall
as from the said date vest in and stand
transferred tothe Board free from any
debt,mortgage or similar obligation of the
licensee attached to such property:
Provided that any such debt, mortgage or
similar obligation shall attach to the amount
referred to in sub- section (2) in
substitution for such property.
(2) Where any property belonging to the
licensee vests in the Board under subsection
(1), not being water works of which only the
management was transferred to him by the Board
under clause (d) of Section 224, the Board
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 11
shall pay to such licensee an amount
determined as hereinafter provided in this
section;
Provided that the licensee shall, in addition
to the said amount, be paid interest thereon
at the Reserve Bank rate ruling on the said
date plus one percentum for the period from
the said date to the date of payment of the
said amount.
(3) The State Government shall appoint, by
order in writing, a person having adequate
knowledge and experience in matters relating
to accounts, to be special officer to assess
any amount payable under this section to the
licensee after making the deductions mentioned
in this section.
(4) (a) The Special Officer may call for the
assistance of such officers and of the State
Government in the Local SelfGovernment
Engineering Department or of the Licensee, as
he may deem fit for assessing the net amount
payable.
(b) The Special Officer shall have the same
powers as are vested in a Civil Court under
the Code of Civil Procedure, 1908, when trying
a suit in respect of the fol lowing matters
(i) enforcing the attendance of any person
and examining him on oath;
(ii) compelling the production of documents;
and
259
(iii) issuing commissions for the nation of
witnesses.
The Special Officer shall also have such
further powers as may be specified by the
State Government by notification in the
Gazette.
(5) The gross amount payable to such be the
aggregate value of the amounts specified below
-
27. Sub-section (2) of Section 1 of Act 45 of 1975, which
refers to commencement of that Act reads, thus:
"(2) Section 3 shall be deemed to have come
into force an January 1, 1975, and the
provisions of this Act shall be deemed to have
come into force on June 13, 1975."
28. Under the said new Section 224-C of the Act where the
licence of a licensee. is revoked under Section 224-B, as it
Stood immediately before the commencement of Act 45 of 1975,
all the property pertaining to water works vested in the
licensee immediately before die date of revocation of the
licence (to be referred to as the said date). vested in and
stood transferred to the Board free from any debt, mortgage
or similar obligations of the licensee attached to such
property.
29. While dealing with Contention-1 above. we have held
that the licence of the appellant in respect of Aligarh
Water Works was revoked by respondents with effect from
1.4.1975 under Section 224B(2Xa) of the Act, as it stood
before it was substituted by new Section 224-B by Act 45 of
1975, and that neither the water works nor the property of
the appellant in Aligarh Water Works, the licence of which
was revoked on 1.4.1975, vest in respondent-1 either on
1.4.1975 or subsequently, since the property in the Water
Works was not sold by the appellant to respondent-1, as
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 11
required under that Section. We have also held therein that
the appellant itself did not agree for the sale of its
property to be completed as provided under the said
provision, so that the properties could vest in respondent-
1. It is beyond dispute that no sale of the property of the
appellant in Aligarh Water Works was made in favour of
respondent1 before Ordinance 16 of 1975 and Act 45 of 1975
came into force. If that be so, the property in Aligarh
Water Works of the appellant continued to belong to him even
when the said Ordinance and said Act came into force. It is
for that reason, it has to be held that the property of the
appellant in Aligarh Water Works vested in respondent-1 on
31.3.1975, immediately before the, date of revocation of the
licence i. e. 1.4.1975, as envisaged under new Section 224-
C(1) of the Act. If that be so, the value or the amount
payable to the appellant for its property in Aligarh Water
Works was the amount pay able under new Section 224-C of the
Act and not the. value, which had to be paid under the, old
Section 224-C as it stood before its amendment.
30. Thus, the question of the value of the property of the
appellant in Aligarh Water Works becoming a chose-in-action
on the date of revocation of the licence of the appellant of
the water works i.e., on 1.4.1975, under Section 224-C of
the Act, as it stood before its amendment, did not arise.
The present contention raised on behalf of the appellant
that Act 45 of 1975 was constitutionally invalid as being
violative of Articles 19(1)(f) and 31, as is
260
pointed out earlier, is founded on the premise that the
acquisition sought to be made thereunder of the property of
the appellant in Aligarh Water Works was money, i.e., a
chose-in-action. But, as we have held, that was transferred
from the appellant and vested in respondent- 1 under new
Section 224-C(1) of the Act which was substituted for old
Section 224-C of the Act by Act 45 of 1975 is Aligarh Water
Works, that is, tangible immovable property therein and its
value, i.e., chose-inaction, the present contention does not
survive for consideration.
Contention-3:
31.This contention relates to the liability of respondent- 1
to pay to the appellant interest on the amount of
Rs.5,39,755/- as required by the proviso to sub-section (2)
of Section 224-C, as it stands substituted for old Section
224-C by Act 45 of 1975. That proviso, which is reproduced
by us earlier, makes it clear that on the amount’ payable
for the property in the water works of the licensee vested
in the Board, the Board shall pay to such licensee in addi-
tion to the amount determined under the Section, interest
thereon at the Reserve Bank rate ruling on the said date
plus one percentum for the period from the said date (the
date immediately before the date of vesting of water works)
to the date of payment of the said amount. Therefore, when
the proviso requires payment by respondent- 1 of the
interest on the amount of Rs.5,39,755/- from 31.3.1975 to
1.2.1989 to the appellant as above, respondent-1 is liable
to pay the appellant interest on Rs.5,39,755/- at the
Reserve Bank rate ruling on the said date, i.e., 9 percent
per annum plus one percentum for the period from the said
date, i.e., 31.3.1975 to the payment of the said amount,
i.e., 1.2.1989, which works out to Rs. 7,45,828/-.
32.We, therefore, hold that respondent1 is liable to pay to
the appellant towards interest on-the amount payable to it a
sum of Rs.7,45,828/- less the sum of Rs.2,50,000/- deposited
by it with the Registrar of Allahabad High Court pursuant to
this Court’s Order dated 3.12.1990.
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 11 of 11
Contention-4:
33.A sum of Rs.2,50,000/- is said to have been deposited
with the Registrar, Allahabad High Court, towards part pay-
ment of interest on the amount payable by respondent-1 to
the appellant towards water works, i.e., the property of the
appellant in Aligarh Water Works. ’Mr, amount so deposited,
could be got by the appellant from the Registrar of the High
Court, since we have given deduction of this amount out of
the interest payable to the appellant while dealing with
Contention3 .
34.Subject to what we have said of the amount of interest
liable to be paid by respondent-1 to the appellant, this ap-
peal is dismissed, but without costs.
35.However, we direct respondent-1 to pay to the appellant
within three months from today, the balance of interest of
Rs.4,95,828/- liable to be paid by respondent-1 to the
appellant, together with interest at the rate of IO per cent
per annum from 1.2.1989 till the date of its payment.
263