M/S. Surajmull Nagarmull v. State of West Bengal

SAoh J. SHAH, J.--Messr~. Surajmull Nngarmull-who

will hereinafter be referred to as the appellants-were tenants of three warehouses and vacant land appurtenant there-topopularly known as the Sham-nagar Jute Godown-sbelonging to Sri Hanuman Seva Trust. The warehouses were used for storage of jute belonging to the appellants. By an order r dated August 17, 1943 and issued under Rule 75A of the Defence of India Rules, 1939, the warehouses were requisitioned and possession t.hereof W&l! taken on September 21, 1943. As the amount of compen-sation payable to the owner of the warehouses could not be fixed by agreement an Arbitrator was appointed under s. 19( l)(b) of the Defence of Indi" Act, 1939. Before the Arbitrator, Sri Hanuman Seva TruHt claimed compensation as owners of the warehouses. The appellant claimed compensation for loss of earnings, "damage to husinesa' and ooat of removal of 18,0llO maunds of j11te and some iron implements, which the appellants claimed had. to be removed in consequence of tho order of requisition. M/1. Su'4imull Nagarmutl The appellants estimated the compensation at Rs. one lakh. The Arbitrator by his order dated State of W ul S.,.,11 December 13, 1917 observed that the appellants had SW 1. failed to prove any actual loss of business in conse· quence of the requisition, and rejected the claim of the appellants.

Against t,he order passed by the· Arbitrator an appeal was preferred to the Hi;h Court of Judi-cature at Calcutta. The appellants valued the claim at Rs. 1,50,000/-. At the hearing of the appeal, t.he State of West Bengal contended that the appeal was not maintainable in view of the provisions of s. 19(l)(f) and (g) ands. 19(3)(c) of the Defence of India Act and the 2nd proviso to r. l!J framed under the Defence of India Aot: 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.

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 section 19A or by or under any rule made under this Act any action is taken of the nature described in sub-section ( 2) of section 2119 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 the princi-ples hereinafter set out, that is to say :- x x x x (f) An appeal shall lie to the High Court

against an award of the Arbitrator except in cases where the amount thereof does pot e~ceed an amount prescribed in this

166 SUPREME OOURT REPORTS [1963]

J96t behalf by rule made by the Central Government.

M :,, S.,ojnrull

.'fogormull •• (g) Save as provided in this section and in 5,... of Wm B"'f!JI any rules made thereunder, nothing in

Sha/> J. any law for the time being in force shall apply to arbitrations under this section." Sub-seotion ( 3), in so far as it is material, provi-des:- "(3l In particular and without any pre· judice to the generality of foregoing power, such rules n;ay preeoribe :- x x x I (o) 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 settle-ment of compensation. Rule 19 of the Rules provided:

"19. Any appeal against the a.ward of the Arbitrator shall be presented within aix weeks from tho date of receipt by the Collec-tor tho party by whom the appeal is preferred of the copy of the a.ward sent under Rule 17 : Provided further that no appeal shall lie against an award made wider these Rules where tho amount of compensation awarded does not exc~ed Rs. 5,000 in lump or Re 250 per mensem."

The Arbitrator appointed under s. 19 of the Defonce of India Act is not & court or a tribunal subject to the Appellate jurisdiction of the High Court. By the Defence of the India Act a right to appeal against the award of the Arbitrat.or is conferred, but that right iR restricted in the manner prescriue(\ ,

2 S.O.R. SUPREME OOURT REPORTS 167

the rules. It is provided by the second proviso to JIJ(JB Rule 19 that an appeal shall not lie against an M/1.s...; .... u a.ward whore the amount of compensation does not Nagmnall •• exceed Rs. 5000/-. S1ot1 of Wat B"'111I

The claim of the appellant was rejected by ShaA J, the Arbitrator and they were not a.warded any oompensation. Mr. Vishwanatha Sastri appearing on behalf of the appellants, contends that by cl. (f) .

of s. ;19 (I) the Legislature provided a right of appeal against all awards and has imposed a res-triction only in those cases were some amount is a.warded but the amount so a.warded is less then Rs. 5,000/-. Counsel submits that the restriction limiting the right of appeal must be strictly cons-trued. 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 Rule 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 sub-ordinate to the High Court, an appeal would lie only if it is expressly so provided. The Legislature has provided that where the amount of compensa-tion 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 Rule 19 as being one where the amount of compensation a.warned does not exceed Rs. 5,000/·.

The 2nd proviso to Rule 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 olaim-Y ant either before the acquiring authority or the

Arbitrator or before the High Court : it depends solely upon the amount of compensation awafded

'• l~~ SUI'RE~IE COURT ' REPORTS [1963) -

. . .

1112_ . by, the Ai:bitrator; But, however, unusual the rule ,..----,-... m.a. y · a .. ·P· ·p· e .. ar .·.t.o be, it would not open to the Court Jl/s~ Nirc•·••IF' 8wllj,,.ull. '· to ·the . right-to appeal and to enable a ,«:~:tend o~.; >.,!· -1·• claimant whose claim has been rejected completely

.,_.,." 1 / ·t 1 t .o tb . H. h C Th . b ··~• · -.,-,- ~••:• · . o ap.1,1e~ . e 1i; ourt. e ng t to appeal

s~.?!· IS exercISable only 1£ the amount awarded ·exceeds

Rs: ... 5,000/'. " · · , . I_n ,that ;yiew of the case, the High Court was right i,J:l_ not . ente~taining . the appeal. The appeal · fails .and jfl dismissed.

Appeal dismissed.

-- 1112 . KAPUR CHAND GODHA

,,,,;1 v.

It.

l\IIR NAWAB HIMAYATALIKHAN AZAIIIJAH (1

(S· l\:· ·DAS, M. HrnAYATULLAH and J. C. SIIAH, JJ.) · · Contract-Pro•-ince accepting performance from third per&m in full Bali•faction of claim-If can Bue promisor for ba~nce- · ~ndi'an ContractA~t, 1872 (9_of 1872), ss. 41, 63, illustration (c), In January I 1937 · one ' M & Co. sold and delivered jewellery vahied at about .13 lakhs to the respondent, the Prince of Berar. The Pririce acknowledged in writing the purchase of the jewellery and the price thereof and passed variOus acknowledgments in respect of the debts due · and the last of such acknowledgments was -made. for sum of RS. 27,79,000. In April 1948, the appellants presented their bill and 'wer~ informed in January, 1919, that the Nizam had passed the bill. In February, 1949, when Hyderabad was under military occupation, a Committee was set up by the· Military Governor to scrutinise all debts of the Prince of Berar and his younger brother. The claim. of the appellants was considered by the. Committee which recommended that the appellants should be paid a sum of Rs. 20 lakhs in full satis-faction of their claim •. The appellants were paid the sum ·or Rs: 20 lakhs in two instalments. The appellants tried to pas• a·r(ceipt when the}' received the second instalment r~sciving v:e,fr ICi~h.t fo ICCO\Cf t.he bruance !'nder the pronote frOJU thy