State Of West Bengal vs Bireswar Dutta Estate Private Ltd

STATE OF WEST BENGAL .......APPELLANT

Versus

BIRESWAR DUTTA ESTATE PRIVATE .....RESPONDENT LTD.

O R D E R

Premises No.32A, Brabourne Road, Kolkata originally

belonged to the respondent. The entire six storey building

(excluding the ground floor and a portion of the first

floor) measuring 20093 sq.ft. had been requisitioned by the

appellant under the West Bengal Premises Requisition and

Control (Temporary Provisions) Act, 1947 (`Act' for short)

for providing barrack accommodation for the police and for

Traffic Police Guard Headquarters on 1.10.1958. The

premises stood derequisitioned on 7.1.1994 by virtue of the

provisions of Sections 10A and 10B of the Act.

2. The appellant, thus became liable to vacate and

deliver vacant possession on 8.1.1994 but continued in

unauthorized possession. By order dated 8.7.1994, made in a

contempt petition filed by the respondent, the High Court

granted three months time to the appellant to initiate 2

acquisition proceedings if it wanted to retain the premises

and the said period of three months expired on 7.10.1994.

Therefore, the respondent filed a suit (CS No.235/1996)

seeking physical possession of the derequisitioned

property. A learned Single Judge of the High Court decreed

the said suit on 9.9.1998 holding that the occupation of

the appellant was illegal with effect from 8.10.1994 and

consequently directed the appellant to pay compensation at

the rate of Rs.7230/- per month from 8.1.1974 to 7.10.1994

and mesne profits at the rate of Rs.1,10,000/- per month

from 8.10.1994 to 31.8.1998 and from 1.9.1998 to date of

delivery of possession.

3. The said decree was challenged by the appellant by

filing an intra court appeal. The respondent filed cross

objections being aggrieved by the quantum of the mesne

profits. A Division Bench of the High Court, by judgment

dated 29.7.1999 upheld the decision of the learned Single

Judge that appellant was in wrongful possession of premises

and was liable to be evicted. Thereafter, it heard the

parties on the issue of mesne profits and by further order

dated 10.8.1999 set aside the decree of the learned Single

Judge in so far as the determination of mesne profits for

the second and third periods (that is from 8.10.1994) and

referred the matter to a Commissioner (retired Judge) for

quantifying the mesne profits. The said order of the 3

Division Bench attained finality as it was not challenged

by the appellant.

4. The Commissioner appointed by the Division Bench

issued notice to the parties for determination of the mesne

profits. In spite of repeated opportunities, the State did

not participate in the proceedings. After considering the

evidence placed by the respondent, the Commissioner

submitted his report dated 21.2.2000 under which he

determined the mesne profits at Rs.8/- per sq.ft. from

8.10.1994 to 31.8.1998 and at the rate of Rs.9/50 per sq.

ft. from 1.9.1998 till the date of recovery of possession.

The appellant challenged the said report inter alia on the

ground that it did not have an opportunity to let in

evidence. The Division Bench considered and overruled the

objections of the appellant by the impugned judgment dated

7.7.2000. It accepted the report of the Commissioner and

directed that a final decree be prepared in terms of the

report of the Commissioner (that is adopting the rate of

rent and the periods for which such rates would apply). The

Division Bench also directed that the respondent will be 4

entitled to interest at 12% per annum on the arrears of

rent and as also further rent. The said judgment is

challenged in this appeal by special leave.

5. Learned counsel for the appellant submitted that the

property was acquired in pursuance of preliminary

notification dated 28.9.1994 issued under Section 4(1) of

the Land Acquisition Act, 1894 (`LA Act' for short) and

final declaration dated 11.8.1997 issued under Section 6 of

the LA Act and an award was passed by the Land Acquisition

Officer on 24.2.2000. Possession of the acquired premises

was formally taken over under Section 16 of LA Act on

24.2.2003. The validity of the said acquisition was upheld

by this Court in Civil Appeal No.638 of 2005 decided on

21.10.2010 [State of West Bengal & Ors. Vs. Bireswar Dutta

Estate Pvt. Ltd. & Ors.]. It was further submitted that in

view of the pendency of the proceedings for acquisition,

the appellant was under the bona fide impression that it

need not participate in the proceedings before the

Commissioner and the High Court ought to have set aside the

report of the Commissioner and given an opportunity to the

appellant to place the necessary material relating to

determination of mesne profits.

5

6. We find that the appellant was given sufficient number

of opportunities by the Commissioner to place its evidence

in regard to mesne profits and the appellant did not do so.

We also find from the report of the Commissioner which has

been accepted by the High Court that the Commissioner has

determined the mesne profits with reference to the rent

that was being paid by the ground-floor tenant after making

appropriate adjustment for the fact that the valuation

related to the upper floors. It is not in dispute that the

premises is situated in the heart of Kolkata in a

commercial area. The High Court, having regard to these

facts had accepted the Commissioner's report and directed

that mesne profits should be paid at Rs.8/- per sq.ft. for

the period from 8.10.1994 to 31.8.1998 and Rs.9/50 per

sq.ft. from 1.9.1998 to the date of delivery of possession.

We find that the award of compensation/mesne profits as

above does not suffer from any infirmity nor call for

interference. The appellant has not been able to

demonstrate any prejudice on account of the report of the

Commissioner.

7. Learned counsel for the appellant next contended that

the High Court was not justified in granting interest at

the rate of 12% per annum on the amounts found due and that 6

too without specifying the date from which the interest

will be due. He also submitted that there was no contract

for payment of interest.

8. On the facts and circumstances, particularly in the

absence of any contract for payment of interest, we are of

the view that the interest awarded should be only from the

date of the judgment of the High Court, that is 7.7.2000,

at the rate of 8% per annum.

9. In view of the above, we partly allow the appeal as

follows :

(i) The judgment dated 7.7.2000 of the High Court in

regard to the quantum of mesne profits and the

period for which it is found payable, is upheld.

(ii) The appellant shall pay compensation and mesne

profits to respondent as under :

(a) Compensation for the period from 8.1.1974 to 7.10.1994 at the rate of Rs.7230/-

per month.

(b) Mesne profits for the period from 8.10.1994 to 31.8.1998 at the rate of Rs.8/- per sq. feet.

(c) Mesne profits for the period from 1.9.1998 to 24.2.2003 (the date of possession) at the rate of Rs.9/50 per sq. ft.

7

(iii) The respondent shall be entitled to interest at 8%

per annum from 7.7.2000 on the amounts due as on

that date till date of payment. Respondent will also

be entitled to interest on mesne profits accruing

every month after 7.7.2000 from the respective due

dates to date of payment.

(iv) The appellant will be entitled to adjustment of the

payments made by it on account, on the respective

dates of payments. Such payment shall be adjusted

towards the principal (that is towards mesne profits

and not accrued interest) so that interest will be

due only on the balance.

(v) The appellant shall also be liable to reimburse the

respondent, the proportionate property tax in

respect of the portion of the property in its

occupation, as directed in the interim order dated

18.7.2001 of this Court.

(vi) Parties to bear respective cots.

......................J. ( R.V. RAVEENDRAN )

......................J. New Delhi; ( A.K. PATNAIK ) November 18, 2010.