Supreme Court of India
Hirachand Kothari (Dead) Through Lrs vs State Of Rajasthan & Anr on 9 May, 1985
Equivalent citations: 1985 AIR 998, 1985 SCR SUPL. (1) 644, AIR 1985 SUPREME COURT 998, (1985) 2 CURCC 632, (1985) 98 MAD LW 686, 1985 SCC (SUPP) 17
Author: A.P. Sen
Bench: A.P. Sen, V. Khalid
PETITIONER:
HIRACHAND KOTHARI (DEAD) THROUGH LRS.
Vs.
RESPONDENT:
STATE OF RAJASTHAN & ANR.
DATE OF JUDGMENT09/05/1985
BENCH:
SEN, A.P. (J)
BENCH:
SEN, A.P. (J)
KHALID, V. (J)
CITATION:
1985 AIR 998 1985 SCR Supl. (1) 644
1985 SCC Supl. 17 1985 SCALE (1)1131
CITATOR INFO :
F 1987 SC2177 (3)
R 1992 SC1356 (12)
ACT:
Indian Evidence Act, 1872-Section 20 'Information or
opinion or matter in dispute-Reference by party to a third
person-Statements made by third person receivable as
admission- 'Information'-What is.
HEADNOTE:
Pursuant to a registered deed of exchange dated July
16, 1951 executed between the parties, the appellant
withdrew a suit for specific performance of an alleged
contract against the State Government under which the
Government were to resume his plot no. C/91 in 'C' Scheme
allotted to him by Improvement Trust, Jaipur for a sum of Rs
5000 in 1951 and give in exchange another plot in the same
scheme on the same terms. Under the terms of the deed, the
State Government agreed to give in exchange plot no. O/17 in
'C' Scheme to the appellant on resumption of his plot
bearing no C/91. In terms thereof, the appellant handed over
possession of his plot no. C/91 to the State Government but
the State Government on their part did not give possession
of the exchanged plot to him. Thereupon, the appellant
brought a suit for possession of the exchanged plot and for
mesne profits thereof. It was revealed in answer to the
interrogatories served by the appellant that the exchanged
plot had already been transferred by the State Government to
Thakur Hari Singh of Achrol under the orders of the Home
Minister, Government of India dated January 8,1945 and that
plot no. C/91 which belonged to the appellant was then in
possession of the Raj Pramukh Maharaja of Jaipur. The
appellant accordingly impleaded Thakur Harisingh of Achrol
as a party to the suit and sought permission from the
Central Government under s. 86 of the Code of Civil
Procedure, 1908 to join Maharaja Mansinghji of Jaipur as a
party to the suit. The objection raised by Thakur Harisingh
of Achrol as to the pecuniary jurisdiction of the Court was
sustained and the Civil Judge, Jaipur City returned the
plaint for presentation to the proper Court.
It transpired during the pendency of the aforesaid suit
that the Joint Secretary, Ministry of Home Affairs,
Government of India had addressed a letter dated January 3,
1956 to the then Chief Minister of Rajasthan conveying that
it was felt that the appellant had a case and should be
given the exchanged plot and if that was not feasible he
should be restored back in possession of plot no. C/91. In
response to the same, the Chief Minister addressed a letter
dated February 3, 1956 to the Joint Secretary, Ministry of
Home Affairs conveying the anxiety of the State Government
to settle the claim of the appellant and intimated that the
appellant had agreed to the appointment of the Town Planning
Officer, Jaipur as the assess or who had been asked to
assess the
645
value of the land and submit his report, with a request that
the Government of India should defer its decision in
fairness to the State Government for a couple of months as
it was felt that it might be possible to settle the claim
without any unreasonable delay. The Town Planning Officer by
his report (Exh. 5) dated February 21, 1956 put the
valuation of the disputed land in 1951 admeasuring 5,000
square yards at Rs. 7 per square yard at 35,000 and to this
he added Rs. 826.50p as the cost of construction of a
boundary wall i.e. Rs. 35,826 50p. in all. [651 G-H, 652 A]
The State Government declined to pay the compensation.
The appellant instituted the present suit for recovery of
Rs. 47,741.50p. as damages i.e. Rs. 35,826.50p. to wards the
value of disputed land and Rs. 11,915 as compensation.
The Civil Judge held that on the admission of the
plaintiff as P W. 6 and his witnesses Secretary, Urban
Improvement Board. P.W. 3 and the Deputy Minister it was
clear that the Town Planning Officer was appointed merely to
assess the value of the disputed land and that it was never
agreed that whatever appraisement or valuation that he may
make would be binding on both the parties, nor did the
Deputy Minister make any commitment that such assessment
would be binding on the State Government and that therefore
the appraisement or valuation could not be treated as an
'admission of liability' under section 20 of the Evidence
Act, 1872 on the part of the State Government. It was
further held that the correct value on the basis of the
notification issued by the Urban Improvement Board clearly
showed that the part rate of the Municipal Committee was not
applicable to the disputed land which was situated outside
the walled city. The suit was decreed in part for Rs. 17,000
with damages by way of interest at 6%.
On appeal, the High Court held, that the plaintiff had
to prove that the State Government had agreed to be bound by
the assessment made by the Town Planning Officer, before
s.20 of the Act, 1872 could be attracted and that there was
no evidence that the State Government had ever agreed to be
bound by the said assessment and that reliance cannot be
placed upon the letter dated February 3, 1956 of the Chief
Minister, as the Chief Minister was not examined as a
witness. It upheld the finding of the Trial Court that the
appraisement or valuation made by the Town Planning Officer
was not binding on the State Government, and that the
disputed land was of an inferior type and affirmed the
judgment and decree of the Trial Court.
Allowing the Appeal,
^
HELD: 1. Admissions may operate as estoppel and they do
so where parties had agreed to abide by them. The word
'information' occurring in s. 20 of the Evidence Act, 1872
is not to be understood in the sense that the parties
desired to know something which none of them had knowledge
of. Where there is a dispute as regards a certain question
and the Court in need of information regarding the truth on
that point, any statement which the referee may make is
nevertheless information' within the purview of s. 20. S. 20
is the second exception to the General rule laid down in s.
18. It deals with one class of
646
vicarious admissions, that is, admissions of persons other
than the party. Where a party refers to a third person for
some information or an opinion on a matter in dispute, the
statements made by the third person are receivable as
admissions against the person referring. The reason is that
when a party refers to another person for a statement of his
views, the party approves of his utterance in anticipation
and adopts that as his own. The principle is the same as
that of reference to arbitration. The reference may be by
express words or by conduct, but in any case there must be a
clear admission to refer and such admissions are generally
conclusive. [651 A-B; G-H; 652 A]
2. The High Court was not right in excluding from its
consideration the Chief Minister's letter dated February 3,
1956 on the ground of want of proof. The document by itself
does not substantiate the plaintiff's claim that the parties
had by mutual consent agreed to appoint the Town Planning
Officer to ascertain the value of the disputed plot as an
appraiser or valuer. [653 H; 654A]
3. The High Court was justified in upholding the
judgment of the Subordinate Judge that the report of the
Town Planning Officer making an appraisement or valuation at
Rs. 35,826.50p could not be treated as an admission under
section 20 of the Evidence Act, on the basis of which the
plaintiffs' claim for damages had to be decreed. [654 B-C]
4. This Court as well as the High Court and the
Subordinate Court had ample power to restitute the plaintiff
by granting him compensation for the value of the property
of which he had been deprived in the years 1951. Taking all
factors into consideration it is just and proper to award
the appellant a sum of Rs. 25,000 as compensation towards
the value of the exchanged plot. The plaintiff having been
deprived of the property he was entitled, a reasonable rate
of interest on the amount is necessary. The Court has ample
power under proviso to section I of the Interest Act 1839 to
award interest on equitable grounds. The reasonable rate of
interest would be 6% per annum on the compensation amount of
Rs. 25,000 from August 13, 1951, the date of dispossession
till August 31, 1959, the date of judgment of the
Subordinate Judge and thereafter at 9% per annum thereon
till realization. [654 D; 655 C; 656 BC]
Satinder Singh v. Amrao Singh [1961] 3 S.C.R. 676;
referred to.
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2216 (N) of 1970.
From the Judgment and Order dated 18.3.1970 of the Rajasthan High Court in D.B. Civil Regular First Appeal No. 10 of 1960.
S.K. Jain for the Appellants.
Miss Maya Rao for the Respondents. (Not present) 647 The Judgment of the Court was delivered by SEN, J. The present appeal on certificate raises two questions, namely (1) Whether the parties by mutual consent had agreed to appoint D.N. Gupta, Superintending Engineer and Town Planning Officer, Jaipur to ascertain the value of the disputed land as an appraiser or valuer and therefore the appraisement or valuation thereof by him in his Report (Exh.5) dated February 21, 1956 at Rs. 35,826.50p. should be treated as an admission under s.20 of the Evidence Act, 1872, on the basis of which the plaintiff's claim for damages had to be decreed, and (2) Whether the plaintiff being deprived of property was, on general principles, entitled to payment of interest on the amount payable to him as the value of the property taken by the State Government.
The facts bearing on the questions are briefly stated. In accordance with the terms of the registered deed of exchange executed by the parties on July 16, 1951, the appellant withdrew a suit for specific performance of an alleged contract against the State Government being Civil Suit No. 120/50 pending in the Court of the Civil Judge, Jaipur City whereunder the State Government agreed to give in exchange plot No. O/17 located in Scheme on resumption of his plot bearing No. C/91 in the same scheme and handed over possession to the State Government on the aforesaid plot No. C/91, but the State Government on their part did not give possession of the exchanged plot to him, in consequence whereof the appellant instituted a suit for possession of the exchanged plot and for mesne profits thereof against the State Government being Civil Suit No. 270/51 in the Court of the Civil Judge, Jaipur City. The State Government in their written statement pleaded inter alia that the suit was not maintainable since the plot which was to be given in exchange to the appellant did not belong to them, but did not disclose as to whom the said plot belonged. The appellant therefore served interrogatories on the State Government. In reply to the said interrogatories it was revealed in the affidavit filed by the State Government that the exchanged plot had been transferred to Thakur Harisingh of Achrol under the orders of the Home Minister, Government of India dated January 8, 1945 and that plot No. C/91 which belonged to the appellant was then in possession of the Raj Pramukh Maharaja Mansinghji of Jaipur. The appellant accordingly impleaded Thakur Harising of Achrol as a defendant in the suit and sought 648 permission from the Central Government under s.86 of the Civil Procedure Code, 1908 to join Maharaja Mansingji of Jaipur as a party to the suit. Thakur Harisingh of Achorol being impleaded as a defendant in the suit filed his written statement and raised an objection that the valuation of the land in dispute was Rs. 40,000 and the Court of Civil Judge, Jaipur City had no jurisdiction to entertain the suit. That objection of his was sustained and the learned Civil Judge by his order dated October 15, 1955 returned the plaint for presentation to the proper Court.
It transpires that the Joint Secretary, Ministry of Home Affairs, Government of India addressed a letter dated January 3, 1956 to the late Shri Mohan Lal Sukhadia, the then Chief Minister of Rajasthan conveying that it was felt that the appellant had a case and should be given the exchanged plot and if that was not feasible, he should be restored to his original position and therefore could claim back possession of plot No. C/91. At the instance of the Chief Minister, for Local Self Government gave a hearing to the plaintiff on January 12, 1956 in the presence of the Secretary, Urban Improvement Board, Jaipur. On February 3, 1956, the Chief Minister addressed a letter to the Joint Secretary, Ministry of Home Affairs, conveying the anxiety of the State Government to settle the claim of the appellant and intimated that the appellant had agreed to the appointment of D.N. Gupta, Town Planning Officer as the assessor who had been asked to assess the value of the land and submit his report by February 20, 1956. He therefore requested the Government of India to defer its decision in fairness to the State Government for a couple of months as it was felt that it might be possible to settle the matter without any unreasonable delay.
The aforesaid assessor D.N. Gupta by his report (Exh.
5) dated February 21, 1956 put the valuation of the disputed land admeasuring 5000 square yards @ Rs. 7 per square yard amounting to Rs. 35,000 and to this he added Rs. 826.50p. as the cost of construction of a boundary wall i.e. Rs. 35,826,50p. in all. There ensued a correspondence between the State Government and the appellant as regards the payment of compensation. It was felt by the State Government that the assessor had wrongly taken into consideration parta rates or the Municipal Committee, Jaipur which could not form any legal basis for assessing the value of the disputed land which admittedly was situated outside the walled city of Jaipur, nor could he have taken into consideration the rates for the sale of 649 plots of commercial site at a distance from the disputed land. The State Government accordingly declined to pay Rs. 35,826.50p.
The suit out of which the present appeal arises was instituted by the appellant on February 4, 1957, as plaintiff, for recovery of Rs. 47,741.50p. i.e. Rs. 35,826.50p. as value of the disputed land in 1951 and Rs. 11,915 as interest at 6% per annum by way of damages. The State Government contested the plaintiff's claim and pleaded inter alia that the State Government had never agreed that the assessment or valuation made by D.N. Gupta of the disputed land was to be final and binding on them; that there was an error of principle in the assessment or valuation made by him based as it was on the parta rates of the Municipal Committee, Jaipur which admittedly was not applicable to the disputed land which was situate outside the walled city of Jaipur or the rate for the sale of plots of commercial site situate at a distance there from, and that since there was no sale of land in C Scheme in the vicinity of the exchanged plot, the correct value thereof had to be assessed on the basis of the C Scheme rates and therefore the real market value of the disputed land admeasuring 5000 square yards on the basis of the full rate in Scheme of the Urban Improvement Board at Rs. 3.50p. per square yard must work out to Rs. 17,000 and nothing more. The learned Senior Civil Judge as well as the High Court have however decreed the plaintiff's claim in part for a sum of Rs. 17,500 with interest thereon @ 6% per annum from February 4, 1957, the date of institution of the suit, till realization on the ground that the State Government was not bound by the assessment made by D.N. Gupta based on parta rates of the Municipal Committee, Jaipur which were not applicable to lands situate outside the walled city of Jaipur and could not form any legal basis for valuation of the disputed land and therefore the State Government was not bound to pay Rs. 35,826.50p. as determined by him. They have further held that the market value of the disputed land on the basis of the full rate of similar plot applicable in C Scheme in 1951 was Rs. 3.50p. per square yard and therefore the plaintiff was entitled to recovery of Rs. 17,500 as the value thereof. The learned Subordinate Judge held that on the admission of the plaintiff himself as PW 6, and his two witnesses Parmanand, Secretary Urban Improvement Board, PW 3 and Shah Alamuddin, Deputy Minister, PW 5 it was clear that D.N. Gupta had been appointed merely to assess the value of the disputed land and that it was never agreed that whatever appraisement or valuation he may make would be binding on both the parties, nor did the 650 Deputy Minister make any commitment on behalf of the State Government that whatever assessment D.N. Gupta would make would be binding on the State Government and that therefore the appraisement or valuation made by D.N. Gupta in his report (Exh.5) dated February 21, 1956 could not be treated as an 'admission of liability' under s.20 of the Evidence Act on the part of the State Government. He further held that the correct value on the basis of the notification issued by the Urban Improvement Board clearly showed that the parta rate of the Municipal Committee, Jaipur was not applicable to the disputed land which was situate outside the old walled city of Jaipur and that the correct value thereof could be assessed on the basis of C Scheme rates and therefore the value of the disputed land Rs. 17,500. The learned Judge however held that the plaintiff was entitled to receive damages by way of interest @ 6% per annum. On appeal the High Court held that the plaintiff had to prove that the State Government had agreed to be bound by the assessment made by D.N. Gupta before s.20 of the Evidence Act could be attracted and that there was no evidence that the State Government had ever agreed to be bound by the said assessment. As regards, the letter addressed by the Chief Minister to the Joint Secretary, Ministry of Home Affairs, Government of India dated February 3, 1956, the High Court observed that the Chief Minister was not examined as a witness and when admittedly he was not present when the talk between the Deputy Minister for Local Self Government and the plaintiff took place, the latter would not necessarily lead to the inference that the State Government agreed to abide by the assessment made by D.N. Gupta. It accordingly affirmed the finding of the learned Subordinate Judge that the appraisement or valuation made by D.N. Gupta was not binding on the State Government and further that the disputed land was much inferior than land included in C Scheme and therefore the amount of Rs. 17,500 awarded by the learned Subordinate Judge was quite adequate. Following the decision of this Court in Satinder Singh v. Amrao Singh it held that the plaintiff was entitled to interest thereon at 6% per annum.
The main question raised is whether the report of the assessor (Exh. 5) was information' within the meaning of s.20 of the Evidence 651 Act and therefore considered to be an admission of the parties as to appraisement or valuation of the disputed land at Rs. 35,826.50p. and such an admission must operate as estoppel. Admissions may operate as estoppel and they do so where parties had agreed to abide by them. The word 'information' occurring in s.20 is not to be understood in the sense that the parties desired to know something which none of them had any knowledge of. Where there is a dispute as regards a certain question and the Court is in need of information regarding the truth on that point, any statement which the referee may make is nevertheless information within the purview of s.20. The contention on behalf of the State Government on the word 'information' occurring in this section is that the parties did not stand in need of obtaining any information from D.N. Gupta and that at any rate the State Government never agreed to abide by the valuation made by him and therefore they were not bound by the same inasmuch as the valuation made by him was not conclusive as to the value of the subject-matter as between the parties.
S.20 of the Evidence Act reads as follows:
"20. Admissions by persons expressly referred to by party to suit-Statements made by persons to whom a party to the suit has expressly referred for information in reference to a matter in dispute are admissions."
Illustration The question is whether a horse sold by A to B is sound. A says to B-"Go and ask C, C knows all about it." C'S statement is an admission.
S.20 is the second exception to the general rule laid down in s.18. It deals with one class of vicarious admission i.e. admissions of persons other than the party. Where a party refers to a third person for some information or an opinion on a matter in dispute, the statements made by the third person are receivable as admissions against the person referring. The reason is that when a party refers to another person for a statement of his views, the party approves of his utterance in anticipation and adopts that as his own.
The principle is the same as that of reference to arbitration. A position analogous to that of agency is created by the reference.
652The reference may be by express words or by conduct, but in any case there must be a clear intention to refer, and such admissions are generally conclusive. As Ellenbrough, L.C.J. said in Williams v. Innes from which the illustration is taken:
"If a man refers another upon any particular business to a third person he is bound by what this third person says or does concerning it as much as if that had been said or done by himself."
There is nothing on record to show that the State Government ever agreed to abide by the valuation made by the assessor D.N. Gupta; on the contrary, the Secretary (Local Self Government) by his letter dated June 30, 1951 had conveyed to the appellant sanction for allotment of the exchanged plot admeasuring 5000 square yards on condition that the terms of allotment would be the same as in the case of the previous allotment, meaning thereby that the plaintiff would have to pay as per the rates fixed by the Government for the sale of plots in C Scheme.
The testimony of Shah Alimuddin, Deputy Minister for Local Self Government clearly shows that he gave a hearing to the appellant and had deputed D.N. Gupta, Town Planning Officer to assess the valuation of the disputed land but he did not make any commitment on behalf of the, State Government that whatever assessment was made by him would be binding on the Government. This hearing was given by the Minister on January 12, 1956 at the instance of the Chief Minister at which Parmanand, the then Secretary, Urban Improvement Board was also present. As a result of this, D.N. Gupta was appointed to determine the market value of the disputed land by letter of the Secretary to the State Government, Local Self Government Department dated February 4, 1956 which was in these terms:
From The Secretary to the Government of Rajasthan.653
To Shri D.N. Gupta through the Chief Engineer. B&R., P.W.D., Rajasthan, Jaipur.
No. F.1 (K) (56) LSG/59 dated Jaipur the February 4, 1956. Sub: Allotment of land to Shri Heera Chand Kothari. With reference to the above, I am directed to forward herewith a full history of the case and to say that the case was heard by the Deputy Minister for Local-Self-Government on 12.1.56. Shri Heera Chand Kothari and the Secretary, Urban Improvement Board, Jaipur, were present. Shri Kothari has agreed to accept the compensation of 5000 sq. yds. of land and to appoint you as assessor. I am, therefore, to request you kindly to assess the value of land (5000 sq. yds.) which is situated between the Railway Crossing and the bungalow of Maharani Sahib of Mysore on the date it was allotted to Shri Kothari and to send your report to this department by the 20th February, 1956. Sd/-
Secretary to the Government As already stated, the assessor, D.N. Gupta submitted his report (Exh.5) dated February 21, 1956 wherein he valued the land @ Rs.7 per square yard, that is, at Rs. 35,000 and added the cost of construction of the boundary wall at Rs. 826.50p. totalling Rs. 35,826.50p. The State Government not being satisfied at the exorbitant value so determined were not prepared to accept the valuation made by the assessor D.N. Gupta. Accordingly, the Secretary (Local Self Government) by his letter dated March 14, 1956 asked him to explain the basis of valuation adopted by him. In reply thereto, D.N. Gupta by his letter dated March 19, 1956 disclosed that he had assessed the value of the disputed land, at the least possible price, taking the value of lands spread over between the years 1948 and 1955 and that he had adopted the parta rates of the Municipal Committee, Jaipur for determining the value of the disputed land.
While we feel that the High Court was not right in excluding from its consideration the Chief Minister's letter dated February 654 3, 1956 on the ground of want of proof, the document by itself does not substantiate the plaintiff's claim that the parties had by mutual consent agreed to appoint D.N. Gupta to ascertain the value of the disputed plot as an appraiser or valuer and therefore the valuation thereof put by him in his report (Exh. 5) dated February 21, 1956 at Rs. 35,826.50p. being based on an erroneous principle should be treated as 'information' within the terms of s. 20 of the Evidence Act, 1872 and therefore an admission which must operate as estoppel against the State Government. The High Court was therefore justified in upholding the judgment of the learned Subordinate Judge that the report of D.N. Gupta dated February 21, 1956 making an appraisement or valuation at Rs. 35,826.50p. could not be treated as an admission under s. 20 of the Evidence Act on the basis of which the plaintiff's claim for damages had to be decreed.
Nevertheless, this Court as well as the High Court and the learned Subordinate Judge had ample power to restitute the plaintiff by granting him compensation for the value of property of which he had been deprived in the year 1951. As already stated, the value of the exchanged plot had to be determined in accordance with the terms of the letter dated June 30, 1951 addressed by the Secretary, (Local Self Government) to the appellant by which he conveyed the sanction of the State Government for allotment of the exchanged plot admeasuring 5,000 square yards on an application made by him to the Urban Improvement Board. The grant was subject to the condition that 'the terms of the allotment would be the same as in the case of the previous allotment' i.e. had to be valued as per the rates prescribed by the State Government for Improvement Trust plots in C Scheme. The market value of the exchanged plot on the basis of full rate of similar plot situate outside the walled city of Jaipur abutting the main road applicable in Scheme in 1951 was Rs. 3.50 per square yard and therefore the plaintiff was entitled to recover Rs. 17,500 upon that basis. Admittedly, the State Government had not fixed any parta rates for land situate outside the walled city of Jaipur. The testimony of Shiv Ram Jain, Secretary, Urban Improvement Board, Jaipur (DW 2) shows that the Maharani of Mysore was allotted a plot in the near vicinity of plot No. C/91 in C Scheme not as a concessional but on normal rate at Rs. 10,000 per acre. If that were to be the basis the appellant would be entitled to compensation at a much lesser rate.
The matter however does not end there. The transaction of 655 exchange which fell through in 1951 was entered into before the formation of the State of Rajasthan. At that time, Jaipur was not the capital of the State, and there was no trend in rise of prices of land. Once it was known that Jaipur would be the capital, the value of land particularly in an exclusive area near and around the palatial bungalow of the Maharani of Mysore (which later became Raj Bhawan) which was extremely scarce, had naturally shot up. The land in dispute was situate near the railway station and which, according to the High Court, was lesser in value than land in C Scheme. Taking all these factors into consideration we think it just and proper to award the appellant a sum of Rs. 25,000 as compensation towards the value of the exchanged plot and to award him a reasonable rate of interest to offset the spiral rise of value of land in the city of Jaipur. We are clearly of the view that the plaintiff having been deprived of the property was entitled to a reasonable rate of interest on the amount found to be due to him. In somewhat similar circumstances the Court speaking through Gajendragadkar, J. in Satinder Singh's case, relied upon the speech of Viscount Cave, LC in Swift & Co. v. Board of Trade and observed:
"Stated broadly the act of taking possession of immovable property generally implies an agreement to pay interest on the value of the property and it is on this principle that a claim for interest is made against the State. This question has been considered on several occasions and the general principle on which the contention is raised by the claimants has been upheld. In Swift & Co. v. Board of Trade (supra) it has been held by the House of Lords that 'on a contract for the sale and purchase of land it is the practice of the Court of Chancery to require the purchaser to pay interest on his purchase money from the date when he took, or might safely have taken, possession of the land.' This principle has been recognized ever since the decision in Birch v. Joy (1852) 3 HLC 565. In his speech, Viscount Cave, LC added that "this practice rests upon the view that the act of taking possession is an implied agreement to pay interest", and he points out that the said rule has been extended to cases of compulsory purchase under the Lands Clauses Consolidation Act, 1845. In this connec-656
tion is drawn between acquisition or sales of land and requisition of goods by the State. In regard to cases falling under the latter category this rule would not apply."
We are in respectful agreement with these observations. It was further held in Amrao Singh's case that the Court had ample power under proviso to s. 1 of the Interest Act, 1839 to award interest on equitable grounds. In all the facts and circumstances of the case, the reasonable rate of interest would be 6% per annum on the compensation amount of Rs. 25,000 from August 13, 1951, the date of dispossession till August 31, 1959, the date of judgment of the learned Subordinate Judge, and thereafter at 9% per annum thereon till realization. It more or less works out to Rs. 95,000 which is a multiple of 20 times the actual investment of the appellant in purchasing plot No. C/91 in C Scheme in the city of Jaipur.
The result therefore is that the appeal partly succeeds and is allowed with costs. The judgment and decree of the High Court and those of the learned Subordinate Judge are modified by decreeing the plaintiff's claim for compensation at Rs. 25,000 with interest as indicated above. The appellant will be entitled to recover and be liable to pay costs in proportion to success and failure. N.V.K. Appeal allowed.
657