JUDGEMENT
M.U.SHAH -
(1.)These are two companion appeals which involve a common question of law of some importance and are directed against a common judgment delivered by the learned Judge 5 Court of the City Civil Court Ahmedabad on January 16 1962 in Compensation Cases Nos. 143 and 144 of 1961 which were references made to the Court under sec. 18 of the Land Acquisition Act (Act I of 1894) which will hereinafter be referred to as the Act. References before the learned trial Judge were made against the orders of compensation passed by the Special Land Acquisition Officer Ahmedabad awarding inadequate compensation to the present appellants who were the claimants before him for their interest in compensation as tenants of the premises on the lands which were compulsorily acquired. The question that seems to have been principally agitated before the learned trial Judge in the compensation cases related to the claimants right to compensation in relation to the premises which were earlier leased out to them by the owners and in so far as they had incurred liability to an increased rental in taking equally convenient new premises for the purpose of carrying on their business as a result of the Collectors taking possession of the lands including the premises in consequence of the acquisition. The learned Judge has awarded compensation for the increase in rent on the basis of four months increased rental. In the memo of the appeals before us the appellants have claimed the increased rental for a period of five years. They have also claimed enhanced compensation on account of items Nos. 2 to 6 of their claims relating to dismantling of the plant machinery and equipment and on other counts. At the hearing before us however Mr. C. T. Daru the learned advocate appearing on behalf of the appellants has confined his arguments to the claimants right to increased rental for a period of three years. He has not urged any other ground and has given up the other claims. In the appeals before us therefore we will be concerned only with the case of the appellants for the compensation for change of place of business as a result of taking over of the premises by the Collector. The appeals which raise a common question will be conveniently disposed of by a common judgment.
(2.)The relevant facts shortly stated are that the premises involved in the two appeals were situated in the compound of Madhubhai Ranchhodbhai Colony known as Madhubhai Mills situated near the Ahmedabad Railway Station and owned by a trust in the name of Sir Chunbhai Madhavlal Ranchhodlal Baronetcy Trust Corporation. Messrs. Shashikant Gopaldas and Co. of Ahmedabad a registered partnership firm were the tenants in the premises situated in a part of the said mill compound ever since March 1948. They are the appellants in First Appeal No. 241 of 1962. Therein they were running a factory manufacturing cotton tapes with 64 tape looms worked with electricity. They were in occupation of the area admeasuring 990 square yards of land and paid a monthly rental of Rs. 246/per months inclusive of taxes. In the same compound were situated another premises covering an area of 1025 square yards Which were occupied by one Mulchand Pannalal Thakore appellant in First Appeal No. 242 of 1962 on a monthly rental of Rs. 211/and municipal taxes at Rs. 619-18 per annum. Mulchand Pannalal Thakore is the proprietor of a Printing Works known as Nathura Dyeing and Printing Works. Thus the respective appellants in First Appeals Nos. 241 of 1962 and 242 of 1962 occupied as tenants premises covering respectively 990 square yards and 1025 square yards of land respectively. The whole of the Madhubhai Mill compound including the premises wherein the present appellants were carrying on their business at all material times was notified for acquisition for the purpose of remodeling the railway yard at Ahmedabad. The relevant notifications under sec. 4 of the Act covering the entire area comprised in the Madhubhai Mill compound were duly published on May 28 1957 and March 22 1958 The notification under sec. 6 of the Act in respect of the entire area of land comprised in the Madhubhai Mill compound was thereafter issued on September 12 1959 The possession of the lands including the concerned premises was taken by the Collector some time in July 1961. It appears that by the time of the taking over of the land Town Planning Scheme had been introduced in the city of Ahmedabad and industrial zones were created. The Ahmedabad Municipal Corporation had constructed in these zones tenements known as Sheds which were being allotted for the use by the industries. The appellants appear to have at first tried to get some alternative convenient accommodation in the vicinity of the Madhubhai Mills compound but they could not get any such accommodation. The Municipal Corporation then appears to have accommodated the two appellants by allotting to them suitable blocks in their industrial zone known as Municipal Industrial Estate. Messrs. Shashikant Gopaldas & Co. the appellants in First Appeal No. 241 of 1962 have rented five blocks in the municipal industrial estate covering a total area of 840 square yards which is now in their possession on a monthly rental of Rs. 2454-87 p. inclusive of taxes Mulchand Panalal Thakore appellant in First Appeal No. 242 of 1962 has rented three blocks in the municipal industrial estate at 2 monthly rental of Rs. 1 215 and Rs. 425/as municipal taxes in aggregate Rs. 1640/per month. Thus the increase in the rent in the case of Messrs. Shashikant Gopaldas & Co. is Rs. 2208-25 per month and that in the case of Mulchand Panalal Thakore is Rs. 1378-42 paper month. At the date of the Collectors taking possession of the notified land they were occupying their respective premises in the Madhubhai Mills compound. first they were tenants for a fixed period of time. The period having expired they continued to occupy the premises and the rent was being accepted by trustee from them. At the date of the publication of the notification sec. 4 of the Act as also on the date of taking over possession of the lands the appellants were occupying their respective premises as tenants holding over. It is not the case of the appellants that the landlord meaning the trustee had entered into a fresh contract of tenancy with them and their contractual tenancy had not expired earlier by efflux of time. Nonetheless the appellants were entitled to the protection under the Bombay Rents Hotel and Lodging House Rates Control Act 1947 (Act LVII of 1947) which will hereinafter be referred to as the Rent Act. These relevant facts clearly appear from the record and are not in dispute before us. Having regard to these facts we will now proceed to consider the question as to whether the appellants are entitled to claim compensation for the change of place of their business as a result of the compulsory acquisition of the land on a part whereof at the date of the Collectors taking over the appellants were sitting tenants of the premises.
(3.)The matters to be considered by the Court in a reference in determining the compensation to be awarded to the persons interested are laid down in sec 23 of the Act. Sub-sec. (1) of sec. 23 provides that in the amount of compensation to be awarded for land acquired under the Act the Court shall take into consideration the factors enumerated in clauses first to sixthly. The only clauses with which we are concerned here are clauses fourthly and fifthly. We are here not concerned with other clauses as also with sub-sec. (2) which provides for an award of 15% solatium on the market value of the land. Clause fourthly deals with the case of the damage for loss of earnings. It provides for a case where damage is sustained by the person interested at the time of the Collectors taking possession of the land by reason of the acquisition injuriously affecting his other property movable or immovable in any other manner or his earnings. In such a case the damage if any sustained must be taken into consideration while determining the amount of compensation to be awarded for property acquired under the Act. Clause fifthly deals with the case of damages for removal. It provides that if in consequence of the acquisition of the land by the Collector the person interested is compelled to change his residence or place of business in such a case the reasonable expenses (if any) incidental to such change must be taken into consideration in determining the compensation. Clause fifthly is connected with the principle of compensation for loss of damages which is provided for in the clause fourthly for the one is frequently dependent on the other. Damages for removal include increased rental and other expenses. Now the appellants do not claim compensation for injurious affection to their other properties at the time of the Collectors taking possession of the lands. The first part of clause fourthly will have therefore no play in the matter. The appellants case is that as a result of the Collectors taking possession of the land by reason of the acquisition their earnings are injuriously affected. The case is that as a result of the taking of the possession of the acquired premises the appellants had to change their place of business and to acquire an equally convenient site in equally convenient premises which they have obtained at a distance of about a mile from Madhubhai Mills compound in the Municipal Industrial Estate at an increased rental. As a direct consequence of the acquisition the appellants who were pursuing their lawful trade in the acquired premises have been compelled to give up the business premises and to remove their going concerns to new premises at a much higher rental. This will have a necessary direct impact on their earnings or profits in business. Their reasonable expenses incidental to such change will increase and ordinarily this would injuriously affect their earnings when the claimants are forced to remove their going concerns from the acquired premises and change to new business premises the excess rent if any which they have to pay of equally convenient site and premises is the direct and natural consequence of the removal. The question that then arises is:- - Whether such increase can form part of the damages to be taken into consideration for determining the amount of compensation awardable under sec. 23 of the Act. We may here with benefit refer to a passage from Cripps on Compulsory Acquisition of Land 11 Edition at page 923 on the point which reads as under :- -
Where the claimant incurs a liability to an increased rental or other reasonable expenses in taking equally convenient new premises for the purpose of carrying on his business such increased rental and other expenses have been taken into account in the assessment of compensation although the business was not being carried on at a profit. Bowen L.J. said in the case of R. V. Borrow:- - The company forced the claimants to remove; and assuming that the extra expense was the natural and reasonable consequence of the removal why should it not be part of the damages given. The observations aforesaid clearly indicate that if the claimants are forced to remove themselves from the acquired premises as a result of the compulsory taking over of their property and the claimants have to incur the liability to an increased reasonable rental for the purpose of carrying on their business that would be the direct consequence of the removal and in such a case reasonable rental increase should from part of the damages to be given. Such would be the case even if the business was not being carried on at a profit.
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