S.K.Mukherjea, J. - (1.) This Rule involves a question of a construction of Section 19 (1) (a) of the Defence of India Act, 1939. It also raises incidentally the question of validity and efficacy of an arbitration agreement entered into by and between the parties.
(2.) On April 25, 1942 certain lands in village Basput in the district of 24 Parganas were requisitioned by the Government of India under Rule 75-A of the Defence of India Rules, 1939. The lands belonged to the opposite party No. 1. On the 29th March, 1947 they were derequisitioned.
(3.) It appears that on the 9th June, 1947 the opposite party filed a claim petition for terminal compensation, that is to say, compensation payable on the expiry of the period of requisition. Compensation was duly assessed by the Collector. The opposite party was not agreeable to accept the proposed compensation and by a petition dated July 30, 1951 expressed its desire to refer the claim to an Arbitrator to be appointed under Section 19 (1) (b) of the Defence of India Act, 1939. On the same date an Agreement was entered into in writing by and between the petitioner and the opposite party whereby it was agreed that eighty per cent of the terminal compensation assessed by the Collector would be paid to the opposite party and the opposite party would accept the same pending an agreement between the parties as to the amount of compensation payable on final determination of such amount under the law. The clauses of the Agreement material for the purpose of this application may be set out in extenso. "Clause (1). The Government shall pay and the owner shall accept and receive a payment of 80% of Collector's award for the said property pending agreement as to or determination of the amount payable as compensation to the owner." "Clause (4). Should any dispute or difference arise, out of or concerning the subject-matter of these presents or any covenant clause or things herein contained or arising out of the acquisition including the amount payable for compensation in respect of such acquisition, the same shall be referred to an arbitrator to be appointed by the Government and the decision of such arbitrator shall be conclusive and binding on the parties hereto." Thereafter, the opposite party accepted payment of eighty per cent of the sum assessed as terminal compensation by the Collector and on the 15th December, 1951 made an application to the Land Acquisition Collector, 24-Parganas, Alipore, for appointment of an Arbitrator for determination of compensation.;