1. Under five notifications of diverse dates, the Provinceof Bengal requisitioned a large area of land in what may be termed the LakeArea, one of the beauty spots in the town of Calcutta, under R. 75A of therules framed under the Defence of India Act, (35 [XXXV] of 1939). The saidlands which are depicted in different colours in map No. 19 are vested in therespondent, the Board of Trustees for the Improvement of Calcutta (hereaftercalled the Board). They fall roughly into two blocks-one to the north of abroad road constructed by the Board called the Southern Avenue and the other tothe south thereof. No claim has been made by the Board for the roads runningwithin the area requisitioned. The lands of the northern block are surpluslands of Scheme No. 47 laid out by the Board as building sites and intended forsale, with the exception of an area of 43 cottas called "an island"or "round-about" at the junction of four cross roads which wasintended by the Board to be kept open for ornamentation and for regulatingvehicular traffic. Scheme No. 47 was a general improvement scheme as defined inS. 36, Calcutta Improvement Act, (Bengal Act 5 [v] of 1911). This scheme hadnot been fully executed at the date of the requisitions.

2. The southern block of land had been acquired by theProvincial Government for the Board not for the purpose of any improvementscheme, such as a "General Improvement Scheme," or a "StreetScheme," or a "Rehousing Scheme" but for a purpose which wasincidental to and necessary for enabling the Board to carry out improvementschemes in other localities. One of declarations for acquiring lands in thesouthern block was made on 14th December 1915 under S. 6, Land Acquisition Act(1 [I] of 1894). It is Ex. B (Part 2, p. 110). Other declarations were to thesame effect. The material portion of Ex. B runs thus:

Whereas it appears to the Governor in Council that land isrequired to be taken by Government at the expense of the Calcutta ImprovementTrust for a public purpose, viz., for the purpose of obtaining a sufficientsupply of earth for the operations of the trust and for the construction of apark and lake in villages Mudiali, etc., ..... it is declared that for theabove purpose a piece of land measuring more or less 412 bighas of standardmeasurement bounded on the..... is required within the aforesaid villages ofMudiali, etc.

3. The purpose of excavating a lake was for getting earthwhich would be required to raise the level of lands in improvement schemes. Atthe time of the requisitions under R. 75A a portion of the southern block hadbeen converted into a lake, the earth taken out having been used for raisingthe level of lands in improvement schemes, a portion called the ExcavationArea" has been reserved for a lake to be dug in future for a like purposein view, but was being then used as a park and the rest had been made a park.The park is to the south of the lake and north of the railway embankment of theBudge Budge line of the Bengal and Assam Railway. In view of the provisions ofS. 19, Defence of India Act, the Board claimed substantial compensation forevery description of land requisitioned. The claim was a claim of monthly rentcalculated on the basis of 5 pec cent, return on the "market value" ofthe land plus occupiers share of municipal rates. The Collector of 24 -Parganas who represented the Government in the negotiations with the Boardrecommended acceptance of the Boards terms but (the Province of Bengal) didnot accept his recommendations. The position that the Province of Bengal tookup in all the cases was that only a symbolic compensation in the shape of rentat the rate of Re. 1 per cotta per month was payable. The reason in support ofsymbolic compensation is stated in the several references made by the Collectorto the arbitrator appointed under S. 19, Defence of India Act, in the followingwords:

Prior to the requisition the property was lying vacant forwhich the owners derived no income whatsoever. They have, therefore, suffered noloss for which they can claim compensations. For this reason a symboliccompensation of Re. 1 per Kata per mensem has been assessed.

4. There being no agreement on the amount of compensationfive references were made under S. 19 (1) (b), Defence of India Act, to Mr. De,who was the then Additional District Judge of 24 Parganas. They were numberedas Land Acquisition Cases Nos. 30 to 34, and 72 and 79 of 1944, whichcorrespond to appeals from original Decrees Nos. 71 to 75, 162 and 163 of 1945respectively. Cases Nos. 30, 31, 33 and 72 relate to the northern block ofland, of which case No. 33 is in respect of the "round about" andsome surplus lands to the north thereof intended to be sold as building sites.Cases Nos. 32, 34 and 79 relate to the southern block, of which case No. 32relates to the lake, No. 34 to the Park to the south of the lake and No. 79 tothe "Excavation Area." Some of the lands of the northern block hadbeen fully developed as building sites and were ready for sale at the dates ofthe requisitions and the others had also been plotted as building sites towhich access roads had been made, but the roads had not been metalled orsewered and no water and gas mains had been laid out, and those works could notbe completed for lack of materials on account of war conditions. The arbitratorappointed under S. 19 (1) (b), Defence of India Act, held that the claim to payonly symbolic compensation was not admissible. He assessed compensation in theshape of monthly rent calculated at five per cent on the market or sale valueof the lands, which he valued at different rates ranging from Rs. 2800 to Rs.3000 per cotta. For the lake he took Rs. 1000 per cotta. The Board claimed nocompensation for the roads which had been requisitioned and so no compensationwas given for them. There is no controversy before us relating to the figuresat which market value of the requisitioned lands has been assessed by thearbitrator. The contention in support of the appeals are (i) that only symboliccompensation is permissible for everything that has been requisitioned, (ii)alternatively, that no compensation ought to be given for anything except forthe fully developed building sites in the northern block and that with regardto them the measure of compensation should be the interest of 3.6 per annum onthe market value, and (iii) that in any event the amount of compensationawarded, by the arbitrator is excessive.

5. The first two questions depend upon the construction ofS. 19, sub-s. (1), cl. (e), Defence of India Act, and as that has beenmodelled, as it must be, on S. 299, Government of India Act of 1935 itsconstruction must be made in the light of the provisions of the last-mentionedsection of the Government of India Act. The relevant portion of S. 299 requiresthat land (which includes immovable property of every kind and any right in orover such property-sub-s. (5) (can only be acquired under the authority of lawand only under a law which provides for the payment of compensation andspecifies the principles on which and the manner in which it is to bedetermined. Rule 2 (11), Defence of India Rules, defines the term"requisition" and R. 75A deals with requisition of movable andimmovable property. According to its definition requisition means taking overof possession by the requisitioning authority-the Central or the ProvincialGovernment as the case may be-and in relation to the owner of immovableproperty the effect is that the owner is deprived of his possession, though notof his ownership, unless under sub-r. (2) of R. 75A the requisitioningauthority chooses to acquire the property out and out. On requisition theowners loses his possession only which is transferred to the requisitioningauthority. Requisition in relation to land without more is thus the"acquisition" of an interest in land for a time or for an uncertainperiod as the case may be.

6. Section 19, Defence of India Act, does not in terms speakof requisition. It however contemplates the case of "temporaryacquisitions," see cl. (e), sub-cl. (ii). In view of that provision in theDefence of India Act, and of the provisions of S. 299, sub.s. (2) read with sub-s.(5), Government of India Act, we hold that S. 19, Defence of India Act, governs"requisitions" also and by reason of cl. (e) thereof compensation hasto be awarded to the owner of the land requisitioned and that on the basis ofS. 23 (1), Land Acquisition Act, of 1894 with such adaptations as the nature ofthe case may require. As sub-s. (2) of S. 23, Land Acquisition Act, has notbeen made applicable the owner would not be entitled to the statutorycompensation of fifteen per cent. Leaving aside clauses secondly to sixthly ofS. 23 (1) which are not material to the case before us, the position is thatwhere land has been acquired out and out under the Defence of India Rules theowner must have the "market value" thereof, which means the fairprice which a willing seller not obliged to sell would have got from a willingpurchaser at the date of the notification for acquisition; and that where onlyan interest in land has been acquired under these rules, as for instance onlypossession, the owner must have the "market value" of that interest,if by its nature it has a market value. If by its nature it has a value thereis no escape, as there is the statutory liability under S. 19 (1) (e), Defenceof India Act, to pay compensation on the basis of the "market value"of the interest acquired.

7. The ground given by the Province of Bengal as stated inthe Collectors references in support of its contention for symboliccompensation is, in our judgment, unsubstantial, for, if pushed logically, itwould mean that no compensation would have to be paid to the owner in the caseof an out and out acquisition where the land was at the time of the acquisitionlying vacant. The true test seems to us to be not what the owner was doing withit at that time but what he could have done at that time if he so wished or inother words what right he had then. The general principle as was conceded in 33ALL. 733 Ujagar Lal v. Secretary of State (11) 33 All. 733 : 11 I. C. 815 andlaid down in many other cases is that the value of the land should becalculated with reference to the most lucrative and advantageous way in whichthe land might be used. One aspect of this principle is the concept of"potential value" as explained in (1909) 1 K. B. 16 In re Lucas andChesterfield Gas and Water Board (1909) 1 K. B. 16 : 77 L. J. K. B. 1009 : 99L. T. 767, 1914 A. C. 569 Cedars Rapids Manufacturing & Power Co. v.Lacoste (14) 1 A. I. R. 1914 P. C. 199 : 1914 A. C. 569 : 83 L. J. P. C. 162 :110 L. T. 873 and 66 I. A. 104 Narayana Gajapati Raju v. Revenue DivisionalOfficer, Vizigapatam (39) 26 A. I. R. 1939 P. C. 98 : I. L. R. (1939) Mad. 532: I.L.R. (1939) Kar. P.C. 167 : 66 I. A. 104 : 181 I. C. 230 (P. C.). For theaforesaid reasons we cannot accept the contention of the Province of Bengalthat for all that has requisitioned only symbolic compensation is payable.

8. The foundation on which the alternative contention of thelearned Advocate-General has been rested is the evidence of Mr. Parks, the thenChief Valuer of the Board, and the notifications of the Provincial Governmentunder which the Excavation Area, the park and the land on which the lake wassubsequently dug were acquired for the Board. We have in the earlier part ofour judgment set out at some length the substance of those notifications.

9. Mr. Parks evidence bearing upon the point is as follows.That the surplus lands of the northern block have been divided into buildingsites, except the round-about, that some of them had been fully developed andwere ready for sale at the dates of the requisitions and the others were not aswater mains, gas mains and drains had not been completed in the adjoiningstreets and those works could not be completed because materials could not behad on account of the War, that the Board generally disposes of the surpluslands of an improvement scheme by selling them as building sites, not all atonce but in blocks in order to control the market, that those building siteswould have been offered to sale according to usual practice if there had notbeen the requisitions, that the round-about was never meant for sale, it was tobe kept open and to serve the purpose of regulating vehicular traffic and forornamentation, that the lake brought no income, and that the park and the landsof the Excavation Area could have been readily let out at the material point oftime, if the Board was so minded.

10. On these facts, the learned Advocate-General has urgedthat so far as the lands of the southern block and of the round-about areconcerned no question of sale or lease can arise, as the Board has in law nopower to offer them for sale or for lease or for letting them for hire even ifit was so minded, and that the only disadvantage from a practical point of viewat which the Board had been placed by reason of the requisitions is that it wasunable to sell only those building sites in the northern block which were readyfor sale at the dates of the requisitioning notifications; that the only likelyloss to the Board is therefore the loss of interest on the price of those plotsonly. The compensation, therefore, according to him, can be claimed by theBoard in respect of those plots only and of no others, even not of theundeveloped building sites, and as 3.64 per cent, per annum was the rate ofinterest on Government securities at the relevant time the amount ofcompensation should not be more than 3.64 per cent, per annum on the marketvalue of the developed plots to be paid as long as those lands were notreleased. He admits that cls. (b) and (c) of the requisition notifications arenot strictly according to the provisions of R. 75A, for the furnishing ofinformations and the restrictions on the owner in the matter of disposal of theland relate, according to sub-r. (5) of that rule, to a period before therequisition is actually made. Those clauses of the notifications can thereforebe disregarded; cl. (a) which is in accordance with R. 75A required the Boardto place the lands at the disposal of the Land Acquisition Collector from astated date till six months after the termination of the War unlessrelinquished earlier. The requisitions were therefore for an uncertain period.

11. We have already held that compensation has to be paid inevery case where the subject-matter by its nature has a value. Sub-rule (4) ofR. 75A expressly provides that compensation has to be given in the case ofrequisitions also. The measure of compensation is not indicated in thatsub-rule, but that is to be found in S. 19 of the Act. It must be "themarket value" of the interest in the land that is requisitioned. In asense reasonable interest for the period of the requisition on the market valuewould be compensation on the basis of market value, but it is not the marketvalue of the interest. The contention of the Advocate-General, besides,proceeds on the basis of the actual user or of one of the modes of intendeduser but those are not the only criterion. The question must be answered as wehave already held, with reference to what the Boards could in law have donewith the lands.

12. Lands acquired for the Board under the provisions of S.69, Calcutta Improvement Act, vest automatically in the Board by reason of S.17A, Land Acquisition Act, which has been added to the last mentioned Act byreason of the provisions of S. 71 (b) of the former Act, and prima facie theBoard would have right, in view of S. 81, Calcutta Improvement Act, to sell,lease or let them on hire. It has not been contended before us, and cannotreasonably be, that the Board had no power to lease or let on hire the developedor the undeveloped building sites and Mr. Parks evidence is that there was agood demand for lease of all vacant lands in that area. Compensation will haveto be paid therefore for the undeveloped building sites also on the same basisas for the developed building sites.

13. The next question is whether the round-about stands onthe same footing. The land is vested in the Board has its owner, but it beingpart of an "improvement scheme," there are limitations on the Boardspowers. Those limitations are defined in S. 50, Calcutta Improvement Act. Asscheme No. 47, of which it is a part, had not yet been fully carried intoexecution, the Board has power to alter the scheme without the sanction of theLocal Government, if the alterations be not hit by anyone of the three provisosto that section, and it would not be hit if the Board were to determine thatonly the lands of the round-about be plotted into building sites. At the timeof the requisitions, there was no legal restriction on the Board by reason ofwhich it was deprived of the power to put the same to any beneficial use. Evenif there be restrictions in law, for the reasons, which we would state indealing with the park, we hold that the Board is entitled to adequatecompensation for the round-about.

14. We will now consider the position in relation to the"Excavation Area" and the lake. A corporation is the creature ofstatute. It will have only those powers which have been expressly conferred onit by the statute which has created it, and also all such other powers whichmay be necessary for effectively carrying out the purpose for which it wascreated, and also all such powers as may be incidental and necessary to theexercise of the powers expressly conferred on it. A corporation which has beengiven the right to own land would necessarily have the power to alienate it forany interest it may deem fit, unless restrained therefrom either expressly orby implication, provided, however, such alienation be in the ordinary mode ofconducting its business or operations (Brice on Ultra Vires Part 3, chap. 1,sub-s. (6), Art. 25 at p. 128, Ed. 2). In the case before us, the power ofalienation by way of sale, lease etc., has been given expressly by S. 81 of thestatute. There is no express provision in that statute, which has taken awayfrom the Board those powers in respect of any particular class of land that itmay be owning. To determine as to whether the power of alienation has beentaken away by necessary implication in regard to the lands of the"Excavation Area" and of the lake the general scheme of the Act andsome of its detailed provisions will have to be examined in the light of wellestablished principles. One of such principles is what we have already noticednamely that a corporation has all the powers which may be necessary to carryout the purpose for which it was created.

15. The general purpose of the Calcutta Improvement Act,which, has been expressed in the preamble is, for the improvement and expansionof the town of Calcutta, and those are to be effected through the Board.Sections 41 and 42 of the Act enact that an improvement shall provide not onlyfor the acquisition of land in the area comprised in the scheme, and which willbe required for the execution of the scheme and land which will be affected bythe execution of the scheme but also for raising the level of any land in thearea comprised in the scheme. One of the objects of S. 81 is obviously for thepurpose of enabling the Board to dispose of surplus lands, lands which havebeen improved after the execution of the improvement scheme and lands whichwere within the area comprised in the scheme but which were no longer necessaryfor the Boards operation after the scheme had been completely executed. Thepower to raise the level of land in an area comprised in an improvement schemenecessarily carries with it the power to get earth for raising the level. It iscommon knowledge that the immediate suburbs of Calcutta, to which the town wasto be extended, as it was in 1911 consisted mostly of low lying paddy lands andof tanks and dobas (small tanks) and a part of Calcutta itself, namelyBhowanipore which required improvement was full of tanks and dobas. Acquisitionof land in an area outside the area of a particular improvement scheme, for thepurpose of getting earth therefrom by excavation for the purpose of raising thelands of the area of any improvement scheme is therefore a necessary andancillary purpose and after that ancillary purpose has been fulfilled the Boardin our judgment has under the provisions of S. 81 the option of eitherretaining the used up land or of disposing it of by sale, lease or by lettingit on hire. The Board had, therefore, the right to lease the lake.

16. An acquisition of land for getting earth is anincidental purpose. The Board, therefore, has the option of not using it forthat purpose, if it later on and after the acquisition came to the conclusionthat earth may be obtained and/or carried more cheaply to an improvement areafrom other localities. In that event, it can abandon its intention of gettingearth from the plot so acquired and consequently dispose it of in any manner itlikes. Even if the Board has no such option to abandon and so to dispose it of,we hold that there is no restriction on its power to put it to any beneficialuse, and more so till the time when it would require it to be dug up. Duringthat period, it has the right to let it on lease or hire. We accordingly holdthat compensation is payable for the lake and the "Excavation Area,"even if the Board had not the power to sell, lease or let on hire these itemsof property for the reasons which are given for the park would apply to them.

17. We will now take up the case of the park. One of thepurposes of the Calcutta Improvement Act is the providing of open spaces forpurpose of ventilation and recreation. It is the common case of the partiesthat the lands of the park had been acquired for the Board for the expresspurposes of a park. The Board became the owner and so had possession. Itsownership, however, is restricted ownership. In Brice on Ultra Vires, the lawhas been summarised thus :

If corporations acquire lands, easements or otherproprietary rights to be devoted to certain specified purposes, their ownershipthereof will be pro tanto restricted, so that they cannot employ them in ortowards the furtherance of other purposes" (Part 3, Chap. 1, Sub-s. (6),Art. 21, page 121, 2nd edition).

18. Dealing the case brought by the vendor for injunction,whose lands had been acquired for a special purpose by a railway company undercompulsory powers Campbell L. C. J. observed in (1855) 24 L. J. Q. B. 225Bostock v. North Staffordshire Railway Co. (1855) 24 L. J. Q. B. 225 that

nothing so unjust could have been contemplated as that whenthe land had been purchased professedly to enable the company to make a lake,they might have erected upon it a soap manufactory or alkali works utterlydestroying the amenity of the residence of the grantor, although not amountingto an indictable or actionable nuisance.

19. This rule would, in our judgment, equally apply to acase where the special purpose is set out in the instrument or notification ofacquisition, and so any user by the Corporation for a purpose other than thatspecified would be unlawful and may be restrained by persons interested oraffected by the deviation. It would follow that the right conferred on theBoard in general terms by S. 81, Calcutta Improvement Act, to sell, lease orlet for hire the lands vested in it has been taken away by necessaryimplication in respect of lands acquired by the Government for the Board forthe express purpose of providing an open space for ventilation and recreation,for the exercise of the power of sale, lease, etc., would defeat the purposefor which the said land had been acquired. The position then in regard to thepark is as follows : (a) that the Board is the owner; (b) that it haspossession; (c) that it holds it for the benefit of the public; (d) that itcannot in law put it to any other use, and (e) it has no right to sell, leaseor let on hire the same or any portion thereof.

20. In these circumstances the question is whether it isentitled to get compensation for losing its possession by reason of therequisition. The question is not free from difficulty. So far as we are awarethere is no precedent in the Indian High Courts and the cases decided inEngland, which have a bearing on the question, do not speak with one voice. Thecase in 24 I. A. I77 Stebbing v. Metrapolitan Board of Works (1870) 6 Q. B. 37: 40 L. J. Q. B. 1 : 23 L. T. 530 : 19 W. R. 73 related to the lands of apublic highway. The important cases for consideration are (1850) 10 C. B. 327 :138 E. R. 132 Hilcoat v. Archbishop of Canterbury & York (1850) 10 C. B.327 : 19 L. J. C. P. 376 : 138 E. R. 132, (1870) 6 Q. B. 37 Stebbing v.Metrapolitan Board of Works (1870) 6 Q. B. 37 : 40 L. J. Q. B. 1 : 23 L. T. 530: 19 W. R. 73, (1903) 2 K. B. 728 In re City and South London Railway (1903) 2K.B. 728, 1914 A. C. 1056 Corrie v. Mao Dermot (14) 1 A. I. R. 1914 P. C. 213: 1914 A. C. 1056 : 83 L. J. P. C. 370 : 111 L. T. 952 and Lord Shands awardin respect of the Princes Street Gardens in Edinburg. The award is given infull in Crisp on Compensation, page 916, Edn. 8. As the case before us is ofrequisition, which is not to last long, the possibility of the restrictions onalienation being removed cannot be taken into consideration in assessingcompensation, as that would not be a reasonable possibility.

21. In (1850) 10 C. B. 327 Hilcoat v. Archbishop ofCanterbury & York (1850) 10 C. B. 327 : 19 L. J. C. P. 376 : 138 E. R. 132judgment on the second point raised therein was based on two reasons. There theplaintiff had dedicated his land to a Church. That land was acquired by arailway company under a private Act of Parliament giving the company powers ofacquisition. The Act required the value of the land acquired to be paid to allpersons having interest therein. The plaintiff contended that he was entitledto have the same value of the land, which it would have had in the normalmarket as if it was not consecrated land. The contention of the defendant wasthat as the land had been irrevocably appropriated to spiritual purposes theplaintiff could make no pecuniary advantage and so he cannot be awarded the sumof money he had claimed. It was contended that the jury had been misdirected bythe Judge in that they had been told that they were not bound to estimate thevalue as of land irrevocably appropriated to spiritual uses. Wilde C. J. heldthat there was no misdirection. The first reason for so holding was stated byhim in the following words : "The owner is to be paid the value."That enactment (the private Act of Parliament under consideration) is unaccompaniedby any words of qualification or restrictions : and there seems to be no reasonfor construing the words in any other than their ordinary sense and meaning.

The Act of Parliament passed for the purpose of withdrawingthe Church, ground and buildings from spiritual appropriation and applying themto secular uses; and, in connexion with that determination, the duty wasimposed of paying the owner the value of the ground and buildings not formingthe site of the Church; and in the absence of any peculiar rule beingprescribed for ascertaining such value, it is reasonable to infer that thevalue was to be ascertained in relation to the nature and the situation of theproperty generally, and its applicability to ordinary purposes discharged ofany prescribed appropriation.

22. The second reason was formulated thus :

By the appropriation of property to ecclesiastical orspiritual purposes, the owner voluntarily sacrifices the pecuniary value of theproperty so appropriated; but he makes that sacrifice to obtain an object whichhe estimates of greater value than the pecuniary value. But when the object isentirely withdrawn from him, by the application of the property against hiswill, to secular uses, and these uses connected with pecuniary profit, it doesnot seem consistent with justice to estimate the value to the owner upon thefooting of its irrevocable appropriation to these spiritual purposes from whichit has already been withdrawn.

23. It is not necessary for us to invoke the second reasonbut it may not be out of place to note that the second reason was quoted byVaughan-Williams L. J. in (1903) 2 K. B. 728 In re City and South LondonRailway (1903) 2 K.B. 728 and 736, the learned Lord Justice observing that thesaid reason was equally applicable

to every sort of property which is devoted to such purposesthat it cannot be sold, and that a person or corporate body which has obtainedpower to acquire the land, as if there was no such restriction, cannot acquirethe land and then ask that the price should be assessed on the basis that theproperty is still subject to the restriction.

24. The fact, which was the case in (1850) 10 C. B. 327Hilcoat v. Archbishop of Canterbury & York (1850) 10 C. B. 327 : 19 L. J.C. P. 376 : 138 E. R. 132, of voluntary sacrifice of pecuniary interest by theowner, is not in our judgment the essence of the thing, and the principle wouldapply equally to the case where the restriction on ownership has been placednot by a voluntary act on the part of the owner but from an outside butcompetent authority or by rules of law. This, in our judgment, is also theeffect of Lord Shands award in the Princes Gardens case. A part of therelevant passage in that award runs thus :

They further agreed that the gardens, having regard to theirsituation in the city, should in this way be looked at as a feeing or buildingsubject, and that as the Corporation had used the grounds for a purpose morevaluable to them and to the community they represent than building purposes, atleast its fair and full value (to use the words of Mr. Blyth, one of theleading witnesses of the company) or the highest value of the land, as Mr.Barr suggests, as building ground, should be allowed.

25. I entirely concur in this view. The facts of that caseare very similar to the case of the park we have before us. Till the timecontemplated by S. 177, Calcutta Improvement Act, arrived the Board would beusing it for the citizens of Calcutta. The reasons given in Lord Shands awardwere referred to with approval in (1914) A. C. 1056 Corrie v. Mao Dermot (14)1 A. I. R. 1914 P. C. 213 : 1914 A. C. 1056 : 83 L. J. P. C. 370 : 111 L. T.952 at pp. 1064-1065 where 24 I. A. 177 Manmatha, Nath Mitter v. Secretary ofState (98) 25 Cal. 194 : 24 I. A. 177 : 7 Sar. 226 (P. C.) was cited at theBar by Sir Robert Finlay. The case in 24 I. A. 177 Manmatha, Nath Mitter v.Secretary of State (98) 25 Cal. 194 : 24 I. A. 177 : 7 Sar. 226 (P. C.) in ourjudgment is distinguishable. It was assumed by their Lordships of the Judicial Committeein favour of the appellant that the subsoil remained the property of thezemindar (Monmatha Nath Mitter) after his grand-father had dedicated the landsto public use to be used as public highways. The lands subject to public useras highways as they were at the date of the acquisition had by their nature nomarket value. In a way this was accepted by the appellants counsel but hisargument was that when compensation was actually awarded the road had beenbroken up and the land thus freed from the burden of the road was capable ofbeing used for any purpose. This argument was repelled by Lord Hobhouse whopointed out that the material point of time at which the rights of the owner,whose land has been acquired under the Land Acquisition Act, was when his landwas acquired and not when the award for compensation was made, and that theprinciple was that no increase in the value of the land that is likely toaccrue from the use to which it may be put after acquisition can be taken intoconsideration in assessing compensation. In that case, unlike the case ofPrince Gardens Edinburg, the zamindar was not representing the public holdingand using the land for the benefit of the public. The case before us is likethe case of the Princes Gardens and the observations of Lord Shand thatcompensation on the basis of building sites had to be paid to the Corporationof Edinburgh for the reason that the said corporation was using it for thecommunity it represented would in our judgment be applicable to the case of thepublic park which we have before us.

26. The proposition laid down in (1870) 6 Q. B. 37 Stebbingv. Metrapolitan Board of Works (1870) 6 Q. B. 37 : 40 L. J. Q. B. 1 : 23 L. T.530 : 19 W. R. 73 that compensation, or which is the same thing as loss to theowner, must be tested not by what would be its value to person acquiring it iswell settled. Some passages in the second reason given by Wilde C. J. in (1850)10 C. B. 327 Hilcoat v. Archbishop of Canterbury & York (1850) 10 C. B. 327: 19 L. J. C. P. 376 : 138 E. R. 132 may at first sight appear to go againstthat test. The learned Chief Justice, however, used those expressions toemphasise the justice of the case. The observations in the later decisionswhich we have reviewed and in Lord Shands award do not appear to us tomilitate against the aforesaid test formulated in (1870) 6 Q. B. 37 Stebbing v.Metrapolitan Board of Works (1870) 6 Q. B. 37 : 40 L. J. Q. B. 1 : 23 L. T. 530: 19 W. R. 73. The compensation must be tested no doubt by the loss to theowner, but in estimating his loss it is legitimate to disregard therestrictions on owner ship which were existing at the time of acquisition. Ifrestrictions on the power of the owner to alienate at the time of theacquisition be taken to be a material factor in assessing compensation payableon an acquisition under the Land Acquisition Act, the amount of compensationwould be different according as the property at the time of the acquisitionbelonged to a Hindu widow or a full owner, for a Hindu widow has only a limitedpower of alienation. She can alienate only for legal necessity. But S. 32, LandAcquisition Act, indicates otherwise. We accordingly hold that the Board isentitled to get compensation for the park on the same basis as building sites.

27. We have already held that the effect of a requisitionunder the Defence of India Rules is to deprive the owner of his possession. Hemust, therefore, get the value of his possession. Looking from another aspectthe requisitioning authority gets the possession from the owner and becomes, soto say, a statutory tenant. The basis of compensation must therefore be fairrent, and we hold accordingly. The question therefore is what amount should beregarded as fair rent. No instance of letting of approximately similar land inthe area requisitioned has been proved. The six instances of letting of landson which the learned Advocate-General has relied are in respect of (1) 68/2Aand 68/2B, Monohar Pukur Road, (2) 68/3A, 68/3B and 68/3C, Monoharpukur Road,(3) P. 86, Lake Road, (4) P. 665, Rash Behary Avenue, (5) 698C, Gariahat Road,and (6) 19, Gariahat Road. Those plots are shown in the key map-map No. 27. Thefirst five plots of land are in different localities and at some distance fromthe requisitioned area. The last-mentioned plot, though within scheme No. 47and very near the requisitioned area, is not within the area which has beenimproved yet.

28. We will first analyse the leases in respect of theseproperties and find out the percentage of return. Plots Nos. 68/2A and 68/2B,Monoharpukur Road were leased out together to two joint tenants for a term of 5years in 1938 by Ex. 1 (a). The rate per cotta was Rs. 5-8-0 per month. The twotenants occupied different portion, one of them Nalini Sarkar, the back portion(No. 68/2A) and the other, Uttama Sundari, the front portion (No. 68/2B) andpaid rent separately at the same rate even before the expiry of the lease. Onthe expiry of the lease, and at the material time each paid at the rate of Rs.6-8-0 per cotta per month. The back portion after division among the twotenants became a tandem plot (map No. 12). The evidence is that its marketvalue would be Rs. 1600 and the front portion Rs. 2400 per cotta. The returnfor the back portion thus comes to 4.9 per cent, and of the front portion atabout 3.25 per cent, of the market value plus all municipal taxes, both theowners and the occupiers (EX. 33). Premises Nos. 68/3-A, 68/3-B and 68/3-C,Monoharpukur Road are lands adjoining premises Nos. 68/2-B and 68/2-A. At thematerial point of time, rent paid for each one of those plots was Rs. 6 percotta per month. The price of those plots would be a little less than that ofNo. 68/2-A, Monoharpukur Road. Taking it to be about Rs. 1500 per cotta, thereturn on the market value would be 4.8 per cent, plus all municipal taxes.

29. Premises No. P-86 Lake Road, gave a return of 9.7 percent (Ex. 30). It is a very small plot of land, a little more than half acotta, with a tin hut, which had been let out to a cabinet maker. By reason ofthe smallness of the size and the fact that it was not a case of lease of bareland, this case must be left out of consideration. The rent was clearlyabnormal rent. Premises No. P. 665 Rash Behary Avenue, was let out at Rs. 4 acotta per month (Ex. A) to one Anil Krishna Roy Chowdhury on 1st March 1943.The value of the land may be taken at Rs. 3000 per cotta (Ex. 34). The returnwas therefore 1.6 per cent, plus all municipal taxes. A portion, which wassublet gave a return of 11.8 per cent. Anil has deposed. He said that he gotthe lands at very low rent, as there was then an exodus from Calcutta. In hiscross-examination he said that there was no exodus from Calcutta in 1943 due towar panic. The matter was rested then. It ought to have been cleared up inre-examination. It is, however, common knowledge in Calcutta that the exodusfrom War panic was in the early part of 1942 when the Japanese invaded Burma,but there was another exodus later on due to the bombing of Calcutta. Thatexodus began shortly after the first bomb fell. That was about 22nd December1942 and Calcutta had a deserted look till about June or July 1943. Be that asit may, this would not be of much assistance, for no other instance has beenproved where rent was so low. The rent paid in this instance cannot beconsidered to be fair, especially when there is so great a disparity betweenwhat the lessee paid to his superior landlord and what his sub-lessee paid tohim.

30. The rent paid for the land at 698C, Gariahat Road wasRs. 9 per cotta per month (see evidence of Pramatha Nath 195) plus occupiersshare of taxes. Mr. Parks in his calculation takes the value of the land at Rs.3000 per cotta. On this basis the return comes to 3.25 per cent. The returnfrom the sub-tenants were, however, very high. For the reasons we have given inrespect of p. 86 Lake Road the high rate of rent paid by the sub-tenant shouldnot be taken into account. The value of the land according to the appellant isto be taken at a much higher figure than Rs. 3000 a cotta. Two of the adjoiningplots (Nos. 8 and 9 of scheme No. 48) were sold at Rs. 4400 and Rs. 5100 percotta (Ex. E). Taking the price at Rs. 4400 per cotta the return is about 21/4per cent. Mr. Parks, the Chief Valuer of the Board, whose evidence we believe,however, states in his oral evidence that the sale price of the plots 8 and 9of Scheme 48 was not fair as the price was pushed up by competition. (part I,p. 116).

31. Premises No. 19, Gariahat Road, is shown in map No. 28and in relation to the requisitioned land in map No. 27. One portion wasoccupied by Babu Lal Dass (D. W. 1) alias Jiban Krishna Das and the other byhis brother Akhoy Kumar Das. The former paid at the rate of Rs. 5-5-3 per cottaper month and the latter at the rate of Rs. 7 per cotta per month plusoccupiers share of the municipal taxes (Exs. F and F 2). The plot was withinImprovement Scheme No. 47 but the adjoining road had not been completed. Mr.Parks evidence is that price would be Rs. 3000 a cotta after the completion ofthe road. On the basis of Rs. 3000 a cotta, the return works out 2.6 per cent,but the price of the land would be much less than Rs. 3000 a cotta in itspresent condition. A good part, namely the back portion, was a foot lower thanthe road level (D. W. 2 p. 122). The sub-letting return was high. Theoccupiers share of municipal taxes was Rs. 21 per quarter and so with theowners share of taxes it comes up to Rs. 42 per quarter, that is, Rs. 168 ayear. The annual value, as defined in the Calcutta Municipal Act, assessed bythe municipality would be at least Rs. 840 in view of the provisions of S. 127(a), Calcutta Municipal Act. That would work out at Rs. 70 per month as fairrent, whereas the actual rent that was being paid by the two tenants together,namely, Jiban and Akhoy was Rs. 51 per month on1y. This shows that the rentthat was being actually paid by those two was much below fair rent.

32. On the analysis of those cases on which reliance canpossibly be placed the return varies round the figure 4.8 per cent. With theowners share of municipal taxes the percentage of return would be above five.We are, however, of opinion that none of these cases should be taken as guides,and our reasons are as follows: (1) that the lands, except No. 19 GariahatRoad, were in different localities; (2) that they were much too small in areain comparison with the requisitioned lands; (3) that the evidence does notsatisfy us that the rents paid for these plots by the lessees were fair, one ofthe reasons for so holding is the great disparity between the rate of rent paidby the lessees and the rate of rent paid by their sub-tenants; (4) that therents were erratic, there being no fair degree of uniformity in relation to theprice of the lands.

33. We must therefore fall back upon the other evidence thathas been adduced to assess the compensation for the firm lands. The first itemof evidence which is also supported by authoritative text books is that thebest security is Government security, the next best is secured ground rent andthe third best is unsecured ground rent; that the fair return in the case ofsecured ground rent should be half to one per cent, above the return fromGovernment securities and that of unsecured ground rent from one per cent, toone and half per cent, above the return from Government securities. At therelevant date the return from Government securities was 3.64 per cent. Even ifthe cases before us are to be considered to be cases of secured ground rent,the fair percentage of return would be from 4.14 to 4.64 and with the ownersshare of municipal taxes added the percentage would be about 4.64 to 5.14. Onthis evidence, the percentage given by the learned arbitrator which is 5 percent, the owners share being included, does not seem to us to be excessive.There is also documentary evidence to the effect that the Board lets out itssurplus lands all over Calcutta on the basis of about 5 per cent, return plusthe occupiers share of municipal rates.

34. The third item of evidence consists of rents accepted bythe Province of Bengal in respect of other requisitioned lands in this veryarea and within the same scheme-scheme No. 47-and in the adjoining scheme-scheme No. 48-and in respect of lands which adjoin those now in suit. Thoseplots are marked in map No. 19. They are plots Nos. 171 to 197 coloured orangeand marked with the price Rs. 2650 per cotta, plots Nos. 198 to 202 colouredyellow and marked with the price Rs. 3470 per cotta, plots Nos. 204 to 207coloured brown and marked with the price Rs. 3020, plots Nos. 283 to 296coloured green and marked with the price Rs. 2800 per cotta and plots Nos. 8,9, 10 and 15 hatched in red and marked some with the price Rs. 3500 and otherswith the price Rs. 3250. The Province of Bengal agreed to pay to the Board andother private proprietors rent on 6 per cent, basis, plus occupiers share ofmunicipal taxes. The relevant documents are Exs., 19-D, 19, 19-E, 19-B, 19-G,19-C and 22 and Mr. Parks evidence is at page 111, Part I. There is nosuggestion by the Province of Bengal that the rents which it had agreed to payfor those plots were not fair but excessive. We accordingly hold that the Boardis entitled to get compensation on the basis of 5 per cent, of the price of thelands. We have already observed that there is no controversy before usregarding the price.

35. The learned arbitrator has, however, added 10 per cent,more on account of occupiers share of municipal tax. This is wrong in view ofthe provisions of S. 128, Calcutta Municipal Act. The annual value has to becalculated at 5 per cent, of the costs of acquisition by the Board and on thebasis of that annual value the consolidated rate would have to be determined.As there is no evidence about the said cost there would have been the necessityof a remand to the arbitrator in order that evidence may be led to prove whatthe cost of acquisition by Board per cotta was, and the occupiers share of thetax determined on the basis of annual value as indicated in S. 123 and added tothe figure which would represent 5 per cent, of the price of land as determinedby the arbitrator. But the Board has agreed to forego its claim for theoccupiers share of municipal taxes. Regarding the lake, that is to say, thewatery portion only, the assessment of compensation would have been more orless a matter of guess work. There is, however, one piece of evidence on whichwe can proceed in the absence of better materials. A portion of the lakeforming part of block D marked in Ex. B (map No. 9) and of the adjoining parkto its south had been requisitioned before under R. 75A, Defence of IndiaRules. There was an agreement between the Board and the Governor-General inCouncil in regard to compensation. That agreement, which is Ex. C-1, is dated 20thJuly 1944. The compensation was on the basis of 1.25 per cent, of the estimatedprice. The amount of rent as stated in the memorandum of agreement is Rs. 2500per month. Mr. Parks analysed the figure and stated that it was 1.25 per cent,of the price (Part 1, page 28, line 23). We have corrected the slips andmistakes which occur in the printed record in that part of his deposition bycomparing it with the original. For the lake, which is the subject matter ofcase No. 32 of 1944 (First Appeal No. 73 of 1945) we hold that the price ofland is to be taken at Rs. 1000 per cotta and the compensation payable is to beon the basis of 1.25 per cent, thereof. The figure thus arrived divided by 12would represent the monthly compensation. The amount awarded by Mr. De inrespect of the lake is reduced accordingly.

36. The result is, the award given by Mr. De is affirmedsubject to two variations, namely, (1) the amount representing the occupiersshare of municipal taxes is disallowed, and (2) the compensation for the wateryportion of the lake is reduced to one-fourth the amount awarded for it by Mr.De. As the appeals have failed substantially the Province of Bengal must paythe costs. Hearing fee to the respondent five gold mohurs in each of theappeals valued below Rs. 5000 and in the other appeals valued above Rs. 5000,the hearing fee in each will be according to scale.

.

Province of Bengal vs. Board of Trustees for the Improvement of Calcutta (20.02.1946 - CALHC)