HIRACHAND KOTHARI (DEAD) THROUGH LRS.versusSTATE OF RAJASTHAN & ANR.

      644


 A
              HIRACHAND KOTHARI (DEAD) THROUGH LRS.

                                              v.
                                                                                        -
                         STATE OF RAJASTHAN & ANR.

                                       May 9, 1985.
 B
                            [A.P. SEN AND V. KHALID, JJ.]

             Indian Evidence Act, 1872-Section 20 'Inforn.ation' or opinion on matter
      in dispute-Reference by party to a third person-Staten1ents rr.ade by third
 c    person receivable as admission-' lnformation'-iVhat is.

              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 Improve·
       meat Trust, Jaipur for a sum of Rs 5000 in 1951 and give in exchange another
 D     plot in the same scheme on the same terms. Und:r the terms of the deed, the
       State Government agreed to give in exchange plot no. 0/ 17 in 'C' Scheme to
       the appellant on resumption of his plot bearing no. C191. In terms thereof,
       the appellant handed over possession of his plot no. C/91 to the State Govern-
       ment 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
E      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 bad
      already been transferred by the State Government to Thakur Harisingh of
      Achrol under the orders of the Home t-/rinister, 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
F    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 retur-
     ned the plaint for presentation to the proper Court.

G            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 shoLdd 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
11   dated Febuary 3, 1956 to the Joint Secretary, Ministry of Home Affairs convey-;
     ing 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 a~ the assess or who had been askeQ to ~ssess the
                      lliRACliAND v. RAiASNHAN                             64S
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       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 SOp. in all. [651 G·H, 652 A)
                                                                                   8
      Tho State Government declined to pay the compensation. The appellant
instituted the present suit for recovery of Rs. 47 ,741.SOp. 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 tho admission of the plaintiff as PW. 6 and    C
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 assess·
ment would be binding on the State Government and that therefore the
appraisement or valuation could not be treated as an 'admission of liability'      D
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 lmprove1nent Board clearly showed that the
parta 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 %·                                 E
       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 Srate 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 \Vas not examined    F
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 larid was of an inferior type and affirmed
the judgment and decree of the Trial Court.

       Allowing the Appeal,                                                        G
       HELD : I. Admissions may operate as estoppel and they do so where
parties had agreed to abide by them. The word 'information' occuring ins. 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    H
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 tbo general fllle laid down in s. 18. It deals with one class of
    646                   SUPREME COURT REPORTS                [1985) SUPPL. s.c.il.
    vicarious admissions, that is, admissions of persons other than the party.
A   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
B   admissions are generally conclusive. [651 A·B; 0-H; 652 AJ

           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 appiont the Town Planning Officer to
c   ascertain the value of the disputed plot as an appraiser or valuer. (653 H; 65 4A]

          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.SOp could not be treated as an admis-
    sion under section 20 of the Evidence Act, on the basis of which the plaintiffs'
    claim for damages had to be decreed. [654 B-C]
D
           4. This Court as well as the High Court and the Subordinate Court
    had an1ple power to restitute the plaintiff by granting him compensation for
    the value of the property of which he bad been deprived in the years 1951.
    Taking all factors into consideration it is just and proper to award the appel-
    lant a sum of Rs. 25,000 as compensation towards the value of the exchanged
E   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
    powers under proviso to section 1 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. 2l,000 from August 13, 1951, the date of
    dispossession till August 31, 1959, the date of judgment of the Subordinate
    Judge and tbc-reafter at 9% per anun1 thereon till realization.
F                                                              [654 D; 655 C; 656 BC]

            Satinder Singh v. Amrao Singh [1961] 3 S.C.R. 676; referred to.

            CIVIL APPELLATE JURISDJC1ION: Civil Appeal No. 2216 (N) of
    1970.
G
          From the Judgment and Order dated 18.3.1970 of the Rajas-
    than High Court in D.B. Civil Regular First Appeal No. 10 of
    1960.
H
            S.K. Jain for the Appellants.

            Miss Maya Rao for the Respondents. (Not present)
                 Ii!RACiiAND v. RAJASTHAN (Sen, J.)                647

     The Judgment of the Court was delivered by

                                                                           A
      SEN, J. The present appeal on certificate raises two questions,
namely (!) 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
                                                                           B
Rs. 35,826.SOp. 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      c
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         D
specific performance of an alleged contract against the State Govern-
ment 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. 0/17 located in C Scheme on resumption of his
plot bearing No. C/91 in the same scheme and handed over possession
to the State Government of the aforesaid plot No. C191, but the            E
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         F
Government in their written statement pleaded inter al/a that the
suit was not maintainable since the plot which was to be given in
exchange to the appe Hant 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 inrerrogatories it was revealed in the affidavit filed by the State   G
Government that the exchanged plot had been transferred to Thakur
Harisingh of Achrol under the orders of the Home Minister, Govern-
ment oflndia 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
                                                                           H
Thakur Harising of Achrol as a defendant in the suit and sought
    648                  SU~REME COURT REPORTll        (i98S] SUPPL. s.c.a.

     permission from the Central Government under s.86 of the Civil
A   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
B   entertain the suit. That objection of bis 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
c   late Shri Mohan Lal Sukbadia, 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. C191. At the instance of the Chief Minister,
D   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 bad agreed to the appoint-
E   ment of D.N. Gupta, Town Planning Officer as the assessor who had
    been asked to assess the value of the land and submit bis 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
F   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. 3 5,000 and to this he added Rs. 826.SOp. as the cost of
G   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 of the Municipal Committee, Jaipur which
H
    could not form any legal basis for assessing the value of the disputed
    land which admittedly was situate outside the walled city of Jaipur,
    nor could he have taken into consideration the rates for the sale of
                 HIRACHAND v. RAJASTHAN (Sen, J.)                    649

plots of commercial site at a distance from the disputed land. The
State Government accordingly declined to pay Rs. 35,826.50p.                  A

       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.            B
The State Government contested the plaintiff's claim and pleaded
inter a/ia 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
                                                                              c
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           D
 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.SOp.
 per squore 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 mm of Rs. 17,500 with            E
 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       F
  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       G
  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
                                                                              H
  and that it was never ajlreed that whatever appraisement or valuation
   he may make would be binding on both the parties, nor did the
     650                     SUPREME COURT REPORTS      (1985) SUPPL. s.c.lt.

       Deputy Minister make any commitment on behalf of the State
A      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' und;r s.20 of the Evidence Act on the part of the State
B     Government. He further held that the correct value on the basis of the
      notification issued by the Urban fmprovement 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
c    the disputed land Rs. 17,500. The learned Judge however held that
     the plaintiff was entitled to receive damages by way of intsrest @ 6%
     per annum, On appeal the High Court held that the plaintiff had
     to prove that the State Goveanment had agreed to be bound by the
     assessment made by D. N. Gupta before s.20 of the Evidence Act
D    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
E   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 findin~ of the learned Subordinate Judge that the
F   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
G   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
H

        (1) [1961) l s.c.c. 676.
                HIMCl!AND v. RAJASTl!AN (Sen, J.)                 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.        A
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        B
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          c
 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:
                                                                         D

            "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.''             E

                              ll/ustration

            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                   F
       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 peron    G
  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.           H

       The principle is the same as that of reference to arbitration.
  A position analogous to that of agency is created by the reference.
                                                                              ·-
     652                    SUPREME COURT REPORTS     (1985) SUPPL. i!.C.R.

    The refeeence may be by express words or by conduct, but in any
A   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
8      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
       himse If."(')

           There is nothing on record to show that the State Government
c   ever agreed to abide by the valuation made by the assessor D.N.
    Gupta; on the contrary, the Srcretary (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
D
    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
E   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 whate'Ver
    assessement was made by him would be binding on the Government.
    This bearing was given by the Minister on January 12, 1956 at the
F   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 Govern-
    ment, Local Self Government Department dated February 4, 1956
    which was in these terms:
G
    From

           The Secretary to the Government of Rajasthan.
H
        (I) I Camp. 364.
        (2) Sarkar on Evidence, 13th cda. p. 217.
                H!RACHAND v. RAJAITHAN (Sen. J.)                    653

To
         Shri_ D.N. Gupta through the Chief Engineer. B&R.,               A

         P.W.D., Rajastban, Jaipur.

No. F.1 (K) (56) LSG/59 dated Jaipur the February 4, 1956.
                                                                          B
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-Govern-
     ment on 12.1.56. Shri Heera Chand Kothari and the                    c
     Secretary, Urban Improvement Board, Jaipur, were
     present. Shri Kothari has agreed to accept the compensa-
     tion 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                    D
     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/·                             E
                           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 construe·
tion of the boundary wall at Rs. 826.50p. totalling Rs. 35,826.SOp.       F
The State Government not being satified 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 bis letter dated March 14, 1956 asked him to
explain the basis of valuation adopted by him. In reply thereto,          G
D.N. Gupta by bis letter dated March 19, 1956 disclosed that be bad
assessed the value of the disputed land, at the least possible price,
tal::ing the value of lands spread over between the years 1948 and
 1955 and that be bad adopted the parta rates of the Municipal
Committee, Jaipur for determining the value of the disputed land.         H
      While we feel that the High Court was not right in excluding
 from its consideration the Chief Minister's letter dated February
      654                SUPREME COURT REPORTS          [19851 SUPPL. s.c.R.

      3, 1956 on the ground of want of proof, the document by itself does
A     not substantiate the planitiff'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.SOp. being based on an erroneous principle should be
B     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 justi-
     fied 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
c    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
D     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
E    admeasuring 5,000 square yards on an application made by him to
     the Urban Improvement Board. The grant was subject to the condi-
    tion that 'the terms of the allotment would he the same as in the case
    of the previous allotment' i.e. bad to be valued as per the rates
    prescribed by the State Government for Improvement Tru;t plots in
F   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 C 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
G   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
H   compensation at a much lesser rate.

            The matter however does not end there. The transaction of
                      HIRACHAND v. RAJASTHAN (Sen, J.)                   655

    exchange which fell through in 1951 was entered into before the
    formation of the State of Rajasthan. At that time, Jaipur was not            A
    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 np. The
    land in dispute was situate near tne railway station and v;hich,
     according to the High Court, was lesser in value than land in
     C Scheme. Taking all these factors into consideration we think it
                                                                                 B


    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     c
     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,
                                                                                 D
     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               E
           State. This question has been conisdered on several
           occasions and the general principle on which the conten-

-          tion 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                    F
           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            G
            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 Conslidation l\ct, 1845. ln this connec-               H

          (I) L.R. [1925] A.C. 520@ 532.
    656                   SUPREME COURT REPORTS         (1985] SUPPL. s.c.R,

A         tion is drawn between acquisition or sales of land and
          requistion 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
B   held in Amrao Singh' s case that the Court had ample power under
    proviso to s. I of the Interest Act, 1839 to award interest on equitable
    grounds. In all the facts and circumstances of the case, the reason-
    able rate of interest would be 6% per annum on the compensation
    amount of Rs. 25,000 from August 13, 1951, the date of dispossession
c   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 pur, basing plot No. C/91 in
    C Scheme in the city of Jaipur.
                                                                               ·-
D          The result therefore is that the appeal partly succeeds and is
                                                                               r
    allowed with costs. The judgment and decree of the High Court and          r
    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
E   liable to pay costs in proportion to success and failure.
    N.V.K.                                                 Appeal allowed.




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