MAHESH LALL SEAL AND ORS. versus UNION OF INDIA AND ORS.

Citation: [2006] SUPP. 5 S.C.R. 696 · Decided: 01-09-2006 · Supreme Court of India · Bench: ARIJIT PASAYAT, S.H. KAPADIA · Disposal: Case Partly allowed
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Judgment (excerpt)

A 
B 
MAHESH LALL SEAL AND ORS. 
v. 
UNION OF INDIA AND ORS. 
SEPTEMBER I, 2006 
[ARIJIT PASA YAT AND SH. KAPADIA, JJ.) 
Requisition and Acquisition of Immovable Property Act, 1952-Sections 
8(/)(a)(b) and I I-Property acquired 12 years after agreement-Payment 
C received by claimants under protest-State Government issuing notification 
appointing arbitrator-Notification challenged on the ground that there 
was no referable dispute-Meanwhile award passed by arbitrator-Validity 
of notification upheld by Single Judge and Division Bench-Award 
challenged-Subsequent Division Bench holding that findings by earlier 
Division Bench were tentative and setting aside award on the ground that 
D arbitration proceedings were without jurisdiction as there was no referahle 
dispute-Whether subsequent Division Bench right in holding that findings 
by earlier Division Bench were tentative in nature-In the circumstances, 
held, finding by earlier Division Bench could not be held to be tentative and 
issue stands concluded by earlier Division Bench--Practice and procedure. 
E 
Property belonging to appellants-claimants was acquired by Union of 
India on 3.3.1987 under Section 8(1)(a) of Requisition and Acquisition of 
Immovable Property Act, 1952 at fixed price of Rs. 18,98,00fli. in terms of 
agreement dated 18.7.75. On 26.5.93 claimants received the entire amount 
of Rs. 18,98,000/- under protest. State Government issued notification 
F appointing arbitrator under Section 8(1)(b) of 1952 Act to which Union of 
India objected by filing Objections on the ground that on account of agreement 
between parties on 18.7.75 and signing of Form Kon 26.5.93 by claimants, 
the Arbitrator could not make award under Section 8(3) of the 1952 Act beyond 
the agreed amount of Rs. 18,98,000/-. Claimants filed claim petitions before 
Arbitrator claiming compensation in respect of acquired property @ R~. 
G 3,00,000/- per kattah. On 5.1.98 Union of India filed written objection before 
arbitrator stating that fair market value of acquired lands on 3.3.87 would 
not exceed Rs. 70,000/- per kattah. Union of India also filed writ petition 
seeking cancellation of appointment of arbitrator. However, there was no stay 
of proceedings before the arbitrator by the High Court. Claimants agreed to 
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MAHESH LALL SEAL v. U.0.1 
697 
receive compensation@ Rs. 70,000/- per kattah as suggested by Union of A 
India in its objection dated 5.1.98. On 21.1.2000 Union of India moved 
application before Arbitrator saying that concession made on 5.1.98 by 
Advocate conceding rate of Rs. 70,000/- per kattah was without obtaining 
instructions and the claimants were not entitled to receive compensation at 
.; 
the said rate. Arbitrator on 18.5.2000 dismissed the objection dated 21.1.2000 B 
filed by Union of India and also came to the conclusion that dispute regarding 
compensation did exist and the Arbitrator had jurisdiction to try and decide 
such dispute. Writ Petition preferred by Union of India against decision dated 
18.5.2000 of the arbitrator was dismissed by High Court. Earlier writ petition 
filed by Union of India seeking cancellation of appointment of arbitrator was 
also dismissed by Single Judge on 28.9.2000 holding that there existed dispute C 
as to amount of compensation payable for acquisition of the premises on 3.3.87 
and State Government was competent to appoint an arbitrator under Section 
8(l)(b) of the 1952 Act. Arbitrator announced award on 25.10.2000 assessing 
market value at the rate of Rs. 70,000/- per Kattah as on 3.3.87. Aggrieved 
by the decision of the Single Judge dated 28.9.2000, Union of India preferred 
writ appeal which was dismissed by Division Bench holding that notification 
issued under Section 8(1)(b) of the 1952 Act appointing arbitrator was valid 
in law without going into the question of validity of the Award. 
When claimants filed writ petition for realization of compensation as 
D 
per the Award, Union of India filed appeal before Division Bench under Section E 
II of the 1952 Act against award dated 25. 10.2000. Union of India again 
contended that notification appointing arbitrator was not valid as there existed 
no dispute to be referred to arbitration; that award was passed on the basis of 
concession made by Union of India without noticing that the same were 
subsequently withdrawn ; and that claimants were not entitled to sofatium and 
interest as awarded. Division Bench allowed appeal and set
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