Authored By : Harold Derbyshire, Gentle

Harold Derbyshire, C.J.

1. This is an appeal from a judgment of Das J. whereby hedeclared that an order of the appellant requisitioning certain property wasultra vires of R. 75.A, Defence of India Rules, and made an order that theappellant should cancel the order complained of and forbear from enforcing it.The respondent Mr. Mackertich John for some thirty years past has carried on abusiness known as the Continental Hotel at 12 Chowringhee Road, Calcutta. Thebusiness is a considerable one employing some 300 persons. The hotel premisesconsisted of two floors, the ground floor and the first floor on which are sixdouble bed rooms and seventeen single bed rooms; there are also kitchens andother offices. The respondent pays a rent of Rs. 4000 per month plus rates andtaxes to his landlord under a lease for five years of which some two years havealready run. The respondent has let the bed rooms to his customers and sincethe beginning of the War has catered very largely, but not exclusively, for militarypersonnel. For that purpose he has doubled the number of beds in the variousrooms.

2. In October 1943, the military authorities acting throughthe appellant, who is the Additional Land Acquisition Collector for Calcuttaand invested with powers under the Defence of India Rules for the purpose ofrequisitioning land, buildings and other property, requisitioned a considerableportion, namely, ten thousand square feet of the ground floor of the hotel forthe purpose of providing amenities in the way of food and drink for themilitary. The compensation for this area which was requisitioned in 1943 wasnot fixed immediately, but was eventually fixed at the rate of Rs. 2,500 permonth. The amount due was not paid until November 1944 and then only Rs. 27,000was paid. This tardy payment undoubtedly inflicted hardship upon therespondent. In June 1944 the military asked the requisitioning board, anunofficial body connected with requisitioning in Calcutta, to requisition therest of the premises and Mr. John was requested to state his objections to therequisitioning of the entire hotel with all its fittings, fixtures andappurtenances. On 20th June Mr. John made his representations pointing out thatpart of his hotel had already been taken and that with the rest he was cateringfor the requirements of the military and that if the requisition was made itwould put him out of business and cause him considerable loss and hardship.However, the military authorities persisted in their intention to requisitionthe premises. On 18th November the appellant requested Mr. John to come to hisoffice on 21st November and bring with him his lease and discuss the matter.The meeting on 21st November took place and at the meeting Mr. John protestedagainst the requisition of the premises and complained of the withholding ofthe payment of the part already requisitioned. It is alleged that at thismeeting the appellant got angry and said " I will teach you alesson." It is also alleged that the complaint of the respondent abouttardy payment was the cause of the order for requisitioning of the remainder ofthe premises. This allegation has not been persisted in. On 29th November, theappellant made an order as follows: [After quoting the order dated 29thNovember 1944 (see page 143 above) his Lordship proceeded.]

3. On 1st December Mr. Johns attorneys wrote suggesting aworking arrangement whereby Mr. John might continue in occupation of thepremises. On 12th December a Mr. and Mrs. Lettington called at the hotel andsaw Mr. John and told him that they would probably be asked to run the hotel onbehalf of the military, Mr. John was of the opinion that this was an attempt tooust him from his business and on 8th December he moved this Court under S. 45,Specific Relief Act, for a rule prohibiting the appellant from enforcing ortaking any steps in connexion with the requisition. On 28th February the rulewas heard and Das J., made the order which is now appealed against. Thecontentions of Mr. John were (1) that the order was not in proper form in thatit stated it was in Mr. Guptas opinion necessary and expedient for theefficient prosecution of the War to requisition the buildings whereas it shouldhave been in the opinion of the Government of India or the Bengal Government;and (2) that the effect of requisitioning the remainder of the premises underthe order was to deprive Mr. John temporarily, if not permanently, of hisbusiness and its goodwill and that this could not be done under R. 75-A.

4. The learned Judge found against Mr. John on the firstcontention, but in his favour on the second. As regards the second contentionhe held that the effect of the order was to deprive the defendant of hisbusiness and its goodwill and that the business was an undertaking as definedby R. 81, Defence of India Rules, and that proceedings in respect of theacquisition of such an undertaking could only be under R. 81. He further was ofthe opinion that the acquisition of this part of the undertaking would becontrary to the provisions of S. 299, sub-ss. (1) and (2), Government of IndiaAct, which reads as follows:

(1) No person shall be deprived of his property in BritishIndia save by authority of law.

(2) Neither the Federal nor a Provincial Legislature shallhave power to make any law authorising the compulsory acquisition for publicpurposes of any land, or any commercial or industrial undertaking, or anyinterest, in or in any company owning, any commercial or industrialundertaking, unless the law provides for the payment of compensation for theproperty acquired and either fixes the amount of the compensation, or specifiesthe principles on which, and the manner in which, it is to be determined.

5. The learned Judge has followed the decision of the LahoreHigh Court in 24 Lah. 617 Electric Supply Co., Ltd. v. Province of Punjab (43)30 A. I. R. 1943 Lah. 41 : I. L. R. (1943) 24 Lah. 617 : 205 I.C. 337 (F. B.).The matter has been argued very fully by the learned Advocate-General on behalfof the appellant and Mr. N. C. Chatterjee on behalf of the respondent. It willbe convenient here to set out the relevant provisions of the Defence of IndiaAct and Rules. Section 2 (1), Defence of India Act, provides:

The Central Government may, by notification in the OfficialGazette, make such rules as appear to it to be necessary or expedient forsecuring the defence of British India, the public safety, the maintenance ofpublic order or the efficient prosecution of war, or for maintaining suppliesand services essential to the life of the community.

6. Sub-s. (2) provides that the rules may empower anyauthority to make orders providing for inter alia,

(xxiv) the requisitioning of any property, movable orimmovable, including the taking possession thereof and the issue of any ordersin respect thereof.

7. Sub-s. (3) provides that:

The rules made under sub-s. (1) may further- (iv) conferpower and impose duties-(a) upon the Central Government or officers andauthorities of the Central Government as respects any matter, notwithstandingthat that matter is one in respect of which the Provincial Legislature also haspower to make laws; and (b) upon any Provincial Government or officers andauthorities of any Provincial Government as respects any matter notwithstandingthat that matter is one in respect of which the Provincial Legislature has nopower to make laws.

8. Sub-s. (4) provides:

The Central Government may by order direct that any power orduty which by rule under sub-s. (1) is conferred or imposed upon the CentralGovernment shall in such circumstances and under such conditions, if any, asmay be specified in the direction be exercised or discharged-

(b) whether or not the power or duty relates to a matterwith respect to which a Provincial Legislature has power to make laws, by anyProvincial Government or by any officer or authority subordinate to suchGovernment, or

(c) by any other authority.

9. Section 19 of the Act provides:

Where by or under any rule made under this Act any action istaken of the nature described in sub-s. (2) of S. 299, Government of India Act,1935, there shall be paid compensation, the amount of which shall be determinedin the manner, and in accordance with the principles, hereinafter set out.

10. Rule 75-A, Defence of India Rules, provides inter aliaas follows:

(1) If in the opinion of the Central Government or theProvincial Government it is necessary or expedient so to do for securing thedefence of British India, the public safety, the maintenance of public order orthe efficient prosecution of the war, or for maintaining supplies and servicesessential to the life of the community, that Government may by order in writingrequisition any property, movable or immovable, and may make such furtherorders as appear to that Government to be necessary or expedient in connexionwith the requisitioning :

Provided that no property used for the purpose of religiousworship and no such property as is referred to in R. 66 or in R. 72 shall berequisitioned under this rule.

(2) Where the Central Government or the ProvincialGovernment has requisitioned any property under sub-r. (1), that Government mayuse or deal with the property in such manner as may appear to it to beexpedient, and may acquire it by serving on the owner thereof, or where theowner is not readily traceable or the ownership is in dispute, by publishing inthe Official Gazette, a notice stating that the Central or ProvincialGovernment, as the case may be, has decided to acquire it in pursuance of thisrule.

(3) Where a notice of acquisition is served on the owner ofthe property or published in the Official Gazette under sub-r. (2) then at thebeginning of the day on which the notice is so served or published, theproperty shall vest in Government free from any mortgage, pledge, lien or othersimilar encumbrance, and the period of the requisition thereof shall end.

(4) Whenever in pursuance of sub-r. (1) or sub-r. (2) theCentral Government or the Provincial Government requisitions or acquires anymovable property, the owner thereof shall be paid such compensation as thatGovernment may determine.

11. Rule 81 provides for the control and for regulation ofindustry and inter alia provides :

(1) In this rule any reference to article shall be construedas including a reference to electrical energy, and the expression"undertaking" means any undertaking by way of any trade or businessand includes the occupation of handling, loading or unloading goods in thecourse of transport.

(2) The Central Government, or the Provincial Government sofar as appears to it to be necessary or expedient for securing the defence ofBritish India or the efficient prosecution of the war, or for maintainingsupplies and services essential to the life of the community, may by orderprovide-

(bb) for regulating the letting and sub-letting of anyaccommodation or class of accommodation, whether residential or non-residential,whether furnished or unfurnished and whether with or without board.

12. It has not been suggested either before Das J. or beforethis Bench that the powers sought to be exercised in this case have beenexercised improperly or mala fide. It has been suggested, however, that it wasnot necessary under the circumstances for the Government to acquire theremainder of the hotel, and that Mr. John could have been directed to run whatremains of this hotel in accordance with the directions of Government laid downin Rule 81 (2) (bb). The position generally with regard to orders made underEmergency Defence Regulations and the powers of the Courts there under issummed up in the judgment of Lord Greene, M. R. in the English case in (1943) 2All. E.R. 560 Carltona Ltd. v. Commissioners of Works (1943) 2 All. E. R. 560at p. 564 as follows :

It has been decided as clearly as anything can be decidedthat, where a regulation of this kind commits to an executive authority thedecision of what is necessary or expedient and that authority makes thedecision, it is not competent to the Courts to investigate the grounds or thereasonableness of the decision in the absence of an allegation of had faith. Ifit were not so it would mean that the Courts would be made responsible forcarrying on the executive government of this country on these importantmatters. Parliament which authorises this regulation, commits to the executivethe discretion to decide and with that discretion if bona fide exercised noCourt can interfere. All that the Court can do is to see that the power whichit is claimed to exercise is one which falls within the four corners of thepowers given by the Legislature and to see that those powers are exercised ingood faith. Apart from that, the Courts have no power at all to inquire intothe reasonableness, the policy, the sense or any other aspect of thetransaction.

13. The above was a case where a factory was requisitionedby the Government under Regn. 51, Defence (General) Regulations. I will nowdeal with the first contention of the respondent (which Das J. decided infavour of the appellant) namely, that R. 75-A provides for two things (1)formation of opinion regarding specified matters by the Central or ProvincialGovernment and (2) the making of the specified order, and that no order couldbe made unless and until the Government concerned formed the necessary opinion.It is said that in this case it is not the Government who formed the opinionthat it was necessary to requisition the premises, but the appellant. In thisconnexion the appellant has produced his authority which is contained in aGovernment of India Notification of 27th February 1943 published in the Gazetteof India. It reads as follows: [After quoting the notification (see page 143above) his Lordship proceeded.] The respondent contends, however, that thatnotification which is made under S. 2 (4), Defence of India Act, quoted aboveonly refers to the power to requisition the property and that the appellant hadnot been entrusted with either the power or the duty of forming an opinion asto whether the requisition of premises is necessary and expedient. In my viewthe notification which unquestionably gives him the power to requisition thepremises, gives him power and the duty of considering whether it is necessaryand expedient to requisition them. The notification delegates to him the powersconferred on the Government of India by R. 75-A and those powers, in myopinion, include the power to consider whether the requisitioning is necessaryand expedient and also the duty. Those powers were possessed by the Governmentof India which has conferred them upon him. I am, therefore, in agreement withthe learned Judge on this point. On the second question, the argument rangedover a wider field. It was contended by Mr. Chatterjee that this hotel was anundertaking within the provisions of S. 299, Government of India Act, and R.81, Defence of India Rules. An undertaking in the relevant sense according tothe Concise Oxford Dictionary means work &c. undertaken. I think, broadlyspeaking, it is synonymous with the word business. I think the business ofcarrying on this hotel does come within the meaning of the word undertaking.

14. Mr. Chatterjee then referred to 24 Lah. 617 Medawar v.Grand Hotel Co. (1891) 2 Q. B. 11 : 60 L. J. Q. B. 209 : 64 L. T. 851,mentioned above, where the Punjab Government who had powers to take over theLahore Electric Supply Company under certain Acts, but found difficulties inits way of doing so, purported to act under R. 75-A, Defence of India Rules,and requisitioned the whole of the undertaking. The learned Chief Justice alterdealing with the circumstances came to the conclusion that the PunjabGovernment was not acting bona fide under R. 75-A, but using it in order toacquire the undertaking which it found difficult in doing owing to its lachesunder the Acts which entitled the Government to acquire it. I can see no reasonfor doubting that part of the decision of the Lahore High Court. That wassufficient for the purpose of the Lahore case. The learned Chief Justice thenwent on to fortify the judgment by holding that R. 75-A was not applicable atall to the requisition of an undertaking such as the Lahore Electric SupplyCompany. I regret I do not see my way to follow the reasoning in that matter.Rule 75-A provides that for purposes of the defence of British India, publicsafety, the maintenance of public order, or the efficient prosecution of thewar or for maintaining supplies essential to the life of the community, theGovernment may, by order in writing, requisition any property movable orimmovable and may make such further orders as to the Government may have beennecessary or expedient for requisitioning. The words any property, movable orimmovable must necessarily include all kinds of property, land, buildings,machinery and chattels of any kind, and anything that can be described asproperty. This prima facie covers a business and its goodwill. There are threeexceptions to that, namely, no property used for the purpose of religiousworship and no property such as is referred to in R. 66, namely, ships andtheir contents and property referred to in R. 72, namely, aeroplanes and theircontents, shall be requisitioned. If it had been desired to exclude businessesand their component parts including goodwill the section could easily haveprovided for such exclusion. There are good reasons why businesses and parts ofbusiness and the goodwill are not excluded, since much property essential forthe purposes of R. 75-A (1), may be part of some business. Indeed in most casessuch essential property would only be likely to be found in such businesses.

15. It was then pointed out that under R. 75-A (4) when theGovernment requisitions any movable property the owner shall be paid suchcompensation as that Government may determine. It was further pointed out thatunder S. 299 (2), Government of India Act, the Government has no power to makeany law authorising the compulsory acquisition for public purposes of any land,or any commercial or industrial undertaking, or any interest in, or in anycompany owning, any commercial or industrial undertaking, unless the lawprovides for the payment of compensation for the property acquired and eitherfixes the amount of the compensation, or specifies the principles on which, andthe manner in which, it is to be determined. It was said that R. 75-A (4)authorises the Government to pay such compensation as the Government maydetermine, but does not fix the amount of compensation or specify theprinciples on which and the manner in which it is to be determined and thatconsequently the movable property referred to in R. 75-A (4) cannot be movableproperty which forms part of an undertaking. I am unable to agree with thatcontention. Section 19 (1), Defence of India Act, provides:

Where by or under any rule made under this Act any action istaken of the nature described in sub-s. (2) of S. 299, Government of India Act,1935, there shall be paid compensation, the amount of which shall be determinedin the manner, and in accordance with the principles, hereinafter set out.

16. The manner and the principles are set out in thefollowing part of the section. In my view, therefore, the provisions of R. 75 Aare not in conflict but are pursuant to the provisions of S. 299 (2),Government of India Act. It may be that there are cases where movable propertyis requisitioned which is not part of an undertaking and then compensation maybe paid under R. 75-A (4). In this case, we are not concerned with movableproperty since in the operative part of the requisition order the movableproperty of the hotel is not requisitioned, but only the immovable property,namely, the land and buildings of the hotel. It seems to me that under theprovisions of S. 19 (1) (e), Defence of India Act, where it is directed that

the arbitrator in making his award shall have regard to (i)the provisions of sub-s. (1) of S. 23, Land Acquisition Act, 1894, so far asthe same can be made applicable

apply in this case. Section 23 (1), Land Acquisition Act,enacts:

In determining the amount of compensation to be awarded forland acquired under this Act, the Court shall take into consideration....fourthly, the damage (if any) sustained by the person interested, at the timeof the Collectors taking possession of the land, by reason of the acquisitioninjuriously affecting his other property, movable or immovable, in any othermanner, or his earnings.

17. I am, therefore, of opinion that the words in R. 75-A (1)"may requisition any property, movable or immovable" refer to allkinds of property except those referred to in the proviso. I think, therefore,that although the requisitioning of the remainder of Mr. Johns hotel may for atime if not permanently, interrupt and damage his business that does notprevent the Government from requisitioning the land and buildings if it isnecessary or expedient to do so for securing the defence of British India,public safety, the maintenance of public order, or the efficient prosecution ofthe war, or for maintaining supplies and services essential to the life of thecommunity. The purpose for which the property was requisitioned is, we aretold, to provide amenities for troops and comes within the purposes of R. 75-A,Defence of India Rules. Mr. John may find his business injuriously affected buthe will be entitled from the Government to such compensation as is laid down inthe Defence of India Act and Rules. In my view, the declaration and order ofDas J., should be set aside and the appeal allowed with costs here and below.Certificate is granted under S. 205, Government of India Act, 1935.

Gentle, J.

18. The respondent, Mr. Mackertich John, is the lessee ofNo. 12, Chowringhee Road, Calcutta, known as the Continental Hotel, where hehas conducted the business of a hotel and restaurant keeper for the past 30years; the monthly rental is Rs. 4000 and in addition he pays the usual taxes.In October 1943, the major portion of the ground floor comprising therestaurant and lounge, was requisitioned by the authorities and thereafterceased to be occupied by the respondent. The appellant, Mr. Harish ChandraGupta, is the Additional Land Acquisition Collector for Calcutta. On 29thNovember 1944 he issued an order, in Case No. 574 of 1944, by which hepurported to requisition the remaining portion of the hotel. Proceedings weretaken by the respondent to question the validity of the order; Das J. held itwas ultra vires R. 75-A, Defence of India Rules, and directed the appellant towithdraw or cancel the order and to forbear from enforcing it. Against thisdecision the present appeal is preferred.

19. The hotel is a two storied building, the ground floorhas a restaurant and lounge and on the upperfloor there are 6 double and 17single bed rooms which normally accommodate 29 guests. Since the outbreak ofthe War large numbers of people, including members of the Allied Forces, havecome to Calcutta; in order to meet the increased need for accommodation, thenumber of beds in each room was doubled and there is now provision for 58visitors. There are 7 permanent residents, the remaining accommodation ismainly used by members of the Forces. In October 1943 the major portion of theground floor (about 10 000 square feet) was requisitioned; no objection wasraised by the respondent and it has since been utilised as a troops canteen. InMay 1944 the amount of compensation payable to the respondent, in respect ofthe requisitioned portion, was agreed at Rs. 2,500 per month; no payment wasmade until 29th November 1944, when a sum of RS. 27,000 was paid on account.Meanwhile, the Secretary of the Requisitioning Board, by letter dated 14th June1944, informed the respondent that a request had been made to requisition theremainder of the hotel, including its contents, such as fans, furniture andlinen; the case would be considered by the Board on 20th June; any objectionshould be forwarded before that date; and he was invited to be present at theBoards meeting. The respondent wrote to the President of the Board setting outhis objections and he attended the meeting. Nothing further transpired forseveral months. In November the respondents solicitors, Messrs Fowler &Co., wrote to the appellant complaining of the delay in payment of compensation.Thereafter negotiation took place with the Bengal Government which eventuatedin an agreement being signed on 21st November 1944 and on 29th November 1944 asalready stated the respondent was paid Rs. 27,000 on account of the amount due;the ground floor had then been requisitioned for nearly 14 months. On the sameday as payment was made, the appellant issued the order, the subject matter ofthe appeal, for requisitioning the remainder of the hotel, which was servedupon the respondent on 1st December and required him to hand over the premiseson 6th December. On 5th December the respondent took proceedings to questionthe validity of the order, a rule nisi was issued and also an injunction wasgranted restraining the operation of the order. On 12th December, a Mr. andMrs. Lettington called at the hotel and informed the respondent they had cometo take charge, and to conduct it, for the authorities, but, in view of theinjunction, they left. On 12th February 1945, Das J. made the rule absolute holdingthat the order is ultra vires R. 75-A, Defence of India Rules, 1939. It isconvenient, firstly, to set out the relevant provisions of the Defence of IndiaAct 1939 (hereinafter called "the Act") and the rules madethereunder. They are as follows: (After setting out the relevant provisions ofS. 2 (1), (2) and (4) his Lordship proceeded to quote the following provisionsof the Defence of India Act.)

Section 15. Any authority or person acting in pursuance ofthis Act shall interfere with the ordinary avocations of life and the enjoymentof property as little as may be consonant with the purpose of ensuring thepublic safety and interest and the defence of British India.

Section 16 (2). Where any order purports to hard been madeand signed by any authority in exercise of any power conferred by or under thisAct, a Court shall, within the meaning of the Indian Evidence Act, 1872,presume that such order was so made by that authority.

Section 19 (1). Where by and under any rule made under thisAct any action is taken of the nature described in sub-s. (2) of S. 299,Government of India Act, 1935, there shall be paid compensation, the amount ofwhich shall be determined in the manner, and in accordance with the principles,hereinafter set out, that is to say :-

(a) Where the Amount of the compensation can be fixed byagreement, it shall be paid in accordance with such agreement.

(b) Where no such agreement can be reached, the CentralGovernment shall appoint as arbitrator a person qualified....

(c) The arbitrator in making his award shall have regard to-(i) the provisions of sub-s. (1) of S. 23, Land Acquisition Act, 1894, so faras the game can be made applicable; and (ii) whether, the acquisition is of apermanent or temporary character.

20. [After setting out Rs. 75-A (1), (2), (5) (a); 81 (2)(b), Defence of India Rules, S. 299, (1) and (2), Government of India Act,1935, and S. 28 (1), Land Acquisition Act, 1894, his Lordship proceeded.]

21. On 27th February 1943, the Government of India inpursuance of S. 2 (4) of the Act, made the following delegation of its powersto the appellant. (His Lordships then set out the Government of IndiaNotification of 27th February 1943 (see page 143 above) and proceeded). It isto be noticed that the notification mentions powers and does not mentionduties which S. 2 (4) enables the Central Government also to delegate. Inexercise of the delegated powers, on 29th November 1944 the appellant made theorder which is impugned, the relevant parts are: [After setting out therelevant parts of the order (see page 143 above) his Lordship proceeded.] Theabove order purports to have been made and signed by the proper authority inthe exercise of powers conferred by and under the Act; it conforms with theprovisions of R. 75-A, including the requirement for the respondent to furnishinformation with a view to determination of compensation; whilst in hispetition, verified by affidavit on 5th December 1944 the respondent alleges theappellants order was mala fide, for the reasons therein stated, theseallegations were not pursued before Das J., nor during the hearing of theappeal. It is, therefore, to be presumed, pursuant to S. 16 (2) of the Act,that the order was made bona fide by the proper authority and thatconsideration was given to the matters set out in S. 15 of the Act. Thevalidity of the impugned order is questioned by the respondent on the followinggrounds:

(1) Before the order could properly be made, it was the dutyof the Central Government to form the opinion that it was necessary orexpedient to requisition the hotel. Since this was done by the appellant andnot by the Government, there has not been compliance with the requirements ofthe rule.

(2) There is no power to requisition an undertaking; in theguise of requisitioning the building of the hotel, the order requisitions therespondents undertaking established at the hotel and deprives him of hisproperty of that undertaking.

22. It was contended by Mr. N. C. Chatterjee, on behalf ofthe respondent, that by virtue of (1) the order has not been properly made andis ineffective, and, by virtue of (2) the order is ultra vires R. 75-A and isinvalid.

23. As to (1) - Mr. Chatterjee argued that the rule enablesproperty to be requisitioned provided two requirements are fulfilled, namely,(1) the discharge of a duty by the Central Government to form an opinion thatit is necessary or expedient to do so including consideration being given tothe provisions of S. 15 of the Act and, not until this has been done, (2) theexercise of the power by the Government to issue an order to requisition.Unless and until the Government delegates both the duty and the power, each canonly be performed and exercised by the Government:. By the notification thepower alone has been delegated to the appellant and the duty has not beendelegated to him. Before the appellant can exercise the power to issue aneffective order, the Government must previously discharge the duty to form theopinion. The appellant has purported to discharge this duty-the order recites,"whereas I am of opinion..." -which should have been performed by theGovernment. Since there has been no delegation of the duty to the appellant, hecannot perform it, and since it has not been performed by the Government, therefore,it is contended, the impugned order is not an effective order to requisitionthe hotel. In my view a duty of the Central Government, which S. 2 (4)contemplates being delegated, is a substantial or an express duty, such as, aduty, which pursuant to S. 2 (3) (iv), can be imposed upon it and its duty toappoint an arbitrator under S. 19 (1) (b). Such duty is not the formation ofopinion indicated in R. 75-A. The exercise of the power in that rule is subjectto and dependent upon the formation of the opinion; the power is not absolutebut is conditional upon the opinion being previously formed; the formation ofthe opinion and the making of the order are not separate and distinct andindependent attributes but the former is a component or an integral part of thelatter; the need for the formation of the opinion before the power can beexercised is a limitation of the power, it qualifies its extent and is a partof the power; and the formation of the opinion and the issue of the orderconstitute the exercise of the power. The delegation of the power includesauthority to form the opinion conditioned upon which the power can beexercised. When the power has been delegated it is the responsibility of theperson, in whose favour the delegation is made, to form the opinion before hecan exercise the power. The validity of the delegation of the power to theappellant is not questioned; after the delegation he was the person by whom theopinion had to be formed. This is in accordance with the decision in Kewalramv. Collector of Madras (44) 81 : A.I.R. 1944 Mad. 285 [LQ/MadHC/1944/48] :I.L.R. (1944) Mad. 826 :218 I.C. 271. I agree with Das J., that the impugnedorder is not ineffective by reason that the appellant formed the opinion thatit was necessary and expedient to requisition the hotel.

24. As to (2)- It is not disputed that the object ofrequisitioning the hotel building is to utilise it solely for the accommodationof personnel of the allied Forces; except for a few permanent civilianresidents, the majority of the hotel guests are members of the Forces, at thepresent time. It is also not in dispute that the respondents business of ahotel keeper, which he has conducted for 30 years, is a commercial undertakingand is movable property. It was contended on his behalf that Rule75-A does notenable an undertaking to be requisitioned; an undertaking can only becontrolled by the machinery of R. 81; and, by the requisition of the buildingthe undertaking is thereby requisitioned and the respondent is wrongly deprivedof the property of the undertaking.

25. Whilst the majority of the visitors at the hotel aremilitary they go there in the same way as all guests. If and when the buildingis used by the authorities, it will provide solely for personnel of the Forces,but they will be sent there by the authorities and they will not go to, or useit, as a hotel but as a place which caters for them alone. Sleepingaccommodation, meals and refreshment will be provided, as at the present time,but the business and the goodwill of the hotel undertaking will have no bearingupon the use of the premises by the military and a hotel, as such, whichprovides for all wayfarers, will not be conducted. The existing conditions inCalcutta may make it difficult for the respondent to conduct his businesselsewhere, with its name "Continental Hotel," but he will beperfectly at liberty to do so. When the requisition period terminates, therespondent will also he at liberty to resume his business at the premises. Byrequisitioning the building the authorities do not requisition the business,although there will be an interruption and an interference in the conducting ofit and, in that respect it will be injuriously affected e. g. loss of customand profit both during the time the requisitioning is in operation and at leastfor some period after the business is resumed at the hotel.

26. If it were necessary to decide the question, in myopinion, a commercial undertaking can be requisitioned by R. 75-A. The power torequisition, in the rule, expressly applies to movable property, and acommercial undertaking is property of that description. There is nothing in theAct or the rules which prevents this being done. Rule 81 provides forGovernment controlling and regulating undertakings, including those whichsupply furnished residential accommodation and meals, which remain under theadministration and direction of the proprietors but it does not provide thatthis is the only method by which Government can compulsorily be concerned withundertakings. Mr. Chatterjee relied upon the observation of Sir Douglas YoungC. J. in 24 Lah. 617 Medawar v. Grand Hotel Co. (1891) 2 Q. B. 11 : 60 L. J. Q.B. 209 : 64 L. T. 851 to support his contention that an undertaking cannot berequisitioned by R. 75-A. At p. 639 the learned Chief Justice said

a careful examination of the provisions of R. 75-A showsconclusively that this rule is not applicable at all to the requisition oracquisition of an undertaking.

In that case the requisition order by the ProvincialGovernment was not made bona fide; they had failed to give the required noticeof their intention to exercise statutory powers and compulsorily to acquire anelectricity undertaking; in consequence the undertakers were entitled to keepit for a further 20 years and the Government lost its opportunity to purchaseit until the expiration of that period; in order to overcome their failure andto obtain the undertaking for themselves they utilised R. 75-A. That was aclear case of mala fide conduct in the use of the rule and the exercise of therequisitioning power contained in it. There is no question of mala fide conductin the present case and the above observations must be considered applicableonly to the special circumstances of the case in which they were made and, inmy view, do not have general application.

27. Mr. Chatterjee referred to S 299, Government of IndiaAct, and argued that the requisitioning of the building and as he contended,which involved requisitioning or acquiring the hotel business, is in violationof the section. The section prohibits a person being deprived of property saveby authority of law and denies power to a Legislature to make law authorisingthe compulsory acquisition for public purposes of any land or any commercial undertakingunless the law provides for payment of compensation and either fixes the amountor specifies how it is to be determined. I have previously indicated that therespondents undertaking has not been requisitioned but only his building, i.e. his land. The requisition has been effected by authority of law contained inR. 75-A.

28. The requisitioning of the hotel is compulsoryacquisition of it within sub-s. (2) of S. 299, Constitution Act, and theprovisions of sub-s. (1) of S. 19, Defence of India Act, apply. The acquisitionis intended to be temporary but S. 299 (2) does not limit compensation topermanent acquisition. Section 19 (1) provides that where, by or under any rulemade under the Act action is taken of the nature described in sub-s. (2) of S.299 there shall be paid compensation, the amount of which shall be determinedby agreement (cl. (a)) or by arbitration (cl. (b)) and the arbitrator, inmaking his award, shall have regard to the provisions of sub-s. (1) of S. 23,Land Acquisition Act, and whether the acquisition is of a permanent ortemporary character (cl. 1 (e) (i) and (ii)). Those provisions require that indetermining the amount of compensation for the acquisition of land, the damagesustained by reason of the acquisition injuriously affecting other property,movable or immovable, of the person interested, shall be taken intoconsideration. The impugned order does not infringe the provisions of S. 299,Constitution Act, the deprivation of the respondents building has been accomplishedby authority of law contained in R. 75-A, its compulsory acquisition is subjectto compensation being paid and being determined under S. 19 (1) of the Act, theprovisions of which conform with the requirements in sub-s. (2) of S. 299. Theamount of compensation which the respondent will be entitled to receive will,failing agreement, be ascertained as directed by the several clauses of subs.(1) of S. 19 of the Act, and the injurious effect to his undertaking namely,his movable property, by interruption or interference in its being carried onwhilst his building is requisitioned and also the period of the requisition,will have to be considered by the arbitrator when making his award as to theamount of compensation. The impugned order is effective and valid and is inconformity with the requirements of law. In my opinion the appeal should beallowed.

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H.C. Gupta vs.Mackertich John (30.04.1945 - CALHC)