Principles and methods of determining compensation

(1) Where in exercise of the powers conferred by clause (d) of sub-section (1) of Section 7, the State Government or any officer or authority empowered by it in this behalf cancels any permit or modifies the terms thereof so as to (i) render ineffective beyond a specified date any permit or class of permits of (ii) reduce and curtail the number of vehicles or routes covered by holder of the permit compensation, the amount of which shall be determined in the manner and in accordance with the principles hereinafter set out, that is to say: - (a) where the amount of compensation can be fixed by agreement on the scale specified in the Second Schedule it shall be paid in accordance with such agreement; (b) where no such agreement can be reached, the State Government shall appoint as arbitrator a person who is, or has been or qualified for appointment as a district judge; (c) the State Government or the person to be compensated may, in any particular case, nominate a person having expert knowledge of the matter under consideration as an assessor to assist the arbitrator and where such nomination is made by either party, the other party may, also nominate another person as assessor for the same purpose; (d) at the commencement of the proceedings before the arbitrator, the State Government and the person to be compensated shall state what in their respective opinion is a fair amount of compensation; (e) the arbitrator shall, after hearing the dispute, make an award determining the amount of the compensation which appears to him to be just and specifying the person or persons to whom such compensation shall be paid, and in making the award, he shall have regard to the circumstances of each case and the provisions of sub-section (2) and (3), so far as they are applicable; (f) where there is any dispute as to the person or persons who are entitled to the compensation, the arbitrator shall decide such dispute and if the arbitrator finds that more persons than one are entitled to compensation, he shall apportion the amount thereof under this section. (2) Where in exercise of the powers conferred by clause (d) of sub-section (1) of Section 7 any existing permit is cancelled or the terms thereof are modified so as to prevent the holder of the permit from using any vehicle authorized to be used thereunder for the full period for which the permit would otherwise have been effective, the amount of compensation payable to the holder of the permit on account of such cancellation or modification shall be a sum, if any, which is equal to the average net annual profit in relation to the vehicle multiplied by the unexpired period of the permit; terms thereof so as to (i) render ineffective beyond a specified date any permit or class of permits of (ii) reduce and curtail the number of vehicles or routes covered by holder of the permit compensation, the amount of which shall be determined in the manner and in accordance with the principles hereinafter set out, that is to say: - (a) where the amount of compensation can be fixed by agreement on the scale specified in the Second Schedule it shall be paid in accordance with such agreement; (b) where no such agreement can be reached, the State Government shall appoint as arbitrator a person who is, or has been or qualified for appointment as a district judge; (c) the State Government or the person to be compensated may, in any particular case, nominate a person having expert knowledge of the matter under consideration as an assessor to assist the arbitrator and where such nomination is made by either party, the other party may, also nominate another person as assessor for the same purpose; (d) at the commencement of the proceedings before the arbitrator, the State Government and the person to be compensated shall state what in their respective opinion is a fair amount of compensation; (e) the arbitrator shall, after hearing the dispute, make an award determining the amount of the compensation which appears to him to be just and specifying the person or persons to whom such compensation shall be paid, and in making the award, he shall have regard to the circumstances of each case and the provisions of sub-section (2) and (3), so far as they are applicable; (f) where there is any dispute as to the person or persons who are entitled to the compensation, the arbitrator shall decide such dispute and if the arbitrator finds that more persons than one are entitled to compensation, he shall apportion the amount thereof under this section. (2) Where in exercise of the powers conferred by clause (d) of sub-section (1) of Section 7 any existing permit is cancelled or the terms thereof are modified so as to prevent the holder of the permit from using any vehicle authorized to be used thereunder for the full period for which the permit would otherwise have been effective, the amount of compensation payable to the holder of the permit on account of such cancellation or modification shall be a sum, if any, which is equal to the average net annual profit in relation to the vehicle multiplied by the unexpired period of the permit; Provided that in no case, the amount of compensation shall be a sum which is less than the said average net annual profit. (3) Where in exercise of the powers conferred by clause (d) of sub-section (1) of Section 7 the terms of any existing permit are modified so as to curtail the route of any vehicle authorized to be used there under, the amount of compensation payable to the holder of the permit on account of such curtailment of the route shall be a sum, if any, which bears the same proportion to the compensation payable under sub-section (2) on account of the cancellation of the permit in relation to the vehicle as the length of the route curtailed bears the total length of the route covered by the permit. (4) Notwithstanding anything contained in sub-section (1), no compensation shall be payable on account of the cancellation of any existing permit or any modification of the terms thereof, when a permit for an alternative route in lieu thereof has been offered and accepted by the holder of the permit. (5) The average net annual profit in relation to a vehicle authorized to be used under a permit shall be in accordance with the provisions of the third Schedule with reference to the profits, if any, which have accrued to the holder of the permit in relation to the vehicle in respect of that notified route during the period for which the permit (including any renewal thereof) was effective or the period of two years, immediately proceeding the date on which the order under sub-section (1) of Section 7 was made, whichever is less.