C.E.S.C. LIMITED v. SANDHYA RANI BARIK & ORS.

[2008] 10 S.C.R. 137 _,-!_ A ·'<. Ill C.E.S.G: LIMl 1 TED _v._ SANDHYA RANI BARIK AND ORS. (Civil.Appeal No.7201 of 2005) **==> picture [76 x 10] intentionally omitted <==** B [DR. ARIJIT PASAYAT AND P. SATHASIVAM, JJ.] _West Bengal Land (Requisition and Acquisition) Act, 1948_ - _Acquisition under_ - _Of large tract of land_ - Assess- _ment of land value_ - _Just and reasonable compensation_ - c _Held: Armchair assessment of land value has to proceed with_ - _common sense and circumspection For assessing compensation, efforts should be to find out the price fixed for simitar land in the vicinity_ - _Where_ a _very large plot of land has been acquired and the comparison is sought to be made with_ a _comparatively small piece of land which has been sold. or_[0 ] _otherwise dealt with, then in that event,_ a _percentage of t/Je_ ~ _pric_e is to be knocked off because of the largeness itself of the acquired land_ - _Land Acquisition Act, 1894._ _-r._ > The land in question, cpnstituting a total area of more E than 3 big has, was part of a 10 bigha tract owned previou51y by a single common ancestor. of the Respondents. The said land was acquired under the West Bengal Land (Requisition· and Acquisition) Act, 1948 for construction > ·of an electric sub-station. The Collector awarded compenF sation @ Rs.50,000/- per cottah (one cottah being equal to 1/20 bigha). Respondents-claimants filed appeals, whereupon the Land Acquisition Judge raised the compensation to nearly Rupees 5 lakhs per cottah. CESC, th'e requiring authority under the West Bengal Act, filed writ G petition before the High Court taking the stand that the > matter was decided in its absence. The High Court remanded the matter to the Land Acquisition Judge directing the.Appellant to be made a party. The Land Acquisi- 137 H 138 SUPREME COURT REPORTS [2008] 10 S.C.R. )- F A tion Judge again made assessment, but maintained the earlier rate. The determination was challenged before the High Court. The Appellant's main grievance was that large track of land was the subject matter of acquisition and the rates applied for smaller plots could not have any s relevance.The High Court determined compensation @ Rs.2.25 lakhs per cottah and directed that the Respondents/~laimants were entitled to rent compensation at the rate of 9% per annum and also entitled to interest at the rate of 9% ·per annum. C Before this Court, the stand of CESC is that the plot acquired for its use was wholly land locked and the rate appiicable therefor could not be as high a$ Rs.5,32,000t· per co·ttah as fixed by the Reference Court; that though the High Court fixed it at Rs.2,25,000/- per cottah, the same D was .also high. Cross appeals have been filed by the claimants seeking enhancement of rent and higher rate· of interest. The number of claimants is quite large and about 20. E Disposing of the appeals, the Court HELD:1. The armchair assessment of larid value has to proceed with common sense and circumspection. One should attempt to find out the just and reasonable compensation without attempting any mathematical precision in that regard. For the purpose of assessing compensation, the effortS should be to find out the price fixed for the similar land in the vicinity. [Para 16] [14S-B & C] .. 2.The difference in the land acquired and the land G sold might take on various aspects. One plot of land might"' be larger, ·another small, one plot of land might have a large frontage and another might have none. There might be differences in land development and location. There might be special features which have to be taken note of H and reasonably considered in the matter of assessing C.E.S.C. LIMITED _v._ SANDHYA RANI BARIK & ORS. [DR. ARIJIT PASAYAT, J] 139 ,.-~ A ' compensation. [Para 17] [145-D & F] 3. Where a very large plot of land has been acquired and the comparison is sought to be made with a comparatively small piece of land which has been sold or otherwise dealt with, then in that event, a percentage of the B price is to be knocked off because of the largeness itself of the acquired land. Accordingly, the High Court made the deductions. The High Court also dealt with the question of land locking and held that it was a special feature which had to be taken note of. [Para 18] [145-E & F] c -l 4.There is no infirmity in the approach of the High Court. Therefore, the rate fixed by the High Court does not suffer from infirmity. The appeals filed by the CESC, therefore, stand dismissed. But there is substance in the plea regarding rate of interest. The rate of interest as statutorily fixed shall be applicable in place of rate fixed by the[D ] Reference Court and the High Court. [Paras 19, 2-0, 22] (145-G, 146-A & F] CIVILAPPELLATE JURISDICTION: Civil Appeal No. 7201 of 2005 E From the final Judgment and decree dated 11/2/2003 of the High Court of Calcutta at Calcutta· in F.A. No.· 12 of 2002 ## WITH C.A. Nos. 7202, 7203, 7203, 7204, 7205 and 7206 of 2005[F ] Shanti Bhushan, Shyam Diwan, Bhaskar Gupta, K.V. Viswanathao, Sanjeev K: Kapoor, Vishal Gupta, Vikram Bajaj (for M/s. Khaitan & Co.), bhruv Mehta, Chanchal Kr. Dutta, D. Bera, Partha Sil, Sarla Chandra·, Avijit Bhattacharjee and G Saumya Kundu for the appearing parties. ## The Judgment of the Court was delivered by Dr. ARIJIT PASAYAT, J. 1.These appeals have been filed by CESC Ltd. questioning correctness of the judgment rendered H 140 (2008] 10 S.C.R. SUPREME COURT REPORTS A by a Division Bench of the Calcutta High Court disposing of three appeals filed by the present appellant challenging commo·n judgment and order of learned Land Acquisition Judge by which he disposed of three references from the award of the Collector. The acquisition of these lands took place under the B West Bengal Land.(Requisition and Acquisition) Act, 1948 (in short the 'West Bengal Act') and not under the Land Acquisition Act, .1894 (in short the 'Act'). ;.-. 2. Cross appeals have been filed by the claimants seeking enhancement of rent and higher rate of interest. c 3. The number of claimants was quite large and about 20. They were booked in three sets. The land was a-cquired under the West Bengal Act in May 1995. The requisition was- made in 1995 and the Notification was issued on 3.5.1995. The total area was more than· 3 bighas. One bigha is 20 cottahs and 1 0 cottah is 720 sq.ft. The. land was part of 10 bigha tract situated in 156A, Manicktala Main Road owned previously by a single common ancestor namely, Kali Pada Barik who had since died; The Collector made the award. some time in the year 1997 and E .thereafter th~ Land Acquisition Judge was approached on reference by the Bariks i.e the respondents ir) .the three appeals. The Collector's award was initially on the basis of about Rs.50,000/- per cottah as compensation but the Land Acquisi:tion Judge on the first occasion raised it to nearly Rupees 5 lakhs per cottah. At that stage the State and the Bariks were F opposite parties. Since the land was acquired for the purpose of present appellant which was the requiring authority under the West Bengal Act, acquisition has to be preceded by a requisition for maintenance of supplies essential to public life and in this case supply of electricity was the-Service involved. A S,ub. G station i.e. 132 'K.V, had aiready been built over the acquired land. The Requiring Authority filed a Writ Petition before the High Court taking the stand that the matter was decided in its absence. - On 3rd May, 2000 order was passed by a Division Bench of the High Court whereby the matter was remanded to H the Land Acquisition Judge directing the appellant to be made , C.E.S.C. LIMITED _v._ SANDHYA RANI BARIK & 141 ORS. [DR. ARIJIT PASAYAT, J] I ~" ## 142 SUPREME COURT REPORTS [2008] 10 S.C.R. _t-(_ A claimants in all these cases do get an award of compensation of Rs.2.25 lac per cottah . ..... /· 2. In addition thereto, they are entitled to solatium at the rate of 30% on the said land value. ,:.: - B 3. They shall also be entitled to additional compensation of 12% per annum on the land value, but not the solatium, from 3.5.95 to 27.3.97(see: Sunder's·case (2001) 7 sec 211) which deals with ultimate i.e. 5.28 interest on solatium but does not pronounce - c that Section 23(1A) will apply on Section 23(2) also). 4. The respondents/referring claimants shall also be entitled to rent compensation at the rate of 9% per annum from 16.10.90 to 2.5.95 on the land value computed at the rate (per cottah) of Rs.2.25 lac less D 25%; we clarify that the land value is to be reduced _.P_ by 25% and rent compe~sation shall run thereon the said period 16.10.90 to 2.5.95. 5. On all the items 1, 2, 3 and 4 the respondents/ referring claimants shall be entitled ~o interest at the E rate of 9% per annum from 27.3.97 until payment or payment into court; if such payment is not made within 17th February, 2004 the interest shall be thereafter at the rate of 15% per annum; and _'r-_ - F 6. Due credit shall be given in regard to the wiping of liability as regards the abq'lle .heads, on account of payments or payments into court already made by the appellants." 7. Stand of learned counsel ~or the appellant essentially G was that the rate applicable for acquired land cannot be as ·high as Rs.5,32,000/- per cottah as was fixed by the Reference Court. It is submitted that though the High -Court fixed it to• Rs.2,25,000/- per cottah, same was also high. The claimants relied upon sale deeds measuring about 5 cottahs. In the Cross H Appeals filed, Bariks have taken the stand that the apprecia- -\- ~ C.E.S.C. LIMITED _v._ SANDHYA RANI BARIK & 143 ORS. [DR. ARIJIT PASAYAT, J] c t . ~ ..... ' ~ --, .. tion aspect has not been taken note of. The reductions i.e. 25% A for land locking, 15% for road frontage and 5% fo·r belting are irrational. A large number of claimants i.e. 22 are involved and it is their undivided shares which had to be taken note of. It was pointed out that each person on partition does not get more than 5 cottah. The purpose of acquisition was construction of B sub-station which required large area. The acquired land was homestead urbanized industrial area .. 8. It is pointed out that the statute i.e. West Bengal Act provides that the rate of interest has to be 9% for one year and thereafter 15%. '"'" 9. It is submitted that the High Court took note of some common passage concept. There was no. lease and licence arrangement with Purbasa Housing Estate. So ingress and egress facilities. were known. Because of the locational advan- D tage no deduction is called for any largeness. It is pointed out · that the High Court went wrong in not adding land value for 7% years. The High Court while considering the largeness aspect has fixed 15 to 20%. It is the stand of Bariks that largeness · ·· -- cannot be an issue in the present one. The Reference Court E rightly held that largeness question was not relevant. It was a case of acquisition of contiguous land. Largeness has to be linked to the purpose. The belting method has no application because it was an open area for particular purpose. Similarly, there was no question of any land locking. The High Court observed, according to the Bariks, erroneously that there was any[F ] access. The common passage was linked to the main road. Since the purpose was to have protected area, largeness question was not of any relevance. So far as the frontage factor is concerned, it was submitted that for the purpose for which the land had been acquired frontag.e may not be necessary. It has G to-be anywhere in the area . 10. Additionally, belting method is an obsolete method. Further, belting is not a proper method as the land was situated in well defined development block. H 144 SUPREME COURT REPORTS [2008] 10 S.C.R. A B 11. It has been pointed out by learned counsel for the appellant that the purpose is really irrelevant for determining market value. The potential has to be seen: It is a case of willing buyer and williqg seller. It is also pointed out that number of ultimate claimants is really irrelevant because 20 sellers have to join if they have to sell the land and suit for partition has to be filed. 12. The High Court has noticed the following factual posi- · tion. c - (i) The acquired plot of land is about 150 to 200 ft. away from the Manicktala Main Road. It is the third belt away from the main road. -o - (ii) · It is impossible to conclude that the.re is any frontage of the acquired larid on the southern side where Manicktala main road runs. - _f_ E - (iii) So far as northern and southern .sides of the acquired plot are concerned it is admitted that those are land bound. On the west there is other land of Bariks and on the north there was a housing .estate .called Purbasa Housing ~state. F 13. The case of the appeUant was that the plot whicb wa~ _acquired for their use was wholly land locked. This fo(ms a very importantfactual issue which is important while determining the compensation. · 14. The issue was whether on the eastern side oi the ac"' · quired land there was a frontage on 40 ft. municipal public road. ·· The case of Bariks that this was so. On the other hand the appellant took the stand that there was no municipal road and it G was a private land of Purbasa Housing leading from the Manicktala Main road on the South into the Housing Estate itself. The road runs south to north and belongs to Purbasa. That 40 ft wide road is not a municipal road and it has no name.· There are no premises numbers attached to it. H C.E.S.C. LIMITED _v._ SANDHYA RANI BARIK & ORS. [DR. ARIJIT PASAYAT, J] 145 ~ \ ~ I " ~.J . _,JI-_ 15.1 nterestir:igly, the witnesses of th~ appellant were asked A a question as to whether it had taken permission from the Publie Works Department for laying cables under the P.W.D. road. No evidence was there to show that the road was a public road or it connected with the Manicktala Main Road. From the plan it appears that the road goes into the Purbasa Housing. Estate s· and ends there. Therefore, the plot was wholly land locked. The High Court ultimately therefore fixed the rates as noted above. > 16. The armchair assessment of land value has to pro~ ceed with common sense and circumspection. One should at~ tempt to find out the just and reasonable compensation without[c ] attempting any mathematical precision in that regard. For the purpose of assessing compensation, the efforts should be to find out the price fixed for the similar land in the vicinity, l ~~ 17. The difference in the land acquirecf\and the land sold D might take on various aspects. One plot . of land might be larger, . -another small, one plot of land might have a large frontage and another might .have none .. There might be difference.sjn land development and location. There might be special f~atures which.have to be. taken note of and rea_sonably considered in ·E the matter of a~sessing compensation. . _-r_ 18. Where a very large plot of land has been ac·q·uired and the comparison is sought to be made with a comparatively small piece of land which has been sold or.otherwise dealt with, then in that event, a percentage of the price is to be knocked off ·F because of the largeness itself of the acquired land. Accordingly, the High Court_made the deductions. The High Court also de~lt with the question of land locking and held that it was a. special feature which had to be taken note of. 19. We do not find any infirmity in the approach of the High[.G ] Court. Therefore, the rate fixed by the High Court does not suffer from infirmity. The appeals filed by the appellant-CESC, therefore, stand dismissed. 20. Rate fixed by the High Court as questioned ii:) the cross H [2008] 10 S.C.R. 146 SUPREME CQURT REPORTS A appeals does not warrant irlterference. But there is substance in the plea re,garding rate of interest. 21. Section 7(2)(a) ofWest Bengal Act is as follows: B '7(2)(a):' When the compensation has been determined under sub-section (1) the Collector shall make an award in accordance with the principles set out in section 11 of the Land Acquisition Act, 1894 and the amount referred to . in sub-section (2) of section 23 of that Act shall also be included in the award: c D Provided tha·t interest at the rate of nine per centum per annum on the amount 6f compensation . . under~the award from the date of the publication of the notice under subsectic>n (1 a) of section 4 unti.I payment,shall be included in the amount payable under the award: > Provided further that if such compensation or any part > thereof is not paid or deposited within a period of one year from the date of publication of the notice under subsection (1 a) of section 4, interest at the rate of fifteen per centum per annum shall be payable from the date of expiry of the said period of one year on the amount of compensation or part thereof which has not been paid or deposited before the date of such expiry." . 22. The rate of interest as statutorily fixed shall be appli·F cable in place of ratefi,xed by the Reference Court and the High Court. 23. The cross-appeals are allowed to that limited extent. There will be no order as to costs. B.B.B. Appeals disposed of.