REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 7201 OF 2005

C.E.S.C. Limited …..Appellant

Versus

Sandhya Rani Barik and Ors. ….Respondents

(With Civil Appeal Nos. 7202, 7203, 7204, 7205 and 7206/2005)

J U D G M E N T

Dr. ARIJIT PASAYAT, J.

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1. These appeals have been filed by CESC Ltd. questioning

correctness of the judgment rendered by a Division Bench of

the Calcutta High Court disposing of three appeals filed by the

present appellant challenging common 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  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.

3. The number of claimants was quite large and about 20.

They were booked in three sets. The land was acquired 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

cottah  is  720  sq.ft.  The  land  was  part  of  10  bigha  tract

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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  thereafter  the  Land  Acquisition  Judge  was

approached on reference by the Bariks i.e the respondents in

the three appeals. The Collector’s award was initially on the

basis of about Rs.50,000/- per  cottah as compensation but

the Land Acquisition Judge on the first occasion raised it to

nearly Rupees 5 lakhs per cottah. At that stage the State and

the Bariks were 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  Sub-station  i.e.  132  K.V.  had

already  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  the  Land Acquisition

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Judge  directing  the  appellant  to  be  made  a  party.  It  also

directed that persons who had already been examined before

the  Land  Acquisition  Judge  would  be  again  presented  for

cross  examination  by  the  appellant  subject  to  their

availability.  The  matter  was  considered  again.  The  Land

Acquisition Judge again made assessment and after hearing

the present appellant held that the rate per cottah would be

higher. But in view of the fact that earlier  a lower rate had

been fixed, same was maintained.

4. The determination was challenged before the High Court.

5. The  appellant  referred  to  the  evidence  of  some  of  the

witnesses  examined  by  Bariks.  One  Chandra  Nath  Barik

admitted that the acquired land was previously being used by

the washerman of the family for washing clothes and drying

those.  Evidence was led by the appellant that at the time of

requisition of the land in 1990 the land was low in lying area

and  was  filled  with  water  hyacinths.  Just  outside  the

boundary of the tract acquired, there was a big pond. The land

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had to be filled up by copious supply of fly ash which was

supplied by the appellant itself  from its generation plant at

Titagarh.  The thickness of the filling fly ash layer was of the

order of 10 ft.  The land development was undertaken by the

appellant  by  engagement  of  certain  contractors.  Their  bills

were exhibited and the payment to the order of about Rs.30

lakhs was claimed.

6. Bariks  on  the  other  hand  took  the  stand  that  entire

money was not spent on land development, but a part of that

was for putting up the structures of the appellant as well. The

High Court  referred to some factual aspects and took note of

the  fact  that  the  appellant’s  main  grievance  was  that  large

track of land was the subject  matter of acquisition and the

rates  applied  for  smaller  plots  cannot  have  any  relevance.

After  referring  to  certain  factual  aspects,  the  High  Court

disposed of the appeals in the following manner:

“1. the  market  price  of  the  land  acquired  is determined to be  Rs.2.25 lac per  cottah and the  referring claimants  in all  these  cases  do

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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.   

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 SCC 211) which deals with ultimate i.e. 5.28 interest on solatium but does not pronounce 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 25%; we clarify that the land value is to be reduced by 25% and rent compensation 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 to interest at the 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

6. Due credit shall be given in regard to the wiping of liability as regards the above heads, on account of payments or payments into court already made by the appellants.”   

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7. Stand  of  learned  counsel  for  the  appellant  essentially

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 Appeals filed, Bariks have taken the

stand that the appreciation aspect has not been taken note of.

The reductions i.e. 25% for land locking, 15% for road frontage

and 5% for 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  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%.  

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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

advantage  no  deduction  is  called  for  any  largeness.  It  is

pointed  out  that  the  High Court  went  wrong in not  adding

land value for 7½ 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 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 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

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purpose for which the land had been acquired frontage may

not be necessary. It has 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.  

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 willing 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

position.  

(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.  

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(ii)  It  is  impossible  to  conclude  that  there  is  any frontage of the acquired land on the southern side where Manicktala main road runs.

(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 Estate.

13. The case of the appellant was that the plot which was

acquired for their use was wholly land locked.  This forms a

very  important  factual  issue  which  is  important  while

determining the compensation.  

14. The  issue  was  whether  on  the  eastern  side  of  the

acquired 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 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.

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That 40 ft wide road is not a municipal  road and it has no

name. There are no premises numbers attached to it.  

15. Interestingly, the witnesses of the appellant were asked a

question  as  to  whether  it  had  taken  permission  from  the

Public 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 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 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 similarly land in the vicinity.

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17. The  difference  in the  land acquired  and the  land 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  and

reasonably  considered  in  the  matter  of  assessing

compensation.  

18. 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 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.  

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19. We do not find any 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 appellant-CESC,

therefore, stand dismissed.   

20. Rate fixed by the High Court as questioned in the cross

appeals does not warrant interference. But there is substance

in the plea regarding rate of interest.  

21. Section 7(2)(a) of West Bengal Act is as follows:

“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:

Provided that interest at the rate of nine per  centum   per  annum  on  the  amount  of compensation under the award from the date of  the  publication  of  the  notice  under  sub- section (1a) of section 4 until payment shall be included  in  the  amount  payable  under  the award:

Provided  further  that  if  such compensation or any part thereof is not paid

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or deposited within a period of one year from the  date  of  publication  of  the  notice  under sub-section  (1a)  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 applicable

in  place  of  rate  fixed  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.

   …………………………

J. (Dr. ARIJIT PASAYAT)

…………………………J. (P. SATHASIVAM)

New Delhi, July 7, 2008

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