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CASE NO.: Appeal (civil)  1401 of 2007

PETITIONER: Numaligarh Refinery Ltd

RESPONDENT: Green View Tea & Industries & Anr

DATE OF JUDGMENT: 15/03/2007

BENCH: B.P. SINGH & TARUN CHATTERJEE

JUDGMENT: J U D G M E N T   

(Arising out of SLP) No.15810 of 2005)  WITH CIVIL APPEAL NO 1402 2007 (Arising out of SLP) No.7182 of 2005) M/s Green View Tea & Industries                                 \005.Appellant Versus                                                      Collector, Golaghat & Anr.                                      \005Respondents

B.P. SINGH, J.

These special leave petitions have been preferred against the  judgment and order of the High Court of Assam at Gauhati dated  December 21, 2004 in Review Application No.54 of 1998.  Special  Leave Petition No.7182 of 2005 has been preferred by M/s. Green  View Tea and Industries Ltd. whose lands measuring about 681  bighas, 1 katha with tea bushes, drainage system, garden roads, shade  trees and other valuable trees were notified for acquisition under  Section 4 of the Land Acquisition Act by Notification published in  Assam Gazette on November 11, 1992.  The petitioner in the  aforesaid special leave petition has challenged the compensation  awarded by the High Court for the lands in question.

Special Leave Petition No.15810 of 2005 has been preferred by  M/s. Numaligarh Refinery Ltd. for whose benefit the acquisition has  been made, and is directed against the award of compensation for the  tea bushes at the rate of Rs.75/- each.

Special Leave granted in both these petitions.

This litigation has a long chequered career.   The Notification  issued under Section 4 of the Land Acquisition Act was followed by a  declaration made under Section 6 of the Act.  Possession of the lands  in question had been taken invoking the urgency provisions.  The  Collector by his award of July 4, 1994 awarded compensation for the  lands @ Rs.7,000/- per bigha and compensation for the tea bushes @  Rs.15 per tea bush.  Dissatisfied with the award of the Collector M/s.  Green View Tea and Industries Ltd. (hereinafter referred to as the  "appellant") sought a reference under Section 18 of the Act which was  made to the District Judge, Golaghat and was registered as L.A. Case  No.1 of 1996.  By his judgment and order dated November 18, 1996  the learned District Judge awarded compensation @ Rs.22,000/- per  bigha for the lands and @ Rs.75/- each for tea bush.

The appellants preferred First Appeal No.27 of 1997 against the  award of the learned District Judge contending that the compensation

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granted for the lands was inadequate.  The Numaligarh Refinery Ltd.  (hereinafter referred to as the "respondent") as well as the Collector  filed appeals before the High Court being First Appeal No.32 of 1997  and First Appeal No.33 of 1997 respectively.  By judgment and order  dated June 24, 1998, the High Court dismissed First Appeal No.27 of  1997 preferred by the appellant while allowing the appeals preferred  by the respondent and the Collector.  The High Court restored the  award of the Collector granting compensation @ Rs.7,000/- per bigha  and Rs.15 per tea bush.

The appellant filed a Review Application No.54 of 1998  praying for the review of the judgment and order of June 24, 1998  dismissing its appeal.  The petitioners also filed Special Leave  Petitions before this Court against the judgment and order of the High  Court aforesaid, but on March 8, 1999 withdrew the Special Leave  Petitions in view of the pendency of the review petition before the  High Court.  Ultimately, the High Court by its order dated August 25,  1999 dismissed the review petition.

The appellant then filed Special Leave Petition Nos.18180- 18182 of 1999 against the judgment and order of the High Court dated  June 24, 1998 dismissing the First Appeal preferred by the appellant.   On November 22, 1999 the appellant also filed a special leave petition  before this Court being Special Leave Petition No.5417 of 2000  impugning the order of the High Court dated August 25, 1999  dismissing the review petition.  

This Court by its order of December 1, 1999 dismissed the  special leave petitions preferred by the appellant.  Aggrieved thereby  the appellant filed Review Petition Nos.306-308 of 2000 in which this  Court issued notice on March 8, 2000.  The special leave petitions  preferred against the order of the High Court dismissing the review  petition and the review petitions filed by the appellant against the  order of dismissal of its special leave petitions were heard together.   By its judgment dated November 9, 2001 this Court dismissed the  Review Petition Nos.306-308 of 2000 but granted leave in Special  Leave Petition No.5417 of 2000 against the order of the High Court  rejecting the review petition of the appellant. This gave rise to Civil  Appeal No.7692 of 2001.

The appeal of the appellant, namely, Civil Appeal No.7692 of  2001 was allowed by this Court setting aside the order of the High  Court and the matter was remitted to the High Court to be heard and  disposed of in accordance with law.  The judgment of this Court in the  aforesaid appeal is reported in 2004, Vol.4 SCC 122.  It would be  necessary at the appropriate stage to notice the observations made by  this Court in its aforesaid judgment.

To complete the narrative, in the light of judgment and order of  this Court the High Court considered the review application filed  before it by the appellant and by its judgment and order of November  21, 2004 partly allowed the review application in as much as it  increased the compensation awarded for the lands from Rs.7,000/- per  bigha to Rs.10876/- per bigha and awarded the compensation of Rs.75  for each tea bush.  This order of the High Court partly allowing the  review application is challenged before us in these two appeals.   

Before adverting to the facts of the case and the evidence  produced by the parties in support of their respective claims, it may be  useful to broadly indicate even at this stage the thrust of the argument  of counsel for the appellant that the State having itself granted  compensation @ Rs.55,000/- per bigha, which was also at one stage  offered to the appellant \026 company, and in the light of several awards  made, there was no justification for granting to the appellant \026  company compensation for the lands at a rate less than Rs.55,000/-

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per bigha.  Reliance was also placed on the observations of this Court  to the effect that these were relevant matters to be considered while  awarding compensation in the instant case.

The appellant has relied upon the offer made by the State as  contained in its approval dated September 10, 1992.   It has further  relied on the approval of rates for tea lands in the districts of Tinsukia  and Dibrugarh, apart from estimates prepared for some other lands  which were sought to be acquired for Oil and Natural Gas  Commission.  The appellant has also relied on awards made in respect  of tea lands in the district of Sibsagar Exhibits \026 8 and 9.  The  appellant has relied on the sale deeds Exhibits 3,4 and 5 and submitted  that the compensation awarded by the High Court is wholly  unjustified and grossly inadequate.   

There is no dispute that in the Jamabandi the lands have been  classified as tea class.  The lands fall within the district of Golaghat  which earlier formed part of the district of Sibasagar.

It was strenuously urged before us that the offer made by the  State itself was a very important piece of evidence to be considered,  and this aspect of the matter was emphasized by this Court while  remanding the matter to the High Court on an earlier occasion.  Our  notice has been drawn to the letter of the Deputy Commissioner,  Golaghat addressed to the Commissioner and Secretary to the  Government of Assam, Department of Revenue dated August 20,  1992.  In the said letter the Deputy Commissioner has referred to  lands measuring 751.30 acres which was proposed to be acquired for  the respondent to set up its refinery.  The Deputy Commissioner  proposed for approval of a uniform bigha rate @ Rs.55,000/- per  bigha irrespective of class for both Government and patta lands.   Reference is made to the lands acquired for ONGC in the District of  Sibsagar for which uniform bigha rate of Rs.55,000/- was fixed and  which had been duly approved by the Government.

The Additional Secretary, Department of Revenue wrote to the  Deputy Commissioner, Golaghat by his letter dated September 10,  1992 that the Government had approved the proposal for fixation of  uniform rate of Rs.55,000/- per bigha for both Government and patta  lands proposed to be transferred/acquired for the respondent.  It would  thus appear that the proposal made by the Deputy Commissioner,  Golaghat was accepted by the Government and it is further reinforced  by Annexure P-6 which is the "Minutes of the Meeting" held in the  Chief Minister’s Chamber on 25.2.93.  The said Meeting was attended  by the Minister of Revenue, Member - State Planning Board, the  Chief Secretary of the State, the Commissioner and Secretary \026  Industries etc. on behalf of the Government and the Chairman and  Managing Directors of IBP and other officers on behalf of the  respondent.  The issue relating to fixation of compensation for the  land to be acquired for the refinery of the respondent was discussed  and the following decision was taken:-

"1.  For Patta land compensation for per bighas              should not exceed Rs.55,000/- per bigha all inclusive.

For this purpose additional Secretary, Revenue  and Joint Secretary, Industries have been authorized  to make a filed visit and discuss the matter with the  Deputy Commissioner, Golaghat so that there is no  problem in taking over this land and handing it over to  IBP for construction of the Refinery.

       If this team arrives at a final decision to pay  Rs.55,000/- per bigha then the Deputy Commissioner  will complete formal proceeding and compensation

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will be paid through the deputy commissioner.

       In case the negotiations cannot be arrived as  Rs.55,000/- per bigha all inclusive then the land  acquisition proceeding would continue".

However, for the Government land premium @ Rs.35,000/- per bigha  was fixed.   

It appears that the offer made by the State Government was not  acceptable to the appellant and, therefore, the matter had to be re- considered by the Government since it was not possible to acquire the  land on the basis of agreed compensation.  Thus, the Revenue  Secretary by his letter of April 2, 1993 wrote to the Deputy  Commissioner and Collector, Golaghat informing him that since land  acquisition proceedings under the provisions of the Land Acquisition  Act have been taken up by the Collector, Golaghat for acquisition of  the lands in question, the valuation of the land should be fixed at  market value of the land on the date of publication of Notification  under Section 4 (1) of the Act and other relevant factors as per  prescribed provisions of the Act.   It was clarified that since the  valuation of the land at Rs.55,000/- per bigha was not determined as  per the provisions of the Land Acquisition Act, the decision of the  Government as contained in its letter dated September 10, 1992  forwarded by message dated September 21, 1992 was cancelled.   Apparently, since Notification under Section 4 of the Act was issued  on November 11, 1992 and the matter had to be considered in the light  of the provisions of the Act, the Government cancelled its earlier offer  in view of the proceedings taken under the Act to determine the  market value.

The second set of documents on which reliance was placed by  the appellant are the orders of the Deputy Commissioner, Dibrugarh  issued in June, 1992 wherein it was stated that the valuation  (categorywise) have been fixed for the lands which were acquired/  taken over by Oil India Ltd. in the year prior to 1990 and which  remained pending for payment.  The order stated that the fixation of  value of lands had been arrived at after considering the market price  of land prior to 1990 alongwith interest payable on them.  Hence it  was ordered that the rates fixed in the aforesaid order shall be  applicable to pending cases of the period prior to the year 1990.  The  land value of "Rural Area viz Paddy Field and Tea Cultivation Area"  was fixed at Rs.60,000/- per bigha and the rate fixed for "Land unfit  for cultivation viz rocky areas, sandy areas, Jaldube areas etc." was  fixed at Rs.40,000/- per bigha. A similar order was passed by the  Deputy Commissioner, Tinsukia district on August 4, 1992 which also  related to lands acquired/ taken over by Oil India Ltd. during the  period prior to June 26, 1990.  The same rates were fixed for tea  cultivation area and land unfit for cultivation.

These two orders do establish that the rate for tea lands was  determined in respect of lands acquired prior to year 1990, at the rate  of Rs.60,000/- per bigha.  This, however, included the element of  interest payable to the claimants as also inclusive of all concessions.   Therefore, from the decision of the Government communicated by  letter dated September 10, 1992 in respect of the lands in question as  also the two orders issued by the Deputy Commissioners of Tinsukia  and Dibrugarh it is clear that the price was "all inclusive" meaning  thereby that nothing beyond the amount mentioned therein would be  payable to the land owners.  This was apparently so because the price  was being fixed by agreement and not after following the procedure  prescribed under the Land Acquisition Act.  The State therefore did  not incur the statutory liability to pay solatium, interest etc. apart from  the price determined in accordance with the rates mentioned therein.

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The next set of documents on which reliance was placed by the  appellant are the two estimates of the probable cost of acquisition of  land under the Land Acquisition Act.  Exhibit - 6 related to the district  of Sibsagar and is dated April 23, 1992 and Exhibit - 7 which also  relates to district Sibasagar is dated May 25, 1992.  In both cases  probable rate was shown to be Rs.55,000/- per bigha.

The appellant also relied on two awards made by the Collector  under the Act relating to lands acquired in the district of Sibasagar.   These awards are dated August 12, 1995 and December 13, 1995 and  relate to acquisitions made under Notifications issued under Section 4  of the Land Acquisition Act on May 23, 1994 and May 24, 1994.   Having regard to the amount awarded the rate would work out to  approximately Rs.55,000/- per bigha.  Counsel for the appellant  emphasized that the new district of Golaghat where the lands in  question are situated formed part of the district of Sibsagar before the  new district of Golaghat was carved out.  The appellant also relied on  three sale deeds Exhibits 3, 4 and 5 to prove that the rate at which  lands were sold between February 12, 1985 and May 12, 1992 varied  from Rs.40,000/- to Rs.50,000/- per bigha.  

Relying on all these documents the appellant contended that the  compensation awarded by the High Court @ Rs.10,876/- per bigha  was grossly inadequate.  The Collector ought to have awarded  compensation at least @ Rs.55,000/- per bigha if not more.  There was  no reason why the documentary evidence on record should not be  relied upon particularly when they related to offer made by the State  Government.  Those documents disclosed that the rate was about  Rs.55,000/- per bigha as evidenced by awards made by the Collector  and estimates prepared by the Department of the State Government.  It  was further submitted that of the three sale deeds produced before the  Court the highest rate should have been accepted which was  Rs.50,000/- evidenced by sale deed dated February 12, 1985.  It was  submitted that even if some deduction was allowed on account of plot  being small, the increase in value of land over 7 years had also to be  taken note of.

Learned counsel appearing on behalf of the respondent  submitted that the earlier offer made by the State Government for the  lands in question @ Rs.55,000/- was cancelled since the appellant did  not accept the same and it became necessary to resort to the process of  acquisition under the Land Acquisition Act.  Learned counsel sought  to justify the rate of  Rs.10,876/- per bigha.   He has referred to  Exhibit - 3 which is the calculation on the basis of which the rate of  Rs.10,876/- per bigha was worked out.  The chart discloses that the  sale deeds in respect of 5 plots of land were taken into consideration.   These sale deeds related to the period 1988 to 1992 and the average  price worked out to Rs.10,876/-.  It was not disputed before us that  one of the plots sold was homestead land while the others have been  described as "faringati" lands which we are told are lands which are  not suitable for cultivation.  Be that as it may, what is obvious is the  fact that the lands referred to therein are not of the same category as  lands with which we are concerned in these appeals namely, tea class  lands.  Moreover, the government itself did not agree with this  valuation as is evident from the letter of the Revenue Department  dated July 22, 1993 in which it was pointed out that the inclusion of  homestead land (Bari Class) enhanced the average price of the lands  which was not acceptable to the Government.  Necessary instructions  were issued to keep this in mind while preparing the estimates.

The High Court in substance has restored the value of lands as  worked out in the aforesaid chart prepared in the office of the Deputy  Commissioner and Collector, Golaghat.

It was contended that the three sale deeds on which the

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appellant relied related to small plots by the side of the road and,  therefore, the plots were not comparable with the lands subject matter  of the acquisition.  In fact the best evidence was the purchase of the  lands in question by the appellant itself in the year 1987.  It was  sought to be urged before us that by registered sale deed of September  7, 1987 the appellant had purchased the partnership firm together with  other lands movable and immovable properties including all rights  and interests from the partnership firm which earlier managed the Tea  Estate.  Under the said deed only a sum of Rs. 2,45,424/- was paid for  purchase of the entire Estate by the partnership firm. This document  was never produced before the Reference Court and, therefore, the  appellant strongly objected to this document being looked at by the  Court.  Apart from the fact that this document was never produced  before the Reference Court, there is another objection to the taking  into account the price paid by the appellant for the purchase of the  partnership firm which earlier managed the tea company.  Since, the  entire partnership firm was taken over with its assets and liabilities,  the price paid did not represent merely the price of the lands but also  the other assets as diminished by the liabilities.  Learned counsel for  the respondent submitted that the value of the lands could be worked  out by taking into account the total assets as well as total liabilities of  the firm.  We are afraid such a procedure cannot be permitted for land  acquisition cases.  If the price paid did not represent the price of the  lands purchased, it cannot be taken as evidence of the value of the  land.

Referring to the rates fixed for acquisition/taking over of lands  in the districts of Dibrugarh and Tinsukia it was submitted that there  was no evidence with regard to the location of these lands and also  with regard to other parameters that were relevant.  Dibrugarh and  Tinsukia were more developed than the district of Golaghat.  It was,  therefore, submitted that the orders relied upon were not of any help  to the appellant.  Lastly, it was submitted that the awards made by the  Collector under the Land Acquisition Act relied upon by the appellant  related to the district of Sibasagar and not the district of Golaghat.

Learned counsel for the respondent has also cited several  decisions of this Court before us but we do not consider it necessary  to refer to them since they all reiterate the principles fairly well  established over the years laying down norms for assessing the market  value of the lands acquired.

Before considering the submissions urged before us it is useful  to notice the observations of this Court while remanding the matter to  the High Court for re-consideration of the Review Petition.  This  Court observed:-

"This first thing that strikes us is that when the  proposal of acquisition of land was mooted, the  Deputy Commissioner himself was of the view that  the compensation payable should be at the rate of  Rs.55,000/- per bigha.  The State Government  considered this and then agreed to the same.   Ultimately, this compensation would have to be paid  by the beneficiary of the land acquisition namely the  oil refinery.                  Secondly, the appellant had placed on record  the awards made in the case of other similarly situated  tea estates nearby showing that in each of these cases,  the Government had directed compensation at the rate  of Rs.55,000/- per bigha.

       Thirdly, an order of the State Government  issued by the Collector and Deputy Commissioner,

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Tinsukia dated 4th August 1992 and an order of the  District Collector and Deputy Commissioner  Dibrugarh were placed on record, which indicate land  value of different categories.  They are as under:-

1.  Highly developed commercial Rs.2,00,000/- per bigha                places within notified area         2.  Urban area (the recognized          Rs.1,20,000/- per bigha                towns within notified area)         3.  Semi-urban area (the area           Rs.1,20,000/-per bigha                beyond the notified area                but within two miles radius                of the town either revenue                or municipal town)          4. Rural area viz. paddy field          Rs.60,000/- per bigha                and tea cultivation area                  5.  Land unfit for cultivation          Rs.40,000/- per bigha                viz. rocky areas, sandy                  areas, jaldube areas etc.

Thus, it would be seen that, even according to  the State Government, if the land was unfit for  cultivation and comprised only rocky areas, sandy  areas or jaldube areas, the amount of compensation  payable was at the rate of Rs.40,000/- per bigha.  As  against this the Collector was directed to fix the  compensation at the rate of Rs.7,000/- per bigha and  the District judge enhanced it to Rs.22,000/- per  bigha.  Surely, the tea estate land was much more  valuable than "land unfit for cultivation".  It is  nobody’s case that the tea estate’s land was  uncultivated or that there was no tea bushes growing  thereupon.

Fourthly, the oral evidence on record showed  that, at all stages, the Government was prepared to  pay Rs.55,000/- per bigha and it was only the  appellant who had taken a rigid stand demanding a  higher price.

Fifthly, Exhibits 6, 7 & 8 placed on record  prima facie seem to be similar cases of acquisition of  land in Sibsagar District, wherein for arable land the  estimate of compensation payable made, by the  Government itself was Rs.55,000/- per bigha.  Exhibit  8 was the case of acquisition of tea class land, which  also showed the compensation payable at the same  rate as the Government had initially agreed to pay.

Sixthly, even if the High Court disagreed with  the valuation of tea bushes made by the District  Judge, being the Court of first Appeal, it would have  had to itself fix the compensation for the tea bushes.   This, the High Court failed to do.  All this on record  appears to have escaped the notice of the High Court".  

Having considered all aspects of the matter we have reached the  conclusion that the compensation awarded by the High Court is  inadequate and requires modification.  In the first instance, the  government itself suggested that the appellant may be compensated by  working out the compensation @ Rs.55,000/- per bigha.  The proposal

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made by the Deputy Commissioner in respect of the lands in question  was acceptable to the government.  Unfortunately, the appellant did  not agree to accept the offer made by the State Government and,  therefore, it became necessary to resort to acquisition proceedings  under the Land Acquisition Act.  This appears to us to be a very  important piece of evidence, and the mere fact that the Government  later cancelled its decision because the appellant did not agree to the  rates suggested, will not make much of a difference.   The documents  do establish that the government itself was willing to pay  compensation for the lands @ Rs.55,000/- per bigha, but the appellant  thought that the rate offered was inadequate.  

The decision of the government to offer compensation @  Rs.55,000/- per bigha is not an isolated instance because in other  districts as well a similar rate was offered.  At least two such orders  were produced before us which related to the districts of Dibrugarh  and Tinsukia.  An all inclusive price of Rs.60,000/- per bigha was  offered for tea class lands.  The amount offered included the element  of interest as well, and related to an earlier period namely the period  before the year 1990 since the acquisitions/ take over in those cases  related to the period prior to 1990.  This certainly gives a clear picture  as to the value of tea class lands in different districts of the State.  The  submission urged before us that the proximity of the lands in question  was an important consideration cannot be over-looked.  It is true that  if there was evidence to prove that tea class lands were sold in the  vicinity of the lands in question at a particular rate, the Court could  not have ignored such sale transaction and the price paid.  However,  in the instant case, we are concerned with a tea garden.  It was not  disputed before us that such tea gardens are to be found in many  districts of the State of Assam.  Having regard to the fact that in the  districts of Dibrugarh and Tinsukia compensation at the same rate was  awarded, it appears that the value of tea class lands did not vary much  on account of their location in different districts.  The two instances  relied upon by the appellant provides evidence to the effect that tea  class lands in different districts, in the absence of special features, had  the same value.  These rates were fixed in the year 1992, only a few  months before Notification under Section 4 of the Land Acquisition  Act was issued in respect of the lands in question.  The High Court  rejected these valuations observing:-

"The price offered for lands in other districts may be a  good piece of evidence, but the districts referred to i.e.  namely \026 Sibasagar and Dibrugarh are far away from  Golaghat District.  That apart, the price paid for the  lands in those districts do not appear to have been  tested in any court of law.  The payment in those  cases might have been on the higher side.  We,  therefore, order payment after recalculation at the rate  of Rs.10,876/- per bigha as determined by the  Collector".

We do not approve the approach of the High Court.  

The two estimates prepared by the Collector of Sibasagar dated  April 23, 1992 and May 25, 1992 also give some indication as to the  value of tea class lands and it is not a mere co-incidence that in those  estimates as well the cost of acquisition worked out was @ of  Rs.55,000/- per bigha.  Similar is the case with the two awards made  in respect of tea class lands acquired in the district of Sibasagar where  also the rates worked out to about Rs.55,000/- per bigha.  Notification  in respect of both these acquisitions was issued in May 1994, while  Notification under Section 4 of the Act was issued on November 11,  1992 in the instant case.  However, viewed from a realistic angle, it  would appear that the compensation awarded under the two awards

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would work out to much more that the "all inclusive offer" of  Rs.55,000/- per bigha, because the claimants in those cases will also  be entitled to solatium and interest etc. which itself would  considerably increase the total compensation payable to the claimants.

So far as the sale deeds are concerned. They no doubt relate to  small plots but the best price offered was one under sale deed dated  February 12, 1985 which was @ Rs.50,000/- per bigha.  Even if we  reduce the value by about 30% on account of smallness of the plots  but enhanced the price @ 10% per year since the sale deed related to a  period approximately 7 years earlier, it would again work out to a  figure not less than Rs.55,000/- per bigha.

The High Court has determined the rate of compensation basing  itself on a proposal made by the Deputy Commissioner which was not  even accepted by the Government.  Moreover, the sale instances taken  into account did not relate to tea class lands but related to "firangati"  lands which fall under a lower category.

The question then is as to what should be the rate at which  compensation should be awarded for the lands in question.  In doing  so, we must bear in mind the fact that the offer made by the  Government was an all inclusive offer of Rs.55,000/- per bigha.  If the  appellant had accepted the offer, it would not have been necessary for  the State to initiate a proceeding for acquisition under the Land  Acquisition Act and, thereafter, to contest the protracted litigation.   The State would not have been liable to pay solatium, interest etc.   The grant of compensation @ Rs.55,000/- per bigha under the Land  Acquisition Act is, therefore, not justified.  It has been often said that  fixation of compensation under the Land Acquisition Act involves an  element of rational guess work.  We are of the view that having regard  to the evidence on record compensation worked out @ Rs.35,000/-  per bigha for the lands would be fair and adequate because the  appellant would also be entitled to statutory benefits such as solatium  and interest thereon.  We accordingly hold that the appellant is  entitled to compensation for the lands @ Rs.35,000/- per bigha apart  from all statutory benefits to which it may be entitled by way of  solatium, interest etc.

The next question is as to what compensation should be  awarded for the tea bushes standing on the acquired lands.  The  Collector had offered compensation @ Rs.15/- per tea bush which had  been enhanced to Rs.75/- per tea bush by the Reference Court.  In the  earlier round of litigation the High Court reduced it to Rs.15/- per tea  bush but after remand the High Court has approved the rate of Rs.75/-  per tea bush.   

According to the respondent and the Collector compensation  for tea bushes should be fixed on the basis of Krishnamurthy formula  which was formulated in the year 1972 by Shri Krishnamurthy, the  then Secretary, Department of Revenue.  On the other hand, counsel  for the appellant submitted that the aforesaid Krishnamurthy formula  was considered in an award given by a former Chief Justice of the  Assam High Court which award was approved by the High Court.   The learned Arbitrator noticed the Krishnamurthy formula but in the  circumstances found that the compensation needed to be enhanced  considerably.   

As noticed by the High Court, the Krishnamurthy formula laid  down two governing factors for determining compensation for tea  bushes namely; (1) cost of fresh plantation not exceeding Rs.45,000/-  per hector (2) annual net profit from tea bushes per hector Rs.10,000/- .  The same formula was commended for our acceptance.  On the  other hand, the High Court by its impugned judgment and order has  fixed the rate of Rs.75/- per tea bush on the basis of the award of

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Justice S.K. Dutta which was approved by a Division Bench of the  Assam High Court.

Counsel for the respondents submitted that even if the formula  adopted by the Arbitrator is accepted and the compensation calculated  thereon, the compensation will not be Rs.75/- per tea bush but only  Rs.37.50 per tea bush.   

There is substance in the submission of learned counsel for the  respondent and the Collector.  The dispute referred to the learned  Arbitrator in the case of Lakwah Tea Company Ltd. related to damage  done to the tea garden of Lakwah Tea Company Ltd. on account of  crude oil and sludge entering the garden damaging the tea bushes as  well as the nursery.  The damage was mainly on account of crude oil  getting mixed up with flood water.  It was in a dispute of such nature  that an award was made by the Arbitrator.  The learned Arbitrator  noticed the Krishnamurthy formula and observed :-          "The instant case is different from cases in which the  land with tea bushes is acquired.  This is not a case of  requisition.  In this case the tea bushes will have to be  replanted on the land which was affected by oil and  from which the damaged bushes are uprooted".

       The learned Arbitrator observed that in cases where land with  bushes is acquired compensation for land is paid so that the person  concerned can buy a similar land, and compensation for tea bushes is  paid as cost of fresh plantation and for loss of crops.  In that case the  Arbitrator found that the tea bushes had to be uprooted and the land  had to be prepared for cultivation by adopting the procedure for  treatment of the land so as to rehabilitate the land.  According to the  evidence available in that case the rehabilitation of land could take  about two years and if crude oil was deposited it would take longer  time on account of the treatment process to be applied.  In these  circumstances, the learned Arbitrator concluded:-

"Hence replantation cost will be very high and the  loss of crops will be much higher than in a case in  which land with tea bushes is acquired.  Thus the  value of a tea bush in the instant case will be about  double of the value of a tea bush in a case where the  land is taken, I therefore fix Rs.75/- as the value of a  tea bush in the instant case will be about double of the  value of a tea bush in a case where the land is taken, I  therefore fix Rs.75/- as the value of a tea bush in the  instant case with observation that it is on the lowers".

       It would thus be seen that the award of the Arbitrator fixing the  rate of Rs.75/- per tea bush took into account the cost of re- habilitation of the land which was adversely affected by seepage of  crude oil and which therefore required treatment.  The learned  Arbitrator himself assessed, in view of the degradation which the land  had suffered and the treatment required that the rate per bush would  come to Rs.75/- each which was double the value of a tea bush in a  case where the land was acquired.  Thus 50 per cent of the  compensation awarded represented the cost of treating the land which  had been adversely affected by seepage of crude oil and suffered  degradation.

       We are therefore satisfied that even if the formula adopted by  the Arbitrator is accepted, compensation must be awarded for the tea  bushes only @ Rs.37.50 per tea bush, which is 50 per cent of the  compensation awarded by the Arbitrator, since the instant case is a

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case of acquisition and does not involve incurring of any expenditure  on treatment of the lands in question.  We, therefore, accept the  submission urged on behalf of the respondent and the Collector that  the compensation for tea bushes @ Rs.75/- each is excessive and  ought to be reduced to Rs.37.50 for each tea bush.  We order  accordingly.   

       In the result Appeal arising out of the Special Leave Petition )  No.7182 of 2005 is partly allowed and the compensation for the land  acquired is determined at the rate of Rs.35,000/- per bigha instead of  Rs.10,876/- per bigha as awarded by the High Court.  Appeal arising  out of the Special Leave Petition ) No.15810 of 2005 is also partly  allowed in as much as the compensation for tea bushes is reduced  from Rs.75/- to Rs.37.50 per tea bush.  The Collector is directed to re- calculate the compensation payable to the claimant and pay the same  together with such statutory benefits to which it may be entitled under  the Act.  The parties shall bear their own costs.