C.E.S.C. Ltd vs Sandhya Rani Barik & Ors

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

2 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

3 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

4 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

5 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."

6 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 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 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

8 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.

10 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

13 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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