Full Judgment Text
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 11
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
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 11
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/-
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 11
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
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 11
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.
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 11
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
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 11
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,
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 11
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
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 11
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
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 11
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
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 11
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
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 11 of 11
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.