Supreme Court Upholds Land Acquisition Compensation Based on Non-Cumulative Increase: Manik Panjabrao Kalmegh vs. Executive Engineer Bembla Project Division (2024)

Date of the Judgment: 6 November 2024

Citation: 2024 INSC 844

Judges: Pankaj Mithal, J., R. Mahadevan, J.

Can compensation for acquired land be enhanced in a review application based on new evidence? The Supreme Court recently addressed this question in a case concerning land acquisition in Maharashtra. The core issue revolved around whether the High Court was correct in setting aside the additional compensation granted by the Reference Court in a review application for trees and a borewell on acquired land, and whether the compensation for land should be calculated with a cumulative or simple annual increase. This judgment clarifies the scope of review jurisdiction and the method for calculating land compensation in acquisition cases. The judgment was delivered by a division bench of Justices Pankaj Mithal and R. Mahadevan, with the opinion authored by Justice Pankaj Mithal.

Case Background

The appellant, Manik Panjabrao Kalmegh, owned land in Village Barad, Maharashtra, consisting of Survey No. 14 (4.32 hectares), Survey No. 15 (1.40 hectares), and Survey No. 17 (5.87 hectares). These lands were acquired by the State of Maharashtra for the Vidarbha Irrigation Development Corporation. The acquisition was initiated with a notification dated 24 July 2003, under Section 4 of the Land Acquisition Act, 1894. The Land Acquisition Officer (LAO) issued an award on 27 June 2005, offering compensation for the land and some existing trees, but not for all the trees and a borewell claimed by the appellant. Dissatisfied with the compensation, the appellant accepted the amount under protest and sought an enhancement through a reference under Section 18 of the Land Acquisition Act, 1894.

The Civil Judge, Senior Division, partially allowed the reference on 4 April 2015. Subsequently, the appellant filed a review application, asserting that compensation for 1824 awala trees and a borewell on Survey No. 17 had not been granted. The review application was allowed on 5 August 2015, awarding additional compensation for the trees and borewell. The respondents then appealed to the High Court, which initially admitted the appeal on the limited ground of whether compensation could be awarded in a review but later decided to hear it on merits. The High Court ultimately set aside the additional compensation for the trees and borewell, leading to the present appeal before the Supreme Court.

Timeline

Course of Proceedings

The appellant, dissatisfied with the initial compensation offered by the Land Acquisition Officer (LAO), sought a reference under Section 18 of the Land Acquisition Act, 1894, before the Civil Judge, Senior Division. The Civil Judge partially allowed the reference on 4 April 2015. Subsequently, the appellant filed a review application, claiming that compensation for the awala trees and a borewell on Survey No. 17 was not awarded. The Civil Judge allowed the review application on 5 August 2015, granting additional compensation for the trees and borewell.

The respondents appealed to the High Court under Section 54 of the Land Acquisition Act, 1894, challenging the additional compensation awarded in the review. The High Court initially admitted the appeal on the limited ground of whether compensation could be awarded in a review, but later decided to hear it on merits. The High Court, in its final order, partly allowed the appeal, setting aside the compensation awarded for the awala trees and the borewell. The High Court also dismissed the cross-objections filed by the appellant, leading to the present appeal before the Supreme Court.

Legal Framework

The case primarily involves the interpretation and application of the Land Acquisition Act, 1894, specifically:

• Section 4 of the Land Acquisition Act, 1894: This section deals with the publication of a preliminary notification for the acquisition of land. The notification in this case was dated 24 July 2003.
• Section 18 of the Land Acquisition Act, 1894: This section allows a person dissatisfied with the compensation awarded by the Land Acquisition Officer (LAO) to seek a reference to the court for enhanced compensation.
• Section 54 of the Land Acquisition Act, 1894: This section provides for appeals to the High Court from the awards of the reference court.

The Supreme Court also considered the principles governing the review jurisdiction of a court and the method for determining fair market value of land for compensation purposes.

Arguments

Appellant’s Arguments:

• Cumulative Increase in Compensation: The appellant argued that the 10% annual increase in land value, based on a 1994 sale deed, should have been applied cumulatively rather than simply. The appellant relied on the case of Ramrao Shankar Tapase v. Maharashtra Industrial Development Corporation and Others (2022) 7 SCC 563, to support this argument.

• Compensation for Trees: The appellant contended that compensation should have been awarded for 600 orange trees on Survey Nos. 14 and 15 (where only 500 were compensated), and for 1824 awala trees and a borewell on Survey No. 17. The appellant relied on the 2nd Joint Measurement Report (JMR) dated 08.07.2015 to support the existence of the awala trees and borewell.

Respondent’s Arguments:

• No Cumulative Increase: The respondents argued that the High Court was correct in not granting a cumulative increase in the market value. They stated that the court has discretion in such matters and that the 10% annual increase was sufficient. They also stated that the reference court had relied upon an earlier judgment in LAC No.48 of 2007 (Exh.68) which had relied upon an exemplar sale deed of the year 1994 and had not granted cumulative increase.

• Lack of Evidence for Trees: The respondents submitted that there was no admissible evidence to establish the existence of the awala trees and the borewell on Survey No. 17 before the acquisition. They argued that the 2nd JMR was not part of the evidence and could not be relied upon.

Submissions of Parties

Issues Framed by the Supreme Court

The Supreme Court addressed the following key issues:

1. Whether the appellant was entitled to any compensation in respect of 1824 awala trees and the borewell as claimed by him and as was allowed in the review application which had ultimately been set aside by the High Court.
2. Whether the 10% annual increase in land value should have been applied cumulatively.

Additionally, the court also considered the issue of compensation for 100 additional orange trees and 1 tamarind tree, although this was not pressed before the High Court.

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues

Authorities

The Supreme Court considered the following authorities:

The Court also considered the following legal provisions:

• Section 4 of the Land Acquisition Act, 1894: This section deals with the publication of a preliminary notification for the acquisition of land.
• Section 18 of the Land Acquisition Act, 1894: This section allows a person dissatisfied with the compensation awarded by the Land Acquisition Officer (LAO) to seek a reference to the court for enhanced compensation.
• Section 54 of the Land Acquisition Act, 1894: This section provides for appeals to the High Court from the awards of the reference court.

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• The Supreme Court distinguished Ramrao Shankar Tapase v. Maharashtra Industrial Development Corporation and Others (2022) 7 SCC 563, stating that the cumulative increase is not an absolute rule and is optional.
• The Supreme Court accepted the judgment in LAC No.48 of 2007 (Exh.68) wholly and not in part.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the following factors:

• Admissibility of Evidence: The Court emphasized that the 2nd JMR, which was the basis for the review application, was not admissible as evidence. The Court noted that the review application was allowed based on inadmissible evidence and not within the scope of review jurisdiction.
• Scope of Review Jurisdiction: The Court clarified that the review jurisdiction is not meant for re-appreciating evidence or deciding the reference afresh. The review application was allowed in a manner as if the court considering it, was sitting in appeal or was deciding the reference afresh.
• Discretion in Granting Cumulative Increase: The Court held that the grant of cumulative increase in the market value of land is not an absolute rule and is optional. The court noted that the judgment relied upon by the reference court (Exh.68) did not grant cumulative increase, and the court cannot accept the judgment in part.
• Consistency with Previous Judgments: The Court emphasized the need for consistency with the judgment in LAC No.48 of 2007 (Exh.68), which had not granted cumulative increase and was based on the same acquisition.

Logical Reasoning

Key Takeaways

• Review Jurisdiction: Courts cannot use review jurisdiction to re-appreciate evidence or decide a case afresh. Review is limited to correcting errors apparent on the face of the record.
• Admissibility of Evidence: Evidence relied upon must be admissible and proven in accordance with law. Unproven documents cannot be the basis for granting compensation.
• Cumulative Increase in Land Value: The grant of cumulative increase in the market value of land is not an absolute rule and is optional. Courts have discretion in determining whether to grant cumulative increase or not.
• Consistency in Judgments: Courts should maintain consistency with previous judgments in similar cases, especially when those judgments pertain to the same acquisition.

Directions

No specific directions were given by the Supreme Court in this case.

Development of Law

The ratio decidendi of this case is that the review jurisdiction cannot be used to re-appreciate evidence or decide a case afresh and that the grant of cumulative increase in the market value of land is not an absolute rule and is optional. This case clarifies the scope of review jurisdiction and the discretion of the court in granting cumulative increase in land compensation cases. There is no change in the previous position of law, but this case reinforces the existing principles.

Conclusion

The Supreme Court dismissed the appeal, upholding the High Court’s decision to set aside the additional compensation granted in the review application for the awala trees and borewell. The Court also affirmed that the 10% annual increase in land value need not be applied cumulatively. The judgment reinforces the principles of review jurisdiction, admissibility of evidence, and the discretionary nature of granting cumulative increases in land compensation cases. The Supreme Court held that the High Court was correct in setting aside the additional compensation granted in the review application, and that the 10% annual increase in land value need not be applied cumulatively.