Read Time: 12 minutes

Synopsis

The Supreme Court has emphasised that tea estate land has higher potential than agricultural land and, therefore, the market value of tea garden land would also be greater than that of agricultural land.

A bench of Justices Surya Kant and N Kotiswar Singh partly allowed an appeal filed by All India Tea and Trading Company Limited against the February 22, 2017 order of the Gauhati High Court, which had deducted 10% from the awarded compensation towards development charges.

As per the facts of the case, land measuring 248 bighas 8 cottahs and 9 chittakhs in village Harinccherra Cha Bagicha, District Cachar, and land measuring 1 bigha 7 cottahs and 13 chittakhs in village Bhitor Gangapur were acquired for the public purpose of constructing an LPG Bottling Plant by the respondent – Indian Oil Corporation Ltd. The notification under Section 4 of the Land Acquisition Act, 1894 was issued on June 1, 1989, followed by a declaration under Section 6 of the Act on June 6, 1989, and August 28, 1989.

Thereafter, the Land Acquisition Collector passed an award in April 1990, determining the value of the land at Rs 5,000 per bigha for garden land, also known as ‘charra class land,’ and Rs 3,000 per bigha for the patit class of land.

Dissatisfied with the valuation, the landowners filed a reference under Section 18 of the Act. By an award dated March 19, 1999, the reference court-cum-District Judge, Cachar, Silchar enhanced the compensation to Rs 14,000 per bigha for charra class land and Rs 5,000 per bigha for patit class land.

The award was challenged by IOC in a first appeal before the high court, which, by a judgment dated June 6, 2000, remanded the matter back to the reference court for fresh adjudication.

Subsequently, the District Judge, Cachar, Silchar, by an award dated December 24, 2001, determined the market value of the acquired land at Rs 14,000 per bigha for charra class land and Rs 5,000 per bigha for patit class land.

IOC again appealed before the high court, which, in its February 22, 2017 judgment, reduced the compensation by applying a 10% cut towards development charges, thereby fixing the compensation at Rs 12,600 per bigha for charra class land and Rs 4,500 per bigha for patit class land.

After hearing counsel for both parties, the bench noted that the appellant-landowner was satisfied with the compensation awarded by the reference court, as no appeal had been preferred against it. Similarly, no cross-objections were filed in the first appeal preferred by IOC. It was only when the high court reduced the compensation by imposing a 10% deduction towards development charges that the appellant approached the apex court.

The court thus examined whether the high court was justified in imposing the 10% development charges.

The bench noted that the undisputed facts, as observed by the high court in the impugned judgment, established that the acquired land was part of the Harinchherra Division of the Ballacherra Tea Estate. The appellant had produced certain exemplars before the reference court to substantiate its claim for Rs 25,000 per bigha.

The court pointed out that the high court had rightly noted that most of the sale instances relied upon by the appellant pertained to agricultural lands, whereas the acquired land was tea garden land with different potential.

As no sale instance of tea estate land was produced before the high court, the court found that the best exemplar was a sale deed for a small area measuring slightly over one bigha, in which the land was sold for Rs 15,500.

"There can be no quarrel and it has not been disputed on behalf of respondent – IOC also that in light of a decision of this Court in Numaligarh Refinery Ltd Vs Green View Tea & Industries and another, (2007), the tea estate land shall have higher potentiality than the agricultural land and, thus, the market value of the tea garden land will also be more than that of the agricultural land," the bench pointed out.

Applying this principle, the bench inferred that the market value of the subject tea estate land in 1989 was undoubtedly more than Rs 15,500 per bigha.

Court explained that this conclusion was based on the fact that a small plot of agricultural land had fetched Rs 15,500 per bigha in 1989 itself.

"Even applying the development charges on the analogy that the acquired land is a big chunk of land as compared to a small plot of land sold, there can be no doubt that the market value of the tea estate land, even after deduction of 10% or more, would not be less than Rs 14,000," the bench said.

The court opined that the reference court was justified in awarding Rs 14,000 per bigha for charra class land and Rs 5,000 per bigha for patit class land, along with the increased Zirat valuation.

Accordingly, the bench allowed the appeal in part and set aside the high court’s decision imposing a 10% cut towards development charges. It restored the compensation as awarded by the District Judge, Cachar, Silchar, in the December 24, 2001 award.

The court further ruled that the appellant would be entitled to compensation along with other statutory benefits, including interest at the rate determined by the reference court.

The bench directed the reference court-cum-District Judge, Cachar, Silchar, to calculate the compensation payable to the appellant in accordance with its directions.

"On doing so, the IOC is directed to deposit the enhanced amount of compensation before the Reference Court within six weeks from the date of such a determination," the court ordered.

Lastly, the court clarified that since the appellant had not challenged the high court’s decision regarding the land measuring 1 bigha 7 cottahs and 13 chittakhs in village Bhitor Gangapur, the impugned judgment in respect of that land would remain unaffected.

Case Title: All India Tea and Trading Co Ltd Vs Indian Oil Corporation Ltd & Ors