Holding

The High Court's assessment, including deductions for the land's largeness and land‑locking, is valid and the CESC appeal is dismissed, with the statutory interest rate to be applied.

Summary

The case involved the acquisition of more than three bighas of land by CESC Ltd. under the West Bengal Land (Requisition and Acquisition) Act, 1948 for an electric sub‑station. The Collector initially awarded Rs.50,000 per cottah, which was later raised by the Land Acquisition Judge to about Rs.5 lakh per cottah. The High Court reduced the award to Rs.2.25 lakh per cottah, applying deductions for the land’s largeness, land‑locking and frontage, and ordered rent compensation and interest. CESC appealed, arguing that the deductions were unwarranted and that the compensation rate was too high. The Supreme Court held that the High Court’s arm‑chair valuation, which considered comparable local sales and adjusted for the special features of the large parcel, was sound and not infirm, and therefore dismissed CESC’s appeal, while confirming that the statutory interest rates under the West Bengal Act must apply. The cross‑appeals by the claimants for higher rent and interest were allowed in part.

Issues considered

The appropriate method for assessing compensation for a large parcel of land acquired under the West Bengal Land (Requisition and Acquisition) Act, 1948.
Whether deductions for largeness, land‑locking and frontage are permissible in the valuation.
Whether the High Court's award of Rs.2.25 lakh per cottah is legally sustainable.
The correct rate of interest applicable to compensation under the West Bengal Act.

Legislation cited

Subjects

land acquisitioncompensation assessmentarm‑chair valuationlargeness deductionland lockinginterest rateWest Bengal Actrent compensation

Judgment

[2008] 10 S.C.R. 137

,-!
C.E.S.G: LIMl1TED A
v.
SANDHYA RANI BARIK AND ORS.
(Civil.Appeal No.7201 of 2005)
JULY 7, 2008
·'<.
B
[DR. ARIJIT PASAYAT AND P. SATHASIVAM, JJ.]

West Bengal Land (Requisition and Acquisition) Act,
1948 - Acquisition under - Of large tract of land - Assess-
ment of land value - Just and reasonable compensation - c
Held: Armchair assessment of land value has to proceed with
common sense and circumspection - For assessing com-
pensation, efforts should be to find out the price fixed for simi-
tar land in the vicinity - Where a very large plot of land has
Ill been acquired and the comparison is sought to be made with
a comparatively small piece of land which has been sold. or 0
otherwise dealt with, then in that event, a percentage of t/Je
~ pric_e is to be knocked off because of the largeness itself of
the acquired land - Land Acquisition Act, 1894.
The land in question, cpnstituting a total area of more E
than 3 big has, was part of a 10 bigha tract owned previ-
ou51y by a single common ancestor. of the Respondents.
The said land was acquired under the West Bengal Land
(Requisition· and Acquisition) Act, 1948 for construction
-r. ·of an electric sub-station. The Collector awarded compen- F
sation @ Rs.50,000/- per cottah (one cottah being equal
to 1/20 bigha). Respondents-claimants filed appeals,
whereupon the Land Acquisition Judge raised the com-
pensation to nearly Rupees 5 lakhs per cottah. CESC, th'e
requiring authority under the West Bengal Act, filed writ
G
petition before the High Court taking the stand that the
matter was decided in its absence. The High Court re-
manded the matter to the Land Acquisition Judge direct-
ing the.Appellant to be made a party. The Land Acquisi-
137 H
138 SUPREME COURT REPORTS [2008] 10 S.C.R.

A tion Judge again made assessment, but maintained the
earlier rate. The determination was challenged before the
High Court. The Appellant's main grievance was that large
track of land was the subject matter of acquisition and
the rates applied for smaller plots could not have any
s relevance.The High Court determined compensation @
Rs.2.25 lakhs per cottah and directed that the Respon-
dents/~laimants were entitled to rent compensation at the
rate of 9% per annum and also entitled to interest at the
rate of 9% ·per annum.
C Before this Court, the stand of CESC is that the plot
acquired for its use was wholly land locked and the rate
appiicable therefor could not be as high a$ Rs.5,32,000t·
per co·ttah as fixed by the Reference Court; that though
the High Court fixed it at Rs.2,25,000/- per cottah, the same
D was .also high.
Cross appeals have been filed by the claimants seek-
ing enhancement of rent and higher rate· of interest. The
number of claimants is quite large and about 20.
E Disposing of the appeals, the Court
HELD:1. The armchair assessment of larid value has
to proceed with common sense and circumspection. One
should attempt to find out the just and reasonable com-
pensation without attempting any mathematical precision )-
F in that regard. For the purpose of assessing compensa-
tion, the effortS should be to find out the price fixed for
..
the similar land in the vicinity. [Para 16] [14S-B & C]
2.The difference in the land acquired and the land
G 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
H and reasonably considered in the matter of assessing
C.E.S.C. LIMITED v. SANDHYA RANI BARIK & 139
ORS. [DR. ARIJIT PASAYAT, J]
,.-~
compensation. [Para 17] [145-D & F] A

3. Where a very large plot of land has been acquired
and the comparison is sought to be made with a com-
paratively small piece of land which has been sold or oth-
erwise dealt with, then in that event, a percentage of the
price is to be knocked off because of the largeness itself B
of the acquired land. Accordingly, the High Court made
the deductions. The High Court also dealt with the ques-
tion of land locking and held that it was a special feature
which had to be taken note of. [Para 18] [145-E & F]
c
4.There is no 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 CESC,
therefore, stand dismissed. But there is substance in the
-l
plea regarding rate of interest. The rate of interest as statu-
D
torily fixed shall be applicable in place of rate fixed by the
Reference Court and the High Court. [Paras 19, 2-0, 22]
(145-G, 146-A & F]

__. CIVILAPPELLATE JURISDICTION: Civil Appeal No. 7201
of 2005 E
From the final Judgment and decree dated 11/2/2003 of
the High Court of Calcutta at Calcutta· in F.A. No.· 12 of 2002
WITH
~·

C.A. Nos. 7202, 7203, 7203, 7204, 7205 and 7206 of 2005 F

Shanti Bhushan, Shyam Diwan, Bhaskar Gupta, K.V.
Viswanathao, Sanjeev K: Kapoor, Vishal Gupta, Vikram Bajaj
(for M/s. Khaitan & Co.), bhruv Mehta, Chanchal Kr. Dutta, D.
Bera, Partha Sil, Sarla Chandra·, Avijit Bhattacharjee and G
Saumya Kundu for the appearing parties.
' ,-j
----) The Judgment of the Court was delivered by

"" Dr. ARIJIT PASAYAT, J. 1.These appeals have been filed
by CESC Ltd. questioning correctness of the judgment rendered
H
140 SUPREME COURT REPORTS (2008] 10 S.C.R.

A by a Division Bench of the Calcutta High Court disposing of
three appeals filed by the present appellant challenging com-
mo·n judgment and order of learned Land Acquisition Judge by
which he disposed of three references from the award of the
Collector. The acquisition of these lands took place under the
B 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 seek-
ing enhancement of rent and higher rate of interest.
c
3. The number of claimants was quite large and about 20.
They were booked in three sets. The land was a-cquired 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 ,______
0
cottah is 720 sq.ft. The. land was part of 10 bigha tract 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
E .thereafter th~ Land Acquisition Judge was approached on ref-
erence by the Bariks i.e the respondents ir) .the three appeals.
The Collector's award was initially on the basis of about
Rs.50,000/- per cottah as compensation but the Land Acquisi:-
tion Judge on the first occasion raised it to nearly Rupees 5
lakhs per cottah. At that stage the State and the Bariks were
F 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 requisi-
tion for maintenance of supplies essential to public life and in
this case supply of electricity was the-Service involved. A S,ub-
.G station i.e. 132 'K.V, had aiready 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
H the Land Acquisition Judge directing the appellant to be made
v.
C.E.S.C. LIMITED SANDHYA RANI BARIK & 141
ORS. [DR. ARIJIT PASAYAT, J]
I

~"
t
142 SUPREME COURT REPORTS [2008] 10 S.C.R.
t-(

A claimants in all these cases do 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. ,:.:

B 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 sec 211) which deals with ultimate i.e.
5.28 interest on solatium but does not pronounce
c 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
D 25%; we clarify that the land value is to be reduced
.P
by 25% and rent compe~sation 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 ~o interest at the
E 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 'r-

F 6. Due credit shall be given in regard to the wiping of
liability as regards the abq'lle .heads, on account of
payments or payments into court already made by
the appellants."
7. Stand of learned counsel ~or the appellant essentially
G 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
H Appeals filed, Bariks have taken the stand that the apprecia-
C.E.S.C. LIMITED v. SANDHYA RANI BARIK & 143
ORS. [DR. ARIJIT PASAYAT, J]

tion aspect has not been taken note of. The reductions i.e. 25% A
for land locking, 15% for road frontage and 5% fo·r 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 B
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
c
.
t thereafter 15%.
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 advan-
D
tage 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 E
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 ob-
served, according to the Bariks, erroneously that there was any F
access. The common passage was linked to the main road.
Since the purpose was to have protected area, largeness ques-
tion was not of any relevance. So far as the frontage factor is
concerned, it was submitted that for the purpose for which the
~
--,

. land had been acquired frontag.e may not be necessary. It has G
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.
H
144 SUPREME COURT REPORTS [2008] 10 S.C.R.

A 11. It has been pointed out by learned counsel for the ap-
pellant that the purpose is really irrelevant for determining mar-
ket value. The potential has to be seen: It is a case of willing
buyer and williqg seller. It is also pointed out that number of ulti-
mate claimants is really irrelevant because 20 sellers have to
B 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 posi- ·
tion.

c (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.
(ii) · It is impossible to conclude that the.re is any frontage
of the acquired larid on the southern side where
-o Manicktala main road runs.
f

(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
E Purbasa Housing ~state.
13. The case of the appeUant was that the plot whicb wa~
_acquired for their use was wholly land locked. This fo(ms a very
importantfactual issue which is important while determining the
F compensation. ·
14. The issue was whether on the eastern side oi the ac"' ·
quired land there was a frontage on 40 ft. municipal public road. ··
The case of Bariks that this was so. On the other hand the ap-
pellant took the stand that there was no municipal road and it
G was a private land of Purbasa Housing leading from the
Manicktala Main road on the South into the Housing Estate it- -•
self. The road runs south to north and belongs to Purbasa. That
40 ft wide road is not a municipal road and it has no name.·
There are no premises numbers attached to it.
H
C.E.S.C. LIMITED v. SANDHYA RANI BARIK & 145
ORS. [DR. ARIJIT PASAYAT, J]
~
15.1 nterestir:igly, the witnesses of th~ appellant were asked A
\ a question as to whether it had taken permission from the Pub-
~

lie 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
. ,JI- appears that the road goes into the Purbasa Housing. Estate s·
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 pro~
ceed with common sense and circumspection. One should at~
tempt to find out the just and reasonable compensation without c
attempting any mathematical precision in that regard. For the
purpose of assessing compensation, the efforts should be to
I
find out the price fixed for the similar land in the vicinity,

l ~~ 17. The difference in the land acquirecf\and the land sold
D
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 difference.sjn land
development and location. There might be special f~atures
which.have to be. taken note of and rea_sonably considered in
the matter of a~sessing compensation. ·E
.
18. Where a very large plot of land has been ac·q·uired and
the comparison is sought to be made with a comparatively small
piece of land which has been sold or.otherwise dealt with, then
-r in that event, a percentage of the price is to be knocked off ·F
because of the largeness itself of the acquired land. Accord-
ingly, the High Court_made the deductions. The High Court also
de~lt with the question of land locking and held that it was a.
special feature which had to be taken note of.
19. We do not find any infirmity in the approach of the High .G
Court. Therefore, the rate fixed by the High Court does not suf-
~.J
" fer from infirmity. The appeals filed by the appellant-CESC, there-
fore, stand dismissed.

20. Rate fixed by the High Court as questioned ii:) the cross
H
146 SUPREME CQURT REPORTS [2008] 10 S.C.R.

A appeals does not warrant irlterference. But there is substance
in the plea re,garding rate of interest.
21. Section 7(2)(a) ofWest Bengal Act is as follows:
'7(2)(a):' When the compensation has been determined
B 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:
c Provided tha·t interest at the rate of nine per centum per
annum on the amount 6f compensation . .
under~the award
from the date of the publication of the notice under sub-
sectic>n (1 a) of section 4 unti.I payment,shall be included in
the amount payable under the award:
D
Provided further that if such compensation or any part
thereof is not paid or deposited within a period of one
year from the date of publication of the notice under sub-
section (1 a) 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." L
. 22. The rate of interest as statutorily fixed shall be appli-
·F cable in place of ratefi,xed 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.
B.B.B. Appeals disposed of.