Supreme Court Orders Eviction and Compensation for Unlawful Possession of Kolkata Property

The Supreme Court of India has delivered a significant ruling in the case of Punalur Paper Mills Ltd. v. West Bengal Mineral Development and Trading Corporation Ltd., directing the eviction of government corporations from illegally occupied private property in Kolkata and ordering compensation for over two decades of unlawful possession.

Background of the Case

The case revolved around the second floor of premises at 13, Nellie Sengupta Sarani (Lindsay Street), Kolkata, measuring approximately 7,500 square feet. The premises were requisitioned in 1973 under the West Bengal Premises Requisition and Control (Temporary Provisions) Act, 1947 by the State Government and occupied by West Bengal Mineral Development and Trading Corporation Ltd. (WBMDTCL).

In 1987, an amendment to the Requisition Act introduced Section 10B, mandating the release of requisitioned properties after a maximum period of 25 years. Accordingly, the property was due to be returned to Punalur Paper Mills Ltd. by August 15, 1998. However, the government failed to vacate the premises.

Instead of releasing the property, the government initiated land acquisition proceedings under the Land Acquisition Act, 1894, first through a Section 4 notification in 1999 and then through another notification in 2000, invoking the urgency clause under Section 17 to bypass the landowners’ right to objection under Section 5A.

Petitioner’s Arguments (Punalur Paper Mills Ltd.)

Punalur Paper Mills Ltd. argued:

The property should have been vacated in 1998 under the provisions of Section 10B of the Requisition Act.
The government had ample time (25 years) to acquire the property through due process but failed to do so.
The use of the urgency clause under Section 17 of the Land Acquisition Act was a misuse of power aimed at denying the owners their legal right to object.
WBMDTCL had continued to occupy the property without paying any rent or compensation for over two decades.

Respondent’s Arguments (West Bengal Government and WBMDTCL)

The State and WBMDTCL contended:

The property was acquired for a valid public purpose—to provide permanent office space for WBMDTCL.
The urgency clause was justifiably invoked to expedite the acquisition process.
The property owners had already filed writ petitions, and the government had acted in accordance with legal procedures.
Compensation for the period beyond the 25-year requisition was a separate issue that could be determined by a judicial authority.

Supreme Court’s Observations

The bench comprising R.F. Nariman and B.R. Gavai made key observations:

1. Violation of Requisition Act Provisions

“The State was on notice from 31.03.1987, i.e., from the date of insertion of Section 10B in the West Bengal Requisition Act, that the premises would have to be released on or before 15.08.1998.”

The Court held that the failure to vacate the property by the deadline violated the law.

2. Misuse of the Urgency Clause

“Invoking the urgency clause under Section 17 to dispense with the landowners’ right to object under Section 5A was a clear abuse of power.”

The Court ruled that the urgency provision was used to cover up administrative delays and was not justified.

3. Illegal Occupation Without Compensation

“WBMDTCL has continued in unlawful possession of the premises since 15.08.1998 without paying a single pice towards compensation till date.”

The Court found that the continued possession by WBMDTCL and West Bengal Sugar Industries was unauthorized and unjust.

Supreme Court’s Verdict

The Court ruled:

The acquisition proceedings under Section 17 of the Land Acquisition Act were quashed.
WBMDTCL and other government entities were ordered to vacate the property within four months.
A retired judge, Soumitra Pal, was appointed as an arbitrator to determine compensation for unlawful occupation.
If the government failed to submit to arbitration, they would be liable to pay Rs. 100 per square foot per month as damages.

Conclusion

This ruling sets a precedent for cases involving unauthorized occupation of private property by government entities. It upholds property rights and ensures that state authorities cannot misuse legal provisions to delay vacating properties beyond permissible limits.

Petitioner Name: Punalur Paper Mills Ltd..
Respondent Name: West Bengal Mineral Development and Trading Corporation Ltd. & Ors..
Judgment By: Justice R.F. Nariman, Justice B.R. Gavai.
Place Of Incident: Kolkata, West Bengal.
Judgment Date: 01-03-2021.

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