Featured image for Supreme Court Judgment dated 16-07-2019 in case of petitioner name Shri Badru (Deceased) Through vs NTPC Limited & Ors.
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Land Acquisition Compensation: Supreme Court Remands Case for Reconsideration

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The case of Shri Badru (Deceased) Through L.R. Hari Ram & Ors. v. NTPC Limited & Ors. deals with the determination of fair compensation for land acquired by the government for the construction of a public utility project. The Supreme Court had to decide whether the compensation awarded by the Reference Court was adequate and whether the High Court erred in dismissing the cross-objection of the landowners.

Background of the Case

The appellants (landowners) owned land in Himachal Pradesh, which was acquired for the construction of a National Thermal Power Corporation (NTPC) project under the provisions of the Land Acquisition Act, 1894. The Land Acquisition Collector (LAC) determined the compensation at Rs. 3,87,383 per bigha. Dissatisfied with the award, the landowners sought reference under Section 18 of the Act.

The Reference Court enhanced the compensation to Rs. 5,00,000 per bigha. The State and NTPC challenged this enhancement before the High Court, whereas the landowners, instead of filing a separate appeal, filed a cross-objection seeking further enhancement.

The High Court dismissed the appeals filed by NTPC and the State, thereby affirming the compensation of Rs. 5,00,000 per bigha. However, the High Court also summarily dismissed the landowners’ cross-objection without providing reasons.

Petitioner’s Arguments

The landowners argued that:

  • The High Court erred in summarily dismissing their cross-objection without assessing the adequacy of compensation.
  • They were entitled to a higher amount based on comparable sale transactions and the prevailing market rate of land.
  • The High Court should have conducted an independent examination of the evidence presented for enhancement.
  • The principle of fair compensation was not fully upheld.

Respondent’s Arguments

NTPC and the State of Himachal Pradesh contended:

  • The compensation awarded by the Reference Court was already on the higher side.
  • The landowners had opted to file a cross-objection instead of a separate appeal, and they failed to substantiate their claim for further enhancement.
  • The High Court had correctly dismissed the cross-objection, as no strong evidence justified a higher compensation.

Supreme Court’s Observations

The Supreme Court analyzed the approach adopted by the High Court and noted that:

  • The High Court was required to examine the cross-objection independently, irrespective of the dismissal of the appeals by NTPC and the State.
  • Under Order 41 Rule 22(4) of the Code of Civil Procedure, a cross-objection must be decided on its merits, even if the main appeal is dismissed.
  • The High Court failed to provide reasons for dismissing the cross-objection, violating the principle of reasoned judgments.
  • The landowners had the right to seek higher compensation, and their claim should have been evaluated based on evidence.

The Court stated:

“Even if the main appeal is dismissed, the cross-objection filed by the landowners must be independently examined based on its merits. The High Court erred in disposing of the cross-objection without proper adjudication.”

Final Judgment

The Supreme Court allowed the appeal and remanded the case to the High Court, ruling that:

  • The High Court must reconsider the landowners’ cross-objection on its merits.
  • The compensation amount should be reassessed based on the available evidence.
  • The issue of enhancement must be evaluated in light of comparable land transactions and expert assessments.
  • The landowners should be given an opportunity to present additional evidence if required.

Impact of the Judgment

This ruling reinforces key principles in land acquisition cases:

  • Landowners have the right to seek fair compensation through judicial review.
  • Courts must provide reasoned judgments when dismissing claims.
  • Even if the government’s appeal is dismissed, a cross-objection must be examined on its own merits.
  • Compensation should be based on prevailing market rates and comparable sales.

Conclusion

The Supreme Court’s decision in this case ensures that land acquisition compensation is determined through a fair and transparent process. By remanding the case for reconsideration, the ruling upholds the principle that every claimant deserves a reasoned decision on their plea for just compensation. This judgment sets a precedent for similar cases where landowners seek enhanced compensation for acquired land.


Petitioner Name: Shri Badru (Deceased) Through L.R. Hari Ram & Ors..
Respondent Name: NTPC Limited & Ors..
Judgment By: Justice Abhay Manohar Sapre, Justice Indu Malhotra.
Place Of Incident: Himachal Pradesh.
Judgment Date: 16-07-2019.

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