Supreme Court sets aside Karnataka HC order reducing compensation to be paid by NICE for land acquisition

New Delhi: The Supreme Court on Thursday set aside the Karnataka High Court's 2012 judgment which reduced the land compensation to be paid by Nandi Infrastructure Corridor Enterprises and Nandi Economic Corridor Enterprises for Bangalore Mysore Infrastructure Corridor Project (BMICP) from Rs 1,000 to Rs 500 per square feet.

A bench of Justices Aravind Kumar and N V Anjaria allowed an appeal filed by B Gurappa Naidu and Smt Sunitha against the High Court's judgment that modified the 2012 order by the Additional City Civil Judge, Bengaluru, whereby the value of the property at Kengeri Village, Kengeri Hobli, Bengaluru South Taluk, measuring 3 acres 6 guntas out of a total extent of 6 acres 10 guntas, determined at Rs 1,000 per square feet was reduced.

"What the High Court has done in the present matter is precisely what may be characterised as acting in the capacity of an appellate court, which is impermissible in the exercise of supervisory jurisdiction under Article 227 of the Constitution," the bench said.

The court noted the High Court permitted the state to interpret its own notification and thereby influence a list exclusively between private parties, which was again impermissible.

The bench found that a plain reading of the notification left no manner of doubt that the value prescribed for sites falling within the jurisdiction of the BBMP and City Municipal Councils was Rs 800 per square feet.

The schedule land was expressly covered under the said notification. Consequently, the base guideline value applicable to sites was Rs 800 per square feet.

Further, upon applying Instruction No. 2 of the notification, an additional 25 per cent of the base value was required to be added.

Accordingly, the computation would be Rs 800 plus 25 per cent of Rs 800, which works out to Rs 1,000 per square feet, the bench said.

The court also dismissed a civil appeal by the NICE against determination of compensation payable in respect of the schedule land at the rate of Rs 500 per sq feet.

It directed NICE to pay the balance amount, namely Rs 13,72,14,000 minus Rs 4,92,18,750, which is equal Rs 8,79,95,250 with interest at the rate of 6 per cent per annum to the land owners.

Before the apex court, senior advocate P Vishwanatha Shetty, appearing for land owners, contended the High Court had erred in interfering with the executing court’s determination of market value at Rs 1,000 per sq ft, fixed strictly in accordance with the Government of Karnataka notification of 2007 applicable on the date of the memorandum of settlement.

Senior advocate Anil Kaushik for NICE said the High Court failed to appreciate that compensation was required to be paid strictly in terms of the government-fixed guideline value as prevailing in August 2007 and as applicable to the subject land.

He also said the High Court also faulted in treating the subject land as developed without proof.

Having considered the matter, the bench said, ''In the facts of the present case, we are of the considered view that the High Court has exceeded the jurisdiction vested in it under Article 227 of the Constitution''.

The executing court was duly vested with jurisdiction to deal with the matter, and no case of gross abuse of jurisdiction was made out. On this ground, the High Court could not have exercised its jurisdiction under Article 227, the court said.

"The High Court, while exercising jurisdiction under Article 227 of the Constitution, could not have acted as an appellate court or substitute its own judgment for that of the subordinate court to correct an error which was not apparent on the face of the record,'' the bench said.

The court also pointed out the valuation of the schedule land in the present case arose out of a compromise decree entered into between the parties. Both the parties were then fully conscious of the fact that the schedule land stood converted for industrial use.

Having agreed to compensation on the basis of guideline value, NICE cannot now be permitted to contend that the value ought to be determined by treating the land as agricultural, it said.