As per case facts, Nandi Infrastructure Corridor Enterprises (N.I.C.E.) and the Decree Holders had a compromise decree where N.I.C.E. was to pay compensation based on guideline value for land used, ...
2026 INSC 434 Civil Appeal No. 1388 of 2013 Page 1 of 49
NON-REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.1388 OF 2013
NANDI INFRASTRUCTURE
CORRIDOR ENTERPRISES
LTD. & ANR. ...APPELLANT(S)
VERSUS
B. GURAPPA NAIDU & ORS. …RESPONDENT (S)
WITH
CIVIL APPEAL NO. 1354 OF 2013
J U D G M E N T
ARAVIND KUMAR, J.
1. The Judgment Debtors, namely Nandi Infrastructure
Corridor Enterprises (N.I.C.E.) and Nandi Economic
Corridor Enterprises
1
, and the Decree Holders, namely Sri
B. Gurappa Naidu and Smt. Sunitha
2
, are before this Court
1
Both the Judgment Debtors are together hereinafter referred to as
the ‘N.I.C.E’.
2
Hereinafter referred to as the Decree Holders.
Civil Appeal No. 1388 of 2013 Page 2 of 49
in Civil Appeal No. 1388 of 2013 and Civil Appeal No. 1354
of 2013, respectively, assailing the judgment dated
12.09.2012 passed by the High Court of Karnataka
3
in Writ
Petition. No. 21068 of 2012
4
. By the impugned judgment,
the High Court modified the order dated 31.05.2012 passed
by the V Additional City Civil Judge, Bengaluru
5
, in
Execution Petition No. 2237 of 2009
6
, whereby the value of
the property bearing Survey No. 122 (New Survey No.
272/2) of Kengeri Village, Kengeri Hobli, Bengaluru South
Taluk, measuring 3 acres 6 guntas out of a total extent of 6
acres 10 guntas
7
, which had been determined at Rs.1,000/-
per square feet came to be reduced to Rs.500/- per square
feet.
2. Civil Appeal No. 1388 of 2013, filed by Nandi Infrastructure
Corridor Enterprises (N.I.C.E.), assails the determination of
compensation payable in respect of the schedule land at the
rate of Rs.500/- per square foot and seek for reduction. On
the other hand, Civil Appeal No. 1354 of 2013, preferred by
3
Hereinafter referred to as the ‘High Court’.
4
Hereinafter referred to as the ‘Impugned Judgment’.
5
Hereinafter referred to as the ‘Executing Court’.
6
Hereinafter referred to as the ‘Execution Petition’.
7
3 Acre 6 guntas out of 6 Acre 10 guntas of Survey No. 122 (New Survey
No. 272/2), of Kengeri Village, Kengeri Hobli, Bengaluru South Taluk
i.e. the Property for which the guideline value has been determined is
hereinafter referred to as the ‘Schedule Land’ or ‘AA Schedule
property’.
Civil Appeal No. 1388 of 2013 Page 3 of 49
the Decree Holders, challenges the fixation of compensation
at Rs.500/- per square foot and seeks restoration of the
valuation as fixed by Executing Court at Rs.1,000/- per
square feet, on the basis of the guideline value determined
under the Karnataka Stamp Act, 1957.
8
PART-I
BRIEF FACTS:
3. As the case involves a lengthy history, it is discussed in brief
in this section under various sub-heads forming a part of this
section, which as under:
A. THE ALLOTMENT OF LAND TO N.I.C.E FOR
EXECUTION OF BANGALORE – MYSORE
INFRASTRUCTURE CORRIDOR PROJECT
(BMICP):
4. A Framework Agreement was executed between Nandi
Infrastructure Corridor Enterprises (N.I.C.E.) and the
Government of Karnataka for the execution of the
Bangalore Mysore Infrastructure Corridor Project
(hereinafter referred to as “the BMICP”) under an
agreement dated 03.04.1997. Among the several parcels of
land allotted to N.I.C.E. for implementation of the said
project, the lands belonging to the Decree Holders, namely
8
Hereinafter referred to as the ‘Guideline Value’.
Civil Appeal No. 1388 of 2013 Page 4 of 49
the schedule land admeasuring 3 acres 6 guntas out of a total
extent of 6 acres 10 guntas in Survey No. 122 (New Survey
No. 272/2), Kengeri Village, Kengeri Hobli, Bengaluru
South Taluk was also allotted to N.I.C.E by the Government.
The said land was earmarked for the construction of a ramp
of Interchange No. 5/7 on Mysore Road, and construction
activities in that regard were initiated in the year 2006.
5. Though the schedule land was initially classified as
agricultural land, the same was subsequently converted for
industrial use on an application made by the owner, pursuant
to an order dated 05.11.2004 passed by the competent
authority.
B. THE SUIT FILED BY N.I.C.E AGAINST THE DECREE
HOLDERS AND THE COMPR OMISE ENTERED
BETWEEN THE PARTIES.
6. Alleging interference with the implementation of the
BMICP, N.I.C.E instituted a suit in O.S. No.4691 of 2006
9
before the City Civil Court, Bengaluru against the Decree
Holders seeking the prayer of permanent injunction
restraining the Decree Holders from interference with the
implementation of BMIC project. The parties to the Suit,
9
Hereinafter referred to as ‘the Suit’.
Civil Appeal No. 1388 of 2013 Page 5 of 49
later entered into a Memorandum of Settlement dated:
10.08.2007
10
.
7. As per the MOS, the parties agreed as follows:
a) Decree Holder No. 2 i.e. Smt. Sunitha, was acknowledged
as the absolute owner in possession of the Schedule ‘A’
property comprising of 6 acres 10 guntas in Survey No. 122
(New Survey No. 272/2), Kengeri Village, Kengeri Hobli,
Bengaluru South Taluk and the N.I.C.E expressly
relinquished all right, title, and interest therein.
b) However, to facilitate completion of the Bangalore–
Mysore Infrastructure Corridor Project, particularly the
ramp of Interchange No. 5/7 on Mysore Road (SH-17).
Decree Holder No. 2 permitted N.I.C.E to enter upon and
utilize the schedule land i.e. 3 acres 6 guntas of the
Schedule ‘A’ land and the same was referred to Schedule
‘AA’ for interchange development, while retaining
possession and enjoyment of the remaining portion i.e. 3
acre 4 guntas which was referred to as Schedule ‘AAA’
property.
c) In consideration thereof, the N.I.C.E agreed to convey, by
way of exchange, an extent of 6 acres 10 guntas in land
10
Hereinafter referred to as the ‘Memorandum of Settlement’ or
‘MOS’ or ‘Settlement’.
Civil Appeal No. 1388 of 2013 Page 6 of 49
bearing Sy Nos 164/4, 164/5 & Sy No 165 of Kengeri
Village, Bangalore South Taluk which was described in
Schedule ‘B’ to Decree Holder No.2. N.I.C.E agreed to
bear all stamp duty and registration charges, and to ensure
access and infrastructure facilities, subject to detailed
conditions relating to conveyance, possession,
contingencies, and timelines.
d) The settlement records that N.I.C.E had already acquired
title to an extent of 4 acres 34 guntas forming part of Sy.
Nos. 164/4 and 164/5 of Kengeri Village through KIADB
under a registered sale deed dated 11.05.2004. They
further undertook to obtain conveyance of the remaining
extent of 1 acre 16 guntas in Sy. No. 165 from the
Government under a registered instrument. In the event of
failure to secure such conveyance, the plaintiffs bound
themselves to convey an equivalent extent of land in any
other survey number of Kengeri Village at Interchange No.
5/7, Mysore Road, having road frontage and access to all
amenities. Upon securing full title, the N.I.C.E, agreed to
convey the entire Schedule ‘B’ property to Decree Holder
No. 2 by way of exchange and to place her in possession
within a period of 24 months, followed by execution of a
formal deed of exchange vesting absolute title of Schedule
Civil Appeal No. 1388 of 2013 Page 7 of 49
‘A’ property in the plaintiffs and Schedule ‘B’ property in
Defendant No. 2.
e) It was further agreed that, in consideration of the exchange
option, the plaintiffs paid a sum of Rs. 25,00,000/- to
Defendant No. 2 towards the value of existing trees,
horticultural crops, structures, and appurtenances, subject
to realization of the cheque, and Defendant No. 2 waived
any future claim for compensation or alteration of
structures thereafter.
f) The settlement provided detailed contingencies: one
among which was clause (xiii) which is as follows:
“(xiii) In the event of the Plaintiffs not being able to
acquire title to 6 Acres and 10 Guntas of land in one
block and to convey the same to the Second Defendant
under a deed of Exchange, the second defendant shall
continue to retain the ownership of the land described in
schedule AAA and shall be entitled to develop the same
and continue to enjoy the same as absolute owner
thereof in the manner she likes. In such an event, the
Plaintiffs shall pay to the second defendant the value of
the property described in the Schedule AA at the
guideline value fixed by the Government as on today
11
and shall obtain conveyance of the same from the second
defendant at the cost of the plaintiffs.”
g) In such an event, Decree Holder No. 2 would refund Rs.
12,50,000/- out of the compensation amount, retaining the
balance. The agreement also safeguarded title by
11
The State of Karnataka notification dated: 17.04.2007 was prevalent
at that point in time, which had fixed the Guideline value of the
immovable property.
Civil Appeal No. 1388 of 2013 Page 8 of 49
obligating Decree Holder No. 2 to resolve third-party
claims over specified portions, failing which the plaintiffs
were entitled to proportionately reduce the extent of
Schedule ‘B’ land to be conveyed, thereby ensuring
enforceability of the exchange arrangement.
8. The suit was disposed of in terms of the aforesaid settlement
vide Judgment and Decree dated: 20.08.2007. Though the
terms of the settlement have not been reproduced verbatim
except for clause (xiii), the substance thereof has been
indicated. Reference to the specific terms of the settlement
shall be made, wherever necessary, for the purpose of
adjudication of the present dispute.
C. AFTERMATH OF THE COMPROMISE: EXECUTION
PETITION AND THE LEGAL BATTLES BETWEEN
THE PARTIES.
9. The Decree Holders filed an Execution Petition before the
Executing Court contending that Despite having initially
acquired only 4 acres 34 guntas and undertaking to secure
and convey the balance 1 acre 16 guntas so as to make up
the agreed 6 acres 10 guntas of Schedule B land at Kengeri
Village, the judgment debtors failed to obtain, convey, or
develop the entire land within the stipulated period.
Consequently, under the decree, they became liable to pay
the guideline value of 3 acres 6 guntas retained by them in
Sy. No. 122 (New Sy. No. 272/2) i.e. Schedule Land, after
Civil Appeal No. 1388 of 2013 Page 9 of 49
adjusting Rs. 12,50,000/- from the Rs. 25,00,000/- already
paid; although notices demanding compliance were issued
and acknowledged.
9.1. The Decree Holders further contended that the judgment
debtors expressed their inability to convey land at Kengeri
and instead proposed alternate land at Kommaghatta
Village which according to the Decree Holders was
contrary to the decree. As the Schedule Land stood
converted for non-agricultural industrial use and was
assessed to municipal tax, the Decree Holders contended
that they are entitled to the guideline value of the property
which according to them was Rs. 1,000/- per square feet,
aggregating to Rs. 13,72,14,000/-, and the decree holders,
alleging default by the judgment debtors, sought recovery
of the said amount along with interest at 12% per annum.
10. After the service of summons, the Judgment Debtors i.e.
N.I.C.E entered their appearance and filed their objections
contending that the execution petition was misconceived,
not maintainable, and an abuse of process, as the
compromise decree dated 20.08.2007 did not contain any
direction for payment of any monetary amount or interest
and merely records reciprocal, conditional obligations for
exchange of immovable properties, which the Executing
Civil Appeal No. 1388 of 2013 Page 10 of 49
Court cannot convert into a money decree. They assert that
their obligation to convey Schedule ‘B’ land was contingent
upon securing title to Sy. No. 165, which could not be
obtained due to circumstances beyond their control, and that
the option under Clause (xiii) to pay guideline value was
discretionary and never exercised, giving rise to no
enforceable monetary claim.
10.1. It was further contended that the decree holders
themselves breached the settlement by delaying
withdrawal of the criminal complaint and adopting a mala
fide interpretation of the compromise, while the judgment
debtors, without prejudice, express readiness and
willingness to convey an alternative contiguous extent of
6 acres 10 guntas in Kengeri Village in full satisfaction of
the decree.
11. The Executing Court, by order dated 19.03.2010, dismissed
the Execution Petition filed by the Decree Holders on the
ground that the compromise decree was not a money decree.
Aggrieved thereby, the Decree Holders preferred Civil
Revision Petition No. 166 of 2010 before the High Court.
The High Court, by judgment and order dated 09.12.2010,
set aside the order of dismissal and directed restoration of
the Execution Petition, accepting the contention of the
Decree Holders that, since the Judgment Debtors had
Civil Appeal No. 1388 of 2013 Page 11 of 49
already utilised the schedule land, they were liable to pay the
guideline value as indicated in the Memorandum of
Settlement (MoS) in terms of Clause (xiii) thereof. The High
Court further directed the Executing Court to determine the
guideline value payable to Decree Holder No. 2 by Judgment
Debtors in accordance with Clause (xiii) of the MOS.
12. Upon restoration of the Execution Petition, the Judgment
Debtors sought further time to execute the decree. The said
request was declined by the Executing Court by order dated
25.02.2012, whereupon N.I.C.E. assailed the same before
the High Court by filing W.P. No. 7521 of 2012. The High
Court, by order dated 08.03.2012, disposed of the said writ
petition, once again directing the parties to assist the
Executing Court in determining the guideline value of the
property.
13. The Judgment Debtors assailed the order passed by the High
Court in C.R.P. No. 166 of 2010 before this Court by filing
S.L.P. (C) No. 10633 of 2012. This Court, by order dated
09.04.2012, dismissed the said Special Leave Petition with
the following observation:
“In the course of submissions, Mr Dushyant Dave,
learned senior counsel for the petitioners, submitted that
the petitioners shall pay to the respondent No 2 (second
defendant) the value of the property described in
Schedule AA at the guideline value fixed by the
Government as on the date of compromise deed as
Civil Appeal No. 1388 of 2013 Page 12 of 49
provided in clause (xiii) in the Memorandum of
Settlement.
Let the executing court determine the value of the land
in terms of clause (xiii) of the Memorandum of
Settlement as expeditiously as may be possible. The
petitioners shall pay the amount so determined within
eight weeks from the date of determination by the
executing court.
If any amount has been paid as per the agreement to the
respondent No 2, the same shall be adjusted in the
amount that may be determined by the executing court.”
14. The aforesaid observation of this Court constituted the final
determination on the entitlement of the Decree Holders to
the amount payable, which was required to be determined by
the Executing Court in accordance with the guideline value
of the schedule land as fixed by the Government and
prevailing on the relevant date, namely, the date on which
the parties had entered into an amicable settlement.
PART-II
THE GUIDELINE VALUE DETERMINATION: THE
GOVERNING NOTIFICATION FOR DETERMINATION
OF GUID ELINE VALUE, THE ARGUMENTS
ADVANCED BY THE PARTIES REGARDING THE
CALCULATION OF THE GUIDELINE VALUE BEFORE
THE EXECUTING COURT , THE JUDGMENT OF THE
EXECUTING COURT AND THE HIGH COURT .
15. In the previous section, we have reproduced the factual
background which is relevant for the determination of the
Civil Appeal No. 1388 of 2013 Page 13 of 49
current issue; now, before we proceed to record the
submission of the parties raised before this Court and
analyse the correctness of the impugned order, we deem it
proper to dwell upon the notification governing the
determination of the guideline value - which forms the basis
to determine the amount to which the Decree Holders would
be entitled to, the submissions regarding the guideline value
raised before the Executing Court requires to be noted to
understand the stand of each party with reference to the
guideline value.
A. THE GOVERNING NOTIFICATION:
16. The parties, while entering into the settlement, agreed that in
the event of default by the Judgment Debtors in transferring
the ‘B Schedule’ land in favour of Decree Holder No. 2, as
agreed, the Judgment Debtors would compensate Decree
Holder No. 2 by payment of an amount equivalent to the
guideline value prevailing at the time of the settlement in
respect of the ‘AA Schedule’ land, namely, 3 acres 6 guntas
out of a total extent of 6 acres 10 guntas in Survey No. 122
(New Survey No. 272/2), Kengeri Village, Kengeri Hobli,
Bengaluru South Taluk. In that regard, both parties placed
reliance on the notification dated 17.04.2007
12
issued by the
12
Hereinafter referred to as ‘the Notification’.
Civil Appeal No. 1388 of 2013 Page 14 of 49
Government of Karnataka for determination of the value of
the land.
17. The said notification fixes the guideline value for
properties situated in Survey No. 122 of Kengeri Village,
wherein the schedule land is located which is as follows:
18. Along with the guideline value as mentioned above, the
notification also had some Special Instructions which was
also supposed to be considered for the determination of the
guideline value as mentioned in those particular instructions.
Some of the important Special Instructions are as follows:
“1. The following rate has to be fixed in the case the property,
which has been converted but not been fully developed is
alienated in favour of third parties:
a for residential purpose 50% of the land value
b for Commercial purpose 60% of the land value
c for Industrial purpose 25% of the land value
2. For the properties which have not been specified in the
Rates List and abutting to the National and State Highway,
Civil Appeal No. 1388 of 2013 Page 15 of 49
the value to be fixed at 50% and 25% respectively more
than the value of the other properties.
6. The rate for residential sites has to be followed for the
industrial areas as already been notified in the guideline
Excluding this area, for all other industrial sites, 50% of the
residential sites value has to be fixed.”
B. ARGUMENTS OF THE PARTIES BEFORE THE
EXECUTING COURT REGARDING
DETERMINATION OF GUID ELINE VALUE OF
THE SCHEDULE LAND:
19. After examining the notification governing the
determination of the guideline value, The Decree Holders
before the Executing Court contended as follows:
19.1. It was contended on behalf of the decree holders that the
entire land bearing Sy. No. 272/2, including the extent of
3 acres 6 guntas in respect of which the judgment debtors
were stated to be liable, stood converted for non-
agricultural industrial purposes and had been assessed to
municipal tax by the Town Municipal Council, Kengeri,
which later fell within the jurisdiction of the BBMP. On
that basis, the decree holders asserted that the guideline
value fixed by the Government was Rs. 1,000/- per square
foot and that the total amount payable worked out to Rs.
13,72,14,000/- for an extent of 1,37,214 square feet,
together with interest at 12% per annum from the date it
became payable, as already demanded by notice. It was
Civil Appeal No. 1388 of 2013 Page 16 of 49
urged that the execution petition had been filed for
recovery of the said amount on the footing that the land
was urban in character, industrially developed, and
equipped with all civic amenities.
19.2. In support of the said contention, the decree holders relied
upon licences issued by the then City Municipal Council,
Kengeri, permitting industrial activity and construction
with financial assistance from UCO Bank, power
connections granted by BESCOM, and tax assessments
made by BBMP. A detailed memo of calculation was
placed on record to show that, as per the Government
Notification dated 17.04.2007, the base value of Rs. 800/-
per square feet applicable to properties within municipal
limits and the same also attracted an addition of 25% of
the base value as the property is abutting the state
highway, thereby justifying the rate of Rs. 1,000/- per
square foot which was claimed. It was also contended that
upon conversion of land for non-agricultural purposes,
the provisions of the Land Revenue Act ceased to apply
and such lands were required to be treated as converted
urban lands for the purpose of valuation, warranting
fixation of value as claimed by the decree holders.
Civil Appeal No. 1388 of 2013 Page 17 of 49
20. In reply to the stand taken by the Decree Holders, the
Judgment Debtors appeared before the Executing Court and
contended as follows:
20.1. That as per the notification, the judgment debtors relied
upon paragraph 1 of the special instructions to the
notification relating to fixation of guideline value issued
by the competent authority and submitted that the
appropriate guideline value of the land in question ought
to be Rs. 1,56,25,000/- per acre. It was contended that
paragraph 1 of the guideline value notification
specifically dealt with fixation of land rates in respect of
agricultural lands which had been converted for
residential, commercial, or industrial purposes but had
not been fully developed. The relevant provision
stipulated that where such converted but undeveloped
land was alienated in favour of third parties, the rate to be
applied would be 50% of the land rate for residential
purpose, 50% for commercial purpose, and 25% for
industrial purpose.
20.2. On the basis of the said provision, the judgment debtors
stand was that the land in question was originally an
agricultural land, converted for industrial use in the year
2004, but had never been developed in fact. It was
asserted that the land lacked civic amenities such as water
Civil Appeal No. 1388 of 2013 Page 18 of 49
supply and drainage, no layout of sites had been formed,
and even the surrounding areas within a radius of about
one kilometre remained undeveloped. It was further
submitted that the Government had fixed the guideline
value for agricultural lands abutting the State Highway at
Rs. 1.25 crore per acre, and by adding 25% thereto under
Special Instruction paragraph 1(c) of the guidelines on
account of industrial conversion, the value would come
to Rs. 1,56,25,000/- per acre which would be,
approximately Rs. 350/- per square foot.
C. ORDER PASSED BY THE EXECUTION COURT:
21. The Executing Court, upon examination of the material
available on record and on consideration of the aforesaid
notification, held that the Decree Holders were entitled to
compensation at the rate of Rs. 1,000/- per square foot in
respect of the schedule land; however, it declined to grant
interest on the said amount. The Executing Court recorded
the said conclusion for the following reasons:
21.1. Firstly, the Executing Court held that Clause (xiii) of the
Memorandum of Settlement, recorded under Section 89
CPC and incorporated into the compromise decree dated
20-08-2007, expressly required the judgment debtors to
pay the value of Schedule ‘AA’ property strictly as per
Civil Appeal No. 1388 of 2013 Page 19 of 49
the Government guideline value prevailing on the date of
settlement (10-08-2007). The court emphasized that
neither party disputed the applicability of guideline value,
and therefore the determination had to be confined to the
official Government notification, not private estimates or
subsequent market fluctuations.
21.2. Secondly, the court examined the character and location
of the Schedule ‘AA’ land and found that it was not
agricultural land as claimed by the judgment debtors.
Evidence showed that the land was converted for non-
agricultural/industrial use and was situated within the
limits of Kengeri City Municipal Council (later BBMP)
and the Decree Holders had an industrial licence, power
connection, building permission, tax assessments, and
access to civic amenities, and abutted a State Highway.
In light of these factors, the court rejected valuation on a
per-acre agricultural basis and treated the land as urban,
converted property, justifying valuation on a per-square-
foot basis as fixed under the Notification.
21.3. Thirdly, the Executing Court relied on the Karnataka
Gazette Notification dated 17-04-2007, which prescribed
Rs. 800 per sq. ft. as the base guideline value for
converted land within City Municipal Council limits,
with an additional enhancement of 25% where the land
Civil Appeal No. 1388 of 2013 Page 20 of 49
was converted and situated in urban municipal areas.
Applying this statutory enhancement, the Court
mathematically arrived at the value of the land @ Rs.
1,000 per sq. ft. and held that this rate squarely fell within
Column 6 of the Gazette notification applicable as on the
date of compromise. The court specifically rejected the
judgment debtors’ attempt to apply rates fixed for
agricultural land at per-acre valuation as being contrary
to the notification.
21.4. Finally, the court reasoned that equity and contractual
fairness required acceptance of the Rs. 1,000 per sq. ft.
rate. The decree holder had permanently lost valuable
land under the compromise, while the judgment debtors
an experienced infrastructure company had full
knowledge of the land’s potential and guideline
framework at the time of settlement. The court observed
that, had the judgment debtors developed and sold the
land as sites, they would have realized even higher value.
Their prolonged delay in payment since 2007 further
weighed against them. Accordingly, the court concluded
that Rs. 1,000 per sq. ft. represented the correct, lawful,
and just compensation, fully aligned with the
Government guidelines and the intent of the compromise
decree.
Civil Appeal No. 1388 of 2013 Page 21 of 49
D. THE IMPUGNED ORDER
22. The Judgment Debtors challenged the order of the
Executing Court before the High Court by filing a Writ
Petition. No. 21068 of 2012, raising similar contentions
which were raised before the Executing Court. During the
pendency of the Writ Petition before the High Court, the
High Court vide order dated: 01.08.2012 impleaded the
State of Karnataka, represented by its Revenue Secretary
holding that the Notification does not fix a guideline value
for a land that has been converted for industrial use and
therefore only the State can clarify regarding the guideline
value of such a property. The High Court further directed
the Govt. Advocate appearing for the State to make his
submissions regarding the issue of fixation of guideline
value on obtaining instructions.
23. Pursuant to the above direction, the State of Karnataka filed
its Statement of Objections as follows:
23.1. It was contended that pursuant to the directions of the
High Court, the State was impleaded to place the
valuation of the land on record. In compliance with the
Court’s order, the Inspector General of Stamps directed a
spot inspection, which was carried out by the District
Registrar, Jayanagar.
Civil Appeal No. 1388 of 2013 Page 22 of 49
23.2. On inspection, it was reported that the land measuring 3
acres 6 guntas in Sy. No. 122/New No. 272/2 at Kengeri
Village, though was converted for industrial use, the land
was undeveloped, lacked civic amenities, and abutted the
State Highway. Relying on the relevant valuation
notification dated 17.04.2007, State contended that where
no specific guideline value was prescribed for industrial
sites, the value had to be fixed at 50% of the applicable
residential site rate, with an additional 25% if the land
abutted a State Highway. Applying these instructions, the
guideline value was worked out at Rs. 500 per sq. ft., and
it was asserted that higher values reflected in letters
issued by the Sub-Registrars were contrary to the
notification.
24. The High Court after examination of all the above material,
disposed of the Writ Petition filed by N.I.C.E and accepted
the valuation as given by the State by fixing the market
value of the land to be Rs. 500 per sq. foot of the land. The
High Court disposed of the Writ Petition with the following
reasons:
24.1. Firstly, the High Court found that the Executing Court
committed a fundamental error by misapplying the
Government Guideline Value Notification dated
17.04.2007. While the Executing Court fixed the value at
Civil Appeal No. 1388 of 2013 Page 23 of 49
Rs. 1,000 per sq. ft., it did so by selectively applying
Column 6 (converted sites) and Instruction No.2 (25%
increase for lands abutting a State Highway), but failed to
apply Instruction No.6, which mandates that where no
specific industrial rate is provided, industrial land must
be valued at 50% of the residential site rate. This
omission amounted to a clear non-application of
mandatory statutory instructions, rendering the valuation
legally unsustainable.
24.2. Secondly, the High Court held that the reasoning of the
Executing Court was internally contradictory and legally
flawed. On one hand, the Executing Court stated that
valuation should be based on Column 8 (agricultural land
at Rs. 1.25 crore per acre), and in the very next breath
concluded that Column 6 (Rs. 1,000 per sq. ft.) applied.
The High Court observed that such mutually inconsistent
reasoning showed lack of judicial application of mind,
since valuation could not simultaneously be based on two
incompatible columns of the same notification.
24.3. Thirdly, the High Court rejected the Executing Court’s
reliance on equitable considerations, such as the decree
holders having “lost valuable land” or the judgment
debtors allegedly delaying payment. It emphasized that
an Executing Court cannot travel beyond the decree or
Civil Appeal No. 1388 of 2013 Page 24 of 49
substitute legal valuation with notions of fairness or
sympathy. Execution proceedings are confined strictly to
enforcing the decree in accordance with law, and equity-
based reasoning cannot override statutory valuation rules
contained in the guidance notification.
24.4. Finally, the High Court placed significant weight on the
clarification issued by the State Government itself, which
explained the correct method of applying the guidance
value and the special instructions. Accepting this
clarification, the Court concluded that the correct
valuation required: (i) taking the residential site rate of
₹800 per sq. ft., (ii) adding 25% due to the land abutting
a State Highway (₹1,000 per sq. ft.), and (iii) applying
Instruction No.6 to fix the industrial land value at 50%
thereof, i.e., ₹500 per sq. ft. Since the Executing Court
failed to apply this mandatory reduction, its order
required modification rather than outright affirmation.
24.5. It is this order that is challenged by both the decree
holders and the judgment debtors before this Court.
PART-III:
ARGUMENTS OF THE PARTIES BEFORE THIS COURT
25. Shri. P. Vishwanatha Shetty, Learned Senior Advocate
appearing for the decree holders submitted as follows:
Civil Appeal No. 1388 of 2013 Page 25 of 49
25.1. The High Court had erred in interfering with the
Executing Court’s determination of market value at Rs.
1,000 per sq. ft., which had been fixed strictly in
accordance with the Government of Karnataka
notification dated 17.04.2007 applicable on the date of
the Memorandum of Settlement. It was emphasized that,
in an earlier round of litigation, the Supreme Court had
dismissed the SLP and had expressly directed the
Executing Court to determine the value of the Schedule-
AA property on the basis of the guideline value prevailing
as on the date of the compromise, with payment to follow
within the stipulated period. Applying the notification,
the property being within municipal limits, already
converted for industrial use, and abutting a State
Highway had rightly attracted a base guideline value of
Rs. 800 per sq. ft. with a further 25% increase, resulting
in Rs. 1,000 per sq. ft. This valuation was also stated to
be corroborated by letters issued by the jurisdictional
Sub-Registrar assessing the market value at Rs. 1,000 and
later Rs. 1,500 per sq. ft., which were rejected without
valid justification.
25.2. It was further contended that the High Court had wrongly
applied Special Instruction No. 6 to reduce the value by
50%, even though that instruction applied only to lands
Civil Appeal No. 1388 of 2013 Page 26 of 49
outside BBMP or municipal limits and, in any event, its
first part mandated residential value for properties
already declared as industrial zones. The reliance placed
on a belated and unauthorised spot inspection by the State
was assailed as untenable, especially when the High
Court itself noted that no such inspection had been
directed and that possession had been handed over years
earlier. He further urged that the property was being used
as a toll plaza generating substantial daily revenue and
that compensation had been unjustly delayed despite the
2007 settlement.
25.3. He further contended that the High Court’s approach
i.e. interpretation of guideline values and impleadment of
the Government at a belated stage, the High Court
essentially acted as an appellate court while exercising
the jurisdiction under Article 227 of the Constitution,
which is not permissible. He further contended that, High
Court’s reliance on an allegedly collusive and inaccurate
report had vitiated the impugned judgment in law.
26. Mr. Anil Kaushik, Learned Senior Advocate appearing for
N.I.C.E submitted as follows:
26.1. That 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
Civil Appeal No. 1388 of 2013 Page 27 of 49
August 2007 and as applicable to the subject land in the
condition in which it existed on the date of the
Memorandum of Settlement. It was contended that the
applicable provision was para 1 of the guideline value and
not para 6, since para 1 specifically governed agricultural
lands converted for residential, commercial, or industrial
use but not fully developed. The petitioners emphasized
that the land was originally agricultural, converted for
industrial use in 2004, remained wholly undeveloped
with no civic amenities or layout, and even the affidavit
of the State confirmed these facts after spot verification.
On this basis, it was argued that the correct valuation
ought to have been Rs. 1.56 crore per acre, arrived at by
adding 25% to the agricultural guideline value of Rs. 1.25
crore per acre applicable to lands abutting a State
Highway.
26.2. It was further urged that the High Court erred in relying
entirely on the valuation suggested by the State, despite
that affidavit itself was confirming that the land was not
developed, making the application of para 6 of the
guideline value ex facie erroneous. It was further
contended that accepting State’s approach would lead to
anomalous and contradictory results, effectively equating
agricultural or converted lands within BBMP limits with
Civil Appeal No. 1388 of 2013 Page 28 of 49
fully developed lands on a square-foot basis. The High
Court also faulted in treating the subject land as
developed without proof, by erroneously adding 25%
under para 2 by ignoring settled law that even developed
land cannot be valued in entirety due to mandatory
deductions for amenities and development costs. On
these grounds, it was contended that the impugned
judgment suffered from serious errors of law and
misinterpretation of the guideline value framework.
PART-IV:
POINTS THAT ARISE FOR DETERMINATION:
27. Having heard the learned counsels appearing for the parties
and on perusal of the entire material on record, the following
points arise for our consideration:
i. Whether the High Court exceeded its jurisdiction
conferred upon under Article 227 of the
Constitution of India?
ii. Whether the High Court was justified in
interfering with the findings recorded by the
Executing Court?
Civil Appeal No. 1388 of 2013 Page 29 of 49
28. Before proceeding to analyse the whole issue, it is necessary
to first delineate the admitted and undisputed facts of the
case:
28.1. Firstly, Decree Holder No. 2 being the owner in
possession of the schedule land, which was originally an
agricultural property.
28.2. Secondly, the schedule land was subsequently converted
for industrial use pursuant to an order dated 05.11.2004
passed by the competent authority.
28.3. Thirdly, Nandi Infrastructure Corridor Enterprises
(N.I.C.E.) and the Decree Holders entered into a
compromise decree in a suit filed by N.I.C.E. against the
Decree Holders, wherein N.I.C.E. agreed to compensate
the Decree Holders in terms of the market value of the
schedule land, determinable in accordance with the
guideline value prevailing on the date of compromise, in
the event N.I.C.E. failed to transfer the alternative land
described in the ‘B Schedule’ of the compromise decree.
28.4. Fourthly, N.I.C.E. failed to transfer the ‘B Schedule’
property as agreed under the compromise decree and was,
therefore, liable to compensate the Decree Holders in
terms of Clause (xiii) thereof.
28.5. Fifthly, in the earlier round of litigation, which
culminated before this Court, a specific direction was
Civil Appeal No. 1388 of 2013 Page 30 of 49
issued to the Executing Court to determine the guideline
value in accordance with the terms of the compromise
decree.
28.6. Lastly, the lis throughout remained between private
parties, namely, N.I.C.E. and the Decree Holders, until
the High Court impleaded the State Government in a writ
petition filed under Article 227 of the Constitution at the
instance of N.I.C.E.
29. Save and except the facts enumerated hereinabove, no other
facts stand admitted by the parties. The learned Senior
Counsel appearing on behalf of the Decree Holders has
seriously assailed the manner in which the High Court dealt
with the writ petition filed by Nandi Infrastructure Corridor
Enterprises (N.I.C.E.) under Article 227 of the Constitution.
We, therefore, proceed to examine this issue in the first
instance.
PART-V: ANALYSIS
RE: POINT NO. I:
A. EXERCISE OF THE POWER BY HIGH COURT
UNDER ARTICLE 227.
30. Before adverting to the factual matrix, it would be apposite
to examine whether the High Court exceeded the
Civil Appeal No. 1388 of 2013 Page 31 of 49
jurisdiction vested in it under Article 227 of the Constitution
of India?
31. The scope and ambit of the power of the High Court under
Article 227 of the Constitution has been the subject matter
of consideration before this Court in several judgments, and
the law governing the exercise of such power now stands
well settled. In exercise of its supervisory jurisdiction, the
High Court cannot act as an appellate court, nor can it sit in
appeal over the correctness of the orders passed by courts
and tribunals over which it exercises the power of
superintendence under Article 227.
32. This court in Shalini Shyam Shetty and Another v.
Rajendra Shankar Patil
13
, has held:
“35. Nasirullah Beg J. of the Allahabad High Court in a
very well-considered judgment rendered in the case
of Jodhey vs. State, reported in AIR 1952 All
788, discussed the provisions of Section 15 of the Indian
High Courts Act of 1861, Section 107 of the
Government of India Act 1915 and Section 224 of the
Government of India Act 1935 and compared them with
almost similar provisions of Article 227 of the
Constitution. The learned judge considered the power of
the High Court under Article 227 to be plenary and
unfettered but at the same time, in paragraph 15 at page
792 of the report, the learned judge held that High Court
should be cautious in its exercise. It was made clear, and
rightly so, that the power of superintendence is not to be
exercised unless there has been an (a) unwarranted
assumption of jurisdiction, not vested in Court or
13
(2010) 8 SCC 329
Civil Appeal No. 1388 of 2013 Page 32 of 49
tribunal, or (b) gross abuse of jurisdiction or (c) an
unjustifiable refusal to exercise jurisdiction vested in
Courts or tribunals. The learned judge clarified if only
there is a flagrant abuse of the elementary principles of
justice or a manifest error of law patent on the face of the
record or an outrageous miscarriage of justice, power of
superintendence can be exercised. This is a discretionary
power to be exercised by Court and cannot be claimed as
a matter or right by a party.
…….…..
40. Same principles have been followed by this Court in
the case of Mani Nariman Daruwala @ Bharucha
(deceased) through Lrs. & others vs. Phiroz N. Bhatena
and others etc. reported in (1991) 3 SCC 141, wherein it
has been held that in exercise of its jurisdiction
under Article 227, the High Court can set aside or
reverse finding of an inferior Court or tribunal only in a
case where there is no evidence or where no reasonable
person could possibly have come to the conclusion
which the Court or tribunal has come to. This Court
made it clear that except to this `limited extent' the High
Court has no jurisdiction to interfere with the findings of
fact (see para 18, page 149-150). In coming to the above
finding, this Court relied on its previous decision
rendered in the case of Chandavarkar Sita Ratna Rao vs.
Ashalata S. Guram reported in (1986) 4 SCC 447. The
decision in Chandavarkar (supra) is based on the
principle of the Constitution Bench judgments
in Waryam Singh v. Amanath and Another, reported in
AIR 1954 SC 215 and Nagendra Nath Bora & Another
vs The Commissioner of Hills Division and others,
reported in AIR 1958 SC 398 discussed above.”
33. This court in the case of Estralla Rubber v. Dass Estate (P)
Ltd.
14
, has held that the power of the High Court in
interfering with the order of the Court or Tribunal, would be
14
(2001) 8 SCC 97.
Civil Appeal No. 1388 of 2013 Page 33 of 49
restricted to cases of serious dereliction of duty and flagrant
violation of fundamental principles of law or justice. It has
been further held:
“6. The scope and ambit of exercise of power and
jurisdiction by a High Court under Article 227 of the
Constitution of India is examined and explained in
number of decisions of this Court. The exercise of power
under this Article involves a duty on the High Court to
keep inferior courts and tribunals within the bounds of
their authority and to see that they do duty expected or
required by them in a legal manner. The High Court is
not vested with any unlimited prerogative to correct all
kinds of hardship or wrong decisions made within the
limits of the jurisdiction of the courts subordinate or
tribunals. Exercise of this power and interfering with the
orders of the courts or tribunal is restricted to cases of
serious dereliction of duty and flagrant violation of
fundamental principles of law or justice, where if High
Court does not interfere, a grave injustice remains
uncorrected. It is also well settled that the High Court
while acting under this Article cannot exercise its power
as an appellate court or substitute its own judgment in
place of that of the subordinate court to correct an error,
which is not apparent on the face of the record. The High
Court can set aside or ignore the findings of facts of
inferior court or tribunal, if there is no evidence at all to
justify or the finding is so perverse, that no reasonable
person can possibly come to such a conclusion, which
the court or Tribunal has come to.”
34. This Court in a recent judgment of Garment Craft v.
Prakash Chand Goel
15
, had an occasion to again deal with
the exercise of Jurisdiction under Article 227 of the
Constitution of India and held that, High Court exercising
15
(2022) 4 SCC 181.
Civil Appeal No. 1388 of 2013 Page 34 of 49
supervisory jurisdiction would not act as a Court of First
Appeal. It was also held:
“15. Having heard the counsel for the parties, we are
clearly of the view that the impugned order is contrary
to law and cannot be sustained for several reasons, but
primarily for deviation from the limited jurisdiction
exercised by the High Court under Article 227 of the
Constitution of India. The High Court exercising
supervisory jurisdiction does not act as a court of first
appeal to reappreciate, reweigh the evidence or facts
upon which the determination under challenge is based.
Supervisory jurisdiction is not to correct every error of
fact or even a legal flaw when the final finding is justified
or can be supported. The High Court is not to substitute
its own decision on facts and conclusion, for that of the
inferior court or tribunal. The jurisdiction exercised is
in the nature of correctional jurisdiction to set right grave
dereliction of duty or flagrant abuse, violation of
fundamental principles of law or justice. The power
under Article 227 is exercised sparingly in appropriate
cases, like when there is no evidence at all to justify, or
the finding is so perverse that no reasonable person can
possibly come to such a conclusion that the court or
tribunal has come to. It is axiomatic that such
discretionary relief must be exercised to ensure there is
no miscarriage of justice.”
(Emphasis supplied)
35. In short, the principles laid down in the above matters is as
follows:
a) The power of superintendence under Article 227 is not to
be exercised unless there has been an (a) unwarranted
assumption of jurisdiction, not vested in Court or
tribunal, or (b) gross abuse of jurisdiction or (c) an
Civil Appeal No. 1388 of 2013 Page 35 of 49
unjustifiable refusal to exercise jurisdiction vested in
Courts or tribunals.
b) It is also well settled that the High Court while acting
under this Article cannot exercise its power as an
appellate court or substitute its own judgment in place of
that of the subordinate court to correct an error, which is
not apparent on the face of the record.
c) The High Court exercising supervisory jurisdiction does
not act as a court of first appeal to reappreciate, reweigh
the evidence or facts upon which the determination under
challenge is based. Supervisory jurisdiction is not to
correct every error of fact or even a legal flaw when the
final finding is justified or can be supported. The High
Court is not to substitute its own decision on facts and
conclusion, for that of the inferior court or tribunal.
36. Applying the aforesaid principles to 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 of India. We say so for the following
reasons:
36.1. Firstly, the power of superintendence under Article 227
of the Constitution can be exercised where there is an
unwarranted assumption of jurisdiction by a court not
vested with such jurisdiction, or in cases of gross abuse
Civil Appeal No. 1388 of 2013 Page 36 of 49
of jurisdiction. In the present case, it is evident from the
record that the Executing Court was duly vested with
jurisdiction to deal with the matter, and no case of gross
abuse of jurisdiction is made out. On this ground, the
High Court could not to have exercised its jurisdiction
under Article 227.
36.2. Secondly, the power of superintendence may be invoked
where there is an unjustifiable refusal to exercise
jurisdiction vested in a court. In the present case, the
Executing Court did exercise the jurisdiction conferred
upon it. Consequently, no occasion arose for the High
Court to invoke its jurisdiction under Article 227 of the
Constitution on this ground.
36.3. Thirdly, 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. In the present
case, while considering the petition filed by N.I.C.E.
under Article 227, the High Court ought to have borne in
mind that this Court, in the earlier round of litigation, had
specifically directed the Executing Court to determine the
guideline value of the property and accordingly the
Executing Court had determined the value of the land. In
Civil Appeal No. 1388 of 2013 Page 37 of 49
our considered opinion, the High Court travelled beyond
the limits of its jurisdiction under Article 227 while
adjudicating the writ petition filed by N.I.C.E. and we say
so for the following reasons:
36.3.1. While exercising its jurisdiction under Article 227
of the Constitution, the High Court had a limited scope
of interference with the order passed by the Executing
Court. 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. Firstly, while
exercising jurisdiction under Article 227, the High
Court belatedly impleaded the State Government to
resolve an issue relating to the interpretation of the
manner in which the guideline value was to be
determined. In our considered opinion, such
impleadment ought not to have been resorted to, for the
reason that the lis throughout was between private
parties and arose solely out of a compromise decree.
36.3.2. Secondly, the High Court, in effect, called upon the
State Government to file an affidavit seeking
clarification on the interpretation of the notification.
Although the High Court ultimately rejected the report
Civil Appeal No. 1388 of 2013 Page 38 of 49
submitted by the State, it nonetheless accepted the
State’s clarification with regard to the interpretation of
the notification and proceeded to act upon the same. In
substance, the High Court permitted the State to
interpret its own notification and thereby influence a
lis exclusively between private parties. The State was
thus placed in the position of being a rule-maker,
interpreter, and adjudicator of its own notification
simultaneously, all while the High Court was
exercising its jurisdiction under Article 227 of the
Constitution. Such an approach, in our considered
view, is impermissible. The executive cannot be
allowed to explain away or reinterpret a statutory
instrument during the course of litigation to the
prejudice of one of the parties.
36.3.3. Thirdly, the High Court accepted the interpretation
advanced by the State solely on the ground that an
alternative interpretation of the notification was
possible. By doing so, the High Court substituted its
own view for that of the Executing Court, thereby
exhibiting the conduct of an Appellate Court rather
than that of a court exercising supervisory jurisdiction
under Article 227 of the Constitution.
Civil Appeal No. 1388 of 2013 Page 39 of 49
36.3.4. Fourthly, at the very least, the interpretation,
adopted by the Executing Court constituted a plausible
and reasonable view. In such circumstances, the High
Court could not, in exercise of its supervisory
jurisdiction under Article 227 of the Constitution,
supplant that view with another interpretation, merely
because such an alternative view was also possible. By
exercising jurisdiction under Article 227 solely to
demonstrate that another view was possible, the High
Court, in effect, acted as an appellate court, which is
impermissible in law.
36.4. Therefore, in our considered opinion, the High Court,
while exercising its jurisdiction under Article 227 of the
Constitution, travelled beyond the limits of the narrow
and circumscribed scrutiny permissible under the said
provision, in direct contravention of the principles set out
in paragraph 35 of this judgment.
RE: POINT NO. 2:
37. Having held that the High Court substituted its own
interpretation merely because another interpretation was
possible which was erroneous, we now proceed to examine
whether the interpretation adopted by the Executing Court
was a plausible interpretation or whether it was so perverse
Civil Appeal No. 1388 of 2013 Page 40 of 49
as to warrant interference in exercise of jurisdiction under
Article 227 of the Constitution. A plain reading of the
notification leaves no manner of doubt that the value
prescribed for sites falling within the jurisdiction of the
BBMP and City Municipal Councils, as reflected in Column
No. 6, is Rs. 800/- per square foot. The schedule land,
bearing Survey No. 122, is expressly covered under the said
notification. Consequently, the base guideline value
applicable to sites falling within Survey No. 122 is Rs. 800/-
per square foot. Further, upon applying Instruction No. 2 of
the notification, an additional 25% of the base value is
required to be added. Accordingly, the computation would
be Rs. 800/- plus 25% of Rs. 800/-, which works out to Rs.
1,000/- per square foot. Now, the crucial question, therefore,
is whether Instruction No. 6 of the notification is applicable
to the present case. On bare reading of Instruction No. 6, it
can be seen that same is intended to operate only as a
residual provision applicable to industrial layouts or
industrial zones where no specific guideline value is
prescribed. In the present case, the land falls within
municipal urban limits, and the guideline notification itself
prescribes a specific rate of Rs. 800 per square foot for such
lands within such limits. Consequently, the opening limb of
Instruction No. 6 “the rate for residential sites has to be
Civil Appeal No. 1388 of 2013 Page 41 of 49
followed for the industrial areas as already been notified in
the guideline” stands satisfied, and the exclusionary phrase
“excluding these areas” squarely applies. As a result, the
fallback rule of fixing 50% of the residential site value never
gets triggered. Applying Instruction No. 6 in the present
factual matrix would lead to an anomalous and absurd
outcome whereby converted urban land within BBMP limits
is valued lower than agricultural land with conversion
benefits, a result that courts have consistently cautioned
against.
B. MERITS OF THE APPEALS FILED :
38. In view of the foregoing discussion, it is evident that the
High Court exceeded the limits of its supervisory
jurisdiction under Article 227 of the Constitution.
Accordingly, we are of the view that the impugned order
deserves to be set aside. However, for the sake of clarity and
completeness, we proceed to consider the merits of the
appeals preferred by the Decree Holders and the Judgment
Debtors, independently.
39. Civil Appeal No. 1388 of 2013, filed by the Judgment
Debtors/Nandi Infrastructure Corridor Enterprises
(N.I.C.E.). The consistent stand taken by N.I.C.E. before the
Executing Court, the High Court, and this Court has been
Civil Appeal No. 1388 of 2013 Page 42 of 49
that the land in question was originally agricultural land,
converted for industrial use in the year 2004, but had never
been developed in fact. It was contended that the land lacked
civic amenities such as water supply and drainage, that no
layout of sites had been formed, and that even the
surrounding areas within a radius of approximately one
kilometre remained undeveloped. On this basis, it was urged
that the Government had fixed the guideline value for
agricultural lands abutting the State Highway at Rs. 1.25
crore per acre, and that by adding 25% thereto under Special
Instruction paragraph 1(c) of the guidelines, on account of
industrial conversion, the value would work out to Rs.
1,56,25,000/- per acre, which is approximately Rs. 350/- per
square foot. The aforesaid contention has been consistently
rejected by both the Executing Court and the High Court,
and, in our considered opinion, the said contention has been
rightly rejected.
39.1. The Decree Holders produced material on record to
demonstrate that developmental activities had been
undertaken after the land was converted for industrial use.
The Executing Court specifically recorded that the
evidence established that the land was converted for non-
agricultural/industrial purposes, was situated within the
limits of the Kengeri City Municipal Council (later
Civil Appeal No. 1388 of 2013 Page 43 of 49
BBMP), and that the Decree Holders possessed an
industrial licence, power connection, building
permission, tax assessments, and access to civic
amenities, and that the land abutted a State Highway. The
High Court also rejected the aforesaid contention of
N.I.C.E., and, in our considered view, such rejection was
entirely justified.
39.2. The learned Senior Counsel appearing for Nandi
Infrastructure Corridor Enterprises (N.I.C.E.) placed
reliance on the decision of this Court in K.S.
Shivadevamma and Others v. Assistant Commissioner
and Land Acquisition Officer and Another
16
to contend
that the fact that the land was not developed at the
relevant point of time ought to be taken into consideration
while fixing the guideline value. This submission, in our
considered opinion, does not merit acceptance. The
decision relied upon arose out of land acquisition
proceedings, wherein this Court was concerned with the
determination of the market value of acquired land. In
such proceedings, factors such as the developmental
potential of the land are undoubtedly relevant and
material for determining market value. In the present
case, however, we are concerned with the determination
16
(1996) 2 SCC 62.
Civil Appeal No. 1388 of 2013 Page 44 of 49
of the market value on the basis of the guideline value
fixed by the State, which is a statutory benchmark and
does not depend upon factual considerations such as the
potentiality of the land, the extent of development
undertaken, or other attendant circumstances. Further, the
valuation of the schedule land in the present case arises
out of a compromise decree entered into between the
parties. At the time of entering into the compromise, both
parties were fully conscious of the fact that the schedule
land stood converted for industrial use. Having agreed to
compensation on the basis of guideline value, N.I.C.E.
cannot now be permitted to contend that the value ought
to be determined by treating the land as agricultural.
Consequently, the reliance placed by the Judgment
Debtors on the decision of this Court in K.S.
Shivadevamma is misplaced and does not advance their
case.
39.3. In so far as the submission of Nandi Infrastructure
Corridor Enterprises (N.I.C.E.) with respect to interest is
concerned, we do not find merit in the contention
advanced by the learned Senior Counsel for N.I.C.E. that
the Decree Holders are not entitled to interest on the
amount determined. It is no doubt true that the
compromise decree does not contain any clause
Civil Appeal No. 1388 of 2013 Page 45 of 49
stipulating payment of interest. The finding of the
Executing Court, that the Decree Holders were not
entitled to interest on the amount so determined had been
assailed by the Decree Holders before the High Court in
W.P. No. 25158 of 2012, which came to allowed in part
by granting interest as under:
“Petition is partly allowed and the impugned order
dated 31.5.2012 at Annexure-A on the file of V Addl.
City Civil Judge at Bangalore City, in so far as not
granting interest on the cost of the land, is quashed.
Consequently, it is held that petitioners/Decree
Holders are entitled for interest @ 6% per annum on
the cost of the land from 20.8.2007 till the amount is
paid or deposited. Respondents/Judgment Debtors
are directed to deposit the interest on the cost of the
land in Execution Case within weeks from today,
failing which the Executing Court shall proceed to
recover the same from the respondents/Decree
Holders.”
(Emphasis supplied by us)
The learned Senior Counsel for N.I.C.E. has placed reliance
on the decision of this Court in Government of Tamil Nadu,
represented by its Secretary, Transport Department and
Others v. P.R. Jaganathan and Others
17
. The said decision
clearly lays down that, in the absence of any stipulation
regarding interest in a compromise decree, a party cannot
claim interest as a matter of right. It would be apposite to take
note of the order passed by this Court in SLP. (C) No.
17
2025 SCC OnLine SC 2496.
Civil Appeal No. 1388 of 2013 Page 46 of 49
10633/2012 on 09.04.2012, the extract of which has already
been noted in Paragraph No. 13 @ supra, whereunder it has
been clearly held that Petitioner’s therein (N.I.C.E) herein
should pay the amount, so determined within 8 weeks from the
date of determination by the Executing Court. In the instant
case, the Executing Court determined the value of the land
vide order dated: 31.05.2012, against which W.P. No. 21068
of 2012 came to filed and in the said petition a sum of Rs.
4,92,18,750 was deposited in the Registry of the High Court in
the terms of the Order dated: 27.06.2012. This amount appears
to have been determined based on the calculation made by the
Judgement Debtors (N.I.C.E). When the order passed by this
Court on 09.04.2012, referred to herein supra is clear and
unequivocal namely ‘Petitioner shall pay the amount so
determined within eight weeks from the date of determination
by the Executing Court’ the Judgment Debtor (N.I.C.E), ought
to have complied with the said order. It appears from the
records that the amount determined by the Executing Court
fixing the value of the land has not been fully deposited and
only admitted (by N.I.C.E.) amount was deposited. That apart,
the Decree Holders also having challenged the order of the
Executing Court denying the interest for the belated payment
in W.P. No. 25158 of 2012, seeking interest on the delayed
payment ought to have been taken into consideration by the
Civil Appeal No. 1388 of 2013 Page 47 of 49
High Court while adjudicating the Writ Petition of the
Judgment Debtors (N.I.C.E.) more particularly when it was
brought to the notice of the High Court. It would be apt to note
at this juncture itself, the Writ Petition No. 25158 of 2012 filed
by the Decree Holders seeking interest on delayed payment
came to be allowed in part and an interest @ 6% per annum on
the cost of the land from the date of decree drawn in OS
No.4691/2006 (20.08.2007) till the amount is paid or
deposited was ordered to be paid by the Judgment Debtors. At
the cost of repetition, it requires to be noticed that in W.P. No.
21068 of 2012 a sum of Rs. 4,92,18,750/- was deposited in
terms of the order dated: 27.06.2012, since the issue of interest
was seized in W.P. No. 25158 of 2018 and the said Writ
Petition having not been taken up fort adjudication, along with
W.P. No. 21068 of 2012, the present situation has arisen. On
the one hand, the decree-holder contends that judgment
debtors are liable to pay interest on the delayed payment, and
on the other hand, the judgment debtors attempt to stave off
the said claim. The fact remains that a determination has
already been made by the High Court in W.P. No. 25158 of
2012, by order dated 11.06.2013, determining the rate of
interest. None of the parties to the present proceedings have
brought to our notice that the said order having been set aside,
modified, or varied. It is also made clear that in the event of
Civil Appeal No. 1388 of 2013 Page 48 of 49
said order, having being challenged by either of the parties, it
is needless to state that the order passed thereon would be
binding on both the parties and the direction for payment of
interest would be subject to the result of the said proceedings.
40. Civil Appeal No. 1354 of 2013 has been filed by the Decree
Holders seeking restoration of the order passed by the
Executing Court. In view of the foregoing discussion, and
having held that the High Court exceeded the limits of its
jurisdiction while exercising power under Article 227 of the
Constitution, the said appeal preferred by the Decree
Holders deserves to be allowed.
PART VI:
CONCLUSION
41. In view of the above discussion, we pass the following
order:
a) Civil Appeal No. 1388 of 2013, filed by the Judgment
Debtors/Nandi Infrastructure Corridor Enterprises
(N.I.C.E.), is dismissed, and Civil Appeal No. 1354 of
2013, filed by the Decree Holders, is allowed.
b) Consequently, the impugned judgment and order dated
12.09.2012 passed by the High Court of Karnataka in W.P.
No. 21068 of 2012 is set aside, and the order passed by the
Civil Appeal No. 1388 of 2013 Page 49 of 49
V Additional City Civil Judge, Bengaluru, acting as the
Executing Court, is restored.
c) Accordingly, the value of the Schedule Land (AA
Schedule Property), in terms of the Compromise Decree
dated 20.08.2007, is determined at Rs. 1,000/- per square
foot, aggregating to a total sum of Rs. 13,72,14,000/-.
d) The judgment debtors (N.I.C.E) are directed to pay the
balance amount, namely Rs.13,72,14,000/- minus
Rs.4,92,18,750/- = Rs.8,79,95,250/- (Rupees Eight Crore
Seventy Nine Lakh Ninety Five Thousand Two Hundred
Fifty Only) with interest at the rate of 6% p.a. as ordered
in W.P. No. 25158 of 2012 by order dated 11.06.2013
which would be subject to observations made in paragraph
39.3 hereinabove.
e) Pending applications, if any, shall stand disposed of. The
parties shall bear their own costs.
.……………………………., J.
[ARAVIND KUMAR]
.……………………………., J.
[N.V. ANJARIA]
New Delhi;
April 30
th
, 2026.
Legal Notes
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