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CASE NO.:

Appeal (civil) 1401 of 2007

PETITIONER:

Numaligarh Refinery Ltd

RESPONDENT:

Green View Tea & Industries & Anr

DATE OF JUDGMENT: 15/03/2007

BENCH:

B.P. SINGH & TARUN CHATTERJEE

JUDGMENT:

J U D G M E N T

(Arising out of SLP) No.15810 of 2005)

WITH

CIVIL APPEAL NO 1402 2007

(Arising out of SLP) No.7182 of 2005)

M/s Green View Tea & Industries \005.Appellant

Versus

Collector, Golaghat & Anr. \005Respondents

B.P. SINGH, J.

These special leave petitions have been preferred against the

judgment and order of the High Court of Assam at Gauhati dated

December 21, 2004 in Review Application No.54 of 1998. Special

Leave Petition No.7182 of 2005 has been preferred by M/s. Green

View Tea and Industries Ltd. whose lands measuring about 681

bighas, 1 katha with tea bushes, drainage system, garden roads, shade

trees and other valuable trees were notified for acquisition under

Section 4 of the Land Acquisition Act by Notification published in

Assam Gazette on November 11, 1992. The petitioner in the

aforesaid special leave petition has challenged the compensation

awarded by the High Court for the lands in question.

Special Leave Petition No.15810 of 2005 has been preferred by

M/s. Numaligarh Refinery Ltd. for whose benefit the acquisition has

been made, and is directed against the award of compensation for the

tea bushes at the rate of Rs.75/- each.

Special Leave granted in both these petitions.

This litigation has a long chequered career. The Notification

issued under Section 4 of the Land Acquisition Act was followed by a

declaration made under Section 6 of the Act. Possession of the lands

in question had been taken invoking the urgency provisions. The

Collector by his award of July 4, 1994 awarded compensation for the

lands @ Rs.7,000/- per bigha and compensation for the tea bushes @

Rs.15 per tea bush. Dissatisfied with the award of the Collector M/s.

Green View Tea and Industries Ltd. (hereinafter referred to as the

"appellant") sought a reference under Section 18 of the Act which was

made to the District Judge, Golaghat and was registered as L.A. Case

No.1 of 1996. By his judgment and order dated November 18, 1996

the learned District Judge awarded compensation @ Rs.22,000/- per

bigha for the lands and @ Rs.75/- each for tea bush.

The appellants preferred First Appeal No.27 of 1997 against the

award of the learned District Judge contending that the compensation

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granted for the lands was inadequate. The Numaligarh Refinery Ltd.

(hereinafter referred to as the "respondent") as well as the Collector

filed appeals before the High Court being First Appeal No.32 of 1997

and First Appeal No.33 of 1997 respectively. By judgment and order

dated June 24, 1998, the High Court dismissed First Appeal No.27 of

1997 preferred by the appellant while allowing the appeals preferred

by the respondent and the Collector. The High Court restored the

award of the Collector granting compensation @ Rs.7,000/- per bigha

and Rs.15 per tea bush.

The appellant filed a Review Application No.54 of 1998

praying for the review of the judgment and order of June 24, 1998

dismissing its appeal. The petitioners also filed Special Leave

Petitions before this Court against the judgment and order of the High

Court aforesaid, but on March 8, 1999 withdrew the Special Leave

Petitions in view of the pendency of the review petition before the

High Court. Ultimately, the High Court by its order dated August 25,

1999 dismissed the review petition.

The appellant then filed Special Leave Petition Nos.18180-

18182 of 1999 against the judgment and order of the High Court dated

June 24, 1998 dismissing the First Appeal preferred by the appellant.

On November 22, 1999 the appellant also filed a special leave petition

before this Court being Special Leave Petition No.5417 of 2000

impugning the order of the High Court dated August 25, 1999

dismissing the review petition.

This Court by its order of December 1, 1999 dismissed the

special leave petitions preferred by the appellant. Aggrieved thereby

the appellant filed Review Petition Nos.306-308 of 2000 in which this

Court issued notice on March 8, 2000. The special leave petitions

preferred against the order of the High Court dismissing the review

petition and the review petitions filed by the appellant against the

order of dismissal of its special leave petitions were heard together.

By its judgment dated November 9, 2001 this Court dismissed the

Review Petition Nos.306-308 of 2000 but granted leave in Special

Leave Petition No.5417 of 2000 against the order of the High Court

rejecting the review petition of the appellant. This gave rise to Civil

Appeal No.7692 of 2001.

The appeal of the appellant, namely, Civil Appeal No.7692 of

2001 was allowed by this Court setting aside the order of the High

Court and the matter was remitted to the High Court to be heard and

disposed of in accordance with law. The judgment of this Court in the

aforesaid appeal is reported in 2004, Vol.4 SCC 122. It would be

necessary at the appropriate stage to notice the observations made by

this Court in its aforesaid judgment.

To complete the narrative, in the light of judgment and order of

this Court the High Court considered the review application filed

before it by the appellant and by its judgment and order of November

21, 2004 partly allowed the review application in as much as it

increased the compensation awarded for the lands from Rs.7,000/- per

bigha to Rs.10876/- per bigha and awarded the compensation of Rs.75

for each tea bush. This order of the High Court partly allowing the

review application is challenged before us in these two appeals.

Before adverting to the facts of the case and the evidence

produced by the parties in support of their respective claims, it may be

useful to broadly indicate even at this stage the thrust of the argument

of counsel for the appellant that the State having itself granted

compensation @ Rs.55,000/- per bigha, which was also at one stage

offered to the appellant \026 company, and in the light of several awards

made, there was no justification for granting to the appellant \026

company compensation for the lands at a rate less than Rs.55,000/-

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per bigha. Reliance was also placed on the observations of this Court

to the effect that these were relevant matters to be considered while

awarding compensation in the instant case.

The appellant has relied upon the offer made by the State as

contained in its approval dated September 10, 1992. It has further

relied on the approval of rates for tea lands in the districts of Tinsukia

and Dibrugarh, apart from estimates prepared for some other lands

which were sought to be acquired for Oil and Natural Gas

Commission. The appellant has also relied on awards made in respect

of tea lands in the district of Sibsagar Exhibits \026 8 and 9. The

appellant has relied on the sale deeds Exhibits 3,4 and 5 and submitted

that the compensation awarded by the High Court is wholly

unjustified and grossly inadequate.

There is no dispute that in the Jamabandi the lands have been

classified as tea class. The lands fall within the district of Golaghat

which earlier formed part of the district of Sibasagar.

It was strenuously urged before us that the offer made by the

State itself was a very important piece of evidence to be considered,

and this aspect of the matter was emphasized by this Court while

remanding the matter to the High Court on an earlier occasion. Our

notice has been drawn to the letter of the Deputy Commissioner,

Golaghat addressed to the Commissioner and Secretary to the

Government of Assam, Department of Revenue dated August 20,

1992. In the said letter the Deputy Commissioner has referred to

lands measuring 751.30 acres which was proposed to be acquired for

the respondent to set up its refinery. The Deputy Commissioner

proposed for approval of a uniform bigha rate @ Rs.55,000/- per

bigha irrespective of class for both Government and patta lands.

Reference is made to the lands acquired for ONGC in the District of

Sibsagar for which uniform bigha rate of Rs.55,000/- was fixed and

which had been duly approved by the Government.

The Additional Secretary, Department of Revenue wrote to the

Deputy Commissioner, Golaghat by his letter dated September 10,

1992 that the Government had approved the proposal for fixation of

uniform rate of Rs.55,000/- per bigha for both Government and patta

lands proposed to be transferred/acquired for the respondent. It would

thus appear that the proposal made by the Deputy Commissioner,

Golaghat was accepted by the Government and it is further reinforced

by Annexure P-6 which is the "Minutes of the Meeting" held in the

Chief Minister's Chamber on 25.2.93. The said Meeting was attended

by the Minister of Revenue, Member - State Planning Board, the

Chief Secretary of the State, the Commissioner and Secretary \026

Industries etc. on behalf of the Government and the Chairman and

Managing Directors of IBP and other officers on behalf of the

respondent. The issue relating to fixation of compensation for the

land to be acquired for the refinery of the respondent was discussed

and the following decision was taken:-

"1. For Patta land compensation for per bighas

should not exceed Rs.55,000/- per bigha all inclusive.

For this purpose additional Secretary, Revenue

and Joint Secretary, Industries have been authorized

to make a filed visit and discuss the matter with the

Deputy Commissioner, Golaghat so that there is no

problem in taking over this land and handing it over to

IBP for construction of the Refinery.

If this team arrives at a final decision to pay

Rs.55,000/- per bigha then the Deputy Commissioner

will complete formal proceeding and compensation

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will be paid through the deputy commissioner.

In case the negotiations cannot be arrived as

Rs.55,000/- per bigha all inclusive then the land

acquisition proceeding would continue".

However, for the Government land premium @ Rs.35,000/- per bigha

was fixed.

It appears that the offer made by the State Government was not

acceptable to the appellant and, therefore, the matter had to be re-

considered by the Government since it was not possible to acquire the

land on the basis of agreed compensation. Thus, the Revenue

Secretary by his letter of April 2, 1993 wrote to the Deputy

Commissioner and Collector, Golaghat informing him that since land

acquisition proceedings under the provisions of the Land Acquisition

Act have been taken up by the Collector, Golaghat for acquisition of

the lands in question, the valuation of the land should be fixed at

market value of the land on the date of publication of Notification

under Section 4 (1) of the Act and other relevant factors as per

prescribed provisions of the Act. It was clarified that since the

valuation of the land at Rs.55,000/- per bigha was not determined as

per the provisions of the Land Acquisition Act, the decision of the

Government as contained in its letter dated September 10, 1992

forwarded by message dated September 21, 1992 was cancelled.

Apparently, since Notification under Section 4 of the Act was issued

on November 11, 1992 and the matter had to be considered in the light

of the provisions of the Act, the Government cancelled its earlier offer

in view of the proceedings taken under the Act to determine the

market value.

The second set of documents on which reliance was placed by

the appellant are the orders of the Deputy Commissioner, Dibrugarh

issued in June, 1992 wherein it was stated that the valuation

(categorywise) have been fixed for the lands which were acquired/

taken over by Oil India Ltd. in the year prior to 1990 and which

remained pending for payment. The order stated that the fixation of

value of lands had been arrived at after considering the market price

of land prior to 1990 alongwith interest payable on them. Hence it

was ordered that the rates fixed in the aforesaid order shall be

applicable to pending cases of the period prior to the year 1990. The

land value of "Rural Area viz Paddy Field and Tea Cultivation Area"

was fixed at Rs.60,000/- per bigha and the rate fixed for "Land unfit

for cultivation viz rocky areas, sandy areas, Jaldube areas etc." was

fixed at Rs.40,000/- per bigha. A similar order was passed by the

Deputy Commissioner, Tinsukia district on August 4, 1992 which also

related to lands acquired/ taken over by Oil India Ltd. during the

period prior to June 26, 1990. The same rates were fixed for tea

cultivation area and land unfit for cultivation.

These two orders do establish that the rate for tea lands was

determined in respect of lands acquired prior to year 1990, at the rate

of Rs.60,000/- per bigha. This, however, included the element of

interest payable to the claimants as also inclusive of all concessions.

Therefore, from the decision of the Government communicated by

letter dated September 10, 1992 in respect of the lands in question as

also the two orders issued by the Deputy Commissioners of Tinsukia

and Dibrugarh it is clear that the price was "all inclusive" meaning

thereby that nothing beyond the amount mentioned therein would be

payable to the land owners. This was apparently so because the price

was being fixed by agreement and not after following the procedure

prescribed under the Land Acquisition Act. The State therefore did

not incur the statutory liability to pay solatium, interest etc. apart from

the price determined in accordance with the rates mentioned therein.

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The next set of documents on which reliance was placed by the

appellant are the two estimates of the probable cost of acquisition of

land under the Land Acquisition Act. Exhibit - 6 related to the district

of Sibsagar and is dated April 23, 1992 and Exhibit - 7 which also

relates to district Sibasagar is dated May 25, 1992. In both cases

probable rate was shown to be Rs.55,000/- per bigha.

The appellant also relied on two awards made by the Collector

under the Act relating to lands acquired in the district of Sibasagar.

These awards are dated August 12, 1995 and December 13, 1995 and

relate to acquisitions made under Notifications issued under Section 4

of the Land Acquisition Act on May 23, 1994 and May 24, 1994.

Having regard to the amount awarded the rate would work out to

approximately Rs.55,000/- per bigha. Counsel for the appellant

emphasized that the new district of Golaghat where the lands in

question are situated formed part of the district of Sibsagar before the

new district of Golaghat was carved out. The appellant also relied on

three sale deeds Exhibits 3, 4 and 5 to prove that the rate at which

lands were sold between February 12, 1985 and May 12, 1992 varied

from Rs.40,000/- to Rs.50,000/- per bigha.

Relying on all these documents the appellant contended that the

compensation awarded by the High Court @ Rs.10,876/- per bigha

was grossly inadequate. The Collector ought to have awarded

compensation at least @ Rs.55,000/- per bigha if not more. There was

no reason why the documentary evidence on record should not be

relied upon particularly when they related to offer made by the State

Government. Those documents disclosed that the rate was about

Rs.55,000/- per bigha as evidenced by awards made by the Collector

and estimates prepared by the Department of the State Government. It

was further submitted that of the three sale deeds produced before the

Court the highest rate should have been accepted which was

Rs.50,000/- evidenced by sale deed dated February 12, 1985. It was

submitted that even if some deduction was allowed on account of plot

being small, the increase in value of land over 7 years had also to be

taken note of.

Learned counsel appearing on behalf of the respondent

submitted that the earlier offer made by the State Government for the

lands in question @ Rs.55,000/- was cancelled since the appellant did

not accept the same and it became necessary to resort to the process of

acquisition under the Land Acquisition Act. Learned counsel sought

to justify the rate of Rs.10,876/- per bigha. He has referred to

Exhibit - 3 which is the calculation on the basis of which the rate of

Rs.10,876/- per bigha was worked out. The chart discloses that the

sale deeds in respect of 5 plots of land were taken into consideration.

These sale deeds related to the period 1988 to 1992 and the average

price worked out to Rs.10,876/-. It was not disputed before us that

one of the plots sold was homestead land while the others have been

described as "faringati" lands which we are told are lands which are

not suitable for cultivation. Be that as it may, what is obvious is the

fact that the lands referred to therein are not of the same category as

lands with which we are concerned in these appeals namely, tea class

lands. Moreover, the government itself did not agree with this

valuation as is evident from the letter of the Revenue Department

dated July 22, 1993 in which it was pointed out that the inclusion of

homestead land (Bari Class) enhanced the average price of the lands

which was not acceptable to the Government. Necessary instructions

were issued to keep this in mind while preparing the estimates.

The High Court in substance has restored the value of lands as

worked out in the aforesaid chart prepared in the office of the Deputy

Commissioner and Collector, Golaghat.

It was contended that the three sale deeds on which the

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appellant relied related to small plots by the side of the road and,

therefore, the plots were not comparable with the lands subject matter

of the acquisition. In fact the best evidence was the purchase of the

lands in question by the appellant itself in the year 1987. It was

sought to be urged before us that by registered sale deed of September

7, 1987 the appellant had purchased the partnership firm together with

other lands movable and immovable properties including all rights

and interests from the partnership firm which earlier managed the Tea

Estate. Under the said deed only a sum of Rs. 2,45,424/- was paid for

purchase of the entire Estate by the partnership firm. This document

was never produced before the Reference Court and, therefore, the

appellant strongly objected to this document being looked at by the

Court. Apart from the fact that this document was never produced

before the Reference Court, there is another objection to the taking

into account the price paid by the appellant for the purchase of the

partnership firm which earlier managed the tea company. Since, the

entire partnership firm was taken over with its assets and liabilities,

the price paid did not represent merely the price of the lands but also

the other assets as diminished by the liabilities. Learned counsel for

the respondent submitted that the value of the lands could be worked

out by taking into account the total assets as well as total liabilities of

the firm. We are afraid such a procedure cannot be permitted for land

acquisition cases. If the price paid did not represent the price of the

lands purchased, it cannot be taken as evidence of the value of the

land.

Referring to the rates fixed for acquisition/taking over of lands

in the districts of Dibrugarh and Tinsukia it was submitted that there

was no evidence with regard to the location of these lands and also

with regard to other parameters that were relevant. Dibrugarh and

Tinsukia were more developed than the district of Golaghat. It was,

therefore, submitted that the orders relied upon were not of any help

to the appellant. Lastly, it was submitted that the awards made by the

Collector under the Land Acquisition Act relied upon by the appellant

related to the district of Sibasagar and not the district of Golaghat.

Learned counsel for the respondent has also cited several

decisions of this Court before us but we do not consider it necessary

to refer to them since they all reiterate the principles fairly well

established over the years laying down norms for assessing the market

value of the lands acquired.

Before considering the submissions urged before us it is useful

to notice the observations of this Court while remanding the matter to

the High Court for re-consideration of the Review Petition. This

Court observed:-

"This first thing that strikes us is that when the

proposal of acquisition of land was mooted, the

Deputy Commissioner himself was of the view that

the compensation payable should be at the rate of

Rs.55,000/- per bigha. The State Government

considered this and then agreed to the same.

Ultimately, this compensation would have to be paid

by the beneficiary of the land acquisition namely the

oil refinery.

Secondly, the appellant had placed on record

the awards made in the case of other similarly situated

tea estates nearby showing that in each of these cases,

the Government had directed compensation at the rate

of Rs.55,000/- per bigha.

Thirdly, an order of the State Government

issued by the Collector and Deputy Commissioner,

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Tinsukia dated 4th August 1992 and an order of the

District Collector and Deputy Commissioner

Dibrugarh were placed on record, which indicate land

value of different categories. They are as under:-

1. Highly developed commercial Rs.2,00,000/- per bigha

places within notified area

2. Urban area (the recognized Rs.1,20,000/- per bigha

towns within notified area)

3. Semi-urban area (the area Rs.1,20,000/-per bigha

beyond the notified area

but within two miles radius

of the town either revenue

or municipal town)

4. Rural area viz. paddy field Rs.60,000/- per bigha

and tea cultivation area

5. Land unfit for cultivation Rs.40,000/- per bigha

viz. rocky areas, sandy

areas, jaldube areas etc.

Thus, it would be seen that, even according to

the State Government, if the land was unfit for

cultivation and comprised only rocky areas, sandy

areas or jaldube areas, the amount of compensation

payable was at the rate of Rs.40,000/- per bigha. As

against this the Collector was directed to fix the

compensation at the rate of Rs.7,000/- per bigha and

the District judge enhanced it to Rs.22,000/- per

bigha. Surely, the tea estate land was much more

valuable than "land unfit for cultivation". It is

nobody's case that the tea estate's land was

uncultivated or that there was no tea bushes growing

thereupon.

Fourthly, the oral evidence on record showed

that, at all stages, the Government was prepared to

pay Rs.55,000/- per bigha and it was only the

appellant who had taken a rigid stand demanding a

higher price.

Fifthly, Exhibits 6, 7 & 8 placed on record

prima facie seem to be similar cases of acquisition of

land in Sibsagar District, wherein for arable land the

estimate of compensation payable made, by the

Government itself was Rs.55,000/- per bigha. Exhibit

8 was the case of acquisition of tea class land, which

also showed the compensation payable at the same

rate as the Government had initially agreed to pay.

Sixthly, even if the High Court disagreed with

the valuation of tea bushes made by the District

Judge, being the Court of first Appeal, it would have

had to itself fix the compensation for the tea bushes.

This, the High Court failed to do. All this on record

appears to have escaped the notice of the High Court".

Having considered all aspects of the matter we have reached the

conclusion that the compensation awarded by the High Court is

inadequate and requires modification. In the first instance, the

government itself suggested that the appellant may be compensated by

working out the compensation @ Rs.55,000/- per bigha. The proposal

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made by the Deputy Commissioner in respect of the lands in question

was acceptable to the government. Unfortunately, the appellant did

not agree to accept the offer made by the State Government and,

therefore, it became necessary to resort to acquisition proceedings

under the Land Acquisition Act. This appears to us to be a very

important piece of evidence, and the mere fact that the Government

later cancelled its decision because the appellant did not agree to the

rates suggested, will not make much of a difference. The documents

do establish that the government itself was willing to pay

compensation for the lands @ Rs.55,000/- per bigha, but the appellant

thought that the rate offered was inadequate.

The decision of the government to offer compensation @

Rs.55,000/- per bigha is not an isolated instance because in other

districts as well a similar rate was offered. At least two such orders

were produced before us which related to the districts of Dibrugarh

and Tinsukia. An all inclusive price of Rs.60,000/- per bigha was

offered for tea class lands. The amount offered included the element

of interest as well, and related to an earlier period namely the period

before the year 1990 since the acquisitions/ take over in those cases

related to the period prior to 1990. This certainly gives a clear picture

as to the value of tea class lands in different districts of the State. The

submission urged before us that the proximity of the lands in question

was an important consideration cannot be over-looked. It is true that

if there was evidence to prove that tea class lands were sold in the

vicinity of the lands in question at a particular rate, the Court could

not have ignored such sale transaction and the price paid. However,

in the instant case, we are concerned with a tea garden. It was not

disputed before us that such tea gardens are to be found in many

districts of the State of Assam. Having regard to the fact that in the

districts of Dibrugarh and Tinsukia compensation at the same rate was

awarded, it appears that the value of tea class lands did not vary much

on account of their location in different districts. The two instances

relied upon by the appellant provides evidence to the effect that tea

class lands in different districts, in the absence of special features, had

the same value. These rates were fixed in the year 1992, only a few

months before Notification under Section 4 of the Land Acquisition

Act was issued in respect of the lands in question. The High Court

rejected these valuations observing:-

"The price offered for lands in other districts may be a

good piece of evidence, but the districts referred to i.e.

namely \026 Sibasagar and Dibrugarh are far away from

Golaghat District. That apart, the price paid for the

lands in those districts do not appear to have been

tested in any court of law. The payment in those

cases might have been on the higher side. We,

therefore, order payment after recalculation at the rate

of Rs.10,876/- per bigha as determined by the

Collector".

We do not approve the approach of the High Court.

The two estimates prepared by the Collector of Sibasagar dated

April 23, 1992 and May 25, 1992 also give some indication as to the

value of tea class lands and it is not a mere co-incidence that in those

estimates as well the cost of acquisition worked out was @ of

Rs.55,000/- per bigha. Similar is the case with the two awards made

in respect of tea class lands acquired in the district of Sibasagar where

also the rates worked out to about Rs.55,000/- per bigha. Notification

in respect of both these acquisitions was issued in May 1994, while

Notification under Section 4 of the Act was issued on November 11,

1992 in the instant case. However, viewed from a realistic angle, it

would appear that the compensation awarded under the two awards

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would work out to much more that the "all inclusive offer" of

Rs.55,000/- per bigha, because the claimants in those cases will also

be entitled to solatium and interest etc. which itself would

considerably increase the total compensation payable to the claimants.

So far as the sale deeds are concerned. They no doubt relate to

small plots but the best price offered was one under sale deed dated

February 12, 1985 which was @ Rs.50,000/- per bigha. Even if we

reduce the value by about 30% on account of smallness of the plots

but enhanced the price @ 10% per year since the sale deed related to a

period approximately 7 years earlier, it would again work out to a

figure not less than Rs.55,000/- per bigha.

The High Court has determined the rate of compensation basing

itself on a proposal made by the Deputy Commissioner which was not

even accepted by the Government. Moreover, the sale instances taken

into account did not relate to tea class lands but related to "firangati"

lands which fall under a lower category.

The question then is as to what should be the rate at which

compensation should be awarded for the lands in question. In doing

so, we must bear in mind the fact that the offer made by the

Government was an all inclusive offer of Rs.55,000/- per bigha. If the

appellant had accepted the offer, it would not have been necessary for

the State to initiate a proceeding for acquisition under the Land

Acquisition Act and, thereafter, to contest the protracted litigation.

The State would not have been liable to pay solatium, interest etc.

The grant of compensation @ Rs.55,000/- per bigha under the Land

Acquisition Act is, therefore, not justified. It has been often said that

fixation of compensation under the Land Acquisition Act involves an

element of rational guess work. We are of the view that having regard

to the evidence on record compensation worked out @ Rs.35,000/-

per bigha for the lands would be fair and adequate because the

appellant would also be entitled to statutory benefits such as solatium

and interest thereon. We accordingly hold that the appellant is

entitled to compensation for the lands @ Rs.35,000/- per bigha apart

from all statutory benefits to which it may be entitled by way of

solatium, interest etc.

The next question is as to what compensation should be

awarded for the tea bushes standing on the acquired lands. The

Collector had offered compensation @ Rs.15/- per tea bush which had

been enhanced to Rs.75/- per tea bush by the Reference Court. In the

earlier round of litigation the High Court reduced it to Rs.15/- per tea

bush but after remand the High Court has approved the rate of Rs.75/-

per tea bush.

According to the respondent and the Collector compensation

for tea bushes should be fixed on the basis of Krishnamurthy formula

which was formulated in the year 1972 by Shri Krishnamurthy, the

then Secretary, Department of Revenue. On the other hand, counsel

for the appellant submitted that the aforesaid Krishnamurthy formula

was considered in an award given by a former Chief Justice of the

Assam High Court which award was approved by the High Court.

The learned Arbitrator noticed the Krishnamurthy formula but in the

circumstances found that the compensation needed to be enhanced

considerably.

As noticed by the High Court, the Krishnamurthy formula laid

down two governing factors for determining compensation for tea

bushes namely; (1) cost of fresh plantation not exceeding Rs.45,000/-

per hector (2) annual net profit from tea bushes per hector Rs.10,000/-

. The same formula was commended for our acceptance. On the

other hand, the High Court by its impugned judgment and order has

fixed the rate of Rs.75/- per tea bush on the basis of the award of

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Justice S.K. Dutta which was approved by a Division Bench of the

Assam High Court.

Counsel for the respondents submitted that even if the formula

adopted by the Arbitrator is accepted and the compensation calculated

thereon, the compensation will not be Rs.75/- per tea bush but only

Rs.37.50 per tea bush.

There is substance in the submission of learned counsel for the

respondent and the Collector. The dispute referred to the learned

Arbitrator in the case of Lakwah Tea Company Ltd. related to damage

done to the tea garden of Lakwah Tea Company Ltd. on account of

crude oil and sludge entering the garden damaging the tea bushes as

well as the nursery. The damage was mainly on account of crude oil

getting mixed up with flood water. It was in a dispute of such nature

that an award was made by the Arbitrator. The learned Arbitrator

noticed the Krishnamurthy formula and observed :-

"The instant case is different from cases in which the

land with tea bushes is acquired. This is not a case of

requisition. In this case the tea bushes will have to be

replanted on the land which was affected by oil and

from which the damaged bushes are uprooted".

The learned Arbitrator observed that in cases where land with

bushes is acquired compensation for land is paid so that the person

concerned can buy a similar land, and compensation for tea bushes is

paid as cost of fresh plantation and for loss of crops. In that case the

Arbitrator found that the tea bushes had to be uprooted and the land

had to be prepared for cultivation by adopting the procedure for

treatment of the land so as to rehabilitate the land. According to the

evidence available in that case the rehabilitation of land could take

about two years and if crude oil was deposited it would take longer

time on account of the treatment process to be applied. In these

circumstances, the learned Arbitrator concluded:-

"Hence replantation cost will be very high and the

loss of crops will be much higher than in a case in

which land with tea bushes is acquired. Thus the

value of a tea bush in the instant case will be about

double of the value of a tea bush in a case where the

land is taken, I therefore fix Rs.75/- as the value of a

tea bush in the instant case will be about double of the

value of a tea bush in a case where the land is taken, I

therefore fix Rs.75/- as the value of a tea bush in the

instant case with observation that it is on the lowers".

It would thus be seen that the award of the Arbitrator fixing the

rate of Rs.75/- per tea bush took into account the cost of re-

habilitation of the land which was adversely affected by seepage of

crude oil and which therefore required treatment. The learned

Arbitrator himself assessed, in view of the degradation which the land

had suffered and the treatment required that the rate per bush would

come to Rs.75/- each which was double the value of a tea bush in a

case where the land was acquired. Thus 50 per cent of the

compensation awarded represented the cost of treating the land which

had been adversely affected by seepage of crude oil and suffered

degradation.

We are therefore satisfied that even if the formula adopted by

the Arbitrator is accepted, compensation must be awarded for the tea

bushes only @ Rs.37.50 per tea bush, which is 50 per cent of the

compensation awarded by the Arbitrator, since the instant case is a

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case of acquisition and does not involve incurring of any expenditure

on treatment of the lands in question. We, therefore, accept the

submission urged on behalf of the respondent and the Collector that

the compensation for tea bushes @ Rs.75/- each is excessive and

ought to be reduced to Rs.37.50 for each tea bush. We order

accordingly.

In the result Appeal arising out of the Special Leave Petition )

No.7182 of 2005 is partly allowed and the compensation for the land

acquired is determined at the rate of Rs.35,000/- per bigha instead of

Rs.10,876/- per bigha as awarded by the High Court. Appeal arising

out of the Special Leave Petition ) No.15810 of 2005 is also partly

allowed in as much as the compensation for tea bushes is reduced

from Rs.75/- to Rs.37.50 per tea bush. The Collector is directed to re-

calculate the compensation payable to the claimant and pay the same

together with such statutory benefits to which it may be entitled under

the Act. The parties shall bear their own costs.