Consent Award Cannot Form Basis To Award Or Decide Compensation In Another Acquisition - Supreme Court

A two-judge Bench of Justice M.R. Shah and Justice B. V. Nagarathna while setting aside a judgment of the Karnataka High Court has held that the consent award ought not to have been relied upon and/or considered for the purpose of determining the compensation in the case of another acquisition.

By the impugned judgment and order passed by the Karnataka High Court at Bengaluru, the High Court had allowed the Miscellaneous First Appeal of the original landowner and enhanced the amount of compensation in respect of the acquired land to Rs. 40 lakhs per acre and consequently the state preferred an appeal before the Supreme Court.

In this case, the land of the Respondent was acquired by the Appellant for a public purpose for the improvement of Ranganathittu Bird Sanctuary. A notification under Section 4 of the Land Acquisition Act was issued followed by a notification under Section 6. The Land Acquisition Officer passed an award fixing the market value of the acquired land @ Rs.21,488/- per guntha, which was enhanced by the Reference Court.

Aggrieved by the order of the Reference Court, an appeal was preferred before the High Court by the Respondent to enhance it and the High Court enhanced the amount of compensation to Rs.40 lakhs per acre.

It was brought to the notice of the Court that the award – Ex.P.17 was a consent award and was in respect of the property acquired in the year 2011 and which was acquired for a different purpose, namely, for the formation of double line railway broad gauge between Bengaluru and Mysore City. But in this case, Section 4 notification was issued in the year 2008, i.e., three years before the land was acquired in the case of Ex.P.17.

The Apex Court noted, "...therefore, the award – Ex.P.17, which has been relied upon by the High Court was for the acquisition subsequent to the land acquired in this case, i.e., after a period of three years and therefore the High Court ought not to have relied upon the same while determining the market price of the land acquired in 2008."

Further, the Bench held that the consent award ought not to have been relied upon and/or considered for the purpose of determining the compensation in case of another acquisition.

"In case of a consent award, one is required to consider the circumstances under which the consent award was passed and the parties agreed to accept the compensation at a particular rate. Therefore, a consent award cannot be the basis to award and/or determine the compensation in other acquisition, more particularly, when there are other evidences on record," the Court opined.

The Court also held that the High Court committed a grave error in solely relying upon Ex. P.17 to determine the market value of the lands in this case.

Hence, the Bench opined that the impugned order of the High Court cannot be sustained, however, since there were other documentary evidence on record that ought to have been considered by the High Court, the matter was remanded to the High Court to decide the appeal afresh and to determine the market price/compensation considering the other evidence on record, if any.

Accordingly, the Court allowed the appeals.

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