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2022 Supreme(SC) 130

SUPREME COURT OF INDIA
(From the High Court of Judicature at Bombay)
HEMANT GUPTA, V. RAMASUBRAMANIAN, JJ.
Walchandnagar Industries Ltd. – Appellant
Versus
The State of Maharashtra and Another – Respondents
Civil Appeal Nos. 2671-2672 of 2016
Decided On : 04-02-2022

Advocates appeared:
For the Appellant(s) : Mr. Jatin Zaveri, AOR Mr. Neel Kamal Mishra, Adv. Mr. D. S. Mishra, Adv.
For the Respondent(s): Mr. Sachin Patil, AOR Mr. Rahul Chitnis, Adv. Mr. Aaditya A. Pande, Adv. Mr. Geo Joseph, Adv. Ms. Shwetal Shepal, Adv. Mr. Nishant Ramakantrao Katneshwarkar, AOR Mr. Uday B. Dube, AOR

Headnote:(A) Land Acquisition Act, 1894 - Sections 4, 17, 18, 23, and 28 - Claim for compensation for injurious affection of railway infrastructure - Court upheld portions of the Reference Court's award for depreciated value of rails and sleepers and reversed denial of compensation for rolling stock and transportation cost - Key findings centered on interpretation of severance and injurious affection under relevant statutory provisions. (Paras 30, 29, 77, 79)

(B) Compensation Principles - The court determined that compensation must reflect genuine economic loss resulting from land acquisition, considering operational disruptions and reinvestment needs for affected businesses. (Paras 30, 29)

Facts of the case:
The appellant, a company owning a township, challenged a High Court decision that modified the Reference Court's compensation under the Land Acquisition Act tied to their trolley line rendered obsolete due to dam construction. (Paras 1, 6, 18)

Findings of Court:
The High Court improperly denied compensation linked to rails and sleepers over a wider area influenced directly by acquisition implications, emphasizing scope of severance and injurious affection is linked to property use. (Paras 79, 80)

Issues: The core issue was whether the appellant suffered compensable damages due to severance and injurious affection from the loss of operational capacity of the trolley line, particularly in light of previous transportation shifts. (Paras 22, 24, 26)

Ratio Decidendi: The Court reinforced that claims under sections of the statute must consider effective utility loss attributable to the acquisition process in line with economic principles governing compensation. (Paras 30, 39, 79)

Result: Appeals partly allowed; compensation for rails and sleepers restored. (Para 79)

Table of Content
1. challenge to high court's judgment on compensation (Para 1 , 2)
2. background of land acquisition and transportation issues (Para 3 , 4 , 5 , 6)
3. claim for compensation for severance and injurious affection (Para 8 , 12 , 14 , 15)
4. court's evaluations of rolling stocks and claims (Para 18 , 19 , 21 , 22)
5. legal principles on compensation under land acquisition act (Para 29 , 30 , 32)
6. increase in transportation costs and operational changes (Para 50 , 52 , 63 , 66)
7. assessment of appellant's profit claims related to transport (Para 72 , 74 , 75)
8. final rulings on compensation claims (Para 77 , 79)

JUDGMENT :

V. RAMASUBRAMANIAN, J.

1. Challenging a common Judgment rendered by the High Court of Judicature at Bombay in two appeals, modifying the award of the Reference Court passed under Section 18 of the LAND ACQUISITION ACT , 1894 the claimant-landowner has come up with these civil appeals.

2. We have heard Mr. Gopal Sankaranarayanan, learned senior advocate appearing for the appellant; Mr. Sachin Patil, learned advocate appearing for the first respondent-State and Mr. Deepak Nargolkar, learned senior advocate appearing for the second respondent-beneficiary.

3. The appellant is a company incorporated under the Companies Act. It has established a township in a vast area measuring about 16000 acres of land, located 136 kms. away from Pune. The nearest railway station to the township is at Bhigwan, located 36 kms. away from Walchandnagar Township.

4. For the purpose of transporting sugarcane and other goods, the appellant had laid trolley lines covering a distance of 50 kms. inside its estate. The appellant has also set up a 36 km. narrow gauge trolley line from Walchandnagar to Bhigwan for transportation of heavy engineering goods.

5. In the year 1967, the Government of Maharashtra approved the BHIMA (Ujjani) Irrigation Project. As part of the project, a 18 feet height dam across the Bhima River was proposed to be constructed at Ujjani about 1½ kms. upstream from Hingangaon bridge on Pune-Sholapur National Highway. Before undertaking the construction of the dam, a general survey was carried out, which revealed that a section of the trolley line may get submerged. Therefore, a spate of correspondence and personal discussions ensued between the officials of the Government and the representatives of the appellant for exploring the possibility of diverting the trolley line.

6. It is the case of the appellant that they wanted the Government to invoke the urgency clause for the acquisition of some other land for diverting the trolley line. But it is the case of the respondents that the appellant had by then abandoned transportation through trolley line and switched over to road transport.

7. Be that as it may, a notification under Section 4 of the LAND ACQUISITION ACT , 1894 was published on 26.10.1972. The proposal included the land on which a section of the trolley line passed. The extent of land covered by the trolley line that was expected to be submerged was measured to be 6 hectares 7 ares. Since the total land acquired for the project, included the lands of the appellant, which were located in different villages, a series of awards were passed.

8. For our present purpose, it may be noted that the Land Acquisition Officer passed an award on 9.12.1981. The claim of the appellant in the Award Enquiry was not only for the market value of the land, but also for: (i) compensation for the loss and (ii) compensation for the injurious affection due to the trolley line becoming obsolete. The claim of the appellant also included a claim for the loss sustained by the appellant on account of the un-acquired portion being rendered useless.

9. By his Award dated 9.12.1981, the Land Acquisition Officer awarded:

    (i) Rs. 15,329 for the acquired portion of land.

    (ii) Rs. 39,032.94 for embankments, rails, bullies, sleepers.

    (iii) R

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