High Court Cannot Act As Appellate Court Or Substitute Its Own View Under Article 227 Jurisdiction: Supreme Court

"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," Supreme Court, in a significant ruling, held that the High Court cannot act as an appellate court or substitute its own findings for that of a subordinate court while exercising supervisory jurisdiction under Article 227 of the Constitution of India.

A bench of Justice Aravind Kumar and Justice N.V. Anjaria observed that the power of superintendence is intended strictly to keep inferior courts within the bounds of their authority and not to correct every error of fact or legal flaw.

The Court emphasized that where a subordinate court's view is plausible and reasonable, the High Court must refrain from supplanting it with an alternative interpretation. The bench noted that "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 dispute arose from a compromise decree between Nandi Infrastructure Corridor Enterprises (N.I.C.E.) and land owners (Decree Holders) regarding the Bangalore-Mysore Infrastructure Corridor Project. Under the settlement, N.I.C.E. was to convey alternative land to the owners, failing which it became liable to pay the "guideline value" of the original 3 acres 6 guntas of land as of August 2007.

When N.I.C.E. failed to perform, the Decree Holders sought execution. The Executing Court determined the guideline value at ₹1,000 per sq. ft. based on a 2007 Government Notification. However, the Karnataka High Court, exercising jurisdiction under Article 227, impleaded the State Government and reduced the valuation to ₹500 per sq. ft., leading to cross-appeals in the Apex Court.

The primary question before the court was whether the High Court exceeded its supervisory jurisdiction under Article 227 by interfering with the Executing Court's valuation. The court was also called upon to determine if the High Court was justified in impleading the State to interpret a notification in a private civil dispute arising from a compromise decree.

Limits of Supervisory Jurisdiction Under Article 227

The Supreme Court reiterated that the power of superintendence under Article 227 is "plenary and unfettered" but must be exercised with extreme caution. Citing Shalini Shyam Shetty v. Rajendra Shankar Patil, the bench noted that such power is not to be exercised unless there is an unwarranted assumption of jurisdiction or a flagrant abuse of the elementary principles of justice.

High Court Cannot Act As Court Of First Appeal

The bench clarified that a High Court exercising supervisory jurisdiction does not act as a Court of First Appeal. It cannot reappreciate evidence or substitute its own decision on facts for that of the inferior court. The court noted that "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."

Impleadment Of State In Private Disputes Impermissible

The Supreme Court took strong exception to the High Court impleading the State Government during the Article 227 proceedings to clarify the interpretation of the guideline value notification. The bench observed that since the lis was entirely between private parties arising from a compromise decree, such impleadment was legally untenable.

State Cannot Be Rule-Maker And Adjudicator Simultaneously

The Court criticized the High Court's reliance on the State's interpretation of its own notification during the litigation. The bench observed that permitting the State to interpret the notification to the prejudice of one party placed the executive in a position where it was simultaneously the rule-maker, the interpreter, and the adjudicator.

"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."

Interpretation Of Guideline Value Notification

Regarding the valuation, the Court found that the Executing Court’s interpretation of the Karnataka Gazette Notification dated April 17, 2007, was plausible. The land fell within municipal limits and was converted for industrial use, justifying the ₹800 base rate plus a 25% enhancement for abutting a State Highway, totaling ₹1,000 per sq. ft.

Instruction No. 6 Only A Residual Provision

The bench held that Instruction No. 6 of the notification, which suggests a 50% reduction for certain industrial sites, was a residual provision. Since the land in question was specifically covered under the municipal rates, the fallback rule was never triggered. The Apex Court noted that applying the reduction would lead to an "anomalous and absurd outcome" where urban industrial land is valued lower than agricultural land.

Parties Bound By Compromise Decree Terms

The Court rejected N.I.C.E.'s argument that the land should be valued as agricultural because it was undeveloped. The bench noted that at the time of the compromise, both parties were aware the land was converted for industrial use. Having agreed to pay the "guideline value," N.I.C.E. was estopped from seeking a lower agricultural valuation based on potentiality or development status.

"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."

Entitlement To Interest On Delayed Payment

While the compromise decree was silent on interest, the Court noted that a separate High Court order in W.P. No. 25158 of 2012 had granted 6% interest per annum on the cost of the land from 2007. Since that order remained unchallenged and N.I.C.E. had only deposited a partial admitted amount, the direction for interest remained binding.

The Supreme Court set aside the High Court's judgment and restored the Executing Court's order fixing the land value at ₹1,000 per sq. ft. The Court concluded that N.I.C.E. is liable to pay the balance of ₹8,79,95,250 with 6% interest per annum. The ruling reaffirms that Article 227 is a correctional jurisdiction and not a second opportunity for merit-based appellate review.

Date of Decision: 30 April 2026