High Court Cannot Act As Appellate Court Under Article 227 Supervisory Jurisdiction: Supreme Court Restores NICE Project Land Valuation

"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," Supreme Court, in a significant ruling dated April 30, 2026, held that the High Court cannot exceed its supervisory jurisdiction under Article 227 of the Constitution of India by acting as an appellate court to reappreciate evidence.

A bench of Justice Aravind Kumar and Justice N.V. Anjaria observed 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 Court set aside a Karnataka High Court order that had halved the valuation of land involved in the Bangalore–Mysore Infrastructure Corridor Project (BMICP).

The dispute arose from a compromise decree between Nandi Infrastructure Corridor Enterprises (NICE) and landowners regarding 3 acres 6 guntas of land converted for industrial use. NICE was required to pay the "guideline value" prevailing on the date of settlement (August 10, 2007) as it failed to provide alternative land under the Memorandum of Settlement. While the Executing Court fixed the valuation at Rs. 1,000 per sq. ft., the High Court, exercising Article 227 jurisdiction, reduced it to Rs. 500 per sq. ft. after impleading the State to clarify the notification.

The primary question before the court was whether the High Court exceeded its supervisory jurisdiction under Article 227 by substituting its own interpretation of the guideline notification for that of the Executing Court. The court was also called upon to determine the correct application of the Karnataka Government Notification dated April 17, 2007, regarding the valuation of converted industrial land within municipal limits.

Article 227 Power Is Supervisory, Not Appellate

The Supreme Court emphasized that the power of superintendence under Article 227 is not to be exercised unless there is an unwarranted assumption of jurisdiction, gross abuse of jurisdiction, or a manifest error of law patent on the face of record. Citing Shalini Shyam Shetty v. Rajendra Shankar Patil, the bench noted that the High Court cannot act as a court of first appeal to re-weigh facts or evidence.

"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."

Improper Impleadment Of State In Private Dispute

The Court criticized the High Court's decision to implead the State Government at a belated stage in a writ petition arising from a private execution proceeding. It observed that the lis throughout remained between private parties based on a compromise decree. The bench held that the High Court essentially permitted the State to interpret its own notification to influence the outcome of a private dispute, which is impermissible in law.

"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."

Executing Court's Interpretation Was Plausible

The Court found that the Executing Court had adopted a reasonable and plausible interpretation of the 2007 Notification. The land, situated within municipal limits (BBMP/Kengeri), attracted a base rate of Rs. 800 per sq. ft. under Column 6. Adding 25% for the property abutting a State Highway as per Instruction No. 2 resulted in the Rs. 1,000 per sq. ft. valuation. The bench held that where a view is plausible, the High Court cannot substitute it with another view under Article 227.

Instruction No. 6 Of Notification Inapplicable

The bench clarified that Instruction No. 6, which reduces industrial land value to 50% of residential rates, is a residual provision. Since a specific rate for the area was already prescribed in the guideline table, the exclusionary clause in Instruction No. 6 applied. Applying a 50% reduction would have led to an "anomalous and absurd outcome" where converted urban land was valued lower than agricultural land.

Rejection Of NICE’s Plea For Agricultural Valuation

NICE argued that the land should be valued as agricultural land (approx. Rs. 350 per sq. ft.) as it was undeveloped. The Court rejected this, noting that NICE was fully aware the land was converted for industrial use when it signed the compromise. Citing K.S. Shivadevamma v. Assistant Commissioner, the bench held that guideline value is a "statutory benchmark" and does not depend on factual potentiality or the actual extent of development.

"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."

Directions On Interest and Final Order

Regarding interest, the Court noted that although the compromise decree was silent, a previous order by the Supreme Court in 2012 directed NICE to pay the determined amount within eight weeks. Since NICE only deposited the "admitted" amount and not the full "determined" amount, the Court upheld the High Court's separate direction for 6% interest per annum on the delayed payment.

The Supreme Court dismissed NICE's appeal and allowed the Decree Holders' appeal, restoring the order of the Executing Court. The valuation was confirmed at Rs. 1,000 per sq. ft., and NICE was directed to pay the balance amount of Rs. 8,79,95,250 with 6% interest per annum from August 20, 2007, till the date of payment.

Date of Decision: 30 April 2026