Highest Exemplar Must Prevail: Calcutta High Court Fixes Land Compensation at ₹5.52 Lakh Per Cottah, Rejects Average Valuation as “Perverse”

“It is the highest market value that must guide compensation under Section 26, not the average or pleadings,” Calcutta High Court recalibrating the method of compensation in land acquisition proceedings. The Division Bench comprising Justice Sabyasachi Bhattacharyya and Justice Supratim Bhattacharya held that the compensation payable to land losers must be determined by applying Section 26(1)(a) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, and not by resorting to average sale prices or the value stated in pleadings.

“The Referral Court applied erroneous legal yardsticks, followed invalid legal principles, and ignored binding precedent,” the Court observed, while setting aside the earlier awards dated 20.09.2018 passed by the Additional District Judge, Hooghly.

“Compensation Must Be Based on the Highest Comparable Sale – Not What Was Pleaded or Averaged”

The dispute arose out of acquisition of land in Mouza-Bhadrakali, Uttarpara, West Bengal, originally initiated under Section 4 of the Land Acquisition Act, 1894, for the public purpose of rehabilitating squatters of the Bhadrakali Women’s Home. However, due to the intervening enactment of the 2013 Act, and in view of no award having been passed under Section 11 of the 1894 Act, the High Court unequivocally held that Section 24(1)(a) of the 2013 Act must apply in full.

“It is an admitted position that no award under Section 11 of the 1894 Act had been passed. Thus, the premise of calculation has to be in respect of the 2013 Act,” the Bench ruled.

In a scathing assessment of the methodology adopted by the Referral Court, the High Court stated, “Both the State and the Referral Court proceeded on the wrong premise of taking the average of sale deeds. The Referral Court acted in a perverse manner in making an arithmetically wrong calculation… and restricted compensation to the market value mentioned in pleadings without considering the actual exemplars.”

“₹5,52,544 Per Cottah Is the Just Value After Deduction of Structure – State's Own Logic Used Against It”

Rejecting the State’s objections about structures existing on the exemplar plots, the Court ruled that even after deducting the highest structure valuation (₹49,956 as suggested by the State), the market value per cottah based on Deed No. 05821 dated 29.09.2011 stood at ₹5,52,544/-. This deed, registered prior to the Section 4 notification, was declared as the most reliable basis for determining fair compensation.

“It is a well-settled position of law that the highest exemplar is to be taken as the basis for calculation of compensation,” the Court reiterated, relying on a line of Supreme Court authorities including Meherawal Khewaji Trust v. State of Punjab and Ashok Kumar v. State of Haryana.

The Court held that the Referral Court was duty-bound to undertake an independent assessment, stating, “In compensation matters, it is not for the claimant to prove their exact entitlement, but for the Court to determine fair compensation under Section 26.”

The State’s reliance on post-notification deeds and unpleaded assessment slips was dismissed, with the Court noting that “evidence beyond pleadings cannot be entertained under Order XLI Rule 27 CPC.” It went on to clarify that none of the State’s documents could substitute the binding statutory criteria under the 2013 Act.

“Governor’s Assent Not Required Under 2013 Act – Award Becomes Final on the Date of Passing”

A key legal issue raised by the land losers was whether compensation should be awarded up to the date the Governor approved the award. This argument was firmly rejected.

“Section 23 of the 2013 Act clearly does not require prior governmental approval for the award to attain finality,” the Court held, distinguishing the 2013 regime from the 1894 Act, where such approval was mandatory under Section 11.

“In the present case, the award stood final as of July 30, 2015. The attempt to link the compensation to the date of Governor’s approval has no statutory backing under the 2013 Act,” the Court declared.

“Interest Under Sections 72 and 80 is Mandatory – Referral Court Must Ascertain Date of Possession”

The High Court gave considerable attention to the issue of statutory interest. It ruled that interest on excess compensation (Section 72) and interest for delayed deposit (Section 80) must be considered, subject to ascertainment of the date of possession.

“There is no reason why the claimant should be deprived of interest on excess compensation… the date of possession must be determined from the evidence and relevant records,” the Court directed.

It held that “These mandates are statutory. No specific pleading is required to invoke them.” The Referral Court was directed to reopen the issue solely on the question of possession and apply the law accordingly.

“Referral Court’s Duty Is to Ensure Justice, Not Follow Technicalities”

The Court made a strong statement about the role of Referral Courts in land compensation cases: “Unlike an ordinary civil suit, where it is for the respective parties to prove their respective cases, in a compensation matter, it is for the Referral Court to assess, on the basis of available documents, fair compensation.”

It underscored that technical objections cannot override substantive rights: “Substantive justice must prevail. The Referral Court should not have limited itself to the pleadings, especially when certified deeds were admitted without objection.”

Court Orders Remand with Binding Directions on Valuation, Solatium, Interest and Disbursement

Concluding that the previous awards were legally unsustainable, the High Court allowed the appeals and cross-objections in part and remanded the matter with strict instructions. It fixed ₹5,52,544/- per cottah as the compensation for all affected lands, and ordered the Referral Court to calculate and award:

– 100% solatium under Section 30(1) of the 2013 Act
– 12% interest under Section 30(3) from notification to award
– Further interest under Sections 72 and 80, subject to proof of possession date

The Bench also directed that deposited sums with the Registrar General be released to the land losers after accounting for previous withdrawals, and that these sums be adjusted against final awards post-remand.

“In ensuring that justice is not just done, but seen to be done, the law cannot be reduced to arithmetic error or administrative habit,” the Court concluded.

Date of Decision: 14 January 2026