Supreme Court Imposes ₹2 Lakh Cost On Chhattisgarh For Challenging Compensation To Landowners After Decades-Long Illegal Occupation
The Court noted that the State unauthorisedly took over the possession of private land and occupied it for a prolonged period.
The Supreme Court has dismissed a plea filed by the State of Chhattisgarh challenging enhanced compensation and interest awarded to landowners whose land had been occupied by the Public Works Department (PWD) for nearly 25 years without acquisition proceedings. The Court termed the State's challenge "absolutely frivolous" and imposed costs of ₹2 lakh.
Dismissing the State's appeal, a patial court working days bench of Justice Sandeep Mehta and Justice Vijay Bishnoi upheld the High Court's decision to direct the Appellant-State to compute the land acquisition compensation towards the Respondents-landowners and grant them compensation @ Rs. 5,380/- per square metre.
The dispute arose from land in Durg district which the PWD had taken possession of in 1986 and used for road construction without formally acquiring it. The encroachment came to light during demarcation proceedings conducted on May 3, 2006, following which the landowners initiated proceedings seeking eviction of the department under the Chhattisgarh Land Revenue Code.
Subsequently, the State initiated acquisition proceedings in 2010 by issuing a notification under Section 4 of the Land Acquisition Act, 1894. A final award passed in June 2011 fixed compensation at ₹4,308 per square metre based on guideline rates for the financial year 2009-10.
On a reference under Section 18 of the Land Acquisition Act, the Reference Court enhanced the compensation to ₹5,380 per square metre, applying the revised guideline rates for the financial year 2010-11. It also directed payment of interest at 9% per annum for the first year from the date of publication of the acquisition notification and 15% thereafter until payment.
The High Court affirmed the enhanced market value and further held that the landowners were entitled to interest from September 2, 2006, when they filed the eviction suit, observing that the State had illegally occupied their land for years without compensation.
The Court rejected the State's contention that no interest be calculated from the date of the filing of the eviction suit. Instead, the Court said that since “the State had unauthorisedly taken over the possession of the respondents' land and used the same for a prolonged period, and, further, as no offer of compensation was made even after the institution of the eviction suit by the respondents in the year 2006, it was wholly justified for the High Court to have awarded interest on the compensation amount from the date of filing of the suit at the rates indicated above.”
In fact, the Court termed the State's attempt to re-litigate the settled proposition by the High Court as a mere harassment to the Respondents-landowners, in order to deprive them of their rightful entitlement to the compensation.
Resultantly, the appeal was dismissed, with a direction to the Appellant-State to pay the cost to the respondents within a period of 8 weeks from the date of the order.
Cause Title: STATE OF CHHATTISGARH & ORS. VERSUS PARIKSHIT SINGH GUPTA & ORS.
Citation : 2026 LiveLaw (SC) 635
Appearance:
For Petitioner(s) : Mr. Bishwajit Dubey, A.A.G. Mr. Vinayak Sharma, Adv. Mr. Ravinder Kumar Yadav, AOR Mr. Karan Khetani, Adv.
For Respondent(s) : Mr. Ashutosh Ghade, AOR Mr. Pallav Mongia, AOR