04 August 2025 Land Acquistion >> Property & Real Estate  

A recent court decision sheds light on the complexities of determining fair market value in land acquisition cases, particularly when previous judgments and evidence are called into question. The case of SAIL (ISP), Burnpur, Steel Authority of India Limited v/s Bibekananda Majhi & Others, which involves the State of West Bengal acquiring land for the modernization of a SAIL-ISP plant, centers on a dispute over the appropriate compensation to be paid to landowners.

The court has revisited its prior decision and reaffirmed its stance on the matter. The core of the issue lies in the evidence used by the Referral Court to determine the land's value. The Referral Court had relied on a single deed of sale from a related party, which the appellate court found to be an unreliable indicator of the true market value.

The Flawed Foundation: Discarding the Original Sale Deed

The court's primary concern with the original evidence was that the sale deed used to calculate compensation had an inflated value. The court reasoned that under the Indian Stamp Act, as amended in West Bengal, if a sale price is higher than the actual market value, the higher price is used for stamp duty assessment. In this case, the registering authority accepted the deed's consideration amount as the market value, which suggested that the price was likely higher than the prevailing market rates.

In contrast, the appellant (SAIL) presented five other contemporaneous sale deeds to a different entity (ECL) where the assessed market value was higher than the consideration amount shown in the deeds. This led the court to conclude that the market values in these five deeds were a more accurate reflection of the prevailing rates. The court also dismissed the claimants' argument that the low consideration in the ECL deeds was due to a job-for-land scheme, noting that the assessed market value was still higher than the stated sale price.

Admitting New Evidence and a Path Forward:

A crucial part of the court's decision was allowing the five new sale deeds to be admitted as additional evidence. The court's reasoning for this was twofold:

1. Late Impleading of the Appellant: SAIL, the acquiring body, was not initially a party to the case before the Collector. It was only later impleaded at the reference stage. This made it difficult for SAIL to have obtained these deeds, which were between third parties, at the outset. This satisfied the conditions for admitting new evidence under Clause (aa) of Order XLI Rule 27 of the Code of Civil Procedure.
2. Necessity for Proper Adjudication: The court found that because the original sale deed was not a valid indicator, the five new deeds were essential for a fair and complete resolution of the case. The court cited Clause (b) of Order XLI Rule 27, which allows for the admission of new evidence when it is necessary for the court to pronounce judgment.

The court also affirmed that certified copies of these deeds could be admitted as evidence without requiring formal proof from the original parties, citing Section 51A of the Land Acquisition Act, which provides a special provision for such situations in land acquisition cases.

As a result, the court set aside the earlier awards and judgments and remanded the cases back to the Referral Court. The Referral Court has been instructed to re-hear the references and calculate the new compensation based on the market values reflected in the five additional sale deeds. The claimants will be given an opportunity to present rebuttal evidence, and the court expects the process to be completed within one year. This decision provides a strong precedent for the importance of accurate and relevant market data in determining land acquisition compensation.

Section 51A, LAND ACQUISITION ACT - 1894  

LAND ACQUISITION ACT, 1894  

Section 27., Code of Civil Procedure - 1908  

Code of Civil Procedure, 1908