Right to fair compensation

Written by Indu Bhan | Indu Bhan | Updated: Sep 18 2013, 09:07am hrs
Land takeover of sick sugar mills

Quashing the Allahabad High Court order that asked the UP government to return the land to Lakshmi Sugar and Oil Mills Ltd, the Supreme Court said that the land was used by the sugar mill for industrial purposes and not agricultural. In the case, State of UP vs M/s Lakshmi Sugar & Oil Mills Ltd, several sugar mills were making losses in the state.

UP had acquired 12 such private sugar mills including Lakshmi Sugar & Oil Mills (LSOM) after passing the UP Sugar Undertakings (Acquisition) Act. While the sugar factory stood vested in the state Sugar Corporation, set up to revive the sick units to protect cane growers, the Consolidation Officer recorded its name in place of LSOM in 1992. Lakshmi Sugar challenged the take-over of its land in Hardoi stating that its land was agricultural and therefore exempted from acquisition. The HC in April 2010 asked the government to return the land within a month. The government moved the Supreme Court, which held that the land had been treated as industrial for purposes of the Land Ceiling Act. The apex court said there was no evidence on record to show that the subject land was ever held or occupied for agricultural purposes or that any agricultural activity was ever carried out on the same. These concurrent findings of fact, in our opinion, could not have been reversed by the HC.

Compensation of land acquisition

Slamming the Maharashtra government for the inordinate delay in payment of compensation to a landowner whose land was acquired in 1981, the Supreme Court in the case of Tukaram Kana Joshi vs MIDC said that statutory authorities are bound to not only pay adequate compensation but also rehabilitate displaced persons. It said that denying compensation to farmers amounts to deprivation of livelihood, which is a violation of Article 21 of the Constitution. Even under valid acquisition proceedings, there is a legal obligation on the part of the authorities to complete the proceedings at the earliest and to make payment of requisite compensation, the top court said, while setting aside the Bombay High Court 2011 judgment which found fault with Joshi for not filing a claim petition, and directed the state to pay compensation to him at the prevailing market rate.

In this case, land was acquired from illiterate farmers by MIDC for an industrial development project. Some landowners were paid compensation. Meanwhile, the acquisition lapsed and a fresh notification was issued in 1981 and land was transferred to the City Industrial Development Corporation of the state. Still, these land owners were not able to get compensation. The landowners have been deprived of their legitimate dues for about half a century. Some of them were given benefits of acquisition, including compensation in 1966. This kind of discrimination not only breeds corruption, but also dis-respect for governance, as it leads to frustration and to a certain extent, forces persons to take the law into their own hands, the Supreme Court observed.

Computing compensation

Criticising the motor accident claims tribunal and the High Court for wrongly calculating the compensation, the Supreme Court in the case, Master Mallikarjun vs National Insurance, has directed the National Insurance Company to pay enhanced compensation of R3.75 lakh to a 12-year-old child who suffered severe injuries in a road accident. The surgeon had assessed the disability to the extent of 34% of right lower limb and 18% permanent disability. Laying down a formula to compute just and fair compensation based on medical evidence, the top court said: We are of the view that the appropriate compensation on all other heads in addition to the actual expenditure for treatment, attendant, etc, should be, if the disability is above 10% and up to 30% to the whole body, R3 lakh; up to 60%, R4 lakh; up to 90%, R5 lakh and above 90%, it should be R6 lakh. For permanent disability up to 10%, it should be R1 lakh, unless there are exceptional circumstances to take a different yardstick.

It is unfortunate that both the tribunal and the HC have not properly appreciated the medical evidence available in the case, it added. While the tribunal had awarded R63,000 to Master Mallikarjun, the HC enhanced it to R1.09 lakh without taking into consideration the age of the child and deformities. Citing its earlier judgment in the case of RD Hattangadi vs M/s Pest Control (India), it said that while assessing the non-pecuniary damages, the damages for mental and physical shock, pain and suffering already suffered and that are likely to be suffered, any future damages for the loss of amenities in life like difficulty in running, participation in active sports, etc., damages on account of inconvenience, hardship, discomfort, disappointment, frustration, etc, have to be addressed especially in the case of a child victim.