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SC holds WB Govt company to be in unlawful possession of property for 22 years;


PUNALUR PAPER MILLS LTD. V. WEST BENGAL MINERAL DEVELOPMENT AND TRADING CORPORATION LTD. & ORS

Civil Appeal No. 738-739 OF 2021 (Arising out of SLP (C) Nos. 9834-9835 of 2020)

Decided on March 1st, 2021

The present case was decided by a division bench of the Supreme Court consisting of Justice R.F. Nariman and Justice B.R. Gavai.

In the facts of these appeals, the entire second floor of premises no. 13, Nellie Sengupta Sarani (Lindsay Street), Calcutta [“the Premises”], measuring approximately 7500 square feet, owned by Punalur Paper Mills Ltd. [“Appellant”], was requisitioned under the West Bengal Premises Requisition And Control (Temporary Provisions) Act, 1947 [“West Bengal Requisition Act”] on 16.08.1973.

As a result of the operation of section 10B of the West Bengal Requisition Act, any property requisitioned under the Act had to be released by the State Government on or before the expiry of a period of 25 years from the date of requisition. For the Premises, this 25-year period ended on 15.08.1998, obligating the State to release the Premises. It is common ground between the parties that the Premises was not in fact released and physical possession remained with the West Bengal Mineral Development and Trading Corporation Ltd.

Subsequent to the lapse of such period, by way of a notification under section 4 of the Land Acquisition Act, 1894 [“Land Acquisition Act”], published on 12.08.1999, the Premises was sought to be acquired for the public purpose of providing the permanent office accommodation of WBMDTCL. This notification of 12.08.1999 was challenged in Writ Petition No. 1045 of 2000 filed on 18.04.2000 before the High Court of Calcutta by the Appellant, who owned the said Premises. It may also be mentioned that Writ Petition No. 1042 of 2000 was also filed by the Appellant on 17.04.2000, seeking handover of vacant possession of the Premises since the 25-year period prescribed by section 10B of the West Bengal Requisition Act had ended.


The learned advocate appearing on behalf of the State of West Bengal, assailed the impugned judgment of the Division Bench by arguing that the order of the Single Judge dated 22.06.2000 had made it clear that the State could take appropriate steps to initiate land acquisition proceedings, which were then done pursuant to such order on 04.08.2000. Taking shelter under this order, she therefore argued that it would not be possible to strike down the notification under section 4 read with section 17 of the Land Acquisition Act, since this was done pursuant to the order dated 22.06.2000. For this purpose, she relied upon the judgments of this Court in State of U.P. v. Keshav Prasad Singh, (1995) 5 SCC 587 and State of A.P. v. Goverdhanlal Pitti, (2003) 4 SCC 739. [Para 14]


The learned senior advocate appearing on behalf of the Appellant, stoutly refuted these arguments and relied upon certain judgments of this Court which covered the issue in the Appellant’s favour. In any case, he also argued that given the conduct of the parties in not vacating the Premises by 15.08.1998 and continuing to be in unauthorised possession till date, as well as not paying a single paisa towards compensation, this Court ought not to entertain the State’s appeals under Article 136 of the Constitution of India. [Para 15]


The Supreme Court relied upon the case of Banwarilal & Sons Pvt. Ltd. v. Union of India, C.W.P. No. 2385 of 1988 reported in 1991 Supp DRJ 317 [“Banwarilal (Delhi HC)”], a Division Bench of the High Court of Delhi, vide an order dated 04.02.1991, quashed a similar notification in the context of a similar provision contained in the Requisitioning and Acquisition of Immovable Properties Act, 1952. The High Court of Delhi held that there was no urgency established and the State had sufficient time to make alternate arrangements for the purpose so there was no need to invoke the provisions of Section 17(1).

The learned judges then held that a cursory reading of the provisions for compensation will make it clear that the Appellant is correct in its submission, which is therefore accepted and the impugned judgment of the Division Bench is set aside to this extent. Civil appeals arising out of SLP (C) Nos. 9834-9835 of 2020 and SLP (C) Nos. 9837-9838 of 2020 are thereby allowed.


A very disturbing feature of these appeals is the fact that WBMDTCL, which is “State” within the meaning of Article 12 of the Constitution of India, has continued in unlawful possession of the Premises since 15.08.1998 without paying a single pice towards compensation till date. Following the judgments of this Court, most notably, Assam Sillimanite Ltd. v. Union of India, (1990) 3 SCC 182 (see paragraphs 13 and 14) and Krishan Lal Arneja (supra), we appoint Shri Soumitra Pal (Retd. Judge, High Court of Calcutta) as arbitrator to determine compensation that is payable by way of damages for occupation of the Premises without any authority of law. A written authority to appoint such arbitrator is to be furnished to us immediately, i.e., within a week from 23.02.2021. If not so furnished, WBMDTCL will be liable to pay a sum of Rs. 100 per square foot, per month (being the average of the rental amounts paid by other tenants in the same building since August 26, 1998 as per the Valuation Report dated 30.11.2019 prepared by Banibrata Mukherjee, Chartered Engineer, Engineer Commissioner & Valuer of Alipore Judges’ Court) for the entire period of illegal occupation of the Premises within four months from the date of this judgment [Para 27]


The Supreme Court therefore took a very grim view of the West Bengal government body retaining unlawful possession of a property in Kolkata for the last 22 years without "paying a single pice towards compensation"



Keerthana R

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