MANAGER, FARIDKOT, PUNJAB, ETC. ETC. versus MAKHAN SINGH AND ANR. ETC. ETC.

Citation: [1992] 2 S.C.R. 615 · Decided: 21-04-1992 · Supreme Court of India · Bench: M.M. PUNCHHI · Disposal: Appeal(s) allowed
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Judgment (excerpt)

FOOD CORPORATION OF INDIA THROUGH ITS DISTRICT 
A 
MANAGER, FARIDKOT, PUNJAB, ETC. ETC. 
v. 
MAKHAN SINGH AND ANR. ETC. ETC. 
APRIL 21,1992 
B 
[MADAN MOHAN PUNCHHI ANDS. C. AGRAWAL, JJ.] 
Land Acquisition Act, 1894 : 
Sections 4,6,ll,15,18,23,24,25,50 and 54-Land acquisition for Com-
C 
pany (Food Corporation of India)-Award-Reference court holding 
company's reference barred under Section 50(2)--Reference of claimants--
Company keen contestant-Compensation enhanced-Appeals by Com-
pany-Whether maintainable. 
Compensation-Detennination of-Factors for consideration. 
D 
Constitution of India, 1950: 
Article 136-Land-Acquisition of-Award-Reference court enhancing 
compensation-High Court upholding enhancement but on different E 
gr_ounds-Supreme Court-When can inteifere and modify compensation. 
The State of Punjab acquired for the Food Corporation of India 
(f .c.I.), land measuting a little over 50 acres situated in the revenue estate 
of ~illage Danewala near Malout town in District Faridkot. Notifications 
under sections 4 and 6 of the Land Acquisition Act, 1894 were issued on 
F 
20.12.1977. The District Collector awarded compensation at the rate of 
Rs.30,000 per acre and below, according to the quality ofland. Both, the land 
owners and the F.C.I., moved for reference under section 18 of the Act. 
The reference· court held the references by the F.C.I. barred under 
the proviso to section 50(2) of the Act. As regards the references of the G 
land owners, the court relied on two instances of sale, Ext.A-23 dated 
6.6.1979 at the rate of Rs.1.20,000 per acre and Ext.A-16 dated 30.6.1981 at 
the rate of Rs.2,40,000 per acre. The court considered the sale Ext.A-23 
closer in time and situation to the land acquired, and fixed the compensa-
tion at the uniform rate of Rs.1,20,000 per acre. It also held that the two H 
615. 
616 
SUPREME COURT REPORTS 
[1992] 2 S.C.R. 
A sale instances Exts.A-16 and A-23 revealed the average price of Rs.1,80,000 
per acre and since those transactions took place after the notification 
under s.4, 1/3 of the average price was to be deducted towards roads and 
parks, and thus market value would again come to Rs.1,20,000 per acre. It 
also awarded 30% solatium and statutory interest. 
B 
c 
Two sets of appeals - one by the claimant for enhancement of 
compensation and the other by F.C.I. for reduction of compensation - were 
filed before the High Court. The Single Judge dismissed all the appeals 
and affirmed the compensation awarde~ by the court below. He concluded 
that since the land under sale instance Ext.A-24 at the rate of Rs.1,40,000 
had a better access, the compensation for the land acquired was rightly 
fixed at the rate of Rs.1,20,000 per acre. Consequent Letters Patent Ap-
peals by the F.C.I. and the land owners were also dismissed by the Division 
Bench. It relied on sale instances Ex.A-11 dated 18.12.1978 at the rate of 
Rs.96,800 per acre and Ext. A-23 dated 6.6.1979 at the rate of Rs.1,20,000 
per acre, and upheld the compensation awarded by" the courts below. The 
D 
t~.C.I. and the claimants further appealed to this Court by special leave. 
The land owners, besides challenging the judgments of the courts 
below on merits, also raised a preliminary objection to maintainability of 
the appeals by F .C.I. It was contended that in view of proviso to s.50(2) of 
E 
the Land Acquisition Act, which debars the local authority or. company 
from demanding reference under s.18, the F.C.I. could not tile appeals 
against the award of the court. 
F 
G 
Allowing the appeals of the F.C.I. and dismissing those of the land 
owners, this Court. 
HELD: 1.1. Food Corporation of India was a keen contestant before 
the reference court. Having suffered the award from that court, it had the 
right to file an appeal to the High Court under s.54 of the Land Acquisition 
Act, 1894. (p. 622 CJ 
1.2. Limitation on the right of the F.C.I. to ask for a reference under 
s.18 only meant that it could not se~k reduction of <;o~pensation as 
awarded by the (:ollector because it was an offer by the State. Section.25 
is also a pointer to the effect that comp~nsation can in no event be less 
than the amount awarded by the , ~ollector. Conversely, subject to 
H provisions of s.25, there being no bar for enhancement of compensation 
FOOD CORPN. 
v. MAKHJ\N SINGH 
617 
from the sum awarded by the Collector, the appeals of the F.C.I., in the A 
very nature of things, attacked the amount awarded by the court ove
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