Nandi Infrastructure Corridor Enterprises Ltd. & Anr. v. B. Gurappa Naidu & Ors.
Background
Land belonging to the decree-holders was taken for the Bangalore-Mysore Infrastructure Corridor Project by Nandi Infrastructure Corridor Enterprises (N.I.C.E.) under a 2007 compromise decree that fixed compensation based on the government's official "guideline value." In execution proceedings, the Executing Court determined the land's value at Rs. 1,000 per square foot; N.I.C.E. challenged this in a writ petition before the Karnataka High Court, which reduced the rate to Rs. 500 per square foot. Both N.I.C.E. (seeking a further reduction) and the decree-holders (seeking restoration of Rs. 1,000) appealed to the Supreme Court, along with a dispute over whether interest was payable on the compensation despite the decree being silent on interest.
Decision Breakdown
The Supreme Court held that the High Court had exceeded the limited scope of its supervisory jurisdiction under Article 227 of the Constitution by re-appreciating the valuation on merits and substituting its own figure for that of the Executing Court, rather than confining itself to correcting jurisdictional errors. On the interest question, the Court held that since both parties had knowingly agreed to compensation based on the statutory guideline value (which reflected the land's industrial conversion) at the time of the compromise decree, N.I.C.E. could not later argue the land should be valued as agricultural land. It also upheld a separate, unchallenged High Court order granting the decree-holders 6% annual interest on delayed payment from the date of the decree. N.I.C.E.'s appeal was dismissed, the decree-holders' appeal was allowed, the High Court's reduction was set aside, and the Executing Court's valuation of Rs. 1,000 per square foot (totalling Rs. 13,72,14,000) was restored, with N.I.C.E. directed to pay the balance amount plus interest.
Lesson Learnt
A High Court's supervisory power under Article 227 is meant to correct jurisdictional errors, not to re-weigh evidence and substitute its own findings for those of a trial or executing court; and once parties agree to a valuation basis in a compromise decree, they cannot later disown that basis simply because the resulting figure proves unfavourable to them.