Introduction:
In the case of Subrata Hait v. Indian Oil Corporation Limited and Others (MAT No. 1959 of 2023, judgment dated 29/08/2025), the Calcutta High Court bench comprising Chief Justice T.S. Sivagnanam and Justice Chaitali Chatterjee (Das) delivered an important ruling interpreting the provisions of Section 10 of the Petroleum and Minerals Pipelines (Acquisition of Rights of User in Land) Act, 1962 (the 1962 Act). The Court held that compensation determined by the competent authority under Section 10(1) of the Act shall be considered as an initial determination when there is no agreement between the parties making such compensation binding. Consequently, landowners cannot be prohibited from seeking enhanced compensation under Section 10(2) of the 1962 Act if they are aggrieved by the initial determination. The ruling came in the backdrop of an intra-court appeal filed by landowners against an order of a Single Judge that had allowed a writ petition by the Indian Oil Corporation Limited (IOCL), which had contended that reassessment of compensation payable for acquiring rights of user in land was impermissible.
Arguments of the Appellants:
The appellants, represented by Senior Advocate Debasish Kundu and his team, contended that they were entitled to additional compensation for their land used under the provisions of the 1962 Act. They highlighted that their claims in the representation dated 17.02.2022 were not an attempt to seek enhanced compensation at the earlier agreed rate but rather a new claim for additional compensation for the unpaid period at the rate of Rs. 1250 per decimal. They asserted that the competent authority was well within its jurisdiction to determine this claim at the first instance under Section 10(1) of the Act. The appellants further argued that there was no unequivocal acceptance on their part to settle for Rs. 450 per decimal without protest, and hence, the determination at that rate could not be treated as final or binding. They also emphasized the role of the panchnama, stating that the document was a crucial piece of evidence recorded during the enquiry process and must be duly considered in determining compensation. According to them, IOCL could not disregard or dispute the facts recorded in the panchnama at this stage. The appellants thus sought recognition of their right under Section 10(2) to approach the District Court for enhanced compensation beyond the amount initially determined.
Arguments of the Respondents:
On the other hand, the Indian Oil Corporation Limited, represented by Senior Advocate Pratik Dhar and his team, contended that the compensation had already been determined and disbursed in two installments, which had been duly acknowledged by the appellants. According to IOCL, the competent authority had no jurisdiction to revisit or reassess compensation once determined, since the 1962 Act does not vest review powers in the authority. They maintained that the initial compensation of Rs. 450 per decimal had been arrived at in terms of Section 10(1) of the Act, and since the appellants had accepted the payments, the issue had reached finality. IOCL argued that allowing the appellants’ subsequent claim would effectively permit a review by the competent authority, an exercise impermissible under law. Furthermore, IOCL insisted that once compensation is paid and acknowledged, the competent authority becomes functus officio, meaning it cannot reopen or reconsider its decision. They maintained that the fresh claim for Rs. 1250 per decimal was an indirect attempt to seek enhanced compensation that should have been pursued only through the District Court, not before the competent authority.
Court’s Judgment:
After carefully considering the rival contentions, the Division Bench rejected the reasoning advanced by IOCL and upheld the rights of the appellants. The Court made a critical distinction between a “review” of earlier compensation and a “fresh determination at the first instance.” It held that the appellants’ representation dated 17.02.2022 was not a claim for enhanced compensation at the earlier rate but a fresh claim for additional compensation for the unpaid period at a new rate. Therefore, the competent authority’s decision could not be categorized as a review of its earlier order but as an initial determination under Section 10(1). The Court observed that since the appellants had not unequivocally accepted the compensation at Rs. 450 per decimal, the earlier determination was not final and binding. In such cases, the determination by the competent authority must be considered an initial determination, leaving the appellants free to invoke Section 10(2) of the Act for enhanced compensation before the District Court. The Court further emphasized the evidentiary value of the panchnama recorded under Rule 4(3) of the 1963 Rules, stating that it was a vital document in compensation determination and could not be disputed by IOCL at this stage.
The Bench categorically ruled that the competent authority did not exceed its jurisdiction nor did it act in review of its earlier decision. Instead, it had lawfully exercised its power to make a fresh determination at the first instance. It rejected IOCL’s contention that the competent authority became functus officio after its initial decision. The Court clarified that in the absence of any admission or agreement by the appellants to accept Rs. 450 per decimal, the authority’s determination had to be treated as provisional, allowing the appellants the statutory right to seek enhanced compensation.
Accordingly, the intra-court appeal was allowed, and the appellants were declared entitled to approach the concerned District Court under Section 10(2) of the 1962 Act to claim enhanced compensation over and above Rs. 450 per decimal initially calculated. The Court reiterated that IOCL could not prevent landowners from exercising their statutory right in the absence of clear acceptance of earlier compensation. This judgment reinforced the principle that compensation under the 1962 Act is not to be treated as final unless unequivocally agreed upon by the parties and that the competent authority has a continuing role in making determinations at the first instance whenever new claims arise.