The Supreme Court has directed JK Paper Ltd to deposit an additional ₹15 crore within two months to continue protection against execution of a land acquisition compensation award. The Court also rejected the company’s contention that a nala and associated waterlogging reduced the usable area of the acquired land, observing that the company had known about these conditions since the acquisition proceedings began.
A bench comprising Justice Dipankar Datta and Justice Sheel Nagu passed the order on October 7, 2026, while disposing of appeals filed by the company and the landowners against an interim order of the Gujarat High Court.
The Supreme Court left the final determination of compensation and disputed questions concerning possession to the High Court, where the parties’ first appeals remain pending.
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Compensation Enhanced From ₹124 To ₹950 Per Square Metre
The dispute concerns acquisition of land bearing Block No. 207 in Gunsada village, measuring 1,40,504 square metres, or approximately 34.72 acres. The acquisition proceedings were initiated in 2005 under the erstwhile Land Acquisition Act, 1894, for the benefit of JK Paper Ltd.
The Special Land Acquisition Officer assessed the land’s value at ₹124 per square metre. On an application by the landowners, the Reference Court, through an award dated February 23, 2023, enhanced the valuation to ₹950 per square metre.
The award also provided for a 12% price escalation, 30% solatium and interest at 9% for the first year and 15% for the subsequent period from the date of receipt of possession.
Both sides challenged the award before the Gujarat High Court. While the company disputed the ₹950-per-square-metre valuation, the landowners sought additional compensation at ₹1,500 per square metre.
Execution Proceedings Sought Recovery Of ₹67.48 Crore
During the pendency of the appeals, the landowners approached the Executing Court. On May 23, 2025, that court issued a warrant for recovery of ₹67,48,34,981 from the company, with the recovered amount to be deposited subject to the outcome of the first appeals.
The company subsequently sought a stay of the execution proceedings.
By a common order dated June 30, 2025, the High Court stayed the compensation award and execution proceedings on the condition that the company deposit 50% of the awarded additional compensation, together with the specified solatium, price rise and interest.
The High Court permitted the landowners to withdraw half of the deposited sum upon furnishing appropriate security. The remaining half was to be placed in a fixed deposit pending disposal of the appeal.
Before the Supreme Court, the company stated that it had deposited ₹9,33,33,744.
Remaining 24.77 Acres Delivered In November 2025
A significant issue concerned when the company received possession of the acquired land.
At an earlier stage of the Supreme Court proceedings, it was represented that approximately 24.77 acres had not been handed over to the company. On November 4, 2025, the Court issued directions to ensure delivery of possession.
The State of Gujarat subsequently informed the Court through an affidavit that the remaining 24.77 acres were handed over by the Mamlatdar on November 10, 2025. Until then, the company purportedly possessed only 9.95 acres.
The Supreme Court consequently noted that possession of the entire acquired land had now been delivered. However, disputes over the timing and extent of earlier possession remained relevant to determining the final compensation payable.
Court Rejects Objection Based On Known Nala And Waterlogging
The company argued that a nala running through the land caused waterlogging and reduced the area available for use.
After examining the material on record, including the company’s July 6, 2026 letter to the Mamlatdar, the Supreme Court rejected this contention.
The bench found that the company knew about the nala, associated waterlogging and other encumbrances from the time the acquisition proceedings were initiated for its benefit.
“It is too late in the day” for the company to contend that these conditions reduced the usable land, the Court observed.
The bench expressly barred the company from raising this issue again before the High Court.
High Court To Decide Disputed Facts And Final Compensation
The Supreme Court declined to determine other contested factual issues while examining the interim order.
Relying on Malluru Mallappa (Dead) v. Kuruvathappa & Ors., (2020) 4 SCC 313, the bench reiterated that a first appeal involves reconsideration of both law and fact. The first appellate court must examine the issues, assess the oral and documentary evidence and provide reasoned findings.
The Gujarat High Court remained the appropriate forum to resolve the disputed possession questions and conclusively decide the compensation dispute, the bench held. It declined to undertake that fact-finding exercise under Article 136 of the Constitution.
Failure To Deposit ₹15 Crore Will Revoke Stay
The Supreme Court directed the company to deposit an additional ₹15 crore with the Registrar General of the Gujarat High Court within two months of the order.
The deposit will be without prejudice to the rights and contentions of both sides in the pending appeals. The Registrar General must invest it in a short-term, interest-bearing fixed deposit with a nationalised bank on an automatic renewal basis.
The existing stay will continue for two months. If the company makes the deposit within that period, the stay will continue until the High Court passes further orders. If it fails to do so, the stay on the award and execution proceedings will stand revoked, allowing the landowners to pursue recovery before the Executing Court.
Noting that the acquisition proceedings began in 2005, the Supreme Court requested the High Court to expedite the first appeals. Apart from the rejected objection concerning the nala and other known encumbrances, all issues remain open for determination on their merits.
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