In a significant ruling, the Calcutta High Court has allowed a group of landowners from Purba Medinipur to pursue additional compensation from Indian Oil Corporation Limited (IOCL) for delays in completing a pipeline project. The Division Bench comprising Chief Justice T.S. Sivagnanam and Justice Chaitali Chatterjee (Das) set aside an earlier single-judge order that had favoured IOCL.
Background
The dispute began when IOCL laid underground pipelines through land leased by the appellants. Although the company paid ₹42,12,245 as compensation, the landowners claimed the payment only covered 60 days of disruption, while the land remained unusable for over two years.
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They sought compensation at the rate of ₹1,250 per decimal for every 110 days, citing agreements where IOCL had paid other leaseholders higher rates under similar circumstances. When the competent authority granted them additional compensation, IOCL challenged this before a single judge, who ruled that the authority had no power to “review” its own decision.
Court's Observations
The Division Bench took a very different view. It noted that there had never been any formal agreement fixing the compensation rate at ₹450 per decimal and that IOCL had not objected when the writ court earlier directed the competent authority to decide the landowners’ claim.
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The bench observed,
"If IOCL truly believed the competent authority lacked jurisdiction, they should have raised it at the threshold. Their silence amounts to a waiver," the Chief Justice remarked.
The court stressed that this was not a case of reviewing an old decision but of deciding a fresh claim for a period that had not been compensated earlier. It also highlighted that the Panchanama (site inspection report) recorded the land as being used for fisheries, making it unfair for IOCL to later argue that such use was restricted.
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Decision
Allowing the appeal, the High Court restored the competent authority’s order and directed IOCL to pay the additional compensation within 30 days. It further granted the landowners liberty to seek enhanced compensation from the District Judge under Section 10(2) of the Petroleum and Minerals Pipelines (Acquisition of Right of User in Land) Act, 1962.
The court made it clear that unless the landowners had explicitly agreed to the earlier rate, IOCL could not insist that they were bound by it.
"In absence of any agreement, the amount paid can only be treated as the first instance of compensation," the bench clarified, giving the landowners a legal route to challenge its adequacy.
With this, the long tussle over the compensation issue now moves to the district court, where the quantum of payment will likely be re-examined.
Case Title: Subrata Hait vs Indian Oil Corporation Limited & Others
Case No.: MAT No. 1959 of 2023
