Supreme Court Refuses Fact-Finding In Article 136 Appeal, Directs Rs 15 Cr Deposit

Refusing to wade into complex disputed questions of fact in an interim appeal, the Supreme Court mandated an additional Rs 15 crore deposit to protect landowners while directing the High Court to expeditiously resolve the two-decade-old land acquisition dispute. 

In a judgment delivered by a bench comprising Justice Dipankar Datta and Justice Sheel Nagu, the apex court disposed of cross-appeals arising out of a land acquisition dispute in Gujarat, emphasizing that the first appellate court remains the sole appropriate forum for reconsidering open issues of fact and law.

First Appellate Court Role in Fact-Finding

While dealing with the extent of factual re-examination permitted before the apex court, the Bench emphasized the wide power and duty of the first appellate court under statutory framework. Reiterate the precedent established in Malluru Mallappa (Dead) v. Kuruvathappa & Ors., the Court reaffirmed that a first appeal constitutes a continuation of original proceedings requiring a complete rehearing on facts and law. The Supreme Court explained that "It is a settled position of law that an appeal is a continuation of the proceedings of the original court. Ordinarily, the appellate jurisdiction involves a rehearing on law as well as on fact and is invoked by an aggrieved person. The first appeal is a valuable right of the appellant and therein all questions of fact and law decided by the trial court are open for reconsideration. Therefore, the first appellate court is required to address itself to all the issues and decide the case by giving reasons."

Considering the ongoing proceedings before the High Court, the Supreme Court held that it would be inappropriate to determine disputed dates of possession and monetary adjustments under Constitution of India, 1950.

Background

Land acquisition proceedings involving 1,40,504 square meters of land at Village Gunsada were initiated under the Land Acquisition Act, 1894 for the benefit of M/s JK Paper Ltd. The Special Land Acquisition Officer initially valued the land at Rs. 124 per square meter, which was later enhanced by the Reference Court to Rs. 950 per square meter along with 30% solatium, 12% price rise, and interest.

Both the company and the landowners filed cross-appeals before the Gujarat High Court. While the landowners sought Rs. 1500 per square meter, the company challenged the enhanced valuation. During execution, the Executing Court issued a recovery warrant against the company for Rs. 67.48 crore. Subsequently, the High Court stayed the award subject to the company depositing 50% of the additional compensation with statutory benefits.

Both parties approached the Supreme Court against the High Court's interim order. The Supreme Court noted that full possession of the land (34.72 acres) had finally been handed over to the company as of November 10, 2025. It rejected the company's argument regarding a natural gorge (nala) reducing useful land area, ruling that such an objection could not be raised at this belated stage. Clarifying that all other factual issues remain open for the High Court to decide, the Supreme Court modified the interim arrangement by directing an additional deposit of Rs. 15 crore and requested the High Court to expedite the pending appeals.

Case Details:
Case No.: Civil Appeal No._______of 2026 [Arising out of SLP (C) No. 21774 of 2025]
Neutral Citation: 2026 INSC 1095
Case Title: M/s JK Paper Ltd vs. Bipinchandra Natwarlal Shah & Ors.

Source: 2026 CaseBase(SC) 8247