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REVENUE DIVISIONAL OFFICER cum- L A O Shaik Azam Saheb [2009(1)SCALE 545]
The extent of deduction taking into consideration the nature of land acquisition and
the land involved in the subject matter of sale deed relied on for computing the market rate
and deducted one third towards development cost and observed thus:- "It must be bear in
mind that the lands in question were agricultural lands whereas the lands which were the
subject matter of the said deed of sale was a homestead land, thus, some amount,
therefore, will have to be deducted towards the development cost. Indisputably while
comparing the market value of developed lands with that of undeveloped lands, the court
has to make suitable deductions towards the cost of development.
8.3. Percentage Of Deduction For Development
Lal Chand Vs. Union of India 2009 (15) SCC 769
It was held that percentage of deduction for development to be made for arriving at
market value of large tracts of undeveloped agricultural land with potential for development
can vary between 20 and 75 per cent of the price of developed plots and observed that the
deduction for development consists of two components. The first is with reference to the
area required to be utilised for developmental works and the second is the cost of the
development works.
It is held by the Supreme Court that if the size of the plot is very small and the same
has to be taken into consideration for non-availability of other evidence and where the land
acquired is a large chunk of land, then it would be advisable to apply some deduction on
that score. Deduction can also be applied on account of wastage of land and development
charges. The Supreme Court considered the fact that the land under acquisition in that
matter was an agricultural land at the time of acquisition and the land was acquired to
carry out the development scheme.
The Supreme Court considered that the development purpose, being in public
interest, is bound to result in utilisation of part of the land for the purposes of roads, by-
links, water and electricity lines and other infrastructural amenities of the project. Supreme
Court held that as a general rule that for laying the roads and other amenities 33 1/3% is
required to be deducted. However, if the development has already taken place,
appropriate deduction needs to be made.
A P RANDHIR](https://image.slidesharecdn.com/landacquisitionfinalarticle-190318151158/85/Land-acquisition-act-Judgment-31-320.jpg)
![31
REVENUE DIVISIONAL OFFICER cum- L A O Shaik Azam Saheb [2009(1)SCALE 545]
The extent of deduction taking into consideration the nature of land acquisition and
the land involved in the subject matter of sale deed relied on for computing the market rate
and deducted one third towards development cost and observed thus:- "It must be bear in
mind that the lands in question were agricultural lands whereas the lands which were the
subject matter of the said deed of sale was a homestead land, thus, some amount,
therefore, will have to be deducted towards the development cost. Indisputably while
comparing the market value of developed lands with that of undeveloped lands, the court
has to make suitable deductions towards the cost of development.
8.3. Percentage Of Deduction For Development
Lal Chand Vs. Union of India 2009 (15) SCC 769
It was held that percentage of deduction for development to be made for arriving at
market value of large tracts of undeveloped agricultural land with potential for development
can vary between 20 and 75 per cent of the price of developed plots and observed that the
deduction for development consists of two components. The first is with reference to the
area required to be utilised for developmental works and the second is the cost of the
development works.
It is held by the Supreme Court that if the size of the plot is very small and the same
has to be taken into consideration for non-availability of other evidence and where the land
acquired is a large chunk of land, then it would be advisable to apply some deduction on
that score. Deduction can also be applied on account of wastage of land and development
charges. The Supreme Court considered the fact that the land under acquisition in that
matter was an agricultural land at the time of acquisition and the land was acquired to
carry out the development scheme.
The Supreme Court considered that the development purpose, being in public
interest, is bound to result in utilisation of part of the land for the purposes of roads, by-
links, water and electricity lines and other infrastructural amenities of the project. Supreme
Court held that as a general rule that for laying the roads and other amenities 33 1/3% is
required to be deducted. However, if the development has already taken place,
appropriate deduction needs to be made.
A P RANDHIR](https://image.slidesharecdn.com/landacquisitionfinalarticle-190318151158/75/Land-acquisition-act-Judgment-31-2048.jpg)
Uploaded byArjun Randhir
Land acquisition act Judgment
The document provides an overview of key Indian land acquisition acts: 1) The Land Acquisition Act of 1894 allows the government to acquire private land for public purposes, paying compensation based on market value. It remains the primary legislation on land acquisition. 2) The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act of 2013 reformed the 1894 act by strengthening consent clauses, introducing SIA and R&R. 3) Key sections of the 1894 act outlined include provisions for land surveys, notifications, hearings and Collector awards on compensation within deadlines.
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Land acquisition act Judgment
- 1. 1 USEFUL ARTICLE OF The LandAcquisition Act, 1894 & The Right to fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. PREPARED BY A P RANDHIR. A P RANDHIR
- 2. 2 CHAPTER 1 :INTRODUCTION 1. The Land Acquisition Act, 1894 The Land Acquisition Act of 1894, allows the Indian Government to acquire the private land in the country. Under this Act, “Land Acquisition” means acquiring land for any public purpose by the government or its agency, as authorized by law, from the individual landowners after paying a fixed compensation in lieu of losses incurred by these landowners due to the surrendering of their land to the concerned government agencies. According to this Act, the state has the power to exercise its right of eminent domain wherein it is the ultimate owner of all the Land which it can acquire for public purposes after paying full compensation calculated on the basis of market value. Despite numerous amendments to the Act after independence, the two basic principles of land acquisition, that is, A). Public purposes and B). Compensation on Market Value remains unchanged. Although the Central Government determines the content of the law, there can be regional variations in the procedural matters. As Land is a scarce resource and always has various holders claiming ownership, this Act provided a set of rules for convenient settlement of such disputes. As per the 1894 Act, land can be acquired either under Part-II or Part-VII of the Act. While the former is used when acquiring body is the central or state government or companies that are either owned, partly owned or controlled by the State, the latter is used in case of private companies. Another important aspect is that, while land acquisition under Part-II is entirely for “Public Purpose”, acquisition under Part-VII can be for both “Public Purpose” and “Non-public Purpose”, although the scope for “Non-public Purpose” is very limited. 1.1 Introduction and History of Land Acquisition Act 1894 The Land Acquisition Act, 1894 is the primary legislation in India that deals with the acquisition of land by the Government for a public purpose. It forms the Parent Act and is the basis of all Central and State laws relating to compulsory acquisition and the compensation payable to the interested person upon such acquisition. Therefore it is A P RANDHIR
- 3. 3 important to notethat the power of the Government in this regard is not absolute and is subject to payment of adequate and just compensation to the landowner. Thus the law of compensation is intertwined with the law of acquisition. What any statute relating to acquisition or requisition seeks to achieve is acquisition and not confiscation. The cardinal principles pertaining to acquisition are contained in two inbuilt conditions, viz., the right of the expropriated owner to receive compensation and, no acquisition is permissible without a public purpose. 1.2 History of Law of Land Acquisition in India The first piece of legislation in respect of acquisition of property in India was the Bengal Regulation I of 1824 which was applicable throughout the whole of the provinces immediately subject to the presidency of Fort William. This regulation provided rules for enabling the officers of Government to acquire, at a fair valuation, land or other immovable property required for roads, canals or other public purposes. In 1850, some of the provisions of the Regulation were extended to the town of Calcutta with the object of confirming the title, to lands in Calcutta taken for public purposes. In 1850, when the Railways were being developed, the Railways were declared as public works and the Regulation was extended to the Railways also. As Regards Bombay, the Building Act XXVIII of 1839 was the first piece of legislation which provided for acquisition of land "for the purposes of widening or altering anyexisting public road, street or other thoroughfare or drain or for making any new public road street or other thoroughfare within, the stands of Bombay and Colaba.This Act was extended to Railways in the year 1850. In Madras, Act XX of 1852 was passed, for the purpose of facilitating the acquisition of land for public purpose in the Madras presidency. Railways were brought under the purview of 'public purpose' in 1850. Thus, it could be seen that till 1857, there was no law of land acquisition applicable to the whole of British India. The First Legislation on the subject of land acquisition for the whole of British India was the Act VI of 1857, which repealed all previous enactments relating to acquisition. As stated in its preamble, its object was to make better provisions for the acquisition of land needed for public purposes within the territories in the possessionand under the governance of the East India Company and for determination of the amount of compensation to be paid for the A P RANDHIR
- 4. 4 same. Under thislegislation, the collector was empowered to fix the amount of compensation by agreement if possible; but if there was no such agreement, the dispute had to be referred to arbitrators whose decision was to be final and could not be assailed, except for their misconduct or corruption. Therefore it could be seen that the Collectors have been given a prominent role right from 1857 and still they are playing a key role in awarding compensation even today similarly, the so called Alternative Dispute Resolution (ADR) was introduced in acquisition proceedings way back in 1857. Then it was found that the method of settlement of compensation by agreement or arbitration was unsatisfactory as the arbitrators were incompetent and even corrupt. Further it was also realized that there was no appellate mechanism against the awards given by the arbitrators. In other to correct this anomaly, the legislature intervened and passed the Act X of 1870. The notable contribution of this Act was that, for the first time, the Act provided for a reference to a Civil Court for the determination of the amount of compensation when the collector could not settle it by agreement. It laid down a clear procedure for the acquisition of land and also provided definite rules for the determination of compensation. However the Act could not plug many loopholes in the then existing system, and had to be eventually replaced by the Land Acquisition Act, 1894. The Land Acquisition Act, 1894 originally applied to the British India only and the Native States passed their own Acts, for example the Mysore Land Acquisition Act, 1894, the Travancore Land Acquisition Act, 1089 and the Hyderabad Land Acquisition Act, 1309 Fasli etc. In fact under the Government of India Acts 1919 and 1935 the provinces had the power to legislate with respect to compulsory acquisition of land and by exercising such power many provinces amended in respect of certain provisions, the Act of 1894. After the Indian Independence Act, 1947, by virtue of the Indian Independence (Adaptation of Central Acts and Ordinances) Order, 1948 the Act was made applicable to all the provinces of India. After the Constitution, came into force it was made applicable to the whole of India except Part B States. 1.3 . IMP PROVISION OF Old Land Aquistion ACT Commencement of the acquisition proceedings and Award. Following three notifications and their dates are very very important for any acquisition proceeding and to calculate the base year for fixing market value of acquired land, time limit to produce objections and to file reference and also for A P RANDHIR
- 5. 5 determining the amountof compensation and interest thereon. 1. Notification u/s 4(1). This can be considered as initiation of any Acquisition proceedings. (1) Whenever it appears to the appropriate Government that land in any locality is needed or is likely to be needed for any public purpose or for a company, a notification to that effect shall be published in the Official Gazette and in two daily newspapers circulating in that locality of which at least one shall be in the regional language, and the Collector shall cause public notice of the substance of such notification to be given at convenient places in the said locality (the last of the dates of such publication and the giving of such public notice, being hereinafter referred to as the date of the publication of the notification). (2) Thereupon it shall be lawful for any officer, either, generally or specially authorised by such Government in this behalf, and for his servants and workmen,to enter upon and survey and take levels of any land in such locality; to dig or bore in the sub-soil; to do all other acts necessary to ascertain whether the land is adapted for such purpose; to set out the boundaries of the land proposed to be taken and the intended line of the work (if any) proposed to be made thereon; to mark such levels, boundaries and line by placing marks and cutting trenches; and, where otherwise the survey cannot be completed and the levels taken and the boundaries and line marked, to cut down and clear away any part of any standing crops, fence or jungle: Provided that no person shall enter into any building or upon any enclosed Court or garden attached to a dwelling-house (unless with the consent of the occupier there of) without previously giving such occupier at least seven days’ notice in writing of his intention to do so. Sec. 5. Payment for damage. The officer so authorised shall at the time of such entry pay or tender payment for all necessary damage to be done as aforesaid, and in case of dispute as to the sufficiency of the amount so paid or tendered, he shall at once refer the dispute to A P RANDHIR
- 6. 6 the decision ofthe Collector or other Chief Revenue Officer of the District, and such decision shall be final. 2. Notification u/s 6. Declaration that land is required for a public purpose.— (1) Subject to the provisions of Part VII of this Act, when the appropriate Government is satisfied, after considering the report, if any, made under section 5- A, sub-section (2) that any particular land is needed fora public purpose, or for a company, a declaration shall be made to that effect under the signature of a Secretary to such Government or of some officer duly authorised to certify its orders and different declarations may be made from time to time in respect of different parcels of any land covered by the same notification under section 4, sub-section (1), irrespective of whether one report or different reports has or have been made (wherever required) under section 5-A, sub- section (2): Provided that no declaration in respect of any particular land covered by a notification under section 4, sub-section (1),— (i) published after the commencement of the Land Acquisition (Amendment and Validation) Ordinance, 1967 (1 of 1967), but before the commencement of the Land Acquisition (Amendment) Act, 1984, shall be made after the expiry of three years from the date of the publication of the notification; or (ii) published after the commencement of the Land Acquisition (Amendment) Act, 1984, shall be made after the expiry of one year from the date of the publication of the notification: Provided further that no such declaration shall be made unless the compensation to be awarded for such property is to be paid by a company, or wholly or partly out of public revenues or some fund controlled or managed by a local authority. Explanation 1.—In computing any of the periods referred to in the first proviso, the period during which any action or proceeding to be taken in pursuance of the notification issued under section 4, sub-section (1), is stayed by an order of a Court shall be excluded. A P RANDHIR
- 7. 7 Explanation 2.—Where thecompensation to be awarded for such property is to be paid out of the funds of a corporation owned or controlled by theState, such compensation shall be deemed to be compensation paid out of public revenues. (2) Every declaration shall be published in the Official Gazette, and in two daily newspapers circulating in the locality in which the land is situate of which at least one shall be in the regional language, and the Collector shall cause public notice of the substance of such declaration to be given at convenient places in the said locality (the last of the dates of such publication and the giving of such public notice, being hereinafter referred to as the date of the publication of the declaration), and such declaration shall state the district or other territorial division in which the land is situate, the purpose for which it is needed, its approximate area, and, where a plan shall have been made of the land, the place where such plan may be inspected. (3) The said declaration shall be conclusive evidence that the land is needed for a public purpose or for a company, as the case may be; and, after making such declaration the appropriate Government may acquire the land in a manner hereinafter appearing. 9. Notice to persons interested .— (1) The Collector shall then cause public notice to be given at convenient places on or near the land to be taken, stating that the Government intends to take possession of the land, and that claims to compensation for all interests in such land may be made to him. (2) Such notice shall state the particulars of the land so needed, and shall require all persons interested in the land to appear personally or by agent before the Collector at a time and place therein mentioned (such time not being earlier than fifteen days after the date of publication of the notice), and to state the nature of their respective interests in the land and the amount and particulars of their claims to compensation for such interests, and their objections (if any) to the measurements made under section 8. The Collector may in any case require such statement to be made in writing and signed by the party or his agent. A P RANDHIR
- 8. 8 (3) The Collectorshall also serve notice to the same effect on the occupier (if any) of such land and on all such persons known or believed to be interested therein, or to be entitled to act for persons so interested, as reside or have agents authorised to receive service on their behalf, within the revenue district in which the land is situate. (4) In case any person so interested resides elsewhere, and has no such agent, the notice shall be sent to him by post in a letter addressed to him at his last known residence, address or place of business and registered under sections 28 and 29 of the Indian Post Office Act, 1898 (6 of 1898). 3. Notification u/s 11. 11. Enquiry and award by Collector .— (1) On the day so fixed, or on any other day to which the enquiry has been adjourned, the Collector shall proceed to enquire into the objection (if any) which any person interested has stated pursuant to a notice given under section 9 to the measurements made under section 8, and into the value of the land at the date of the publication of the notification under section 4, sub- section (1), and into the respective interest of the persons claiming the compensation and shall make an award under his hand of— (i) the true area of the land; (ii) the compensation which in his opinion should be allowed for the land; and (iii) the apportionment of the said compensation among all the persons known or believed to be interested in the land, of whom, or of whose claims,he has information, whether or not they have respectively appeared before him:Provided that no award shall be made by the Collector under this sub-section without the previous approval of the appropriate Government or of such officer as the appropriate Government may authorise in this behalf: Provided further that it shall be competent for the appropriate Government to direct that the Collector may make such award without such approval in such class of cases as the appropriate Government may specify in this behalf. (2) Notwithstanding anything contained in sub-section(1), if at any stage of the A P RANDHIR
- 9. 9 proceedings, the Collectoris satisfied that all the persons interested in the land who appeared before him have agreed in writing on the matters to be included in the award of the Collector in the form prescribed by rules made by the appropriate Government, he may, without making further enquiry, make an award according to the terms of such agreement. (3) The determination of compensation for any land under sub-section (2) shall not in any way affect the determination of compensation in respect of other lands in the same locality or elsewhere in accordance with the other provisions of this Act. (4) Notwithstanding anything contained in the Registration Act, 1908 (16 of 1908), no agreement made under sub-section(2) shall be liable to registration under that Act. 11-A. Period within which an award shall be made.— (1)The Collector shall make an award under section 11 within a period of two years from the date of the publication of the declaration and if no award is made within that period, the entire proceedings for the acquisition of the land shall lapse: Provided that in a case where the said declaration has been published before the commencement of the Land Acquisition (Amendment) Act, 1984, the award shall be made within a period of two years from such commencement. Explanation.—In computing the period of two years referred to in this section, the period during which any action or proceeding to be taken in pursuance of the said declaration is stayed by an order of a Court shall be excluded. 12. Award of Collector when to be final .— (1) Such award shall be filed in the Collector’s office and shall, except as hereinafter provided, be final and conclusive evidence, as between the Collector and the persons interested, whether they have respectively appeared before the Collector or not, of the true area and value of the land, and the apportionment of the compensation among the persons interested. (2) The Collector shall give immediate notice of his award to such of the persons A P RANDHIR
- 10. 10 interested as arenot present personally or by their representatives when the award is made. 16. Power to take possession .— When the Collector has made an award under section 11, he may take possession of the land, which shall thereupon vest absolutely in the Government, free from all encumbrances. 2. Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation And Resettlement (Amendment) Bill, 2015 The Amendment Bill was introduced in the Lok Sabha by the Minister for Rural Development, Mr. Birender Singh on February 24, 2015. The Bill amends the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (LARR Act, 2013). The Bill replaces the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation, and Resettlement (Amendment) Ordinance, 2014. 3. KINDS OF MATHOD FOR DECIDING VALUE OF LAND 3.1 Belting Method: When a plot of big size is to be valued or when a plot with less frontages and more depth is to be valued, it is logical to adopt the method of belting. It is due to the principle that the value of land in general decrease as the depth of the plot increases or in other words, the front land abutting road is more valuable than the rear land away from road. The main problem facing the Valuer while adopting this method is to decide the depth up to which the maximum land value extends and from that point onwards, it starts declining or diminishing. The next step would then be to fix the relationship regarding the value of back land to the front land. In this method, the plot of land under consideration is divided into different sections or zones and different rates of land are estimated for each section or zone. A P RANDHIR
- 11. 11 Usually, the plotof land is divided into three belts. 1. The depth of first belt near the road is suitably adjusted. 2. The depth of second belt is kept 50% more than that of first belt and, 3. the depth of third belt is kept 50% more than that of second belt. Consider the size, shape, location and various other factors affecting rate of land, a suitable rate of land is estimated and that is taken for the first belt. For second belt, two- thirds of rate of first belt is taken and for third belt, one-half of rate of first belt is taken. There is no hard and fast rule regarding the ratio of land values of front portion and back portion. Each case has to be studied independently depending upon the merit of each case, a valuer has to apply his own judgement. Smt. Lila Ghosh (Dead) through Lr. Tapas Chandra Roy Vs State of West Bengal) 2003(2) Apex Court Judgments 626 (S.C.) Land Acquisition Act, 1894, Ss.4, 6, 23, 28 and 34 - Acquisition of compact block - Belting method is not the correct method for determination of compensation. 3.2 Developmental Method: This method is used for Lands which are not developed but bears potential strength to appreciate to a considerable value if converted to residential/commercial or an industrial layout depending upon the location, size, shape, frontage & depth etc. If an NA Land is developed, the net plotable area is only 50%. Working back, one can arrive at the present Value of NA Land of Residential area. 3.3 Comparative Method: In this method, the various transactions of nearby lands are properly studied and then a fair rate of land under consideration is decided. Thus, the comparative method will be useful only in case of an active market where there are large number of statistics available for comparison. The Valuer has to satisfy himself after a thorough inspection of all the underlying factors in the market that there have been no changes in conditions A P RANDHIR
- 12. 12 since the transactiontook place. The element of time plays a vital role in this method. In case of volatile markets, it is found that within a very short interval of time, the evidence of sale chosen for comparison becomes unreliable. Following factors are to be taken into account while making analysis using comparative method: i) Location: The value of land which is situated in a busy locality or centre of city or shopping district will certainly be more than that of land which is situated far away from the town. The location of the property is very important and it is quite likely that a slightly different location can cause a vast difference to the market value. The location is said to be a prime factor in demand for land. ii) Size: The size of plot also plays an important role in fixation of its value. The rate of a large land cannot be compared to that of a small land. Usually, there will be keen demand for plots of certain sizes in a particular locality. The rate of land with such sizes should be considered as the trend prevailing in that locality for arriving at the value of open lands under consideration. iii) Shape: People prefer to have land having regular shape. It is observed that plots of land with regular shapes will be sold at a higher price than those with irregular shapes. iv) Frontage and depth: It is quite clear that the most valuable part of a plot of land is its street frontage and the value of rear portion of plot decreases as the distance from street increases. v) Return frontage: A corner plot gets an additional return frontage and depending upon the importance of intersecting streets or roads, there will be corresponding increase in the value of such plots. The corner plot has better facility of entrance and egress & gives more light and A P RANDHIR
- 13. 13 ventilation. In residentialarea, a corner plot gives wide scope for better layout of shops or offices with greater space for show-rooms and advertisements. vi) Level: If the natural level of land is lower than the road level, considerable amount will have to be spent for filling and there will also be substantial increase in the cost of foundations. On the contrary, if the natural level of land is considerably higher than the road level, there will be difficulty in laying water / drainage lines and hence, the extra earth will have to be excavated to make the plot reasonably level. vii) Nature of soil: For lands with building potentiality, the bearing capacity of soil should also be considered. If the bearing capacity is adequate, the cost of foundation will be reasonable in proportion to the total cost of the building. If, however, the bearing capacity is poor, considerable amount will have be spent to make the structure stable. It is thus clear that the land with good bearing capacity will command more rate as compared to the land with poor bearing capacity. viii) Land-locked land: It sometimes so happens that a plot of land has no well-defined legal access and it is surrounded on all sides by plots belonging to other owners resulting in less value. ix) Restriction on development: The permissible floor space index or F.S.I should be studied for the plot to be valued and scrutinized. The plot of land having more permissible F.S.I. will naturally be sold at higher price as compared to the one having less permissible F.S.I. x) Encumbrances: The plots of land which are subject to the easement rights of air, light or passage will be less attractive to the prospective purchasers and depending upon the inconveniences caused, there will be reduction in values of such lands. A P RANDHIR
- 14. 14 xi) Miscellaneous advantages: Inaddition to the above consideration, if the property possesses some special advantages because of its location or any other reason, the same should be considered while arriving at the reasonable rate of open land. 4 COMPARISION OF OLD AND NEW ACT. Comparative study of Land Acquisition Act, 1894 and the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act 2013 Provisions of other laws in consonance with the LARR 2013 The LARR Act, 2013 exempted 13 laws (such as the National Highways Act, 1956 and the Railways Act, 1989) from its purview. However, the LARR Act, 2013 required that the compensation, rehabilitation, and resettlement provisions of these laws be brought in consonance with the LARR Act, 2013, within a year of its enactment (that is, by January 1, 2015), through a notification. The Bill brings the compensation, rehabilitation, and resettlement provisions of these laws in consonance with the LARR Act, 2013. 4.1 Exemption of five categories of land use from certain provisions The Bill creates five special categories of land use: (i) defence, (ii) rural infrastructure, (iii) affordable housing, (iv) industrial corridors, and (v) infrastructure projects including Public Private Partnership (PPP) projects where the central government owns the land. The LARR Act, 2013 requires that the consent of 80% of land owners is obtained for private projects and that the consent of 70% of land owners be obtained for PPP projects. The Bill exempts the five categories mentioned above from this provision of the Act. In addition, the Bill permits the government to exempt projects in these five categories from the following provisions, through a notification: The LARR Act, 2013 A P RANDHIR
- 15. 15 requires that aSocial Impact Assessment be conducted to identify affected families and calculate the social impact when land is acquired. The LARR Act, 2013 imposes certain restrictions on the acquisition of irrigated multi-cropped land and other agricultural land. For example, irrigated multi- cropped land cannot be acquired beyond the limit specified by the appropriate government. 4.3 Return of Unutilised land The LARR Act, 2013 required land acquired under it which remained unutilised for five years, to be returned to the original owners or the land bank. The Bill states that the period after which unutilised land will need to be returned will be: (i) five years, or (ii) any period specified at the time of setting up the project, whichever is later. 4.4 Time period for retrospective application The LARR Act, 2013 states that the Land Acquisition Act, 1894 will continue to apply in certain cases, where an award has been made under the 1894 Act. However, if such an award was made five years or more before the enactment of the LARR Act, 2013, and the physical possession of land has not been taken or compensation has not been paid, the LARR Act, 2013 will apply. The Bill states that in calculating this time period, any period during which the proceedings of acquisition were held up: (i) due to a stay order of a court, or (ii) a period specified in the award of a Tribunal for taking possession, or (iii) any period where possession has been taken but the compensation is lying deposited in a court or any account, will not be counted. 2.5 Other changes The LARR Act, 2013 excluded the acquisition of land for private hospitals and private educational institutions from its purview. The Bill removes this restriction. While the LARR Act, 2013 was applicable for the acquisition of land for private companies, the Bill changes this to acquisition for ‘private entities’. A private entity is an entity other than a A P RANDHIR
- 16. 16 government entity, andcould include a proprietorship, partnership, company, corporation, non-profit organization, or other entity under any other law. The LARR Act, 2013 stated that if an offence is committed by the government, the head of the department would be deemed guilty unless he could show that the offence was committed without his knowledge, or that he had exercised due diligence to prevent the commission of the offence. The Bill replaces this provision and states that if an offence is committed by a government official, he cannot be prosecuted without the prior sanction of the government. 4.6 . WHAT ARE THE DIFFERENCES BETWEEN THE LA ACT, 1894 AND LARR ACT, 2013? The following table compares some key features between the LA Act, 1894 and the LARR Act, 2013. ISSUE LA ACT, 1894 LARR ACT,2013 Public Purpose Includes several uses such asinfrastructure, development and housing projects. Also includes use by companies under certain conditions No significant changes. Consent from affected people No requirement. For private projects and PPP- projects: Consent of 80% or 70% of the affected families. Social ImpactAct Assessment No requirement. SIA has to be undertaken in every acquisition. Compensation Based on market value. Market value doubled in rural areas but not in urban area. A P RANDHIR
- 17. 17 Market value Basedon the current use of land. Explicitly prohibits using the intended use of land while calculating market value. Higher of: (a) value specified for stamp duty, or (b) average of the top 50% recorded sale prices of similar land. Solatium 30% 100% Resale of land No provision. Prior permission of the government required. Sharing of profit No provision. If the acquired land is unused and is transferred, 20% of the profits shall be shared with the original land owners. R&R No provision. R&R necessary for all affected families. Minimum R&R entitlements to be provided to each affected family specified. Fertile land No restriction Acquisition of multi crop or agricultural land able only as a last resort. Unutilized Land No provision After 5 years the states can return the land either to the owner or to the State Land Bank OBJECTION/ DEFENCE Four Types Of Objections Permissible Under Section 18 The Supreme Court in the case of Ambya Kalya Mhatre (dead) through Lrst. vs State of Maharashtra 2012 (1) Mh.L.J. 9 has held that Section 18 does not require a land A P RANDHIR
- 18. 18 owner objecting tothe amount of compensation, to make a claim for any specific amount as compensation, nor does it require him to state whether the increase in compensation is sought only in regard to the land, or land and building, or land, building and trees. A land owner can seek reference to civil court, with reference to any one or more of the four types of objections permissible under Section 18 of the Act, with reference to the award. His objection can either be in regard to the measurement of the acquired land or in regard to the compensation offered by the Collector or in regard to persons to whom it is shown as payable or the apportionment of compensation among several claimants. Once the land owner states that he has objection to the amount of compensation, and seeks reference to the civil court, the entire issue of compensation is open before the Reference Court. Once the claimant satisfies the Reference Court that the compensation awarded by the Land Acquisition Officer is inadequate, the Reference Court proceeds to determine the compensation, with reference to the principles in Section 23 of the Act. 5 APPRECIATION OF EVIDENCE IN CASE OF LAND ACQUISITION ACT 5.1 Presumption & burden of proof. (Sec.12) Award of Collector when to be final :- (1) Such award shall be filed in the Collector's office and shall, except as hereinafter provided, be final and conclusive evidence, as between the Collector and the persons interested, whether they have respectively appeared before the Collector or not, of the true area and value of the land, and the apportionment of the compensation among the persons interested. (2) The Collector shall give immediate notice of his award to such of the persons interested as are not present personally or by their representatives when the award is made. ☼ Sec. 18, 23, 51, Market Value :- Burden of Proof- Held-Burden of proving true value of acquired property is on the state that has acquired it for a particular purpose- on facts, it can legitimately be concluded that the burden of proving inadequacy of amount which lay on the claimant was successfully discharged by him- ☼ Mahesh Dattatray Thirthkar V/s State of Maharashtra(2009)11 Scc141. ☼Sec-23-Market Value-Burden of proving –Held always lie on Claimants. A P RANDHIR
- 19. 19 ☼Sangunthala V/s SP.Tahasildar(2%)3 SCC 661 ☼ Sec. 23- 18-11. Compensation-Burden of Proof- Burden of Proving inadequacy of amount determinate under the award on the claimant – once burden is discharged onus would shifted on the collector to abuse sufficient evidence to sustain the Award. ☼ Amount of compensation payable on the basis of agreement between claimant & collector u/s 11(2)- Best evidence court cannot be ignored it. ☼ Sale Price of small portion of land should not be ordinarily be mad the basis for market value of larger portion of land. ☼ Expert report only consider when Found/Proved to be correct, genuine and reliable 5.2 Burden on Claimant 1. Land Acquisition officer & Sub-collector Gadwal Vs Sreelatha Bhopal Anr. Held that the burden is on the claimant to prove by adducing cogent and acceptable evidence for higher compensation. 2. Special Deputy Collector & Anr Vs Kurra Sambasiva Rao & ors (1997) 6 SCC 41. Though some guess work is involved, feats of imagination should be eschewed and mechanical assessment of the evidence should be avoided. It is the paramount duty of the Courts of facts to subject the evidence to very close scrutiny, objectively assess the evidence tendered by the parties on proper consideration thereof in correct perspective to arrive at adequate and reasonable market value. It is held that even in the absence of oral evidence adduced by the land acquisition officer or the beneficiaries, the judges are to draw from their experience the normal human conduct of the parties and bona fide and genuine sale transactions are guiding star in evaluating the evidence. Misplaced sympathies or undue emphasis solely on the claimants' right to compensation would place very heavy burden on the public exchequer to which other everyone contributes by direct or indirect taxes. It is held by the Supreme Court in the said judgment that the best evidence of the value of property are the sale transaction in respect of the acquired land to which the claimant himself is a party; the time at which the property comes to be sold; nature of the A P RANDHIR
- 20. 20 consideration and themanner in which the transaction came to be brought out. These factors are relevant and in absence of such sale deed relating to the acquired land, the sale transactions relating to the neighbouring lands in the vicinity of the acquired land can be considered. 3. Shalini Vaman Godbole vs Special Land Acquisition Officer on 22 June, 2009Citation;2009(111)BOMLR2759 ;2009 LAC515 bom The best evidence of the value of property are the sale transactions in respect of the acquired land or the neighbouring land; the time at which the property comes to be sold; the purpose for which it is sold; nature of the consideration; and the manner in which the transaction came to be brought out, are also relevant factors. In the absence of sale deed relating to the acquired land, the sale transactions relating to the neighbouring lands have to be taken into consideration. Undoubtedly, such transactions must be within a reasonable time of the date of the notification and preferably before such date, the transactions must be bona fide and it should be a sale of the land similar to the land acquired or land adjacent to the land acquired. 4. Gulzara Singh V State of Punjab (1993) 4 SCC, 245, Held that mutation entries of the land transactions in the revenue records are not evidence unless the parties to the transactions have been examined in proof of documents. 5.4 Additional Evidence Under Order Xli Rule 27 Of The Code Of Civil Procedure, 1908 1. Union of India vs Ibrahim Uddin and anr (2012) 8 SCC 148. The Supreme Court in the said judgment has held that where the additional evidence sought to be adduced removes the cloud of doubt over the case and the evidence has a direct and important bearing on the main issue in the suit and interest of justice clearly renders it imperative that it may be allowed to be permitted on record such application may be allowed. It is further held that an application under Order XLI Rule 27 CPC is to be considered at the time of hearing of appeal on merits so as to find whether the documents and/or the evidence sought to be adduced have any relevance/bearing on A P RANDHIR
- 21. 21 the issues involved.The admissibility of additional evidence does not depend upon the relevancy to the issue on hand, or on the fact, whether the applicant had an opportunity for adducing such evidence at an earlier stage or not, but it depends upon whether or not the Appellate Court requires the evidence sought to be adduced to enable it to pronounce judgment or for any other substantial cause. It is held that the true test, therefore is, whether the Appellate Court is able to pronounce judgment on the materials before it without taking into consideration the additional evidence sought to be adduced. 2. Land Acquisition Act, 1894 (As amended) Ss.23(1A), 23(2) and 28, Civil Procedure Code, 1908, O.47.R.1 - Reference Court - Review - Reference Court can review its earlier order if there exists an error apparent on the face of record in terms of O.47.R.1 CPC. (Jaya Chandra Mohapatra Vs Land Acquisition Officer, Rayagada) 2005(1) Apex Court Judgments 496 (S.C.) : 2005(1) Civil Court Cases 508 (S.C.) 5.5 Burden of proof to prove regarding the market value for the acquired land. 1. Gafar v. Moradabad Development Authority reported in AIR 2007 SCW 5372 As held by this Court in various decisions, the burden is on the claimants to establish that the amounts awarded to them by the Land Acquisition Officer are inadequate and that they are entitled to more. That burden had to be discharged by the claimants and only if the initial burden in that behalf was discharged, the burden shifted to the State to justify the award. 2. Mahesh Dattatray Thirthkar v. State of Maharashtra" reported in AIR 2009 SUPREME COURT 2238 The burden of proving the true market value of acquired property is on the State that has acquired it for a particular purpose. Where the landowner has been able to show, by the testimony and valuation report of the expert valuer, that the award of compensation passed by the Land Acquisition Officer was inadequate, the onus now shifts on the State to adduce sufficient evidence to sustain the award. The burden of proof in civil cases is that of "balance of probability" and not that of "beyond reasonable doubt". Thus minor A P RANDHIR
- 22. 22 inconsistencies in evidenceare not relevant in civil cases in considering the question of discharge of this burden. 5.6. Certified Copy Of Sale Deed- Evidentiary Value. Sec. 51A, 23 of L.A.Act – Market value of acquired land fixation of – certified cope of – sale deed relating upon without examining vendee or vender or vendor or anybody else connected with the sale. L.A. Officer etc. V/s V. Narsilah, AIR 2001 SC 117 SC DB Sectio No.51-A Scope of and evenditiary Value of the registered document – Held – not only it permits the production of a certified copy of the registered sale deed in evidence But per pits the acceptance of sick transaction without examination of the Vender or Vendee, Hence , the Court can rely on such a presumption only if the same is not rebutted by other evidence . 5.7 Compensation to be awarded within amount claimed Sec.- 18, 25, of L.A.Act. 10 O-6-R-17 of CP Code- Compensation to be awarded within amount claimed- amendment to enhance claim Rs. 20/- to Rs..100/- allowed by reference Court in year 1983 – legality or propriety to unamended S.25 –Plea challenging award of compensation in excess of amount claimed on basis of un amended S.25 – not tenable. Benefit of enhanced rate of – Award of Collector passed on 26-6-69 & award of reference Court passed on 31-5-1984- Both said dates fall within two termini indicated in Sec. 30(2) of Amended Act – Benefit of Solatium & interest at enhanced rates is available – Presumption & burden of proof. (Sec.12) 1 Mahesh Dattatray Thirthkar V/s State of Maharashtra (2009)11 SCC 141. Sec. 18, 23, 51, Market Value :- Burden of Proof- Held-Burden of proving true value of acquired property is on the state that has acquired it for a particular purpose- on facts, it can legitimately be concluded that the burden of proving inadequacy of amount which lay on the claimant was successfully discharged by him A P RANDHIR
- 23. 23 2. SangunMala v/sSp. Tahshildar (2010) 3 SCC p-661 Sec. 18, 23, 51, Market Value :- Burden of Proof- Section No.23 – Market Value- Determination- Consideration Burden of proving Market Value- always lie on Claimant- Besides, relative advantages and facilities available on acquired land also need to be consideration- Grant of higher compensation than claim. 6 : ROLE OF COURTS DECIDING LAND REFERENCE 6.1 Chimanlal Hargovinddas vs Special Land Acquisition on 21 July, 1988 1988 AIR 1652, 1988 SCR Supl. (1) 531 The following factors must be etched on the mental screen: (1) A reference under Section 18 of the Land Acquisition Act is not an appeal against the award and the Court cannot take into account the material relied upon by the Land Acquisition officer in his Award unless the same material is produced and proved before the Court. (2) So also the Award of the Land Acquisition officer is not to be treated as a judgment of the trial Court open or exposed to challenge before the Court hearing the Reference. It is merely an offer made by the Land Acquisition officer and the material utilised by him for making his valuation cannot be utilised by the Court unless produced and proved before it. It is not the function of the Court to suit in appeal against the Award, approve or disapprove its reasoning, or correct its error or affirm, modify or reverse the conclusion reached by the Land Acquisition officer, as if it were an appellate court. (3) The Court has to treat the reference as an original proceeding before it and determine the market value afresh on the basis of the material produced before it. (4) The claimant is in the position of a plaintiff who has to show that the price offered for his land in the award is inadequate on the basis of the materials produced in the Court. Of A P RANDHIR
- 24. 24 course the materialsplaced and proved by the other side can also be taken into account for this purpose. (5) The market value of land under acquisition has to be determined as on the crucial date of publication of the notification under sec. 4 of the Land Acuisition Act (dates of Notifications under secs. 6 and 9 are irrelevant). (6) The determination has to be made standing on the date line of valuation (date of publication of notification under sec. 4) as if the valuer is a hypothetical purchaser willing to purchase land from the open market and is prepared to pay a reasonable price as on that day. It has also to be assumed that the vendor is willing to sell the land at a reasonable price. (7) In doing so by the instances method, the Court has to correlate the market value reflected in the most comparable instance which provides the index of market value. only genuine instances have to be taken into account. (Some times instances are rigged up in anticipation of Acquisition of land). (9) Even post notification instances can be taken into account (1) if they are very proximate, (2) genuine and (3) the acquisition itself has not motivated the purchaser to pay a higher price on account of the resultant improvement in development prospects. (l0) The most comparable instances out of the genuine instances have to be identified on the following considerations: (i) proximity from time angle, (ii) proximity from situation angle. (11) Having identified the instances which provide the index of market value the price reflected therein may be taken as the norm and the market value of the land under acquisition may be deduced by making suitable adjustments for the plus and minus factors vis-a-vis land under acquisition by placing the two in juxtaposition. A P RANDHIR
- 25. 25 (12) A balance-sheetof plus and minus factors may be drawn for this purpose and the relevant factors may be evaluated in terms of price variation as a prudent purchaser would do. The market value of the land under acquisition has there after to be deduced by loading the price reflected in the instance taken as norm for plus factors and unloading it for minus factors. (14) The exercise indicated in clauses (11) to (13) has to be undertaken in a common sense manner as a prudent man of the world of business would do. 6.2 DETERMINING THE MARKET VALUE 1. Sabhia Mohammed Yusuf Abdul Hamid Mulla (D) by L.Rs. and Ors. Held : Laid down the guidelines to be considered while fixing the market value of the acquired land by the Land Acquisition Officer such as (i) existing geographical situation of the land, (ii) existing use of the land, (iii) already available advantages, like proximity to National or State High Way or road and/or developed area and (iv) market value of other land situated in the same locality/village/area or adjacent or very near the acquired land. Market value is ordinarily the price the property may fetch in the open market if sold by a willing seller unaffected by the special needs of a particular purchase. It is held that the amount of compensation cannot be ascertained with mathematical accuracy. A comparable instance has to be identified having regard to the proximity from time angle as well as proximity from situation angle. It is held that for determining the market value of the land under acquisition, suitable adjustment has to be made having regard to various positive and negative factors vis-a-vis the land under acquisition by placing the two in juxtaposition. Supreme Court also spell out the positive factors and negative factors while calculating the amount of compensation. It is held that a smaller plot may be within the reach of many, a large block of land will have to be developed preparing a layout plan, carving out roads, leaving open spaces, plotting out smaller plots, waiting for purchasers and the hazards of an entrepreneur. Such development charges may range between 20% and 50% of the total price. It is further held A P RANDHIR
- 26. 26 that for ascertainingthe market value of the land, the potentiality of the acquired land should also be taken into consideration. Potentiality means capacity or possibility for changing or developing into state of actuality. It is held that market value of a property has to be determined having due regard to its existing condition with all its existing advantages and its potential possibility when led out in its most advantageous manner. The existing amenities like water, electricity, possibility of their further extension, whether near about town is developing or has prospect of development have to be taken into consideration. 2. Viluben Jhalejar Contractor (D) ... vs State Of Gujarat on 13 April, 2005 Section 23 of the Act specifies the matters required to be considered in determining the compensation; the principal among which is the determination of the market value of the land on the date of the publication of the notification under Sub-section (1) of Section 4 One of the principles for determination of the amount of compensation for acquisition of land would be the willingness of an informed buyer to offer the price therefor. It is beyond any cavil that the price of the land which a willing and informed buyer would offer would be different in the cases where the owner is in possession and enjoyment of the property and in the cases where he is not. Market value is ordinarily the price the property may fetch in the open market if sold by a willing seller unaffected by the special needs of a particular purchase. Where definite material is not forthcoming either in the shape of sales of similar lands in the neighbourhood at or about the date of notification under Sectioin 4 (1) or otherwise, other sale instances as well as other evidences have to be considered. The amount of compensation cannot be ascertained with mathematical accuracy. A comparable instance has to be identified having regard to the proximity from time angle as well as proximity from situation angle. For determining the market value of the land under acquisition, suitable adjustment has to be made having regard to various positive and negative factors vis-`-vis the land under acquisition by placing the two in juxtaposition. The positive and negative factors are as under: Positive factors /Negative Factors Positive factors.- (i) Smallness of size, (ii) Proximity to a road, A P RANDHIR
- 27. 27 (iii) Frontage ona road, 1. Nearness to developed area, 2. Regular shape, (vi) Level vis-a-vis land under acquisition, (vii) Special value for an owner of an adjoining property to whom it may have some very special advantage. Negative factors.- (i) Largeness of area, (ii) Situation in the interior at a distance from the road, (iii) Narrow strip of land with very small frontage compared to depth, (vi) Lower level requiring the depressed portion to be filled up, (v) Remoteness from developed locality, (vi) Some special disadvantageous factors which would deter a purchase Whereas a smaller plot may be within the reach of many, a large block of land will have to be developed preparing a layout plan, carving out roads, leaving open spaces, plotting out smaller plots, waiting for purchasers and the hazards of an entrepreneur. Such development charges may range between 20% and 50% of the total price. 8. SUPREME COURT DECISIONS ON PRINCIPLES FOR DETERMINATION OF AMOUNT OF COMPENSATION: 1. The General Manager oil & Natural Gas Corporation ltd V Ramesh Jivnbhai Patel 2008 (11) Scale 637, Hon'ble Supreme Court gave an illustration of the increase in the market value and the percentage of increase to be made and the method of calculation of the increase thus :- "15.The increase in market value is calculated with reference to the market value during the immediate preceding year. When market value is sought to be ascertained with reference to a transaction which took place some years before the acquisition, the method A P RANDHIR
- 28. 28 adopted is tocalculate the year to year increase. As the percentage of increase is always with reference to the previous year's market value, the appropriate method is to calculate the increase cumulatively and not applying a flat rate. The difference between the two methods is shown by the following illustration (with reference to a 10% increase over a basic price of Rs.10/- per sq.m): Year By flat rate By cumulative increase method increase method 1987 10.00 10.00 (Base Year) 1988 10 + 1=11.00 10.00 + 1.00 = 11.00 1989 11 + 1=12.00 11.00 + 1.10 = 12.10 1990 12 + 1=13.00 12.10 + 1.21 = 13.31 1991 13 + 1=14.00 13.31 + 1.33 = 14.64 1992 14 + 1=15.00 14.64 + 1.46 = 16.10 "16.We may also point out that application of a flat rate will lead to anomalous results. This may be demonstrated with further reference to the above illustration. In regard to the sale transaction in 1987, where the price was Rs.10 per sq.m, if the annual increase to be applied is a flat rate of 10%, the increase will be Rs.1 per annum during each of the five years 1988, 1989, 1990, 1991 and 1992. If the price increase is to be determined with reference to sale transaction of the year 1989 when the price was Rs.12 per sq.m, the flat rate increase will be Rs.1.20 per annum, for the years 1990, 1991 and 1992. If the price increase is determined with reference to a sale transaction of the year 1990 when the price was Rs.13 per sq.m, then the flat rate increase will be Rs.1.30 per annum for the years 1991 and 1992. It will thus be seen that even if the percentage of increase is constant, the application of a flat rate leads to different amounts being added depending upon the market value in the base year. On the other hand, the cumulative rate method will lead to consistency and more realistic results. Whether the base price is Rs.10/- or Rs.12/10 or Rs.13/31, the increase will lead to the same result. The logical, practical and appropriate method is therefore to apply the increase cumulatively and not at a flat rate." A P RANDHIR
- 29. 29 8.1 DEDUCTION TOWARDSDEVELOPMENT CHARGES: While fixing the market value, development charges have to be deducted depending upon the nature of the land. While giving such deduction, the Land Acquisition Officer must record reasons about the disadvantage of the land acquired and the purpose for which the land was sought to be acquired as well as extent of land necessary for providing developments like provision of roads, electricity, water and sewerage and other facilities. The extent of deduction cannot be put in a straitjacket formula and it varies from case to case. The Honble Supreme court had time and again indicated the factors to be considered by the Land Acquisition Officer for making deduction towards development charges as well as percentage of deduction. Such deduction is also not automatic unless there is a factual finding that deduction was absolutely necessary on the facts of the case by taking into consideration the ground situation. In case the property has already been developed, there would be no requirement of deduction towards development. Naganath (dead) by Lrs. v. Asst. Commissioner & Land Acquisition Officer and Anr., 2008(13) Scale 202, the Honourable Supreme Court observed that the trend of the various Judgments of the Supreme Court indicates deduction on account of development charges in the range of 1/6th to 33%. The Hon'ble Supreme Court in Atma Singh V State of Haryana (2008) 2 SCC 568, (cited supra) referred to an earlier decision relating to deduction towards development charge, it was held thus :- In fixing the market value of a large property on the basis of a sale transaction for smaller property, generally a deduction is given taking into consideration the expenses required for development of the larger tract to make smaller plots within that area in order to compare with the small plots dealt with under the sale transaction. However, in applying this principle of deduction it is necessary to consider all relevant facts. It is not the extent of the area covered under the acquisition which is the only relevant factor. If smaller area within the large tract is already developed and situated in an advantageous position suitable for building purposes and have all amenities such as roads, drainage, electricity, communications, etc. then the principle of deduction simply for the reason that it is part of the large tract acquired, may not be justified. A P RANDHIR
- 30. 30 In the presentcases the lands covered by the acquisition are located by the side of the National Highway and the Southern Railway Staff Quarters with the Town Planning Trust Road on the north. The neighbouring areas are already developed ones and houses have been constructed, and the land has potential value for being used as building sites. Having found that the land is to be valued only as building sites and having stated the advantageous position in which the land in question lies though forming part of the larger area, the High Court should not have applied the principles of deduction. It is not in every case that such deduction is to be allowed. Therefore, the High Court erred in making a deduction of one-third of the value of the comparable sale and thus reducing the fair market value of land from Rs.10 per sq yd to Rs.6.50 per sq. yd. Atma Singh V State of Haryana,(2008) 2 SCC 568, the Hon'ble Supreme Court also placed reliance on the Judgment in Kasthuri vs. State of Haryana, 2003 (1) SCC 354 and indicated the percentage of deduction towards development charges thus :- wherein it was observed that in cases of those lands where there are certain advantages by virtue of the developed area around, it may help in reducing the percentage of cut to be applied, as the development charges required may be less on that account. There may be various factual factors which may have to be taken into consideration while applying the cut in payment of compensation towards development charges, may be in some cases it is more than 1/3rd and in some cases less than 1/3rd. Therefore, in this case taking into consideration the potentiality of the acquired land for construction of residential and commercial buildings, the deduction made was only 20%. Naganath (dead) by Lrs. v. Asst. Commissioner & Land AcquisiStion Officer and Anr., 2008(13) Scale 202, cited supra, the Hon'ble Supreme Court indicated the percentage of deduction towards development charges thus : ".We find merit in the Civil Appeal on the above three grounds. Firstly, we are of the view that deduction of 53% towards development charges is on the higher side. No reason has been given for applying the rate of 53% towards development charges. Generally, the trend of the various judgments of this Court indicates deduction in the range of 1/6th to 33%. In this case, the High Court has deducted the charges at 53% which, in our view, appears to be excessive." A P RANDHIR
- 31. 31 REVENUE DIVISIONAL OFFICERcum- L A O Shaik Azam Saheb [2009(1)SCALE 545] The extent of deduction taking into consideration the nature of land acquisition and the land involved in the subject matter of sale deed relied on for computing the market rate and deducted one third towards development cost and observed thus:- "It must be bear in mind that the lands in question were agricultural lands whereas the lands which were the subject matter of the said deed of sale was a homestead land, thus, some amount, therefore, will have to be deducted towards the development cost. Indisputably while comparing the market value of developed lands with that of undeveloped lands, the court has to make suitable deductions towards the cost of development. 8.3. Percentage Of Deduction For Development Lal Chand Vs. Union of India 2009 (15) SCC 769 It was held that percentage of deduction for development to be made for arriving at market value of large tracts of undeveloped agricultural land with potential for development can vary between 20 and 75 per cent of the price of developed plots and observed that the deduction for development consists of two components. The first is with reference to the area required to be utilised for developmental works and the second is the cost of the development works. It is held by the Supreme Court that if the size of the plot is very small and the same has to be taken into consideration for non-availability of other evidence and where the land acquired is a large chunk of land, then it would be advisable to apply some deduction on that score. Deduction can also be applied on account of wastage of land and development charges. The Supreme Court considered the fact that the land under acquisition in that matter was an agricultural land at the time of acquisition and the land was acquired to carry out the development scheme. The Supreme Court considered that the development purpose, being in public interest, is bound to result in utilisation of part of the land for the purposes of roads, by- links, water and electricity lines and other infrastructural amenities of the project. Supreme Court held that as a general rule that for laying the roads and other amenities 33 1/3% is required to be deducted. However, if the development has already taken place, appropriate deduction needs to be made. A P RANDHIR
- 32. 32 It is heldthat DDA and other statutory authorities adopt different rates for plots in the same area with reference to the economic capacity of the buyer, making it difficult to ascertain the real market value, whereas market value determination for acquisitions is uniform and does not depend upon the economic status of the land loser. Supreme Court also considered that the land in question was a freehold land whereas the allotment "rates" in the DDA Brochure refer to the initial premium payable on allotment of plots on leasehold basis. The Development Authority will also incur considerable expenditure for development of undeveloped land into a developed layout, which includes the cost of levelling the land, cost of providing roads, underground drainage and sewage facilities, laying waterlines, electricity lines and developing parks and civil amenities, which would be about 35% of the value of the developed plot. It is held by the Supreme Court that the two factors taken together would be the 'deduction for development' and can account for as much as 75% of the cost of the developed plot. The 'deduction for development' with references to prices of plots in authorised private residential layouts may range between 50% to 65% depending upon the standards and quality of the layout. V. Hanumantha Reddy Vs Land Acquisition Officer, 2003 12 SCC 642 It was held that neither its high potentiality nor its proximity to a developed land can be a ground for not deducting the development charges and that normally 1/3rd deduction could be allowed. 8. 4 For what period, the increase should be calculated? The reference court has stated that the gap between 6.1.1987 (the date of transaction covered by Ex.P15) and 15.9.1992 (the date of acquisition under consideration) was six and half years. It therefore calculated the increase for six and half years. This is obviously erroneous. The actual gap is five years and eight months and not six and half years. However, for the purpose of calculation, we have to exclude the year of the relied-upon transaction, which is the base year. If the year of relied-upon transaction in 1987, the increase is applied not from 1987 itself but only from the next year which is 1988. If the rate was Rs.10 per sq.m. in 1987, and the cumulative rate of increase is 7.5% per year, the price will be Rs.10.75 in 1988, Rs.11.56 in 1989, Rs.12.42 in 1990, Rs.13.35 in 1991 A P RANDHIR
- 33. 33 and Rs.14.35 in1992. Thus the calculation of increase is only for five years and not for six and half years. 8.5 What should be the market value of the acquired land? By applying a cumulative rate of escalation of 7.5% over the market price of Rs.10 per sq.m in 1987, we find that the market value in the year 1992 was Rs.14.35. The Reference Court and High Court had deducted Rs.2/- towards distance factor. As the lands are similarly situated and are in adjoining villages, it will be sufficient to deduct Rs.1.35 per sq.m. instead of Rs.2/-. We accordingly determine the market value as Rs.13/- per sq. m. 8.6 Quantum Of Deduction Quantum of deduction is concerned, it is held by the Supreme Court that in fixing market value of the acquired land, which is undeveloped or under-developed, the Courts have generally approved deduction of 1/3rd of the market value towards development cost except when no development is required to be made for implementation of the public purpose for which land is acquired. Supreme Court Kasturi Vs State of Haryana, 2003 (1) SCC 354 It was held that in respect of agricultural land or undeveloped land which has potential value for housing or commercial purposes, normally 1/3rd amount of compensation has to be deducted out of the amount of compensation payable on the acquired land subject to certain variations depending on its nature, location, extent of expenditure involved for development and the area required for roads and other civic amenities to develop the land so as to make the plots for residential or commercial purposes. Trishala Jain & Anr V State of Uttaranchal & Anr It has considered the norms to be considered by the SLAO while computing compensation for the land under acquisition including the issue of deductions to be made. It is held by the Supreme Court that where the evidence led by the parties is of such instances where the compensation paid is comparable, i.e. exemplar lands have all the A P RANDHIR
- 34. 34 features comparable tothe proposed acquired land, including that of size, is another category of cases where principle of 'no deduction' may be applied. Such cases are exceptional and/or rare as normally the lands which are proposed to be acquired for development purposes would be agricultural lands and/or semi or haphazardly developed lands at the time of issuance of notification under Section 4 (1)of the Act, which is the relevant time to be taken into consideration for all purposes and intents for determining the market value of the land in question. Food Corporation of India through its District Manager, Faridkot, Punjab and Ors. vs. Makhan Singh and Anr., (1992) 3 SCC 67 Held that proximity of time of sale with the date of notification under Section 4, closeness between the lands sold and the land acquired, comparative size of the lands, potential value of the acquired land having regard to the location and surroundings to be kept in mind by the Land Acquisition Officer as well as by the reference Court while determining the compensation. The Court of appeal would not ordinarily interfere with the assessment of compensation unless there is wrong application or misapplication of the relevant factors or principles of compensation. A question thus arises for consideration of this Court is whether the Reference Court while passing an order of enhancement of compensation has applied any wrong application or misapplication of the relevant factors or principles of compensation in favour of the claimant or while not allowing the entire claim of compensation as prayed by the claimant while hearing these first three appeals. Special Tehsildar Land acquisition Vishakapatanam Vs A Mangala Gowri (1991) 4 SCC 218 Held, that price received or paid in sale or purchase of the same land under acquisition within the period proximate to the date of acquisition is a vital evidence. Exclusion of that evidence and instead reliance on award of compensation made in respect of some other land is erroneous. In the said judgment, Supreme Court also held that in a developed area, deduction of 1/3 of the market value is proper. State of Maharashtra Vs Bhausaheb Dadasaheb Misal(deceased) through L.Rs. decided on 14th February, 1995 in First Appeal No.1013 of 1987 A P RANDHIR
- 35. 35 It has heldthat sale instances ten years prior to notification relating to rates prevalent may form basis for determination of compensation. Ten percent of increase for every year may be allowed towards increase in the price. A lump sum is to be added further to agricultural land having building potentiality. Supreme Court P Rajan and Kerala State Electricity Board and anr (1997) 9 SCC 330 Hon'ble Court has held that determination of compensation on the basis of square feet would be confined only to highly developed commercial land or land situated at a place in the heart of a city. 8.7. Several Exemplars With Reference To Similar Lands The Supreme Court in the case of Mehrawal Khewaji Trust Faridkot Vs State of Punjun & ors AIR 2012 SC 2721, It has held that when there are several exemplars with reference to similar lands, it is the general rule that the highest of the exemplars, if it is satisfied that it is a bona fide transaction has to be considered and accepted. It is not desirable to take an average of various sale deeds placed before the authority/court for fixing fair compensation. 8.8 Determining The Rate Of The Acquired Land In Question. Surender Singh Versus State Of Haryana & Ors. Civil Appeal No.890 Of 2018 January 25, 2018 Para 37. The High Court, in the absence of any evidence on any of these issues, could not have determined one flat market rate of the acquired land in question by applying one isolated rate of one land situated in one village Kasan and adding 8% annual increase from 1994 in such rate and made it applicable to the entire lands situated in 15 different villages. Para 38. In our opinion, it is only when the evidence had been adduced by the parties to the lis on the aforementioned issues, the Court would have been in a position to apply its mind objectively as to which method should be applied for determination of the rate, i.e., A P RANDHIR
- 36. 36 whether belting systemor flat rate system or different rates for different lands depending upon the quality of land situated in different villages etc. Para 39. The fair market value of the acquired land cannot be decided in isolation on the basis of only one factor. There are several other factors, which govern the determination of the rate. These factors need to be proved with sufficient evidence. It must appear that the Courts have made sincere endeavor to determine the fair market rate of the acquired land and while determining has taken into account all relevant aspects of the case. It is the duty of the landowners and the State to adduce proper and sufficient evidence to enable the Courts to arrive at a reasonable and fair market rate of the acquired land prevalent on the date of acquisition. 8.9 VALUATION ON THE BASIS OF RENT The rent of a number of years purchase multiplier is capitalized in this method. It can be resorted to only when no other method is available. If the rent is very low or very high this method is unsafe. The method: 1. Find out the fair rent 2. Deduct repair charges, insurance, bad debts, expenses for collecting rent etc. 3. Determine the return and find out the multiplier (rate per cent). 4. Using the multiplier capitalize the value of property (See AIR 1973 S.C. 701). 8.10 EXPERT’S VALUATION When claimant produces remarks of experts regarding market value, the court may act upon it if the materials on the basis of which the report has been prepared are produced in the court and its authenticity is proved (AIR 1995 S.C. 840). 8. 11 LAND WITH BUILDING Definition of land Under Sec. 3(a) of the L.A.Act ‘land’ includes benefits to arise out of land A P RANDHIR
- 37. 37 and things attachedto the earth or permanently fastened to anything attached to earth (See AIR 1978 S.C. 515; 2005(1) SCC 553). The land with a building should be taken as a single unit. But it is difficult to get comparable sales with regard to such properties. Also see (AIR 2002 SC 1423; AIR 1988 SC 943). Then value of land and building has to be determined separately. 8.12 GARDEN LANDS Separate compensation cannot be awarded for fruit bearing trees standing on the land acquired (AIR 2002 S.C. 1423; AIR 1991 S.C.2027). Either market value of the land including trees treating them as timber, or annual net income of fruit bearing trees multiplied by a proper multiplier should be given. When market value is determined on the basis of the yield from the trees or a plantation the multiplier shall be 8 and in the case of agricultural properties it shall be 12 (maximum) (AIR 2002 SC 1423; 2005(3) KLT 408). Tree growth cannot be valued with reference to its horticultural value or value of yield. Timber value should be given (AIR 1988 S.C. 943). The High Court has recognized the method of conducting test tapping of rubber trees for determining the annual income (1980 KLT 800). 8.13 HOUSE SITE WITH FRUIT BEARING TREES To value a site as house site and then add to it the value of the trees is duplication. Only one of the two has to be valued (AIR 1970 Madras 184). But the Andhra Pradesh High Court has disagreed with this view (AIR 1981 A.P.310). The view of Andhra Pradesh High Court is said to be correct. (1981 KLT 913). 8.14 LEASE Compensation shall be apportioned between the landlord and the tenant according A P RANDHIR
- 38. 38 to the valueof their interests (1958 KLJ.613; 1994(5) SCC 239; 1997(5) JT 623; 2003(2) KLT 394; AIR 1971 SC 1253). 8.15 EASEMENT Easement is an interest in the property. The following criteria will arise for consideration in 1) To what extent the value of the servient tenement is reduced by the existence of easement rights. 2) To what extent is the value of the dominant tenement reduced by the extinction of the easement right (1975 KLT 497; AIR 2001 SC 3431). Easement of Necessity Easement of necessity is not extinguished by acquisition (AIR 2005 SC 954). 8.16 MORTGAGE Where a mortgaged property is acquired the mortgagee is entitled to the mortgage money out of the compensation (Sec. 73(2) T.P. Act). That claim has preference and can be enforced though the principal amount on the mortgage has not become due (Sec. 73(3) T.P. Act). 8.17 DAMAGES FOR SEVERANCE (S. 23 Clause thirdly and S.49(2) Clause thirdly of S. 23 entitles a person to compensation for the damage caused, if any, to a part of his land by the acquisition of another part. The claimant must prove the fact that he suffered injury as well as the extent of the injury (1996(2) KLT 58; 1968 S.C. 1425; AIR 1975 S.C. 1097; AIR 1990 S.C. 2192). 8.18 BUSINESS DISPLACEMENT A P RANDHIR
- 39. 39 (Section 23 ClausesFourthly & Fifthly). A person who is compelled to stop his business on account of acquisition cannot claim increase in compensation on the basis of loss of earnings till he resettled in business. Only loss caused to the claimant at the time of taking possession is contemplated (1997 (2) SCC 640). In the case of shifting of business the claimant is entitled to transport charges only (1997 (2) SCC 640 & 2004 (7) SCC 388). 8.19 DOCUMENTS RELATING TO SMALLER EXTENT DEDUCTION: While fixing the market rate, very often, documents of smaller extent would be taken as the basis. The normal rule in fixing compensation for large extent of land with reference to the value shown in the sale document of lesser extent is that there must be suitable deduction. It is common knowledge that larger extent of property invariably fetch less when compared to smaller extent. No prudent buyer would buy large extent of land by quoting the price prevailing in the market for a small piece of land. The Hon'ble Supreme Court, Atma Singh v State of Haryana (2008) 2 SCC 568, by placing reliance on some of the earlier Judgments regarding deduction in the case of smaller extent when compared to the larger extent acquired, explained the legal position thus:- Chimanlal Hargovinddas V Special Land Acquisition officer it was held as follows : Firstly while a smaller plot is within the reach of many, a large block of land will have to be developed by preparing a layout, carving out roads, leaving open space, plotting out smaller plots, waiting for purchasers (meanwhile the invested money will be blocked up) and the hazards of an entrepreneur. The factor can be discounted by making a deduction by way of an allowance at an appropriate rate ranging approximately between 20 per cent to 50 per cent to account for land required to be set apart for carving out lands and plotting out small plots. The discounting will to some extent also depend on whether it is a rural area or urban area, whether building activity is picking up, and whether waiting period during which the capital of the entrepreneur would be locked up, will be longer or shorter and the attendant hazards. A P RANDHIR
- 40. 40 Basant Kumar VUnion of India, Land was acquired for planned development of Delhi and in the other two cases for housing boards and a deduction of 33% was applied. The reasons given for the principle that price fetched for small plots cannot form safe basis for valuation of large tracts of land, according to cases referred to above, are that substantial area is used for development of sites like laying out roads, drains, sewers, water and electricity lines and other civic amenities. Expenses are also incurred in providing these basic amenities. That apart it takes considerable period in carving out the roads making sewers and drains and waiting for the purchasers. Meanwhile the invested money is blocked up and the return on the investment flows after a considerable period of time. In order to make up for the area of land which is used in providing civic amenities and the waiting period during which the capital of the entrepreneur gets locked up a deduction from 20% onward, depending upon the facts of each case, is made." 8.20 FIXATION OF COMPENSATION GUIDING FACTORS There are well accepted norms for the purpose of fixing the market rate. While fixing the market value, the Land Acquisition Officer is required to consider the location of the property, its advantages as well as potential. Neither the document showing the inflated rate nor a document of distress sale is relevant for the purpose of fixing the land value. Courts and Tribunals have to sit in the arm-chair of a willing seller as well as a willing purchaser and to arrive at the market rate by taking into account all the positive and negative factors. The purpose for which the property was acquired, the nature of the property, presence of roads, electricity, educational institutions, hospital facilities and other infrastructural facilities available in the area are all relevant factors for the purpose of arriving at the market value. Ambya Kalya Mhatre (dead) through L R and Ors V/s State of Maharashtra, 2012 (1) Mh.L.J. 9 Scope of Section 18 of the Land Acquisition Act is very wide and demand for additional claim even if not made before reference Court, the same can be claimed across the bar even at this stage. A P RANDHIR
- 41. 41 8.21 Publication ofpreliminary Notification Kulsam R. Nadiadwala Vs. State of Maharashtra 2012(2) Law Summary (S.C.) 121 = 2012(5) ALD 70(SC)= 2012 AIR SCW 3079 = AIR 2012 SC 2718. Sec.4(1) - Publication of preliminary Notification and power of Officers thereupon Stated - There are two requirements for issuance of Notification u/Sec.4 of Act - First requirement is that Notification requires to be published in Official Gazette and second requirement is that acquiring authority should cast public notices of substance of such Notification in a convenient place in locality in which land proposed to be acquired is situate and both contentions are cumulative and they are mandatory - Non-compliance with mandatory requirement of Sec.4(1) invalidates entire acquisition proceedings - Merely because parties concerned were aware of acquisition proceedings are served with individual notices does not make position alter when statute makes. it very clear that all procedures/modes have to be strictly complied with in manner provided therein - Merely because land owners failed to submit their objections within 15 days after publication of Notification u/Sec.4(1) of Act, authorities cannot be permitted to claim that it need not be strictly resorted to. 8.22 List of documentary evidence can be produced for determining the market value. 1. Revenue record relating to measurement of the land acquired. 2. Revenue records like 7/12 to show which crops are grown and how many time they take the crop in a year. 3. Whether land is agricultural or non-agriculture. 4. Documents regarding the ownership of the land. 5. Sale deed of the same land or neighboring land. A P RANDHIR
- 42. 42 6. Valuation reportof the land. 7. Previous award of the court. 8. Facilities available in the area to show the development of the area. 9. Irrigation facilities or well or other source of water. 10. Other income dependent on the acquired land. 11. Other loss occur due to acquisition. 12. Trees and other structure standing on the land. 13. Evidence relating to part of land due to acquisition. 8.23 Determination of compensation on the basis of Previous award. 1. 1997(2) G.L.H. 773, Special Land Acquisition Officer, Bharuch Versus Motibhai Mohanbhai. Hon'ble High Court of Gujarat has observed as under. Land Acquisition Act, 1894 - Ss.23 and 54 - Market value-Determination of when comparable sale instances Market value of land in the same village not available- of land is determined by taking into consideration by amount awarded in respect of similar land acquired some years before and increasing by way of appreciation from the in the adjoining village the said amount by 10 % for each year date of the said notification u/s. 4(1) published in respect of land in award till question the Basis adopted for determination of marketvalue is legal, just and reasonable not warranting interference by the High Court under S.54 of the Act. A. I. R. 2001 S. C. 2424, Thakarsibhai Devjibhai v/s Executive Engineer, Gujarat. Observations made by the Hon'ble Supreme court in Para (10) to (12) are as under. 10. Next, in the present case, we find the High Court rightly relied on Exh. 16 which is the foundation of the submission on behalf of the claimants. The High Court, with reference to this records: "As observed earlier, it was neither brought to the notice of the Reference Court nor it is brought to the notice of this Court that the previous award Exh. 16 of the A P RANDHIR
- 43. 43 Reference Court wasin any manner modified by the appellate Court. Therefore, in our opinion, award Exh. 16 had become final between the parties. The respondents had led sufficient evidence to show that the acquired lands of award Exh. 16 and the acquired lands in the present case were in all respects similar lands. It was never brought to the notice of the court that the lands acquired in the present case have certain disadvantages in comparison to the agricultural lands of award Exh. 16 which were previously acquired. Under the circumstances, we are of the opinion that the Reference Court was justified in placing reliance on the previous award Exh. 16 of the Reference court." 11. After accepting this award Ex. 16 as the foundation, while fixing the compensation, it fell into error when it reduced the compensation by 25%. The reason for this doing so by the High Court is reproduced below : "Therefore, if award Exh. 16 is to be taken as basis for the purpose of determination of the market value of the acquired lands in the present case, some deduction will have to be made. At the same time, because of distance between the village site and the acquired lands, which was more than the distance between the village site and acquired lands of award Exh. 16, some deduction shall also have to be made. In our opinion, if the deduction of large area and small area coupled with further deduction for distance is made in the present case, then it would be reasonable to deduct 25% from the market price arrived at in respect of the acquired lands of award Exh. 16." 2. As we have said above the High Court fell into error by reducing the quantum of compensation on this basis. The reduction has been made for two reasons, one that the present acquisition is of larger area and the second the distance between the land under acquisition and Ex. 16 is about 5 kms. With reference to question of acquisition being of a larger area, the error is, when we scan we find for the acquisition of each land owner, it could not be said that the acquisition is of a large area. Largeness is merely when each land holders land is clubbed together then the area becomes large. Each landowners holdings are of small area. Even otherwise visioning in the line with submission for the State we find Ex.16 is about two hectares of land which cannot be said to be of small piece of land. So far the other question of distance between the two classes of lands, that by itself cannot derogate the claim of the claimant unless there are some such other materials to show that quality and potentiality of such land is inferior. However, distance between the A P RANDHIR
- 44. 44 land under Ex.16 and the present land even if they are 5 kms. apart would not be relevant, the relevancy could be, their distances from the Viramgam town. We find, as per map produced by the State the present acquired land is about 3 kms. away from it, while the land under Ex. 16 is about two kilometers away from it. This difference is not such to lead to reduce the rate of compensation, specially on the facts of this case. In the present case, as we have recorded above, it has been found that the quality including potentiality of land between Exh. 16 and the present one are similar. No evidence has been led on behalf of the State to find difference between the two. In view of this, the inference drawn by the High Court for reducing the compensation by Rs. 10/- per sq. mtr. cannot be sustained. 8.24. Best Method For Awarding Compensation Land Acquisition Act, 1894, Ss.4, 23 - Land acquisition - Compensation - Compensation already fixed by High Court in earlier proceedings - In one such case Supreme Court approved the rate fixed - Held, the best method for awarding compensation would be to look at the earlier Judgments and awards as such High Court cannot be faulted for having fixed compensation on the basis of earlier judgments. (Bhim Singh & Ors. Vs State of Haryana & Anr.) 2003(2) Apex Court Judgments 447 (S.C.) Land Acquisition Act, 1894, Ss.4, 6, 18 & 30 - Compensation - Claim for apportionment -In land acquisition proceedings, Government cannot and does not acquire its own interest - Interest which is acquired in land acquisition proceedings are interest of 3rd parties. (Meher Rusi Dalal Vs Union of India & Ors.) 2005(1) Apex Court Judgments 184 (S.C.) : 2005(1) Civil Court Cases 283 (S.C.) Land Acquisition Act, 1894, Ss.4, 6 18, & 23 - Land Acquisition - Compensation - Comparable sale - Guiding principles are: (i) The sale is within a reasonable time of the date of notification under S.4(1); (ii) It should be a bona fide transaction; (iii) It should be of the land acquired or of the land adjacent to the land acquired; and (iv) it should possess similar advantages. (Hans Raj Sharma (Dead) by Lrs. Vs Collector Land Acquisition, Tehsil A P RANDHIR
- 45. 45 & District Doda)2005(1) Apex Court Judgments 529 (S.C.) : 2005(2) Civil Court Cases 302 (S.C.) Land Acquisition Act, 1894, Ss.4, 6 18, & 23 - Land Acquisition - Compensation - Comparable sale - Instances of sale of small tracks of land cannot be the basis of determining the market value of large tracks of land, unless suitable deduction is made in respect of development charges and land to be set apart - How much deductions are to be made depends upon nature of land, its topography and special features and state of its development so as to make it suitable for being adapted for immediate use. (Hans Raj Sharma (Dead) by Lrs. Vs Collector Land Acquisition, Tehsil & District Doda) 2005(1) Apex Court Judgments 529 (S.C.) : 2005(2) Civil Court Cases 302 (S.C.) Land Acquisition Act, 1894, Ss.4 & 23 - Land acquisition - Compensation - Normally in cases where compensation is awarded on yield basis, multiplier of 10 is considered proper and appropriate. (Assistant Commissioner-cum-Land Acquisition Officer, Bellary Vs Sri S.T.Pompanna Setty) 2005(1) Apex Court Judgments 374 (S.C.) : 2005(2) Civil Court Cases 402 (S.C.) Land Acquisition Act, 1894, Ss.4(1), 18 & 23 - Acquisition of land - Compensation - Market value fixed at Rs.2/- per sq. yd. - Reference Court rejected some references and in some references enhanced market value of land to Rs.8/- per sq. yard - High Court in appeal enhanced market value of lands to Rs.9/- per sq. yd. and Rs.8/- per sq. yd. having regard to the locations and other factors - Judgment of High Court, upheld. (U.P.State Industrial Development Corpn. Ltd. Vs Shakti Bhatta Udyog & Ors.) 2005(1) Apex Court Judgments 12 (S.C.) : 2005(1) Civil Court Cases 660 (S.C.) Land Acquisition Act, 1894, Ss.4(1), 6, 34 & 48 - Land acquisition - Compensation - Earlier acquisition proceedings were declared null and void in the suit instituted by the land owner himself as such he is not entitled to compensation or interest for the anterior period - When earlier acquisition proceedings were declared null and void then it was for the land owner to take possession of his land by taking appropriate legal proceedings - Land owner is entitled to get rent or damages for use and occupation for the period the Government A P RANDHIR
- 46. 46 retains possession ofthe property - Subsequent acquisition proceedings initiated - Held, it is just and equitable that Collector may also determine the rent or damages for use of the property to which the land owner is entitled while determining the compensation amount payable to the land owner for the acquisition of the property - Provision of S.48 of the Act is applicable - For delayed payment of such amount appropriate interest at prevailing bank rate may be awarded. (R.L.Jain (D) by Lrs. Vs DDA & Ors.) 2004(1) Apex Court Judgments 412 (S.C.) Land Acquisition Act, 1894, S.11-A, 6(2) - “Within a period of two years from the date of publication of the declaration” - Meaning - Various modes for publication provided are (a) publication in the official gazette (b) publication in two daily newspapers circulating in the locality in which the land is situate of which at least one shall be in the regional language and (c) Public notice at convenience place in the locality - Two years period starts to run from the last of the dates out of the three modes of publication. (Bihar State Housing Board Vs State of Bihar & Ors.) 2004(1) Apex Court Judgments 285 (S.C.) Land Acquisition Act, 1894, Ss.11, 11(2) - There can never be two awards - one under S.11 of the Act and another u/s 11(2) of the Act over the same land acquired. (Orissa Industrial Infrastructure Development Corporation Vs Supai Munda & Ors.) 2004(1) Apex Court Judgments 45 (S.C.) Land Acquisition Act, 1894, S.16 - Acquisition of land - Easement of right of necessity like a right of passage enjoyed by adjoining land owner do not extinguish by reason of acquisition of land by State authority. (H.P.State Electricity Board & Ors. Vs Shiv K.Sharma & Ors.) 2005(1) Apex Court Judgments 628 (S.C.) : 2005(1) Civil Court Cases 603 (S.C.) Land Acquisition Act, 1894, S.17 - Acquisition of land - By invoking urgency clause - Challenged after announcing of award and vesting of land in State Govt. - Not tenable - Merely because payment has been made during pendency of suit after land vested in State Govt. does not enable plaintiff to impugn acquisition. (Union of India Vs Ujagar Singh) AIR 2003 P&H 297 A P RANDHIR
- 47. 47 Land Acquisition Act,1894, Ss.17(3-A), 23(1-A) and 28 - Acquisition of land by private negotiation and possession taken prior to issuance of notification u/s 4 - State by several resolutions provided for rental compensation payable to title holders of lands - Writ petition praying interest on rental compensation for delayed payment - High Court allowed interest at 12% - Liability for rental compensation does not have its source under the Act - Question of equities however required that appellants should pay interest at 6% p.a. from 1.4.2000. (State of Maharashtra & Ors. Vs Maimuma Banu & Ors.) 2003(2) Apex Court Judgments 450 (S.C.) Land Acquisition Act, 1894, S.18 - Co-owners - One co-owner is entitled to have the benefit of the enhanced compensation given in respect of the other co-owners in a reference made at his instance in respect of the land acquired, which belonged to all of them, jointly, irrespective of rejection of reference qua him on ground of belated application. (The Jalandhar Improvement Trust Vs The State of Punjab & Ors.) 2003(1) Apex Court Judgments 13 (S.C.) Land Acquisition Act, 1894, S.18 - Curt exercising jurisdiction under Section 18 cannot decide the question of title of the State over the acquired land. (M/s. Ahad Brothers Vs State of M.P. & Anr.) 2005(1) Civil Court Cases 553 (S.C.) Land Acquisition Act, 1894, S.18 - Land acquisition - Compensation - Market value - Sale transaction showing land far away from acquired land - Sale took place much after issuance of notification - Sale transaction cannot be relied upon for determining market value of land. (State of Punjab Vs Nek Singh) 2004(2) Civil Court Cases 137 (P&H) Land Acquisition Act, 1894, S.18 - Reference to Court - Notice sent u/s 12(2) of the Act - Notice received back after proper service - Respondent denied to have received the notice - Respondent an illiterate person and cannot put his signature - It clearly demonstrates that respondent did not receive notice - Contention of appellant that reference was time barred must fail. (Orissa Industrial Infrastructure Development Corporation Vs Supai Munda & Ors.) 2004(1) Apex Court Judgments 45 (S.C.) A P RANDHIR
- 48. 48 Land Acquisition Act,1894, S.18 - Reference - Right to reference accrues only when award is not accepted - Once award is accepted, no legal right survives for claiming a reference - An agreement between parties as regard the value of land acquired by State is binding on the parties - So long such agreement and consequently the consent awards are not sent aside in an appropriate proceeding by a Court of law having jurisdiction in relation thereto, the same remain binding. (State of Karnataka & Anr. Vs Sangappa Dyavappa Biradar & Ors.) 2005(2) Civil Court Cases 307 (S.C.) Claim For Higher Compensation In Respect Of Trees. Land Acquisition Act, 1894, Ss.18, 3(a) - Trees - Claim for - Reference made for determination of amount of compensation payable for the 'land' acquired - Expression 'land' is inclusive of benefits to arise out of the land and things attached to the earth or permanently fastened to anything attached to the earth - Reference Court is bound to adjudicate the claim for higher compensation in respect of trees. (Hans Raj Sharma (Dead) by Lrs. Vs Collector Land Acquisition, Tehsil & District Doda) 2005(1) Apex Court Judgments 529 (S.C.) : 2005(2) Civil Court Cases 302 (S.C.) Land Acquisition Act, 1884, Ss.18, 20 & 26 - Reference to civil Court - Claimant not participating when matter was taken up - It is not proper to dismiss the reference in default. (Khazan Singh Vs Union of India) AIR 2002 S.C. 726 Land Acquisition Act, 1894, Ss.18 & 30 - Compensation - Dispute as to apportionment - Person who had notice of acquisition proceedings and who, by virtue of S.50 is debarred from filing a reference under Section 18 cannot be allowed to apply for a reference u/s 30 of the Act. (Meher Rusi Dalal Vs Union of India & Ors.) 2005(1) Civil Court Cases 283 (S.C.) State Cannot Be Said To Be A Person Interested Land Acquisition Act, 1894, Ss.18 & 30 - Land acquisition - Compensation - Market value - Reference Court determined market value of acquired land and recorded finding that appellant was having ownership right on acquired land - High Court modified A P RANDHIR
- 49. 49 compensation amount andheld appellant entitled for compensation only to extent of lease hold interest in acquired land and that appellant was not owner of the land - Not only in the notification acquiring the land, name of appellant was recorded as owner but also in the revenue record appellant was shown as owner - If State was the owner of the land in question then there was no reason for it to acquire its own land - State cannot be said to be a person interested to agitate any claim either under S.18 or under S.30 of the Act - Impugned order holding appellant had only lease-hold interest in land cannot be sustained. (M/s. Ahad Brothers Vs State of M.P. & Anr.) 2005(1) Civil Court Cases 553 (S.C.) Land Acquisition Act, 1894, Ss.21, 18 - Land acquisition - Compensation - Large area of 22 Hectares acquired from claimant company - Sale instances of small pieces of land are irrelevant - Company purchased land just 4-5 years before acquisition but not producing sale deeds for determining valuation of land - No commercial or industrial development after purchase till acquisition - Enhancement of compensation by High Court ignoring such circumstances not proper - Case remitted for fresh consideration. (Special Land Acquisition Officer Vs Indian Standard Metal Co. Ltd.) 2004(2) Apex Court Judgments 605 (S.C.) Land Acquisition Act, 1894, S.23 - Land Acquisition - Compensation - Market value - Market value cannot be fixed on basis of a basic valuation register maintained by registering authority for collection of stamp duty - Market value must be determined on the basis of sale deeds of comparable lands. (Krishi Utpadan Mandi Samiti Sahaswan District Badaun through its Secretary Vs Bipin Kumar & Anr.) 2004(1) Apex Court Judgments 425 (S.C.) Land Acquisition Act, 1894, S.23 - Land acquisition - Market value - Collector fixed Rs.6000/- per bigha and Reference Court enhanced to Rs.10,000/- per bigha and the same confirmed by High Court - Claimants had sold some land which was part of land to be acquired just a few months earlier - Sale price was Rs.7500/- per bigha - In another award whereby land was acquired Collector fixed market value at Rs.12,000 per bigha and High Court had enhanced it to Rs.32,000 per bigha - Two conflicting judgments of same High Court - Sale deeds referred t by High Court were not relied on either by claimant or A P RANDHIR
- 50. 50 by Govt. butwere placed by vendees - Those sale deed would not furnish real indicia of market value of land - Value of land fixed at Rs.20000/- per bigha. (Virender Singh & Ors. Vs Union of India) 2003(1) Apex Court Judgments 674 (S.C.) Land Acquisition Act, 1894, S.23 - Land acquisition - Market value - Comparable sales - Merits consideration only when (i) sale is within a reasonable time of the date of notification under Section 4(1); (ii) it should be a bona fide transaction; (iii) it should be of the land acquired or of the land adjacent to the land acquired; and (iv) it should possess similar advantages. (Ravinder Narain & Anr. Vs Union of India) 2003(2) Apex Court Judgments 306 (S.C.) Land Acquisition Act, 1894, S.23 - Land acquisition - Market value - Rates fixed for small plots - Can be made basis for fixation of rate if there is no other material and adjudicating Court can make comparison of the prices paid for small plots of land making necessary deductions/adjustments while determining the price. (Ravinder Narain & Anr. Vs Union of India) 2003(2) Apex Court Judgments 306 (S.C.) Land Acquisition Act, 1894, S.23 - Land acquisition - Structure over the acquired land - Annual rental value assessed at Rs.300/- - Market value of structure be calculated by applying multiplier of 16 to the annual rental value. (Smt.Dhan Devi Vs Union of India & Ors.) 2004(2) Civil Court Cases 37 (P&H) Land Acquisition Act, 1894, S.23 - Land Acquisition - Valuation fixed by District Magistrate in respect of lands in the area - Cannot be the basis for ascertaining market value - No evidence led of any sale instances of comparable lands - Valuation fixed in other appeal for same land awarded to respondents also. (Krishi Utpadan Mandi Samiti Sahaswan District Badaun through its Secretary Vs Mohammed Ibrahim & Anr.) 2004(1) Apex Court Judgments 253 (S.C.) Land Acquisition Act, 1894, S.23(1) - Land Acquisition - Agricultural land having potentiality for urban use - Market value - Determination - Where adjoining lands are fully developed, deduction towards investment on infrastructure which is yet to be made in A P RANDHIR
- 51. 51 respect of acquiredland is to be limited to 33%. (Chandrashekar Vs The Assistant Commissioner) 2003(2) Civil Court Cases 498 (Karnataka) Land Acquisition Act, 1894, S.23(1-A) - Land acquisition - Additional compensation - Payable from date of notification u/s 4 and not from date of taking actual possession upto date of award or date of taking possession under Act, whichever is earlier. (Narotam Ram Vs Land Acquisition Collector) AIR 2003 H.P. 55 Land Acquisition Act, 1894 (As amended) Ss.23(1A), 23(2) and 28, Civil Procedure Code, 1908, O.47.R.1 & S.47 - Reference Court - Can review its earlier order if there exists an error apparent on the face of record - Executing Court having limited jurisdiction cannot go into the question as to whether the Reference Court was correct in passing the review order - A decree on review if amended can be assailed by filing appropriate application before High Court but when it attains finality the same cannot be permitted to be assailed in the Executing Court and in that event principle of estoppel comes into play. (Jaya Chandra Mohapatra Vs Land Acquisition Officer, Rayagada) 2005(1) Apex Court Judgments 496 (S.C.) : 2005(1) Civil Court Cases 508 (S.C.) Land Acquisition Act, 1894, Ss.23 (1-A) and 54(2) - Additional compensation - Omission to award - Omission not justified - Landowners are entitled to additional compensation. (Chandrashekar Vs The Assistant Commissioner) 2003(2) Civil Court Cases 498 (Karnataka) Land Acquisition Act, 1894, Ss.23 & 28 (as amended) & S.30(2) - Award made by Collector as well as award passed by Civil Court on reference falling within time span specified in S.30(2) - Held, claimants are entitled to statutory benefits of S.23 & 28 of the Act. (Ghaziabad Development Authority Vs Anoop Singh & Ors.) 2003(1) Apex Court Judgments 451 (S.C.) Land Acquisition Act, 1894, Ss.23, 54 and 28-A - Land acquisition - Co-owner granted A P RANDHIR
- 52. 52 enhanced compensation inappeal - Other co-owner who had not filed appeal, and whose case was not covered by S.28-A - He is entitled to enhanced compensation on ground of parity. (Smt.Kalawati Vs Union of India) AIR 2004 Delhi 351 Land Acquisition Act, 1894, S.25 - Landlord can claim and get compensation over and above what he claimed in an application seeking reference to Civil Court under S.18. (Ghaziabad Development Authority Vs Anoop Singh & Ors.) 2003(1) Apex Court Judgments 451 (S.C.) Land Acquisition Act, 1894, S.28A, Requisitioning and Acquisition of Immovable Property Act, 1952, S.8(3) - S.28A of Land Acquisition Act is not applicable in proceedings of acquisition under 1952 Act - 1952 Act is a complete Code in itself for grant of compensation to land owners - Provisions of the two Acts are totally different. (Dayal Singh & Ors. Vs Union of India & Ors.) 2003(1) Apex Court Judgments 659 (S.C.) Land Acquisition Act, 1894, S.28-A - Application under Section 28-A is to be filed within three months from the date of the award by the Court - Day on which the award was pronounced and the time requisite for obtaining the copy of the award is to be excluded. (State of Andhra Pradesh & Anr. Vs Marri Venkaiah & Ors.) 2003(2) Apex Court Judgments 202 (S.C.) Land Acquisition Act, 1894, S.28-A - Compensation - Redetermination - Three months limitation - Is not confined to the date of earliest award made but from the date of the award of the Reference Court on the basis whereof redetermination is sought. (The State of Tripura & Anr. Vs Roopchand Das & Ors.) 2003(1) Apex Court Judgments 30 (S.C.) Land Acquisition Act, 1894, Ss.28, 34, 16 & 17 - Interest - Payable from date of taking possession under Act which in no case can be before issuance of notification u/s 4. (Narotam Ram Vs land Acquisition Collector) AIR 2003 H.P. 55 Land Acquisition Act, 1894, S.30 - Land acquisition - Compensation - Market value - Determination - Reference Court determined compensation at Rs.2 per sq. feet while High A P RANDHIR
- 53. 53 Court fixed itat Rs.2 per sq. yard - Notification for acquisition of land issued in the year 1962 - Reference Court took into consideration sale deeds of the year 1954, 1955, 1960 and 1963 and one sale deed of the year 1962 - Land in question surrounded by other industrial establishments and developed area - High Court without considering material and even without considering reasons recorded by Reference Court modified the compensation - Judgment of High Court set aside and that of Reference Court restored - However, Reference Court failed to give any deduction towards development charges as such the same ordered to be deducted at 30% . (M/s. Ahad Brothers Vs State of M.P. & Anr.) 2005(1) Civil Court Cases 553 (S.C.) Land Acquisition Act, 1884, S.30 & Civil Procedure Code, 1908, O.1.R.10 - Reference - Provision of O.1.R.10 CPC is applicable. (Rapaka Vs Muppadi) AIR 2002 A.P. 77 Land Acquisition Act, 1894, S.31(2) - Compensation received under duress - Benefit of the provision to decline reference is not available to the State Authority. (Orissa Industrial Infrastructure Development Corporation Vs Supai Munda & Ors.) 2004(1) Apex Court Judgments 45 (S.C.) Land Acquisition Act, 1894, S.51 (As amended) - Acquisition of land - Compensation - Sale deeds - Besides the sale deeds produced evaluation for fixing the market value has to be done by taking into consideration other evidence if available on record like other sale transactions that may be produced, the comparative nature of the location, suitability, marketability etc. to fix the market value of the land acquired. (Cement Corporation of India Ltd. etc. Vs Purya & Ors. etc.) 2004(2) Apex Court Judgments 530 (S.C.) Land Acquisition Act, 1894, S.51A (As amended in 1984), Evidence Act, 1872, Ss.64 & 65 - Sale deed - Certified copy - Admissibility - Provision enables the party producing the certified copy of a sale transaction to rely on the contents of the document without examining the vendee or the vendor of that document - However, presumption as to genuineness of the contents of the document can be relied upon only if the said presumption is not rebutted by other evidence. (Cement Corporation of India Ltd. etc. Vs Purya & Ors. etc.) 2004(2) Apex Court Judgments 530 (S.C.) A P RANDHIR
- 54. 54 Land Acquisition Act,1894 (As amended by Amendment and Validation) Act, 1967, S.4(3) - Interest - 6% allowed by Collector - Has to be allowed on market value as now determined in appeal - Claimants also entitled to interest on solatium. (Virender Singh & Ors. Vs Union of India) 2003(1) Apex Court Judgments 674 (S.C.) 8. Joining of Legal heirs in LAR Cases. Patel Kashuben Narottambhai V/s. SP.L.A.Off. 2009 (2) GLR -1421 * Sec18-1 C.P. Code, O.22 When it is brought to the notice of reference Court, even after declaration of award, that claimant has died during pendency of reference case, Court require to treat it as an application for abatment setting aside, etc. O.22- of CPC – and provision of limitation Act apply to bringing record heirs on record.The Court directing reference Court to modify award accordingly. 9. JOINING OF HEIRS & MODIFICATION OF AWARD- Two Imp decision also cited in this judgement – V/s Pramod Gupta (1) AIR 2003 Sc 2588 Sardar Amarjit Singh Kalra A + (2003) 3 SCC 272 in respect of modification of award – ( in favour of heirs). Circulated Judgement of Hon’ble H.C. of Gujarat. Hon’ble Mr.Justice M.S.Shah. Patel Kashuben Narottambhai V/s SP.L.A. officer, SPl.C.A. No.960/2009 dt. 18/02/2009 Section No.18- 28 & 53 –Reference – Death of Claimant after reference is made- Court cannot pass award unless his legal representatives are brought on record- -O-22- C.P.Code – is applicable to proceeding on reference U/S -18- of L.A. Act. Provision of Limitation Act does not apply – But application be made reasonable time- Smt. Dhani devi V/s Collector – Land Acquisition- AIR 1982 (HP) 42 (HP D.B.) A P RANDHIR
- 55. 55 Alihusain Abbasbhai &others v. The Collector, Panch Mahals, , a learned Single Judge of the Gujarat High Court held that by virtue of Section 53 of the Land Acquisition Act the provisions of Code of Civil Procedure are applicable to all proceedings before the Court under the Land Aquisition Act unless such provisions in the Code is inconsistent with anything contained in the Land Acquisition Act. The learned Judge observed that there is nothing in the Act which is directly inconsistent with Order 22, Rule 3 of the Code of Civil Procedure and hence on a reference under Section 18 of the Land Acquisition Act provisions of Order 22, Rule 3 of the Code of Civil Procedure will be attracted. In the very same judgment, the learned Judge also took the view that the provisions of the Indian Limitation Act would not apply as a reference is not a suit within the meaning of Article 176 of the Limitation Actof 1908. The learned Judge was of the opinion that there is no time limit prescribed for application to substitute legal representatives of the deceased claimant Bombay High Court Special Land Acquisition Officer ... vs Shri Harichandra Ramji Patil & ... on 16 September, 1999, Equivalent citations: 2000 (1) BomCR 569, 2000 (1) MhLj 256 Having said so, the next question is as to whether the procedure followed whereby the Government Advocate/State were directed to carry out the amendments needs to be interfered with. Ultimately by bringing the legal representatives on record what the Court in fact directs is an amendment of the reference. Reference technically cannot be amended by the Court or by the claimant. That can be done by the Collector himself or the Land Acquisition Officer. It is in that context that the direction for amendment of the reference to bring legal representatives on record is being followed. Considering the above, I do not find that the practice and procedure as being followed till date whereby the State is directed to carry out the amendment needs to be interfered with or disturbed. However, once the application is made by the legal representatives of the claimants, the question of the State serving notice afresh on the legal representatives would not arise, unless fresh notice is directed to be issued by the Court to legal representatives who are not represented before it. A P RANDHIR
- 56. 56 Once itis held that the provisions of Order 22 are attracted there is no difficulty in holding then that the duty is cast on the claimants to move such an application. In a suit the plaint proceeds on the footing that it is the plaintiffs who have a cause of action and it is the plaintiffs who moved the Court based on the cause of action. Language of Order 22 refers to survival of the right to sue. The application therefore has to be made by the party interested in contesting the proceedings and in whom the right to sue survives. As it is the plaintiff who sues, for the relief it will be the surviving plaintiffs or their legal heirs, who must apply. Similarly, in so far as reference is concerned, the reference is made on the application of the parties to the dispute who are not satisfied with the offer made by the Collector / Land Acquisition Officer. The onus thereafter to prove the contention as to apportionment or the measurement of the land or compensation is by the party whose lands are acquired under section 18. In a case under section 30 it could be either of the parties who had filed the claim before the Land Acquisition Officer or Collector claiming that they are interested in the property. In such a case the State is not an interested party. (1985) 60 CLT 234 Maharatna Khamari v. State of Orissa the Hon'ble single Judge of this Court following the view expressed in the case of Gopal Charan Sahu 1976 (I) CWR I permitted the Misc. Appeal to be converted to a civil revision in which an order passed under Order 9, Rule 9, C.P.C. rejecting an application for restoration of a land acquisition reference case was challenged. His Lordship in that case held that the Subordinate Judge had no jurisdiction to dismiss the reference for non-appearance of the petitioner and, therefore, set aside the order of the Sub- Judge on that ground. In a case Jogi Sahu V Colloector Cuttack 1991 (II) OLR 164 : (AIR 1991 Ori 283) Courts came to the same conclusion that the land acquisition reference cannot be dismissed for non-appearance of the claimant under Order 9, Rule 8, C.P.C. and directed restoration of the case. In that case after dismissal of the land acquisition case for default the interested party had filed an application under Order 9, Rule 9, CPC for restoration and the same was dismissed as not maintainable. Examining various decisions touching the point his Lordship came to the conclusion that the A P RANDHIR
- 57. 57 reference court wasjustified in rejecting the application which was filed under Order 9, Rule 9, CPC, but an application Under Section 151, C.P.C. is maintainable in the circumstances. In the ultimate conclusion the court restored the reference case and directed for proceeding with the case from the stage immediately before its dismissal for default. Shyamsundar Mantri vs Land Acquisition Collector, ... on 26 August, 1992 Equivalent citations: AIR 1993 Ori 70 Orissa High Court From the aforesaid discussions it is clear that the court to which reference is made Under Section 18 or 30 of the Act is a Court and as such the inherent powers Under Section 151, CPC is available to be exercised by such court if the circumstances so justify. Para 4. In the cases referred to above, their Lordships have expressed the view that a reference court cannot dismiss a case for non-appearance under Order 9, Rule 8 CPC. It has been consequently held that an application under Order 9. Rule 9 CPC is not maintainable. That being the position of law the order of dismissal of a case by the reference court for non-appearance of the claimant must be held to be without jurisdiction and such an order is available to be recalled in exercise of powers of the court Under Section 151, CPC. The adequacy of the ground taken by the petitioner to explain the default is, therefore, unnecessary to be examined as the order of dismissal itself was without jurisdiction and the same should be recalled to rectify the legal mistake committed by the court. In these circumstances, the petitioner's application for setting aside the order of dismissal of the case can be treated as one Under Section 151, CPC. and should be allowed. Tej Ram and Ors. v. Collector, Land Acquisition Railways, Jammu and Ors. reported as 1985 KLJ 133, where His Lordship, Justice K.K. Gupta, observed as follows: 4. The District Judge has rejected the application of the appellants mainly on the ground that it was filed late. It is to be seen and noted in proceedings under the Land Acquisition Act that once a reference is made by the Collector, the Court has to make an award, no matter whether the person at whose instance the reference has been made appears or fails to appear before the Court or fails to produce evidence in support of his objections. A P RANDHIR
- 58. 58 There cannot beany dismissal or abatement of reference proceedings. In case of death of a person at whose instance the reference has been made, it becomes the duty of the Collector to supply the Court the names and addresses of the legal representatives of the deceased-claimant to enable the Court to issue fresh notices to them. As it appears from the contents of the application filed by the appellants, they came to know about the proceedings vary late, it was the duty of the Court to substitute them for the deceased and then to proceed in accordance with law. The question of Limitation does not come under such circumstances at all. 10. The Petroleum and Minerals Pipelines (Acquisition of Right of User in Land Act, 1962 1. The Petroleum and Minerals Pipelines (Acquisition of Right of User in Land Act 1962 (herein referred to as the “PMP Act”) was enacted by Parliament to provide for the acquisition of right of user in land for laying pipelines for the transport of petroleum and minerals and for incidental matters, with following Statement of Objects and Reasons :-“As a result of the implementation of plans for the development of petroleum resources in the country, it is anticipated that in the next few years there will be a substantial increase in the production of crude oil, natural gas and petroleum products by the public sector oilfields and refineries in India. It has therefore become necessary to lay petroleum pipelines in the country to serve as an efficient and cheap means of transportation and distribution of petroleum and petroleum products. Although land can be acquired outright for laying such pipelines under the Land Acquisition Act, 1894 the procedure for such acquisition is long-drawn and costly. Since the petroleum will be laid underground outright acquisition of land is not necessary. Therefore, in the case of these pipelines it is considered sufficient to acquire the mere right of user in the land for laying and maintaining the pipelines. The Bill seeks to achieve the above purpose. 2. The main features of the Bill are– (i). No right of user of land can be acquired for the purpose of laying pipelines unless the Central Government declares its intention by Notification in the Official Gazette, and unless objections, if any, filed within twenty-one days of that Notification are disposed of by the competent authority. (ii). When final declaration about acquisition is made the right to use land for the purpose of laying pipelines will vest in the Central Government, State Government or the corporation, as the case may be but notwithstanding such acquisition, the owner or occupier of the land shall be entitled to use the land for the purpose for which such land was put to use immediately before the declaration by the Central Government. But after the date of acquisition he shall not construct any building or any other structure or construct or excavate any tank, well, reservoir or dam or plant any tree, on that land. iii). Compensation for the damage, loss or injury sustained by any person interested in the land shall be payable to such person. Besides this, compensation calculated at ten per A P RANDHIR
- 59. 59 cent of themarket value of the land on the date of the preliminary Notification is also payable to the owner and to any other person whose right of enjoyment in the land has been affected by reason of the acquisition. The compensation in both cases is to be determined by the competent authority in the first instance and an appeal lies from its decision to the District Judge.” 3. Section 2 of the PMP Act defines certain expressions. 4. In terms of Section 3, the Central Government is empowered to acquire the right of user in any land. 5. Under Section 4 , it is lawful for any authorized person to enter upon and cause survey in respect of such land. 6. Under Section 5, any person interested in the land can object to the laying of the pipelines under the land. The objections so preferred are to be dealt with by the Competent Authority who would then make a report for the decision of the Central Government. 7. Under Section 6 if the Central Government is satisfied that the land is required for laying any pipeline for transport of petroleum or any mineral, it may declare so by Notification in the Official Gazette, whereafter the right of user shall vest absolutely in the Central Government or in the State Government or the Corporation as directed. 8. After the right of user stands so vested it is lawful to lay pipelines in terms of section 7. section 9 incorporates certain restrictions regarding the use of such land and, 9. section 10 lays down principles for award of compensation in respect of acquisition of the right of user of any land and also in respect of any damage or loss sustained by any person interested in the land. The relevant Sections namely Sections 2, 3, 6, 7, 9 ,10 and 18 of the PMP Act. 10. Compensation.– (1) Where in the exercise of the powers conferred by section 4, section 7 or section 8 by any person, any damage, loss or injury is sustained by any person interested in the land under which the pipeline is proposed to be, or is being, or has been laid, the Central Government, the State Government or the corporation, as the case may be, shall be liable to pay compensation to such person for such damage, loss or injury, the amount of which shall be determined by the competent authority in the first instance. (2) If the amount of compensation determined by the competent authority under subsection (1) is not acceptable to either of the parties, the amount of compensation shall, on application by either of the parties to the District Judge within the limits of whose jurisdiction the land or any part thereof is situated, be determined by that District Judge. (3) The competent authority or the District Judge while determining the compensation under sub-section (1) or sub-section (2), as the case may be, shall have due regard to the damage or loss sustained by any person interested in the land by reason of— (i) the removal of trees or standing crops, if any, on the land while exercising the powers under section 4, section 7, section 8; A P RANDHIR
- 60. 60 (ii) the temporaryseverance of the land under which the pipeline has been laid from other lands belonging to, or in the occupation of, such person; or (iii) any injury to any other property, whether movable or immovable, or the earnings of such persons caused in any other manner: Provided that in determining the compensation no account shall be taken of any structure or other improvement made in the land after the date of the Notification under sub-section (1) of Section 3 . (4) Where the right of user of any land has vested in the Central Government, the State Government or the corporation, the Central Government, the State Government or the corporation, as the case may be, shall, in addition to the compensation, if any, payable under subsection (1), be liable to pay to the owner and to any other person whose right of enjoyment in that land has been affected in any manner whatsoever by reason of such vesting, compensation calculated at ten per cent. of the market value of that land on the date of the Notification under sub-section (1) of section 3 . (5) The market value of the land on the said date shall be determined by the competent authority and if the value so determined by that authority is not acceptable to either of the parties, it shall, on application by either of the parties to the District Judge referred to in subsection (2), be determined by that District Judge. (6) The decision of the District Judge under sub-section (2) or sub-section (5) shall be final. 18. Application of other laws not barred. – The provisions of this Act shall be in addition to and not in derogation of any other law for the time being in force relating to acquisition of land. Laljibhai Kadvabhai Savaliya & ... vs State Of Gujarat & Ors on 5 October, 2016 19. We therefore proceed on the premise that the right of user sought to be taken over under the provisions of the PMP Act amounts to acquisition of one of the facets of property rights which inher in the owner/occupier. For the acquisition of such right of user, the compensation is prescribed in terms of Section 10 of the PMP Act. There are two elements of compensation under Section 10. The first part deals with any damage, loss or injury sustained by any owner/occupier as a result of exercise of powers conferred by Sections 4,7 and 8 of the PMP Act that is to say the actual damage, loss or injury sustained because of entry upon and/or digging or marking levels and survey of land under Section 4 or while actual laying of the pipeline including digging of trenches and carrying of requisite material for such operations under Section 7 or at any stage of maintenance, examinations, repairing and altering or removing of pipeline in terms of Section 8 of the PMP Act. The measure for determining such compensation is given with sufficient clarity in sub-section (3) of Section (10). The idea is to compensate the owner/occupier for actual damage, loss or injury sustained by him as a result of the operations carried out in terms of Section 4 , 7 or 8 of the Act. One of the indicia under sub- Section 3 could be “any injury to any other property whether movable or immovable, or the earnings of such persons in any other manner”. All possible acts as a result of which the damage, loss or injury could be so occasioned are taken care of and stipulated in said sub-section. Over and above such A P RANDHIR
- 61. 61 compensation for actualdamage, loss or injury, additional compensation @ 10% of the market value of the land is given to the owner/occupier under sub-section 4 of Section 10 for taking over the right of user to lay the pipelines. This element of additional compensation is independent of any actual loss or damage and is purely linked to the value of the land for the purposes of computation. This element of compensation is purely for acquisition of right of user simplicitor. The damage/loss or injury to the property is separately dealt with under first part of Section 10 and has to be compensated in toto. Theoretically, it is possible that in a barren piece of land as a result of exercise of powers under Section 4,6,7 there may not be any damage/loss or injury. However compensation under sub-section (4) for acquisition of right of user would still be independently payable. The expression “in addition to the compensation, if any, payable under sub-section (1)” clearly shows the intent that the compensation for acquisition of right of user shall be in addition to the actual damage/loss or injury under first part of Section 10. This part will also be clear from para (iii) of Statement of Objects and Reasons extracted above. 11. The provisions of PMP Act do specify the principles and the manner in which the compensation is to be determined. Not only the actual damage, loss or injury suffered as a result of exercise of various activities in terms of Section 4, 6 & 7are compensated in toto but additionally compensation linked to the market value of land is also to be given for acquisition of right of user in respect of such land. What is taken over is mere right of user to lay the pipeline in the sub-soil of land in question, leaving the title to the land as well as the right to possess that land intact in the hands of the land owner/occupier. It is no doubt that the enjoyment thereof after the pipelines are laid is impaired to a certain extent, in that the owner/occupier cannot raise any permanent construction or cause any excavation or plant any trees. Barring such restrictions, the enjoyment and the right of possession remains unaltered. The lands under which the pipeline would be laid are primarily, going by the mandate of Section 7, agricultural or fallow and there would normally be no occasion for any rendering of the holding completely unfit for any operations. Even in such cases where the holding is rendered unfit, sub- section 3(iii) of Section 10 could be relied upon and any diminution in market value as permanent impairment could sustain a claim for compensation. The principles of compensation as detailed in the PMP Act are thus reasonable and cannot in any way be termed as illusory. The principle laid down in H.D. Vora v. State of Maharashtra (Supra) has no application at all. Para 26. It is axiomatic that a person who occupies the position of Competent Authority under the PMP Act must evoke and enjoy public confidence. Neither the Act nor the Rules framed thereunder deal with the qualifications required of a person before his appointment as Competent Authority nor do they deal with any transparent process for such appointment. We may now turn to see the requirements in that behalf in an enactment which is pari materia. section2 (e) of the Metro Railway (Construction of Works) Act, 1978 (Metro Act for short), defines Competent Authority as the one appointed under Section 16 , 16(2)then sets out, “a person shall not be qualified for appointment as a Competent Authority unless he is holding, or has held, a Judicial Office, not lower in rank than that of a Subordinate Judge.” Like the PMP Act, the Metro Act also confers power upon the Competent Authority therein to consider objections to the construction of the Metro Railway or any other work and to determine the amount payable for acquisition. The orders passed by the Competent Authority under the Metro Act are also appealable before an Appellate Authority. A P RANDHIR
- 62. 62 In our view,the Competent Authority under the provisions of the PMP Act must also be someone who is holding or has held a Judicial Office not lower in rank than that of a Subordinate Judge or is a trained legal mind. If such requirement is not read into and not taken as an integral and essential qualification before appointment of any person as Competent Authority, the provisions in that behalf will not be consistent with the doctrine of fairness under Article 14 of the Constitution of India. At the same time, we hasten to add that actions taken by the Competent Authority till now, will not in any way stand impaired or be invalidated purely on this count. But the Central Government may do well to step in immediately and remedy the situation with appropriate measures. Para 27. Lastly, it is correct that the PMP Act and the Rules framed thereunder do not stipulate any period within which compensation for damage, loss or injury and compensation for acquisition of right of user is to be deposited. While damage, loss or injury occasioned as a result of exercise of power under Section 4 and 7 could be one time damage, that in respect of Section 8 could re-occur as a result of repeated entries for maintenance. Even when no time limit is fixed, it is expected of the concerned authorities to determine and deposit compensation within reasonable time. In so far as the facts of the present case are concerned, ninety percent of the amount so determined by the Competent Authority in the first instance, was deposited in advance. Para 28. We thus do not find the provisions regarding computation of compensation with regard to both elements under Section 10 of the PMP Act to be invalid on any count. We further find that the definition “Corporation” is wide enough to take within its sweep entities in private sector as well. We also do not find the provisions of the PMP Act to be lacking on any count, except to the extent indicated above as regards appointment of Competent Authority. Civil Appeals are thus disposed of without any order as to costs. A P RANDHIR