Coram Altamas Kabir, C.J. Lodha and J.S. (In the instant case, land was within the municipal limits of a city since 1965- Deduction made at the rate of 53%- Neither the Reference Court or the High Court has assigned any specific reasons for making deduction at a rate more than 33 1/3 %.). If sale deed relating to a small developed plot of land is to be the basis for determining the market value of large undeveloped areas, appropriate deductions will have to be made towards development cost which may vary from 20% to 75% of the price of the developed plot. 16 relates to Chalsana Village). If allotment is made to industrial entrepreneurs, they will invariably pass on the cost of land to consumers of their products. (In the instant case, the appellant had adduced oral as well as documentary evidence to show that he had already developed the land by levelling the same, constructing boundary wall, tube wells, powerhouse, tin sheds and fixing the pipes and angles and also by planting a large number of fruit bearing trees, whereas, the respondent (State Authority) did not adduce any evidence to disprove the same or that any particular amount was to be spent for the purpose of making improvements.). After the compensation was paid, the state revenue department levied capital gains tax on the amount from the landowner, reasoning that the transaction was “voluntary sale”, and did not qualify for exemption under Section 10(37) of the Income-Tax Act as compulsory acquisition. Khehar, JJ. Market value of other land situated in same locality. The return from the land acquired for the purpose of housing colony, or offices, or institution and cannot even remotely be compared with the land which has been acquired for the purpose of setting up a factory or industry. The account numbers of the landowners and/or their legal representatives should be furnished by the concerned officer to the Land Acquisition Officer within a period of one month. After Friday’s verdict, the fate of the 999 cases that relied upon the Pune Municipal Corporation ruling is once again in question. The Act will replace the Land Acquisition Act, 1894, a nearly 120-year-old law enacted during British rule.. counsel for the Respondents submitted that in the light of section 51-A of the act, the certified copy of the sale deed (RX), registered under the Registration Act, 1908 could be accepted as evidence of the transaction recorded therein.). LANDMARK RULINGS ON LAND ACQUISITION IN INDIA, JUSTIFICATION OF RIGHT TO PROPERTY AS LEGAL OR FUNDAMENTAL RIGHT- AN ANALYSIS, FUNDAMENTAL RIGHTS IN RELATION TO LAND LAW. We find no merit in the contention that no deduction should be made in this case and that the head of the blog made because no expenses shown to have been incurred for development of the land acquired from the appellants. (1) Subject to the provisions of Part VII of this Act, 25 [when the] 26 [appropriate Government] is satisfied after considering the report, if any, made under section 5A, sub-section (2), that any particular land is needed for a public purpose, or for a Company, a declaration shall be made to that effect under the … Land acquisition is acquiring of private land by the government for public purpose. Be that as it may. Once award has been passed on taking possession under Section 16 of the Act of 1894, the land vests in State there is no divesting provided under Section 24(2) of the Act of 2013, as once possession has been taken there is no lapse under Section 24(2). Citation (2012) 1 SCC 390. To illustrate, if the market value of a land acquired in 1992 has to be determined and if there are no sale transactions/acquisitions of 1991 or 1992 bracket open prior to the date of preliminary notification bracket close, the statistics relating to sales/acquisitions in future, say of the years 1994-1995 or 1995-1996 are taken as the base price and the market value in 1992 is worked back by making deductions at the rate of 10% to 15% p.a. The expression ‘paid’ in the main part of Section 24(2) of the Act of 2013 does not include a deposit of compensation in court. distance of the acquired land from Bombay-Pune Highway. The legislation relating to land acquisition had been in existence since the time of the British Raj in India as the Land Acquisition Act, 1894. Additionally, development includes provision of civic amenities like educational institutions, dispensaries and hospitals, police stations, petrol pumps; etc this “first component” may conveniently be referred to as deductions for keeping aside areas/space for providing developmental infrastructure. The purpose of acquisition can never be a factor to increase the market value of the acquired land. In particular, the Court had to settle the correct interpretation of Section 24 (2) of the 2013 Act read with various provisions of the LA Act. Where lands acquired are of different types and of different locations, averaging is not permissible- But, where there are several sales of similar land, more or less at same time, whose prices have marginal variations, averaging thereof is permissible. The Land Acquisition Collectors in some cases adopt belting methods for valuation of land, with reference to a focal point, that is either with reference to the distance from the main road, or distance from a developed area. Such deductions may even exceed 8%, but that would be so only, where deductions for developmental activities (under the head development) is less than 67% that is as long as the cumulative deductions do not cross the upper benchmark of 75%. We therefore hold that the range for deductions for issues other than developmental costs, would depend on the facts and circumstances of each case, they may be 8%, or even the double their of, or even further more, as long as, cumulatively all deductions put together do not exceed the upper benchmark of 75%. That would however not mean that the landowner in question would not be entitled to compensation. Having regard to the fact that the lands in question were in a semi developed area, we are of the view that it would be appropriate to apply an aggregate deduction of 45% from the value of residential plots to arrive at the market value for the acquired lands. The percentage of standard increase becomes unreliable. The fact that the exemplars filed by the appellants were of the small pieces of land could not be a ground to discard them especially when exemplars of large pieces of land were not available. 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. One of the fundamental principles of valuation is that the transactions subsequent to the acquisition should be ignored for determining the market value of acquired lands, as the very acquisition and the consequential development would accelerate the overall development of the surrounding areas resulting in a sudden spurt sport in the prices. Reference Court’s order for compensation restored along with other statutory benefits and interest. If the purpose of acquisition is a relevant factor in determining compensation, then it would lead to the absurd and unjust situation, that the compensation payable for the same land will be different, depending upon the purpose of the acquisition; and that compensation will be less if the acquisition is for a sewage treatment plant, more if the acquisition is for an industrial layout, much more if acquisition is for residential layout and highest if the acquisition is for commercial value. Raveendran and K.S.P. Common sense is the best and most reliable guide. As the percentage of increase is always with reference to the previous year’s market value, the appropriate methods to calculate the increase cumulatively and not applying a flat rate. Whereas il is expedient 10 amend the law for the Acquisition of Land needed for public purposes and for companies and for dClcmimining the amount ofcompensation to be made For the purpose of calculation, we have to exclude the year of the relied upon transaction, which is the base year. Element of speculation is reduced to minimum if the underlying principles of fixation of market value with reference to comparable sales are made: When sale is within a reasonable time of the date of issuance of notification under Sec. The concerned officers shall instruct the landowners and/or their legal representatives to open savings bank account in a nationalized or scheduled bank, in case they already do not have such account. (In the instant case ,High Court determined market value by placing reliance upon the sale deeds filed by the respondent (Housing Board), lands being in neighborhood purchased 1 ½- 2 years prior to the present accusation. Likewise, deductions may also be made for a variety of other causes which may arise in different cases. Hence, the impugned order is set aside and the order passed by the Reference Court is restored. (The Court in this case divided the quantum of deductions on account of development into two components: Firstly, space/area which would have to be left out, for providing indispensable amenities like formation of roads and adjoining pavements, laying of sewers and rain/flood water drains, overhead water tanks and water lines and streetlights, telecommunication towers, etc. Application of a flat rate will lead to anomalous results. It does not revive stale and time-barred claims and does not reopen concluded proceedings nor allow landowners to question the legality of mode of taking possession to reopen proceedings or mode of deposit of compensation in the treasury instead of court to invalidate acquisition.”. On the other hand, the cumulative rate method will lead to consistency and more realistic results. There is no legal or factual infirmity in approach of the High Court in ascertaining market value glanced warranting interference. In this Court also, learned counsel was unable to show any kind of illegality or perversity in the said calculation made by the executing Court while working out the liability of the State in paying Rs.50, 000/- towards interest. The period of subsistence of interim orders passed by court has to be excluded in the computation of five years. Coram RV Raveendran and AK Patnaik,JJ. With regards to Section 24 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 which states: “(1) Notwithstanding anything contained in this Act, in any case of land acquisition proceedings initiated under the Land Acquisition Act, 1894,—, (a) where no award under section 11 of the said Land Acquisition Act has been made, then, all provisions of this Act relating to the determination of compensation shall apply; or. Beyond that it may be unsafe, even if it relates to a neighbouring land. A-7 to A-10 relate to long-term perpetual leasehold deeds and what was acquired was the appellants’ freehold property and freehold property has higher value than the leasehold plot and suitable addition should have been made. (The Hon’ble Court observed that in Lal Chand Case [(2009) 15 SCC 769] and A.P. When the state government approached the Supreme Court, successors of the deceased failed to appear before it. Deductions could also be made in cases where the exemplar sale transaction is of a date subsequent to the publication of the preliminary notification. It has also to be assumed that the vendor is willing to sell the land at a reasonable price. Much more unsafe is the recent trend to determine the market value of acquired lands with reference to future sale transactions are acquisitions. Let us illustrate. Comparative sales method is a better option for the valuation of the land as it furnishes evidence for determination of market value of acquired land which a willing purchaser would pay for the land if it had been sold in open market at time of issuance of notification under Sec. Market value is determined with reference to open market sale of comparable land in neighbourhood, by a willing seller to a willing buyer, on or before date of preliminary notification. In the case of Indore Development Authority v. Manohar Lal, it was argued by the landowners that acquisitions have lapsed under the Land Acquisition Act of 1894, and fresh proceedings must start under the Land Acquisition Act, 2013. Although the High Court had allowed yearly increase of 12%, taking 1983 as a base year, such increase was not commensurate with the yearly escalation of prices and that was required to be calculated on a cumulative basis, as was held in Rameshbhai Jivanbhai Patel Case(2008) 14 SCC 745. Manohar Lal, it was argued by the landowners that acquisitions have lapsed under the Land Acquisition Act of 1894, and fresh proceedings must start under the Land Acquisition Act, 2013. Expenses are also incurred in providing these basic amenities. 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. These are general guidelines to be applied with understanding informed with common sense. Every case has to be decided on its individual facts taking into consideration various facts and circumstances. 4. Of course, there are other well-known methods of valuation like opinion of experts and yield method. The proviso to Section 24(2) of the Act of 2013 is to be treated as part of Section 24(2) not part of Section 24(1)(b). 1. This ruling was challenged by the landowner in the High Court, however, rejected the appeal. Complexities arose out of the fact that the Court had to resolve how the 2013 Act interacts with its repealed predecessor - The Land Acquisition Act, 1894 (‘LA Act’). Whether such a procedure is legally valid or proper or not, may have to be decided in the context of the respective acquisitions. In case a person has been tendered the compensation as provided under Section 31(1) of the Act of 1894, it is not open to him to claim that acquisition has lapsed under Section 24(2) due to non-payment or non-deposit of compensation in court. What was involved was only the calculation of payment of interest on the decretal sum for a particular period. Such an order cannot be sustained. Adhering to the principle that tendering of fair compensation by the state is the crux of land acquisition proceedings in India, a five-judge constitution bench of the Supreme Court of India, in its judgment dated March 6, 2020, in the Indore Development Authority v Manoharlal & Ors. In view of the gradual increase in land prices, it is reasonable to provide an increase at a cumulative rate of 10% per annum for four years (The relied upon sale is of the year 1990. The Land Acquisition Act, 1894, provides for taking private property for public purposes, the eminent domain principle. 4 UNDERSTANDING LAND ACQUISITION DISPUTES IN INDIA: FROM THE LAND ACQUISITION ACT, 1894 TO THE LARR ACT, 2013 12 4.1 An overview of the legal framework of the Land Acquisition Act 13 4.2 The conventional narrative about the Land Acquisition Act: the need for reform 14 THE LAND ACQUISITION ACT, 1894. Only genuine instances have to be taken into account. It is in this context, in some cases, to avoid the need to differentiate the lands acquired under a common notification for a common purpose, and to extend the benefit of a uniform compensation, courts have observed that the purpose of acquisition is also a relevant factor. The logical, practical and appropriate method is therefore to Blyth increase cumulatively and not at a flat rate. Shashikant Bansal v. Gwalior Improvement Trust/Gwalior Development Authority. This nature of deduction may be placed under the head “de-escalation”. Even after many amendments, to India’s Land Acquisition Act of 1894, the major concern that prevailed was that there was no presence of a cohesive national law that spoke about fair compensation to the owner of the private land at the time of acquiring his land for public purpose, and neither spoke about fair rehabilitation of land owners and people were affected directly from loss of livelihoods. Singhvi and S.J. If the voice of the fourth estate is stifled, India will become a Nazi State […], Distribution and Commisioning Services in Cinema, The colossal Indian Film Industry is seeing a constant increase in its massive turnover each year. Jain and A. K. Ganguly, JJ. After all the factory cannot be set up without land and if such land is giving substantial return, there is no justification for making any deduction from the price exhibited by the exemplars even if they are of small plots. The 2013 act provides both resettlement and rehabilitation to not only the landowners but also to those dependent on the land for livelihood and affected by its acquisition. It is irrelevant for the determination of the percentage of deduction to be applied .It is the overall development cost, incurred (or incorrigible) on the entire acquired land which has to be apportioned amongst the landholders. Coram V. Gopala Gowda and Adarsh Kumar Goel, JJ. In the light of the aforesaid decision of the High Court and in the light of the admitted factual position in the present case, the Commissioner (Appeals) is fully justified in allowing exemption under section 10(37) on the interest received by the assessee under section 28 of the Land Acquisition Act, 1894. Firstly while a smaller plot is within the reach of many, a large block of land will have to be developed by preparing a lay out, 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 existence of the abovementioned factors only can merit consideration as comparable sales. Deduction could be made keeping in mind the waiting period required to raise infrastructure, as also, the waiting period for sale of developed plots and/or built up areas. Of course the materials placed and proved by the other side can also be taken into account for this purpose. The obligation to pay is complete by tendering the amount under Section 31(1). Citation (2010) 12 SCC 151. Reliance upon award in two judgments of High Court relating to acquisition of land in same village for enhancement of compensation. SOCIAL IMPACT ASSESSMENT– The Act requires that except in cases where land is required urgently, for all projects a social impact assessment be done. Section 24(2) of the Act of 2013 does not give rise to new cause of action to question the legality of concluded proceedings of land 319 acquisition. Coram R.V. (Contention made that when land is compulsorily acquired, landlord is entitled to claim highest value which similar land in locality has fetched in bona fide transaction.). The principle is that the quality (class) of land, the situation of the land, the access to the land are all relevant factors for determination of the market value. […], In a routine autopsy the usual practice is to open a body with a chin to downwards. 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. We may illustrate some such illustrative (not exhaustive) factors: (Refer to the judgment for Table). Etc. Section 6 in The Land Acquisition Act, 1894. 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. Yet under the head of “development”, the implied deduction should not exceed 67%. Coram D.K. “ – Dr. Chan, WHO Director-General. Coram R.M. 6 and 9 are irrelevant). The percentage of deduction will depend upon the situation of the lands, the nature of development, etc. Compensation amount hasn’t been paid to landowners. A balance-sheet of 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. 7, Student of Law, Amity Law School, Noida, Amity University Uttar Pradesh, Your email address will not be published. Reasons assigned by the High Court for increasing the percentage of deduction from 40% to 53% are legally untenable. 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. Lands that adjoin a developed area or a main road is given a higher value than a land farther away from the road or the developed area. 15 offered a reasonable basis for determining the market value of the acquired lands in Ijapura. This nature of deduction may be placed under the head “waiting period”. 3. However, in May 2016, the Supreme Court in gave its judgement and went on to pass strong strictures against the state government for abuse of legal process and said, “In our considered opinion, the State unnecessarily pursued this pity matter to this Court in this appeal, which does not involve any arguable point either on facts or in law nor it involves any point of public importance and nor it involves any substantial money claim. WHEREAS it is expedient to amend the law for the acquisition of land needed for public purposes and for Companies and for determining the amount of compensation to be made on account of such acquisition; It is hereby enacted as follows:- Therefore, if the percentage to be added with reference to previous acquisitions/sale transactions is 10% per annum, the percentage to be deducted to arrive at a market value with reference to future acquisitions/sale transactions could not eat 10% per annum, but much more. Patnaik, JJ. Thereafter a Notification under 2 Section 6 of the Act was issued on 18.6.2003. Section 48of the Land Acquisition Act, 1894 empowers the Government to withdraw from the acquisition of the land provided possession has not been taken. This means even if the compensation amount was deposited with the government, fresh acquisition under the 2013 law will not apply. Most prominently, provisions related to compensation or rehabilitation on acquiring land was not provided for. Your email address will not be published. The Friday verdict was on the interpretation of Section 24 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. There was huge jubilation over the landmark Supreme Court judgment among those rank of farmers who were waiting to get back their lands. The observation that purpose of acquisition is a relevant factor, unless properly understood and carefully applied with reference to special circumstances, may lead to absurd or unjust results. In view of the Ex. It helps assess various aspects of acquisition like whether the minimum area that is required is being acquired, whether the project serves a public purpose, and the social impact of the acquisition. Having regard to the potentiality lands, the building system should not have been resorted to. Accordingly, a deduction of 33 1/3% would be more realistic. The Supreme Court has declared Section 3J of the National Highways Act 1956, to the extent it excludes solatium and interest as per Land Acquisition Act 1894 to acquisitions done under the NH Act to be unconstitutional. LARR, which replaced the Land Acquisition Act, 1894, increases compensation to 2-4 times the average of registered sale deeds; recognises the claims of not just those who owned lands; and necessitates a social impact assessment (SIA) and consent of 80% of the landowners in case of a private project and 70% in a public-private partnership project. (1) This Act may be called the Land Acquisition Act, 1894. Land Acquisition Act, 1894 Section 4 Land acquisition - Enhancement of amount of compensation and award of … It is accepted generally that residential plots are costlier than industrial plots, and commercial plots are costlier than residential plots. 12, 2020), https://www.civilsdaily.com/burning-issue-supreme-court-judgment-on-land-acquisition-act/,  Swati Duggal, Land Acquisition in India, LAWCTOPUS, (Aug. 7, 2014) https://www.lawctopus.com/academike/land-acquisition-india/,  Latest Cases: Civil, e-Newsletter 02 CJA Feb. 2017,  Aparna Chaturvedi, Land Acquisition: Supreme Court Lays Down Two Conditions For Pending Cases, BLOOMBERG QUINT (Mar. They were notified by publication in the State Gazette under section 4 (1) of the Land Acquisition Act, 1894 on 23-7-1983 and the declaration under Section 6 was also published simultaneously dispensing with the inquiry under Section 5-A. The Act of 2013 brought on the following changes: The Andhra Pradesh government in a 1987 land acquisition case dragged the landowner for 20 years, court to court, to challenge his claims of Rs. There cannot be any hard and fast or rigid rule. Courts should, therefore, avoid determination of market value with reference to subsequent/future transactions. (Ex. Deduction at the rate of 53% was on the higher side and should not have been made more than 33 1/3%. Under what had then, but the remaining components of deductions fall? The factor can be discounted by making a deduction by way of an allowance at an appropriate rate ranging approx. 15 relating to the neighbouring Santhal Village, Ex. It is the medium of communication. 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