After a 15-year delay, Karnataka HC orders land compensation recalculated using 2025 values while upholding acquisition

The petitioners challenged notifications issued under Sections 28(1) and 28(4) of the Karnataka Industrial Areas Development Act, 1966 (“KIAD Act”), proposing and finalising acquisition of their 6 acres and 23 guntas in Gowdanahalli Village for an industrial area

After receiving a notice under Section 28(2), they objected to the acquisition only on the basis that they would consent if paid ₹1 crore per acre; they later contended that the land was garden land and that compensation had not been paid promptly

The State and KIADB opposed the petition, relying on the petitioners’ delay, their participation in compensation proceedings, deposit of compensation before the Reference Court, and subsequent allotment and possession of the acquired land

The Court rejected the challenge to the acquisition but considered whether the delay in determining and depositing compensation required a fresh award

1. Whether the petitioners could belatedly challenge the acquisition notifications on the grounds that the land was garden land and that the State’s policy was not to acquire such land

2. Whether the delay in determining and depositing compensation justified directing a fresh award using a later date for determining compensation

Sections 28(1)–(4) of the KIAD Act govern the preliminary notification, objections, consideration of objections and final notification for acquisition; Sections 29(2) and 29(3) provide for determination of compensation by consent or otherwise

Under Ram Chand v. Union of India, (1994) 1 SCC 44, delay in challenging acquisition must be considered alongside the authorities’ inaction; where acquisition has progressed and public interest has intervened, quashing may be inappropriate, although the authorities may remain answerable for failing to act within a reasonable time

Under Bernard Francis Joseph Vaz v. Government of Karnataka, (2025) 7 SCC 580, compensation must be determined and disbursed promptly, and prolonged deprivation of compensation may warrant relief recognising the loss in value of money over time

Article 300-A protects the constitutional right to property and requires adequate compensation in accordance with law

The Court held that the petitioners had not raised the garden-land ground in their objections and had waited years to challenge the notifications; meanwhile, the acquisition had progressed, compensation had been deposited, and the land had been allotted and taken into possession for industrial use. In those circumstances, setting aside the acquisition was no longer appropriate

However, the acquisition began in 2010 and compensation was deposited only in 2025. The Court found that the delay was not justified by the partition proceedings and that the compensation could not be regarded as just and reasonable without accounting for the passage of time and diminished value of money. Applying Bernard Francis Joseph Vaz, it directed a fresh award using a 2025 valuation date

Compliance was directed within three months of receipt of a certified copy

The judgment contains an apparent date inconsistency: paragraph 16 refers to 21 March 2025, the date compensation was deposited, whereas the operative order specifies 23 January 2025