Bhilwara Couple’s 25% Developed-Land Award Set Aside: Rajasthan HC Says Later Policy Didn’t Govern Their Earlier Acquisition

The State acquired land for the Urban Improvement Trust, Bhilwara’s Rama Vihar residential colony. Notifications under Sections 4 and 6 of the Land Acquisition Act, 1894, were issued on 18 February 1998 and 1 February 1999, and the Land Acquisition Officer made an award on 31 January 2001.

The landowners sought references, initially seeking enhanced compensation; in 2015, they amended their claims to seek developed land.

By order dated 22 December 2016, the Reference Court granted 25% developed land—20% residential and 5% commercial.

The Trust appealed under Section 54 of the Act, arguing that the 1999 circular applicable at the relevant time allowed 15%, while the circular providing 25% was issued only in 2005.

The respondents relied, among other matters, on a 2024 circular and a 2026 letter seeking their options for allotment.

The appeals were brought under Section 54 of the Land Acquisition Act, 1894.

The Court treated compensation for compulsory acquisition as governed by the statutory acquisition framework, while allotment of developed land required an independent basis in an applicable policy, circular, or statutory provision.

Executive circulars ordinarily operate prospectively; a later circular enhancing a benefit does not apply to earlier acquisitions absent express provision or necessary intendment for retrospective operation.

The Court also held that permitting an amendment under Order VI Rule 17 CPC does not itself establish entitlement to the relief added, and that a Reference Court must decide compensation within the governing statutory framework.

It distinguished UIT, Bhilwara v. Durga Lal & Ors., 2010 (2) WLC (Raj.) 543, because the award in that case post-dated the 2005 circular.

The Court found that the 21 September 1999 circular, providing for 15% developed land, governed the acquisition, whereas the 27 October 2005 circular raised the benefit to 25% only later.

As the later circular contained no basis for retrospective application, the Reference Court could not use it to grant the enhanced percentage.

The subsequent development of the acquired land for the very purpose for which it had been acquired, or the land’s location and potentiality, did not independently create a right to a share of developed plots; those matters could be relevant to valuation, not to an enhanced allotment entitlement.

The amendment of the reference likewise did not supply the missing substantive entitlement.

The Court therefore held that the Reference Court had misapplied the later circular and had wrongly relied on Durga Lal.

It allowed both appeals, set aside the Reference Court’s direction granting 25% developed land, and restored and upheld the Land Acquisition Officer’s award dated 31 January 2001.