Cumulative 10% Annual Rise in Market Value Over Fifteen Years Upheld for Land Compensation

The State of Gujarat acquired lands in village Magharvada, Taluka Keshod, for the Sabali Irrigation Scheme through notifications under Sections 4 and 6 of the Land Acquisition Act, 1894, dated 06.10.2009 and 09.06.2010.

The Special Land Acquisition Officer awarded Rs. 8,900/- per Aare for irrigated land and Rs. 6,680/- per Aare for non-irrigated land.

The claimant challenged this in Land Acquisition Reference Case No. 310 of 2012, where the Reference Court enhanced the compensation to Rs. 16,700/- per Aare by applying a 10% annual increase based on a 1994 precedent (LRC Nos. 1467 to 1481 of 1999) involving village Naredi.

The State appealed this enhancement, claiming the 10% annual rise was excessive.

1. Whether the Reference Court was justified in granting a 10% annual rise in market value over a 15-year period (from 1994 to 2009) to determine compensation.

2. Whether the claimant was entitled to additional statutory benefits including solatium and interest on the aggregate amount.

Section 54 of the Land Acquisition Act, 1894, and Section 96 of the Code of Civil Procedure, 1908, regarding the right to appeal.

Section 23(1-A) for additional compensation (12% p.a.), Section 23(2) for solatium (30%), and Section 28 for interest (9% for the first year and 15% thereafter).

The precedent set by the Hon’ble Supreme Court in Sunder v. Union of India (AIR 2001 SC 3516), which established that interest is payable on the aggregate amount of compensation, including solatium.

The High Court observed that the Reference Court’s determination was based on a joint pursis (Exh.30) where the State had previously accepted the valuation of similar lands in village Naredi from 1994.

Since the current notification (2009) was issued 15 years after the benchmark case (1994), the Reference Court calculated a 10% increase per year on the base price of Rs. 6,680/-.

The court found this methodology consistent with established valuation practices for land acquisition and noted that the State had already accepted the base valuation in the previous group of cases, making the issue res integra (already settled).

The court found no exorbitant error in the 10% annual appreciation given the 15-year gap.

The court affirmed that the claimant is entitled to 30% solatium, 12% additional compensation, and interest on the aggregate amount (including solatium) per the Sunder judgment.

The Reference Court was directed to disburse the deposited amount to the claimant after due verification and deduction of court fees.