District Valuation Committee valuation upheld; deduction reduced from 40% to 25%.

Land situated at Village Gantha, Taluka Tharad, District Banaskantha, was acquired for the public purpose of the Sipu Yojana under Sections 4 and 6 of the Land Acquisition Act, 1894. The Special Land Acquisition Officer awarded compensation at Rs.5.90 per sq. metre under Section 11.

Dissatisfied landowners sought references under Section 18. The Reference Court relied on the District Land Valuation Committee’s valuation of Rs.570 per sq. metre for Government land at neighbouring Village Lakhani, deducted 45% in aggregate, and awarded additional compensation at Rs.307.60 per sq. metre, together with statutory benefits; however, it directed payment of interest at 12% rather than the statutory rate under Section 28.

The State challenged the enhancement, while the landowners filed cross-objections seeking a higher market value and interest at 15%.

The matters were heard together, with First Appeal No.3816 of 2021 treated as the lead matter.

Whether the Reference Court was justified in relying on the District Land Valuation Committee’s report valuing comparable Government land at Rs.570 per sq. metre to determine the market value of the acquired agricultural land?

Whether the deduction applied to the valuation committee’s rate was excessive and ought to be reduced?

Whether the landowners were entitled to statutory interest at 9% for the first year and 15% thereafter under Section 28 of the Land Acquisition Act, 1894, instead of 12%?

The Court applied Sections 4, 11 and 18 of the Land Acquisition Act, 1894 concerning acquisition, the Collector’s award and reference to the civil court, and Section 28 concerning interest on enhanced compensation.

It relied on the principle that market value may be determined on the basis of expert opinion, bona fide sale instances, or capitalisation of profits, and held that a valuation made by a statutorily constituted expert committee may constitute relevant evidence unless displaced by contrary evidence.

The Court followed the Division Bench decision in Land Acquisition and Rehabilitation Officer v. Kanbi Ravtaji Lumbaji and the allied decision in First Appeal No.4879 of 2018, which treated valuation committee reports as a valid basis for compensation and moderated deductions depending on the location, development and potentiality of the acquired land.

It also relied on Lal Chand v. Union of India, (2009) 15 SCC 769, recognising valuation by a statutorily appointed expert committee as relevant expert evidence, and on State of Gujarat v. Amaji Mohanji Thakor.

Under Section 28, interest is payable at 9% for the first year and 15% thereafter.

The Court found that the valuation committee’s report dated 20 May 2004 was reliable expert evidence and that the State had produced no substantive evidence capable of dislodging it; the State’s material consisted substantially of the acquisition award, village map and revenue extracts.

The acquired land at Gantha was within approximately one kilometre of Lakhani, where the comparable valuation had been made for the same public purpose, and the Section 4 notifications were issued contemporaneously.

Although the Reference Court correctly used the Rs.570 rate, its deduction was excessive. Considering the character of the acquired land, its proximity to Lakhani and the applicable precedent, the Court fixed a 25% deduction, producing a value of Rs.427.50 per sq. metre.

After deducting the Rs.5.90 per sq. metre already awarded by the Special Land Acquisition Officer, the net compensation was fixed at Rs.421.60 per sq. metre, resulting in an additional compensation of Rs.114 per sq. metre.

The Court further held that the Reference Court had erred in limiting interest to 12%, since Section 28 mandated 9% for the first year and 15% thereafter.

The landowners’ Cross-Objections were allowed in part.

The compensation was recalculated at Rs.421.60 per sq. metre after applying a 25% deduction to the Rs.570 valuation and deducting the original award of Rs.5.90 per sq. metre.

The landowners were granted additional compensation of Rs.114 per sq. metre, together with statutory benefits and interest at 9% for the first year and 15% thereafter under Section 28.

The State was directed to deposit the differential amount within 16 weeks, after which the Reference Court was to disburse the amount to the claimants following due verification.