Karnataka HC Sets Aside Landowners’ Compensation Hikes Based On Another Taluk’s 19-Year-Later Award, After Appeals Filed Up To 24 Years Late

In brief

The question

1. Whether the First Appellate Court could rely on a later award concerning lands in another taluk, without establishing that the lands were comparable, and apply reverse de-escalation to determine market value.

The court held

The High Court allowed the appeals, set aside the First Appellate Court’s judgments and awards in LACA Nos. 191, 192, 193, 221 and 348, and dismissed those appeals on the merits and on the ground of delay.

It also directed

The substantial questions of law were answered accordingly; there was no order as to costs.

01Facts

The private respondents’ lands were acquired under Section 4(1) notifications dated 11 September 1980 and 2 May 1988.

p. 12

The Reference Court enhanced compensation to Rs. 8,000 per acre in four matters and Rs. 5,000 per acre in the fifth.

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The claimants appealed in 2020, after delays of 8,820, 8,828, 8,820, 8,820 and 3,835 days respectively.

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The First Appellate Court condoned the delays and enhanced compensation by relying on an award concerning lands in Indankal village, Chittapur Taluk, acquired under a 1999 notification; it applied a 3% annual de-escalation to determine the earlier lands’ value.

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The Cement Corporation challenged those decisions in these connected appeals.

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02Issues

i.1. Whether the First Appellate Court could rely on a later award concerning lands in another taluk, without establishing that the lands were comparable, and apply reverse de-escalation to determine market value.

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ii.2. Whether the substantial delay in filing the claimants’ appeals was supported by sufficient cause.

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iii.3. Whether the claimants’ assertion that the Reference Court’s award remained unpaid justified enhancement by reference to an award concerning dissimilar lands.

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03Law Applied

Under Section 23 of the Land Acquisition Act, 1894, market value is determined by reference to the value of the acquired land on the relevant acquisition date.

A comparable-land award must be supported by evidence of relevant similarity; an award concerning lands acquired later cannot, without an adequate evidentiary basis, be used by applying reverse de-escalation.

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In Bhupal Singh v. State of Haryana, (2015) 5 SCC 801, the Supreme Court held that determining an earlier acquisition’s value by taking a later-acquired land’s value and reducing it annually is not a method provided by the Act; escalation may, in appropriate cases, be considered from sale deeds for adjacent and similarly situated lands.

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A long delay requires a sufficient explanation addressing the reasons that prevented timely filing; the principle that every day’s delay need not be explained does not dispense with establishing sufficient cause for an exceptionally long delay.

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The appeals were brought under Section 54(2) of the Land Acquisition Act.

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Provisions in the judgment · 3

Land Acquisition Act, 1894 Section 4Section 23Section 54

04Reasoning

The First Appellate Court did not explain how lands in Indankal village, Chittapur Taluk, were comparable to the acquired lands in Sedam village, Sedam Taluk; the record did not establish similarity in their geographical situation or other relevant features.

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The comparator award also arose from a notification issued 19 years later. Applying a 3% annual reverse deduction therefore lacked a proper basis and was contrary to the principle in Bhupal Singh.

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The delay affidavits did not explain why the appeals had not been filed within time; the stated grievances about the acquisition and compensation did not account for the delay.

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Nor could alleged non-payment of the Reference Court’s award justify enhancement by relying on a dissimilar award; recovery of any unpaid amount was a separate remedy.

p. 22