P&H HC Raises Hisar Landowners’ Compensation, Valuing Acquired Land At ₹389 Per Sq Yard After Accepting 2004 Sale Deed

In brief

The question

Whether the Reference Court was justified in rejecting Ex.P-9 as a basis for assessing the market value of the acquired land

The court held

The Court allowed the landowners’ appeals and dismissed the State’s appeals, fixing the market value of the acquired land at ₹389 per square yard.

It also directed

The landowners were entitled to the statutory benefits granted by the Reference Court on the enhanced compensation.

Any delay in filing the appeals was condoned, but no interest was payable for the delayed period.

01Facts

The State acquired 11.62 acres in Villages Dabra and Hisar for a storm-water discharge channel, following notifications under Sections 4 and 6 of the Land Acquisition Act, 1894, dated 21 June 2006 and 20 June 2007 respectively.

p. 3 · ¶ 3–6

The Collector awarded ₹8,00,000 per acre for Dabra and ₹9,00,000 per acre for Hisar; the Reference Court enhanced compensation to ₹12,48,720 per acre.

p. 3 · ¶ 3–6

In connected appeals under Section 54, landowners sought further enhancement and the State challenged the Reference Court’s award. The principal dispute concerned the Reference Court’s rejection of sale deed dated 1 December 2004 (Ex.P-9) as a valuation exemplar.

pp. 4–5 · ¶ 7–8, 12

02Issues

i.Whether the Reference Court was justified in rejecting Ex.P-9 as a basis for assessing the market value of the acquired land

pp. 4–6 · ¶ 7–8, 12–13

ii.Whether the market value derived from Ex.P-9 should be adjusted for the time between the sale and the Section 4 notification, and for the extent to which the acquired land was used

p. 6 · ¶ 13

03Law Applied

Section 54 of the Land Acquisition Act, 1894 provides for appeals from awards in land-acquisition references; Sections 4 and 6 govern the acquisition notifications, and Section 18 provides for reference of compensation disputes to the court.

pp. 3–4 · ¶ 1, 3–5

Market value may be assessed by reference to comparable sale transactions, with an appropriate escalation for the time between the exemplar sale and the Section 4 notification.

p. 6 · ¶ 13

The Court invoked the doctrine of escalation attributed to the Supreme Court, applying a 12% increase for the relevant period. The judgment does not identify a specific Supreme Court precedent for that doctrine.

p. 6 · ¶ 13

Provisions in the judgment · 1 · Linked ones open on LawLens

Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 Section 51

04Reasoning

The Court held that the Reference Court’s reasons for rejecting Ex.P-9 were insufficient.

pp. 5–6 · ¶ 13

The sale preceded the Section 4 notification by about 18 months, so it was not a transaction made in anticipation of the acquisition; further, the purchaser’s use of acquisition compensation to fund the purchase did not establish that the recorded consideration was sham, particularly as the seller remained liable for capital-gains tax.

pp. 5–6 · ¶ 13

Applying 12% escalation, the Court calculated the exemplar rate at ₹778 per square yard. It then applied the 50% approach used by the Reference Court, noting that only part of the acquired frontage was used for the channel and that the remaining land continued to be used by the landowners, including for parking and other purposes. This yielded a market value of ₹389 per square yard.

p. 6 · ¶ 13