Railway land acquisitions attract the Central Government’s rural multiplier of 2.0 under the LARR Act.

The Railways filed an appeal under Section 74 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (“LARR Act”) against the Reference Court’s award dated 21 March 2024 in MJC No. 17 of 2022.

The Collector had awarded compensation of ₹2,43,000 for the acquired land. The Reference Court enhanced the principal compensation to ₹2,91,600 by granting a 20% increase because the land abutted an “Other District Road”, namely, the main road approaching Village Jawar.

It also applied a multiplication factor of 2.00 to the land compensation. The parties accepted that only the land had been acquired and that no assets standing on or attached to the land had been acquired.

1. Whether the Reference Court was justified in enhancing the principal compensation by 20% on the ground that the acquired land was situated on an “Other District Road” or main road.

2. Whether the Central Government’s multiplication factor of 2.00 was applicable to land acquired for a Railway project, notwithstanding that the acquisition proceedings were undertaken by the State authorities.

3. Whether the multiplication factor could be applied where only the land, and no assets attached to the land, had been acquired.

The Court applied Sections 26(1) and 26(2) of the LARR Act, under which the market value of land is determined by prescribed statutory criteria and multiplied by the factor specified in the First Schedule.

Section 3(e)(v) provides that, for acquisition of land for the purpose of the Union, the Central Government is the appropriate Government; accordingly, the Central Government’s notification dated 9 February 2016 prescribing a factor of 2.00 for rural areas applies to acquisitions for Central Government projects, including Railways.

The Court relied on Deputy Chief Engineer (Construction) v. Sajruddin Ali and Others, F.A. No. 1373 of 2023, and the Division Bench ruling in Badrilal Dhakad and Others v. Union of India and Others, 2022 SCC OnLine MP 280, which held that the Central Government multiplier applies where land is acquired for a Central Government project, even if the acquisition is undertaken through State authorities.

Sections 27–30 distinguish compensation for land from valuation of assets attached to land and provide for solatium and other statutory benefits.

The Court found no legal error or perversity in the Reference Court’s grant of a 20% enhancement. The location of the land on the main approach road to Village Jawar justified treating its location as having incremental value over the circle/guideline rate.

On the multiplier issue, the Court followed the binding reasoning in Sajruddin Ali and Badrilal Dhakad: although the land was situated in Madhya Pradesh and the acquisition was processed by State authorities, the acquisition was for the Railways, a Union purpose. Therefore, Section 3(e)(v) made the Central Government the appropriate Government and the Central Government’s notified factor of 2.00 applicable.

The Court also noted the distinction between compensation for land and valuation of assets attached to land; however, in the present case only land had been acquired, so the challenged multiplier operated on the land compensation.

Finding no ground for interference, it declined admission and dismissed the Railways’ appeal.