Section 26 requires compensation based on qualifying comparable sales from the nearest village, overriding inadequate circle rates.

The appellants were landholders from Mouza Gandke, District Ramgarh, whose lands were acquired for widening and strengthening the Lalki Ghati–Marang Marcha section of N.H. 23 pursuant to Notification No. 407 dated 01.07.2019 under Section 11 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (“2013 Act”).

The District Land Acquisition Officer fixed compensation at the circle rate of ₹3,740 per decimal.

On references under Section 64 of the 2013 Act, the Principal District Judge-cum-L.A.R.R.A., Hazaribag enhanced the compensation uniformly to ₹11,000 per decimal.

The landholders filed 32 first appeals under Section 74, claiming compensation at ₹1,50,000 per decimal, relying on sale deeds from the adjoining villages of Kankebar and Murramkala, as no sale transactions from Gandke were available.

The State opposed enhancement, contending that the acquired lands were classified as “Tanr” land and that the exemplar sale deeds related to residential lands in other villages.

Whether the references under Section 64 of the 2013 Act were maintainable despite the State’s objection that the claimants had accepted compensation without protest?

Whether the compensation determined by the Principal District Judge-cum-L.A.R.R.A. at ₹11,000 per decimal conformed to the statutory method prescribed under Section 26 of the 2013 Act?

Whether the sale deeds from Kankebar and Murramkala could be relied upon for determining the market value of the lands acquired in Gandke?

What was the appropriate market value of the acquired lands, having regard to the applicable three-year period, similarity and proximity of the exemplar lands, and the locational advantages of the acquired properties?

The Court applied Sections 11, 26, 37(2), 64 and 74 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.

Section 26 requires the market value to be determined by considering: (i) the stamp-value or circle rate applicable to the area; (ii) the average sale price for similar land situated in the nearest village or nearest vicinity; or (iii) the consented compensation in applicable cases, with the higher applicable value to be adopted.

Under Explanation 1 to Section 26, the average sale price is to be determined from registered sale deeds or agreements relating to similar land in the nearby village or vicinity during the three years immediately preceding the Section 11 notification; under Explanation 2, half of the sale deeds reflecting the highest sale prices are to be considered.

The Court further applied the principle that, where no sale deed exists for the acquired village, the Collector must examine comparable transactions in the nearest adjoining village rather than mechanically adopting the agricultural circle rate.

A claimant’s timely objection to the offered compensation preserves the right to seek a reference under Section 64.

The High Court held that the State’s maintainability objection was untenable because the reference orders and record showed that the claimants had objected to the compensation upon receiving notice under Section 37(2) and had not voluntarily accepted the awarded amount.

On valuation, the Court found the Reference Court’s approach legally defective: it rejected the sale deeds principally because they were not from Gandke and then enhanced the circle rate to ₹11,000 per decimal without a reasoned statutory computation.

The High Court accepted that Gandke and Kankebar shared a common boundary and that Kankebar was the nearest village proved on the record; however, the appellants failed to establish that Murramkala was adjoining or equally proximate to Gandke. Consequently, the Murramkala sale deeds were excluded.

Of the Kankebar transactions, the sale deed marked Exhibit 1/1, dated 14.07.2017, was the only transaction satisfying both requirements: it concerned the nearest proved village and fell within the statutory three-year period from 01.07.2016 to 30.06.2019 preceding the Section 11 notification.

Its rate was ₹99,300 per decimal.

Although the exemplar land was residential and did not have the same road frontage, the acquired lands had substantial locational advantages, including adjacency to the national highway, roads on two or three sides in several cases, and proximity to Ramgarh town and developing educational and urban facilities.

The Court therefore adopted ₹99,300 per decimal as the appropriate uniform market value, while retaining the statutory benefits granted by the Reference Court.

It rejected the objection that the Section 64 references were not maintainable and held that the claimants had properly protested the compensation offered.

It further held that the Reference Court’s determination of ₹11,000 per decimal was not in conformity with Section 26 of the 2013 Act because it failed to properly evaluate the relevant comparable sale transaction and adopted an arbitrary figure.

The compensation was accordingly enhanced from ₹11,000 to ₹99,300 per decimal for the acquired lands.

The appellants were also held entitled to all statutory benefits under the 2013 Act, as granted in the impugned judgment and awards.