Lands Acquired In Neighbouring Villages Can Be Used To Determine Compensation Only When Reasonably Proximate – SC

A notification was issued to acquire land from two villages. However, the Appellants were aggrieved by the market value determined by the Land Acquisition Collector and sought reference. The Reference Court increased the quantum of compensation for the land. The order was upheld by the higher courts. Aggrieved, the Appellants approached the Supreme Court.

The Counsel appearing on behalf of the Appellants contended that the Reference Court had awarded a greater price to lands situated in adjoining villages two years ago, which was affirmed by the High Court. To that end, the Counsel argued that since the current acquisition was more than two years later, the Appellants were entitled to compensation on the basis of the amount of compensation awarded by the High Court in addition to the increase in prices for the period of 2 years, since adjoining villages were a reasonable yardstick for the determination of the compensation.

The Supreme Court found that according to the Lay-out plan filed before the Court, the villages that the Appellants had mentioned were actually located more than 2 kilometres away, and therefore could not be considered as a reasonable yardstick for determining the market value.

Further, the Court also took account of the fact the Reference Court as well as the High Court had given a finding that no sale instance produced by the parties were relevant for determining the market value.

The Court found that the market value of the disputed lands was not more than the market value that was determined by the High Court.

Regarding the relevance of the determination of market value of land acquired more than two years earlier, the Court opined that "We find that though appreciation in price can be presumed, but the market value cannot be assessed by applying suitable deduction in the market value of the land acquired by a subsequent notification. When the later notification is issued, the development activities had already been taken place in view of the earlier two notifications. Therefore, it is not the percentage of increase in the market value but increase due to the development which has taken place on account of earlier notifications. Therefore, market value of the land cannot be based upon the land acquired vide notification dated 11.11.1993 i.e., more than two years later of the notification in question and when there were other notifications intervening on 26.10.1990 and 25.7.1991."

Dismissing the appeals, the Court opined that "The Reference Court has awarded compensation of Rs.4 lakhs per acre in respect of land situated in Village Lakhnaur, acquired vide the same notification. Such determination has not been appealed against either by the land owners or by the State. The High Court has rightly relied upon such determination to assess the market value of the land at Rs.4 lakhs per acre. In view of the said fact, we do not find any error in the orders passed by the High Court which may warrant interference in the present appeals."