Land Acquisition| Can market value be determined retrospectively based on the market value of land acquired two years later? SC answers

Supreme Court: In a case where the Court was posed with the question as to whether determination of market value subsequent to the notification would be relevant to determine the market value of the land acquired more than two years earlier, the bench of Hemant Gupta* and V. Ramasubramanian, JJ has held that the same was not permissible.

In the present case, the notification dated 26.10.1990 was published intending to acquire 32 acres 6 kanal and 3 marlas of land in Village Sohana and 90 acres 7 kanal and 18 marlas of land in Village Lakhnaur. The said notification was followed by a notification dated 6.11.1991 issued under Section 6 of the Land Acquisition Act, 1894. The Land Acquisition Collector awarded compensation of Rs.1,75,000/- per acre. Aggrieved by the market value determined by the Land Acquisition Collector, the land owners sought reference under Section 18 of the Act. The Reference Court awarded compensation of Rs.4 lakhs per acre apart from the compensation for super-structures. The said award of the amount of compensation was based upon a judgment dated 11.10.2002 by the Reference Court pertaining to the same notification in respect of land situated in Village Lakhnaur.

It is important to note that the land situated at Village Sohana was also acquired vide notification dated 11.11.1993. The Reference Court awarded Rs.6,96,000/- per acre. However, the High Court has awarded compensation @ Rs.8 lakhs per acre. It was hence argued before the Supreme Court that suitable deduction should be made from such determination of the market value of the land acquired vide notification dated 26.10.1990.

The Court, however, noticed that, in the case at hand, when the later notification is issued, the development activities had already been taken place in view of the earlier two notifications. Therefore, it was not the percentage of increase in the market value but increase due to the development which has taken place on account of earlier notifications.

The Court, hence, held that the 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.

[Bhag Singh v. Union of India, 2022 SCC OnLine SC 553, decided on 05.05.2022]

*Judgment by: Justice Hemant Gupta


For Land Owners: Senior Advocate Rameshwar Singh Malik

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