Land Acquisition Act, 1894 – ss.4, 6, 23(1) – Assessment of Market Value for Acquired Lands – Comparable Sales Method – Deduction for Developmental Charges: Held: Compensation for acquired lands must reflect their fair market value as of the date of the Section 4 notification – The "comparable sales method" is the preferred approach, using bona fide sales exemplars of similar land – The ‘market value’ is to be assessed with reference to factors such as standing crops and trees, the severance of part of the land, damage to movable or immovable property or earnings, the need to relocate one’s residence or business, and any loss of profits from the land between the publication of the declaration under Section 6 and the Collector's assumption of possession – Sale deeds of smaller parcels can be considered but must undergo appropriate deductions to account for developmental charges – Deductions may range from 20% to 75%, depending on the nature and location of the land. [Paras 18, 19, 26, 30]
Compensation – Reliance on Best Sale Exemplars – Judicial Guidelines for Determination of Fair Value:
Held: When multiple comparable sale exemplars exist, the highest bona fide exemplar should be preferred, provided it meets legal criteria – Even when averaging values, the highest exemplar may be considered to ensure fair compensation – The Reference Court’s valuation of ₹92,62,500 per acre aligns with market potential and statutory requirements, and the High Court erred in reducing it. [Paras 28, 35, 37]
Principle of Potentiality – Strategic Location of Acquired Land – Enhancement of Compensation:
Held: The acquired land’s strategic location and potential for nonagricultural development must be factored into the compensation. Lands situated near urban areas, major highways, or industrial zones have higher potential value – Deductions should not undermine this potentiality. [Paras 32, 33, 36]
As published in the Supreme Court Reports, Supreme Court of India. Headnotes prepared by: Harshit Anand, Hony. Associate Editor (Verified by: Kanu Agrawal, Adv.). Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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