J. Venkatesan

"Amenities available would also be the relevant factors"

  • "Go by the market value on the date of publication of the acquisition notice"
  • "Consider the future prospect of the development of the land in question"

    NEW DELHI: The Supreme Court has held that the purpose for which a land is acquired must be taken into consideration in fixing the market value for awarding compensation to land owners.

    Dealing with award of compensation for lands acquired, a Bench of Justice A.R. Lakshmanan and Justice Altamas Kabir said that the purpose was a relevant factor to be taken into consideration for fixing compensation. The amenities available, viz., well laid out roads, drainage, water, electricity, telephone and the location of the land near the market, bank, school, petrol pump, etc would also be the relevant factors, the Bench said.

    Writing the judgment Justice Lakshmanan said the future prospect of the development of the land in question should also be taken note of by the authorities. The injury that the land owner was likely to sustain due to loss of his future earnings from the said land; and the damage suffered by him due to diminution of the profits of the land between the time of publication of the acquisition notice and the time of taking possession should be the other considerations for fixing compensation, the Bench said.

    In the instant case lands were acquired in Goa for development of Konkan Railways broad gauge line. The District Judge awarded a compensation of Rs. 192 per sq. metre but on appeal by the authorities, the Goa Bench of the Bombay High Court reduced the compensation amount to Rs. 38 per sqm. In another survey number the amount of compensation was reduced from Rs. 108 per sqm to Rs. 27 per sqm. Nelson Fernandes and others filed the present appeals against the impugned judgments.

    Disposing of the appeals, the Bench said that in determining the amount of compensation to be awarded the Land Acquisition Officer would have to be guided by the market value of the land on the date of publication of the acquisition notice under Section 4 of the Land Acquisition Act. The Bench said that the market value of the land would mean the price of the land, which a willing seller was reasonably expected to get in the open market from a willing purchaser.

    The Bench said, "the compensation awarded by the High Court had no basis whatsoever and was not supported by cogent reasons and that it did not consider the future prospect of the development of the land in question.

    The High Court has miserably erred. The Bench fixed the rate of compensation at Rs. 250 per sqm in both the appeals.