Market Value, Can The Collector Look Beyond The 3 Parameters Provided In Clauses (a), (b) And (c) Of Section 26(1) Of The 2013 Land Acquisition Act?

‘(1) The Collector shall adopt the following criteria in assessing and determining the market value of the land, namely:—

(a) the market value, if any, specified in the Indian Stamp Act, 1899 (2 of 1899) for the registration of sale deeds or agreements to sell, as the case may be, in the area, where the land is situated; or

(b) the average sale price for similar type of land situated in the nearest village or nearest vicinity area; or

(c) consented amount of compensation as agreed upon under sub-section (2) of section 2 in case of acquisition of lands for private companies or for public private partnership projects,

whichever is higher:

……’

At first blush, it appears that S. 26(1) provides a fixed formula to be adopted by the Collector for determining market value and that the Collector cannot look beyond the 3 parameters provided in clauses (a), (b) and (c) of S. 26(1) to determine market value and cannot consider any other material, information or factors to assess the market value of the land.

Such material or information could be an expert valuer’s opinion, awards showing compensation given under previous acquisitions, documents showing prices at which the government has allotted land in the area, etc., factors such as availability of electricity, water and drainage facilities, connectivity to roads, railways, etc., proximity to residential, commercial and industrial areas and educational, cultural or medical institutions, level of the land (low lying, etc.), whether the nearby town is a developing town with prospects of development schemes, the presence or absence of building activity near the land acquired or in the neighbourhood, potentiality evidenced by recent regulatory changes permitting or increasing development in the area or modifying FSI or height restrictions for buildings, introduction of a town planning scheme in the area, inclusion of the area in city limits, the official announcement of a plan to connect the village to a major road or to set up an airport or a railway station or to set up a hospital, school, police station, business park, SEZ or port in the vicinity and so on. Many of these would have an impact on the market value of the land and would, in many cases, result in an increase in the market value of the land. In Digamber v. State of Maharashtra[1], the Supreme Court has referred to judgments which refer to the various factors that can have an impact on the market value of the land viz. industrial growth in the area, availability of electricity and water supply, access to highways and developed areas, etc. In Atma Singh v. State of Haryana[2], the Supreme Court has held that for ascertaining market value, the potentiality of the acquired land has to also be taken into consideration. Para 5 thereof is reproduced below:

‘For ascertaining the market value of the land, the potentiality of the acquired land should also be taken into consideration. Potentiality means capacity or possibility for changing or developing into state of actuality. It is well settled that market value of a property has to be determined having due regard to its existing condition with all its existing advantages and its potential possibility when led out in its most advantageous manner. The question whether a land has potential value or not, is primarily one of fact depending upon its condition, situation, user to which it is put or is reasonably capable of being put and proximity to residential, commercial or industrial areas or institutions. The existing amenities like water, electricity, possibility of their further extension, whether near about town is developing or has prospect of development have to be taken

into consideration. See Collector v. Dr. Harisingh Thakur [(1979) 1 SCC 236 : AIR 1979 SC 472] , Raghubans Narain Singh v. U.P. Govt. [AIR 1967 SC 465] and Administrator General, W.B. v. Collector Varanasi [(1988) 2 SCC 150 : AIR 1988 SC 943] . It has been held in Kausalya Devi Bogra v. Land Acquisition Officer [(1984) 2 SCC 324 : AIR 1984 SC 892] and Suresh Kumar v. Town Improvement Trust [(1989) 2 SCC 329 : AIR 1989 SC 1222] that failing to consider potential value of the acquired land is an error of principle.’

The criteria provided in (a), (b) and (c) of S. 26(1) is incapable of taking into consideration the variety of factors that can have an impact on market value. In fact, it is nearly impossible to pin down the exercise of assessing and determining the market value of land to a simple formula. If the Collector cannot consider anything other than (a), (b) and (c) of S. 26(1) to determine market value, it would mean that in many cases, he will not be able to arrive at the real market value of the land. It will mean that even if the Collector finds that the amount arrived at by following the 3 parameters is not reflective of or is much lesser than the actual prevailing market value, he would be compelled to award such lesser amount. If S. 26 is interpreted in such a manner, it would frustrate the Parliament’s intention to award to the land owner the prevailing market value of the land and would cause grave injustice to him. S. 26, therefore, requires a closer look to ascertain what it actually means.

Principles of interpretation

S. 26 requires a careful look considering the language of the very provision itself and considering the following cardinal principles of interpretation:

• To ascertain the meaning of a provision, it is necessary to look at the statute as a whole i.e. to look at other parts of the same section and other sections of the same statute – as each portion may throw light on the rest[3].
• A provision should be interpreted in a way that it is in harmony with other provisions of the statute[4].
• Place an interpretation which furthers the purpose and intent of the Act.
• Avoid placing an interpretation which results in injustice[5].

The Parliament’s intention is to give to the land owner the market value of the land

The Parliament’s intention to give to the land owner ‘market value’ for his land is evident from several provisions of the Act including the following:

a) S. 23 which casts a duty upon the Collector to enquire into the ‘value of the land at the date of the publication of the notification’,

b) The heading of S. 26: ‘Determination of market value of land by Collector’,

c) The opening words of S. 26(1): ‘The Collector shall adopt the following criteria in assessing and determining the market value of the land..’,

d) The proviso to S. 26(1): ‘Provided that the date for determination of market value shall be the date on which the notification has been issued under section 11.’,

e) Explanations 3 and 4 to S. 26(1) both use the words ‘market value’. Explanation 4 uses the phrase ‘actual prevailing market value’.

f) S. 27 opens with the words ‘The Collector having determined the market value of the land to be acquired..’.

From S. 23, from the proviso to S. 26(1) and from the words ‘actual prevailing market value’ used in Explanation 4, it is evident that what the Parliament means is the actual prevailing market value as on the date of the S. 11 notification.

In Ambya Kalya Mhatre v. State of Maharashtra[6], the Supreme Court has, while dealing with the Land Acquisition Act, 1894, explained the importance of giving to the landowner actual market value by describing his plight when he is not given actual market value:

‘The Collector making the offer of compensation on behalf of the State is expected to be fair and reasonable. He is required to offer compensation based on the market value. Unfortunately, Collectors invariably offer an amount far less than the real market value, by erring on the safer side, thereby driving the landowner first to seek a reference and prove the market value before the Reference Court and then approach the High Court and many a time this Court, if he does not get adequate compensation. In most land acquisitions, the land acquired is the only source of livelihood of the landowner. If the compensation as offered by the Collector is very low, he cannot buy any alternative land. By the time he fights and gets the full market value, most of the amount would have been spent in litigation and living expenses and the price of lands would have appreciated enormously, making it impossible to buy an alternative land. As a result, the landowner seldom has a chance of acquiring a similar land or an equal area of similar land…’

Both the name and the Preamble of the Act emphasise that one of the main objects of the Act is to provide fair compensation to the land owner. In fact, the name of the 2013 Act begins with the words ‘the right to fair compensation’. The Preamble also talks about providing just and fair compensation to land owners and bringing ‘an improvement in their post acquisition social and economic status’ which is unlikely to be achieved unless they are given the actual market value of the land.

Sections 21 and 23 – Right of the land owner to make representations on market value, the Collector’s duty to enquire into market value and award the same – all consistent with the intention to award market value

D-1) Section 21 – confers a substantive right on the landowner to make representations on market value.

Under S. 21(1), the Collector is to publish a public notice inter alia stating that ‘claims to compensations and rehabilitation and resettlement for all interests in such land may be made to him’. Under Section 21(2), all persons interested in the land are given the right to appear personally or through an agent or an advocate before the Collector ‘and to state the nature of their respective interests in the land and the amount and particulars of their claims to compensation for such interests...’. Therefore, the landowner has a right to make a representation on his claim for compensation. Under S. 27, compensation comprises of different amounts. The most significant one of them is market value of the land. Therefore, clearly, the land owner has a valuable right to make a representation stating his claim with respect to the market value of the land. Naturally, the land owner would also then have the right to rely on documents to substantiate his claim with respect to market value. Otherwise, his right to state his claim would be an empty right. In May George v. Tahsildar[7], the Supreme Court construed S. 9 of the Land Acquisition Act, 1894 which is similarly worded and observed: ‘Section 9 of the Act provides for an opportunity to the “person interested” to file a claim petition with documentary evidence for determining the market value of the land….’.

It is only after issuing a public notice calling upon the land owners to make their claims that the Collector does an enquiry under S. 23.

D-2) Section 23 – the source of the Collector’s power to enquire into the market value of the land and form an opinion thereon

Under S. 23, the Collector ‘shall proceed to enquire into the objections (if any) which any person interested has stated pursuant to a notice given under section 21, to the measurements made under section 20, and into the value of the land at the date of the publication of the notification, and into the respective interests of the persons claiming the compensation and rehabilitation and resettlement, shall make an award under his hand of—

(a) …;

(b) the compensation as determined under section 27 along with Rehabilitation and Resettlement Award as determined under section 31 and which in his opinion should be allowed for the land

(c)…’

From S. 21(1), S. 21(2) read with S. 23, it is clear that the Collector is required to exercise his power to ‘to enquire…into the value of the land’ after considering the claims made by the landowners with respect to compensation (pursuant to issuance of the notice under Section 21(1)). Therefore, one thing is clear from S. 21 read with S. 23: The Collector is bound to look into the representations made by the land owners with respect to compensation (which includes market value of land) and into the documents produced by the land owners to substantiate their claims. This is the first indication in the statute that the Collector can look beyond the 3 parameters provided in S. 26(1) of the Act.

Secondly, under S. 23 read with (b) thereof, the Collector is to ‘to enquire…into the value of the land’ and make an award of ‘the compensation as determined under section 27….and which in his opinion should be allowed for the land’. This is another indication that the Collector’s discretion to form his own opinion on what compensation to award has not been taken away. (It appears that the words ‘in his opinion should be allowed for the land’ are required to be read not just with the words ‘Rehabilitation and Resettlement Award as determined under section 31’ but also with the words ‘the compensation as determined under section 27’. Section 11(ii) of the Land Acquisition Act, 1894 which reads ‘the compensation which in his opinion should be allowed for the land’ also supports this view. Such an interpretation would be consistent with the Parliament’s intention to empower the Collector to ‘to enquire…into the value of the land’ and the intention to award market value to the land owner.)

Before going to S. 26, it is necessary to note that the source of the Collector’s power and duty to enquire into and determine the market value of the land is S. 23 and not S. 26. It is also necessary to note that by itself, S. 23 puts no restriction on what the Collector can look into to determine the market value of the land. S. 26 is a provision which regulates the power conferred by S. 23 on the Collector (or, one could contend, curtails it).

Section 26 – a closer look

S. 3(u) defines ‘market value’ to mean ‘the value of land determined in accordance with section 26’. Therefore, what S. 26 actually means is crucial.

E-1) The opening words of S. 26(1)

S. 26(1) begins with the words ‘The Collector shall adopt the following criteria in assessing and determining the market value of the land, namely:-’ and thereafter refers to (a), (b) and (c).

The opening words of S. 26(1) indicate 3 things:

1. What is provided thereunder is ‘criteria’.
2. The Collector must adopt the criteria provided (‘The Collector shall adopt…)
3. The criteria is be adopted ‘in assessing and determining’ the market value of the land.

E-2) What is the meaning of ‘criteria’?

As per https://dictionary.cambridge.org/dictionary/english, the meaning of ‘criterion’ (which is the singular of criteria) is: ‘a standard by which you judge, decide about, or deal with something:’. Aiyer’s Law Lexicon defines criterion to mean ‘means of judging; standard of judgment’. Therefore, criterion is a means used for judging something else. Criterion is not that thing itself.

E-3) The significance of the words ‘in assessing and determining the market value’ – denote a larger exercise

S. 26(1) says that the ‘The Collector shall adopt the following criteria in assessing and determining the market value of the land, namely:-‘.

The language suggests that ‘assessing and determining the market value of the land’ is a larger exercise and that adoption of the criterion prescribed by S. 26(1) is in nature of a smaller exercise within that larger exercise. In other words, adoption of criterion is not the only thing to be done for assessing and determining market value. There is something more to be done.

This interpretation is supported by the fact that after the words ‘The Collector shall adopt the following criteria in’, the Parliament has used the words ‘assessing and determining’ and not just the word ‘determining’. The words ‘assessing’ and ‘determining’ bear different meanings, particularly considering the principle that when the Parliament uses two different words in the same statute in relation to the same subject matter, the words would normally bear different meanings[8]. As per https://www.collinsdictionary.com/dictionary/english/, ‘assess’ means ‘to judge the worth, importance, etc, of; evaluate’ whereas ‘determine’ means ‘to ascertain or conclude, esp after observation or consideration’. Therefore, in S. 26(1), the word ‘assessing’ would mean the process of evaluating and judging undertaken to arrive at the final figure of market value whereas ‘determining’ would mean fixing the final figure of market value (after following the process of assessing). The use of the word ‘in assessing’ after the words ‘The Collector shall adopt the following criteria’ indicates that the criteria is to adopted to aid the process of assessing or as a part of the process of assessing and not merely for ‘determining’ i.e. fixing the final figure. Therefore, the highest figure arrived at under S. 26(1) read with (a), (b) and (c) is not the market value itself but only a criterion to be adopted ‘in assessing and determining the market value’. It is in the nature of a standard or base price to be considered by the Collector while ‘assessing and determining’ market value.

Under S. 26(1), the Collector is duty bound to follow the criteria provided in (a), (b) and (c) and find out the highest price from the three. However, the said exercise is to be followed only for the purpose of arriving at a base figure which would be considered in ‘assessing and determining the market value of the land’ and not for the purpose of directly arriving at the market value. Adopting the criteria prescribed under S. 26(1) is a step in performing the larger exercise of ‘assessing and determining the market value’. However, it is not meant to take away the Collector’s power and duty to make a complete enquiry into market value by taking into consideration a variety of factors and form his own opinion as to what is the market value as contemplated under S. 23.

E-4) The 3 parameters provided under S. 26(1) – hardly require the Collector to form any opinion, leave virtually no scope for the landowner to make representations on market value and make it impossible for the Collector to take into consideration a variety of factors which impact market value

Under S. 26(1), the Collector is to pick the highest of the 3 figures arrived at under (a), (b) and (c).

• S. 26(1)(a) is the value specified in the statement of rates published under the stamp law. S. 26(1)(c) is the consented amount of compensation. The figures to be taken under (a) and (c) are to be picked from other documents (statement of rates and consent award). They hardly require any application of mind or formation of opinion by the Collector.

• Under S. 26(1)(b) read with Explanations 1, 2 and 4, the Collector is to find out the average sale price for similar type of land situated in the nearest village or nearest vicinity area by picking the highest 50% of the registered sale deeds and agreements to sell of the last 3 years in terms of sale price. This involves ministerial jobs of procuring the documents from the sub-registrar’s office, picking 50% amongst them which have the highest prices and making an average thereof. This does not involve application of mind or formation of opinion by the Collector except to the very limited extent of a) identifying similar type of land in a nearby village/vicinity area and b) the exercise contemplated under Explanation 4 (discussed later).

• If S. 26 is interpreted to be meaning that the Collector is to do nothing other than picking the highest price from amongst the prices under (a), (b) and (c), it will have the following consequences-:

• It will effectively mean that the Collector is not required to form any opinion on what is the market value but is to just apply a simple formula. Such an interpretation would not be consistent with the wide power and discretion given to the Collector under S. 23 (‘to enquire…into the value of the land’ and make an award of ‘the compensation as determined under section 27….and which in his opinion should be allowed for the land’) or with the words ‘..in assessing and determining the market value’ appearing in S. 26(1) (words which presuppose application of mind and formation of opinion).

• It will render the land owner’s valuable right under Ss. 21(1), (2) and 23 to make a representation on the market value of the land and to have it considered by the Collector nugatory and run contrary to the object expressed in the Preamble: ‘An Act to ensure…a humane, participative, informed and transparent process for land acquisition,..’ Because if the Collector’s enquiry is going to be restricted to only (a), (b) and (c) of S. 26(1), then he would not be able to take into consideration anything stated in the landowners’ representations unless it relates to (a), (b) or (c). And on (a), (b) and (c), there is hardly any scope for making representations because they are simple ministerial matters like procuring figures from other documents and making arithmetical calculations. Therefore, if so interpreted, the landowners will not be able to make any real or substantial representation to show the market value of the land. This is despite the fact that Ss. 21 and 23 do not place any restriction on the right of the landowners to make representations on market value.

• The Collector will not be able to take into consideration the various other factors which will have an impact on market value like the ones enumerated under the second para of topic A of this article and will never be able to arrive at the real market value.

S. 26(1) ought not to be interpreted in a way that it results in the aforesaid consequences.

E-5) Explanation 3 – an indicator that the Collector is not constrained to (a), (b) and (c) of S. 26(1)

Under S. 26(1)(c), the Collector is to consider the consented amount of compensation as agreed upon under S. 2(2) in case of acquisitions of lands for private companies or for public private partnership projects. Except for S. 26(1)(c) which is restricted to consented amounts paid for specified projects, neither of the three categories i.e. (a), (b) or (c) of S. 26(1) allow the Collector to take into consideration price paid as compensation for land acquired on an earlier occasion in the district. Now, if the provision is interpreted to be meaning that the Collector cannot look at anything beyond (a), (b) and (c) for determining the market value, he naturally cannot take into consideration price paid as compensation for land acquired under the Act on an earlier occasion in the district. If that is so, there was no reason for the Parliament to insert Explanation 3 and specifically prohibit the Collector from considering price paid for previous acquisitions under the same Act for determining market value. Explanation 3 is reproduced hereinbelow:

While determining the market value under this section and the average sale price referred to in Explanation 1 or Explanation 2, any price paid as compensation for land acquired under the provisions of this Act on an earlier occasion in the district shall not be taken into consideration.

The fact that the Parliament has inserted Explanation 3 means that but for Explanation 3, the Collector could have taken into consideration price paid as compensation for previous acquisitions made under the same Act. The insertion of Explanation 3 is yet another indication that the Collector has the power to look at material beyond (a), (b) and (c) of S. 26(1) for assessing and determining market value (unless specifically prohibited from doing so as is done by Explanation 3). Also, it is pertinent to note that Explanation 3 does not prohibit the Collector from considering compensation paid for land acquired under other Acts like the National Highways Act, 1956, the Railways Act, 1989, the Land Acquisition (Mines) Act, 1885, etc.

E-6) Explanation 4 – a major indicator that the Collector can make an independent inquiry to find out the actual prevailing market value

Explanation 4 to S. 26(1) reads as follows:

While determining the market value under this section and the average sale price referred to in Explanation 1 or Explanation 2, any price paid, which in the opinion of the Collector is not indicative of actual prevailing market value may be discounted for the purposes of calculating market value.

Explanation 4 is an indicator that the Parliament’s intention is that the land owner must get the actual prevailing market value of the land. Explanation 4 relates to S. 26(1)(b) and empowers the Collector to discard any price paid, ‘which in the opinion of the Collector is not indicative of actual prevailing market value’. However, the Collector can exercise this power of discarding undervalued or overvalued transactions only if he has some broad idea of the ‘actual prevailing market value’ of the land. Explanation 4, therefore, presupposes that the Collector is broadly aware of the actual prevailing market value of the land. That is possible only if the Collector has the power to make an enquiry to find out the actual prevailing market value of the land. Therefore, Explanation 4 to S. 26(1) is a very major indicator that the Collector is empowered to make an assessment of the ‘actual prevailing market value’ independently i.e. dehors of (a), (b) and (c).

Now the question that arises is that if the Collector has enquired into and found out or acquired a broad idea about the actual prevailing market value, is he allowed to use such knowledge only for the very limited purpose of Explanation 4 i.e. for discarding undervalued documents? An interpretation that the Collector can enquire into and find out the actual prevailing market value and yet cannot award it would defeat the very intention of the Parliament to empower the Collector to enquire into the market value. On the other hand, an interpretation that the Collector not only has the power to enquire into and ascertain the actual prevailing market value but also the power to award it would be consistent with the Parliament’s intention to give to the land owner the market value of the land. This power of the Collector to enquire into and determine the actual prevailing market value flows particularly from:

• S. 23 whereunder the Collector is ‘to enquire…into the value of the land’ and make an award of ‘the compensation as determined under section 27….and which in his opinion should be allowed for the land’.

• The words ‘in assessing and determining the market value of the land’ appearing in S. 26(1) which encompass the larger exercise of ascertaining and determining the market value (as against the smaller exercise contemplated under (a), (b) and (c) of S. 26(1)).

E-7) S. 26 (3)– perhaps a sign that what is arrived at by adopting the criteria provided under S. 26(1) (a), (b) and (c) is not ‘market value’ but only a floor price or minimum standard

S. 26 (3) provides that in a situation where the criteria provided in S. 26(1) cannot be resorted to due to non-availability of registered sale deeds, etc., ‘the State Government concerned shall specify the floor price or minimum price per unit area of the said land based on the price calculated in the manner specified in sub-section (1) in respect of similar types of land situated in the immediate adjoining areas:’

This would mean that where the criteria provided under S. 26(1) cannot be resorted to, the Collector would have to instead take into consideration the price specified by the State Government. The following question then arises: In such a situation, would the price specified by the State Government straight become the ‘market value’? It is submitted that when the power to assess and determine market value is conferred upon the Collector, the price specified by the State Government can only be a criterion to be considered by the Collector while performing the larger exercise of ‘assessing and determining the market value’. It can never automatically become the market value. This view is further strengthened by the fact that what the State specifies under S. 26(3) is only ‘the floor price or minimum price per unit’ and not the market value. If this is so, it means that the Collector’s power to independently determine market value must lie somewhere. As stated above, it lies in S. 23 and in the opening words of S. 26(1) (‘in assessing and determining the market value’).

There is something more to S. 26(3) which demands attention. Under S. 26(3), what the State specifies is a ‘floor price or minimum price’ (of lands where documents are not available). This is done on the basis of ‘the price’ calculated under S. 26(1) read with (a), (b) and (c) in respect of similar lands in adjoining areas. This provision is perhaps an indication that the price arrived at under S. 26(1) read with (a), (b) and (c) is only in the nature of a ‘floor price’ or ‘minimum price’ to be considered by the Collector while assessing and determining market value and is not ‘market value’ under S. 26(1).

E-8) Judgements

Single Judges of the Kerala High Court[9] and the Madras High Court[10] have held that the Collector has to fix the highest value from amongst the 3 specified categories as the market value. In Jigarbhai Patel v. State of Gujarat[11] decided by a Division Bench of the Gujarat High Court, one of the issues raised by the landowners was that the State had not revised the Statement of Rates issued under the Stamp Act since many years and ought to have done so (so that the rate taken into consideration under S. 26(1)(a) is the updated one). The Division Bench of the Gujarat High Court observed that that is not necessary to be done as market value can be determined on the basis of the criteria that is available out of the three criteria provided under S. 26(1). The court also observed that compensation paid under previous acquisitions made under the National Highways Act or the Railways Act or by other government authorities can be taken into consideration. However, in the said judgments, there is no discussion on whether the Collector can independently assess and determine the market value and whether he can consider additional material or on the issues discussed in this article.

Section 26 – Interpretation consistent with the intention of the Parliament and with the other provisions of the Act

For the reasons given above, S. 26 ought not to be interpreted to mean that the Collector is chained to (a), (b) and (c) of S. 26(1) and that he cannot look beyond the same for the purpose of assessing and determining market value. Such an interpretation is not supported by the opening words of S. 26(1) (‘The Collector shall adopt the following criteria in assessing and determining the market value of the land, namely:—’). Had the Parliament intended that the highest of the 3 figures from (a), (b) and (c) must be taken as the market value of the land, the Parliament could have easily said so by using the following language instead in S. 26(1):

The Collector shall fix the highest figure obtained from (a), (b) and (c) below as the market value of the land:-

If that was the intention, the Parliament would also not have used the wide language it has used in S. 23 while conferring powers on the Collector (or would have atleast inserted the words ‘subject to Section 26(1)’ or the like in S. 23). An interpretation that the Collector cannot look (a), (b) and (c) of S. 26(1) for the purpose of assessing and determining market value will be inconsistent with S. 21, S. 23 and with several parts of S. 26 and will:

• Frustrate the Parliament’s intention to award the market value of the land to the landowner,
• Frustrate the substantive right conferred by Ss. 21(1) and (2) on the land owner to make a representation to the Collector on market value,
• Frustrate the power and duty conferred on the Collector under S. 23 to enquire into the market value of the land, to take into consideration representations on market value, to form an opinion on the market value of the land and award compensation which in his opinion ought to be awarded,
• Make Explanations 3 and 4 to S. 26(1) otiose,
• Be inconsistent with the language of S. 26(1),
• Will mean that a variety of factors which would have an impact on the market value of the land will be left out of consideration,
• Result in grave injustice to the landowner in cases where the highest figure from amongst the specified categories is not reflective of or is much lesser than the market value of the land.

On the other hand, an interpretation whereunder the Collector is empowered to make an enquiry to assess and determine the market value of the land independent of (a), (b) and (c) of S. 26(1) and can consider other material, information and factors for this purpose:

• Will do no violence to the language of S. 26(1) inasmuch as S. 26(1) only talks about adopting the specified ‘criteria’ in (doing the larger exercise of) ‘assessing and determining the market value of the land’ and does not take away the Collector’s power to make an independent assessment of the market value by relying on other material. Rather, the words ‘in assessing and determining the market value’ appearing in S. 26(1) permit the same.

• will be in harmony with Ss. 21, 23 and with the other parts of S. 26,

• will neither frustrate the landowner’s right under S. 21 to make a representation on market value nor frustrate the powers conferred on the Collector under S. 23 to ascertain and award market value.

• will not result in any injustice to the landowner and will be consistent with the Parliament’s intention to award market value to him,

• Will allow a variety of factors which would have an impact on the market value of the land to be considered while assessing and determining market value.

At this stage, it is necessary to refer to S. 3(u) which defines ‘market value’ to mean ‘the value of land determined in accordance with section 26’ and the First Schedule which provides that market value is ‘to be determined as provided under section 26’. Both these provisions could be relied on to contend that under the Act, ‘market value’ is only that which is ‘determined in accordance with section 26’. The answer to that is this: The words ‘in assessing and determining the market value’ appearing in S. 26(1) are wide enough to permit the Collector to make an independent assessment by considering other material, information and factors (in addition to considering the highest figure as per the specified criteria). Therefore, where the Collector has, in addition to taking into consideration the highest price from amongst the specified criteria, also taken into consideration additional material for assessing and determining the market value of the land, the market value so arrived at would be market value ‘determined in accordance with Section 26’. Such an exercise would be consistent with the definition of ‘market value’ provided in S. 3(u) and with the First Schedule which provides that market value is ‘to be determined as provided under section 26’.

The Collector must take the highest figure from amongst the 3 parameters provided in clauses (a), (b) and (c) of S. 26(1) of the Act into consideration while assessing and determining the market value of the land. However, the Collector is not bound to fix the said figure as the market value of the land. The Collector is free to make an independent enquiry and consider other material, information and factors for the purpose of assessing and determining the market value of the land.

The author is an advocate practising at the Gujarat High Court. Views are personal.