Land Acquisition Act | Market Value Assessment Should Be Avoided On Post-Notification Exemplar Sales: Himachal Pradesh High Court

The Himachal Pradesh High Court on Tuesday while hearing a series of appeals filed under Section 54 of the Land Acquisition Act observed that assessment of market value should be avoided on exemplar sale transactions that have taken place after issuance of notification under Section 4 (Publication of preliminary notification) of the Land Acquisition Act.

Justice Satyen Vaidya was hearing these appeals that had arisen from a common award passed by the Additional District Judge, Mandi, in 2011 for the acquisition of land in Village Alyana, Tehsil Sarkaghat, District Mandi, for the construction of Sarori-Rissa Road.

In this case the State Government had issued a notification under Section 4 of the Land Acquisition Act in 1992, and the Land Acquisition Collector had offered Rs. 13,166.20 as the market value for the entire land proposed to be acquired. In response, the landowners filed reference petitions under Section 18 of the Act, which were registered as Reference Petitions No. 50 to 60 of 2003. The compensation was reassessed by the Additional District Judge at the rate of Rs. 31.30 per square meter for land irrespective of its classification, and the benefit of consortium and interest under Sections 23(1)(a), 28, and 34 of the Act was also awarded.

Aggrieved, the State challenged the award by filing instant appeals.

Additional Advocate General Mohinder Zharaick contended that the impugned award deserved interference as the Reference Court had based its findings on only one exemplar sale deed dated August 26th 1993, which was for a small area and was executed after the issuance of the notification under Section 4 of the Act. Such a sale deed could not have been legally made the basis for determining the market value of the land, he argued.

Rejecting the contention that the market value could not be assessed due to the smallness of the land involved in the exemplar sale deed, the High Court stated that the Reference Court had assessed the market value by making a deduction of Rs. 33.33% from the market value of Rs. 46.94 per square meter, and had assessed the market value at Rs. 31.30 per square meter.

Deliberating on the other contention that the reference to the sale deed being later in time to the date of notification under Section 4 of the Act was impermissible, the High Court cited the judgment in General Manager, OIL and Natural Gas Corporation Ltd vs. Rameshbhai Jivanbhai Patel (2008) 14 SCC 745, wherein Supreme Court held that the assessment of market value should be avoided on the exemplar sale transactions that have taken place after the issuance of the notification under Section 4 of the Act.

Observing that the Reference Court was not right in assessing the market value of exemplar sale deed, which was executed after about eleven months from the date of issuance of notification under Section 4 of the Act, the court noted that except the exemplar sale deed, the Reference Court has not placed reliance on any other evidence for assessment of market value of the land. Thus, the impugned award, passed in Reference Petitions cannot be sustained, the court said.

In view of the said exposition of law the bench set aside the impugned awards while remanding back to the Reference Court to decide afresh.

"Since initiation of reference petitions dates back to the year 2002, it is expected from the Reference Court that the above noted reference petitions will be decided by such Court with sufficient expedition and preferably within three months from the date of receipt of this judgment", the bench concluded.

Case Title: Principal Secretary PWD Vs Mehr Chand

Citation: 2023 LiveLaw (HP) 31

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