Land Acquisition| Proximity To Developed Area Relevant Factor While Determining Market Value For Purpose Of Compensation: Supreme Court

The Supreme Court of India has observed that the market value of a land must be determined keeping in view the various factors including proximity to the developed area and the road etc. and it is not the nature of land alone which is determinative of the market value of the land.

A Bench comprising Justice Hemant Gupta and Justice V Ramasubramanian has delivered its order in an appeal filed by some landowners against the Bombay High Court's order whereby the compensation for the land acquired was assessed as Rs. 56,500/- per hectare.

The High Court through the impugned order set aside the Reference Court's order enhancing the amount of compensation to Rs.1,95,853/- per hectare.

The Supreme Court has held that the High Court has erred in law in setting aside the determination of market value of the land by the Reference Court.

The Bench noted that the evidence produced by the landowners is that the acquired land is close to Educational Institutions, Banks, Tahsil Office etc. whereas there is no evidence that the irrigated agricultural land has the potential of use for either residential or commercial purposes.

According to the Court, as per landowners' evidence, the land acquired is 1⁄2 km from the road and is close to developed residential or commercial or institutional area. On the other hand, there is no evidence that the two sale exemplars (Exhibit 31 and 32) are in any way comparable to the land acquired.

The Bench has held that the High Court has erred in law in holding that since the land of the two sale exemplars (Exhibit 31 and 32) is of irrigated agricultural land whereas the land acquired is unirrigated, is not the reasonable yardstick to determine market value of the land as the land in question is close to already developed area.

In the present case, the land admeasuring 2.42 hectares of land was intended to be acquired in pursuance of the notification under Section 4 of the Land Acquisition Act for the purpose of resettlement of affected person from Lower Wardha submergence-project.

The Special Land Acquisition Officer granted compensation at the rate of Rs.56,500/- on 31.07.2000. The landowners aggrieved against the inadequate determination of the market value sought references under Section 18 of the Act.

Before the Reference Court, five sale exemplars were relied upon, out of which two were excluded on the ground that such sale exemplars were after the date of publication of notification under Section 4 of the Act. However three sale exemplars were considered (Exh. 31, Exh.32 and Exh.33). The Reference Court found that per hectare market value would be Rs.1,95,853.55.

Case Title: Madhukar S/O Govindrao Kamble & Ors vs Vidarbha Irrigation Development Corporation & Ors.

Citation: 2022 LiveLaw (SC) 112

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