Public Administration & Law

Land Valuation under

Land Acquisition Act, 1894
Review of Sureme !ourt"s Position
Land Acquisition

!omulsor# Acquisition of land b# t$e %overnment

After followin% due rocess of law

After a#in% adequate comensation as

rescribed b# law&

Affected art# $as no otion to refuse

Princile of 'minent (omain

All ri%$ts flow from t$e soverei%n

Accordin% to some )urists * a remnant of t$e

feudal times&
+eed for Land Acquisition

Land for develomental ro)ects ,

Sacrifice required from t$e communit#

!annot be urc$ased at mar-et rates

Land for lar%e industries ,

Also imortant for develoment

.oldin% out roblem

+o %uarantee of land titles

Land Acquisition Act, 1894

(etailed rocedure acquisition of land

(efinition of /Public Purose0 1Sec& 21f33

+otification for reliminar# investi%ation 1Sec&43

Public $earin% 1Sec& 4A3

(eclaration b# %overnment t$at land is required for ublic

urose& 1sec& 53

Procedure for acquisition and ma-in% of award

6r%enc# !lause 1Sec& 173 *

Land can be acquired wit$out ma-in% an award8

and wit$out ublic $earin% under Sec& 4A

Land Acquisition Act, 1894

Reference to !ourt onl# in matters ertainin% to * 1Sec& 183 *

9easurement of land

Amount of comensation

:o w$om t$e comensation is a#able

Aortionment of comensation

9atters to be considered w$ile determinin% comensation 1Sec& ;23

:$e erson interested is comelled to c$an%e $is lace of business or

residence, t$e e<enses incidental to suc$ c$an%e&

9atters not to be considered w$ile determinin% comensation 1Sec& ;43

:$e de%ree of ur%enc# of acquisition

(isinclination of t$e erson to art wit$ t$e land

An# increase in t$e value of t$e land li-el# to accrue from t$e use to
w$ic$ it will be ut
Land Acquisition Act, 1894

Land acquisition for Private !omanies 1Part 23

Sec& 17 not to be used&

Land to be acquired onl# is needed for * 1Sec& 4=3 *

Provision of dwellin%s for wor-men

!onstruction for a !oman# w$ic$ is en%a%ed in

an# industr# or wor-s w$ic$ is for ublic
urose&
S! on >air Valuation
/ & & & t$e rice t$at a willin% urc$aser would a# to a willin%
seller for t$e roert# $avin% due re%ard to its e<istin% conditions
wit$ all its e<istin% advanta%es and its otential ossibilities w$en
laid out in most advanta%eous manner e<cludin% an# advanta%e
due to carr#in% out of t$e sc$eme for w$ic$ t$e roert# is
comulsoril# acquired&0
Atma Sin%$ v& State of ?i$ar @ 1;==83 ; S!! 458
S! on >air Valuation

.as interreted t$e issue of fair valuation wit$in t$e boundaries

rovided b# Sec& ;2 and Sec& ;4

Past transactions seen as an imortant basis

S! $as concerned itself wit$ issues suc$ as ,

:ime %a between ast transactions and date of acquisition

(istance between lots bein% comared

Potential for develoment

Soil qualit#

Ad)ustment factor to be alied for valuation of small lots

and lar%e lots, develoed lots and undeveloed lots

Valuations of construction, trees, wells, etc&

S! on >air Valuation

:$e entire ob)ective be$ind t$e deliberations of S! is

to construct a $#ot$etical scenario&

S! surrisin%l# silent on reco%niAin% t$at

re$abilitation and resettlement is an inte%ral art of
fair comensation&

Valuation strictl# interreted wit$in Sec& ;2 and Sec&

;4

+o reco%nition of t$e ri%$t of land loser to ne%otiate

* even w$en t$e acquisition is for rivate comanies

+o attemt to develo a land mar-et

S! on >air Valuation
/:$ere is an element of %uess wor- in$erent in most cases
involvin% determination of mar-et value of t$e acquired land,
but t$is in t$e ver# nature of t$in%s cannot be $eled&0
:$a-ur Bamta Prasad Sin%$ v& State of ?i$ar
19A+6CS!C=279C19753
Rationale for S!"s View

Princile of 'minent (omain

/:$e concet of "eminent domain" is an essential attribute of

ever# State& :$is concet is based on fundamental rincile
t$at t$e interest and claim of t$e w$ole communit# is alwa#s
suerior to t$e interest of an individual&0 , (aualat Sin%$ Surana & Drs&
v& >irst Land Acquisition !ollector & Drts& 9A+6CS!C8555C;==5

Land needed for (evelomental ro)ects w$ere ,

Returns are eit$er absent or over lon% %estation eriods

?enefits accrue to t$e communit# as a w$ole

9a# not be viable if land urc$ased at mar-et rates&

Public Purose

S$ould t$e %overnment use its eminent domain

owers in all casesE

F$at about cases w$ere ,

Profits are clearl# identifiable

F$en t$ese rofits accrue to Private firms

Public Private Partners$i ro)ects

Greater +DH(A acquisition cancelled not because it

was not considered ublic urose * but because S!
felt it was a "coloured e<ercise"&
Acquisition for Private !omanies

/Public Purose cannot and s$ould not be recisel# defined&0

1(aualat Sin%$ Surana & Drs& v& >irst Land Acquisition !ollector & Drts& 9A+6CS!C8555C;==53

/F$et$er in a articular case t$e urose for w$ic$ t$e land

was acquired was a ublic urose or not is for t$e
Government to decide and t$e declaration of t$e Government
in t$e matter would be final&0 1Somavanti v& State of Pun)ab 9A+6CS!C==24C195; *
!onstitutional ?enc$3

Scoe of Sec& 4= alread# widened * ?ut Private !omanies

still want to acquire under Part HH&

Attemt to avoid Sec& 4A and %et t$e benefit of Sec& 17

'ven a nominal contribution of Rs& 1==C, b# t$e Government

sufficient 1Pratb$a +ema & Drs& v& State of 9&P& & Drs& 9A+6CS!C=4;;C;==23
F$at t$e S! missedI

Dver t$e last few decades t$e ublic debate is over

den#in% t$e land loser a s$are in t$e soils of
develoment&

Land loser an equitable artner in develoment

rocess & & & :$erefore $as a ri%$t to ne%otiate & & & and
refuse

+o attemt to discover bu#er"s reservation rice

Government auctionin% of ro)ects does not benefit

t$e land loser

+o attemt to develo a fair land mar-et

LARR ?ill, ;=11

Valuation 9et$odolo%# in Sec& ;5 to Sec& ;9

9inimum land value for t$e %iven area as er t$e Hndian Stam Act,
1899& 1Standin% !ommittee $as roosed to c$an%e t$is to /9ar-et
value as er t$e Hndian Stam Act, 1899&03

DR Avera%e rice of similar and in t$e vicinit#

+o arallel to Sec& ;4 of t$e old Act

Public Purose as defined in Sec& 21Aa3 1vi3 and 1vii3 includes ,

PPP ro)ects for roduction of ublic %oods or roduction of

ublic services&

Prior informed consent of atleast 8=J of ro)ect affected eole

s$ould be obtained for acquisition for Sec& 21Aa3 1vi3 and 1vii3
ro)ects&

Hnte%rated Act for Acquisition and R&R&

LARR ?ill, ;=11

Hn rincile reco%niAes t$e ri%$t of t$e land loser to ne%otiate

F$et$er ne%otiations done for 8=J of land to $ave bearin% on

valuation under Sec& ;5 is not clear

:$e rincile of eminent domain still available in case of

instances of "$oldin% out" or in case of acquisition for
develomental ro)ects&

Hf land transferred wit$out carr#in% out furt$er develoment,

;=J of s$are of areciated value to be %iven to ori%inal land
losers&

State to create enablin% environment for a fair ne%otiation

rocess between industr# and land losers&
LARR ?ill, ;=11
State c$an%es its role from bein% a facilitator of industr# to t$at of
creatin% an enablin% environment for a fair ne%otiation between industr#
and t$e land owners&
:$an- KouI
?