The Government of India believed there was a heightened public concern on land acquisition issues
in India. Of particular concern was that despite many amendments, over the years, to India’s Land
Acquisition Act of 1894, there was an absence of a cohesive national law that addressed fair
compensation when private land is acquired for public use, and fair rehabilitation of land owners and
those directly affected from loss of livelihoods. The Government of India believed that a combined law
was necessary, one that legally requires rehabilitation and resettlement necessarily and
simultaneously follow government acquisition of land for public purposes.
Land acquisition refers to the process by which government forcibly acquires private property for
public purpose without the concurrent of the land owner. The land owner is not a willing seller,
therefore, compensation and the way in which compensation were payable, is to be fair and
reasonable. TRTFCAT in LARR Act 2013 (The LARR Act) provides for land acquisition as well as
rehabilitation and resettlement (R & R) and replaces the Land Acquisition Act 1894.
Section 26 of land acquisition act of the Land Acquisition, Rehabilitation And Resettlement Act, 2013-
“Determination of market value of land by Collector.”
- (1) The Collector shall adopt the following criteria in assessing and determining the market value of
the land, namely:—
(a) the minimum land value, if any, specified in the Indian Stamp Act, 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:
Provided that the date for determination of market value shall be the date on
which the notification has been issued under section 11.
Explanation 1.— The average sale price referred to in clause (b) shall be determined
taking into account the sale deeds or the agreements to sell registered for similar type of
area in the near village or near vicinity area during immediately preceding three years of
the year in which such acquisition of land is proposed to be made.
Explanation 2.— For determining the average sale price referred to in Explanation 1, onehalf
of the total number of sale deeds or the agreements to sell in which the highest sale
price has been mentioned shall be taken into account.
Explanation 3.— 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.
Explanation 4.—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.
(2) The market value calculated as per sub-section (1) shall be multiplied by a factor to be specified in
the First Schedule.
(3) Where the market value under sub-section (1) or sub-section (2) cannot be determined for the
(a) the land is situated in such area where the transactions in land are restricted by or
under any other law for the time being in force in that area; or
(b) the registered sale deeds or agreements to sell as mentioned in clause (a) of subsection
(1) for similar land are not available for the immediately preceding three
(c) the minimum land value has not been specified under the Indian Stamp Act, 1899
by the appropriate authority, the concerned State Government 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:
Provided that in a case where the Requiring Body offers its shares to the owners of the lands (whose
lands have been acquired) as a part compensation, for acquisition of land, such shares in no case
shall exceed twenty-five per cent. of the value so calculated under sub-section (1) or sub-section (2)
or sub-section (3) as the case may be:
Provided further that the Requiring Body shall in no case compel any owner of the land (whose land
has been acquired) to take its shares, the value of which is deductible in the value of the land
calculated under sub-section (1).
Provided also that the Collector shall, before initiation of any land acquisition proceedings in any area,
take all necessary steps to revise and update the market value of the land on the basis of the
prevalent market rate in that area:
Provided also that the appropriate Government shall ensure that the market value determined for
acquisition of any land or property of an educational institution established and administered by a
religious or linguistic minority shall be such as would not restrict or abrogate the right to establish and
administer educational institutions of their choice.
According to the Land Acquisition Act 2013, the appropriate Government shall constitute multimember
land pricing commission or authority to finalize cost of land acquisition/compensation Statewise/area-wise
as determined under Section 30(1) read with Schedule I to the Act. The Second
Schedule lists eleven (11) elements of Rehabilitation and Resettlement entitlements in addition to
those provided in the First Schedule.
Third Schedule enumerates twenty five (25) infrastructural amenities to be provided for resettlement
to the affected families. Fourth Schedule lists thirteen (13) Central legislations, which are sought to be
exempted from the provisions of the Act.
2. The Aims And Objectives Of The Act
The aims and objectives of the Act include:
• To ensure, in consultation with institutions of local self-government and Gram Sabhas
a humane, participative, informed and transparent process for land acquisition
for industrialization, development of essential infrastructural facilities and urbanization with the
least disturbance to the owners of the land and other affected families.
• Provide just and fair compensation to the affected families whose land has been
acquired or are affected by such acquisition.
• Make adequate provisions for such affected persons for their rehabilitation and
Purpose and scope:
The Act aims to establish the law on land acquisition, as well as the rehabilitation and
resettlement of those directly affected by the land acquisition in India. The scope of the Act
includes all land acquisition whether it is done by the Central Government of India, or any
State Government of India, except the state of Jammu & Kashmir.
The Act is applicable when:
Government acquires land for its own use, hold and control, including land for Public sector
undertakings Government acquires land with the ultimate purpose to transfer it for the use of
private companies for stated public purpose. The purpose of LARR 2013 includes publicprivate-partnership
projects, but excludes land acquired for state or national highway projects.
Government acquires land for immediate and declared use by private companies for public
The provisions of the Act does not apply to acquisitions under 16 existing legislations
including the Special Economic Zones Act, 2005, the Atomic Energy Act, 1962, the Railways
Act, 1989, etc.
3. Jurisdiction Of Courts
No lower civil court, u/s 63 shall have jurisdiction to entertain any dispute relating to land acquisition in
respect of which the collector or the authority is empowered and no injunction shall be granted by any
court in respect of any such matter. If aggrieved by the Award of the Collector by person interested in
compensation and any reference is made to Authority u/s 64by the Collector, the final Award shall be
in accordance with S. 69.
Appeal to High Court: The appropriate Government or a Requiring Body or any person aggrieved by
the Award passed by an Authority under section 69 may file an appeal to the High Court within sixty
days from the date of Award; provided that the High Court may, if it is satisfied that the appellant was
prevented by sufficient cause from filing the appeal within the said period, allow it to be filed within a
further period not exceeding sixty days as per S. 74. A period of six months is the time limit for
disposal of case.
Retrospective operation: Where no award under the 1894 LA Act has been made, the new Act shall
apply with regard to compensation in the following circumstances: where an award has been made
but the affected individuals have not accepted compensation or have not yet given up possession,
and the proceedings have been pending for 5 years or more and where a majority of individuals in an
affected area have not received compensation, then the new law shall apply.
U/s: 3(c) “Affected families”:
(i) A family whose land or other immovable property has been acquired,
(ii) a family which does not own any land but a member or members of such family may be
agricultural labourers, tenants including any form of tenancy or holding of usufruct right,
share-croppers to artisans or who may be working in the affected area for three years prior to
the acquisition of the land, whose primary source of livelihood stand affected by the
acquisition of land,
(iii) the Scheduled Tribes and other traditional forest dwellers who have lost any of their forest
rights recognized under the Scheduled Tribes and Other Traditional Forest Dwellers
(Recognition of Forest Rights) Act, 2006 due to acquisition of land,
(iv) family whose primary source of livelihood for three years prior to the acquisition of the
land is dependent on forests or water bodies and includes gatherers of forest produce,
hunters, fisher folk and boatmen and such livelihood is affected due to acquisition of land,
(v) a member of the family who has been assigned land by the State Government or the
Central Government under any of its schemes and such land is under acquisition, and
(vi) a family residing on any land in the urban areas for preceding three years or more prior to
the acquisition of the land or whose primary source of livelihood for three years prior to the
acquisition of the land is affected by the acquisition of such land.
Section 3 (i): Cost of acquisition includes:
i) amount of compensation which includes solatium (i.e., extra compensation
for the forcible nature of acquisition), any enhanced compensation ordered by the
Land Acquisition and Rehabilitation and Resettlement Authority or the Court and
interest payable thereon and any other amount determined as payable to the affected
families by such Authority or Court;
ii) demurrage to be paid for damages caused lo the land and standing crops in
the process of acquisition;
iii) cost of acquisition of land and building for settlement of displaced or
adversely affected families
iv) cost of development of infrastructure and amenities at the resettlement areas.
Section 3 (u): “Market Value” means the value of land determined in accordance with Section 26.
Section 3 (x) is: “person interested in AWARD” means —
(i) all persons claiming an interest in compensation to be made on account of
the acquisition of land under this Act;
(ii) Scheduled tribes and other traditional forest dwellers, who have lost any
forest rights recognized under the Scheduled Tribes and Other Traditional Forest
Dwellers Recognition of Forest Rights Act, 2006;
(iii) a person interested in an easement affecting the land;
(iv) persons having tenancy rights under the relevant State laws including sharecroppers
by whatever name they may be called; and
(v) any person whose primary source of livelihood is likely to be adversely
5. Market Value
Market value is the estimated amount for which an asset or liability should exchange on the valuation
date between a willing buyer and a willing seller in arm’s length transaction, after proper marketing
and where the parties had each acted knowledgeably, prudently and without compulsion.
According to Supreme Court in the case of Maj. Gen. Kapil Mehra v. Union of India (UOI)1
, the first
question that emerges is what would be the reasonable market value which the acquired lands are
capable of fetching. While fixing the market value of the acquired land, the Land Acquisition Officer is
required to keep in mind the following factors:
i. existing geographical situation of the land;
ii. existing use of the land;
iii. already available advantages, like proximity to National or State Highway or
road and/or developed area and
iv. market value of other land situated in the same locality/village/area or
adjacent or very near to the acquired land.
The standard method of determination of the market value of any acquired land is by the valuer
evaluating the land on the date of valuation publication of notification Under Section 4(1) of the Act,
acting as a hypothetical purchaser willing to purchase the land in open market at the prevailing price
on that day, from a seller willing to sell such land at a reasonable price. Thus, the market value is
determined with reference to the open market sale of comparable land in the neighbourhood, by a
willing seller to a willing buyer, on or before the date of preliminary notification, as that would give a
fair indication of the market value.
In Viluben Jhalejar Contractor v. State of Gujarat2
this Court laid down the following principles for
determination of market value of the acquired land: (SCC pp. 796-97, paras 17-20)
“(17) Section 23 of the Act specifies the matters required to be considered in determining the
compensation; the principal among which is the determination of the market value of the land
on the date of the publication of the notification Under Sub-section (1) of Section 4.
(18) One of the principles for determination of the amount of compensation for acquisition of
land would be the willingness of an informed buyer to offer the price therefore It is beyond any
cavil that the price of the land which a willing and informed buyer would offer would be
different in the cases where the owner is in possession and enjoyment of the property and in
the cases where he is not.
(19) Market value is ordinarily the price the property may fetch in the open market if sold by a
willing seller unaffected by the special needs of a particular purchase. Where definite material
is not forthcoming either in the shape of sales of similar lands in the neighbourhood at or
about the date of notification Under Section 4(1) or otherwise, other sale instances as well as
other evidences have to be considered.
(20) The amount of compensation cannot be ascertained with mathematical accuracy. A
comparable instance has to be identified having regard to the proximity from time angle as
well as proximity from situation angle. For determining the market value of the land under
acquisition, suitable adjustment has to be made having regard to various positive and
negative factors vis-a-vis the land under acquisition by placing the two in juxtaposition....”
While taking comparable sales method of valuation of land for fixing the market value of the acquired
land, there are certain factors which are required to be satisfied and only on fulfillment of those
factors, the compensation can be awarded according to the value of the land stated in the sale deeds.
In Karnataka Urban Water Supply and Drainage Board and Ors. v. K.S. Gangadharappa and Anr.3
factors which merit consideration as comparable sales are, inter alia, laid down as under:
It can be broadly stated that the element of speculation is reduced to minimum if the
underlying principles of fixation of market value with reference to comparable sales are made:
(i) when sale is within a reasonable time of the date of notification Under
(ii) It should be a bona fide transaction;
(iii) It should be of the land acquired or of the land adjacent to the land acquired;
(iv) It should possess similar advantages.
It is only when these factors are present, it can merit a consideration as a comparable case (Special
Land Acquisition Officer v. T. Adinarayan Setty4
Compensation for land is often complicated, particularly the estimation of land values. The market
value is one option used. This is commonly defined as “the estimated amount that the land might be
expected to realise if sold in the open market at valuation date after proper marketing between a
willing seller and a willing buyer and they had acted knowledgeably, prudently, and willingly”.5
Fair market value might be used exchangeable with market value, but there is a distinction between
them. The fairness of market value herein reflects the estimated price for the transfer of a property
between willing parties who have the respective interests of those parties. It is necessary to carry out
the assessment of the price that is fair for those parties taking consideration on the respective
advantages and disadvantages that each is able to obtain from the transaction. Meanwhile, market
value entails the strong points that are not available to market participants generally to be ignored,
and therefore the concept of market value is narrower than fair market value.6
6. Acquisition Awards
The new Act stipulates that the minimum compensation is to be a multiple of the total of the
ascertained market value, plus value of the assets attached to the property, plus a solatium equal to
100% of the market value of the property including value of assets.
Under Section 23 the Collector shall proceed to enquire into the objections which any person
interested has stated pursuant to a notice given under Section 21 and into the respective interests of
the persons claiming the compensation and rehabilitation and resettlement, shall make an award
under his hand of–
(a) the true area of the land;
(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; and
(c) the apportionment of the compensation among all the persons known or believed to
be interested in the land, or of whose claims, he has information, whether or not they
have respectively appeared before him.
Period for Award:
Under Section 25 the Collector shall make an award within a period of 12 months from the date of
publication of the declaration and if no award is made within that period, the entire proceedings for the
acquisition of the land shall lapse Provided that the appropriate Government may take the decision to
extend the period of 12 months if in its opinion, circumstances exist justifying the same but such
decision shall be recorded in writing and the same shall be notified and be uploaded on the website of
the authority concerned.
Determining Market Value:
The claimant will be entitled to the compensation which is determined on the basis of the market
value of the land determined as on the date of preliminary notification. The market value of the
proposed land under Section 26 to be acquired shall be set as the higher of:
• the minimum land value, if any, specified in the Indian Stamp Act, 1899 for the
registration of sale deeds in the area, where the land is situated; or
• the average of the sale price for similar type of land being acquired, ascertained from
the highest fifty per cent of the sale deeds registered during the preceding three years in the
nearest village or nearest vicinity of the land being acquired.; or
• the consented amount in case the land is acquired for private companies or publicprivate
The market value would be multiplied by a factor of, at least one to two times the market value for
land acquired in rural areas and at least one times the market value for land acquired in urban areas.
Example: The Right to Fair Compensation and Transparency in Land Acquisition,
Rehabilitation and Resettlement Act, 2013 mandates compensation and entitlements without limit
to number of claimants. Thus, for clarity and as an example, if 1000 acres of rural land is to be
acquired for a project, with market price of Rs.2,25,000 per acre, 100 families claim to be land
owners, and 5 families per acre claim their rights as livelihood losers under the new Act, the total cost
to acquire the 1000 acre would be
• Land compensation = Rs.90,00,00,000
• Land owner entitlements = Rs.6,30,00,000 + 100 replacement homes
• Livelihood loser entitlements = Rs.365,00,00,000 + 5000 replacement homes
The average effective cost of land, in the above example will be at least Rs.41,00,000 per acre plus
replacement homes and additional services.
The new Act of 2013 proposes the above benchmarks as minimum. The state governments of India,
or private companies, may choose to set and implement a policy that pays more than the minimum
Value of Things Attached:
The Collector in determining the market value of the building and other immovable property or assets
attached to the land or building which are to be acquired, under Section 29 will use the services of a
competent engineer or any other specialist in the relevant field, as may be considered necessary by
The Collector for the purpose of determining the value of trees and plants attached to the land
acquired, use the services of experienced persons in the field of agriculture, forestry, horticulture,
sericulture, or any other field, as may be considered necessary by him.
The Collector for the purpose of assessing the value of the standing crops damaged during the
process of land acquisition may use the services of experienced persons in the field of agriculture as
may be considered necessary by him Determination of Compensation:
The Collector having determined the market value of the land to be acquired shall under
Section 27 calculate the total amount of compensation to be paid to the land owner whose land has
been acquired by including all assets attached to the land.
In determining the amount of compensation to be awarded for land acquired under this Act, the
Collector shall under Section 28 take into consideration–
• the market value as determined under section 26 and the award amount in
accordance with the First and Second Schedules;
• the damage sustained by the person interested, by reason of the taking of any
standing crops and trees which may be on the land at the time of the Collector’s taking
• the damage sustained by the person interested, at the time of the Collector’s taking
possession of the land, by reason of severing such land from his other land;
• the damage sustained by the person interested, at the time of the Collector’s taking
possession of the land, by reason of the acquisition injuriously affecting his other property,
movable or immovable, in any other manner, or his earnings;
• in consequence of the acquisition of the land by the Collector, the person interested is
compelled to change his residence or place of business, the reasonable expenses incidental
to such change;
• the damage bona fide resulting from diminution of the profits of the land between the
time of the publication of the declaration under section 19 and the time of the Collector’s
taking possession of the land: and
• any other ground which may be in the interest of equity, justice and beneficial to the
Award of Solatium:
The Collector after having determined the total compensation to be paid shall, to arrive at the final
award, under Section 30 impose a “Solatium” which is the amount equivalent to 100% of the
This solatium amount shall be in addition to the compensation payable to any person whose land has
been acquired. The Collector shall issue individual awards detailing the particulars of compensation
payable and the details of payment of the compensation as specified in the First Schedule.
In addition to the market value of the land provided under section 26, the Collector shall, award an
amount calculated at the rate of 12% per annum on such market value for the period commencing
from the date of the publication of the notification of the Social Impact Assessment study under
section 4(2), till the date of the award of the Collector or the date of taking possession of the land,
whichever is earlier.
7. Judicial Precedents (Supreme Court Of India)
Larger agri-use land vis-à-vis smaller residential plot: In Haridwar Development Authority v.
Raghubir Singh and Others7
. In the said case, this Court held as follows: “When the value of a large
extent of agricultural land has to be determined with reference to the price fetched by sale of a
small residential plot, it is necessary to make an appropriate deduction towards the development
cost, to arrive at the value of the large tract of land. The deduction towards development cost may
vary from 20% to 75% depending upon various factors. Even if the acquired lands have
situational advantages, the minimum deduction from the market value of a small residential
plot, to arrive at the market value of a larger agricultural land, in the usual course, will be in the
range of 20% to 25%. In this case, the Collector has himself adopted a 25% deduction which
has been affirmed by the Reference Court and the High Court. We, therefore, do not
propose to alter it.” Therefore, it is clear that mere reliance made by a Court on sale deeds of smaller
residential area for determination of market value of larger agricultural area, the same will not
render the determination illegal until and unless it is shown that the determination was not
Supreme Court on the Fourth Amendment
The Supreme Court considered the extent to which the Fourth Amendment had excluded the courts'
jurisdiction in respect of compensation under Article 31(2) in Vairavelu Mudaliar vs Spi Deputy
on the one hand, and in State of Gujarat vs Shantilal Mangal-das9
and R C Cooper vs
Union of India (the bank nationalisation case)10 on the other. The basis on which the Court found
jurisdiction in this respect in the first case is different from that in the other two cases. In Vairavelu
Mudaliar's case the Court found jurisdiction under the doctrine of fraud on power or colourable
legislation. In the view of the Court, the word 'compensation' in Article 31(2) continues to mean 'just
equivalent' but after the Fourth Amendment "neither the principles prescribing the 'just equivalent' nor
the 'just equivalent' can be questioned by the Court on the ground of the inadequacy of the
compensation fixed or arrived at by the working of the principles". This is because the word
'compensation' still exists in Article 81(2) and the clause which has excluded the jurisdiction of the
courts uses the word 'compensation' indicating thereby that what is excluded from the courts'
jurisdiction is the adequacy of the compensation. Then the Court went on to illustrate the matters
which pertain to questioning the adequacy of compensation and laid down that, where different
principles of compensation are applicable and if one principle gives higher value than the other and
the legislature selects the one which gives lesser value, it is not for the court to say that the law
should have selected the principle which gives the higher value, for it relates only to the question of
adequacy. From these illustrations the Court deduced the following general propositions: "If the
legislature makes a law for acquiring a property by providing for an illusory compensation or by
indicating the principles for ascertaining the compensation which do not relate to the property
acquired or to the value of such property at or within a reasonable proximity of the date 0f acquisition
or the principles are so designed and arbitrary that they do not provide for compensation at all, one
can easily hold that the legislature made the law in fraud of its powers . . . . If the question pertains to
the adequacy, it is not justiciable; if the compensation fixed or the principles evolved- for fixing it
disclose that the legislature made the law in fraud of powers in the sense we have explained, the
question is within the jurisdiction of the court."
On the facts of this case the Court held that the principle which provided for determining
compensation on the basis of five years' average market value, excluding potential value and giving
solatium at 5 per cent of the market value rather than 15 per cent as in the Land Acquisitioin Act, if
questioned, would relate to adequacy of compensation which is excluded by the Fourth
Amendment. In the bank nationalisation case (which is a culmination of the theory propounded by
the Court in the Shantilal Mangaldas case) the Court for finding jurisdiction made a distinction
between 'just equivalent' and 'equivalent', and argued that, keeping in view the reasons for enacting
the Fourth Amendment, the exclusion of 'adequacy of compensation from the courts' jurisdiction
only means that it is not open for the court to enquire whether the, compensation provided by law is
'just or fair equivalent' of the property acquired, and that the basic 'compensation' guarantee under
Article 31(2), ie, an equivalent in money of the property According to Supreme Court in Chimanlal
Hargovinddas v. Special Land Acquisition Officer, Poona and Anr.11
The following factors must be etched on the mental screen:
(1) A reference under Section 18 of the Land Acquisition Act is not an appeal against the award
and the Court cannot take into account the material relied upon by the Land Acquisition Officer in
his Award unless the same material is produced and proved before the Court.
(2) So also the Award of the Land Acquisition Officer is not to be treated as a judgment of the trial
Court open or exposed to challenge before the Court hearing the Reference. It is merely an offer
made by the Land Acquisition Officer and the material utilised by him for making his valuation
cannot be utilised by the Court unless produced and proved before it. It is not the function of the
Court to suit in appeal against the Award, approve or disapprove its reasoning, or correct its error
or affirm, modify or reverse the conclusion reached by the Land Acquisition Officer, as if it were an
(3) The Court has to treat the reference as an original proceeding before it and determine the
market value afresh on the basis of the material produced before it.
(4) The claimant is in the position of a plaintiff who has to show that the price offered for his land in
the award is inadequate on the basis of the materials produced in the Court. Of course the
materials placed and proved by the other side can also be taken into account for this purpose.
(5) The market value of land under acquisition has to be determined as on the crucial date of
publication of the notification under Section 4 of the Land Acquisition Act(dates of Notifications
under Sections. 6 and 9 are irrelevant).
(6) The determination has to be made standing on the date line of valuation (date of publication of
notification under Section 4) as if the valuer is a hypothetical purchaser willing to purchase land
from the open market and is prepared to pay a reasonable price as on that day. It has also to be
assumed that the vendor is willing to sell the land at a reasonable price.
(7) In doing so by the instances method, the Court has to correlate the market value reflected in the
most comparable instance which provides the index of market value.
(8) Only genuine instances have to be taken into account. (Some times instances are rigged up in
anticipation of Acquisition of land).
(9) Even post notification instances can be taken into account (1) if they are very proximate, (2)
genuine and (3) the acquisition itself has not motivated the purchaser to pay a higher price on
account of the resultant improvement in development prospects.
(10) The most comparable instances out of the genuine instances have to be identified on the
(i) proximity from time angle,
(ii) proximity from situation angle.
(11) Having identified the instances which provide the index of market value the price reflected
therein may be taken as the norm and the market value of the land under acquisition may be
deduced by making suitable adjustments for the plus and minus factors vis-a-vis land under
acquisition by placing the two in juxtaposition.
(12) A balance-sheet of plus and minus factors may be drawn for this purpose and the relevant
factors may be evaluated in terms of price variation as a prudent purchaser would do.
(13) The market value of the land under acquisition has thereafter to be deduced by loading the
price reflected in the instance taken as norm for plus factors and unloading it for minus factors.
(14) Every case must be dealt with on its own facts pattern bearing in mind all these factors as a
prudent purchaser of land in which position the Judge must place himself.
(15) These are general guidelines to be applied with understanding informed with common sense.
8. Land Acquisition Process
According to the high court of tripura at agartala in The State of Tripura and Ors. v. Dinabandhu
Debnath and Ors.
12-“Law in respect of determination of market value of the land acquired under the
provisions of the L.A. Act, is fairly well settled and the best method to determine the same is to
consider the prices obtained by contemporaneous sale deeds whether of the same land or of lands in
the vicinity. Various factors may be taken into consideration, namely the size and shape of the land,
the locality and its situation, the tenure of the property, the user, the potential value and the rise or
depreciation of valuation of the land in the locality. Where sale instances of comparable lands are
available on record, the court can safely take into consideration such sale instances and make the
award relying on such sale transactions. It is also a settled law that where there are several
exemplars with reference to similar lands the highest exemplars should be taken into consideration for
determination of compensation.”
Where consent of people is involved, it shall be along with SIA Study.
S: 4(1) Preparation of Social Impact Assessment (SIA) Study by the appropriate Government. The Act
mandates a SIA of every project which must be completed within a period of six months. "SIA is being
done to assess the nature of public interest involved, study of socio-economic impact upon the
families residing the adjoining area of land acquired, extent of lands, public and private, houses,
settlements and other common properties likely to be affected, study of social impact from the project
and the nature and cost of addressing them etc. Reports prepared under the SIA are to be shared
with concerned individuals in their local language along with a summary. S: 5 Whenever a Social
Impact Assessment is required to be prepared under section 4, the appropriate Government shall
ensure that a public hearing is held at the affected area, after giving adequate publicity about the
date, time and venue for the public hearing, to ascertain the views of the affected families to be
recorded and included in the Social Impact Assessment Report. S: 6 (1) The appropriate Government
shall ensure that the SIA study report is prepared and published in the affected area, in such manner
as may be prescribed, and uploaded on a website created especially for this purpose. (2) Wherever
Environment Impact Assessment (EIA) is carried out, a copy of the Social Impact Assessment report
shall be made available to the Impact Assessment Agency authorized by the Central Government to
carry out environmental impact assessment. The SIA process for irrigation projects shall be waived, if
EIA has been already conducted by Central Government Agency, S: 7 the appropriate Government
shall ensure that the Social Impact Assessment report is evaluated by an independent multidisciplinary
expert group, as may be constituted by the appropriate government. The Experts Group
can accept or reject the SIA Study with recorded reasons.S:8 Examination of report of the Collector
and appraisal report of experts group on SIA study by the appropriate government, including
determining a legitimate and bona fides public purpose. The Government concerned can override the
appraisal report but only if they have sufficient reason that is recorded in writing; and u/s S: 8, the
decision is made public.
S: 11 (1) is Publication of Preliminary Notification and powers of officers thereupon. After issuance of
notice u/s 11.( 1), the Collector shall, before the issue of a declaration under section 19, undertake
and complete the exercise of updating of land records as prescribed within a period of two months. As
per S: 26(3) while determining the market value for award, the collector shall update and revise the
land records before making compensation.
De novo SIA Report is mandated if PN u/s 11.1 is not issued within twelve months of appraisal report
of Experts; As per S: 14. Hearing of objection shall be completed within sixty days from 11(1) PN.
Administrator u/s 43 for R&R shall prepare R&R Scheme upon PN 11(1) and submit it to the
Collector. Review with suggestion of R&R Scheme by the Collector is forwarded to the R&R
Commissioner (Appointed u/s 44) for approval of the scheme. S: 19 (1)
Publication of declaration & summary of RR under the hand and seal of a Secretary to the appropriate
Government & (2) the Collector’s publication and (4) publication on the Gazette process completed.
S.20 deals with Land are to be marked out, measured and planned including marking of specific
S.21 deals with Notice to persons interested. S.22 deals with Power to require and enforce the
making of statements as to names and interests and S.23 Enquiry and land acquisition award by the
Collector and the compensation as determined under section 27 along with Rehabilitation and
Resettlement award as determined under section 30 and which in his opinion should be allowed for
the land. S: 38 Power to taking possession only “after ensuring that” the compensation and R&R
responsibilities have been discharged.
Section 29. Determination of value of things attached to land
(1) The Collector in determining the market value of the building and other immovable
property or assets attached to the land or building which are to be acquired, use the services of
a competent engineer or any other specialist in the relevant field, as may be considered
necessary by him.
(2) The Collector for the purpose of determining the value of trees and plants attached to the
land acquired, use the services of experienced persons in the field of agriculture, forestry,
horticulture, sericulture, or any other field, as may be considered necessary by him.
(3) The Collector for the purpose of assessing the value of the standing crops damaged during
the process of land acquisition, may use the services of experienced persons in the field of
agriculture as may be considered necessary by him.
9. Time Limit For Award Assuming No Extension
Payment of compensation within a period of three months for compensation and six months for
monetary part of R & R entitlements listed in the Second Schedule from the date of award and the
components of R & R package in the Second and Third Schedules that relate to infrastructural
entitlements shall be provided within a period of eighteen months from the date of the award. In case
of acquisition of land for irrigation or hydel project, being a public purpose, the rehabilitation and
resettlement shall be completed six months prior to submergence of the lands proposed to be so
acquired. Reference to Authority by the Collector u/s 64 (2) (b) within six weeks of the receipt of the
notice from the Collector u/s 21 or within six months from the date of Collector’s AWARD whichever
period shall first expire.
U/s 69 (1) in determining the amount of compensation to be awarded for land acquired including the
Rehabilitation and Resettlement entitlements, the Authority shall take into consideration whether the
Collector has followed the parameters set out under section 26 to section 30 and the provisions under
the Second Schedule (The R&R entitlements). (2) In addition to the market value of the land, as
above provided, the Authority shall in every case award an amount calculated at the rate
of twelve percent per annum on such market value for the period from 4(2) SIA study publication to
the date of award of the Collector or the date of taking possession of the land, whichever is earlier. (3)
In addition to the market value of the land as above provided, the Authority shall in every case award
a solatium of one hundred per cent. over the total compensation amount.
S: 9/40 Urgency Clause can be invoked after Section 19 declaration or the expiry of 30 days from
section 21 Notice. It provides special powers to the appropriate Government to acquire land in
urgency cases for the purposes of defence of India or national security or for any emergency arising
out of natural calamities. Compensation payable shall be as per section 30 (1) and the First
Schedule of the Act Say “MV” plus 75% of “MV”, out of which 80% shall be payable prior to taking
possession. Any one or many provisions from chapter II to VI are exempted. I.e. SIA to Food Security,
R & R: Local administration shall make available temporary camp accommodation to the families
whose house has been acquired till total compensation is paid or 90 days whichever is earlier.
Section 28. Parameters to be considered by Collector in determination of award.
In determining the amount of compensation to be awarded for land acquired under this Act, the
Collector shall take into consideration—
firstly, the market value as determined under section 26 and the award amount in accordance
with the First and Second Schedules;
secondly, the damage sustained by the person interested, by reason of the taking of any
standing crops and trees which may be oh the land at the time of the Collector's taking
thirdly, the damage (if any) sustained by the person interested, at the time of the Collector's
taking possession of the land, by reason of severing such land from his other land;
fourthly, the damage (if any) sustained by the person interested, at the time of the Collector's
taking possession of the land, by reason of the acquisition injuriously affecting his other
property, movable or immovable, in any other manner, or his earnings;
fifthly, in consequence of the acquisition of the land by the Collector, the person interested is
compelled to change his residence or place of business, the reasonable expenses (if any)
incidental to such change;
sixthly, the damage (if any) bona fide resulting from diminution of the profits of the land between
the time of the publication of the declaration under section 19 and the time of the Collector's
taking possession of the land; and
seventhly, any other ground which may be in the interest of equity, justice and beneficial to the
There are many more detailed points in the Act which need attention, but overall, the Act doesn’t
protect land rights or deals with the historic injustices committed in the name of development and
public purpose. It is solely aimed at facilitating land acquisition for corporates without any stock taking
of the land acquired, used or lying vacant and so on. The rapacious use of LAA by the government to
secure land for ‘development’ projects has caused over 10 crore people to be displaced from their
land, livelihoods and shelters. The country is dotted with communities resisting state-sponsored land
grab which resonate the demand for a just law to ensure that there is no forced acquisition of land and
resources, including minerals and ground water. The government must respond to the voices from
movements across places such as Narmada, Koel Karo, Singur, Nandigram, Sonbhadra, Chindwara,
Bhavnagarm, Kalinga Nagar, Kashipur, Raigarh, Srikakulam and mining areas in Central India with
genuine efforts to address the longstanding crisis concerning land acquisition and R&R.
Following are certain points which the author seeks to highlight as major faults in the LARR Act, 2013
regarding issues of compensation1.
Coming to R&R benefits, Section 26-30, Schedule II, promotes the principle of cash
compensation rather than livelihood-based R&R. It is a retrogressive step, since it negates
land and employment based R&R as mandated in the Narmada Water Dispute Tribunal
(NWDT) Award, and various other projects. The proposed provisions of compensating
employment with money and high rates for land acquired will only lead to speculative land
market and will destroy the fragile economy of the rural hinterland which will lead to further
2. Land for land provision is limited to one acre for general category farmers and twoand-a-half
acre for scheduled caste (SC) and scheduled tribe (ST) families in case of
irrigation projects. By its own definition, marginal farmers are those who have one hectare of
un-irrigated or half hectare of irrigated land. Hence, the provision of one acre land in
command area is nothing but a cruel joke on farmers.
3. Section 26-30, Schedule I, deals with the various provisions of calculation of
compensation for land acquired, but the power remains with the collector. It would have been
fairer to set up a land price determination commission which would have had participation of
affected communities and also taken in account the various factors.
4. Much hype has been generated that two times and four times of compensation
amount would be paid in urban areas and rural areas respectively. However, Schedule I
mentions of a sliding scale, to be fixed by state governments, which will mean that farmers in
rural areas won’t get four times the market price of the land.
Thus, despite the new act covering various fallacies of the 1894 law on land acquisition, it
severely lacks in certain areas, such as the area of provision of compensation at market value as
has been discussed in detail by the author in the various chapters of this research paper.
However, by way of effective amendments and decentralization of power in regard to provision of
compensation, immediate relief can be granted to people whose lands need to be acquired for
public purpose. Besides, amendments to the Schedules, making the nature of compensation less
ambiguous and open for abuse would also prevent bureaucratic corruption and help provide
effective relief to the land owners.