Land Acquisition | Courts Deciding Compensation References Not Bound By Section 26 Market Value Parameters: Punjab & Haryana High Court

The Punjab and Haryana High Court has held that the parameters prescribed under Section 26 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 are not binding on courts or authorities while adjudicating references for enhancement of compensation. [2026 LiveLaw (PH) 199]The Court clarified that these parameters serve only as guiding factors for the Collector and do not restrict the independent adjudicatory jurisdiction of courts under Section 64 of the 2013 Act.Justice Harkesh Manuja said, "the Collector rate under Clause (a) of Section 26(1) can, at best, serve as a guiding factor for the 'Authority' or the Court in determining market value. It is a minimum base price fixed for revenue purposes and cannot be elevated to the status of a determinative standard of assessing the true market value. Binding the 'Authority' or the Court to such a rate would be contrary to settled law and inconsistent with the object of the 2013 Act to ensure just and fair compensation to the landowner."The observation came while deciding a batch of 19 Regular First Appeals arising out of a common land acquisition pertaining to Village Barara, District Ambala, acquired for the construction of a Mini Secretariat.The acquisition process was initiated through notifications issued in 2012 under Sections 4 and 6 of the Land Acquisition Act, 1894. The Land Acquisition Collector (LAC), vide award dated October 13, 2014, assessed compensation at ₹15 lakh per acre.On reference, the Additional District Judge, Ambala enhanced the compensation to ₹390 per square yard by award dated August 2, 2024. Dissatisfied, the landowners approached the High Court seeking further enhancement.The principal legal question before the Court was, whether the Authority or Court adjudicating a reference under Section 64 of the 2013 Act is bound by the parameters laid down under Section 26 for determination of market value?Answering the question in the negative, the Court undertook an extensive comparative analysis of the 1894 Act and the 2013 Act, and held, Section 26 of the 2013 Act is addressed exclusively to the Collector and prescribes the methodology to be followed at the stage of initial determination of market value.The “Authority” under the 2013 Act is a judicial body distinct from the Collector, vested with powers of a civil court and empowered to independently adjudicate disputes.The statute consciously distinguishes between the roles of the Collector and the Authority/Court; hence, Section 26 cannot be extended to bind judicial determination.The Court emphasized that Section 69 merely requires the Authority to “take into consideration” whether the Collector followed Section 26 parameters, and does not mandate strict adherence.Section 26 Not a Rigid FormulaThe Bench further observed that strict application of Section 26 would lead to unjust results, Circle rates are only minimum benchmark values for stamp duty purposes and do not reflect actual market value.Averaging of sale deeds may undervalue land, particularly in rapidly developing areas and Sale instances often reflect undervaluation due to stamp duty considerations.The three-year limitation for considering sale deeds is impractical in many cases.The Court reiterated, "that determination of market value cannot be reduced to a mechanical or mathematical exercise, and must involve a holistic assessment of all relevant evidence."Beneficial InterpretationHighlighting the welfare nature of the 2013 Act, the Court held that the legislation must be interpreted liberally to ensure just and fair compensation.Any interpretation restricting the Court's power to assess true market value would defeat the object of the Act.Application to Present CaseIn the present case the Court found merit in the landowners' submissions that Sale deeds produced by the landowners pertained largely to the acquired land itself or adjacent areas.The acquired land had significant locational advantages and commercial potential.Sale instances ranged between ₹1000 to ₹1810 per square yard and fell within a narrow bandwidth.The Court held that averaging of these sale instances was appropriate in the given circumstances, after applying 12% annual appreciation (where applicable), and a 60% deduction for small plot size.The Court determined the fair market value at ₹608 per square yard and also held that no development cut was warranted, as the acquisition did not involve additional infrastructural costs by the State.The High Court modified the Reference Court's award and held that landowners are entitled to compensation at ₹608 per square yard, along with all statutory benefits under the 1894 Act, including interest and solatium.The appeals were accordingly allowed.Mr. Vijay Kumar Jindal, Sr. Advocate, assisted by Mr. Abhishek Shukla, Advocate, for the appellant(s)-landowner(s). (in RFA Nos. 1182, 1183, 1184, 1190, 1192, 1193, 1202, 1204, 1206, 1207, 1218, 1219 & 1220 of 2024;...

Land Acquisition | Courts Deciding Compensation References Not Bound By Section 26 Market Value Parameters: Punjab & Haryana High Court

Aiman J. Chishti

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Aiman J. Chishti

Land Acquisition | Courts Deciding Compensation References Not Bound By Section 26 Market Value Parameters: Punjab & Haryana High Court

Aiman J. Chishti

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