State as a sovereign body has the power to acquire land
when it is needed for public purposes, industrialization, companies etc.
Land Acquisition Act, 1894 provides a complete scheme to be followed
for acquisition of land. The award determining the compensation of
acquired land has to be made by the Collector which is final unless
altered by the Court to which reference is made as provided under the
Reference can be made to the Court as to :
1. Measurement of Land
2. Amount of Compensation
3. Person to whom it is payable for apportionment of
compensation amongst the persons interested.
An application has to be filed stating the grounds.
Application has to be made within six weeks from the date of
Collector’s award, if a person was present or represented when Collector
made the Award.
In other cases, limitation is six weeks of the receipt of notice from
Collector U/s 12(2) or within six months from the date of Collector’s
award, whichever period shall first start.
A person has the absolute right of reference u/s 18 provided the
application is in accordance with Section 18. Scope of reference u/s 30 is
limited and is confined ton question of title. Collector has discretion u/s
30 to refer or not to refer. However, on fulfillment of condition u/s 18,
Collector is bound to make the reference as held in Dr. G.H. Grant v.
State of Bihar, AIR 1966 SC 237.
2. WHO CAN FILE AN APPLICATION FOR REFERENCE
Reference can be made at the instance of any “person interested”.
In Santosh Kumar v. Central Warehousing Corporation, (1986) 2 SCC
343, the view was taken that the Government company or local authority
cannot seek reference u/s 18 whereas in Union of India v. Sher Singh,
(1993) 1 SCC 608, the Apex Court has held the term person interested
includes any person for whose benefit the land is acquired. The term
should be liberally construed so as to include a body, local authority or a
company for whose benefit the land is acquired. Similar view was taken
in Himalaya Tiles and Marble (P) Ltd. V. Francis Victor Countino, AIR
1980 SC 1118.
3. RIGHT TO APPLY FOR REFERENCE
The claimant who received compensation under protest and who
filed an application u/s 18 alone can seek the reference. In order to
maintain the reference it is necessary that the person should have
protested against the determination made by L.A.O. and who has filed an
application u/s 18 can seek reference as held in LAO v. Shiva Bai, AIR
1997 SC 2642 and Ashwani v. State of Punjab, AIR 1992 SC 974.
Person who has agreed to accept the compensation cannot make an
application for reference as held in State of Gujarat v. Daya Shamji Bhai,
AIR 1996 SC 133.
4. REFERENCE COURT CANNOT ENLARGE SCOPE OF
REFERENCE
The jurisdiction of the Court is confined to the reference made to it
u/s 18 and it cannot enlarge its scope by invoking ordeer 1 Rule 10 CPC
as held in TKTN Rai V. State of Haryana, 1987 PLR 396.
5. POWER OF REFERENCE COURT TO SEE VALIDITY OF
REFERENCE
Collector has no discretion to refuse making of reference u/s 18 if
the application is with respect to subject matter prescribed u/s 18 and is
made within limitation. However, the reference Court can see if the
reference is valid one, the Court has jurisdiction to decide whether the
reference was sought beyond period of limitation prescribed by Section
18(2) of the Act as held in Mohd. Hasuddin v. State of Maharashtra, AIR
1974 SC 404
Court cannot quash a notification u/s 4 and 6 of the Land
Acquisition Act in reference u/s and has to confine to the reference as laid
down in Balram v. State of U.P., AIR 1995 SC 1552.
In reference of section 18 State cannot plead lack of title of owner
in reference : State of Madras v. KN Shan Mugam Mudaliya, AIR 1976
6. DISMISSAL IN DEFAULT AND RESTORATION OF
REFERENCE :
The Apex Court in Khazan Singh v. Union of India (2002) 2 SCC
292 has held that reference cannot be dismissed in default of appearance.
In Rajmani v. Collector, Raipur, (1996) 5 SCC 701, it was laid down that
if a reference is dismissed in default, remedy is under Order 9 Rule 9 read
with Section 151 CPC. Order 9 Rule 13 is not applicable.
As per Section 53 of the Land Acquisition Act save in case of
inconsistency provision of C.P.C. applies to all the proceedings under the
7. LIMITATION TO FILE APPLICATION U/S 18 AND ITS
7. LIMITATION TO FILE APPLICATION U/S 18 AND ITS
EXTENSION
Collector acts as statutory authority while making reference u/s 18
and is not a Court. Hence, Section 5 of the Limitation Act is not
applicable for extending the period of limitation prescribed under the
proviso to Section 18(2), as laid down in Officer on Special Duty, Land
Acquisition v. Shan Maanilal Chudalal, (1996) 8 SCC 414.
Application for reference filed after 3 years from the date of award cannot
be allowed: State of Gujarat v. Gopal Bhai, (1996) 6 SCC 125.
IN order to set in motion the limitation, there should be knowledge of the
details of the award. Notice u/s 12(2) is sufficient to set in motion the
limitation to seek reference – State of Punjab v. Sri Satinder, (1995) 3
SCC 330.
For commencement of limitation u/s 18(2) proviso (b) either
actual or constructive communication of the order is necessary : Raja
Harishcahndra Rajdeo v. Dy. LAO, AIR 1961 SC 1500
8. REFERENCE U/S 30
The Collector is authorised u/s 30 to refer to the Court after
compensation is settled u/s 11 any dispute relating to apportionment to
the same or any part thereof.
A person who has not appeared ion the acquisition proceedings
before the Collector, may raise a dispute relating to apportionment or to
the person to whom it is payable and apply to the Collector for reference
u/s 30 for determination of his right to compensation which may have
existed before the award or devolved upon him since the award.
There is limitation u/s 18. But no limitation is prescribed u/s
30. Collector can ask the person to settle the same in the suit and pay the
compensation in the manner declared by bus award : Dr. G.H. rant v.
State of Bihar, AIR 1966 SC 237.
A person can apply for claiming compensation even if right has
been acquired after passing of the award and can have the reference u/s
30 of the Act. Collector has the distraction to make the reference Dr.
G.H. G rant v. State of Bihar, AIR 1966 SC 237.
9. WRIT AGAINST AWARD
An award cannot be challenged in a writ petition. It has to be
challenged as per procedure prescribed u/s 18.
10. REMEDY IN CASE OF REFUSAL TO MAKE REFERENCE
In case there is refusal to make the reference, remedy of revision
can be availed. Remedy of writ petition under Article 224 of the
Constitution of India can also be availed : Sugandhi v. Collector, Raipur,
AIR 1969 MP
11. BENEFICIARIES SHOULD BE NOTICED BY REFERENCE
COURT :
It is proper to issue the notice to the beneficiaries as payment of
compensation has to be made to the beneficiaries. Want of notice may
invalidate the award : Nilanganga v. State of Karnataka, AIR 1990 SC
1321, Krishi Upaj Mandi v. Ashok Singhal, AIR 1991 SC 1320, NTPC v.
State of Bihar, (2004) 12 SCC 96, 1000, Neyveli Lignite Corporation v.
Special Officer, (1995) 1 SCC 221 and (1994) Suppl. 3 SCC 743
12. EVIDENCE IN REFERENCE
Reference is not an appeal, as such evidence on record of the case
of the Land Acquisition Officer have to be proved by independent
Reference in original case is to be treated as original proceedings.
It has to be established that price offered is inadequate as held by the
Apex Court in Chimanlal Hargovinddas v. Lao Poona, AIR 1988 SC
1652 and in Kiran Tandon v. Allahabad Development Authority, (2004)
10 SCC745 = AIR 2004 SC 2006
13. WHETHER EXECUTING COURT CAN ENHANCE
COMPENSATION
Executing Court cannot allow enhanced compensation on the
enhancement of compensation in the reference sought by one of the
claimant : Ramesh Singh v. State of Haryana, AIR 1996 SC 3033
14. ENHANCEMENT OF AWARD IN FAVOUR OF PERSON
WHO HAS NOT SOUGHT REFERENCE – SECTION 28 A
Person who has not applied for reference and has received the
compensation without protest can claim for additional compensation u/s
28a at the enhancement being made by the reference Court. But such
remedy is not available when the award was enhanced u/s 54 of the Act in
appeal : Hukum Singh v. State of Haryana, AIR 1996 SC 3275. Reference
was made to larger Bench as to scope of Section 28a in Union of India v.
Hansali Devi, AIR 2001 SC 2184.
It has been answered in (2002) 7 SCC 273. It is held that even if
application under Section 18 was filed and dismissed on ground of
limitation, Section 28a applies.
In determination of compensation on the basis of judgment of
reference Court application should be made within 3 months before LAO
: Raj Kumar Karanwal v. Commissioner, AIR 1997 SC 1792.
15. AWARD OF INTEREST U/S 30 AND INTEREST DURING
THE PENDENCY OF COMPENSATION U/S 30
Reference Court cannot award interest during the pendency of
objection about apportionment of compensation. The Collector is
required to deposit the amount of compensation u/s 31(2) and the liability
of the State ceases with effect from the date of deposit of amount in the
Court as held in Special Land Acquisition Officer v. Pattai, AIR SC 136.
16. RIGHT TO LIVELIHOOD
Acquisition of land cannot be challenged on the ground that it takes
away the right to livelihood. Such a challenge on the ground under
Article 19(1) (F) of the Constitution of India is precluded by Article 31
17. INTEREST ON MARKET VALUE AND SOLATIUM
Interest on market value of the property not to be granted on
solatium : State of Punjab v. Gouri Shankar, 2000 AIR SCW 4224 has
been overruled. The matter was referred to Large Bench. It is held that
awarded amount includes all amount in all sub section of Section 23.
Section 23 cannot be split up in different heads. Interest on aggregate
compensation including solatium was to be paid : Sunder v. Union of
India, (2001) 7 SCC 211.
18. DETERMINATION OF COMPENSATION
The price has to be offered applying the test of a prudent buyer : Special
Duty Collector v. K. Sambasiv Rao, AIR 1997 SC 2625.
(A) Claim for poultry business and land.
(A) Claim for poultry business and land.
Compensation granted for dislocation of business was not
interfered with by the Supreme Court in Ramesh Dutt v. State of Punjab,
AIR 1996 SC 2831.
Same value can be adopted by land covered by the same
notification : Union of India v. Shri Dhyansingh, 2000 AIR SCW 4936.
(B) Tenants Right to Compensation
If the land is burdened with tenant, the reduction made
incompensation was upheld by the Apex Court in M.P. Gopal Krishna v.
Dy. Collector LAO, AIR 1996 SC 3149.
In Smt. Vaidya Wati v. The Collector of Agra, AIR 1979 SC 733 the
Apex Court held that the tenant is entitled to proportionate share.
In Mangatram v. State of Haryana, AIR 1996 SC 3347, WAKF
Board was given 1/4th compensation and tenant who was in actual
occupation 3/4th.
(C) Sale deeds to be proved
Sale deeds shall be proved before the reference Court before they
are acted upon : UPSRTC v. State of UP, AIR 1997 SC 3675.
However, Apex Court held thjat certified copy of sale deds can be
considered : State of Haryana v. Ram Singh, (2001) 6 SCC 254.
(D) Determination of compensation
A sale deed relating to closest or nearest piece of land carried more
value : M/s Printeres House Pvt. Ltd. V. Mst. Saiyadan (Deceased) by
LRs and ors., AIR 1994 SC 1160. Similar potentiality and nature is to be
seen : AIR 2004 SC 1179.
Distance from the land acquired is relevant consideration : Triveni
Devi v. LAO, AIR 1972 SC 14171.
(E) Relevant Date
Market value has to be determined on the date of notification u/s 4
of the Land Acquisition Act. Use on the date of acquisition is one of the
material factors. 1/5th deduction was made towards development : P.S.
Krishna & Co. Pvt. Ltd. V. LAO, Hysderabad, AIR 1992 SC 421.
Potential value on the date of notification u/s 4 is relevant, not the
subsequent user : LAO Karnataka Housing Board v. P.N. Malappa, AIR
1997 SC 3661.
(F) Development and deduction
In case of acquisition of developing land, 60% deduction towards
development was held permissible on facts in Basant Kumar v. Union of
India, (1996) 11 SCC 542.
If the land is developed less deduction can be made : B. Sammano
v. LAO Vishakhapatnam, AIR 1992 SC 2298.
Different prices can be offered for banana plantation and bagagot.
(G) Size of Land
In case of acquisition of large piece of land 17.57 acres was
acquired. Grant of compensation per sq. ft. was held to be illegal.
Compensation should be awarded as per acre basis : Indumati Chitle v.
Union of India, AIR 1996 SC 531.
In case of acquisition of large piece of lan, 1/3rd deduction was held
to be permissible. Grant of compensation at Rs. 10 per sq. ft. was upheld
in Karan Singh v. Union of India, (1998) 11 SCC 1170.
(H) Situation
(H) Situation
If the situation of the land is relevant criteria, if the land is situated
near the road, it may fetch higher value. Higher compensation is
permissible as held by the Supreme Court in Priya Vrat v. Union of India,
AIR 1995 SC 2471.
In G. Rameshan v, State of Kerala, AIR 1997 SC 2159, offer of
two different price abutting road and the land which was low lying
area was upheld.
Distance from the city is relevant consideration. Compensation of
Re. 1/- s q. ft. was awarded and 50 paise was deducted for
development : Hansanli Walchand v. State of Maharashtra, AIR 1998 SC
(I) Rise in Market Price
Rise in market price is a valid consideration : Gokul v. State of
Haryana, AIR 1992 SC 150
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(J) Basic Value Register
Basic value register maintained by the Municipal Council cannot
be basis for determining the price – Held by the Supreme Court in LAO
Eluru v. Jasti Rohani, (1995) 1 ACC 717
(K) Various aspects for determination of compensation are elaborately
dealt with in Chimanlal Hargovinddas v. LAO, Poona, AIR 1988 SC 1652
Time gap between sale transaction, situation, genuineness of the
transaction are relevant factors while determining the price, compensation
for the land acquired. Similarly acquisition of the plot where it is small
or large is relevant factor. Nearness to road where land is in frontage or
only small opening on front, proximity to developed area, depressed
portion requiring filing, shape, level etc. are relevant considerations.
(L) Burden of proof
In various decisions by Apex Court it is held that burden is on
claimant to prove inadequacy of compensation. However it was held that
burden is on State to prove market value of land acquired by it in LAO &
Mandan Officers v. Narsaih, AIR 2001 SC 117
(M) Previous Judgement
Previous judgment is relevant for determination of value : Pal
Singh v. Union Territory of Chandigarh, AIR 1993 SC 225
19. ANNUAL YIELD METHOD
In case of acquisition of agricultural land and considering the
potential and the evidence about the annual yield 10 years multiplier of
annual yield can be made the basis for awarding the compensation as held
by Apex Court in Special Land Acquisition Officer v. V. Shankar
Nadagopuda, (1996) 6 SCC 124 and Collector of Land Acquisition v.
Gangaram Choba, (1996) 1 SCJ 15.
In Thakarsi Bhai v. Executive Engineer, AIR 2001 SC 2424, it is
held that annual yield method can be used only in case of absence of sale
transaction or expert opinion, not otherwise.
In the case of fruit bearing trees, capitalization of profit of 15 years
yield was applied : K.M. Aisha Amma v. State of Kerala, (1991) 4 SCC 8
20. INTEREST
9% interest is to be granted for the first year, 15% after one year on
market value till the amount is deposited : K.S. Shivdevamma v. Assistant
Commissioner, LAO, AIR 1996 SC 2886.
21. BUILDING
If the land and building is acquired, capitalization of the profit is
the relevant consideration.
22. AMENDMENT 1984 NOT RETROSPECTIVE
Controversy as to applicability of the amendment made in 1984 has
been settled and enhanced solatium and interest can be awarded only in
the cases where award was not passed. The amendment cannot be given
retrospective effect : K.S. Paripoornan v. State of Kerala, (1994) 5 SCC
593 = AIR 1995 SC 1012
23. REFERENCE COURT CANNOT REDUCE AWARD OF
LAO
Reference Court cannot award lesser compensation than awarded
by the Collector as provided in Section 25 and the factors mentioned in
Section 24 have to be excluded while determining the compensation.
No straitjacket formula can be laid down. Determination of
compensation has to be made applying the prudence in the facts and
situation of the case.
24. COURT CANNOT GRANT HIGHER COMPENSATION
Court has no jurisdiction to grant higher compensation than
claimed as held in Ujjain Development Authority v. Tarachand, (1996) 5
25. COURT CAN CORRECT CLERICAL OR ARITHMETIC
ERROR
It is open to correct clerical and arithmetic errors in award as held
in Union of India v. Pratap Kaur, (1995) 3 SCC 263.
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