How to calculate compensation under land acquisition Act 2013?

Submitted by:

A. Mohammed Ibrahim. B.Arch, FIV, FIE (I) FICA

Valuation for Land Acquisition

RFCT LARR ACT 2013 is restored. (Removal of Difficulty).

The LA Act 2013 Brief: Compensation package - The appropriate Government shall constitute multi-member land pricing commission or authority to finalize cost of land acquisition/compensation State-wise/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. The Third Schedule enumerates twenty five (25) infrastructural amenities to be provided for resettlement to the affected families.

The Fourth Schedule lists thirteen (13) Central legislations, which are sought to be exempted from the provisions of the Act in the Principal Act 2013 and as per executive order dated 28^th  August 2015 these 13 (Thirteen) acts are within the scope of RFCTLARR ACT 2013. I.e. Compensation, Rehabilitation and resettlement entitlements are included. The LARR Act 2013 is restored by an Executive Order Dated 28^th August 2015.

Word web British dictionary meaning of rehabilitation is the restoration of someone to a useful place in a society and resettlement is the transportation of people (As a family or colony) to a new settlement (As after an upheaval of some kind). According to Black’s Law Dictionary, Executive Order is, “Directive action from a Prime minister or President to its executive governmental agencies on an official document (i.e. The Gazette of India; Ministry of Rural Development F.No. 13011/01/2014-LRD dated 28^th August, 2015). ^http://dolr.nic.in/dolr/downloads/pdfs/RFCTLARR%20(Removal%20of%20Difficulties)%20Order,%202015.pdf

Minimum and Final Award by the Collector:

. Award by the Collector: Determination of market value of land by collector u/s 26: The higher of (a) the market value specified in 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 (The market value shall be determined by the Collector based on one-half of the total number of sale deeds or the agreements to sell recorded in preceding 3 years where highest sale price have been mentioned); (c) consented amount of compensation as agreed upon in case of acquisition for PPP or private companies projects as defined in section 2(2).

Section 29 (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 utilize the services of experienced persons in the field of agriculture as considered necessary by him.

S. 30 (1) In addition to the market value of the land as above provided, the collector shall in every case award a solatium (i.e., extra compensation for the forcible nature of acquisition)  of one hundred per cent over the total compensation amount.

Valuation as per First Schedule: The land value (Say “P”) thus calculated shall be multiplied by a factor 1 for urban area and regarding rural area, the Act only provides the baseline for compensation and has devised a sliding scale which allows state Governments to fix the multiplier from 1 to 2 when moved from urban to rural area. The precise slabs shall be left to respective state governments. Market value of land “MVL” thus calculated is added with assets attached to land say “B”. Market value of acquired property “MVAP” is MVL + B.

Add a solatium Say “S” of 100% of MVAP. The Award is MVAP+S and the Second Schedule elements of rehabilitation and resettlement entitlements for all the affected families (Both land owners and families whose livelihood is primarily dependent on land acquired) in addition to those provided in the First Schedule.

Valuation: URBAN AREA:

The following components shall constitute the minimum compensation package to be given to those whose land is acquired and to tenants referred to in clause (c) of section 3 in a proportion to be decided by the appropriate Government:

Section of Bill	Description	Amount INR
S. 26, 27 and 30 (1) & Schedule I	The value of land: Extent of land 35,000 sf @ INR 7,000 / sq.ft. (Say “P”)	24,50,00,000
	Multiplier 1 (P x 1): Market value of land “MVL”	24,50,00,000
	Market value of land. Say “MVL”	24,50,00,000
	Assets attached to land Say “B”	0
	Market value of acquired property Say  “MVAP” (MVL+B)	24,50,00,000
	Add Solatium @ 100% of MVAP. Say “S”	24,50,00,000
	Compensation  MVAP + S	49,00,00,000
(INR Forty Nine Crore only)

Urban area compensation is @ 100 percentages increase of land value assessed (P) or 2.00 times.

Rural AREA:

Section of Bill	Description	Amount INR
S. 26, 27 and 30 (1) & Schedule I	The value of land: Extent of land 35,000 sf @ INR 7,000 / sf (Say “P”) The value of land: Extent of land 35,000 sf @ INR 7,000 / sf (Say “P”)	24,50,00,000
	Multiplier Say 2 (P x 2): Market value of land “MVL”	49,00,00,000
	Market value of land. Say “MVL”	49,00,00,000
	Assets attached to land Say “B”	0
	Market value of acquired property Say “MVAP” (MVL+B).	49,00,00,000
	Add Solatium @ 100% of MVAP. Say “S”	49,00,00,000
	Compensation  MVAP + S	98,00,00,000
(INR Ninety Eight Crore only)

(Please note: The land value in rural area is not like urban area; the above is only for illustration). Rural area compensation is @ 300 percentages increase of land value assessed (P) or 4.00 times.

X. Parameters are to be considered by the collector in determination of award (Final Award Format):

S. 28. In determining the amount of compensation to be awarded for land acquired under this Act, the collector shall take into consideration—

Reference	Particulars of Compensation	Amount INR
Section -28 Firstly	(A) The market value as determined under section 26 and the award amount in accordance with the First Schedule & (B) the Second Schedule	A+B = say “C”
Secondly	Damage to crops or any standing trees	D
Thirdly	The depreciation in the value of the claimant’s retained interest arising from the severing of the land acquired from the original whole.	E
Fourthly	Injurious affection to the retained land may arise as a result of the execution and use of the works; the depreciating effect is to be related to the new works to be situated on the land taken and elsewhere.	F
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.	G
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.	H
Seventhly	Any other ground which may be in the interest of equity, justice and beneficial to the affected families.	J
	Compensation Say “K”	C+D+E+F+G+H+J
Section 30 (1)	Solatium Amount @  100 percent of “K” Say “L”	L
Section 30 (3)	12 % interest payable on “A” Say “M” from S. 4(2) SIA notification till the date of the award of the Collector or the date of taking possession of the land, whichever is earlier.	M
	Total AWARD	L+M

The date of valuation is section 11 notification; provided that 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 and 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.

Original Article can be viewed in ^ http://www.lawweb.in/2013/12/valuation-for-land-acquisition.html and

also ^ http://www.lawyersclubindia.com/articles/Valuation-for-Land-Acquisition-5910.asp

Source: 1. ^ http://www.rlarrdc.org.in/images/New%20Land%20Acqusiition%20Act,%202013.pdf retrieved on 31 August 2015

2. ^ http://www.rlarrdc.org.in/images/RFCTLARR_SIA_and_Consent_Rules_2014.pdf retrieved on April 19, 2015