The Supreme Court has held that the market value of an acquired land need not necessarily be calculated on the basis of the value of adjacent land, as several other factors need to be considered while fixing compensation. Allowing an appeal by the Lucknow Development Authority (LDA) against enhanced compensation in a land acquisition case, a Bench comprising Justices Arijit Pasayat and L S Panta said while determining the market value of the land acquired it had to be correctly calculated and paid so that there was neither unjust enrichment on the part of the acquirer nor undue deprivation on the part of the owner. “It is an accepted principle that the compensation must be determined by reference to the price which a willing vendor might reasonably expect to receive from the willing purchaser. While considering the market value, disinclination of the vendor to part with his land and the urgent necessity of the purchaser to buy it must alike be disregarded, neither must be considered as acting under any compulsion,” the Bench observed.The LDA appeal challenged the enhanced rate of Rs 6 per square feet fixed by the Land Tribunal as against the Rs 2.20 awarded by the Land Acquisition Officer to owners of the agricultural land in UP’s Mahibullapur village.The contention of the land owners that their land is situated in a developed area and some pieces of land were sold at much higher price immediately before the acquisition was accepted by the High Court.While holding that the fact that an area is developed or adjacent to a developed area will not ipso facto make every land situated in the area also developed, the Bench said where a large area was the subject matter of acquisition the rates paid for small parcels of land do not always provide a useful guide for determining the market value of the land acquired. Therefore, a claimant who maintains that his land is fully developed and nothing more is required to be done for developmental purpose, must back the claim with sufficient evidence.Referring to its earlier judgments, the court laid down certain broad principles to reduce speculation vis-a-vis fixation of market value for land acquired by the Government. "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 when sale is within a reasonable time of the date of notification, it should be a bona fide transaction, it should be of the land acquired or of the land adjacent to the land acquired and it should possess similar advantages," the Bench said.
