Potentiality Of Acquired Land Has To Be Taken Into Consideration To Determine Market Value: Supreme Court

25th Mar,2021

Potentiality Of Acquired Land Has To Be Taken Into Consideration To Determine Market Value: Supreme Court

The Supreme Court stated that the potentiality of the purchased land is one of the most important aspects to consider when determining the land's market value.
ISSUES BEFORE THE COURT:
Although allowing the appeals filed by Uttar Pradesh Awas Evam Vikas, the bench comprising Justices UU Lalit, Hemant Gupta, and S. Ravindra Bhat observed that whether a land has potential value or not is primarily determined by its condition, situation, use to which it is put or its reasonable capability of being put, as well as its proximity to residential, commercial, or industrial areas/institutions.
OBSERVATION OF THE COURT:
The court stated that the following methods of valuation should be used to determine the market value of land on the date of notification under Section 4(1) of the Land Acquisition Act, 193: (i.) expert opinion, (ii) price paid within a reasonable time in bona fide transactions of purchase of the lands acquired or lands adjacent to the lands acquired and possessing similar advantages; and (iii) price paid within a reasonable time in bona fide transactions of purchase of the lands acquired or lands adjacent to The acid test for measuring market value in compulsory acquisition cases should always be to avoid feats of creativity. The bench noted that the facts in this case does not indicate large-scale construction activities and instead focuses on the selling of small areas of land. The court also noted that prior to notification, the landowners had not created any other sale deed or award of compensation on account of land acquisition on the northern side of National Highway-24. The court also stated that compensation assessed on the basis of a notice five years later cannot be used to assess compensation for land acquired years earlier.