A Single Bench of the J&K&L HC comprising Justice Sajeev Kumar, in an appeal against the judgment/award passed by District Judge, Jammu [“the Reference Court”] under the Jammu & Kashmir Land Acquisition Act, Svt. 1990 [“the Act”] enunciated the factors to be considered in determining the amount of compensation to be awarded for the land acquired under the Act. 

In the case where the Reference Court enhanced the market rate of the acquired land in village Satwari from Rs.1,45,000/- per kanal to Rs.2,07,500/- per kanal, the Appellants agitated before the High Court that the Reference Court did not appreciate the factors that are to be taken into account in terms of Section 23 the Act for determining the true market value of the acquired land at the time of issuance of notification under Section 6 of the Act, and that the market value of the land of the appellants acquired by respondents was not less than Rs.5.00 lakh per kanal.

The High Court noting that in terms of Section 23 of the Act, market value of the land was to be determined in reference to the date of publication of declaration under Section 6 of the Act (i.e. 09.01.1996 in the instant case), observed that the Appellants had failed to bring on record any cogent evidence to demonstrate and prove that the market value of the acquired land at the time of issuance of Section 6 notification was 5/6 lakh per kanal, as is claimed by the appellants. 

The Court further observed that the factors provided under Section 23 of the Act are not exhaustive and enumerated the four factors to be considered for determining the value of the land to be acquired, viz., situation/location of the land, nature of development in surrounding area, availability of land for development in the area, and the demand for land in the area. However, in absence of any concrete evidence, the Court observed that the mode to be adopted is to take the proved market value of the nearby land in previous years as the base value and then give it annual incremental increase of 10% to arrive at the correct market value of the acquired land at the time of issuance of Section 6 notification. In the case at hand, the Court noted that there is no evidence of any comparable sale transaction of the relevant time of the land available in the neighborhood, in which case, the Court has tolook for any proved market value of the nearby land.

However, the Court while relying upon “Central Warehousing Corporation Ltd. v. Thakur Dwara Kalan-ul-Maruf Baraglan Wala (Dead) and others” (decided on 19th October 2023)” stated, “it is now trite law that where gap between the subject acquisition and the transaction that proves market value is more than five years, it is not safe to award increase in the market value of the acquired land @15%, that too, with cumulative effect. It would, thus, depend on the facts and circumstances of the case and would be further reduced depending upon the length of gap between the two situations.”

The Court, although did not find fault with the view of the Reference Court, nevertheless, in light of the pronouncement in the case of “Oil and Natural Gas Corporation Ltd. v. Rashmeshbhai Jivanbhai Patel and another [(2008) 14 SCC 745]” it went on to enhance the compensation based on principles discussed hereinabove. However, noting that in the instant case nine years had passed, the Court opined that enhancement to the market rate of acquired land @ 12% with cumulative effect would be just and fair compensation and would meet the ends of justice, and fixed the rate at Rs.2,48,466/- per kanal. In arriving at this conclusion, the Court took judicial note of the fact that the land was situated in an urban area and had high commercial potential. 

Therefore, while disposing off the Appeal, the Court directed the respondents to pay enhanced amount along with solatium @15% and interest @ 6% per annum, to be reckoned from the date of taking possession of the acquired land for a period of one year and @ 10% per annum till the enhanced amount is actually paid to the appellants.