Case Note & Summary
The case involves a first appeal under Section 54 of the Land Acquisition Act, 1894 read with Section 96 of the Code of Civil Procedure, 1908, filed by the Special Land Acquisition Officer and others against the judgment and order dated 30.04.2010 passed by the learned Reference Court in LAR No. 652 of 1999 and connected matters. The land in question is situated in Village Karmali, Taluka District Bharuch, acquired for the construction of the Shukla Tirth Branch Distributory Canal under the Narmada Project. The notification under Section 4 of the Act was published on 28.08.1997, and the notification under Section 6 was published on 21.05.1998. The Special Land Acquisition Officer passed an award under Section 11 on 22.02.1999, awarding Rs. 600/- per Are. The claimants sought additional compensation by filing an application under Section 18 of the Act. The learned Reference Court, relying on a decision in LAR No. 1710 of 1998 (which pertained to a Section 4 notification dated 07.02.1996), determined the market value at Rs. 37/- per square metre, effectively granting a 15% annual escalation. The appellant State contended that the escalation was excessive, arguing that since the village is situated in the interior of Taluka Bharuch, a reasonable escalation would be around 7.5% per annum instead of 15%. The High Court heard the learned AGP Mr. Parth Patel for the State. The Court agreed with the appellant's submission, noting that the Reference Court had erred in mechanically applying the 15% escalation from a previous case without considering the difference in notification dates and the interior location of the village. The High Court held that a reasonable escalation would be 7.5% per annum. Consequently, the appeal was partly allowed, and the compensation was reduced accordingly. The Court directed that the modified compensation be calculated based on 7.5% annual escalation from the date of the earlier notification (07.02.1996) to the date of the present notification (28.08.1997). The judgment was delivered on 26.02.2026.
Headnote
A) Land Acquisition - Market Value Determination - Escalation Rate - Land Acquisition Act, 1894, Sections 4, 6, 11, 18, 54 - The Reference Court granted 15% annual escalation based on a previous decision for land with a different notification date. The High Court held that for land in an interior village, a reasonable escalation would be 7.5% per annum instead of 15%. The appeal was partly allowed, reducing the compensation accordingly. (Paras 1-5) B) Land Acquisition - Reference Court - Reliance on Previous Decision - Land Acquisition Act, 1894, Section 18 - The Reference Court relied on a decision in LAR No. 1710 of 1998 which pertained to a Section 4 notification dated 07.02.1996, whereas the present case had a notification dated 28.08.1997. The High Court found that the escalation applied was excessive given the difference in notification dates and the interior location of the village. (Paras 2-4)
Issue of Consideration
Whether the Reference Court erred in granting 15% annual escalation in market value for land situated in an interior village, and what is the appropriate rate of escalation.
Final Decision
Appeal is partly allowed. The compensation awarded by the Reference Court is modified. The market value shall be determined by applying 7.5% annual escalation instead of 15%. The modified compensation shall be calculated accordingly. No order as to costs.
Law Points
- Land Acquisition Act
- 1894
- Section 4
- Section 6
- Section 11
- Section 18
- Section 54
- Code of Civil Procedure
- 1908
- Section 96
- Determination of market value
- Escalation rate for interior village land
