Supreme Court: Purpose Of Land Acquisition Also A Relevant Factor For Determining Market Value

The Supreme Court in the case S. Shankaraiah vs Land Acquisition Officer and Revenue Divisional Officer Peddapali Karimnagar observed and has reiterated that the purpose for which the land acquisition is made is also a relevant factor for determining the market value
In the present case, A large extent of land in Adrial Village of Manthani Mandal, Karimnagar District of Andhra Pradesh was acquired by the State Government for the benefit of Singareni Collieries Company Limited. The land owners not being satisfied with the compensation awarded by the Land Acquisition Officer seek references under Section 18 of the Land Acquisition Act, 1894. Thus, the Reference Court fixed the market value at Rs.30,000/­ per acre and Rs.50,000/­ per acre. A compensation of @ Rs.15,000/­ per acre towards sub­soil mineral rights has also been awarded by the Reference Court. Lately, the award was modified by the High Court and fixed the compensation @ Rs.80,000/­ per acre considering the market value of the land Rs.1,23,000/­ per acre and thereafter deducting 1/3rd towards the developmental activities. Also, in addition the High Court awarded Rs.10,000/­ per acre as part of the market value for sub­soil rights. Aggrieving with the same, the land owners r original claimants preferred appeal seeking enhancement of the amount of compensation.
It has been contended by the land owners/claimant that the lands in question have been acquired for the benefit of the mining company/ Singareni Collieries Company Ltd. which is to be used for coal excavation. The coal is already being existed in the lands acquired. Thus, the entire land is to be mined and the coal is to be excavated, there is no wastage of land on account of any developmental activities such as roads, sewage lines, parks etc. In the view of the present matter, they contended that there is no development required and therefore 1/3rd deduction is not warranted at all.
Further, the court noted that by this court the identical question came to be considered by this Court in the case of Nelson Fernandes (supra) and after taking into consideration the earlier decision of the Court in the case of Basavva vs. Spl. Land Acquisition Officer, wherein it was held by the court that the purpose for which acquisition is made is also a relevant factor for determining the market value.
The court while applying the said judgement to the facts of this case observed that when the acquisition is solely for the purpose of excavation of coal and the entire land is being acquired on the basis of the estimates of the coal reserve identified and the entire land is to be used and mined and no further developmental activity is required, the court is of the opinion that in the facts and circumstances of the case, the High Court has erred in deducting 1/3rd towards the developmental activities.