Supreme Court delivers landmark judgment on compensation under Land Acquisition Act
Justices Surya Kant & KV Viswanathan [10-07-2024]

Read Order: KAZI AKILODDIN v. STATE OF MAHARASHTRA & ORS [SC- CIVIL APPEAL NOS. 6776-6777 OF 2013]

LE Correspondent

New Delhi, July 11, 2024: The Supreme Court has delivered a landmark judgment deciding several important legal questions related to compensation under the Land Acquisition Act, 1894. The judgment deals with various civil appeals filed by landowners and the Maharashtra government challenging orders of the Bombay High Court.

The Supreme Court held that the High Court erred in declaring the appellant's entire land as falling within a 'Blue Zone' or no-construction zone. The Court found that on the date of the Section 4 notification in 1999, there was no valid statutory demarcation of a Blue Zone. Only land up to 15 meters from the defined boundary of a water course could be considered as falling under a no-construction zone as per applicable building bye-laws at the time.

The Apex Court awarded compensation of Rs. 100 per sq ft for the appellant's land falling outside the 15-meter no-construction zone, relying on similar awards for adjoining lands. It rejected the State's contention that the land had no development potential.

The Court held that no deduction towards development charges was warranted as the land acquisition was for constructing a flood protection wall and no development work was involved. Further deductions made by the High Court towards difference in plot size and disadvantageous location were set aside.

The Top Court upheld the entitlement of landowners to rental compensation at 8% of the awarded amount from the date of taking possession till the passing of the award, based on earlier government resolutions. In other connected appeals, the Supreme Court affirmed compensation of Rs. 100 per sq ft awarded by Reference Courts for acquired lands, relying on sale deeds of similar plots between unrelated parties. It rejected reliance on sale deeds between family members just prior to acquisition.

The judgment lays down important principles on determining market value and development potential of acquired lands, admissibility of exemplar sale transactions, and impermissible deductions. It upholds a balanced approach considering the interests of landowners as well as the government's power of eminent domain for public purposes.