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

The Supreme Court observed that potentiality of the acquired land is one of the primary factors to be taken into consideration to determine the market value of the land. The question whether a land has potential value or not primarily depends upon its condition, situation, use to which it is put or its reasonable capability of being put and also its proximity to residential, commercial or industrial areas/institutions, the bench comprising Justices UU Lalit, Hemant Gupta and S. Ravindra Bhat observed while allowing the appeals filed by Uttar Pradesh Awas Evam Vikas Parishad against enhancement of compensation by the Allahabad High Court to land owners of the acquired lands in some villages in the State. The acquisition relates to a notification dated 26.06.1982 by the Parishad under Section 28 of the Land Acquisition Act, 1894, to acquire 1229.914 acres of land. The court said that the methods of valuation to be adopted to ascertain the market value of land on the date of the notification under Section 4(1) of the Land Acquisition Act, 193 are: (i) opinion of experts, (ii) the price paid within a reasonable time in bona fide transactions of purchase of the lands acquired or the lands adjacent to the lands acquired and possessing similar advantages; and (iii) a number of years’ purchase of the actual or immediately prospective profits of the lands acquired. The acid test which the court should always adopt in determining the market value in matters of compulsory acquisition is to eschew feats of imagination and sit in the armchair of a prudent willing purchaser, the bench observed.

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