Law:

Section:

Section 23 of the Land Acquisition Act, 1894-Valuation of acquired properties-Agricultural land-In respect of agricultural land compulsorily acquired, high court determined compensation by applying multiplier of 15 to net annual profits from those lands-Whether in view of facts ( i) that evidence of comparable sales was not available, (ii) that rate of return on gilt-edged securities was around 8 per cent on date of acquisition, and (iii ) that expected return from agricultural lands should be more, adoption of 12 as multiple would be reasonable-Held, yes Facts In respect of agricultural lands belonging to the respondent, which were compulsorily acquired under section 4 of the Land Acquisition Act, 1894 ('the Act'), the High Court as well as the lower Courts, held that the amount of compensation could be fixed by applying the multiple of 15 to the net annual profits from the lands. The Government contended in appeal, that in view of the fact that the rate of return from gilt-edged securities at the relevant time was around 8 per cent, only a multiple of 12| per cent should have been adopted. Held The function of the Court in awarding compensation under the LA Act is to ascertain the market value of the land at the date of the notification under section 4(1) of the LA Act and the methods of valuation may be (i) opinion of experts, (ii)the prices paid within a reasonable time in bona fide transactions of purchase or sale of the lands acquired or of the lands adjacent to those acquired and possessing similar advantages, and (iii) a number of years' purchase of the actual or immediately prospective profits of the lands acquired. Normally, the method of capitalising the actual or immediately prospective profits or the rent of a number of years' purchase should not be resorted to if there is evidence of comparable sales or other evidence for computation of the market value. It can be resorted to only when no other method is available. Where definite material is not forthcoming either in the shape of sales of similar lands in the neighbourhood at or about the date of notification under section 4(1) or otherwise, the Court has no other alternative but to fall back on…

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