Summary
In 1985 land in Adrial village, Karimnagar district, was acquired for Singareni Collieries to mine coal. The Andhra Pradesh High Court valued it at Rs 1,23,000 an acre but deducted one-third for development, leaving Rs 80,000, and separately allowed Rs 10,000 an acre for the coal deposits. The company's own challenge had already been dismissed. On the landowners' appeals, the Supreme Court held that the one-third deduction was unwarranted. The land was acquired only to mine coal from the identified reserves, and none of it would be lost to roads, drains or other development works. Following Nelson Fernandes, the purpose of acquisition bears on market value. Compensation was fixed at Rs 1,23,000 an acre plus Rs 10,000 an acre for the coal.
Issues
- Whether a one-third deduction towards development charges was justified in fixing compensation for land acquired solely for excavation of coal, where the entire land was to be mined.
Provisions considered
- Sections 4(1), 6 and 18, Land Acquisition Act, 1894Market value on references for land notified on 13.05.1985 was fixed without a development deduction, the purpose of acquisition being relevant to valuation. (¶¶ 2, 6.2, 6.3, 7)
Held
- The purpose of acquisition is a relevant factor in fixing market value and the deduction for development, as held in Basavva, Viluben Jhalejar Contractor and Nelson Fernandes. (¶ 6.2)
- As the land was acquired solely to excavate coal on the basis of identified reserves, the entire area was to be mined and no part would be wasted on roads, sewage lines, parks or other developmental activity, so the High Court erred in deducting one-third from the market value of Rs 1,23,000 per acre. (¶¶ 6.2, 6.3)
- The additional Rs 10,000 per acre awarded for coal deposits stands, the beneficiary company's challenge to the High Court's judgment having been dismissed by this Court. (¶¶ 2.2, 6.1, 6.3, 7)
Result
Civil Appeal No. 6821 of 2022 and connected appeals partly allowed; compensation fixed at Rs 1,23,000 per acre with statutory benefits plus Rs 10,000 per acre for coal deposits; the Andhra Pradesh High Court's judgment dated 06.12.2013 modified accordingly; no costs.