SUPREME COURT: LAND VALUE UNDER RFCTLARR ACT BASED ON SECTION 11 NOTIFICATION DATE:

On Monday (April 21), the Supreme Court held that the market value of land acquired under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (“2013 Act”) must be determined based on the date of the acquisition notification issued under Section 11 of the Act.

A bench comprising Justices Dipankar Datta and Manmohan set aside a Gujarat High Court ruling that had pegged the valuation date as January 1, 2014—the date the Act came into force—instead of the actual date of the acquisition notification issued in 2023.

“the legislative scheme does not give discretion to the Courts to select a date for valuation. On the contrary, RFCTLARR Act, 2013 expressly mandates that compensation/valuation must be determined as of the date of Notification under Section 11 of the RFCTLARR Act, 2013 – which in this present case is yet to be issued.”, the court said.

The proviso to Section 26(1) of the 2013 Act clearly stipulates that the market value of the land must be determined as of the date the preliminary notification is issued under Section 11, which initiates the acquisition process for a public purpose.

Emphasizing the use of the word "shall" in the proviso, the Supreme Court held that this makes it mandatory to consider the date of the Section 11 Notification as the valuation date. Therefore, the Gujarat High Court erred in treating January 1, 2014—the date the Act came into force—as the relevant date, which has no bearing on fresh acquisitions initiated under the 2013 Act.

“This Court is of the view that the said provision lays down the methodology for computing the market value of the land on the date of the acquisition notification. The use of the word „shall‟ in Section 26(1) proviso is reflective of the legislative mandate that Section 11 Notification is the date for determination of the compensation.”, the court said.

“This Court has no doubt that the legislative intent is to ensure that the land owners receive fair compensation reflective of the market value prevailing at the time of acquisition. By fixing the date of 01st January, 2014 as the date for determination of market value, the impugned order deprives the Appellant of compensation at the 2023 rates, which must be considerably higher.”, the Court said. Resultantly, the appeal was allowed.