"Immediately Preceding Three Years" For Land Compensation Must Be Calculated From Date Of Section 11 Notification, Not Calendar Year: Jharkhand High Court

"The 'immediately preceding three years' for computing the 'market value' on the date of notification under section 11... would be 'immediately preceding three years' from the date of notification... and not from the date when NTPC claimed to have filed fresh application." High Court of Jharkhand, in a significant ruling dated March 30, 2026, held that the "immediately preceding three years" for determining the market value of acquired land under Section 26 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, must be calculated strictly backward from the exact date of the preliminary notification under Section 11.

While adjudicating a massive batch of 118 appeals concerning land acquired for NTPC Limited, a single-judge bench of Justice Anubha Rawat Choudhary observed that importing the definition of a "calendar year" from the General Clauses Act would be completely out of context and contrary to the statutory framework governing land acquisition compensation.

The dispute stemmed from the acquisition of 84.80 acres of raiyati land in village Tarhesa for NTPC's Keredari Coal Mining Project. The District Land Acquisition Officer initially fixed compensation at Rs. 4,823 per decimal, which a reference court subsequently enhanced to a flat rate of Rs. 11,000 per decimal. Dissatisfied with this enhancement, both NTPC Limited and the land-owning claimants approached the High Court, with NTPC seeking a reduction based on older sale deeds and the claimants demanding strict adherence to the statutory average calculation.

The primary question before the court was whether the three-year period for assessing average sale price under Section 26 of the 2013 Act should be calculated from the date of the Section 11 notification or from the date the acquiring body applied to initiate the acquisition. The court was also called upon to determine whether the term "year" in the statute implies a strict calendar year under the General Clauses Act, and whether a trial court possesses the discretion to award compensation at a rate lower than the statutorily computed average.

Addressing NTPC's argument that the three-year period should be calculated from April 2016, when it filed a fresh application after previous proceedings lapsed under the old 1894 Act, the court firmly rejected the proposition. The bench emphasised that Section 26 expressly mandates that the date for determining the market value shall be the date of the notification issued under Section 11 of the 2013 Act. The court reasoned that accepting NTPC's argument would arbitrarily exclude relevant sale deeds executed closer to the actual notification date, which runs contrary to the legislative intent of providing fair compensation based on prevailing market rates. "Such is not the intention of the legislature. The legislature has clearly and in unequivocal words provided under section 26 of the Act of 2013 itself that the date for determination of ‘market value’ shall be the date on which the notification has been issued under section 11."

The court then tackled NTPC's reliance on Section 3(66) of the General Clauses Act, 1897, through which the corporation argued that the word "year" in Section 26 means a British calendar year. Justice Choudhary dismissed this interpretation, noting that applying a strict calendar year metric would result in the outright exclusion of sale deeds executed in the months immediately preceding the notification. The bench clarified that the statutory framework of the 2013 Act requires a precise backward calculation from the exact date of the Section 11 notification, rendering the General Clauses Act definition repugnant to the specific context of land acquisition. "This Court finds that the said definition of ‘year’ as provided under the General Clauses Act, 1897... is completely out of context and would be contrary to the intent and manner in which the ‘market value’ has to be determined under section 26 of the Act of 2013 for payment of compensation."

Consequently, the court dealt with an interlocutory application filed by NTPC under Order XLI Rule 27 of the Code of Civil Procedure, 1908, seeking to adduce ten older sale deeds as additional evidence. NTPC alleged that the claimants had suppressed these deeds, which showed much lower land values. However, applying the established statutory timeline of June 2016 to June 2019, the court found that all the proposed deeds were executed prior to the relevant three-year window. Finding them outside the statutory zone of consideration, the court dismissed the application and absolved the claimants of any material suppression. "This court finds none of the aforesaid sale deeds sought to be brought on record by way of additional evidence... falling within the said period and hence, they do not come under the zone of consideration for the purpose of determining the compensation."

"Once the average rate is arrived in terms of the provision of Section 26 (1)(b) of the Act of 2013 and the same is found to be higher than the calculation under Section 26(1)(a) and Section 26(1)(c), the court has no option but to take the average rate."

Scrutinising the trial court's methodology, the High Court identified a critical error in how the lower court arrived at its final figure. The trial court had correctly calculated an average statutory rate of Rs. 15,372 per decimal using the available sale deeds but inexplicably reduced the final award to Rs. 11,000 per decimal in the name of the "interest of justice." The High Court held that courts do not possess the arbitrary discretion to deviate downward from the mathematical average calculated under Section 26(1)(b) of the 2013 Act. The bench ruled that if the average sale price method yields a higher value than the circle rate or consented amount, the statute dictates that the court must award that higher figure. "Therefore, the approach of the learned trial court to take figure of Rs.11,000/- per decimal, which is different from the average rate as arrived under section 26(1)(b), is beyond the scope of Section 26 of the Act of 2013, particularly when neither any cogent reason has been assigned nor any justification has been given."

Finally, the court recalculated the compensation by applying Explanation 2 to Section 26(1)(b), which requires taking one-half of the total eligible sale deeds showing the highest prices. After excluding two deeds that fell outside the relevant three-year period, the court took the top seven deeds from the adjoining villages. Adopting the government's circle rate methodology, the court converted the residential land rates to agricultural rates at fifty percent. Through this strict statutory computation, the High Court arrived at a revised average market value of Rs. 15,783 per decimal. "The compensation granted by the learned trial court at the rate of Rs.11,000/- per decimal in the impugned judgement and awards as discussed above, is hereby set aside... and the compensation is now fixed at Rs.15,783/- per decimal."

Ultimately, the High Court dismissed the 59 appeals preferred by NTPC Limited and allowed the 59 appeals filed by the land-owning claimants. The final compensation was significantly enhanced from Rs. 11,000 to Rs. 15,783 per decimal, bringing a definitive end to the valuation dispute while entitling the claimants to all statutory benefits under the 2013 Act.

Date of Decision: 30 March 2026