Whichever Is Higher Must Prevail: Calcutta High Court Clarifies Compensation Method Under Land Acquisition Act, 2013

“Section 26(1) clearly disjuncts the three valuation criteria using the word ‘or’; hence, the highest among them is to be adopted”— In a significant ruling Calcutta High Court held that while determining compensation under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, authorities must apply the highest among the three valuation methods prescribed in Section 26(1). The Court criticized the State’s attempt to dilute compensation by relying on average market prices and reiterated that the statutory mandate is to favour landowners with the most beneficial rate.
“Out of the three criteria, whichever is higher is to be adopted.”

“Disjunctive Language in Section 26(1) Leaves No Room for Ambiguity”—Highest Recorded Value Must Be Applied
The State argued that compensation should be calculated based on average market prices of similar land parcels. The Court rejected this view, holding:
“A perusal of Section 26(1) clearly shows that the three criteria—average sale price, highest sale price, or consented compensation—are separated by ‘or’, not ‘and’. The intention of the legislature is to ensure the highest benefit to the land loser.”
Accordingly, the Court fixed the compensation on the basis of a registered sale deed (Deed No. 05821) reflecting a price of Rs.6,02,500 per cottah, less Rs.50,000 for the value of standing structures, thus determining the net market value at Rs.5,52,544 per cottah.

“Award Date Is the Cut-Off for Compensation—Not Administrative Assent”
The claimant had argued that compensation should be awarded until the date the Governor approved the award. The Court dismissed this submission:
“There is no requirement of such assent under the 2013 Act. The award was passed on 30.07.2015, and that date alone governs the outer limit for interest calculation.”

“State Barred from Introducing Evidence Without Written Objection”—Pleadings Are Prerequisite to Admissibility
When the State sought to introduce documents to challenge the land value, the Court invoked the principle laid down in Bachhaj Nahar v. Nilima Mandal:
“Evidence cannot be looked into without pleadings. The State, having failed to file written objections before the Reference Court, is estopped from introducing documents at the appellate stage.”

“Interest under Sections 72 and 80 Is Justified”—Discretion Cannot Be Arbitrarily Denied
While Section 72 of the 2013 Act uses the word “may” for granting interest on excess compensation, the Court held that this discretion must not be used capriciously:
“We do not find any conceivable reason as to why the claimant should be deprived of such interest when the law itself creates the entitlement.”
Reiterating that land acquisition must be guided by transparency and fairness, the Calcutta High Court directed the Referral Court to complete the revised calculation within eight months, using the highest market value, applying the correct multiplier, granting 100% solatium, and considering interest under Sections 72 and 80.
“The award must reflect the most favourable of the statutory criteria—not a compromise.”

This judgment stands as a landmark reaffirmation of the pro-claimant spirit of the 2013 Act, intended to reverse historic injustice in land acquisition matters.

Date of Decision: 8 May 2025