The theory of deduction does not apply under the Acquisition Act, 2013; compensation must be based on the highest market value as per the Stamp Act.

JUDGMENT

(Sanjiv Khanna, CJI.)

The issue raised in the present batch of appeals filed by the appellant, Madhya Pradesh Road Development Corporation, relates to the applicability of the “theory of deduction” for determining the compensation payable under The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013¹[Hereinafter, “Acquisition Act, 2013”].

2. Before examining the legal position, it would be appropriate to set out the facts in brief:

- By a Gazette Notification dated 12.09.2014, the Central Government declared its intention of acquiring the stretch of land falling within 3.4 km to 22.8 km of the Jabalpur-Mandla-Chilpi section, in the district of Jabalpur, State of Madhya Pradesh. The purpose of the acquisition was stated to be widening, four-laning, maintenance, management and operation of National Highway No.12-A. On 30.10.2014, the notification was also published in two newspapers.

- By a Gazette Notification dated 02.02.2015, the land was declared to have been acquired.

- On 31.08.2015, the Competent Authority and Land Acquisition Officer, Collectorate, Jabalpur passed an award determining the compensation payable for the land acquired. The award relies on the mandate of Section 105(3) of the Acquisition Act, 2013 (as amended) ²[Section 105 (3) – The provisions of this Act relating to the determination of compensation in accordance with the First Schedule, rehabilitation and resettlement in accordance with the Second Schedule and infrastructure amenities in accordance with the Third Schedule shall apply to the enactments relating to land acquisition specified in the Fourth Schedule with effect from 1st January, 2015]. It accordingly holds that for the acquisition in question, provisions relating to the determination of compensation shall apply in accordance with the First Schedule of the Acquisition Act, 2013. Further, provisions for rehabilitation and resettlement would apply as per the Second Schedule, and those relating to infrastructural amenities shall apply as per the Third Schedule of the Acquisition Act, 2013.

- The First Schedule of the Acquisition Act, 2013 states that the market value of the land has to be determined in accordance with Section 26 of the Acquisition Act, 2013. Clause (a) to Section 26(1) adopts the market value as specified under the Indian Stamp Act, 1899³[Hereinafter, “Stamp Act”]. Based on the date of the Gazette Notification published as per Section 11 of the Acquisition Act, 2013, i.e., on 12.09.2014, the Competent Authority deemed it appropriate to compute the market value according to the Collector’s Guidelines for the year 2014- 2015⁴[Hereinafter, “Collector’s Guidelines”]. These guidelines have been formulated in the exercise of the powers conferred under the Stamp Act. The Collector’s Guidelines have been annexed as ‘Annexure P-1’ to the present appeal.

- Paragraph 4.1 of the Collector’s Guidelines deals with municipal corporation areas of Jabalpur amongst other districts. It provides for the valuation of two kinds of land – converted agricultural land and non-converted agricultural land. These are further divided into Categories (A) and (B). Category (A) applies when the area of land is less than or equal to 1000 square meters, while Category (B) applies when the area of land exceeds 1000 square meters.

- The Competent Authority determined the concerned area to be non-converted land of more than 1000 square meters, which would fall under Category (B). According to the method prescribed under Category (B), the first 1000 square meters are to be valued in accordance with Category (A). This corresponds to the rate applicable to residential plots set out in Form-1 of the Collector’s Guidelines. The remaining area is to be valued at the rate for agricultural land as specified in Form-3 of the Collector’s Guidelines. In the present case, the Competent Authority applied the rate for Village Katiyaghat, which is specified as Rs.1,50,00,000 pe