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THE LAND ACQUISITION ACT, 1894. Presented by, G . Mouna – 060123 S . Supraja – 060138. THE LAND ACQUISITION ACT, 1894 An act to amend the law for the acquisition of land for public purposes and for companies. The basic principles of Land Acquisition Act are:

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Presented by,

G . Mouna – 060123

S . Supraja – 060138



  • An act to amend the law for the acquisition of land for public purposes and for companies.
  • The basic principles of Land Acquisition Act are:
  • Land or property is required for a public purpose.
  • Sale by owner is compulsory and there is no option in the same.
  • Owner to get market value as against sentimental or monopoly value.
  • Property is acquired free from all encumbrances.
  • In addition to market value, an owner will be entitled to additional compensation of 30% on the value of such land for compulsory acquisition which is known as ‘Solatium’.
  • “Acquisition meant that the entire bundle of rights which were vested in the original holder would pass on acquisition to the acquirer by leaving nothing to the former”.

The procedure for the acquisition of land can be divided into the following parts:

  • Investigation;
  • Objection and confirmation;
  • Claim and value
  • Award
  • Possession
  • Payment
  • Reference to court; and
  • Apportionment.


  • When land is required by a local authority or a company, an application is required to be made by it to the revenue authority, the application to be accompanied with a copy of plan showing Survey Nos., purpose of acquisition and the reason as to why this particular site has been selected for the purpose of acquisition.
  • It must also contain the provision made for the cost of acquisition.
  • The application must contain the fact that the local authority or the company as the case may be, did try in the first instance to purchase the land by negotiations which did not materialisefor one reason or another and hence the need for acquisition proceedings.
  • After the Government has been fully satisfied about the purpose, the least area needed and other relevant facts as provided under Land Acquisition Rules, it will issue a notification under Section 4 of the Act in the State Government Gazette, Part- I, that the particular land is needed for a public purpose. One of the revenue officers will be appointed to function as Collector to hold an enquiry under Section 5-A of the Act.


  • Section 4 of the Act is very important as it fixes the material date for determining the market value of a property.
  • After notification under Section 4 the owner is prohibited from selling his property or disposing of in any manner he likes and further prevented from carrying out any works of improvements or renovations for which no compensation will be payable if executed without obtaining prior permission from the Collector.
  • Objection and Confirmation
  • Generally, the notice for acquisition of a particular land will be served on all persons interested in land, inviting their objections to the said acquisition within 30 days from the date of notification under Section 4 or from further date as may be fixed by the Collector.

Objection and Confirmation

  • The objections to the acquisition will be valid on one or more of the following grounds, namely:
  • That the purpose for which the land is proposed for acquisition is not a public purpose.
  • That the land is not suitable for the said purpose.
  • That land under acquisition is less suitable than the other piece of land.
  • That the area under acquisition is excessive.
  • That the acquisition will destroy or impair the amenity of historical or artistic monuments and places of public resort or will take away important public rights of way or other conveniences or will desecrate religious buildings, grave yards and the like.
  • The Collector after hearing the parties will submit his report to the Government with his observations and if the Government is satisfied about the same it will finally declare the land for acquisition under Section 6; on the other hand, if the objections of the owners are upheld, the Government can cancel the notification.

After the publication of the notification under Section 6, the Land Acquisition Officer (L.A.O.) will proceed with the claim, etc.

  • At times, the owner may file objections when the acquiring body desires to acquire part of the property instead of the whole.
  • This will be under the provision of Section 49(1) which prevents the Government from putting in force the provisions of Land Acquisition Act in respect of only a part of the property when the owner objects to the same.
  • In this case if the owner desires and the acquiring body also agrees, the acquisition is proceeded further by notifying the rest of the property afresh.
  • However, if there is any dispute as to whether a particular part notified does or does not form an integral part of the whole property, it is obligatory on the part of L.A.O. to refer such matter for the determination of the Court.
  • If the Court holds in favour of the claimant, the acquisition in respect of part is quashed, and the L.A.O. will have to proceed further de novo for the acquisition of the whole of the property.

Claim and Award

  • The L.A.O will issue notices under Section 9 to all persons interested in the acquisition, including the occupants, to file their claim reports.
  • He will conduct the necessary inquiries which are not judicial ones, and his award is merely an offer unless the parties accept the same.
  • The L.A.O :
  • Is not to be a party to the proceedings
  • Is to possess an expert knowledge on valuation
  • Offers a fair price to an owner
  • Is to check that the public funds are not wasted.
  • The claim filed before a L.A.O must contain:
  • Names of the claimants and co-sharers if any, with their shares, a written declaration is required to that effect.
  • Document of profits
  • Rents or profiles for last 3 years
  • Valuation report of an architect or engineer together with the documentary evidence in support of the same.
  • Whether area given in notice issued by the Collector is acceptable or not.

Claim and Award

  • The government has got the right to abandon the acquisition proceedings at any time before the final declaration under Section 6 by simply cancelling the notification under Section 4.
  • In case however, the Government desires to drop any acquisition proposal after notification under Section 6 in respect of land, the possession of which is not taken over, it can do so under Section 48(1) of the Land Acquisition Act. However, in such cases, compensation as provided under Section 48(2) will be required to be paid.
  • For preparing a claim report for the purpose of acquisition Sections 23 and 24 are required to be considered.

Section 23(1)

  • In determining the amount of compensation to be awarded for land acquired under this Act, the Court shall take into consideration:
  • Firstly, the market value of the land at the date of the publication of the notification under Section 4, Sub-section (1).
  • Market value can be determined by any one of the following methods, namely:
  • The actual price of the very property under acquisition provided that there is no material time lag between the date of transaction and date of notification under Section 4. Rise and fall in the value of land during that period will have to be accounted for.
  • By comparing land under acquisition with instances of sale in the neighborhood of comparable properties after making due allowance for all the relevant factors which effect the value.
  • Capitalizing the net annual income or net profit at certain number of year’s purchase. The rents restricted by the Rent Act cannot form the basis of valuation as it is not possible to forecast what will be the rent after repeal of the Rent Act.
  • Development method of valuation depending upon the circumstances of a case.

Secondly, the damage sustained by the person interested, by reason of the taking of any standing crops or trees which may be on the land at the time of the Collector’s taking possession thereof.

  • Thirdly, the damage (if any) sustained by the person interested, at the time of Collector’s taking possession of the land by reason of severing such land from his other land.
  • Fourthly, the damage (if any) sustained by the person interested at the time of Collector’s taking possession of the land, by reason of the acquisition injuriously affecting his other property, movable or immovable in any other manner or his earnings.
  • The line between severance and injurious affection is sometimes too fine to be discerned as when by severance the building value is diminished.
  • Compensation is payable when part of property is proposed for acquisition in such a manner that the remainder depreciates in value.

The following illustrations show some of the severances:

  • When a large piece of agricultural land admeasuring about 4 acres or more is proposed for acquisition, leaving about 20 gunthas which cannot be utilised by an owner for agricultural purpose.
  • Amenity of a bungalow is destroyed on account of its river view frontage being taken away.
  • A railway line or a water canal passing through the centre of a plot, thus dividing the same into two parts, out of which one becomes inaccessible or unsuitable for the purpose to which it is put at present.
  • The measure of damage by severance is the diminution in the value of the remaining land of an owner.
  • When by the acquisition of a portion of a building used for residential purposes, the remaining portion is rendered useless for such purposes, compensation to the extent of the entire building is required to be given.

Fifthly, if in consequence of the acquisition of the land by the Collector, the person interested is compelled to change his residence or place of business, the reasonable expenses (if any) incidental to such change; and

  • Sixthly, the damage (if any) bonafide resulting from diminution of the profits of the lands between the time of the publication of the declaration under Section 6 and the time the Collector’s taking possession of the land.
  • Compensation will also be payable towards the cost of transportation of furniture, fixtures, machineries etc., when a person is forced to leave his place of business or residence.
  • Depending on the circumstances of a case more rent payable for new premises is also considered for the compensation.
  • Depending on the circumstances of a case more rent payable for new premises is also considered for the compensation.
  • In addition to the market value, the claimants will be entitled to an additional compensation of 30% of such market value under Land Acquisition Act Section 23(2).
  • However, it would differ in acquisition under various other Acts such as Bombay Municipal Corporation Act, Requisition Act, Highway Act, etc.

f) Matters not be taken into consideration for the purpose of compensation:

  • Firstly, the degree of urgency which ha sled to the acquisition;
  • Secondly, any disinclination of the person interested to part with the land acquired;
  • Thirdly, any damage sustained by him which if caused by a private person, would not render such person liable to a suit;
  • Fourthly, any damage which is likely to be caused to the land acquired, after the date of the publication of the declaration under Section 6 by or in consequence of the use to which it will be put;
  • Fifthly, any increase in the value of the land acquired likely to accrue from the use to which it will be put when acquired;
  • Sixthly, any increase to the value of the other land of the person interested likely to accrue from the use to which the land acquired will be put; and
  • Seventhly, any outlay or improvements on or disposal of the land acquired, commenced, made or effected without the sanction of the Collector after the date of publication of the Notification under Section 4, sub-section (1)

g) After the necessary enquiries have been completed, having heard the claimants and the acquiring body, the Land Acquisition Officer declares his award which shows:

True area of land

Total amount of compensation payable

Apportionment of compensation if there are two or more owners of claimants, provided there is a consent to that effect.

h) If the claimants are dissatisfied with the award, then they can accept the amount under protest and request the L.A.O to refer the matter to the Court for necessary adjudication under Section 18 of the Act.

i) The application to the Collector requesting him to refer the matter to the Court when the claimants are not satisfied with the award, should be made within six weeks from the receipt of the notice from the Collector as regards declaration of award or from the date of award if the award is declared in presence of the claimants whichever is earlier and in other cases within six months from the date of the Collector’s award.


j) At times the matter can be referred to the Court by the Collector himself under Section 30 either on account of defective titles or on account of a dispute in apportionment.

  • k) In case any dispute about the apportionment arises after the declaration of the award, it is obligatory on the part of the Land Acquisition Officer to refer such disputes to the Court for determination instead of deciding on his own accord.
  • The apportionment of the compensation is a very difficult proposition and hence, the Collector instead of taking a risk in the matter refers the same to the Court as is stipulated in the Act.
  • In apportionment of compensation each claimant is entitled to the value of his interest which he has lost by compulsory acquisition. Thus what is required to be valued is variety of interests, rights and claims in land in terms of money.

The Land Acquisition Act has been amended in 1984, and the amendment from the valuation point of view are as under:

  • 1. Original solatium allowance of 15% has been raised to 30%.
  • 2. Interest at 12% P.A. on such market value for the period commencing on and form the date of publication of the notification under Section 4(1) in respect of said land to the date of the award of the Collector or from the date of taking possession of the land, whichever is earlier.
  • Object
  • The object of Land Acquisition Act is to empower Government to acquire land only for a public purpose or for a company. In respect of acquiring land for a company, the Government must satisfy that the purpose of the land under acquisition is
  • extension of dwelling houses for workmen employed by the company or
  • for providing amenities directly connected therewith or
  • for the construction of some work which is likely to prove directly useful to the public.

Godrej and boyce manufacturing co. ltd vs. state of Maharashtra and ors.

  • Date of judgment: 06/02/2009
  • Subject:Maharashtra Regional and Town Planning Act, 1966/Development ControlRegulations for Greater Bombay, 1991:Sections 2, 22A, 29, 31, 37, 126, 154/3, 32, 34, 35, 62, Paragraph 6 ofAppendix VII
  • - Voluntary surrender of lands
  • - Roads constructed by theowners before surrendering the lands
  • - Claim for Floor Space Index orTransferable Development Rights for the whole of the surface area of theroads
  • Municipal Corporation limiting it to 15% of the area relying on acircular
  • - Held: Such changes could be made only by making suitableamendments in the law and not by an executive circular
  • - It is highlydebatable if certain public utilities can be introduced through a circularwithin the meaning of the Act or the Regulations
  • Surrender of the landsin terms of clause (b) of section 126(1) of the Act cannot be subjected toany further conditions than those provided for in the statutory provisions
  • It is open to the Legislature to add to the conditions provided for inthe statute
  • But not to be left in the hands of the executive to imposeconditions.The appellants and the writ petitioners had their plots of land shown inthe Development Plan as reserved for roads.

They voluntarily surrenderedtheir lands. In addition, they constructed on their respective pieces ofland the Development Plan roads at their own cost and as per thespecifications stipulated in the relevant rules.

  • There is no disputebetween the parties in regard to the Floor Space Index or TransferableDevelopment Rights granted to them for the surrendered pieces of land.
  • Butthe parties are in serious controversy over the extent of Floor Space Indexor Transferable Development Rights for the roads constructed on thesurrendered lands at the owners\' cost.
  • The landowners claim that forconstructing the roads they are entitled to Floor Space Index orTransferable Development Rights for the whole of the surface area of theroads.
  • The municipal authorities would, however, grant them additionalTransferable Development Rights only to the extent of 15% of the road area.
  • The stand of the municipal authorities is based on a circular dated April9, 1996 issued by the Municipal Commissioner, Municipal Corporation ofGreater Bombay.
  • The circular envisages a graded scheme for grant ofAdditional Development Rights for construction of amenities by thelandowner, e.g., in case of amenities like general hospital, municipalprimary school etc.

it allows FSI equal to the built up area of thestructure but in case of DP road only 15% of the area of the road surface.On behalf of the landowners it is argued that the contents of the circularare no more than executive instructions and can not supersede or overridethe provisions of the Regulations which are legislative in nature;

  • in anyevent the circular would only operate prospectively and have no bearing onthe cases in hand since it was issued after the appellants and thepetitioners had surrendered their plots of lands after constructing roadson those lands as required by the authorities.
  • On behalf of the State andther municipal authorities, it is contended that the law provides for grantof additional Floor Space Index or Transferable Development Rightscommensurate to the value of the amenity constructed by the landowner andthe meaning of paragraph 6 of Appendix VII to the Regulations will be clearby reading it along with the other provisions of the Regulations and theparent Act; and that the circular dated April 9, 1996 would appear to bemerely clarificatory and fully apply to the claims of the appellants andthe petitioners.

Tamil Nadu housing board & ors. vs. sea shore apartments owners welfare association. Date of judgment: 9/01/2008

Subject: Consumer Protection Act, 1986; Ss.2 (1)(0) and 12:

Services - Housing construction - Construction of flats by Housing Board on land acquisitioned by State Government - Agreement of sale-purchase of flats entered into between respondent-allottees and Housing Board - Ultimate cost of flats subject to amount of compensation to be rewarded for the land acquisitioned - Issuance of allotment letters demanding certain additional amount - Challenged by allottees by filing Complaints - State Consumer Commission observed that raising of demand of additional amount by the Board improper and illegal - Affirmed by National Commission holding that demand of additional amount made on non-existing grounds - On appeal, Held: Flats in question developed on land acquired by State Government - Compensation as awarded to land owners enhanced in a reference proceedings - Enhanced compensation affirmed by Supreme Court - In terms of agreement, allottee-purchasers agreed to pay the final price of flats as would be fixed by the Board - Thus, the Board did not act unfairly/unreasonably - However, the averments made by the allottees in the counter affidavit filed in Supreme Court were unnecessary - All the complaints remitted to State Commission to decide issues/disputes in accordance with law - Contract - Consent.


Consumer Protection Act - State Undertakings/Instrumentalities - Exclusion of service offered by them from application of the Act - Attempt for - Held: Must be discouraged as it would be against the spirit of the Act, a benevolent legislation.

Consumer Redressal Commission - Disputes relating to deficiency in service - Consumer Disputes Redressal Commission - Jurisdiction of - Held: The Commission has jurisdiction to decide disputes relating to deficiency in service as services in terms of s.2(1)(o) of the Act includes housing construction as well.

Words and Phrases:

`Services\' - Meaning of in the context of S.2(1)(o) of the Consumer Protection Act.

State of Tamil Nadu acquired a vast peace of land and transferred it to appellant No.1, Tamil Nadu Housing Board, for execution of the south Madras Neighbourhood Development Scheme. The Board proposed to construct different types of flats under its High Income Group Scheme. In order to assess demand from public, it issued an advertisement inviting applications for registration under the Scheme.


The Board conducted draw for allotment of flats on October 15,1993 and issued provisional allotment letters giving tentative cost to successful applicants. Allotment letters indicating the final cost of the flats were issued by the Board in the year 1994. Later, an agreement was entered into between the Board and the allottees that ultimate cost of the flat was subject to the outcome in the land acquisition proceedings and possession of flats was given to all the allottees. Thereafter the allottees were asked to pay additional amount, to which they objected by filing representations to the Board. The Board, however, did not give any response. Even subsequent representations were not responded by the Board. Aggrieved, the allottees filed complaints before the State Consumer Commission under Section 12 of the Consumer Protection Act, 1986 for direction to the Board to return the additional amount so demanded and paid by the members with interest thereon; that the Board to collect the instalments in 15 years as per the order of allotment issued earlier; and to pay compensation of rupees one lakh for the loss sustained and mental agony suffered by its members. The State Commission allowed all the complaints quashing the demand made by the Board. Appeals filed by the Board against the order of the State Commissions were dismissed by the National Commission. Hence the present appeals filed by the Board.


Appellant-Board contended that the Commissions were clearly in error in invoking the provisions of the Consumer Protection Act and in observing that there was `deficiency in service\'; that dispute in the instant case related to fixation and determination of price of flats. Such dispute cannot be resolved in terms of provisions under the Act, and therefore, the Consumer Commission has no power/authority/jurisdiction to inquire into, deal with and decide such questions. Even otherwise, only civil court can enter into disputed questions of fact on the basis of evidence adduced by the parties; that from the facts it was clearly established that in the year 1991, the Board formulated a scheme and tentative price of the flat was fixed. In view of overwhelming response, the scheme was changed from seven types to fifteen types flats. Increase in plinth area was made, in ground area as also payment of excess compensation to land owners. All the applicants whose names had been registered in 1991 were informed about the revised price, the period within which the amount was to be paid and the reasons for fixation of higher price; that at the time of registration, it was clearly indicted that for those who opted to make payment in instalments, the period of repayment was 13 years. However, when applications for allotment were called for, the period was indicated as 15 years, and it was accepted by the allottees; and in connection thereto agreements were signed by the allottees giving necessary undertakings. It was thereafter not open to the allottees to challenge fixation of price of flats by the Board. They were estopped from doing so under the doctrine of promissory estoppel; and that when complaints were filed before the State Forum, a counter-affidavit was filed on behalf of the Board wherein it was asserted that there were reasons for increase of price.