In a recent decision bearing considerable relevance to ongoing land acquisition disputes, the Supreme Court on April 21, 2025, allowed a civil appeal against the Gujarat High Court’s determination of compensation based on an incorrect valuation date under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (RFCTLARR Act, 2013).
The two-judge Bench comprising Justice Dipankar Datta and Justice Manmohan held that the market value for land acquired under the 2013 statute must be computed strictly in accordance with the date of the acquisition notification issued under Section 11 of the Act. The impugned Gujarat High Court order had adopted January 1, 2014 the date of enforcement of the statute, as the relevant date for valuation, which the Supreme Court found untenable in law.
The dispute arose from the State of Gujarat’s unauthorised utilisation of He-0-11-41 sq. meters of private land belonging to the appellant, Sumitraben Singabhai Gamit, without initiation of any formal acquisition proceedings or disbursement of compensation. This land, part of Revenue Survey No. 119 in Tapi District, had been used for the construction of a high-level canal by the Ukai Dam Division. While an earlier portion of the appellant's land had been duly acquired, the additional portion remained uncompensated.
Before the High Court, the State admitted through an affidavit that the land was indeed utilised without statutory acquisition. Nevertheless, the High Court directed that the market value be assessed as on January 1, 2014.
The core issue before the Supreme Court was the proper interpretation of the proviso to Section 26(1) of the RFCTLARR Act, 2013, which governs the methodology for determining market value.
Interpreting the statutory provision, the Supreme Court observed:
“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 noted that no discretion is afforded to judicial forums to select an alternative valuation date, stating:
“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.”
Rejecting the High Court's reasoning that the statute’s enforcement date could serve as the basis for valuation, the Bench further clarified:
“The date of enactment of RFCTLARR Act, 2013 i.e. 01st January, 2014 has no relevance to fresh acquisition initiated under the statute. The date of 01st January, 2014 is relevant only if land acquisition proceedings had been initiated under the old Land Acquisition Act, 1894 and where no award had been made before the enforcement of the RFCTLARR Act, 2013.”
The Court underscored that fixing the valuation date at 2014 rates would undermine the statutory objective of providing fair and updated compensation to landowners:
“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 Supreme Court, accordingly, allowed the appeal and set aside the High Court’s order. It directed:
“The date of determination of market value of He-0-11-41 sq. meters land of Survey No.119 shall be the date on which Notification under Section 11 of the RFCTLARR Act, 2013 is issued by the Respondents.”
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