Land Compensation to be Based on 2014 Rates if Award Not Declared by January 1, 2014: Allahabad HC

The news

The Allahabad High Court has ruled that compensation for land acquired by the Uttar Pradesh Housing and Development Board must be calculated based on rates as of January 1, 2014, if the compensation award was not declared by that date. A division bench of Justices Siddharth Verma and Kunal Ravi Singh issued the order on a petition by Dilshad Ali and five others concerning three plots in Mavi Khurd village, Saharanpur, covering a total area of 45,767 square metres.

The court held that the June 12, 2004 acquisition notification cannot be the reference date for determining compensation in such cases. It directed the state government to recalculate compensation for the three plots under the new land acquisition law, using January 1, 2014, as the reference date. The process must be completed within three months of receiving the certified copy of the order, and payment to eligible landowners must follow within two months. The board had already deposited ₹20.39 crore with the special land acquisition officer but had calculated compensation at 2004 rates, which the court found unlawful.

The bench relied on the principle established in the Hem Chandra case, which the Supreme Court has upheld. According to that precedent, if the compensation award was not declared by January 1, 2014, the compensation must be determined under the new law with that date as the reference. The court clarified that this does not automatically invalidate the acquisition process itself.

What is the Hem Chandra land acquisition principle?

The Hem Chandra principle arose from a decision of the Allahabad High Court that was later upheld by the Supreme Court. It states that when land acquisition proceedings were initiated under the Land Acquisition Act, 1894 but the compensation award was not declared by January 1, 2014, the compensation must be determined under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. The reference date for calculating compensation in such cases becomes January 1, 2014, the day the 2013 Act came into force. The principle further clarifies that the acquisition proceedings themselves do not automatically lapse merely because the award was not declared by that date.

What was the earlier arrangement?

The Uttar Pradesh Housing and Development Board had initiated acquisition of land in Mavi Khurd, Chunheti and Saiyadpur villages in Saharanpur under the Delhi Road Land Development and Housing Scheme. Notifications under Section 28 of the Land Acquisition Act, 1894 were issued on June 12, 2004, and under Section 32(1) on August 7, 2010. However, the compensation award was not declared by January 1, 2014, when the new Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 came into force.

What does the Hem Chandra precedent say?

The Hem Chandra case, upheld by the Supreme Court, established that if the compensation award for an acquisition was not declared by January 1, 2014, the compensation must be determined under the new 2013 Act with that date as the reference. The Allahabad High Court noted that this principle remains binding. The acquiring body had argued that the delay in declaring the award occurred at the level of the special land acquisition officer, but the court held that the compensation calculation at 2004 rates was not in accordance with law.

What is the next step for the state government?

The state government must now recalculate compensation for the three plots using January 1, 2014, as the reference date. This process must be completed within three months of receiving the certified copy of the order. Payment to eligible landowners must follow within two months of the compensation determination.