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    Monday, 30 March 2015

    Determination of Compensation and its matters

    1. Introduction
    Land Acquisition Act 1984 empowers government to acquire land only for public purpose or for companies. Compensation is determined and paid to those private persons or bodies whose land is so acquired. Different matters are kept in view while determining the value of the property which is acquired.

    2. Relevant Provisions
    Section 23 of Land Acquisition Act 1894.

    3. Meaning of Compensation
    According to Osborn’s Concise Law Dictionary, A payment to make amends for loss or injury to person or property or as recompense for some deprivation.

    4. Right to Compensation
    Right to compensation is incidental to the unavoidable right to property. The person interested in entitled to claim compensation.

    5. Matters to be considered by the Court in Determining the Compensation

    Following are matters which are taken into consideration while determining the compensation.

    (i) Market Value of Land; Section 23 (1)(i)
    The market value of the land at the date of the publication of the notification under section 4 of the land acquisition act act 1894.

    The term market has not been defined in the land acquisition Act 1984. Hence we have to describe it generally. The term market value is an amount of price which an owner was willing to accept and vendee is also willing to accept. Market value means the value to owner. Market value would mean the price which the relevant property would bring for him in the market which, however, might be different from the price for which property in question could be sold at a given time.

    (ii) Compensation for standing crops and trees; Section 23(1)(ii)
    The damage sustained by the person interested by reason of the taking of any standing crops or by trees by taking possession.

    (iii) Damage by Severance; section 23(1)(iii)
    The damage sustained by the person interested at the time of collector’s taking possession of land by reason of severing such land from his other land.

    Illustration:
    A land consists of two parts. One consists of crops while the other consists of partly desert and party crops. The Government acquires the land with crops. The other land has not been acquired. The value of the land, which has not been acquired, shall diminish because of the acquisition of the fertile land by the Government.

    (iv) Damage for Injuries effect other Property; Section 23(1)(iv)
    The damage sustained by the person interested at the time of the collector’s taking possession of land by reason of the acquisition injuriously effecting his other property, moveable or immoveable, in any other manner, or his earning.

    Illustration
    The land consists of two parts, one consists of pasture and the other part consists of the cattle farm. The Government acquires the land consisting of pasture and does not take the cattle farm. In such situations the cattle will suffer because of the loss of the pasture which is their food and their market value would also fall. Because of it the earnings of the owner of the land out of the cattle farm would also fall due to its closure.

    (v) Loss of Earning; Section 23(1)(v)
    The damage sustained by the person interested while taking possession of the collector and the person interested is compelled to change his residence place of business, the reasonable expenses incidental to such change.

    Illustration:
    If the store and the shop are adjacent to the house and they open on the road. If the shop is acquired for the purpose of the widening of the road the in such circumstances the owner of the shop shall have to shift his business. In such situations this fact shall be taken into consideration by the court in determining the amount of compensation.

    (vi) Diminution of Profit; Section 23(1)(vi)
    The damage sustained at the time of taking possession of land resulting from diminution of profit of the land between the time of publication of declaration under section 6 and the time of the collector’s taking possession of the land.

    In such situation the people shall stop planting corps and the crops and fruit etc, get damaged due to boring drilling. This fact shall be taken into consideration by the court in determining the amount of compensation.

    (vii) Award of fifteen per centum; Section 23(2)
    In addition to the market value of the land as above provided, the court shall in every case award a sum market value, in consideration compulsory nature of acquisition.

    Conclusion

    To conclude that under land acquisition act 1894 different matters are taken into consideration for fixation of compensation. Which is paid to injured person. The court has discretionary powers while determining the compensation. The court shall also award 15 % on the market value in consideration of the compulsory nature of the acquisition of the property.
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    Item Reviewed: Determination of Compensation and its matters Rating: 5 Reviewed By: Usman Ali
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