Court Holds Market Value Must Be Fixed As On Section 11 Notification Date Under RFCTLARR Act

A bench of Justices Dipankar Datta and Manmohan heard the civil appeal challenging the Gujarat High Court's order fixing 1 January 2014 as the date for determination of market value in a land acquisition matter under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (RFCTLARR Act). The appeal arose from the High Court's judgment and final order dated 21 August 2024 in R/Special Civil Application No. 20392 of 2023.

The Supreme Court allowed the appeal and set aside the High Court order, holding that the proviso to Section 26(1) of the RFCTLARR Act prescribed the date for determination of market value as the date on which the notification under Section 11 was issued. The Court observed that the statute used the word "shall" in the proviso, reflecting a legislative mandate that the Section 11 notification date was determinative and that courts had no discretion to select an alternative valuation date. The Court noted that fixing 1 January 2014 as the valuation date "deprive[d] the Appellant of compensation at the 2023 rates, which must be considerably higher." The Court, in its reasoning, observed: "Consequently, this Court agrees with the submission of the learned counsel for Appellant that proviso to Section 26(1) explicitly states that the market value of the land shall be determined as on the date of issuance of the Notification under Section 11 of RFCTLARR Act, 2013" The appeal was allowed and the matter was remitted to the respondents to determine compensation as of the date of the Section 11 notification when issued.

Background

The dispute arose when the appellant, Sumitraben Singabhai Gamit, who owned land in Revenue Block No.119 (new Revenue Block No.126), Village Moje Sarkuva, Taluka Vyara, District Tapi, contended that an additional portion measuring He-0-11-41 sq. meters of her land had been utilised for construction of the Ukai High Level Cantor Canal without initiation of acquisition proceedings or payment of compensation. An earlier area of He-0-17-84 sq. meters had been acquired previously for the canal. The High Court had directed the State to file an affidavit; the Executive Engineer, Ukai Dam Division-1 admitted utilisation of He-0-11-41 sq. meters without acquisition.

The appellant argued that the proviso to Section 26(1) mandated that the date for determining market value was the date on which the notification under Section 11 was issued, and therefore the High Court erred in using 1 January 2014 (the date of commencement of the RFCTLARR Act) as the valuation date. The State conceded that acquisition proceedings for the disputed portion had not been commenced on the PM Gati Shakti portal due to a technical error and assured the Court that acquisition would commence once the error was resolved.

The Supreme Court interpreted the proviso to Section 26(1) as laying down the methodology for valuation on the date of the Section 11 notification and held that the date of enactment (1 January 2014) was relevant only where acquisition had been initiated under the Land Acquisition Act, 1894 and no award had been made before enforcement of the RFCTLARR Act. The Court found that the legislative scheme did not permit courts to select a different valuation date. Consequently, the High Court order was set aside and the market value of the He-0-11-41 sq. meters was to be determined as on the date the Section 11 notification was issued by the respondents.

Case No.: Civil Appeal No. 5095 of 2025 (Arising out of SLP (C) No. 23668 of 2024)
Case Title: Sumitraben Singabhai Gamit v. State of Gujarat & Ors.
Appearances:
For the Petitioner(s): Aastha Mehta, Advocate
For the Respondent(s): Counsel for State of Gujarat (name not specified in judgment record)