Compensation under land acquisition act

“Karl Polanyi referred to labour as a fictitious good. Even more troublesome is land. Land is nothing more than abstract thought portrayed as a continuum of competing dreams. How is it possible for a varied group of dreamers to share a same value about land?
In India, the term “land acquisition” refers to the process by which the federal or a state government purchases private land for industrialization, the construction of infrastructure, or urbanisation of the private land, and then pays the affected landowner’s compensation and arranges for their rehabilitation and relocation. In other terms, land acquisition refers to the procedure through which the government seizes private property against the will of the owner in order to use it for public reasons. It differs from a land transaction in which a willing seller makes the sale. India has a significant amount of work to do to build systems that promote economic growth while upholding the Rule of Law, social equity, and environmental sustainability.

The 1894 Land Acquisition Act
The Indian government is permitted to purchase private lands throughout the nation under the Land Acquisition Act of 1894. According to this Act, “Land Acquisition” refers to the government or one of its agencies acquiring land from individual landowners for any legally permitted public purpose after paying a set compensation in lieu of any losses these landowners may have suffered as a result of giving up their land to the relevant government agencies. According to the Land Acquisition Act of 1894, no one may have their land taken away unless it is necessary for a public good and they are compensated. The compensation will be calculated in consideration of:
I. The market value of the property in question;
II. Any direct losses or other indirect losses he may incur as a result of being unable to use or enjoy his property; and
III. Any other pertinent factors.
Acquisition is the process of obtaining land or any interest therein. It is the acquisition of or receipt of property.

India’s History of Land Acquisition
The British government passed the first land acquisition laws in India in 1824. The Bengal Resolution I of 1824, as it was known, only pertained to the Bengal region during Fort William’s administration. According to the statute, the government was allowed to “take, at a reasonable valuation, land or other immovable property required for highways, canals, or other public purposes.” Through another piece of law, the British expanded the rule to Calcutta (now Kolkata) in 1850.
The Resolution I of 1824’s provisions could be used to acquire property for the construction of railways thanks to the Act of 1850, which “stated that Railways were public constructions.”
But it wasn’t until 1857 that the British passed legislation that was applicable to all of British India, including the remaining provinces or presidencies. The purpose of Act VI of 1857, as stated in its preamble, was to “repeal all previous enactments relating to acquisition and to make better provisions for the acquisition of land needed for public purposes within the territories in the
possession and under the governance of the East India Company and for the determination of the amount for the compensation to be paid for the same.” This statute was further altered in 1861 (Act II) and 1863 (Act XXII) as a result of “unsatisfactory settlement,” “incompetence,” and “corruption,” which ultimately led to the passage of Act X of 1870. The Land Acquisition Act of 1894 eventually replaced the 1870 statute, which introduced a settlement mechanism for the first time (Act I of 1894).

By the “Indian Independence (Adaptation of Central Acts and Ordinances) Order” of 1948, India, which had acquired its independence in 1947, had adopted the Land Acquisition Act of 1894.

The new Constitution’s framework included provisions for federalism, universal adult suffrage, and fundamental rights at the very least. According to the new Constitutional framework, “requisition and purchase of immovable property” is now a concurrent list issue that can be regulated by both the federal government and the states. Initially, the ownership of property was also seen as a fundamental right. The emergence of an independent judiciary gave the State its first indications of internal difference.

Compensation under the Land Acquisition Act
The Act’s Section 26 addresses compensation for landowners. The suggested minimum salary is described, based on multiples of the market value. For land purchased in rural or urban regions, the market value is typically multiplied by a factor of one to two.
The average sale price for similar types of land located in the nearby village or neighbourhood determines the land’s market value. This sale price is calculated by taking into account 50 percent of all sale deeds or purchase agreements that include the highest price.
In the event that the land is purchased for private businesses or projects involving public-private partnerships, the compensation may also be an agreed-upon sum.

Case Laws
How to Determine a Valid Acquisition
Khub Chand v. State of Rajasthan
The court found that the language of Section 4(1) of the Land Acquisition Act, 1984 plainly implies that the provision is a mandatory one in Khub Chand v. State of Rajasthan. According to the Act’s subsequent structure, publication of the notification in the manner specified in Section 4(1) of the Act is a requirement for a legitimate acquisition.

Public Purpose is Final and cannot be disputed based on falsity
Habib Ahmed v. State of Uttar Pradesh
According to the court’s ruling in Habib Ahmed v. State of Uttar Pradesh, neither the notification nor the declaration can be revoked on the grounds that obtaining the land for a public purpose was not necessary. The State Government alone must decide whether the land is needed for a public purpose or not.
An act that was created in a different setting, changed as a result of numerous pressures, and is nonetheless in violation of other laws. The quantity of land is fixed, even though demand for it is always rising. In order to meet the increasing demand for land, it must be purchased, and its use pattern must be changed, along with the implementation of numerous legislations. But because there is still a need for land and it is still available, succeeding national governments have repeatedly looked to the Land Acquisition Act of 1894 to find a solution.


Aishwarya Says:

Law students often face problems, which they cannot share with their friends and families. We have started a column on our website Student’s Corner. In this column we are talking to several law students about the challenges that they face. Students who are interested in participating in the same, can fill this Google Form.


We do conduct several Courses, Quizs and Webinars, Click here to register

Do follow me on FacebookTwitter  Youtube and Instagram.

The copyright of this Article belongs exclusively to Ms. Aishwarya Sandeep. Reproduction of the same, without permission will amount to Copyright Infringement. Appropriate Legal Action under the Indian Laws will be taken.

If you would also like to contribute to my website, then do share your articles or poems at

Join our Whatsapp group for Legal Job Openings

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Create a website or blog at

Up ↑

%d bloggers like this: