The Supreme Court has enhanced compensation for land acquired for the Aspal Extension Drain in Punjab’s Fazilka district. It restored a uniform market value of ₹5 lakh per acre for the land involved in 47 appeals and held that compensation for the land left behind after the drain split a holding must be calculated on the value of that remaining, unacquired land.

The bench of Bench of Justices Dipankar Datta and Sheel Nagu reversed a 2019 Punjab and Haryana High Court decision that had fixed different rates of ₹2.99 lakh to ₹3.39 lakh per acre and awarded severance compensation at 40% of the value of the acquired land.

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The dispute arose from land acquired in Karni Khera, Odian, Awa, Kotha, Alamshah and Salem Shah for the Aspal Extension Drain, also described in the judgment as a ditch canal. The project extended about 18.42 kilometres, with a width ranging from 264 to 340 feet.

Acquisition proceedings began with notifications issued in November 2000 under the Land Acquisition Act, 1894. In its August 2001 award, the Land Acquisition Collector valued irrigated land at ₹2.25 lakh per acre across the project area and awarded no compensation for severance. Landowners argued that the drain divided their holdings and reduced the usefulness and value of the portions they retained.

Reference Courts enhanced compensation in several cases. The High Court subsequently revised the awards, leading to the 47 civil appeals considered by the Supreme Court.

The Supreme Court rejected the High Court’s approach of assigning graded rates to villages according to their location. It found that the Reference Court’s ₹5 lakh-per-acre valuation was supported by the proximity and comparable character of the land, its development potential, and an earlier acquisition benchmark from nearby Sultanpur.

The Bench noted that land in Karni Khera was about 1.5 kilometres from Sultanpur, on the same road, and was acquired for an integrated drainage project. It also considered evidence that Fazilka’s urban area was expanding towards the acquired land. In the Court’s view, the High Court had not adequately justified the lower, differing rates for the contiguous land involved in these appeals.

The Court therefore restored ₹5 lakh per acre uniformly across the villages covered by the 47 appeals.

The Bench separately addressed how to compensate owners whose remaining land was cut off or made less useful by the drain. It held that severance compensation addresses the reduction in value of the unacquired portion, rather than the value of the strip taken for the project.

On that basis, it set aside the High Court’s award of 40% calculated on the acquired land and restored the Reference Court’s award of 50% of the market value of the remaining unacquired land. The finding recognizes that a landowner may suffer a further loss even after receiving the market value of the land physically acquired.

The landowners did not succeed on every issue. The Supreme Court upheld the High Court’s restriction of compensation for fruit-bearing trees to 280 trees, amounting to ₹5,38,300.

Although evidence was led about additional trees said to have dried up after the irrigation system was affected, the original reference petition had claimed damage only for the 280 trees on the acquired strip and was not amended to include the later claim. The Court held that compensation could not be awarded on a case beyond the pleadings. It accordingly declined to restore the Reference Court’s ₹9 lakh award for trees.

The Court also upheld a flat award of ₹50,000 per tubewell for displacement. It affirmed the High Court’s refusal to add the statutory benefits under Sections 23(1A) and 23(2) of the 1894 Act to the separate awards for trees, tubewells, structures and severance damage.

The Bench distinguished those heads of compensation from the market value of the acquired land. It held that the additional amount and 30% solatium apply to the land’s market value, not to these separate damage awards.

The Supreme Court directed the authorities to recalculate and pay any additional compensation due to the landowners in the 47 appeals within six months of communication of the order.

If recalculation instead shows that an amount is recoverable from a landowner, the authorities must first give written notice and an adequate opportunity to be heard. Any such recovery must be made within nine months of communication of the order. The Court made no order as to costs.

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