• Acquisition of land by KIADB

A private firm Gulbarga cement company,entered into registered sale agreement with farmers for purchase of land for setting up a cement co.in year 2009. Consideration amount/ acre was Rs900000.Farmers were paid 400000/ acre as initial instalment and the rest was promised to be paid at the time of registration.Some of us did not enter into any agreement. Now KIADB issued notices for acquisition on behalf of cement company in July 2012. KIADB has given Rs.1200000/ acre consent award in Feb 2014.The lands have rich cement grade limestone deposits as mentioned in Geological Survey of India review. Sir my queries are
 1)whether the consideration amount of Rs 9,00,000/acre mentioned in registered sale agreement can be considered as market value according to new land act 2013
2) if so are we entitled for compensation 4 times of market value Rs 9,00000 with added escalation for 3 years
3) can we claim the ownership of limestone deposits and hence higher compensation.
Asked 1 year ago in Civil Law from Gulbarga, Karnataka
1) ion respect of those farmers that agreed to accept Rs 9 lakh by regd sale deed the terms of agreement would be binding upon them 

2) in respect of other farmers who agreed to accept Rs 12 lakhs by consent award the said award would be binding upon them 

3)if you have agreed to accept the amount you cannot now claim 4 times market value and the limestone deposits 

4) the regd sales deed as well as consent award has to be peruse  to advice further 

Ajay Sethi
Advocate, Mumbai
23291 Answers
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1)whether the consideration amount of Rs 9,00,000/acre mentioned in registered sale agreement can be considered as market value according to new land act 2013
How did you get this idea of market value and what was the reason to consider it so because the government has re-fixed the rate later on, would you consider that to be the market value?

2) if so are we entitled for compensation 4 times of market value Rs 9,00000 with added escalation for 3 years
Is there any such rule that the compensation can be escalated to 4 times of the market value?, I dont think there is any.

3) can we claim the ownership of limestone deposits and hence higher compensation.
A few excerpts on compensation as per law is reproduced below.


The provisions of KIADB land acquisition act is reproduced below for your information with regard to the compensation rules:
After the compensation amount is determined, the Collector must ensure that payment
occurs within 60 days. Possession of land shall not be taken unless full compensation
is paid or tendered to the land owner.
5. Land owners whose property has been acquired under urgency shall be compensated
an additional 75% of the market value of the land.
6. If the acquisition is for a company, shares or debentures of 20-50% of the
compensation amount must be offered through these options. The interested person
may either accept this offer or opt for a full cash settlement.
7. Market value of the land to be computed by Percentage of Sale Deeds: Three criteria
are prescribed by the Bill for determining the market value of land, the highest value
among which should be adopted by the Collector for the purpose of fixing the actual
value of land. The criteria refers to the sale prices of recently done sales of similar
lands, computed from "not less than 50%" of the total transactions, "where the price
has been higher.
(1) Where any land is acquired by the State Government under this Chapter, the State Government shall pay for such acquisition compensation in accordance with the provisions of this Act.
(2) Where the amount of compensation has been determined by agreement between the State Government and the person to be compensated, it shall be paid in accordance with such agreement.
(3) Where no such agreement can be reached, the State Government shall refer the case to the Deputy Commissioner for determination of the amount of compensation to be paid for such acquisition as also the person or persons to whom such compensation shall be paid.
(4) On receipt of a reference under sub-section (3), the Deputy Commissioner shall serve notice on the owner or occupier of such land and on all persons known or believed to be interested herein to appear before him and state their respective interests in the said land.
T Kalaiselvan
Advocate, Vellore
14057 Answers
127 Consultations
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1. You can apply for fair compensation under the new land acquisition act. Whether or not the consideration amount can be considered as market value is a question of fact which can be decided only after a judicial inquiry.

2. The fair compensation would cover the escalation cost from the date of compensation till the lodging of claim.

3. The ownership of limestone deposits cannot be claimed, but this does not take away your right to claim fair compensation.
Ashish Davessar
Advocate, Jaipur
18158 Answers
449 Consultations
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A .  As per the Section 26 of 2013 Act. It provides for determination of market value of land by Collector, stating: The Collector shall adopt the following criteria in assessing and determining the market value of the land, namely:-
The market value, if any, specified in the Indian Stamp Act,1899 (2 of 1899) for the registration of sale deeds or agreements to sell, as the case may be, in the area, where the land is situated; or
The average sale price for similar type of land situated in the nearest village or nearest vicinity area; or
Consented amount of compensation in the case of acquisition of land for private companies or for PPP

B. That farmers will get a compensation of four times the market value of the land that is acquired under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act 2013, popularly referred to as Land Acquisition Act.Market value is four times in rural areas and doubled in urban area including R & R entitlements. This act yet to implemented properly

C. Mere registered Sale agreement does not convey title over the property. You being an agreement holder cannot claim compensation amount. .
B.T. Ravi
Advocate, Bangalore
736 Answers
30 Consultations
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Section 26 of 2013 Act. It provides for determination of market value of land by Collector, stating: The Collector shall adopt the following criteria in assessing and determining the market value of the land, namely:-
(a) The market value, if any, specified in the Indian Stamp Act,1899 (2 of 1899) for the registration of sale deeds or agreements to sell, as the case may be, in the area, where the land is situated; or
(b) The average sale price for similar type of land situated in the nearest village or nearest vicinity area; or
                  (c)  Consented amount of compensation in the case of acquisition of land for private       


 it also explains in sub-section (1) that the average sale price referred to in clause (b) shall be determined taking into account the sale deeds or the agreements to sell registered for similar type of area in the near village or near vicinity area during immediately preceding three years of the year in which such acquisition of land is proposed to be made.
Ajay Sethi
Advocate, Mumbai
23291 Answers
1220 Consultations
5.0 on 5.0
The sale consideration mentioned in the sale agreement can never be taken as market value of the property intended to be sold, it may be higher rate above market value or even lesser than the market value.  
The market value and guideline   values are two different things.The relevant portion of the valuation of market value under different provisions of law is given below for your reference which may be gone through

At a glance a ready reference chart of relevant sections and rules for  Valuation Officers is given as follows :
Various Acts and section there-under are given below in a tabular form with brief remarks :- 
Sr. No. Reference to be Under : Made Purpose Remarks Act Section 1 2 3 4 5 1 Wealth-tax Act, 1957
16 A To estimate the market value of an immovable property in accordance with rule-20 of part II of Schedule
III indicated in subsection (I) of section 7 of the Act. On receiving reference under this section, V.O.
shall examine whether rule 3 of Schedule-III of the Act is applicable or not. If Rule-3 is applicable, clarification may be sought from the Assessing Officer as to why reference under 16 A is made. In this connection provisions of rule 8 of Schedule-III of the Act shall be kept in view. 
2.1 Income-tax Act, 1961    50 C To estimate fair market value of an immovable property as on the date of transfer for the purpose of computing income from capital gains.
Following conditions need to be fulfilled
before the Assessing Officer refer the case under this section :
i)The assessee is to claim that the fair market
value of the property as on the date of
transfer is less than the value adopted or
assessed by the stamp valuation authority
for the purpose of payment of stamp duty
in respect of such transfer.
Provisions of Acts for Reference to Valuation Cell 17 
ii) Value adopted or assessed by the stamp
valuation authority has not been disputed
in appeal or revision or no reference has
been made before any other authority,
court of the High Court. If the Assessing
officer is silent on the above aspects at the
time of making reference, necessary
clarifications may be sought from him as
to whether provisions of sub section (2) of
section 50 C have been fully complied
with.
2.2 Income-tax Act,1961 55 A To estimate fair market value of an immovable property as on 01.04.1981 or date of transfer both for the purpose computing income from capital gains.
It is imperative to know the date or date s for which valuation is required. If any clarification of required in this regard the same may be obtained immediately on receipt of the reference.
2.3 Income-tax Act,  1961 142 A To estimate value of investment made by the Assessee. This investment can be land or land and building or in construction of building.
Previously reference for cost of construction
cases was being made under clause (d) of
subsection (I) of section 131 under garb of
issuing commission. However, the Hon’ble
Supreme Court in Amiya Bala Paul case
Guidelines for Valuation of Immovable Properties 18 
pronounced that the power of the Assessing
Officer u/s 131(1) did not include the power
to refer a matter to the Valuation Officer. It is,
therefore, necessary that cost of construction
case referred u/s 142 A.
2.4 Income-tax Act,
1961
269L To determine the fair market value
an immovable property on the
date of transfer to initiate
proceedings for acquisition of the
property and to determine amount
of compensation u/s 269 J.
These provisions ceased to be applicable in
relation to the transfer of property made after
30.09.1986.
3 Estate Duty Act,
1953
41 To determine the principle value
an immovable property on the
date of death of deceased.
Under this section the controller of Estate Duty
authorizes a person to inspection the property
and report the value to him for the purpose
of levying Estate Duty. This is an advisory
reference. Estate duty has been abolished
w.e.f. 16.03.1985.
4 Gift Tax Act,
1958
15(6) To determine fair market value of
an immovable property on the
date on which the gift was made
As per the schedule-II of the Gift Tax Act, the
value of any property shall be determined in
accordance with the schedule –III of the W.T.
Provisions of Acts for Reference of Valuation Cell 19 
Act, 1957. Therefore, remarks against Sl. No.
1 are also applicable in this case. This act
ceased to operate w.e.f. 01.10.1998.
Guidelines for Valuation of Immovable Properties 20 


T Kalaiselvan
Advocate, Vellore
14057 Answers
127 Consultations
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The amount mentioned in the sale agreement alone cannot be taken in isolation from the other documentary evidence, if any, on record. The court can arrive at the market value by holding its own independent inquiry.
Ashish Davessar
Advocate, Jaipur
18158 Answers
449 Consultations
5.0 on 5.0
1. You do not know whether your neighbour's land has been sold at even a higher price or not and in that event, that price will be considered as ge market price of your land or land of your area,

2. Yes, you are entitled to the said price mentioned by the KIADB with appropriate escalation,

3. The compensation has already been fixed by the KIADB. You shall hve to move High Court for getting higher price fixed for relinquishing the ownership of lime stone deposit.
Krishna Kishore Ganguly
Advocate, Kolkata
12123 Answers
231 Consultations
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1. Yes, normally the price at which the property of the same area has been ast registered is taken as the market value,

2.However, the compensation package has already been fixed by KIADB.
Krishna Kishore Ganguly
Advocate, Kolkata
12123 Answers
231 Consultations
5.0 on 5.0

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