Land acquisition compensation must reflect market value on notification date, using comparable sales and excluding irrelevant valuation factors.

Compensation for acquired land must be fixed on market value as of the notification date, using legally relevant evidence and bona fide comparable sales within a reasonable time. Unsupported averaging, selective reliance on sale instances, and extraneous factors such as the acquiring body's purpose or land suitability are not proper valuation criteria. On the facts, the finding that the building pre-dated the preliminary notification was left undisturbed, the valuation of the low-lying land was upheld because the need for filling and conversion was duly reflected, and the compensation for the remaining land was reduced after correcting the valuation method.

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Issues: (i) whether compensation awarded for the building said to have been constructed before the preliminary notification was liable to be disturbed; (ii) whether the valuation fixed for the low-lying land was justified; (iii) whether the rate of compensation fixed for the remaining land was based on a correct method of valuation.

Issue (i): whether compensation awarded for the building said to have been constructed before the preliminary notification was liable to be disturbed

Analysis: The finding that the building had been erected before the preliminary notification was accepted as a clear finding of fact. The evidentiary material relied upon by the appellant was insufficient to displace that finding.

Conclusion: The compensation for the building was upheld and the challenge to that part of the award failed.

Issue (ii): whether the valuation fixed for the low-lying land was justified

Analysis: The low-lying portion had to be treated as land requiring expenditure for filling and conversion before it could be put to the same use as the rest of the property. After considering the area, the deduction already made for filling, and the comparable value of the surrounding land, the valuation adopted by the High Court was found to be supported by the record and not vitiated by any legal error.

Conclusion: The rate fixed for the low-lying land was upheld and the appellant failed on this issue.

Issue (iii): whether the rate of compensation fixed for the remaining land was based on a correct method of valuation

Analysis: The correct inquiry was the market value on the date of notification. In applying the comparable sales method, the High Court had wrongly ignored two relevant transactions, selected only part of the sale instances without sufficient reason, and then applied a second averaging exercise by reusing the highest price already included in the first average. Extraneous matters such as the purpose of acquisition and the suitability of the land for the acquiring authority had no bearing on valuation. Once those errors were excluded, the proper market value was found to be lower than the figure fixed by the High Court.

Conclusion: The rate of compensation for the remaining land was reduced to Rs. 11 per sq. yard and the appellant succeeded on this issue.

Final Conclusion: The appeal succeeded only in part: the award relating to the building and the low-lying land was maintained, while the compensation for the balance of the land was modified downward.

Ratio Decidendi: In determining compensation for acquired land, the court must ascertain market value at the date of notification on legally relevant evidence, ordinarily by reference to bona fide comparable sales within a reasonable time, and must exclude extraneous considerations and unsupported averaging methods.

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