Compulsory acquisition compensation includes special adaptability on the valuation date, but excludes enhanced post-scheme value.

Compulsory acquisition compensation must reflect the land's market value on the notification date, including any special adaptability or potentiality that would influence a willing purchaser, even if the acquiring authority is the only possible buyer for that use. The valuation cannot be reduced to ordinary value merely because no other purchaser could exploit the same advantage. At the same time, the land may not be valued by reference to its enhanced post-acquisition use under the scheme; only existing advantages and possibilities are relevant. The compensation was therefore assessed on that basis, and the higher post-scheme value was excluded.

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Issues: (i) Whether, in determining compensation for compulsory acquisition, the special adaptability or potentiality of the land for supplying water to the harbour could be taken into account even though the acquiring authority was the only possible purchaser of that adaptability; and (ii) whether the land had to be valued by reference to its post-acquisition use under the scheme or by reference to its market value as on the date of notification, with only existing advantages and possibilities considered.

Issue (i): Whether, in determining compensation for compulsory acquisition, the special adaptability or potentiality of the land for supplying water to the harbour could be taken into account even though the acquiring authority was the only possible purchaser of that adaptability?

Analysis: Compensation under the Land Acquisition Act is to be fixed on the basis of what a willing vendor might reasonably expect from a willing purchaser, disregarding compulsion on either side. The existence of only one possible purchaser does not eliminate value if that purchaser would, in a friendly negotiation, pay more than the ordinary value because of the land's special adaptability. The acquiring authority's need cannot be used to reduce the property to its ordinary value merely because no other buyer could exploit the same potential.

Conclusion: Yes. The special adaptability had to be valued, and the fact that the Harbour Authority was the only possible purchaser did not make its value nil.

Issue (ii): Whether the land had to be valued by reference to its post-acquisition use under the scheme or by reference to its market value as on the date of notification, with only existing advantages and possibilities considered?

Analysis: The land must be valued as it stood on the date of notification, with its existing advantages and possibilities, but without allowing the acquiring scheme to enhance the price. Section 24(5) excludes increase attributable to the use to which the land will be put after acquisition. That provision does not exclude the price a willing purchaser would pay for the land's special adaptability as it then existed. The proper figure is therefore the price the authority would have paid on the valuation date, not the value of the land after the anti-malarial scheme had been carried out.

Conclusion: The land was to be valued at its market value on the notification date, taking account of its existing special adaptability, but not at its enhanced post-acquisition value.

Final Conclusion: The compensation awarded by the High Court was reduced, and the appellant obtained a higher award than that fixed by the High Court, though not the full amount granted by the Subordinate Judge.

Ratio Decidendi: In compulsory acquisition, special adaptability or potentiality must be included in market value if it would influence a willing purchaser on the valuation date, even where the acquiring authority is the only possible purchaser, but the land cannot be valued by reference to its enhanced post-acquisition use under the scheme.

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