Land acquisition valuation dispute: market-value compensation required for personally cultivated lands within ceiling limits, appeals dismissed.

Challenge to a state enactment modifying land acquisition valuation was considered; the court reaffirmed prior precedent that agrarian-reform protections apply where lands are under personal cultivation and within ceiling limits, requiring compensation at market value measured as of the date of publication of the acquisition notification, and rejected arguments that an interim stay nullified that precedent. Consequently, statutory deviations reducing compensation were disallowed, appeals were dismissed, previously paid sums to be adjusted against market-value awards, and relief granted to claimants who met the proviso's conditions.

---

---

Issues: Whether the ratio of this Court in K. Rangaiah (that the second proviso to Article 31A requires payment of market value where land held in personal cultivation within ceiling limits) continues to bind despite an interim stay by the Supreme Court, and whether claimants are entitled to compensation under the Land Acquisition Act, 1894 based on the market value as on the date of publication of the Section 4(1) notification.

Analysis: The Court examined the statutory scheme under the Nagarjuna Sagar (Acquisition of Land) Act, 1956 and the Land Acquisition Act, 1894, and considered constitutional provisions including Article 31A and Article 300-A. It reviewed precedents including D.G. Mahajan, K. Rangaiah, Jeelubhai Nanbhai Khachar and Sree Chamundi Mopeds to analyse (i) the binding effect of Division Bench precedent and the doctrine of stare decisis, (ii) the legal effect of an appellate/interim stay on the ratio of a judgment, and (iii) the applicability of the Second Proviso to Article 31A where land is within ceiling limits and in personal cultivation, which mandates compensation not less than market value. The Court distinguished stay of operation from quashing and held that a stay does not wipe out the ratio of a preceding judgment; accordingly, the Division Bench decision in Rangaiah, having been consistently followed, remains binding. Applying these principles, the Court found that claimants who satisfy the conditions of the Second Proviso are entitled to compensation measured by market value as at the Section 4(1) notification date and that amounts earlier paid under the special Act are to be adjusted against such compensation.

Conclusion: The Court held that the Rangaiah ratio continues to bind despite the interim stay and that the claimants are entitled to compensation under the Land Acquisition Act, 1894 assessed at the market value as of the date of publication of the Section 4(1) notification; the State's writ appeals fail.

Ratio Decidendi: A Division Bench precedent construing the Second Proviso to Article 31A is binding on subsequent benches; an interim stay of a judgment does not extinguish its ratio, and where land is within ceiling limits and in personal cultivation the State must pay compensation not less than the market value as of the Section 4(1) notification date.

---