Under the Land Acquisition Act, 1894, are sale instances that took place after the publication of the Section 4 notification a reliable basis for computing acquisition compensation?

As a rule of thumb, no. Land value in the area tends to appreciate upon acquisition, expecting benefits from the public purpose of the acquisition, so post-Section 4 sale instances are bound to be skewed. The 'fifthly' clause of Section 24 of the 1894 Act mandates that the price increase due to purpose of the acquisition must be disregarded.

Land Acquisition Act, 1894 — s.4 — s.23(1) — s.24 — s.34 — Market value — Sale exemplars — Auction sale — Escalation — Solatium and interest — Land Acquisition Act, 1894 — s.23(1) — Auction sale exemplar — unreliable indicator of true market value — Held: An auction sale reduces the exemplar's reliability, because an auction motivates buyers to purchase at higher prices than the prevailing market rate and imports competition, ego and speculation. Such exemplars can only be used when no other comparable sale instances are available. (¶22, 23) Land Acquisition Act, 1894 — s.4 — s.24 — Post-notification sale instances — price rise to be disregarded — Held further: Sale instances after the initiation of the acquisition are unreliable, as land value tends to appreciate expecting benefits from the public purpose. The 'fifthly' clause of Section 24 mandates that the price increase due to that purpose be disregarded. (¶25) Land Acquisition Act, 1894 — s.23(1) — Highest sale exemplar — higher escalation in metropolitan areas — Held further: The exemplar depicting the highest market value ought to be used among multiple reliable sale instances, an average only where rates are within a narrow margin. Escalation for the time gap, ordinarily 10-12% per year, must be higher in metropolitan areas. (¶38, 43) Land Acquisition Act, 1894 — s.34 — s.23(1A) — s.23(2) — Interest and solatium on enhanced compensation — Held further: Interest under Section 34 runs at 9% per annum for the first year after taking of possession and 15% thereafter, and a court cannot deviate from that explicit mandate. All statutory benefits are due on the enhanced amount; appeals allowed in part, market value reduced. (¶48, 50, 52)

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