Section 20G: Criterion for determination of market-value of land

1[20G. Criterion for determination of market-value of land.– (1) The competent authority shall adopt the following criteria in assessing and determining the market-value of the land,–

(i) the minimum land value, if any, specified in the Indian Stamp Act, 1899 (2 of 1899), for the registration of sale deeds in the area, where the land is situated; or

(ii) the average of the sale price for similar type of land situated in the village or vicinity, ascertained from not less than fifty per cent. of the sale deeds registered during the preceding three years, where higher price has been paid, whichever is higher.

(2) Where the provisions of sub-section (1) are not applicable for the reason that:

(i) the land is situated in such area where the transactions in land are restricted by or under any other law for the time being in force in that area; or–

(ii) the registered sale deeds for similar land as mentioned in clause (i) of sub-section (1) are not available for the preceding three years; or

(iii) the minimum land value has not been specified under the Indian Stamp Act, 1899 (2 of 1899) by the appropriate authority, the concerned State Government shall specify the floor price per unit area of the said land based on the average higher prices paid for similar type of land situated in the adjoining areas or vicinity, ascertained from not less than fifty per cent. of the sale deeds registered during the preceding three years where higher price has been paid, and the competent authority may calculate the value of the land accordingly.

(3) The competent authority shall, before assessing and determining the market-value of the land being acquired under this Act–br (a) ascertain the intended land use category of such land; and

(b) take into account the value of the land of the intended category in the adjoining areas or vicinity, for the purpose of determination of the market-value of the land being acquired.

(4) In determining the market-value of the building and other immovable property or assets attached to the land or building which are to be acquired, the competent authority may use the services of a competent engineer or any other specialist in the relevant field, as may be considered necessary by the competent authority.

(5) The competent authority may, for the purpose of determining the value of trees and plants, use the services of experienced persons in the field of agriculture, forestry, horticulture, sericulture, or any other field, as may be considered necessary by him.

(6) For the purpose of assessing the value of the standing crops damaged during the process of land acquisition proceedings, the competent authority may utilise the services of experienced persons in the field of agriculture as he considers necessary.]

1. Ins. by Act 11 of 2008, s. 3 (w.e.f. 31-1-2008)

Simplified Explanation

Section 20G of the Railways Act, 1989 provides a framework for determining the market value of land that is being acquired for railway projects, ensuring that landowners receive compensation that reflects the true value of their property.

Key Provisions:

1. Criteria for Market Value:
   • The competent authority shall determine the market value of the land based on one of two criteria:
     • Minimum land value: The minimum land value specified under the Indian Stamp Act, 1899 for registering sale deeds in the area where the land is situated.
     • Average of sale prices: The average sale price of similar land in the village or nearby area over the preceding three years, based on at least 50% of registered sale deeds, whichever is higher.
2. Alternate Method of Determination:
   • If the above criteria cannot be applied due to specific circumstances, such as restricted land transactions or lack of available sale deed data, the State Government may set a floor price for the land based on:
     • The higher prices paid for similar land in adjoining areas or the vicinity, determined from at least 50% of the sale deeds in the previous three years.
     • The competent authority will then calculate the land value accordingly.
3. Consideration of Land Use:
   • Before assessing the market value, the competent authority must ascertain the intended land use category of the acquired land.
   • The authority must also take into account the value of land in the same intended category in the surrounding area, ensuring the market value reflects the land’s potential use.
4. Determination of Value for Buildings and Immovable Property:
   • If the land includes buildings or other immovable property that will also be acquired, the competent authority may enlist the help of specialists such as engineers or property experts to assess their value.
5. Assessment of Value for Trees and Plants:
   • For evaluating the value of trees and plants on the land, the authority may seek the expertise of individuals experienced in fields such as agriculture, forestry, horticulture, or sericulture.
6. Assessment of Damaged Standing Crops:
   • If standing crops are damaged during the acquisition process, the competent authority may consult agricultural experts to assess the value of the crops for compensation purposes.

Implications:

• Comprehensive Land Valuation: The provision ensures that the land is valued accurately, considering not just the immediate sale prices but also the land’s intended use and surrounding market conditions.
• Protection of Landowners: By using various criteria and including expert assessments for buildings, crops, and other property, this section ensures that the compensation reflects the full value of the land, including any other assets or resources attached to it.
• Flexibility in Assessment: The section provides flexibility in cases where traditional data (like sale deeds) is unavailable, allowing the State Government to set a floor price and ensuring that the land’s value is assessed in the most accurate way possible.
• Specialist Input: The use of specialists for determining the value of buildings, trees, and crops ensures that all aspects of the property are fairly valued, not just the land itself, which can prevent undervaluation in cases where these assets have significant value.

Conclusion:

Section 20G establishes a clear, flexible, and detailed process for determining the market value of land acquired for railway projects. By considering a range of factors—from sale prices to the land’s intended use and its associated assets—it ensures fair and accurate compensation for landowners. This process protects their interests and helps avoid disputes by providing a transparent and comprehensive valuation method.