CONCEPT OF RIGHT OF COMPULSORY PURCHASE AND VALUE IN INDIA

CONCEPT OF RIGHT OF COMPULSORY PURCHASE AND VALUE IN INDIA

 There exists a difference of opinion as to the nature of power of Eminent Domain, which is defined as the right or power of State to appropriate private property for particular uses for the purpose of promoting the public welfare. Some maintain that it is short of reserved right and others, a super estate or interest in all the properties, vested in the sovereign power . Thus, the right to take the private  property for public use and the common wealth is reserved right attached to every man’s land and paramount to a right of ownership. Every man holds his land subject to the right and has no ground for complaint of injustice, if that paramount right is a lawfully used. Thus, the view is that the power of compulsory purchase is an inherent  right which pertains to the sovereignty as necessary, constant and inextinguishable attribute.

       The first tangible notions of value and valuation in India appeared and appraisal work come in vogue as a result of compulsory acquisition of land by the government of the time for the purpose of promoting the public welfare. For the purpose of compulsory acquisition, the first General Land acquisition Act was passed in 1857 which provided for payment of compensation to be settled by arbitration. But the fact was that there existed no competent body of valuers of numerically sufficient to fill the positions arbitrators and the matters was left to the court to decide, that is, to the persons who were not valuers.

The Indian Railways Act of 1890 was passed for the acquisition of land required for railways. Afterwards, the Land Acquisition act of 1894, successor in title to the Land Acquisition Act of 1857, was passed. The main source of inspirations of this Act was the English Land Clauses Consolidation Act of 1845. This act of 1894 may be look upon as parent Act of various other Acts which  severally and jointly empowered the various authorities to actually acquire the land. This Acts were

  • Calcutta Improvement Trust Act of 1911
  • Bombay Town Planning Act of 1915 for the city of Bombay
  • City of Bombay Improvement Trust (Transfer) act of 1925.

       As per acquisition Act, the compensation was to be paid for the acquired property. Before passing of land Acquisition Act of 1894, the compensation was being determine in an ad hoc manner by the acquiring  authorities. Under the Act of 1894, the concept of market value was stated in the various court decisions during the last decade of nineteenth century and the first decade of the century. The concept was particularly well stated in the famous case of Government of Bombay vs Merwanji Muncherji Cama in 1908. The principal of potential value was also given due regard. The Government Revenue Official dealt with the question of compensation in the first instance. With more and more acquisition of urban lands in
Mumbai, Kolkata and other cities, the question of technique  of valuation cropped up  in the cities of Mumbai and  Kolkata particularly with the starting of city improvement schemes in the developing cities of Bombay and Kolkata.

As long as the property value did not indicate the high rise, there was very little resistance from the claimant, but a values of properties went on rising, the estimation of value determined by the Revenue Officials of the government began to be challenged. The owner of property become interested in showing values which word of benefit to them. This  happened in the beginning of the second decade of the century .

       Sensing the change in time, the Government of Mumbai appointed first consulting surveyor in Mumbai and appointed him also the Member of the Tribunal to decide the compensation cases arising out of City Improvement Trust Schemes. The first Consulting Surveyor to the Government of Mumbai and a Member of the Tribunal was Mr. A.E, Mirams, an Englishman who was a well qualified valuer, being a Fellow of the Surveyors’ Institute of England ,and with experience of about 30 years of practice with the London Country Council, U.K (Inland Revenue Department). He was probably the first man in western India to introduce the correct principles of valuation of land and buildings with due regard to the interpretation of the term Market Value. This being a new concept in the country, he had to create persons from the local cadre to handle the work of valuation. He wrote a very good book, The valuation of Real Property which was published in 1938. The book was in two parts- the first part consisted the valuation table and examples and the second part dealt with the theory and practice of valuation principles. This book is being relied upon the references by the judicial authorities in India.

Incidentally another book Principles and Practice of valuation (Land and Houses) by one Mr. J.A. Parks F.S.I,  Formerly Chief Valuer of Kolkata improvement Trust, was published in 1942.

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