Introduction
Land acquisition is one of the most powerful actions exercised by the State, as it results in compulsory deprivation of private property for public purposes. Recognising the seriousness of such deprivation, Indian law mandates that land acquisition must strictly comply with principles of fair compensation, transparency, and rehabilitation. The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (hereinafter referred to as the Land Acquisition Act, 2013) was enacted to replace the colonial Land Acquisition Act, 1894 and to protect landowners and affected families from injustice, exploitation, and arbitrary valuation.
Despite this progressive legislation, in practical implementation many landowners continue to receive compensation that is far below the actual market value of their land. Inadequate compensation may arise due to undervaluation, non-application of statutory benefits, procedural lapses, or denial of rehabilitation and resettlement entitlements. This leads to a critical legal question for affected persons.
If compensation is inadequate during land acquisition, a landowner has the legal remedy to challenge the compensation by seeking a statutory reference before the Land Acquisition, Rehabilitation and Resettlement Authority and, if necessary, by approaching the High Court for judicial review.
This article explains, in a detailed and structured manner, all legal remedies available to a landowner when compensation is inadequate, the statutory framework governing such remedies, procedural requirements, and the constitutional protections available under Indian law.
Legal Framework Governing Remedies for Inadequate Compensation
The legal remedies available to a landowner flow from the following sources:
- The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013
- Rules framed by Central and State Governments
- Constitutional protection under Article 300A of the Constitution of India
The 2013 Act does not treat the compensation award as final or beyond challenge. Instead, it recognises that disputes are inevitable and provides a structured legal mechanism to ensure fairness and legality.
What Is Meant by Inadequate Compensation?
Compensation is considered inadequate when it does not reflect the lawful entitlements of the landowner under the Act. Common instances include:
- Incorrect determination of market value
- Ignoring recent sale deeds of comparable land
- Failure to apply statutory multipliers (2x or 4x)
- Non-payment or underpayment of 100% solatium
- Exclusion of standing crops, trees, or structures
- Denial or delay of rehabilitation and resettlement benefits
- Delay in payment without statutory interest
Any of these deficiencies give rise to a legal right to challenge the compensation.
Primary Legal Remedy: Reference to the Land Acquisition Authority
Statutory Right to Seek Reference
The first and most important legal remedy available to a landowner is to seek a reference before the Land Acquisition, Rehabilitation and Resettlement Authority for enhancement of compensation.
This remedy is expressly provided under the Land Acquisition Act, 2013 and is the primary forum for adjudicating compensation-related disputes.
Nature and Role of the Land Acquisition Authority
The Land Acquisition, Rehabilitation and Resettlement Authority is a specialised quasi-judicial body constituted to decide disputes arising from land acquisition. It functions independently of the acquiring authority and is empowered to reassess compensation objectively.
The Authority examines both factual and legal aspects of compensation and is not bound by the valuation adopted by the Collector.
Issues That Can Be Raised in Reference Proceedings
A landowner may challenge the compensation award on multiple grounds, including:
- Inadequate or arbitrary determination of market value
- Wrong classification of land as rural or urban
- Incorrect application or non-application of statutory multipliers
- Non-payment or incorrect calculation of solatium
- Exclusion of crops, trees, wells, houses, or commercial structures
- Denial of rehabilitation and resettlement benefits
- Disputes regarding apportionment of compensation
The scope of reference proceedings is wide and comprehensive.
Limitation Period for Seeking Reference
The application for reference must be filed within the limitation period prescribed under the Act, generally:
- Within six weeks from the date of receipt of the award, or
- Within six months from the date of the award
Failure to file the reference within this period may result in the compensation award becoming final and binding.
Evidence Required to Support a Compensation Challenge
A landowner must substantiate the claim for enhanced compensation with proper evidence, such as:
- Sale deeds of comparable lands in the vicinity
- Revenue records showing land classification and use
- Government circle rates and valuation reports
- Proof of standing crops, fruit-bearing trees, and structures
- Copy of the award and compensation calculation sheet
Documentary evidence plays a decisive role in securing enhanced compensation.
Acceptance of Compensation and Its Legal Effect
Does Accepting Compensation Bar Legal Remedies?
Acceptance of compensation does not automatically deprive a landowner of the right to challenge its inadequacy, particularly when:
- Compensation is accepted under protest
- Acceptance is due to financial compulsion
- Statutory benefits are excluded
Indian courts have consistently held that mere acceptance of compensation does not amount to waiver of the right to seek enhancement.
Remedy for Non-Payment or Delayed Payment of Compensation
When compensation is awarded but not paid within the prescribed time, the landowner has the right to:
- Claim statutory interest for delayed payment
- Seek directions from the Land Acquisition Authority
- Approach the High Court for enforcement of legal rights
Delay in payment defeats the object of fair compensation and violates the constitutional guarantee under Article 300A.
Remedy for Denial of Rehabilitation and Resettlement Benefits
Rehabilitation and resettlement benefits are mandatory under the 2013 Act and form an integral part of compensation.
If such benefits are denied or partially granted, the landowner or affected family may:
- Raise the issue in reference proceedings
- Seek enforcement through the Land Acquisition Authority
- File a writ petition before the High Court
Denial of rehabilitation benefits is itself a ground for legal challenge.
Constitutional Remedy: Writ Petition Before the High Court
When Can a Writ Petition Be Filed?
A landowner can approach the High Court under Article 226 of the Constitution of India in cases involving:
- Grossly arbitrary or illusory compensation
- Violation of mandatory provisions of the Act
- Defective or sham Social Impact Assessment
- Non-payment of compensation despite award
- Denial of rehabilitation and resettlement benefits
Although courts generally require exhaustion of statutory remedies first, writ jurisdiction is available in exceptional cases involving grave injustice.
Appeal and Judicial Review of Authority’s Orders
Orders passed by the Land Acquisition Authority can be challenged before the High Court through appellate or supervisory jurisdiction, depending on the applicable State rules.
Judicial review ensures that the Authority’s decision complies with statutory provisions, principles of natural justice, and constitutional mandates.
Remedy of Lapse of Acquisition Proceedings
In certain cases, landowners may contend that acquisition proceedings have lapsed, particularly where:
- Compensation has not been paid, and
- Physical possession of land has not been taken
If proceedings lapse, fresh acquisition must be initiated under the 2013 Act, often resulting in higher compensation and full rehabilitation benefits.
Constitutional Protection Under Article 300A
Article 300A of the Constitution provides that no person shall be deprived of property except by authority of law. Compensation that is arbitrary, inadequate, or illusory violates this constitutional safeguard.
Indian courts have repeatedly held that fair compensation is an essential component of lawful land acquisition, and any deviation invites judicial intervention.
Practical Challenges Faced by Landowners
Despite clear legal remedies, landowners often face challenges such as:
- Lack of awareness about limitation periods
- Financial pressure to accept inadequate compensation
- Difficulty in obtaining valuation evidence
- Delay in adjudication
Professional legal assistance often becomes essential to effectively pursue available remedies.
Importance of Timely Legal Action
Delay in exercising legal remedies can lead to:
- Loss of statutory right to seek reference
- Finality of compensation award
- Restricted scope for judicial intervention
Timely action is crucial to protect legal and constitutional rights.
Conclusion
Indian law provides strong and effective legal remedies to landowners who receive inadequate compensation during land acquisition. The primary remedy is to seek a statutory reference before the Land Acquisition, Rehabilitation and Resettlement Authority, followed by appellate and constitutional remedies where necessary.
The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 is a rights-based legislation designed to ensure that development does not occur at the cost of injustice to landowners and affected families. However, these rights become meaningful only when landowners assert them through informed, timely, and lawful action.
Inadequate compensation is not something a landowner must passively accept. The law empowers affected persons to challenge unfair valuation, seek enhancement, and enforce rehabilitation benefits, thereby ensuring that land acquisition in India remains just, transparent, and constitutionally compliant.
Disclaimer: This information is intended for general guidance only and does not constitute legal advice. Please consult with a qualified lawyer for personalized advice specific to your situation.
Advocate J.S. Rohilla (Civil & Criminal Lawyer in Indore)
Contact: 88271 22304