Sikkim High Court says Rs 565-crore army land award is only preliminary valuation

The Sikkim High Court has ruled that a Rs 564.96-crore award issued by the Mangan Collector for land acquired by the Indian Army cannot be treated as a final compensation award, directing the state government to reconsider the valuation after hearing objections from all stakeholders.

Chief Justice A. Muhamed Mustaque was hearing a petition filed by the Union of India and Defence Estates officials challenging the award dated January 18, 2023, covering 102.11 hectares of land in Lachen, Lachung and Chungthang, near the international border.

The Collector had fixed the land rate at Rs 150 per square foot, compared with Rs 65 per square foot at the time of the preliminary notification. Defence authorities had repeatedly objected to the valuation, but their objections were not addressed in the award, according to the case details.

The dispute centred on the procedure prescribed under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.

Section 23 provides for the Collector's initial determination of compensation, including the market value of the land as on the date of the preliminary notification, while Section 26 sets out the method for determining that market value. The final award and payment of compensation, including applicable solatium, follow under the Act's subsequent provisions.

The High Court found that the Collector had combined the initial valuation and final award into a single composite order. It held that this approach was inappropriate because it curtailed the state government's ability under Section 36 to examine the legality and propriety of the valuation before the final award was issued.

The court also observed that the government ordinarily cannot challenge its own Collector's award through a conventional writ petition. However, it held that declaratory relief was maintainable in this case because the composite award undermined the statutory process.