Himachal Pradesh High Court Quashes State Notification Fixing Multiplier as 1 for Rural Land Acquisition, Directs Application of Multiplier 2

A Division Bench of Justice Tarlok Singh Chauhan and Justice Sushil Kukreja observed, “The executive must abide by the provisions of the Act and cannot ignore or act contrary to the Act in exercise of its powers under Article 162 of the Constitution of India.”

The Court added, “The Notification, therefore, issued under the executive powers cannot override the Act… The action of the State in issuing the Notification by restricting the multiplier factor to one is obviously trying to treat the land owners as one, which cannot be countenanced.”

Advocate C.N. Singh appeared for the Petitioners, while Advocate General Anup Rattan represented the Respondents.

Brief Facts

The Petitioners in both cases challenged a Notification dated April 1, 2015, issued by the State Government under Section 30(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (“the Act”). The Notification fixed the multiplier factor at 1.00 for determining compensation in all rural areas of Himachal Pradesh.

The Petitioners’ lands were acquired in 2018 for public purposes, and awards were passed in 2024 applying a multiplier of 1.00. The Petitioners contended that this was done in complete disregard of the First Schedule to the Act, which prescribes a graded multiplier between 1 and 2 for rural lands depending on their distance from urban areas.

They submitted that they only became aware of the Notification after the award and filed the petitions seeking its quashing and issuance of supplementary awards using the correct multiplier. While the State Government failed to file any reply despite repeated opportunities, Respondents No. 4 and 5 filed a response stating they acted in accordance with the State’s Notification.

Reasoning of the Court

The Court referred to the Statement of Objects and Reasons of the 2013 Act and noted that the legislation was enacted to ensure just and fair compensation to landowners, especially in rural areas, while safeguarding their livelihood and socio-cultural environment.

The Court noted that Section 30(2) of the Act does not empower the Government to fix the multiplier through executive notification, particularly in contradiction to the First Schedule. “On a careful perusal of impugned Notification dated 01.04.2015, we do not find any source for issuance of such notice particularly Section 30 of the Act under which it has been issued, as Section 30 only talks about the award or solatium…”, it added.

The Bench observed, “The impugned Notification is in grave violation to the provisions of Section 107 of the Act which clearly states that the State Legislature has power to enact any law; provided that the same is more beneficial to affected families. The Notification, therefore, issued under the executive powers cannot override the Act. The executive can issue instructions only in respect of those aspects which are not covered by the legislation i.e. Act. It is more than settled that the executive instructions cannot override the Act. The powers derived by the authorities under the Act cannot be circumscribed by executive instructions. The instructions cannot supplant the law. The executive must abide by the provisions of the Act and cannot ignore or act contrary to the Act in exercise of its powers under Article 162 of the Constitution of India.

On the structure of the First Schedule, which provides for a multiplier ranging from 1.00 to 2.00 depending on distance from urban areas, the Court noted, “This makes it explicitly clear that in rural areas which are farthest from urban area, the multiplier factor is required to be two and when rural area… is closer to the urban area, such multiplier factor scales down… even up to one.”

The Court observed that the Notification, by applying a flat 1.00 multiplier across all rural areas, subverted the legislative intent, stating, “The action of the State in issuing the Notification by restricting the multiplier factor to one is obviously trying to treat the land owners as one, which cannot be countenanced… This will deny the poor land owners of the remote villages, fair compensation and rehabilitation.”

The Bench further noted that Section 107 of the Act empowers State Governments to enact more beneficial provisions, not to reduce benefits already prescribed by Parliament, hence held the Notification to be ultra vires.

Accordingly, the Court allowed both petitions and quashed the Notification dated April 1, 2015, while directing the Respondents to apply the multiplier as 2 by the First Schedule of the Act and to issue a supplementary award accordingly.

The Land Acquisition Collector was further directed to pay compensation along with all statutory benefits to the Petitioners on or before 30 September 2025.

Cause Title: Keshav Ram & Others v. State of Himachal Pradesh & Ors. (Neutral Citation: 2025:HHC:15408)

Appearance:

Petitioners: Advocates C.N. Singh, Nidhi Singh

Respondents: Advocate General Anup Rattan; AAGs Ramakant Sharma, Navlesh Verma, Sharmila Patial, Sushant Keprate; Dy. AG Raj Negi; Senior Advocate Neeraj Sharma, Advocate Hemant Thakur, Virbahadur Verma