Section 20M of RA, 1989 : Section 20M: Sharing With Landowners The Difference In Price Of A Land When Transferred For A Higher Consideration

Explanation using Example

Imagine a situation where the government acquires land from a farmer, Mr. Sharma, for railway track construction under The Railways Act, 1989. The acquisition cost paid to Mr. Sharma is $100,000. A few years later, the railway authority finds that a portion of this land is not needed and decides to sell it to a private developer for $180,000.

Under Section 20M of The Railways Act, 1989, Mr. Sharma is entitled to a share of the profit made from this transaction. The difference in price is $80,000 ($180,000 - $100,000). Eighty percent of this difference, which amounts to $64,000, is to be shared with Mr. Sharma or his heirs.

The competent authority will calculate Mr. Sharma's share based on the proportion of land he originally owned and ensure that he receives the payment from a fund maintained for this purpose, as per the rules prescribed by the Central Government.