Explanation:

Correct Answer is (b).There is error in the bold part of the sentence since it is a common rule in grammar that an adverb can only modify an adjective, a verb and another adverb, Here, adequately is the adverb but it is followed by the present continuous tense of the word compensate. There lies the error. This word should be either in verb, adjective or another adverb. Now, the correct usage would have been they were not adequately compensated. 
The correct statement would be:
All the villagers are now protesting since they claim that the land was acquired without their consent and they were not adequately compensated.This makes option B the correct choice among the given options.