Smaller Land Sales Can Be Considered For Determining Fair & Just Land Acquisition Compensation: Supreme Court

The Supreme Court on Monday (Oct. 21) observed that there's no bar to take into account the sale of smaller pieces of land as an exemplar for determining the fair and just land acquisition compensation.

“In the instant case, there are multiple sale deeds of smaller plots, and these represent the best available evidence for estimating compensation. Since there is no legal impediment to considering such sale deeds, the logical progression in the compensation estimation process would be to identify the most suitable sale deed(s) for determining the market value and subsequently, to apply adequate deductions on the same.”, the bench comprising Justices Surya Kant and Ujjal Bhuyan said.

The Court referred to the case of Mehrawal Khewaji Trust v. State of Punjab (2012) to reason that since the person whose land is acquired is entitled to receive the highest value of compensation based on the value fetched by the similar pieces of land adjacent to the acquired land, therefore, there would not be a legal impediment to take into consideration the sale value of the smaller pieces of land.

In this case, the appellant's land was acquired by the State Government for developing colonies and converting them into plots after approval from the Town & Country Planning Department. The Land Acquisition Collector (LAC) passed an award and estimated the compensation at Rupees 45,00,000/- per acre, along with other entitlements.

Unsatisfied with the compensation amount determined by the LAC, the appellant filed an appeal before the Reference Court which had enhanced the market value of the acquired land to Rupees 92,62,500/- per acre, in addition to granting other statutory benefits.

While enhancing the compensation amount the Reference Court had taken into account the market value of the smaller pieces of land being adjacent to the appellant's land as an exemplar to determine the appellant's land value.

The High Court set aside the Reference Court decision and noted that the value of tiny plots can't be taken into consideration while determining the fair and just market value of the acquired land.

Following this, an appeal was preferred before the Supreme Court.

Setting aside the High Court's findings, the judgment authored by Justice Surya Kant rejected the respondent's contention that the sale deeds of smaller pieces of land could not be taken as an exemplar for determining the highest land compensation value. Reference was drawn to the case of Sh. Himmat Singh v. State of M.P. (2013) where the court opined that when there exist multiple sale deeds then the courts should rely on the highest valued exemplars.

Since there exist multiple sale deeds thus the Court took into account Ex. P5 which was a small parcel of land that yielded the highest sale value.

“we are of the opinion that we should rely upon the highest sale exemplar, which is Ex. P5 (Rs. 1,81,33,867/- per acre), rather than solely depending upon an average of the multiple sale deeds produced before us. Despite the Respondents' vehement contention that Ex. P5 should not be relied upon owing to it being a significantly smaller parcel of land— the detailed analysis conducted above indicates no reason why Ex. P5 cannot be utilised to determine the amount of compensation to be awarded to the Appellants for the acquired land.”, the court said.

“However, considering the totality of the circumstances and recognizing that the subject land has not been acquired for profiteering or commercial purposes, but primarily for the development of a residential area, we find it appropriate to rely on the valuation reflected in the best exemplar, Ex. P/5, as a fair and reasonable basis for compensation.”, the court held.

Accordingly, the appeal was allowed, and compensation determined by the Reference Court was approved.

Appearances:

Mr. Narender Hooda, Mr. Sunil Dalal, and Mr. Gagan Gupta, Senior Counsels argued for the Appellant

Mr. Vikramjit Bannerjee, Additional Solicitor General of India argued for the Respondents

Case Title: Horrmal (Deceased) through his LRs and others versus State of Haryana and others, SLP(C) No. 007963 - / 2023

Citation : 2024 LiveLaw (SC)818

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