Land Acquisition Compensation Dispute: Supreme Court’s Final Verdict

The case involves a dispute over the compensation for land acquired in Haryana by the Haryana State Industrial & Infrastructure Development Corporation Limited (HSIIDC) for the expansion of industrial sector 39 and the construction of the Kundli-Manesar-Palwal (KMP) Highway. The Supreme Court was tasked with determining whether the compensation awarded by the Punjab and Haryana High Court was justified or required modification.

Background of the Case

The dispute revolves around land acquisition notifications issued on 30.06.2005 and 05.03.2007 for villages Badh Malik, Pritampura, and Rasoi in District Sonipat, Haryana. The Land Acquisition Officer initially awarded compensation at Rs.16,00,000/- per acre, which was later enhanced by the Reference Court to Rs.19,00,000/- per acre for villages Badh Malik and Rasoi under the 2005 notification. However, the Reference Court did not enhance the compensation for Pritampura. In the 2007 notification, the Reference Court increased the compensation only for village Rasoi to Rs.23,00,000/- per acre.

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In the first round of litigation, the High Court raised the compensation significantly, awarding Rs.40,00,000/- per acre for land acquired in 2005 and Rs.50,00,000/- per acre for land acquired in 2007. However, the Supreme Court set aside these orders and remitted the matter back to the High Court for reconsideration, stating that the ‘belting system’ used to assess compensation was not appropriate.

In the second round, the High Court awarded Rs.29,54,000/- per acre for land acquired under the 2005 notification and Rs.45,00,000/- per acre for land acquired under the 2007 notification. Dissatisfied with this decision, HSIIDC filed appeals before the Supreme Court.

Arguments of the Appellants (HSIIDC)

• The compensation of Rs.29,54,000/- per acre awarded by the High Court for land acquired in 2005 was excessive. The High Court had wrongly relied on builder’s sale deeds (Exhibits P43 & P44) while disregarding the sale deeds presented by the State.
• The High Court misinterpreted Section 25 of the Land Acquisition Act, 1894, and failed to consider that the land in question was agricultural, making reliance on builder’s sale deeds inappropriate.
• The High Court should have considered the market value of land as of 13.08.2004, the date of a previous acquisition notification for the same area.
• The High Court miscalculated the 50% deduction on sale deed prices, inflating the final compensation.
• For land acquired under the 2007 notification, the High Court’s decision to increase compensation to Rs.45,00,000/- per acre was arbitrary, as the increase from the 2005 rate was disproportionately high.

Arguments of the Respondents (Landowners)

• The High Court’s assessment of compensation was actually on the lower side. If other sale deeds (Ex. P3, P4, P5, P6, and P7) had been considered, the market value would have been much higher.
• The land was acquired for industrial purposes, meaning it had much higher market value than typical agricultural land.
• As a case of compulsory acquisition, the landowners were entitled to fair market value under precedents set by the Supreme Court in General Manager, Oil and Natural Gas Corporation Limited v. Rameshbhai Jivanbhai Patel and Mehrawal Khewaji Trust v. State of Punjab.

Supreme Court’s Analysis and Judgment

The Supreme Court noted that the lands in question were agricultural lands acquired for an industrial project. Since the 2007 notification came just one year and nine months after the 2005 notification, the compensation for both acquisitions should have been determined based on the same factors.

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The Court found that the High Court had incorrectly calculated the land value by relying on sale deeds that were not entirely representative of the fair market value. Specifically, it found that applying a 50% cut to Ex. P43 and P44 would have resulted in a compensation of Rs.24,43,693/- per acre instead of Rs.29,54,000/- per acre.

For land acquired in 2007, the Supreme Court ruled that the High Court had wrongly applied a 10% cut instead of the 50% cut used earlier. Instead of Rs.45,00,000/- per acre, the Supreme Court ruled that a fair assessment would have resulted in Rs.30,73,280/- per acre.

Final Verdict

• The Supreme Court modified the High Court’s judgment, reducing the compensation for land acquired under the 2005 notification from Rs.29,54,000/- per acre to Rs.24,50,000/- per acre.
• The compensation for land acquired under the 2007 notification was reduced from Rs.45,00,000/- per acre to Rs.30,73,280/- per acre.
• The landowners would still be entitled to statutory benefits under the Land Acquisition Act, 1894.

The Supreme Court’s decision effectively balanced the interests of the landowners and the acquiring authority, ensuring fair compensation based on rational and legal considerations.

Petitioner Name: Haryana State Industrial & Infrastructure Development Corporation Limited.
Respondent Name: Satpal & Others.
Judgment By: Justice M.R. Shah, Justice Hima Kohli.
Place Of Incident: Sonipat, Haryana.
Judgment Date: 08-02-2023.

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