Land Acquisition Compensation Dispute: Supreme Court’s Ruling on Market Value Deduction

The case of Mahanti Devi v. M/S Jaiprakash Associates Ltd. revolves around the issue of fair compensation for land acquired under the Land Acquisition Act, 1894. The dispute concerns a notification issued on April 11, 2005, acquiring land for the Himachal Cement Project in Solan, Himachal Pradesh.

The core issue in the case was the determination of compensation. Initially, the Land Acquisition Collector computed compensation at Rs.2,10,000 per bigha for cultivated land and Rs.40,369 per bigha for uncultivated land. The Reference Court, however, enhanced this amount to Rs.5 lakh per bigha based on sale deeds executed in 2004.

The Supreme Court, while evaluating the methodology used by the lower courts, noted:

“It was held by this Court in Viluben Jhalejar Contractor v. State of Gujarat:
‘The amount of compensation cannot be ascertained with mathematical accuracy. A comparable instance has to be identified having regard to the proximity from time angle as well as proximity from situation angle.’”

Considering the evidence, the Court identified that a sale deed for a smaller piece of land indicated a higher market value. However, the Reference Court applied a 60% deduction without detailed reasoning. The Supreme Court set aside the High Court’s ruling and remitted the case for reconsideration of the justifiability of the deduction.

The Court emphasized that while computing market value, various factors such as location, accessibility, and special advantages should be taken into account.

The appeals were disposed of with the High Court directed to re-evaluate the deduction based on legal principles.

Petitioner Name: Mahanti Devi.
Respondent Name: M/S Jaiprakash Associates Ltd..
Judgment By: Justice L. Nageswara Rao, Justice M.R. Shah.
Place Of Incident: Solan, Himachal Pradesh.
Judgment Date: 08-02-2019.

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Download Judgment: Mahanti Devi vs MS Jaiprakash Assoc Supreme Court of India Judgment Dated 08-02-2019.pdf