Land Acquisition Compensation: Supreme Court Modifies High Court’s Ruling for Fair Market Value

The case of Balwant Singh (D) Through LRs. Gurbinder Singh v. The State of Haryana & Others deals with the compensation payable for land acquired under various notifications issued under the Land Acquisition Act, 1894. The Supreme Court, in its judgment dated March 11, 2019, modified the High Court’s ruling, increasing compensation while balancing the interests of landowners and the government.

This case is crucial in determining fair compensation for landowners when land is acquired for public purposes.

Case Background

The dispute arose over the acquisition of land in Ajronda, Taloribanger, and Daulatabad, Faridabad, under notifications issued under Section 4 of the Land Acquisition Act, 1894. The land was acquired for various public purposes, including a green belt, institutional use, and residential development.

Key details of the land acquisition:

• Notification dated April 7, 1986 for 6.97 acres for a green belt.
• Notification dated June 5, 1992 for 7.81 acres for educational, medical, and administrative purposes.
• Notification dated July 3, 1995 for 385.34 acres in Sectors 20-A and 20-B, Faridabad.

The landowners were dissatisfied with the compensation awarded by the Land Acquisition Collector and sought higher compensation through references under Section 18 of the Act.

High Court’s Decision

The Punjab and Haryana High Court, in its judgment dated October 6, 2010, enhanced the compensation:

• Rs. 435 per sq. yard for land acquired in 1986.
• Rs. 566 per sq. yard for land acquired in 1992.
• Rs. 795 per sq. yard for land acquired in 1995.

Both the landowners and the State of Haryana appealed the High Court’s decision before the Supreme Court.

Petitioner’s Arguments

The landowners, represented by their counsel, contended:

• The High Court failed to consider the future potential of the land.
• Comparable sale transactions in the area suggested a higher market value.
• The compensation should have been increased to reflect the true market value.

Respondent’s Arguments

The State of Haryana, represented by its counsel, argued:

• The compensation awarded by the High Court was excessive.
• The High Court failed to consider transactions where land was sold at lower rates.
• The landowners’ claims were exaggerated and not supported by evidence.

Supreme Court’s Observations and Ruling

The Supreme Court analyzed the evidence and concluded that the High Court’s compensation determination required modification.

On comparable sale transactions:

“The sale transactions relied upon by the landowners involved small plots and were not representative of large-scale land acquisitions.”

On the potentiality of the land:

“The acquired land had a higher future potential due to its location in Faridabad, and its proximity to major commercial and institutional areas justified a higher compensation.”

On increasing compensation using a cumulative increase method:

“Considering the rise in land prices, a cumulative increase of 12% per annum for the period between 1986 and 1995 is reasonable.”

Based on these findings, the Supreme Court modified the compensation:

• Rs. 860 per sq. yard for land acquired in 1992 (earlier Rs. 566).
• Rs. 1,210 per sq. yard for land acquired in 1995 (earlier Rs. 795).

The compensation for land acquired in 1986 was left unchanged at Rs. 435 per sq. yard.

Conclusion

The Supreme Court’s ruling reinforces the principle that compensation for land acquisition should reflect fair market value. The key takeaways are:

• Comparable sale transactions should be carefully analyzed before determining compensation.
• Land potentiality and future development prospects play a crucial role in compensation assessment.
• A structured formula, such as cumulative percentage increase, can be applied to determine reasonable compensation over time.
• Government acquisition must ensure just compensation to landowners to prevent exploitation.

By modifying the High Court’s ruling, the Supreme Court balanced the interests of both landowners and the government, ensuring that fair compensation is awarded while maintaining legal consistency.

Petitioner Name: Balwant Singh (D) Through LRs. Gurbinder Singh.
Respondent Name: The State of Haryana & Others.
Judgment By: Justice L. Nageswara Rao, Justice M.R. Shah.
Place Of Incident: Faridabad, Haryana.
Judgment Date: 11-03-2019.

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