Land Compensation Dispute: Supreme Court Ruling on Haryana Acquisitions

The Supreme Court of India has delivered a landmark judgment concerning land acquisition and compensation disputes related to the villages of Kheri Sadh and Baliyana in the Rohtak district of Haryana. This ruling has far-reaching implications for landowners, compensation claims, and the application of the Land Acquisition Act, 1894. The case revolved around the compensation awarded to landowners whose land was acquired by the State of Haryana for industrial development.

The appeals were filed by the legal heirs of Balwan Singh and other landowners, contesting the compensation fixed by the Punjab and Haryana High Court. The acquiring authority, the State of Haryana, also challenged the enhancement of compensation awarded by the High Court. The Supreme Court’s verdict provides clarity on compensation determination and applicable deductions in such land acquisition cases.

Background of the Case

The case primarily concerned two villages in Haryana—Kheri Sadh and Baliyana. The land acquisition was conducted in two phases:

First Phase: Land acquisition in Kheri Sadh was notified on June 9, 2006.
Second Phase: A subsequent notification was issued on February 13, 2008, for additional land acquisition.
Separate land acquisition was also conducted for Baliyana.

The land was acquired for the development of an Industrial Model Township in Rohtak. The Land Acquisition Officer initially fixed the compensation at Rs. 16,00,000 per acre. Dissatisfied, the landowners approached the Reference Court, which enhanced the compensation to Rs. 24,00,000 per acre for land abutting the highway and Rs. 19,77,000 per acre for land beyond one acre from the highway. The Punjab and Haryana High Court further increased the compensation for land abutting the highway to Rs. 28,69,910 per acre, while keeping the remaining land’s compensation unchanged.

Key Legal Issues

Whether the compensation determined by the High Court was justified or excessive.
Whether the sale exemplars relied upon were appropriate for determining compensation.
Whether deductions should be applied to determine final compensation.
Whether land in Baliyana should receive the same compensation as Kheri Sadh.

Petitioners’ Arguments

The landowners contended that:

The highest sale exemplar should be considered for determining compensation.
Exhibit P3, which showed land selling at Rs. 46,45,714 per acre, should have been the benchmark.
Even if a cut was applied for small plots, it should have been limited to 40%.
The High Court erred in granting a lower escalation rate of 12% for the Second Phase Acquisition.
Since the land in Baliyana was acquired for the same purpose, it should receive compensation on par with Kheri Sadh.

Respondents’ Counterarguments

The State of Haryana and the acquiring authority argued that:

Sale exemplars relied upon by the landowners were for small plots and not indicative of large-scale acquisitions.
The High Court incorrectly applied a cut of 10% instead of 20%, leading to an excessive compensation award.
Land in Baliyana was not as strategically located as Kheri Sadh and thus did not merit equal compensation.
The development of an industrial area does not automatically make agricultural land commercial.

Supreme Court’s Observations

The Supreme Court examined the validity of the High Court’s modifications and made several key observations:

“The Reference Court was justified in applying a cut of 20% for land up to one acre abutting the highway and a cut of 38% for land beyond one acre. As per the settled position of law, a cut can range from 20% to 75%.”

Read also: https://judgmentlibrary.com/supreme-court-rejects-mtnls-challenge-against-land-acquisition-by-mumbai-municipal-corporation/

The Court held that the High Court failed to justify reducing the cut to 10% and reinstated the Reference Court’s calculations. It emphasized that compensation determination should be based on reasonable deductions and adjustments.

Final Judgment

The Supreme Court ruled as follows:

The compensation for First Phase Acquisition in Kheri Sadh was set at Rs. 24,00,000 per acre for land abutting the highway and Rs. 19,77,000 per acre for land beyond one acre.
For the Second Phase Acquisition in Kheri Sadh, compensation was set at Rs. 28,80,000 per acre for land abutting the highway and Rs. 23,72,400 per acre for land beyond one acre.
The compensation for land in Baliyana was upheld at Rs. 17,00,000 per acre, rejecting the claim for parity with Kheri Sadh.

Impact of the Judgment

This judgment has significant implications for future land acquisitions:

Standardization of Compensation Calculations: The ruling reinforces the principle that deductions must be applied to large land acquisitions.
Distinguishing Land Potential: The verdict highlights that compensation varies based on location, proximity to highways, and intended land use.
Guidance for Future Landowners: The judgment clarifies that the highest sale exemplar alone is insufficient; other factors must be considered.
Strengthening Legal Precedents: The Court reiterated past rulings that apply cuts between 20% and 75% when comparing small plot sales to large agricultural land acquisitions.

Overall, this decision provides much-needed clarity on how land acquisition compensation should be determined, ensuring fairness for both landowners and acquiring authorities.

Petitioner Name: Balwan Singh (Dead) By Lrs. and Others.
Respondent Name: State of Haryana and Others.
Judgment By: Justice M.R. Shah, Justice B.V. Nagarathna.
Place Of Incident: Kheri Sadh and Baliyana, Rohtak, Haryana.
Judgment Date: 18-05-2022.

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