Featured image for Supreme Court Judgment dated 16-05-2018 in case of petitioner name Loveleen Kumar & Ors. vs State of Haryana & Ors.
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Supreme Court Sets Aside High Court’s Compensation Order in Land Acquisition Case

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The case of Loveleen Kumar & Ors. v. State of Haryana & Ors. revolves around the compensation for land acquisition by the Haryana government. The Supreme Court examined the correctness of the compensation awarded by the High Court of Punjab and Haryana, ultimately deciding to remand the matter for fresh consideration.

The case originated from the State of Haryana’s decision to acquire 229.13 acres of land in Village Hansi, District Hisar, for commercial and residential development. The dispute arose over the adequacy of compensation granted to landowners.

Background of the Case

On August 29, 2005, the Haryana government issued a notification under Section 4(1) of the Land Acquisition Act, 1894 to acquire land for urban development. The Land Acquisition Collector initially awarded compensation at different rates:

  • Rs. 12,00,000 per acre for land near G.T. Road.
  • Rs. 10,00,000 per acre for land near Jind Bypass Road.
  • Rs. 8,00,000 per acre for the remaining land.

The landowners, dissatisfied with this assessment, approached the Reference Court under Section 18 of the Act. The Reference Court enhanced the compensation significantly, awarding a uniform rate of Rs. 48,40,000 per acre. The State did not appeal this decision, but the landowners sought further enhancement in the High Court.

High Court’s Decision

The High Court of Punjab and Haryana, in its judgment dated May 28, 2016, increased the compensation to Rs. 4,173 per square yard, which amounted to Rs. 2,01,97,320 per acre. The Court justified this enhancement by citing:

  • Past land acquisition cases, including Ashrafi v. State of Haryana, where compensation of Rs. 1,342 per square yard was awarded in a nearby area.
  • Significant development potential of the land.
  • Sale of 27 acres by Haryana Urban Development Authority (HUDA) at Rs. 3,200 per square meter and Rs. 2,246 per square yard.

However, the State of Haryana challenged the High Court’s judgment in the Supreme Court, arguing that the compensation was excessively high.

Arguments by the State of Haryana

The State contended that:

  • The land was originally agricultural, as acknowledged by the landowners.
  • The High Court ignored several sale deeds from 2005 and 2006, showing market values between Rs. 4,00,000 and Rs. 8,00,000 per acre.
  • The land acquisition judgment in Ashrafi should not have been relied upon, as that land was commercial and much smaller in area.
  • The High Court wrongly applied a 15% increase per year based on Ashrafi’s case without considering actual market trends.

Arguments by the Landowners

The landowners countered that:

  • The High Court’s approach was justified, as the land had commercial potential.
  • The compensation in Ashrafi was applicable, as the acquired land was only 300 yards away from the current acquisition.
  • The sale deeds cited by the State did not reflect the true market value of the land.

Supreme Court’s Observations

The Supreme Court found serious flaws in the High Court’s methodology:

“The High Court has mainly relied upon Ashrafi (supra) for coming to its conclusion. In our considered opinion, the method of granting compensation on the basis of cumulative increase as done was not permissible in the facts of the case.”

The Court emphasized that:

  • The land in Ashrafi was acquired in 1995, while the present acquisition took place in 2005, creating a 10-year gap that made direct comparison unreliable.
  • The High Court ignored multiple sale transactions from 2005-2006 that suggested lower values.
  • Past precedents, including ONGC Ltd. v. Rameshbhai Jivanbhai Patel, held that price increases from sales over five years old were not a reliable standard.
  • The High Court did not furnish any reasons for disregarding the State’s sale deed evidence.

Final Judgment

The Supreme Court set aside the High Court’s judgment and remanded the matter for reconsideration:

“Accordingly, the impugned judgment passed by the High Court stands set aside, and the matter is remitted to the High Court for fresh consideration in accordance with law.”

The Court instructed the High Court to review all sale transactions and determine a fair compensation based on contemporary market data rather than outdated acquisition references.

Conclusion

This judgment highlights the importance of evidence-based compensation in land acquisition cases. By setting aside the High Court’s arbitrary enhancements, the Supreme Court reaffirmed that land valuation must be grounded in actual transactions and market realities, ensuring fairness to both landowners and the State.


Petitioner Name: Loveleen Kumar & Ors..
Respondent Name: State of Haryana & Ors..
Judgment By: Justice Kurian Joseph, Justice Mohan M. Shantanagoudar.
Place Of Incident: Hansi, Hisar, Haryana.
Judgment Date: 16-05-2018.

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