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Civil Property & InheritanceSupreme Court of India

Manohar v. The State of Maharashtra

Civil Appeal · 2025 INSC 900Decided 28 Jul 2025
Civil Appeal arising out of Diary No. 26900 of 2023 (with connected appeals from Diary Nos. 25104/2025 and 25109/2025)
Chief Justice B.R. Gavai · Justice Augustine George Masih

Background

The appellants were farmers whose land near Jintur town, Parbhani District, Maharashtra was compulsorily acquired in the 1990s for an industrial area under the Maharashtra Industrial Development Act, 1961. Dissatisfied with the compensation awarded, they sought a reference under the Land Acquisition Act, 1894, which was only partly allowed, and their further appeal was dismissed by a Single Judge of the Bombay High Court (Aurangabad Bench). They then approached the Supreme Court by special leave, arguing that the courts below wrongly ignored the highest comparable land-sale price available on record while fixing compensation.

Decision Breakdown

The Supreme Court held that the Reference Court had erred by disregarding, without giving reasons, the highest genuine sale exemplar (dated 31 March 1990) that was available and by instead averaging a set of lower-value sale instances whose prices varied too widely for averaging to be legally permissible, averaging is only allowed when comparable sale prices show marginal variation. Since the acquired land was in a prime location near a state highway and town, the appellants were entitled to the benefit of the highest exemplar sale value, subject to a reasonable 20% deduction to account for the acquired land being a much larger, undivided plot compared to the smaller comparison plots. The Court allowed the appeals, set aside both the High Court and Reference Court orders, and enhanced compensation from Rs. 32,000 to Rs. 58,320 per acre, along with statutory solatium and interest.

Lesson Learnt

In land acquisition compensation disputes, courts should generally rely on the highest bona fide comparable sale price available (adjusted with reasonable deductions for scale/location differences) rather than mechanically averaging dissimilar sale instances: landowners should press for and scrutinize how comparable sales are selected and weighted when compensation is fixed.

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