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Haryana State Industrial and Infrastructure Development Corporation Ltd. & Ors. vs. Satpal & Ors. Etc. Etc.

Civil Appeal · 2023 INSC 113Decided 9 Feb 2023
Civil Appeal Nos. 612-768 of 2024
M.R. Shah · Hima Kohli

Background

A large tract of agricultural land in villages Badh Malik, Pritampura and Rasoi (Haryana) was compulsorily acquired in 2005 and 2007 for the Kundli-Manesar-Palwal (KMP) Expressway and an industrial sector expansion. After multiple rounds of litigation over how much compensation the landowners should get, the Punjab & Haryana High Court, on a second remand from the Supreme Court, fixed compensation at Rs. 29,54,000 per acre for the 2005-notified land and Rs. 45,00,000 per acre for the 2007-notified land. The land-acquiring authority, HSIIDC, challenged both figures as excessive, while the landowners (whose own earlier appeals had already been dismissed and become final) defended the High Court's numbers in these appeals brought by HSIIDC.

Decision Breakdown

The Supreme Court scrutinized the High Court's own reasoning and found internal inconsistencies. For the 2005 acquisition, the High Court had picked two comparable sale deeds and applied a 50% deduction (for factors like development costs), but then arrived at a final figure inconsistent with its own math: properly applying its own formula gave Rs. 24,43,693 per acre, not Rs. 29,54,000. The Court corrected this to a rounded Rs. 24,50,000 per acre. For the 2007 acquisition, the High Court had relied on a sale deed dated after the first acquisition notification (making it unsuitable as a benchmark) and applied only a 10% cut, inconsistent with the 50% cut used for the earlier acquisition of the same villages for the same purpose. The Supreme Court instead applied a standard 8-12% cumulative annual increase over the corrected 2005 figure, arriving at Rs. 30,73,280 per acre. The appeals were thus partly allowed, reducing both compensation figures.

Lesson Learnt

When courts calculate "fair market value" compensation for acquired land using comparable sale deeds, the deductions and escalation factors applied must be internally consistent across similar acquisitions of the same land for the same purpose: a court cannot apply one discount rate to one parcel and a very different one to a comparable parcel without justification, and errors in a court's own arithmetic can be corrected on appeal.

Official source (sci.gov.in)View Judgment (PDF)

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