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Madhukar S/o Govindrao Kamble & Ors. vs. Vidarbha Irrigation Development Corporation & Ors.

Civil Appeal · 2022 INSC 120Decided 31 Jan 2022
Civil Appeal Nos. 368-369 of 2022

Background

2.42 hectares of the landowners' land near Deoli town in Maharashtra was acquired in 1999 for a resettlement project connected to the Lower Wardha submergence project. The Land Acquisition Officer initially fixed compensation at Rs. 56,500 per hectare, but a Reference Court raised this to about Rs. 1,95,853 per hectare based on a nearby comparable sale (of a small plot sold at public auction), after applying a series of deductions for dissimilarity, small size, and development charges. The Bombay High Court (Nagpur Bench) later set aside the Reference Court's enhancement and restored the original lower valuation, reasoning that two other sale instances of purely agricultural land were more representative. The landowners appealed to the Supreme Court.

Decision Breakdown

The Supreme Court held that the High Court had erred in law by treating the agricultural or non-agricultural character of comparable sale land as decisive by itself, when market value must instead account for a range of factors including proximity to developed areas and roads. The evidence showed the acquired land was close to educational institutions, banks, a tehsil office, hospitals and courts, and only about half a kilometre from the highway, giving it real residential/commercial potential; by contrast, the two sale exemplars the High Court preferred were irrigated agricultural plots with no shown comparability or development potential. Finding the High Court's reasoning "fallacious and not sustainable," the Court restored the Reference Court's higher compensation figure.

Lesson Learnt

In land acquisition disputes, courts must value land based on its realistic development potential and location (proximity to roads, towns and infrastructure), not merely on whether comparable sale instances are technically labelled "agricultural" or "non-agricultural": a mechanical, single-factor approach to fixing compensation is legally unsustainable.

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

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