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Mala Etc. Etc. vs The State of Punjab

Civil Appeal · 2023 INSC 735Decided 17 Aug 2023
Civil Appeal Nos. 3992-4000 of 2011
Bela M. Trivedi · Dipankar Datta

Background

This batch of 12 appeals arose from land acquired by the Hoshiarpur Improvement Trust in Punjab for a residential development scheme. Landowners were unhappy with the compensation fixed by the Land Acquisition Collector, and after a Reference Court enhanced the rate, the Punjab and Haryana High Court further raised the compensation to Rs. 2,400 per marla (after applying a one-third deduction for development costs from an assessed market value of Rs. 3,000 per marla). The landowners appealed to the Supreme Court seeking still higher compensation, arguing the High Court wrongly ignored certain sale deeds and wrongly applied the one-third development deduction.

Decision Breakdown

The Supreme Court held that its power to interfere with land valuation findings under Article 136 is an extraordinary one to be used sparingly, and reaffirmed settled principles on determining market value: that sale instances of small plots cannot automatically set the rate for large acquired tracts without accounting for development costs, and that the deduction for development can reasonably range widely (in this case, one-third) depending on the land's nature and existing development level. Finding that the High Court had properly considered the relevant sale instances and correctly applied the one-third deduction consistent with established precedent, the Court found no error warranting interference and dismissed the appeals.

Lesson Learnt

When land is compulsorily acquired by the Government, the compensation is based on market value adjusted by a standard "deduction for development" for large tracts, and the Supreme Court will not second-guess a High Court's valuation exercise unless it is clearly unreasonable or contrary to settled principles.

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

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