Ravinder Kumar Goel vs The State of Haryana & Ors.
Background
In January 2005 the Haryana Government acquired about 798 kanals of land in village Sultanpur, Gurugram, to build an Express Highway. The Land Acquisition Collector fixed compensation at Rs. 12.5 lakh per acre based on government "floor rates". The landowners spent almost two decades litigating for more: the Reference Court raised it, the High Court raised it further to Rs. 62 lakh per acre, but in 2018 the Supreme Court sent the whole matter back for fresh evidence. On remand the Reference Court fixed Rs. 22 lakh per acre, and then the High Court cut it down to Rs. 14.5 lakh per acre by simply going back to the floor-rate circular. The landowners appealed again.
Decision Breakdown
The Supreme Court held the High Court was wrong to fall back on the floor-rate circular when it had already once remanded the case precisely so that actual sale evidence could be considered. Although the acquisition covered a large area, most individual owners held small plots inside the Gurgaon-Manesar urban area where no crops were growing, so the land had to be valued as urban land with non-agricultural potential, not as bulk farmland; sale deeds of big agricultural tracts relied on by HSIIDC were therefore not comparable. The Reference Court had rightly relied on a small-plot sale deed from December 2004 (Rs. 33.6 lakh per acre) as the closest comparable, though its extra 35-day escalation was unnecessary. Because building an expressway still involves development costs (service roads, flyovers, dividers), a deduction was justified, but at 25% rather than 35%, giving a final market value of Rs. 25.2 lakh per acre plus statutory benefits. Owners who had earlier been paid more under the since-reversed High Court order must refund the excess, but, applying the principle that no one should suffer from an act of the court, in three interest-free half-yearly instalments, with 9% interest only if they default.
Lesson Learnt
Compensation for acquired land must reflect what the land is really worth to a willing buyer, judged by comparable sales and the land's actual character (urban potential, size of individual holdings), not by a government's own pre-fixed floor rate. Landowners should gather genuine sale-deed evidence, and courts should apply development-cost deductions case by case rather than mechanically.