Shankarrao Bhagwantrao Patil Etc. v. The State of Maharashtra & Ors.
Background
Land belonging to the appellants in Bhoom, Maharashtra was taken into State possession in 1984 and 1992, but the formal acquisition notification followed only in 1999. The Land Acquisition Collector initially fixed a low per-square-meter rate; the Reference Court raised it substantially to Rs.70 per square foot based on two comparable sale deeds. On further appeal by the State, the Bombay High Court (Aurangabad Bench) reduced the compensation, holding that one of the relied-upon sale deeds actually involved land with a house already built on it, requiring a bigger deduction.
Decision Breakdown
The Supreme Court scrutinised the two sale exemplars relied on by the landowners and found that one of them (Exhibit 31) was based on a misrepresentation: house-tax records showed a house already stood on that plot years before the claimed construction-permission date, making it an unreliable, "non-bonafide" exemplar; the Court excluded it entirely. Relying on the remaining valid exemplar and applying a 50% deduction for development costs (since the acquired plot was large, rocky, and sold years after possession was taken), the Court restored the Reference Court's rate of Rs.70 per square foot. It also awarded the landowners 9% annual interest on the compensation for the "pre-acquisition" period, from when the State actually took possession (1984/1992) until the formal notification in 1999, to compensate them for the years they were deprived of their land without payment.
Lesson Learnt
Courts carefully test the authenticity of sale exemplars used to value acquired land and will throw out any exemplar shown to rest on a false factual premise; landowners can also claim interest for the period the government used their land before formally completing the acquisition.