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State of Haryana & Anr. vs. Subhash Chander & Ors.

Civil Appeal · 2023 INSC 120Decided 10 Feb 2023
Civil Appeal Nos. 859-899 of 2023
M.R. Shah · C.T. Ravikumar

Background

About 58 acres of land in village Kherki Majra (Haryana) were acquired for a public purpose under a notification dated 13 January 2010. The Land Acquisition Officer awarded Rs. 60 lakh per acre; the reference court raised this to Rs. 1.56 crore per acre. On the landowners' appeal, the Punjab and Haryana High Court took as its base the Rs. 2.38 crore per acre that the Supreme Court had fixed for land in the same village acquired under a January 2008 notification, added a 12% cumulative annual increase, and awarded Rs. 2,98,54,720 per acre. The State appealed, arguing that the earlier Supreme Court order had said it was not to be treated as a precedent, and that repeated acquisitions since 2008 had artificially inflated prices.

Decision Breakdown

The Supreme Court partly allowed the State's appeals. It accepted that although the earlier judgment said it should not be treated as a precedent, it had decided the Rs. 2.38 crore figure on the merits by accepting 2007-2008 sale instances, so it could fairly serve as a base for land in the same village acquired two years later. It reaffirmed, following Pehlad Ram vs. HUDA and Ramrao Shankar Tapse, that an annual escalation of roughly 8% to 15% over an earlier award is a permissible way to reach the market value on a later date. However, because acquisition proceedings had been going on in the same village since 2008, the Court considered a 12% cumulative increase unsafe and settled on 10% instead, fixing the compensation at Rs. 2,87,98,000 per acre with all statutory benefits. The State was directed to pay the balance within six weeks after deducting amounts already paid.

Lesson Learnt

When land is acquired, the compensation fixed for similar land nearby acquired a little earlier can be used as a starting point, with a reasonable yearly increase (typically 8-15%) added to reflect the passage of time. The exact percentage is not automatic; courts will moderate it where local circumstances, such as repeated acquisitions, may have distorted land prices.

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

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