Bombay High Court
DATTATRAYA BAPPAJI KULKARNI THR LRSversusTHE STATE OF MAHARASHTRA AND ORS
- Disposal
- PARTLY ALLOWED AND PARTLY DISMISSED
Holding
The Court held that a non‑agricultural sale instance, if proximate in time and location, may be used to determine market value, subject to appropriate escalation and deductions.
Summary
The appellants challenged the compensation awarded for land acquired under the Land Acquisition Act for the Lower Dudhana Project, arguing that the reference court had undervalued the land by relying on inappropriate sale comparables. The State contended that the reference court correctly used recent non‑agricultural sale prices and that the acquired land was still agricultural, thus should not be valued on non‑agricultural rates. The Court examined the sale of 186 sq m at Rs 7,000 (Rs 37.63 per sq m) dated 12‑12‑1994, held it was sufficiently proximate in time and location to serve as a market comparator despite its non‑agricultural nature, and recognized the land’s non‑agricultural potential. Applying a 10% annual escalation for two years and a 60% deduction for size and development costs, the Court fixed the market value at Rs 18.20 per sq m. Consequently, the appeals were partly allowed, the compensation was modified to the new rate, statutory benefits and interest were granted, and the remainder of the reference court’s award was confirmed.
Issues considered
- Whether sale instances of non‑agricultural land can be used to determine market value of agricultural land acquired under the Land Acquisition Act.
- Whether an escalation factor should be applied to pre‑notification sale prices.
- Whether a deduction for small parcel size and development expenses is appropriate in valuation.
Legislation cited
- Land Acquisition Act, 1894 — s. 11, 28, 34, 4
Subjects
- land acquisition
- compensation valuation
- non‑agricultural potential
- market value determination
- escalation factor
- deduction for parcel size
- reference court
Judgment
2026:BHC-AUG:40939
Dilwale 1 13-FA-1027-07.odt
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
BENCH AT AURANGABAD
13 FIRST APPEAL NO. 1027 OF 2007
Dineshlal Shankarlal Jaiswal & Ors
VERSUS
The State Of Maharashtra & Ors
...
Advocate for Appellants : Mr. Kakade Deepak M.
AGP for Respondent-State: Mr. S. S. Dande
Advocate for Respondent No.3 : Mr. Ruturaj Patil
…
WITH
FIRST APPEAL NO.1441 OF 2011
Dattatraya Bappaji Kulkarni
VERSUS
The State Of Maharashtra & Ors
...
Advocate for Appellant : Mr. A. P. Bhandari
AGP for Respondent-State: Mr. S. S. Dande
CORAM : SIDDHESHWAR S. THOMBRE, J.
DATE : 01.09.2026
PER COURT :
1. As the acquisition proceedings are of the year 1996, the appeals are
being heard finally, with the consent of the learned counsel for the
respective parties.
2. By these appeals, the appellants-original claimants are aggrieved by
the judgment and award dated 11.05.2007 passed by the learned 2 nd Ad-
hoc District Judge, Parbhani in LAR Nos. 1 and 2 of 2002, whereby the
learned Reference Court has enhanced the compensation though not as
per the claim of the claimants.
Dilwale 2 13-FA-1027-07.odt
3. The lands of the claimants were acquired for the purpose of
rehabilitation of land-affected persons of village Deola under Lower
Dudhana Project. The notification under Section 4 of the Land
Acquisition Act, (for short, “the Act”) was published on 19 th July 1996
and the award under Section 11 of the Act was declared on 24 th April
1999. The Special Land Acquisition Officer awarded compensation at the
rate of Rs.34,700/- per hectare and Rs.43,700/- per hectare respectively.
The learned Reference Court has enhanced the compensation @
Rs.1,20,000/- per hectare, the claimants claimed compensation @
Rs.5,00,000/- per hectare.
4. Mr. A. P. Bhandari, learned counsel for the appellants, submits that
before the learned Reference Court, the claimants relied upon nine sale
instances. Two of the said sale instances were from village Sailu, which is
a Taluka place. The sale instances relied upon by the claimants are as
under:
Sr. Date of sale Name of
Area sold Price
No. deed village
186 square
1 12-12-1994 Sailu Rs.7000/-
meters
2 22-03-1995 Sailu 180 sq.m. Rs.5,000/-
3 09-01-1996 Sailu 1 H. 7 R. Rs.1,25,000/-
4 15-01-1995 Sailu 180 sq.m. Rs.6,000/-
5 15-05-1995 Sailu 151.2 sq.m. Rs.6,000/-
6 30-05-1994 Sailu 150 sq.m. Rs.10,000/-
7 30-05-1994 Sailu 100 sq.m. Rs.5,000/-
8 07-06-1994 Sailu 100 sq.m. Rs.10,000/-
9 27-05-1994 Sailu 101 sq.m. Rs.9,000/-
5. He further submits that, having regard to the sale instance at Sr.
Dilwale 3 13-FA-1027-07.odt
No.1 dated 12.12.1994, the learned Reference Court ought to have
awarded compensation at the rate reflected in the said sale instance. The
acquired lands are situated within the limits of the Municipal Corporation
of Sailu, which is a Taluka place, and, therefore, have non-agricultural
potentiality. According to him, the acquired lands and the lands covered
by the aforesaid sale instances are similar in quality, fertility and
potentiality. The learned Reference Court has, therefore, erroneously
granted inadequate enhancement. Therefore, he prays for allowing the
appeals.
6. Per contra, Mr. S. S. Dande, learned AGP for the respondent-State,
submits that the learned Reference Court has relied upon two sale
instances from Survey No.19, which are as under:
Sr. Name of
Date of sale deed Area sold. Price.
No. village.
1 21/02/1995 Sailu 81 R. Rs.80,000/-
2 21/06/1995 Sailu 1H.64.50R. Rs.1,99,000/-
7. He further submits that the aforesaid sale instances are from the
same locality as that of the acquired lands. According to the learned AGP,
lands similar to the acquired lands were not sold at a rate exceeding
Rs.1,00,000/- to Rs.1,20,000/- per hectare. Therefore, he submits that
the learned Reference Court has granted appropriate enhancement.
8. He further submits that the lands covered by the sale instances
relied upon by the claimants had already been converted into non-
agricultural use, whereas the acquired lands were being used for
Dilwale 4 13-FA-1027-07.odt
agricultural purposes as on the date of publication of the notification
under Section 4 of the Act. Agricultural lands, therefore, cannot be
valued on the basis of the market price of non-agricultural lands. The sale
instances relied upon by the claimants cannot, therefore, be treated as
comparable instances for determining the market value of the acquired
lands. Therefore, he prays for dismissal of the appeals.
9. Having heard the learned counsel for the respective parties and
with their able assistance, having gone through the record and
proceedings, it reveals that the learned Reference Court has refused to
rely upon the sale instances produced by the claimants on the ground
that the lands covered by the said sale instances were non-agricultural
lands. It is not in dispute that the acquired lands are situated within the
municipal limits of Taluka Sailu. The sale instances in respect of adjoining
Survey Nos.227 and 236 pertain to non-agricultural lands. As regards the
sale instance pertaining to Survey No.227, an area admeasuring 186 sq.
mtrs. was sold for Rs.7,000/- (i.e. Rs.37.63/- per sq. mtr.) under the sale
deed dated 12.12.1994. The said sale instance is prior to the date of
publication of the notification under Section 4 of the Act, i.e. 19.07.1996.
The said sale instance is also proximate in point of time and location.
Therefore, in the facts and circumstances of the present case, the said sale
instance can be relied upon for determining the appropriate market value
of the acquired lands
10. So far as the non-agricultural nature of the lands covered by the
Dilwale 5 13-FA-1027-07.odt
sale instance is concerned, it is true that the acquired lands had not been
converted into non-agricultural lands. However, the lands adjoining the
acquired lands, situated in Gat Nos.227 and 236, had already been
converted into non-agricultural use. Therefore, merely because the
acquired lands continued to be agricultural lands, their non-agricultural
potentiality cannot be ignored. In the facts and circumstances of the
present case, the acquired lands had definite non-agricultural potentiality.
Therefore, it would result in injustice to the claimants if the market value
of the acquired lands is determined without taking into consideration the
aforesaid sale instance of non-agricultural land.
11. As the sale instance is dated 12.12.1994 and notification under
Section 4 was published on 19.07.1996, 10% escalation per year for two
years must be granted.
12. However, at the same time, it is necessary to apply certain
deduction towards small size of the land in sale instances and
development expenses. In my considered view, a deduction of 60% in
aggregate would sufficiently address the issue. Upon applying 60%
deduction to the market value of Rs.37.63/- per sq. mtr., the market
value of the acquired would work out to Rs.15.05/- per sq. mtr. Upon
applying 10% escalation with cumulative effect for two years the market
value would work out to Rs.18.21/- per sq. mtr., rounded up to
Rs.18.20/- per sq. mtr. Hence, I pass following order:
Dilwale 6 13-FA-1027-07.odt
ORDER
i) The First Appeals are partly allowed.
ii) The appellants/claimants are entitled to compensation @
Rs.18.20/- per sq. mtr. and the operative part of the impugned
award of the learned Reference Court stands modified to that
extent.
iii) The appellants/claimants shall be entitled to all statutory benefits
along with interest under Sections 28 and 34 as per State of
Maharashtra v. Kailash Shiva Rangari, 2016 (3) Mh.L.J. 457.
iv) Rest of the award passed by the learned Reference Court stands
confirmed.
v) Modified Award be drawn accordingly.
vi) Deficit Court fees be paid.
vii) Pending Civil Applications, if any, stand disposed of.
[ SIDDHESHWAR S. THOMBRE ]
JUDGE
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