Bombay High Court

THE EXECUTIVE ENGINEER, CIVIL CONSTRUCTION, MSEB BEED.versusSUBHASH PANDURANG BUSKUTE DIED. THR. ANJALI SUBHASH BUSKUTE AND ORS.

Disposal: DISMISSED
Bench: SANJAY A DESHMUKH

Holding

The Court held that compensation must be based on the most comparable sale exemplar with a 50% development deduction, yielding Rs 6,521 per R, and that interest at 9% accrues from possession to notification and thereafter at 15% until realization.

Summary

The State acquired 1 ha 20 R of agricultural land in Beed for a 33 kV sub‑station. The claimants sought enhanced compensation, arguing the land had non‑agricultural (N.A.) potentiality, while the acquiring authority argued the award of Rs 5,000 per Are was excessive and sought reduction. The High Court examined sale exemplars, the proximity in time and location of comparable transactions, and the need for a development deduction. It held that the most comparable sale (Exhibit 71) justified a market value of Rs 6,521 per R after a 50% deduction for development, and that interest at 9% is payable from the date of possession to the notification date and thereafter at 15% until full payment. Consequently, the appeal by the acquiring authority was dismissed and the claimants' appeal was allowed, modifying the award accordingly.

Issues considered

The correct method for determining market value of acquired land under the Land Acquisition Act, 1894
Whether the land possessed N.A. (non‑agricultural) potentiality at the time of acquisition
Appropriate deduction for development charges in valuation of N.A. land
Entitlement to interest and rental compensation under Sections 34 and 12(2) of the Land Acquisition Act
Whether the claim was filed within the limitation period

Legislation cited

Land Acquisition Act, 1894 — s. 12(2), 34, 4

Subjects

land acquisition
compensation
market value
non‑agricultural potentiality
interest
rental compensation
development deduction
sale exemplars
limitation period

Judgment

2026:BHC-AUG:19660

FA NO.197 &738 OF 2006.odt

IN THE HIGH COURT OF JUDICATURE OF BOMBAY
BENCH AT AURANGABAD

FIRST APPEAL NO.197 OF 2006
The Executive Engineer,
Civil Construction, Sub Division,
Maharashtra State Electricity Board,
Now Maharashtra State Electricity
Dist. Co. Ltd. Beed ...Appellant
(Orig. Respondent No.2)
VERSUS
1. Subhash S/o Pandurang Buskute,
died through L.Rs.,
1A. Anjali W/o Subhash Buskute,
Aged: 58 years, Occu: Household,
R/o. Kada, Tq. Ashti, Dist. Beed
2. Nilkanth Chimaji Gunjal,
died through L.Rs.,
2(a). Subhadra W/o Nilkant Gunjal,
Age: 83 years, Occu: Household,
2(b). Aruna W/o Pramod Dongre,
Age: 65 years, Occu: Household
2(c). Rajani W/o Kalyan Ware,
Age: 63 years, Occu: Household
2(d). Sunil S/o Nilkant Gunjal,
Age: 55 years, Occu: Agriculture,

All of the above
R/o. Kada, Tq. Ashti, Dist. Beed

3. Shivlal S/o. Manakchand Surpre,
Age: 40 years, Occu: Agri,
R/o. Pune, through its Special Power
Of Attorney, Nilkant S/o Chimaji Gunjal,
Age: 36 years, Occu: Agri,
R/o Kada, Tq. Ashti, Dist. Beed

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(( 2 )) FA NO.197 &738 OF 2006

4. Janardhan S/o. Shankar Mule,
Age: 42 years, Occu: Agri,
R/o. Pune, through its Special Power
Of Attorney, Nilkant S/o Chimaji Gunjal,
Age: 36 years, Occu: Agri,
R/o Kada, Tq. Ashti, Dist. Beed ...Orig. Claimants

5. The State of Maharashtra,
through the Collector, Beed. ...Respondents

….
Mr. A. S. Bajaj, Advocate for the appellant
Mr. G. K. Naik-Thigale, advocate for respondent Nos.1 to 4
Mr. D. J. Patil, AGP for Respondent No.5-State
….
AND
FIRST APPEAL NO.738 OF 2006
1. Subhash S/o Pandurang Buskute,
died through L.Rs.,
1A. Anjali W/o Subhash Buskute,
Aged: 58 years, Occu: Household,
R/o. Kada, Tq. Ashti, Dist. Beed
2. Nilkanth Chimaji Gunjal,
died through L.Rs.,
2(a). Subhadra W/o Nilkant Gunjal,
Age: 83 years, Occu: Household,
2(b). Aruna W/o Pramod Dongre,
Age: 65 years, Occu: Household
2(c). Rajani W/o Kalyan Ware,
Age: 63 years, Occu: Household
2(d). Sunil S/o Nilkant Gunjal,
Age: 55 years, Occu: Agriculture,
All of the above
R/o. Kada, Tq. Ashti, Dist. Beed

3. Shivlal S/o. Manakchand Surpre,

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(( 3 )) FA NO.197 &738 OF 2006

Age: Major, Occu: Agriculture,
R/o. Pune.
4. Janardhan S/o. Shankar Mule,
Age: 42 years, Occu: Agri,
R/o. Pune.

(Appellant No.2 for himself
and for appellant Nos.3 and 4
as a Special Power of Attorney) ..Appellants
(Orig. Claimants)
VERSUS
1. The State of Maharashtra,
through the Collector, Beed.
Dist. Beed.
2. The Executive Engineer,
Civil Construction, Sub Division,
Maharashtra State Electricity Board,
Now Maharashtra State Electricity
Dist. Co. Ltd. Beed ..Respondents
(Orig. Respondents)
….
Mr. G. K. Naik-Thigale, Advocate for the appellants
Mr. A. S. Bajaj, Advocate Respondent No.2
Mr. D. J. Patil, AGP for Respondent-State

CORAM : SANJAY A. DESHMUKH, J.
DATE : 08.01.2026
JUDGMENT :-

1. First Appeal No.197 of 2006 has been preferred by the

Acquiring Body for reducing of compensation and First Appeal

No.738 of 2006 has been preferred by the claimants for enhancement

of compensation against the judgment and award delivered by the

Land Reference Court, Beed, District Beed, in L.A.R. No.190 of 1996,

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(( 4 )) FA NO.197 &738 OF 2006

dated 04.10.2005.

2. The agricultural land bearing survey No.151/B situated at

village Kada, Tahsil Ashti, District Beed admeasuring 1 H 20 Are was

acquired by the State Government for the construction of 33 K.V. Sub

Station of M.S.E.B. at village Kada. The notification under Section 4

of the Land Acquisition Act, 1894 (for short, “L.A. Act”) for acquiring

the said land was issued and published on 26.03.1992. However, the

possession of the acquired land was taken on 07.12.1989 by private

negotiations. The Special Land Acquisition Officer passed the final

award on 08.06.1995. The claimants received notice under Section

12(2) of the final award on 16.03.1996. L.A.R. No.190 of 1996 was

preferred by the claimants on 08.04.1996. The learned Reference

Court awarded Rs.5,000/- per Are compensation for the acquired

land.

3. The learned Advocate Mr. A. S. Bajaj for the appellant

Acquiring Authority in First Appeal No.197 of 2006 submitted that

the compensation determined by the learned Reference Court is

neither legal nor correct. He submitted that the sale exemplars at

Exhibit 69 to 72 were not properly appreciated and the evidence of

sale exemplar at Exhibit-35 was wrongly relied upon, even though it

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(( 5 )) FA NO.197 &738 OF 2006

is not comparable sale exemplar. It is the agricultural land adjacent

to Gavthan. It is plotted non-agricultural land and land survey

no.133 of the said sale exemplar is not adjacent to the acquired land

survey No.151/B. He submitted that the said plot is adjacent to

village Kada Gavthan having a small size of plot of 1650 sq. ft. On

the contrary, the claimants’ land is 1H 20 Are. Only an amount of

Rs.1,250/- was reduced out of sale exemplar Exhibit-70 and

Rs.5,000/- per Are was awarded which is an exorbitant compensation

determined without any legal and factual justification. The market

value of acquired land is not properly determined. He further

submitted that the said land reference was not filed within limitation.

He prayed to dismiss the appeal filed by claimant and to allow the

appeal filed by Acquiring Authority. He is relying upon the following

authorities:-

a. Madhya Pradesh Road Development Corporation Vs.

Vincent Daniel and Ors, reported in (2025) 7 SCC 798, in which it is

held that, prices of smaller developed plots cannot be adopted to

determine the value of underdeveloped tracts of land. Further, the

peculiarities of the land, whether the same is plain or uneven, the soil

is soft or hard, whether the land is situated on a hill or is low-lying,

etc. are all relevant factors.

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(( 6 )) FA NO.197 &738 OF 2006

b. State of Maharashtra and ors. Vs. Maimuma Banu and ors.,

reported in (2003) 7 SCC 448, in which it is held that, rental

compensation is not related to land acquisition Act. However, in view

of equity, it would be appropriate to award 6% interest.

c. Exe. Eng. Minor Irrigation Division Vs. Dinkar & Ors,

decided by the Honourable Supreme Court on 19.11.2014 in

Petition(s) for Special Leave to Appeal (C) No(s).31222-31223 of

2019, in which the law is laid down that, the claimant is entitled for

rental compensation from the date of taking possession of the

acquired land till the date of issuance of notification under Section 4

of the L.A. Act @ 9% per annum.

d. State of Maharashtra Vs. Kailash Shiva Rangari, reported in

2016 (3) Mh.L.J. 457, in which it is held that, interest would be

payable under Section 34 from the date of passing of award.

e. Nelson Fernades and Ors. Vs. Special Land Acquisition

Officer, South Goa and Ors, reported in (2007) 9 SCC 447 , in which it

is held that, deduction for development charges, purpose for which

the land acquired, for development of plot needs to be considered.

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(( 7 )) FA NO.197 &738 OF 2006

f. Chimanlal Hargovinddas Vs. Special Land Acquisition Officer

and Another, reported in (1988) 2 SCC 751, in which it is held that,

most comparable sale instances out of the genuine instances have to

be identified on considerations of proximity from time angle and

proximity from situation angle and if land is situated in interior in

large undeveloped area, we have lower value than land situated near

developed area.

g. Chandrashekar (Dead) By Lrs., and others Vs. Land Acquisition

Officer and Another, reported in (2012) 1 SCC 390, in which it is held

that, facts and circumstances of each case would determine the actual

component of deduction under the head of development, de-

escalation etc., in price of acquired land.

4. Learned Advocate Mr. G. K. Naik-Thigale for the appellant

in First Appeal no.738 of 2006 submitted that the learned Reference

Court failed to appreciate the sale exemplar at Exhibit-34 of the

highest value as per the settled principles of law. He submitted that

the acquired land is only 1.5 K.M. away from the S. T. bus stand

having N.A. potentiality. The learned Reference Court failed to

appreciate the evidence of sale exemplar in its proper perspective and

awarded a meager amount of compensation to the claimants. He

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(( 8 )) FA NO.197 &738 OF 2006

fairly conceded that the final order of impugned judgment,

particularly clause no.5 awarding 9% interest is not legal and correct.

He submitted that the claimants’ land has N.A. potentiality and

therefore he prayed for enhancement of compensation. He is relying

upon the following authorities:-

a. S. Shankaraiah Thr. GPA Holder and Ors. Vs. Land Acquisition
Officer and Revenue Divisional Officer Peddapali Karmnagar Dist.
And Ors. Reported in AIR online 2022 SC 862 , in which it is held that,
purpose of acquisition of land is relevant and on that basis whether
deduction of value for development and exclusion for road etc. is
necessary or not can be decided.

b. Pradyumna Mukund Kokil VS. Nashik Municipal Corporation
and Others, passed in civil appeal arising out of SLP. © No.18305 of
2023 dated 15.10.2025, in which it is held that, claimant is entitled
for rental compensation from taking possession of the land earlier to
notification under Section 4 of the L.A. Act till that date of
notification @ 9% p.a.

5. Nobody will dispute the ratio laid down in the above

authorities cited on behalf of both sides. Those are considered and

found useful to decide the issues in this case. However, it is well

settled that each case has to be decided on merits and facts of the

case are decisive.

6. Perused the record and proceedings, particularly, the

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(( 9 )) FA NO.197 &738 OF 2006

pleadings, the evidence adduced by both the sides and sale exemplars

relied upon by both sides.

7. The claimant relied upon the sale exemplar at Exhibits 34

and 35. The respondent is relying upon the sale exemplar at Exhibits

69 to 72. The comparable chart of all the sale exemplars is as

follows:-

Sr. Acquired Survey No. Survey No. Survey No. Survey No. Survey No. Survey No.
No. land 152/A EXH.34 152 EXH.69 152/A EXH.71 133 EXH.35 210 EXH.70 210 EXH.72
Survey No.
151/B
1 Land is not A small portion A small portion A small portion Land Is A small portion A small portion of
adjacent to of entrance on of entrance on of entrance on adjacent to of entrance of entrance of land is
any road land is touching land is land is touching Highway sold land is touching to the
to the highway touching to the to the highway for Rs.19500/- touching to the highway sold for
sold for highway sold sold for highway sold Rs.50000
Rs.20000 for Rs.9500 Rs.20000/- for Rs.50000/-
2 Date of Date of sale Date of sale Date of sale Date of sale Date of sale Date of sale deed
notification deed 8/12/1989 deed deed deed deed 30/11/1990
U/S 4 (1) 03/03/1989 12/03/1991 13/2/1991 30/11/1990
26.03.1992
3 Land is Plot is away Plot is away Plot is away Plot is adjacent Plot is away Plot is away from
away from from gaothan from gaothan from gaothan to gaothan from gaothan gaothan
gaothan
4 Agriculture Plotted land Plotted land Plotted land Plotted land Not Plotted Not Plotted land.
land (NA) (NA) (NA) (NA) land. But (NA) But (NA) is
is mentioned in mentioned in sale-
sale-deed but deed but no plots.
no plots.
5 152/ A is 152/B is 151/B is 151/B is 152/B is not Not adjacent to Not adjacent to
adjacent to adjacent to adjacent to adjacent to adjacent to acquired land acquired land
151/B 151/A survey no 152/A 152/A 152/A
133151/B is No survey no
adjacent to
152/A
No survey no
6 Big piece Small plot Small Plot Small Plot Small Plots 0.8 R 0.8 R
of land 66 x 16.5 =1089 50 x 33 = 1650 50 x 33= 1650 50 x 33 = 1650
area Sq.Ft Sq.Ft Rs.6521/- per R Sq.Ft
(1 h 20 R)

8. It is necessary to decide as to whether there was N.A.

potentiality to the acquired land as claimed by the claimant. The

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(( 10 )) FA NO.197 &738 OF 2006

claimant Nilkant (PW-1) deposed that a village Kada is situated on

Beed Mumbai Highway. Acquired land is situated at a distance of 100

feet away from Beed Mumbai Highway and S.T, stand is 3/4 to 1 km

away from acquired land. Amolak college is adjacent to the said land.

There is Vardhaman Housing Society of 40 houses. Medical store and

hospital are adjacent to it. Shopping center, grocery shop, health

centre, petrol pump are near to that land. In his cross-examination,

he admitted that N. A. order Exh.38 which he has not produced the

sanctioned layout plan from the competent authority to show as to

how the acquired lands was divided into separate plots showing

distinct plot numbers. The 7 X 12 extracts are not filed on record to

show that said land is used as non agricultural land. Thus, claimant

failed to prove that acquired land is N.A. land.

9. The oral evidence of Popatlal Bora (PW-3) and Haribhau

Jachak (PW-2) is only about the sale exemplars relied upon by the

claimants.

10. On behalf of Acquired Authority, Shivaji Wadekar R/W-1,

the Assistant Engineer of Beed, deposed that it was agricultural land

and claimant was cultivating it at the time of acquisition. To the

south side of the acquiring land, there is a petrol pump started in the

10 of 18
(( 11 )) FA NO.197 &738 OF 2006

year 1995 after the said acquisition. But no such documentary

evidence is produced on record. In his cross-examination, he has

admitted that he cannot tell about the location of the lands in sale

exemplar at Exhibits 69 to 72. Residential colonies are one kilometer

away from the sub-station of MSEB i.e. from acquired land. Thus, he

has admitted that there are residential colonies one k.m. away from

the acquired land.

11. The acquired land of the claimants is 1H and 20 R, but

Highway is 100 feet away from it and it is away from Gavthan of

village Kada. Considering all above discussed evidence of both sides,

this Court is of the view that the acquired land has N.A. potentiality at

the time of acquisition.

12. The above comparative chart of sale exemplars with

acquired area shows that sale exemplars at Exhibit 34 and 69 are of

N.A. lands of small size of 1089 and 1650 sq. ft. only. The claimants'

land is acquired by notification published under Section 4 of the L.A.

Act dated 26.03.1992. The sale exemplar Exhibit-34 and 69 are of

the year 1989, which are not proximate in time with the said

acquisition, and therefore, those are not comparable sale exemplar.

There is vast difference between said sale exemplars and the date of

notification issued under Section 4 of L.A. Act. Therefore, sale

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(( 12 )) FA NO.197 &738 OF 2006

exemplars at Exhibits 34 and 69 are not comparable and cannot be

relied upon.

13. The sale exemplars Exhibit 70 and 72 are executed on

30.11.1990, for 8 R land each, for a consideration of Rs.50,000/-

each. Though its recitals shows N.A. land but plotting by layout is not

done. The plot numbers are not mentioned in said sale exemplars.

Therefore, those are also not comparable sale exemplars and cannot

be relied upon.

14. There are two more sale exemplars at Exhibits 71 and 35

executed on 12.03.1991 and 21.03.1991 for consideration of

Rs.20,000/- and Rs.19,500/- respectively for 1650 sq. ft. each area of

N.A. plot. If both are compared as to the consideration the sale

exemplar Exhibit-71 shows Rs.500/- more consideration than sale

exemplar Exhibit-35. It is important to note that sale exemplar

Exh.71 is relied upon by the acquiring Authority. The map produced

by Advocate for Acquiring Authority during the arguments shows that

Survey No.151/B of acquired land is adjacent to 152/A of sale

exemplar Exhibit-71. Therefore, though sale exemplar at Exhibit-71

N.A. plot is found comparable but proper deduction is necessary. The

claimants’ land is 1 H 20 R. For the development of the N.A Plots,

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(( 13 )) FA NO.197 &738 OF 2006

30% land is required for road, open space etc. Though, the claimants’

land does not require any area for development of road etc. as it was

acquired for the 33 K.V. substation building in the peculiar facts and

circumstances of this case, it would be proper to deduct 50% because

of small size of N.A. plot of 1650 sq. ft. in sale exemplar Exh.71 and

big chunk of land of 1H and 20 Are of the claimant, as held in the

case of Chimanlal (Supra) relied upon by the acquiring Authority. It is

just and proper deduction in the peculiar facts of this case.

15. In sale exemplar at Exhibit-71, the 1650 sq. ft plot is sold

for consideration of Rs.20,000/- i.e. Rs.12.12 per sq. ft. If it is

multiplied by one R i.e. 1076 sq. ft., then it comes to Rs.13,042/-,

which is value for one R land. If 50% amount is deducted as held

above, then it comes to Rs.6,521/- per R, which is the proper market

value of acquired land on the day of notification issued and published

under Section 4 of the L.A. Act, for which the claimants are entitled to

as compensation. The learned Reference Court erred in this regard

and determined compensation of acquired land by following average

method, which is not legal and correct when comparable sale

exemplar were on record of the case. Therefore, interference is

warranted in the impugned judgment and award.

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(( 14 )) FA NO.197 &738 OF 2006

16. As far as filing of the claim petition within limitation is

concerned, it is an admitted fact that the claimants got notice

(Exh.74) of award on 12.03.1996 as per Section 12(2) of the Land

Acquisition Act, 1894. The reference application must be filed within

six weeks from the receipt of notice Exh.74 or it must be filed within

six months from the date of passing of final award by Collector

whichever period expires first. The notice under Section 12(2) was

received by claimants on 12.03.1996. The reference application came

to be filed on 08.04.1996. Thus, it is filed within the period of

limitation of six weeks. Therefore, there is no substance in the

grounds of objections raised by the Acquiring Authority in First

Appeal no.197 of 2006 that reference was not filed within limitation.

It is rightly held by the learned Reference Court that it was filed

within limitation.

17. Learned advocate Mr. A. S. Bajaj for the appellant pointed

out the operative part of the impugned judgment, particularly para

Nos.5 and 6 in which the interest @ 9% was awarded for one year

from i.e., 26.03.1992 to 25.03.1992 under Section 34 of the L.A. Act

which is not legal and correct. Learned Advocate for the claimants

fairly conceded that it is erroneous and not sustainable. Therefore,

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(( 15 )) FA NO.197 &738 OF 2006

the operative order of impugned judgment deserve to be corrected.

The claimants are entitled for interest @ 9% from date of award for

one year and thereafter, @ 15% till the realization of entire amount.

18. The learned advocate for the claimants submitted that the

claimants has right to claim rental compensation for taking possession

of acquired land before issuing of notification under Section 4 of the

L.A. Act. He is relying upon the judgment of Shankarrao

Bhagwantrao patil VS. State of Maharashtra, (2022) 15 SCC 657, in

which paragraph no.20 reads as under:

“20. There is no evidence that such land was being put to use
by the landowners even prior to the taking of possession by the State.
But the fact remains that the possession has been taken without
payment of compensation depriving the landowners of the right to use
land. Therefore, the land owners would be entitled to interest on the
amount of compensation awarded at the rate of 9% per annum from
the date of possession which was taken in the year 1984/1992 till the
date of notification under Section 4 of the Act on the amount awarded
after acquisition that is the sum of Rs.70/- per square feet. The
appellant shall be entitled to others statutory benefits on the
compensation amount of Rs.70/- per square feet from the date of
award till realization.”

19. As held above, the claimants are entitled for the rental

compensation @ 9% per annum on amount of compensation from the

date of taking of possession of their land i.e. from 07.12.1989 till date

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(( 16 )) FA NO.197 &738 OF 2006

of issuing and publishing notification under Section 4 of the Land

Acquisition Act, 1984, dated 26.03.1992, as per law laid down in the

case of Pradyumna (supra) and not 6% as per case of Maimuma

(supra).

20. For the reasons stated above, the appeal filed by the

acquiring authority deserves to be dismissed. The appeal filed by the

claimants deserves to be allowed. The impugned judgment and

award deserves to be partly set aside and modified. Hence, the

following order:-

ORDER

I. The first appeal filed by the acquiring body is
dismissed.

II. The first appeal filed by the claimants is allowed.

III. The impugned judgment and award are partly set
aside and modified as under:-

a) The claimants are entitled to the
compensation @ Rs.6,521/- per R, including
earlier awarded compensation, alongwith
statutory benefits i.e. solatium, interest and
additional components, as per the provisions
of the Land Acquisition Act, 1894.

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(( 17 )) FA NO.197 &738 OF 2006

b) The claimants are entitled to rental
compensation @ 9% from the date of taking
of possession i.e. 07.12.1989 till the date of
issuance of notification under Section 4 of
the Land Acquisition Act, dated 26.03.1992.

c) It is clarified that the claimants are entitled
to interest @ 9% for one year from the date
of issuance and publication of notification
under Section 4 of the Land Acquisition Act,
till the date of final award passed by the
Land Acquisition Officer and thereafter, @
15% per annum till the realization of the
entire amount.

d) Rest of the judgment and award is
confirmed.

IV. The claimants are not entitled to interest for the
delayed period, if any, condoned by this Court.

V. The enhanced amount of compensation with
statutory interest etc. shall be deposited in this
Court within a period of six months from the date
of uploading of this judgment.

VI. The claimants shall deposit the deficit court fees, if
any. On deposit of deficit court fees, if any, the
amount of compensation be paid to the claimants.

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(( 18 )) FA NO.197 &738 OF 2006

VII. Award be drawn up accordingly.

VIII. Pending civil applications, if any, are disposed of.

IX. Record and proceedings be sent back.

[ SANJAY A. DESHMUKH, J. ]

HRJadhav

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