Holding

The fair market value of land acquired under the Land Acquisition Act, 1894, must be determined based on the market rates of similarly situated lands as of the acquisition date, without resorting to post‑acquisition rates or arbitrary reductions, and in this case the value is Rs.63 per square yard.

Summary

The State of Haryana acquired large tracts of undeveloped agricultural land in 1977 for residential development, and the landowners sought compensation. The Land Acquisition Officer initially fixed the fair market value at Rs.16.52 per square yard, which was later enhanced to Rs.22 by the reference court. The High Court further increased it to Rs.50 per square yard, but the landowners argued that, based on the potential of the land and the rate of an adjacent parcel acquired at the same time, the fair market value should be Rs.63 per square yard. The Supreme Court held that the fair market value must be determined under Section 23 of the Land Acquisition Act, 1894, using the market rates of similarly situated lands as of the acquisition date, and rejected the appellants' reliance on post‑acquisition rates and a 10% annual reduction method. Applying the relevant factors, the Court fixed the compensation at Rs.63 per square yard and directed the LAO to calculate the full statutory compensation accordingly. The appeals were allowed in part, modifying the High Court's award.

Issues considered

The appropriate method for determining fair market value of land acquired under the Land Acquisition Act, 1894.
Whether post‑acquisition market rates and a 10% annual reduction can be used to compute fair market value.
The adequacy of oral evidence and lack of sale deeds in establishing market value.
The correct quantum of compensation payable to the landowners.

Legislation cited

Land Acquisition Act, 1894s. 18, s. 23, s. 4, s. 54, s. 6, s. 9

Subjects

Land acquisitionFair market valueCompensationSection 23Land valuationOral evidenceDeduction for developmentAppellate jurisdiction

Judgment

[2015] 3 S.C.R. 975

BHUPAL SINGH AND OTHERS A

v.
STATE OF HARYANA

(Civil Appeal No. 7377 of 2008) B

APRIL 01, 2015

[VIKRAMAJIT SEN AND
ABHAY MANOHAR SAPRE, JJ.]
c
Land Acquisition Act, 1894 - s. 23 - Land Acquisition
- Compensation - Enhancement of - Acquisition of large
chunk of land by the State for construction of residentia·t
purpose in the year 1977 - High Court awarded
compensation at the rate of Rs. 501- per square yard to the D
claimants/landowners - On appeal, held: Claimants did not
file any sale deed to prove the fair market value of the
acquired land - On basis of the oral evidence adduced of
some witnesses to prove the potentiality of the lands, the
High Court fixed Rs. 501- per square yard though it did E
hold in the claimants' favour that they were entitled to claim
compensation at the rate of Rs. 631- per square yard -
Findings were based on the potentialities of land and rate
of one adjacent land of the acquired land which was also F
found to have been acquired at the same time - Thus, the
High Court was not justified in determining the fair market
rate of the acquired at Rs. 501- per square yard and
instead it should have been fixed at Rs. 631- per square
yard only - Figure of Rs. 631- per square yard is arrived G
after applying all relevant facts and is just, reasonable and
represents fair market value of the lands on the date of
acquisition - LAO directed to calculate the compensation

975 H
976 SUPREME COURT REPORTS [2015) 3 S.C.R.

A payable to the land owners at the rate of Rs. 631- per sq.
yard and all statutory compensation.

s. 23 - Land acquisition - Fair market value -
Determination of - Held: Is to be determined u/s .. 23 on
B the basis of the market rate of the adjacent lands similarly
situated to the acquired lands prevailing on the date of
acquisition or/and prior to acquisition but not subsequent
to the date of acquisition - In appropriate cases, addition
of 10% pa escalation in the prices specified in the sale
C deeds (if filed and relied on) in relation to adjacent similarly
situated lands for fixing the market value of the acquired
land may be permitted - On facts, claimants-landlords did
not file sale deeds to prove the fair market value of the
acquired land - Further; they wanted this Court to take into
D consideration the rate of those lands which were acquired
ten years subsequent to the acquisition and then reduce
its value 10% every year so as to determine the fair
market value of the acquired land - The same is
misconceived and not provided in the Act.
E
Partly allowing the appeals, the Court
HELD: 1.1 In the instant case, the appellants did
not file any sale deed in evidence in support of their
F case to prove the fair market value of the acquired
land. All that they adduced was an oral evidence of
some witnesses to prove the potentiality of the lands
by showing its location, proximity to the main road
which was passing in the area and named some
G industries and hospitals operating in the nearby areas
of the acquired lands etc. Taking all these factors in
mind and on appreciation of this oral evidence, the
LAO, Reference Court and the High Court fixed their
respective rates namely, Rs.16.52, Rs.221- and Rs. 501
H - per square yard. The High Court did hold in
BHUPAL SINGH AND OTHERS v. STATE OF HARYANA 977

appellants' favour that they were entitled to claim A·
compensation at the rate of Rs.63/- per square yard
basing its finding after taking into consideration the
potentialities of land and rate of one adjacent land of
the acquired land which was also found to have been
acquired at the same time as determined by the courts. B
Having rightly come to a conclusion that the fair market
value of the land on the date of acquisition (04.11.1977)
was Rs.63/- per square yard, there was no justification
on the part of the High Court to have then reduced it
to any rate less than Rs.63/- much less to Rs.50/- per C
square yard, it should have been fixed at Rs.63/- per
square yard only. [Paras 18, 19, 20, 21] [992-E-H; 993-
A-D]
1.2 Having regard to the total scenario emerging
from the record of the case and the findings recorded
0
by the courts below on the issues such as location of
land, its potentiality, surroundings, the rate of the
adjacent land determined by the courts, the condition
of the acquired underdeveloped lands, the expenditure E
required to develop the acquired land to start the
activities, per cent of deductions to be made, its
proximity to the various places in the nearby town
(Faridabad), and lastly, the fact that the appellants failed
to file any sale deed of any parcel of land (be that of F
small piece of land or big) sold in the near proximity
of the acquired land, the fair market value of the lands
as on the date of acquisition can reasonably be worked
out to "Rs.63/- per square yard". [Para 22] [993-F-H;
994-A-C]
G
1.3 The fair market value of the acquired land is
required to be determined under Section 23 of the Act
on the basis of the market rate of the adjacent lands
similarly situated to the acquired lands prevailing on
the date of acquisition or/and prior to acquisition but H
978 SUPREME COURT REPORTS [2015] 3 S.C.R.

A not subsequent to the date of acquisition. In
appropriate cases, addition of 10% per annum
escalation in the prices specified in the sale deeds (if
filed and relied on) in relation to adjacent similarly
situated lands for fixing the market value of the
B acquired land may be permitted. However, in the
instant case where firstly, no sale deeds were filed by
the appellants to prove the fair market value of the
acquired land and secondly, now they want this Court
to take into consideration the rate of those lands
c which were acquired ten years after the date of
·•acquisition and then reduce the value of such land by
10% every year so as to determine the fair market
value of the acquired land. Such procedure for
D determination is not provided in the Act. [Para 24]
[994-F-H; 995-A-8]
1.4 It cannot be said that the appellants are entitled
to claim compensation at the rate ranging between
Rs.100/- to Rs.200/- per sq. yard~ Since the appellants
E failed to file any sale deed of the lands to prove the
price of the lands prevailing at the relevant time
1[04.11.1977), it cannot be appreciated as to on what
basis, the appellants can claim the compensation at
the rate of Rs.100/- per sq. yard or more. It was
F necessary for the appellants to have filed copies of the
sale deed to prove the fair market rate prevailing on
the date of acquisition (04.11.1977). Since the only
evidence which was adduced was to prove the
potentialities of the acquired land, the courts below
G took into account the potentialities and the rate of
adjacent land fixed by the courts and accordingly fixed
lthe rate. There is illegality in such approach of the
1i:ourts below. [Para 25] [995-C-F]

H 1.5 The figure of "Rs.63/- per sq. yard" is arrived
BHUPAL SINGH AND OTHERS v. STATE OF HARYANA 9 79

at after applying all relevant factors. The rate A
determined by this Court is just, reasonable and
represents fair market value of the lands on the date
of acquisition. Indeed, in such cases, one can never
come to any exact figure of price of lands because in
the very nature of things, the prices are bound to vary B
from land to land and further they also depend upon
the individual buyer-to-buyer, seller-to-seller and the
reasons which led to such sale and purchase.
However, courts in such cases always exercise their
discretion within the permissible parameters after C
appreciating the entire evidence brought on record and
applying the relevant legal principles. These factors
have been kept in mind. The concerned LAO is
directed to calculate the compensation payable to the
0
land owners for the acquired lands at the rate of Rs.
63/- per sq. yard. [Paras 26, 28] [995-G-H; 996-A-B, D]

Haji Mohd. Ekramul Haq vs. State of WB. 1959 Supp
(1) SCR 922; State of Kera/a vs. P.P. Hassan Kaya (1968)
3 SCR 459; Bhag Singh & Ors. vs. UT of Chandigarh E
1985 (2) Suppl. SCR 949:(1985) 3 SCC 737; Municipal
Committee, Bhatinda & Ors. vs. Ba/want Singh 1995 (2)
Suppl. SCR 322: (1995) 5 SCC 433; Union of India &
Ors. vs. Mangatu Ram & Ors. 1997 (3) SCR 1121: (1997) F-
6 SCC 59; II. Hanumantha Reddy vs. Land Acquisition
Officer & Manda/ R. Officer (2003) 12 SCC 642; General
Manager; ONGC Ltd. vs. Rameshbhai Jivanbhai Patel &
Anr. 2008 (11) SCR 927:(2008) 14 SCC 745; Maharunnisa
vs. Commissioner & Land Acquisition Officer; Bijapur 2009 G
(10 ) SCR 505 : (2009) 9 SCC 750; Chandrashekhar &
Ors. vs. Additional Special Land Acquisition Officer 2009
(10) SCR 505 : (2009) 14 SCC 441; Val/iyamma/ & Anr.
vs. Special Tehsildar (Land Acquisition) & Anr. 2011 (11)
SCR 293: (2011) 8 SCC 91; Chandrashekar (Dead) by H
980 SUPREME COURT REPORTS [2015) 3 S.C.R.

A L.Rs. and Ors. Vs. Land Acquisition Officer & Anr. 2011
(15) SCR 414: (2012) 1 SCC 390; Sa/aha Begaum & Ors.
vs. Special Land Acquisition Officer (2013) 11 SCC 426;
Digamber & Ors. vs. State of Maharashtra & Ors. 2013 (7)
SCR 1037: (2013) 14 SCC 406; Brig. Sahib Singh Ka/ha
B & Ors. v. Amritsar Improvement Trust & Ors. (1982) 1 SCC
419; Chimanlal Hargovinddas v. Special Land Acquisition
Officer, Poona & Anr. 1988 (1) Suppl. SCR 531: (1988)
3 SCC 751; Kasturi & Ors. v. State of Haryana 2002 (4)
Suppl. SCR 117: (2003) 1 SCC 354; Lal Chand v. Union
c of India & Anr. 2009 (13) SCR 622: (2009) 15 SCC 769;
AP. Housing Board v. K. Manohar Reddy & Ors. 2010 (11)
SCR 1107: (2010) 12 SCC 707; Special Land Acquisition
Officer & Anr. v. M.K. Rafiq Saheb 2011 (8) SCR 1088 :
(2011) 7 sec 714 - referred to.
D
Case Law Reference

1959 Supp (1) SCR 922 referred to. Para 12
(1968) 3 SCR 459 referred to. Para 12
E
'1985 (2) Suppl. SCR 949 referred to. Para 12

_1995 (2) Suppl. SCR 322 referred to. Para 12

1997 (3) SCR 1121 referred to. Para 12
F
(2003) 12 sec 642 referred to. Para 12
2008 (11) SCR 927 referred to. Para 12

2009 (10) SCR 505 referred to. Para 12
G
2009 (10) SCR 505 referred to. Para 12

2011 (11) SCR 293 referred to. Para 12

2011 (15) SCR 414 referred to. Para 12
H
BHUPAL SINGH AND OTHERS v. STATE OF HARYANA 981

(2013) 11 sec 426 referred to. Para 12 A

2013 (7) SCR 1037 referred to. Para 12
(1982) 1 sec 419 referred to. Para 16
1988 (1) Suppl. SCR 531 referred to. Para 16 B
2002 (4) Suppl. SCR 117 referred to. Para 16
2009 (13) SCR 622 referred to. Para 16
2010 (11) SCR 1107 referred to. Para 16
c
2011 (8) SCR 1088 referred to. Para 16

CIVIL APPELLATE JURISDICTION: Civil Appeal No.
7377 of 2008.
D
From the Judgment and Order dated 19.10.2005 of
the High Court of Punjab & Haryana at Chandigarh in
Regular First Appeal No. 363 of 1989.

WITH
E
C. A. Nos. 8635-8636, 8637-8638 of 2014 & 6184-
6185 of 2010
Nidhesh Gupta, Alok Sangwan, AAG, Ajay Bansal,
AAG, S. Singh Deswal, Satbir Singh Pillania, Nitin Kumar F
Thakur, Manoj Swarup, Sangram S. Saron, Shree Pal
Singh, Gautam Sharma, Kamal Mohan Gupta, Rajeev Kr.
Singh, Gaurav Yadav, Sanjay Kumar Visen for the
Appearing parties .
The Judgment of the Court was delivered by G

ABHAY MANOHAR SAPRE, J. 1. Civil Appeal No.
7377 of 2008 is filed against the judgment and order dated
19.10.2005 passed by the High Court of Punjab and
Haryana at Chandigarh in Regular First Appeal No. 363 of H
982 SUPREME COURT REPORTS [2015] 3 S.C.R.

A 1989 which arises out of order dated 21.11.1988 passed
by the Additional District Judge Faridabad in Land
Acquisition Case No. 15 of 1988. Civil Appeal Nos. 8635-
8636 of 2014 & 8637-8638 of 2014 are filed against the
final judgment and orders dated 07.05.2010 along with
B modified orders dated 23.07.2010 and 27.05.2010 passed
by the High Court of Punjab and Haryana in Regular First
Appeal Nos. 2214 of 2010 (O&M) and 2253 of 2010
(O&M) respectively whereby the High Court disposed of
both the RF.As in terms of order dated 19.10.2005 passed
C in RF.A No. 363 of 1989. Civil Appeal Nos. 6184-6185
of 2010 are filed against the judgment and order dated
20.10.2009 in RF.A No. 3165 of 1993(0&M) and Cross
Objection Petition No. 85-CL of 2009.

D 2. By impugned judgmenUorders, the Division Bench
of the High Court partly allowed the first appeals filed by
the appellants herein (claimants/landowners) and
enhanced the quantum of compensation payable to the
claimants at the rate of Rs.50/- per sq. yard for their lands,
E which were acquired by the State under the Land
Acquisition Act 1894 (hereinafter referred to as 'The Act").
Dissatisfied with the judgmenUorders passed by the High
Court, the claimants/land owners have filed these appeals
F for enhancement of the compensation.

3. The question that arises for consideration in these
appeals is whether the High Court was justified in partly
allowing the appeals filed by the claimants/landowners by
awarding compensation at the rate of Rs.50/- per sq. yard
G for their lands which were acquired by the State or the rate
should have been more than Rs.50/- per sq. yard?

4. In order to appreciate the controversy involved in
these appeals, it is necessary to state the relevant facts
H infra.
BHUPAL SINGH AND OTHERS v. STATE OF HARYANA 983
[ABHAY MANOHAR SAPRE, J.)

5. The appellants are the owners of the land described A
hereinbelow in relation to the appellants in the appeals:

(i) Appellants in of C.A. No. 7377 of 2008 and C.A.
Nos. 6184-6185 of 2010 are the owners of the land
acquired in village Atmadpur Had bast No. 127, Tehsil B
Ballabgarh, District Faridabad. AND

(ii) Appellants in C.A. Nos. 8635-8636 of 2014 and
8637-8638 of 2014 are the owneM of the land acquired in
village Mawai, Hadbast Nos. 126 4, Tehsil Ballabgarh, c
District Faridabad.

6. In exercise of the powers conferred under Section
4 of the Act, the State Government issued a notification on
04.11. 1977 and acquired a large chunk of lahd measuring D
689 Kanals and 17 Marlas in village Atmadpur, Hadbast
No. 127, Tehsil Ballabhgarh District Faridabad, Haryana
(as mentioned in Award No.13 of 1982-83 -filed as
Annexure P-1 in C.A. No. 7377 of 2008), 66 Kanals 15
Marlas and 149 Kanals and 18 Marlas in Village Mawai, E
Hadbast Nos. 126 & 4, Tehsil Ballabgarh, District
Faridabad (as mentioned in Award No.12 of 1982-83 &
Award No. 1 of 1984-85-filed as Annexures P-1 & P-3
respectively in C.A. Nos. 8635-36 of 2014 & 8637-8638 of
2014) and 445 Kanals 12 Marlas in village Atmadpur, F
Hadbast No. 127, Tehsil Ballabhgarh District Faridabad,
Haryana (as mentioned in A\'.>Jard dated 06.04.1989 passed
by the reference Court of Land Acquisition Collector-filed
as Annexure P-1 in C.A. Nos. 6184-85 of 2010) for
development of residential colonies for .the public at large. G
It was followed by the declaration published on 01.11.1980
under Section 6 of the Act. The aforementioned land
belonging to the appellants was also acquired pursuant to
these notifications.
H
984 SUPREME COURT REPORTS [2015] 3 S.C.R.

A 7. This led to initiation of the proceedings for
determination of compensation payable to each of the
landowners including that of the appellants herein by the
Land Acquisition Officer (in short "the LAO"). Under
Section 9 of the Act, notices were issued to the appellants
B calling upon them to participate in the land acquisition
proceedings to enable the LAO to determine the fair
market value of the lands on the date of acquisition as
provided under Section 23 of the Act so that the
compensation would be paid to the land owners at such
C determined rate. Accordingly, the LAO held an enquiry and
after affording an opportunity to the appellants passed
award dated 18.11.1982 and 02.05.1984 fixing the
compensation @ Rs.16.52 per square yard being the fair
market value of the acquired land payable to the
0
appellants.

8. Feeling aggrieved by the said awards, the
appellants sought reference to the Civil Court under
Section 18 of the Act for re-determination of the
E compensation made by the LAO. The reference Court, on
the basis of the evidence adduced, partly answered the
reference in favour of the appellants and accordingly
enhanced the rate of compensation from Rs.16.52 per
F square yard to Rs.22/- per square yard. In other words, the
Reference Court held that the appellants were entitled to
get compensation for their lands at the rate of Rs.22/- per
square yard being the fair market value of their lands on
the date of notification issued under Section 4 of the Act.
G 9. Dissatisfied with the determination made by the
reference Court, the appellants filed appeals under Section
54 of the Act before the High Court and challenged the
legality and correctness of the award of the Reference
H Court out of which these appeals arise.
BHUPAL SINGH AND OTHERS v. STATE OF HARYANA 985
[ABHAY MANOHAR SAPRE, J.]
10. The Division Bench of the High Court, by A
impugned judgment/orders, partly allowed the appeals filed
by the appellants and accordingly enhanced the
compensation payable to the appellants. The High Court
held that the fair market value/rate of the acquired lands
on the date of acquisition for the appellants' land was B
Rs.50/- per square yard and hence the appellants were
entitled to get the compensation for their acquired lands
at the rate of Rs.50/- per square yard along with other
statutory benefits payable under the Act. It is against these
judgment/orders, the claimants/landowners have filed these c
appeals by way of special leave before this Court.

11. Heard the learned Counsel for the parties.

12. Shri Nidhesh Gupta, learned Senior Counsel D
appearing for the appellants placing reliance on decisions
in Haji Mohd. Ekramul Haq vs. State of W.B. 1959
Supp(1) SCR 922, State of Kerala vs. P.P. Hassan Koya
(1968) 3 SCR 459, Bhag Singh & Ors. vs. UT of
Chandigarh (1985) 3 SCC 737, Municipal Committee, E
· Bhatinda & Ors. vs. Balwant Singh (1995) 5 SCC 433,
Union of India & Ors. vs. Mangatu Ram & Ors. (1997)
6 SCC 59, V. Hanumantha Reddy vs. Land Acquisition
Officer & Mandal R. Officer (2003) 12 SCC 642, General
Manager, ONGC Ltd. Vs. Rameshbhai Jivanbhai Patel F
& Anr. (2008) 14 SCC 745, Maharunnisa vs.
Commissioner & Land Acquisition Officer, Bijapur
(2009) 9 SCC 750, Chandrashekhar & Ors. vs.
Additional Special Land Acquisition Officer, (2009) 14
SCC 441, Valliyammal & Anr. vs. Special Tehsildar G
(Land Acquisition) & Anr., (2011) 8 SCC 91,
Chandrashekar (Dead) by L.Rs. and Ors. Vs. Land
Acquisition Officer & Anr., (2012) 1 SCC 390, Salaha
Begaum & Ors. vs. Special Land Acquisition Officer, H
986 SUPREME COURT REPORTS [2015] 3 S.C.R.

A (2013) 11 SCC 426 and Digamber & Ors. vs. State of
Maharashtra & Ors., (2013) 14 SCC 406, contended that
the High Court having rightly held in appellants' favour that
a case for enhancement in payment of compensation for
the acquired land is made out, erred in enhancing the
B compensation only @ Rs.50/- per square yard. According
to the learned senior counsel, havihg regard to the nature
of the potentiality of the use of the lands which was duly
proved by the appellants by adducing evidence and rightly
recognized by the Courts in appellants' favour by returning
C finding on this issue, the appellants were entitled to claim
enhancement in the compensation at the rate ranging
between Rs.100/- per square yard to Rs.200/- per square
yard in place of Rs.50/- per square yard. Learned senior
counsel pointed out that several acres of. lands situated
0
near the acquired lands in question were acquired by the
State Government between the years 1980 to 1989-1990
and for acquisition of these lands, the State Government
paid compensation to their landowners• @ Rs.300/- to
E Rs.325/- per square yard pursuant to orders of the Courts.
learned senior counsel, therefore, contended that if
Rs.300/-to Rs.325/- is taken to be the rate of the similarly
situated lands in the year 1989-1990 and if 10% is
reduced retrospectively on yearly basis of Rs.300/-to
F Rs.325/-, then in such event, the fair market value of the
lands in question prevailing in the year 1977, i.e., the year
of acquisition, could safely be determined between Rs.100/
- to Rs.200/- per square yard. Lastly and in the alternative,
learned senior counsel contended that in any event, the
G High Court having rightly held that the appellants were
entitled to claim compensation at the enhanced rate of
Rs.63/- per square yard erred in eventually awarding
compensation at the rate of Rs.50/- per square yard
without there being any basis. According to him, the
H
BHUPAL SINGH AND OTHERS v. STATE OF HARYANA 987
[ABHAY MANOHAR SAPRE, J.]
appellants therefore were entitled to get the compensation A
at the enhanced rate of Rs.63/- per square yard instead
of Rs. 50/- per square yard on the basis of finding of the
tJigh Court.

13. In contra, learned Counsel for the respondent- 8
State supported the impugned judgment and contended
that no case is made out on facts or/and in law to call for
any interference in the impugned judgment of the High
Court. Learned counsel while refuting the contention of Mr.
Nidesh Gupta, learned senior counsel appearing for the C
appellants, contended that the fair market value of the
lands in question cannot be determined in the manner
suggested by Mr. Gupta. According to him, firstly in order
to determine the fair market value of the acquired land, as
provided under Section 23 of the Act, one is required to D
take into account the prevailing market rate of the similarly
situated lands in nearby area of the acquired land on the
date of the issuance of notification under Section 4 of the
Act but in no case the rate of the lands either sold or
acquired subsequent to the date of issuance of the E
notification in question can be taken into consideration.
Learned counsel pointed out that the appellants never
claimed compensation at the rate of Rs.200/- per square
yard as was urged before this Court for the first time and
hence at best the appellants could be considered for F
award of compensation at the rate of Rs.63/- per square
yard but not beyond this rate.

14. Having heard the learned Counsel for the parties
and on perusal of the record of the case, we find force in G
the alternative submission of the learned senior counsel for
the appellants mentioned above and hence are inclined to
allow these appeals in part and accordingly modify the
impugned award in favour of the appellants to the extent H
988 SUPREME COURT REPORTS [2015] 3 S.C.R.

A indicated below by enhancing the rate of the land per
square yard for re-determining the payment of the
compensation and other statutory benefits payable under
the Act to the appellants.

B 15. Law on the question as to how the Court is
required to determine the fair market value of the acquired
land is fairly well settled by several decisions of this Court
and remains no more res integra. This Court has, inter
alia, held that when the acquired land is a large chunk of
C undeveloped land having potential and was acquired for
residential purpose then while determining the fair market
value of the lands on the date of acquisition, the
appropriate deductions are also required to be made.

D 16. It is apposite to take note of some of the decisions
of this Court on the issue relevant for the disposal of these
appeals:

(i) In Brig. Sahib Singh Kalha & Ors. v. Amritsar
E Improvement Trust & Ors., (1982) 1 SCC 419, this Court
opined that where _a large area of undeveloped land is
acquired, provision has to be made for providing minimum
amenities of town life. Accordingly, it wa~ held that a
deduction of 20% of the total acquired land should be
F made for land over which infrastructure has to be raised
(space for roads, etc.). Apart from the aforesaid, it was
also held that the cost of raising infrastructure itself (like
roads, electricity, wa~r. underground drainage, etc.) needs
also to be taken into consideration. To cover the cost
G component for raising infrastructure, the Court held that the
deduction to be applied would range between 20% to 33%.
Commutatively viewed, it was held, that deductions would
range between 40% and 53%.

H (ii)ln Chimanlal Hargovinddas v. Special Land
989
BHUPAL SINGH AND OTHERS v. STATE OF HARYANA
[ABHAY MANOHAR SAPRE, J.]
Acquisition Officer, Poona & Anr. (1988) 3 SCC 751 A
while referring to the factors which ought to be taken into
consideration while determining the market value of the
acquired land, it was observed that a smaller plot was
within the reach of many whereas for a larger block of land
there were implicit disadvantages. As a matter of B
illustration, it was mentioned that a large block of land
would first have to be developed by preparing its layout
plan. Thereafter, it would require carving out roads, leaving
open spaces, plotting out smaller plots, waiting for
purchasers (during which the invested money would C
remain blocked). Likewise, it was pointed out that there
· would be other known hazards of an .entrepreneur. Based
on the aforesaid likely disadvantages it was held that these
factors could be discounted by making deductions by way
0
of allowance at an appropriate rate ranging from 20% to
50%. These deductions, according to the Court, would
account for land required to be set apart for developmental
activities. It was also sought to be clarified that the applied
deduction would depend on, whether the acquired land E
was rural or urban, whether building activity was picking yp
or was stagnant, whether the waiting period during which
the capital would remain lo~ked would be short or long;
· and other like entrepreneurial hazards.
F
(iii) In Kasturi & Ors. v. State of Haryana, (2003) 1
SCC 354, this Court opined that in respect of agricultural
land or undeveloped land which has potential value for
housing or commercial purposes, normally 1/3rd amount
of compensation should be deducted depending upon the G
location, extent of expenditure involved for development,
the area required for roads and other civic amenities, etc.
It was also opined that appropriate deductions could be
made for making plots for residential and commercial
purposes. It was sought to be explained that the acquired H
990 SUPREME COURT REPORTS [2015] 3 S.C.R.

A land may be plain or uneven, the soil of the acquired land
may be soft or hard, the acquired land may have a hillock
or may be low-lying or may have deep ditches. Accordingly,
it was pointed out that expenses involved for development
would vary keeping in mind the facts and circumstances
· B of each case. In Kasturi case, it was held that normal
deductions on account of development would be 1/3'd of
the amount of compensation. It was, however, clarified that
in some cases the deduction could be more than 1/3'd in
other cases even less than 1/3'd.
c
(iv) In Lal Chand v. Union of India & Anr., (2009) 15
sec 769, it was held that to determine the market value
of a large tract of undeveloped agricultural land (with
potential for development), with reference to sale price of
D small developed plot(s), deductions varying between 20%
to 75% .of the price of such developed plot(s) could be
made.

(v) In A.P. Housing Board v. K. Manohar Reddy &
E Ors., (2010) 12 SCC 707, having examined the existing
case law on the point it was concluded that deductions on
account of development could vary between 20% to 75%.
In the peculiar facts of the case, a deduction of 1/3'd
towards development charges was made from the
F awarded amourit to determine the compensation payable.

(vi) In Special Land Acquisition Officer & Anr. v.
M.K. Rafiq Saheb, (2011) 7 SCC 714, this Court after
having concluded that the land which was the subject-
G matter of acquisition was not agricultural land for all
practical purposes and no agricultural activities could be
carried out on it, concluded that in order to determine fair
compensation, based on a sale transaction of a small
piece of developed land (though the acquired land was a
H large chunk), the deduction made by the High Court at
BHUPAL SINGH AND OTHERS,v.. STATE OF HARYANA 991.
[ABHAY MANOHAR SAPRE, J.]
50%, ought to be increased to 60%. A

. 17. Aftertaking .note•of the aforesaid cases and
·placing reliance upon the principles laid ·down 'therein, this
,._,,, .. Court in Chandrashekar and Others, (supra) observed as
under: B. '~ '
ii !
. "It is essential.to earmark appropriate deductions "I
out of the market value of an exemplar land, for J
each' of the two components referred to above.
This would be the first step towards balancing the c
differential factors. This would pave the way for
determining the market value of the undeveloped
acquired land on the basis of market value of the
developed exemplar land.
(' D ,I
As far back as in .1982, this Court in Brig. Sahib "Iilj
·~
Singh Kalha case held, that the permissible Ii'
11.
deduction could be up to 53%. This deduction was · i
I
I
divided by the Court into two components. For the
"first. component" referred to in the foregoing E I'
paragraph, it was held that a deduction of 20%
should be made. For the "second component", it
was held that the deduction could range between
· 20% to 33%. It is therefore apparent that a
. r deduction of up to 53% was the norm laid down F
· by the Court as far back as in 1982. The aforesaid
norm remained unchanged for a long duration of
time, even though, keeping in mind the peculiar
""
facts and circumstances emerging from case, to
case, different deductions' were applied by this G. !'
!
Court to balance the differential factors between
I the exemplar land and the acquired land. Recently
however, this Court has approved a higher 'l
component of deduction. 1:
H.

1'i i
' '
i
992 SUPREME COURT REPORTS./ [2015) 3 S.C.R.

A In 2009 in Lal Chand case and in 2010 in A.P.
Housing Board case it has been held that while
. applying the sale consideration of a small piece of
., • _developed land, to determine the 'market value of
/ a large tract of undeveloped acquired land,
B deductions between 20% to 75% could be made.
· But in· 2009 in Subh Ram case, this Court
••• 1 restricted deductions on account of the "first

component". of development, as· also, on account
of the ~·second component" of development to 33%
c ·each. The aforesaid deductions would roughly
amount to 67% of the component of the sale
consideration of the exemplar sale transaction(s)."
' .,
;a. Keeping the aforesaid principles in mind, we have
.

D perused the evidence in these cases. It is not in dispute .
that the acquisition of land in question was· made in the
• year 1977 and it. was for a· large chunk of undeveloped
agriculture land. It is also_ not in dispute that it was for
· construction of "residential purpose". It is further not in
E dispute that the appellants did not file any sale deed in
evidence in support of their case to prove the fair market
value of the•acquired land. All that they adduced was an
oral evidence of some witnesses to prove the potentiality
F of the lands by showing its location, proximity to the main
road which was passing in the area and. named some
industries and hospitals operating in the nearby areas of
the acquired lands etc. ·

·.19. ·Taking all
these factors in mind and.· on
G appreciation .of this oral evidence, the LAO, Reference
Court and the High ..Court fixed their ·respective rates as
. mentioned above, namely, Rs.16.52, Rs.22/- and Rs. 50/- .
per Square yard.

H 20. As rightly argued by learned senior counsel for the
BHUPAL SINGH AND OTHERS v. STATE OF HARYANA 993
[ABHAY MANOHAR SAPRE, J.]
appellants, it is not in dispute that the High Court djd hold A
in appellants' favour that they were entitled to claim
compensation at the rate of Rs.63/- per Square yard in the
concluding para of the impugned judgment basing its
finding after taking into consideration the potentialities of
land and rate of one adjacent land of the acquired land B
which was also found to have been acquired at the same
time as determined by the Courts.

21. In the light of this finding, we fail to appreciate as
to why the High Court then assessed the rate at Rs.50/- C
per square yard in place of Rs.63/- per sq. yard. In other
words, having rightly come to a conclusion that the fair
market value of the land in question on the date of
aequisition (04.11.1977) was Rs.63/- per square yard, there
was no justification on the part of the High Court to have D
then reduced it to any rate less than Rs.63/- much less to
Rs.50/- per square yard. In our considered view, it should
have been fixed at Rs.63/- per square yard only.

22. We have also given our anxious consideration to E ·
the whole issue keeping in view the peculiar facts,
evidence adduced and the law quoted above for
determining the fair market value of the land on the date
of notification (04.11.1977). Having regard to the total
scenario emerging from the record of the case and the F
findings r.ecorded by the Courts below on the issues such
as location of land, its potentiality, surroundings, the rate
of the adjacent land determined by the Courts, the
condition of the acquired underdeveloped lands, the
expenditure required to develop the acquired land to start G'
the activities, per cent of deductions to be made, its
proximity to the various places in the nearby town
(Faridabad), and lastly, the fact that the appellants failed
to file any sale deed of any parcel of land (be that of small H
994 SUPREME COURT REPORTS (2015] 3 S.C.R.

A piece of land or big) sold in the near proximity of the
acquired land, the fair market value of the lands in
question as on 04.11.1977 (date of acquisition) can
reasonably be worked out to "Rs.63/- per Square Yard".
In other words, in our considered opinion, the High Court
B was not right in determining the fair market rate of the
acquired land at Rs.50/- per Square yard and instead it
should have determined the fair market rate of the
acquired land in question at "Rs.63/- per Square Yard".
We accordingly now fix it.
c
23. We are not impressed by the submission of
learned senior counsel for the appellant when he ·submitted
that we should take into consideration the fair market value
of the adjacent land determined by the Court which was
D acquired 10 years subsequent to the acquisition in
question in 1989-1990 and then go on reducing its value
10% every year to determine the fair market value of the
land in question. To say the least, this submission is wholly
misconceived being against the settled principle of law
E relating to land acquisition cases.

24. As rightly argued by learned counsel for the
respondent, the fair market value of the acquired land is
required to be determined under Section 23 of the Act on
F the basis of the market rate of the adjacent lands similarly
situated to the acquired lands prevailing on the date of
acquisition or/and prior to acquisition but not subsequent
to the date of acquisition. In appropriate cases, addition of
10% per annum escalation in the prices specified in the
'G sale deeds (if filed and relied on) in relation to adjacent
similarly situated lands for fixing the market value of the
acquired land may be permitted. Such is, however, not the
case in hand. Here is the case where firstly, no sale deeds
H were filed by the appellants to prove the fair market value
BHUPAL SINGH AND OTHERS v. STATE OF HARYANA 995
[ABHAY MANOHAR SAPRE, J.]

of the acquired land and secondly, what they now want this A
.Court to do is to take into consideration the rate of those
lands which were acquired ten years after the date of
acquisition in question and then reduce the value of such
land by 10% every year so as to determine the fair market
value of the acquired land in question. In our view, such B
procedure for determination is not provided in the Act.

25. We also cannot accept the submission of the
learned counsel for the appellants when he contended that
the appellants are entitled to claim compensation at the C
rate ranging between Rs.100/- to Rs.200/- per sq. yard.
As observed supra, since the appellants failed to file any
sale deed of the lands to prove the price of the lands
prevailing at the relevant time (04.11.1977), we fail to
appreciate as to on what basis, the appellants can claim D
the compensation at the rate of Rs.100/- per sq. yard or
more. In our view it was necessary for the appellants to
have filed copies of the sale deed to prove the fair market
rate prevailing on the date of acquisition (04.11.1977).
Since the only evidence which was adduced was to prove E
the potentialities of the acquired land, the courts below
took into account the potentialities and the rate of adjacent
land fixed by the Courts and accordingly fixed the rate.
We do not find any illegality in such approach of the courts
below. F

26. We have arrived at the figure of "Rs.63/- per sq.
yard" after applying all relevant factors, which we have
mentioned above. In our view, the rate determined by this
· Court is just, reasonable and represents fair market value G
of the lands in question on the date of acquisition. Indeed,
in such cases, one can never come to any exact figure of
price of lands because in the very nature of things, the
prices are bound to vary from land to land and further they H
996 SUPREME COURT REPORTS [2015] 3 S.C.R.

A also depend upon the individual buyer-to-buyer, seller-to-
seller and the reasons which led to such sale and
purchase. However, Courts in such cases always exercise
their discretion within the permissible parameters after
appreciating the entire evidence brought on record and
B applying the relevant legal principles. We have kept these
factors in mind.

27. In view of foregoing discussion, the appeals filed
by the appellants-landowners deserve to be allowed and
C are accordingly allowed in part. The impugned judgment
and orders are accordingly modified to the extent indicated
above.

28. The concerned LAO is directed to calculate the
D compensation payable to the appellants (land owners) for
their acquired lands pursuant to notification issued under
Section 4 of the Act on 04.11.1977 "at the rate of Rs.63/
- per sq. yard" and accordingly calculate all statutory
compensation such as solatium, interest etc. payable
E under the Act to every land owner.

29. Let this calculation be made, as directed above,
by the LAO and the amount so calculated and worked out
be paid to the appellants (land owners) after making proper
F verification of their claim cases within three months from
the date of receipt of this judgment. No costs.

Midhi Jain Appeals partly allowed.