Ram Kishan (Since Deceased) Through His LRs Etc. v. State of Haryana & Ors., 2025
The Court enhances land acquisition compensation applying highest exemplar and de-escalation principle.
Judgement Details
Court
Supreme Court of India
Date of Decision
3 April 2025
Judges
Justices BR Gavai KV Viswanathan
Citation
Acts / Provisions
Facts of the Case
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Land in Dharuhera village (Haryana) was acquired in December 2008 under the Land Acquisition Act, 1894.
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The High Court fixed compensation at ₹55.71 lakh/acre, relying on lower-priced exemplars.
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The landowners appealed to the Supreme Court seeking enhanced compensation, citing higher market potential and proximity to developed zones.
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The land was surrounded by MNCs, residential colonies, schools, and urban infrastructure, indicating high non-agricultural potential.
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The appellants relied on a 2010 acquisition in a nearby village (BESCO Ltd. case) where compensation was fixed at ₹1.49 crore/acre.
Issues
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Whether the High Court erred in ignoring the highest bona fide sale exemplar while fixing compensation.
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Whether proximity to urban zones and potential for non-agricultural use were adequately considered.
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Whether the principle of de-escalation could be applied to align 2010 exemplar prices with the 2008 acquisition.
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Whether the compensation should be reduced due to lack of Change of Land Use (CLU) charges paid by the appellants.
Judgement
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The Supreme Court allowed the appeal filed by the landowners and enhanced the compensation for the acquired land from ₹55.71 lakh/acre (as awarded by the High Court) to ₹1.18 crore/acre.
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The Bench held that the High Court had erred in relying on low-value exemplars while ignoring other higher-value sale instances that were more comparable in terms of location, proximity, and potential.
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It emphasized that: “When several sale exemplars are available, the highest bona fide sale instance should be the guiding factor in determining fair compensation.”
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The Court noted that the land in question was located in a controlled urban area; Surrounded by multinational companies; Opposite a large residential colony; and within 1 KM of schools and townships.
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These factors clearly indicated that the land had high urban potential and non-agricultural utility, which the High Court failed to take into account.
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The Supreme Court further relied on its decision in BESCO Ltd. v. State of Haryana (2023), where compensation of ₹1.49 crore/acre was awarded for nearby lands acquired in 2010.
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Since the acquisition in the present case occurred 17 months earlier (in December 2008), the Court applied the principle of de-escalation to adjust the 2010 value backward:
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Applied 12% de-escalation per annum → ₹1.31 crore;
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Further adjusted 6% for 5 months → ₹1.23 crore;
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Deducted ₹5 lakh/acre for non-payment of Change of Land Use (CLU) charges;
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Final compensation fixed at ₹1.18 crore/acre.
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The Bench reiterated that: “Potentiality is not only the current use of land but also the use to which the land can be reasonably put.”
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The High Court’s selective reliance on lesser exemplars, and its failure to assess market realities, was deemed legally unsustainable.
Held
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The Court ensured a realistic valuation of urban-adjacent land with strong development potential.
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The Appeal was allowed. The Compensation for acquired land enhanced to ₹1.18 crore/acre.
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High Court erred by Ignoring urban potentiality & Relying only on low-value sale exemplars and Not applying the de-escalation principle correctly.
Analysis
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The Court ensured a realistic valuation of urban-adjacent land with strong development potential.
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Cited Mehrawal Khewaji Trust to justify preference for highest exemplar.
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The Court standardized the 12% de-escalation rate, ensuring consistency with the BESCO Ltd. case.
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Adjusted for non-CLU payment, maintaining equity between appellants and BESCO claimants.
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Reiterated that future utility of land is as critical as current usage in compensation assessments.