{"file_name": "2024_10_1709_1725_EN.pdf", "text": "[2024] 10 S.C.R. 1709 : 2024 INSC 797\n\nHorrmal (Deceased) Through His LRs & Ors. \nv.  \nState of Haryana & Ors.\n\n(Civil Appeal No. 11758 of 2024)\n\n21 October 2024 \n\n[Surya Kant* and K.V. Viswanathan, JJ.]\n\nIssue for Consideration\n\n(1)  Whether the appellants are entitled to higher compensation \nfor their acquired lands, and if so, to what extent; and \n\n(2)  Whether the methodology for calculating the quantum of such \n\ncompensation has been appropriately applied.\n\nHeadnotes†\n\nLand  Acquisition  Act,  1894  –  ss.4,  6,  23(1)  –  Assessment \nof  Market  Value  for  Acquired  Lands  –  Comparable  Sales \nMethod – Deduction for Developmental Charges:\n\nHeld:  Compensation  for  acquired  lands  must  reflect  their  fair \nmarket  value  as  of  the  date  of  the  Section  4  notification  –  The \n\"comparable  sales  method\"  is  the  preferred  approach,  using \nbona fide sales exemplars of similar land – The ‘market value’ is \nto be assessed with reference to factors such as standing crops \nand trees, the severance of part of the land, damage to movable \nor  immovable  property  or  earnings,  the  need  to  relocate  one’s \nresidence  or  business,  and  any  loss  of  profits  from  the  land \nbetween  the  publication  of  the  declaration  under  Section  6  and \nthe Collector's assumption of possession – Sale deeds of smaller \nparcels can be considered but must undergo appropriate deductions \nto account for developmental charges – Deductions may range from \n20%  to  75%,  depending  on  the  nature  and  location  of  the  land.   \n[Paras 18, 19, 26, 30]\n\nCompensation – Reliance on Best Sale Exemplars – Judicial \nGuidelines for Determination of Fair Value:\n\nHeld: When multiple comparable sale exemplars exist, the highest \nbona fide exemplar should be preferred, provided it meets legal \n\n* Author\n\n\f1710 \n\n[2024] 10 S.C.R.\n\ncriteria – Even when averaging values, the highest exemplar may \nbe considered to ensure fair compensation – The Reference Court’s \nvaluation of ₹92,62,500 per acre aligns with market potential and \nstatutory  requirements,  and  the  High  Court  erred  in  reducing  it. \n[Paras 28, 35, 37]\n\nPrinciple  of  Potentiality  –  Strategic  Location  of  Acquired \nLand – Enhancement of Compensation:\n\nHeld: The acquired land’s strategic location and potential for non-\nagricultural development must be factored into the compensation. \nLands  situated  near  urban  areas,  major  highways,  or  industrial \nzones  have  higher  potential  value  –  Deductions  should  not \nundermine this potentiality. [Paras 32, 33, 36]\n\nCase Law Cited\n\nMehrawal  Khewaji  Trust  v.  State  of  Punjab  [2012]  4  SCR  24  : \n(2012) 5 SCC 432; A. Natesam Pillai v. Tahsildar [2010] 10 SCR \n1  :  (2010)  9  SCC  118;  General  Manager,  Oil  and  Natural  Gas \nCorporation  Ltd.  v.  Rameshbhai  Jivanbhai  Patel  [2008]  11  SCR \n927 : (2008) 14 SCC 745; Kanwar Singh v. Union of India [1998] \nSupp.  2  SCR  505  :  (1998)  8  SCC  136;  Subh  Ram  v.  State  of \nHaryana  [2009]  15  SCR  287  :  (2010)  1  SCC  444;  Chimanlal \nHargovinddas v. LAO [1988] Supp. 1 SCR  531 : (1988) 3 SCC \n751; Shaji Kuriakose v. Indian Oil Corporation Ltd. [2001] Supp. 1 \nSCR  573  :  (2001)  7  SCC  650;  Administrator  General  of  West \nBengal v. Collector, Varanasi [1988] 2 SCR 1025 : (1988) 2 SCC \n150; Atma Singh v. State of Haryana and Others [2007] 12 SCR \n1120 : (2008) 2 SCC 568; Balwan Singh v. State of Haryana and \nothers, 2022 SCC Online SC 637; Karan Singh v. Union of India \n[1997]  Supp.  4  SCR  237  :  (1997)  8  SCC  186;  Rishi  Pal  Singh \nv.  Meerut  Development Authority  [2006]  2  SCR  508  :  (2006)  3 \nSCC  205;  Sh.  Himmat  Singh  v.  State  of  M.P.,  (2013)  16  SCC \n392 – relied on.\n\nDollar  Co.  v.  Collector  of  Madras,  AIR  1975  SC  1670;  Special \nLand Acquisition Officer v. T. Adinarayan Setty, AIR 1959 SC 429; \nMaya Devi v. State of Haryana [2018] 1 SCR 225 : (2018) 2 SCC \n474 – referred to.\n\nDigital Supreme Court Reports\f[2024] 10 S.C.R.  \n\n1711\n\nList of Acts\n\nLand Acquisition Act, 1894; Haryana Urban Development Authority \nAct, 1977.\n\nList of Keywords\n\nLand  Acquisition;  Market  Value;  Comparable  Sales  Method; \nDevelopment Charges; Potentiality of Land.\n\nCase Arising From\n\nCIVIL APPELLATE JURISDICTION: Civil Appeal No. 11758 of 2024\n\nFrom the Judgment and Order dated 23.08.2022 of the High Court \nof Punjab & Haryana at Chandigarh in RFA No. 13554 of 2018\n\nWith\n\nCivil Appeal Nos. 11759-11760, 11761, 11762-11766, 11767-11770, \n11771-11772,  11773-11779,  11780-11786,  11787-11796,  11797, \n11798, 11799, 11800-11806, 11807, 11808, 11809, 11810, 11811-\n11812, 11813,11814, 11815, 11816, 11817, 11818-11819, 11820, \n11821, 11822, 11823, 11824, 11825-11828, 11829-11830, 11831-\n11832, 11833, 11834, 11835, 11836-11838, 11839-11840, 11841, \n11842,  11843,  11844,  11845-11846,  11847-11848,  11849-11850, \n11851-11852, 11853-11854, 11855-11856, 11857, 11858, 11859-\n11860, 11861-11862, 11863-11869, 11870-11871, 11872, 11873-\n11874, 11875-11876, 11877-11878, 11879, 11880-11881, 11882-\n11883,  11884-11890,  11891-11894,  11895-11917,  11918-11947, \n11948-11951,  11952-11953,  11954-11955,  11956-11959,  11960-\n11961,  11962,  11963-11964,  11965-11966,  11967-11968,  11969, \n11970-11971,  11972-11973,  11974-11975,  11976-11977,  11978, \n11979-11980,  11981-11987,  11988-11989,  11990-11991,11992-\n11993, 11994-11995, 11996-11997, 11998-11999 and 12000 of 2024\n\nAppearances for Parties\n\nNarender  Hooda,  Rameshwar  Singh  Malik,  Gagan  Gupta,  Sunil \nDalal,  Sr. Advs.,  Tishampati  Sen,  Ms.  Riddhi  Sancheti, Anurag \nAnand,  Mukul  Kulhari,  Pardeep  Dahiya,  Ms.  Mahima  Benipuri, \nDeepak  Goel,  Ms.  Harshita  Maheshwari,  Ms.  Urvashi  Sharma, \nMs. Alka Goyal, Ms. Archana Preeti Gupta, Jitesh Malik, Gaurav \nPratap Singh, Arjun Singh, Mrs. Leelawati Suman, Satish Kumar, \nAjay  Gupta, Ashok Anand,  Ms. Manisha  Saroha,  Nikhil  Beniwal, \n\nHorrmal (Deceased) Through His LRs & Ors. v.  State of Haryana & Ors.\f1712 \n\n[2024] 10 S.C.R.\n\nNavish Bhati, Vikram Singh Dalal, Ms. Rakhi Ray, Deepkaran Dalal, \nRaunaq Dalal, Karan Singh Dalal, A. Venayagam Balan, Gaurav \nPal,  R.V.Kameshwaran,  C.  M.  Sundaram,  Kiritkumar  Govindlal \nSheth, Ashray  Behura,  Deepak  Parashar,  Prakhar  Singh,  Dipak \nKumar Jena, Prasanna Kumar Parhi, R.K. Poswal,  Ranjita Dhal, \nPradeep Kumar Verma, Parmod Kumar, Sunil Kumar Mund, Raj \nSekhar  Jena,  Ms.  Sandhya  Mishra,  Siddharth  Mittal,  Abhijeet \nVarshney, Deepak Agarwal, Darshan, Prabhat Kumar, Mrs. Shilpa \nG Mittal, Devesh Pratap Singh, N S Dalal, Anshuman Nayak, Rahul \nKulhare,  Ms.  Rachana  Dalal,  Krishan  Mourya, Abhishek  Kumar,   \nMs.  Sweta  Kadyan,  Sharad  Mrinal,  Tanishq  Tyagi,  Ms. Ankita \nPandey,  Sanjay  Tyagi,  Ms.  Disha  Singh,  S.K.  Pabbi,  Shivendu \nGaur, Ms. Nidhi Sharma, Ms. Nisha Sharma, Ajay Kumar Singh, \nSomvir Singh Deswal, Manoj Kumar, Neeraj Singh, Diwan Singh \nChauhan, Ms. Amit Kumari Saroha, Nischal Kumar Neeraj, Davesh \nBhatia, Ms. Chaya, Rakesh Dahiya, Aditya Dahiya, Akaash Dahiya, \nAditya Singh, Gagan Gupta, Ananta Prasad Mishra, Saurabh Gupta, \nAdvs. for the Appellants.\n\nVikramjit Banerjee, A.S.G., Samar Vijay Singh, Keshav Mittal, Ms. \nSabarni  Som,  Fateh  Singh,  R.K.  Singh,  Rajeev  Kumar  Gupta, \nParminder Singh Bhullar, Advs. for the Respondents.\n\nJudgment / Order of the Supreme Court\n\nJudgment\n\nSurya Kant, J.\n\nDelay condoned. \n\nLeave granted.\n\n2.  These  appeals  are  preferred  by  the  expropriated  landowners \n(hereinafter  ‘Appellants’),  impugning  the  judgement  dated \n23.08.2022  passed  by  the  Punjab  and  Haryana  High  Court  at \nChandigarh  (hereinafter,  ‘High  Court’),  whereby  their  appeals \nseeking  further  enhancement  in  compensation  for  their  acquired \nlands,  have  been  dismissed. As  a  necessary  corollary,  the  High \nCourt  has  allowed  the  cross  appeals  filed  by  the  Respondent \nState,  challenging  the  enhancement  in  compensation  made  by \nthe  Reference  Court.  Consequently,  the  Awards  passed  by  the \n\nDigital Supreme Court Reports\f[2024] 10 S.C.R.  \n\n1713\n\nReference  Court  have  been  set  aside  and  the  compensation  as \nwas granted by the Land Acquisition Collector (hereinafter, ‘LAC’) \nhas been restored. \n\nA.  FActs\n\n3.  The instant dispute regarding the grant of just and fair compensation \noriginated with the issuance of a notification under Section 4 of the \nLand Acquisition Act, 1894 (hereinafter, ‘1894 Act’) on 11.02.2011, \nfor  the  acquisition  of  approximately  302.75  acres  of  land  by  the \nRespondent  State.  This  land,  including  the Appellants’  lands,  is \nsituated  in  the  revenue  estate  of Tauru  village  in  Mewat  District. \nThe  acquisition  process  was  initiated  for  the  development  and \nutilisation of land for public purposes, specifically for carving out \nResidential  and  Utility  Areas  in  Sectors  7,  8  and  11  in  Mewat \nDistrict  under  the  Haryana  Urban  Development  Authority  Act, \n1977. A notification under Section 6 of the 1894 Act was thereafter \nissued on 10.02.2012. \n\n4.  The  LAC  passed  the  award  on  22.10.2013  in  respect  of  the  land \nadmeasuring  302.75  acres  and  estimated  the  compensation  at \nRupees  45,00,000/-  per  acre,  along  with  30%  solatium  and  an \nadditional amount of 12% per annum for the acquired land. Further, \ncompensation for the lands abutting the Mohammadpur—Sohna—\nTauru bypass road were enhanced by 20% and 25%, respectively, \nover  the  already  fixed  rate.  The  LAC  assessed  the  compensation \nprimarily  based  on  the  rates  fixed  by  the  Divisional  Level  Rate \nFixation  Committee  in  the  following  manner:  (a)  2057  Kanal  at \nRupees  45,00,000/-  per  acre;  (b)  113  Kanals  and  9  Marlas  at \nRupees 54,00,000/- per acre; and (c) 251 Kanals and 11 Marlas at \nRupees 56,25,000/- per acre. In addition to this, the LAC also affixed \ncompensation for building structures and trees wherever subsisting \non the acquired lands. \n\n5.  Aggrieved  by  the  award  dated  22.10.2013,  the  Appellants  filed \nReference(s) under Section 18 of the 1894 Act before the Additional \nDistrict  Judge,  Mewat  (hereinafter,  ‘Reference  Court’).  The \nReference Court, vide separate awards, enhanced the market value \nof  the  acquired  land  to  Rupees  92,62,500/-  per  acre,  in  addition \nto  granting  other  statutory  benefits.  The  Reference  Court,  in  this \n\nHorrmal (Deceased) Through His LRs & Ors. v.  State of Haryana & Ors.\f1714 \n\n[2024] 10 S.C.R.\n\n6. \n\ninstance,  relied  upon  a  sale  exemplar,  Ex.  P76,  to  assess  the \nmarket value of the acquired land as on the date of the issuance of \nSection 4 notification, and subsequently increased the compensation \namount. Both the Appellants and the Respondent, being dissatisfied \nwith the decision of the Reference Court, preferred appeals before \nthe High Court.\n\nIn  this  vein,  the  High  Court  allowed  the  appeals  preferred  by  the \nRespondent  State  while  dismissing  those  filed  by  the Appellants. \nThe  High  Court  held  that  the  Reference  Court  had  incorrectly \nestimated the market value and enhanced the compensation as it \nignored various sale instances of comparable parcels of land that \nhad  been  produced  by  the  Respondents.  Additionally,  the  High \nCourt also doubted the reliability of Ex. P76, which was the basis \nof the Reference Court’s decision, on the ground that this sale deed \nbelonged to a commercial plot of land and was post the notification \nissued under Section 4 of the 1894 Act. Accordingly, the High Court \nset  aside  the  award(s)  of  the  Reference  Court  and  reverted  the \ncompensation amount to that initially granted by the LAC. Hence, \nthese appeals. \n\nB.  contentions oF the pArties\n\n7.  We  have  heard  Learned  Senior  Counsel  for  the  parties  at  a \nconsiderable  length  and  meticulously  perused  the  documents \nsubmitted on record.\n\n8.  S/Shri Narender Hooda, Sunil Dalal and Gagan Gupta, Learned Senior \nCounsel  appearing  on  behalf  of  the Appellants,  first  demonstrated \nthe potentiality of the acquired land. They contended that the High \nCourt had overlooked the fact that the acquired lands fell squarely \nwithin  the  municipal  limits  of  Tauru  city  and  were  surrounded  by \ncivic  amenities  such  as  a  Bus  Stand,  Hospital,  School,  College,  a \nPower Station and Industrial as well as Residential establishments. \nThey  further  asserted  that  the  acquired  land  was  located  on  the \nSohna-Tauru  bypass  and  was  in  close  proximity  to  the  Gurgaon-\nNational Capital Region, as also the Industrial Township established \nat Bhiwadi, Rajasthan. Additionally, the land is situated between the \nSohna—Rewari metal road on one side and the KMP Highway on \nthe  other.  This  strategic  location,  they  argued,  indicated  that  the \n\nDigital Supreme Court Reports\f[2024] 10 S.C.R.  \n\n1715\n\n9. \n\nmarket value of the acquired land, having immense potential at the \ntime of acquisition, could not have been valued at less than Rupees \n5,00,00,000/- per acre.\n\nIt was contended that the sale exemplars, particularly Ex. RW1/D and \nRW1/F, which have been relied upon by the LAC and the High Court \nwhile assessing the rate of compensation at Rupees 45,00,000/- per \nacre, appertained to the smaller pieces of land and were inferior in \nnature, as the sale consideration mentioned therein was lower than \nthe rate estimated by the LAC itself. Instead, they urged that Ex. P76 \nand Ex. P3 ought to have been relied upon, owing to their similarity \nand proximity to the acquired land, as well as their temporal proximity \nto  the  date  of  issuance  of  the  Section  4  notification.  They  further \nemphasised that these sale exemplars are the best sale instances \nto be considered since Ex. P76 was registered only a few months \nafter the Section 4 notification, whereas Ex. P3 was executed prior \nto the said notification. \n\n10.  Given what had been adduced, Learned Senior Counsels relied on \na plethora of decisions in support of their arguments, including the \njudgment of this Court in Dollar Co. v. Collector of Madras,1 wherein \nit was held that a sale deed of a recent date could be considered \nthe best evidence. Additionally, they placed reliance on the decision \nin  Special  Land Acquisition  Officer  and  another  v.  M.K.  Rafiq \nSaheb,2 where this Court held that sale deeds pertaining to smaller \nareas could be taken into consideration by applying a cut. \n\n11.  Conversely,  Mr.  Vikramjit  Bannerjee,  learned Additional  Solicitor \nGeneral  of  India,  representing  the  Respondents,  contended  that \nthe sale deeds produced by the Appellants could not be relied upon \nas they pertained to sale instances of tiny plots of land constituting \nonly a few Marlas. More specifically, he argued that Ex. P3 was not \nreliable since it measured only 1 Kanal and 10.5 Marlas, making it \nsignificantly  smaller  in  comparison  to  the  acquired  land.  Similarly, \nwith  respect  to  Ex.  P76,  which  was  also  heavily  relied  upon  by \nthe Appellants, he asserted that it ought to be discarded, not only \n\n1 \n\n2 \n\n[1975] Supp. 1 SCR 403 : AIR 1975 SC 1670\n\n[2011] 8 SCR 1088 : (2011) 7 SCC 714\n\nHorrmal (Deceased) Through His LRs & Ors. v.  State of Haryana & Ors.\f1716 \n\n[2024] 10 S.C.R.\n\nbecause  it  was  subsequent  to  the  Section  4  notification  but  also \nsince the land therein was purchased for a commercial purpose by \na private company for warehousing, and thus would not accurately \nreflect the market value of the acquired land.\n\n12. \n\nInstead,  Mr.  Bannerjee  urged  that  the  sale  instances  placed  on \nrecord  by  the  Respondents  should  be  relied  upon  despite  having \nbeen recorded post the Section 4 notification, as they lend proper \nguidance  for  estimating  the  market  value  of  the  acquired  land  on \nthe crucial date of 11.02.2021. Lastly, he asserted that even if the \nCourt were to consider the sale instance of a smaller parcel of land, \nonly those sale exemplars where the land has been used towards \ndevelopmental purposes should be relied upon, and after applying \nthe appropriate deduction towards development charges. \n\nc. \n\nissues\n\n13.  Having considered the factual background out of which the dispute \nhas arisen and the contentions put forth, the questions that fall for \nour deliberation are set out as follows:\n\ni.  Whether the Appellants are entitled to higher rate of compensation \n\nand if so, to what extent; and \n\nii.  How should the quantum of such compensation be calculated?\n\nD.  AnAlysis\n\n14.  As  already  elucidated  in  the  facts  of  this  case,  there  has  been  a \nsignificant difference in the evaluations conducted by the Reference \nCourt and, subsequently, the High Court. The High Court has reduced \nthe  valuation  affixed  by  the  Reference  Court  by  half  and,  instead, \nrestored the compensation amount granted by the LAC. Given the \ndifferences  in  the  approaches  adopted  by  these  courts  and  the \nvariation in outcomes faced by the Appellants, it becomes imperative \nfor us to assess the evidence placed on record by both parties and \ndetermine whether sufficient grounds subsist for us to enhance the \ncompensation so awarded. \n\n15. \n\nIn this regard, it would be appropriate to refer to the table prepared \nby the High Court, which, in its decision, has aptly summarised the \ndifferent evidence produced by the parties as follows:\n\nDigital Supreme Court Reports\f[2024] 10 S.C.R.  \n\n1717\n\nSr. \nNo.\n\nEx. No Vasika \n\nDated\n\nNo.\n\nSale \nConsideration \n(In Rs.)\n\nArea of \nLand Sold \n(K.M.S)\n\nRate Per \nacre\n\nVillage\n\nSale Deeds Produced by the respective parties in the Award dated: \n06.01.2017,01.03.2017, 19.07.2017, 20.07.2017, 03.10.2017, 01.08.2017\n\nSale Deeds Produced by the Landowners\n\n1.\n\nP2\n\n1539\n\n2.2.2010\n\n1,75,000\n\n2.\n\nP3\n\n960\n\n27.8.2010 32,27,000\n\n3.\n\nP4\n\n387\n\n31.5.2010 3,36,000\n\n4.\n\nP5\n\n1725\n\n17.12.2010 2,81,000\n\n5.\n\nP6\n\n1707\n\n9.3.2010\n\n2,62,500\n\n6.\n\nP7\n\n2076\n\n24.1.2011\n\n5,25,000\n\n7.\n\nP8\n\n2187\n\n7.2.2011\n\n3,50,000\n\n8.\n\nP9\n\n4633\n\n18.1.2012 7,50,000\n\n9.\n\nP10\n\n2186\n\n7.2.2011\n\n2,10,000\n\n50 Sq. \nYds.\n\n922 Sq. \nYds.\n\n96 Sq. \nYds.\n\n75 Sq. \nYds.\n\n75 Sq. \nYds\n\n150 Sq. \nYds.\n\n100 Sq. \nYds.\n\n140 Sq. \nYds.\n\n30 Sq. \nYds.\n\n1,69,40,000 Tauru\n\n1,69,40,000 Tauru\n\n1,69,40,000 Tauru\n\n1,81,33,867 Tauru\n\n1,69,40,000 Tauru\n\n1,69,40,000 Tauru\n\n1,69,40,000 Tauru\n\n2,59,28,571 Tauru\n\n16,94,000\n\nTauru\n\n10 P76\n\n1220\n\n4.7.2011\n\n10,18,87,500 66k (1320 \n\n1,23,50,000 Tauru\n\nSale Deeds Produced by the State\n\nM)\n\n11 RW1/C 2481\n\n29.8.2011\n\n3,25,000\n\n12.5 M\n\n41,60,000\n\nTauru\n\n12 RW1/D 1220\n\n21.06.2012 60,00,000\n\n13 RW1/E 1802\n\n6.8.2012\n\n17,25,000\n\n14 RW1/F 3798\n\n25.11.2011 60,00,000\n\n15 RW1/G 1779\n\n3.8.2012\n\n18,25,000\n\n1 Acre 4 K \n(240 M)\n\n3K-9M \n(69M)\n\n1 Acre 4k \n(240 M)\n\n3K-13M \n(73 M)\n\n40,00,000\n\nTauru\n\n40,00,000\n\nTauru\n\n40,00,000\n\nTauru\n\n40,00,000\n\nTauru\n\nHorrmal (Deceased) Through His LRs & Ors. v.  State of Haryana & Ors.\f1718 \n\n[2024] 10 S.C.R.\n\n16 RW1/H 4339\n\n13.03.2013 8,32,500\n\n17 R8\n\n1724\n\n17.12.10\n\n2,00,000\n\n18 R9\n\n1591\n\n01.12.10\n\n4,80,000\n\n19 R10\n\n1304\n\n20.10.2010 10,23,750\n\n225 Sq. \nYds.\n\n10 M\n\n17 M\n\n4K-11M \n(91M)\n\n1,79,08,000 Tauru\n\n32,00,000 Gvarka\n\n45,17,648 Gvarka\n\n18,00,000 Gvarka\n\n20 R11\n\n1396\n\n3.11.2010\n\n1,05,000\n\n5M\n\n33,60,000 Gvarka\n\n21 R12\n\n2116\n\n31.1.2011\n\n2,31,000\n\n330 Sq. \nYds.\n\n33,88,000 Gvarka\n\n22 R13\n\n1851\n\n29.12.2010 1,05,000\n\n5M\n\n33,60,000 Gvarka\n\n23. R14\n\n2124\n\n1.2.2011\n\n53,000\n\n2.5M\n\n33,92,000 Gvarka\n\n24. R15\n\n2243\n\n14.2.2011\n\n1,63,350\n\n25 R16\n\n1404\n\n8.11.2010\n\n75000\n\n26 R18\n\n2211\n\n9.2.2011\n\n36,300\n\n9M\n\n6M\n\n2M\n\n29,04,000 Gvarka\n\n20,00,000 Gvarka\n\n29,04,000 Gvarka\n\n16.  Upon  further  examination  of  the  details  of  this  table,  it  seems  to \nus that these exemplars can be classified in the following manner: \n(a)  sale  instances  executed  prior  to  the  issuance  of  Section  4 \nnotification;  and  (b)  sales  instances  executed  after  the  issuance \nof the Section 4 notification. Thereupon, we have taken the liberty \nof  further  representing  this  recalibrated  categorisation  in  a  tabular \nform as follows:\n\nPre-Section 4 \nnotification\n\nAppellants\n\nP2-P8, P10\n\nPost Section-4 \nnotification\n\nP9 and P76\n\nRespondents\n\nR8-14, R16, R18\n\nR15, RW1/C-H\n\n17.  Having distinguished between the two sets of sale instances executed \nbefore and after the issuance of the Section 4 notification, we would \nnow  proceed  to  determine  whether  the Appellants  are  entitled  to \ncompensation at a rate higher than the one determined by the High \nCourt. \n\n18.  The process of assessing or affixing compensation is not tethered \nto precision but is rather aimed at a nuanced estimation of pertinent \nfactors. This task is governed by Section 23(1) of the Land Acquisition \nAct of 1894, which mandates that, in determining compensation for \n\nDigital Supreme Court Reports\f[2024] 10 S.C.R.  \n\n1719\n\nacquired land, the Court must consider the ‘market value’ of the land \nas of the ‘date of publication of the notification under Section 4’. The \n‘market value’ is to be assessed with reference to factors such as \nstanding crops and trees, the severance of part of the land, damage \nto movable or immovable property or earnings, the need to relocate \none’s residence or business, and any loss of profits from the land \nbetween the publication of the declaration under Section 6 and the \nCollector’s assumption of possession.\n\n19.  This  Court  has  through  various  judicial  precedents,  including  a \nthree-judge bench decision in Special Land Acquisition Officer v. \nT. Adinarayan  Setty,3  held  that  the  ‘market  value’  connotes  the \nprice that a willing buyer would pay to a willing seller, taking into \naccount  the  land’s  current  conditions  and  its  advantages  and \npotentialities. For this, typically, the best approach is the comparable \nsales method, under which the bona fide sale exemplars of similar \nlands  are  relied  upon  to  ascertain  the  market  value  of  the  land \nunder  acquisition.  However,  to  ensure  that  the  valuation  is  just \nand  proper,  this  Court  has  explained  that  such  sale  exemplars \nmust satisfy certain criteria, including that: (a) the sale must be a \ngenuine transaction; (b) the sale deed must have been executed \naround  the  time  of  the  Section  4  notification;  (c)  the  land  must \nbe  situated  near  the  acquired  land;  (d)  the  nature  of  the  land \ncovered in the sale instance must be similar to the acquired land;  \nand  (e)  the  size  of  the  plot  covered  by  the  sale  instance  should \nbe comparable to the land acquired.4 \n\n20.  Apart from satisfying these factors, it is also imperative that the sale \nexemplars reflect the price of the land on the ‘date of publication of \nthe notification under Section 4’. On account of this express condition, \nthere are numerous instances where this Court has laid down that \nthe sale exemplars executed after the Section 4 notification should \nnot ordinarily be relied upon.5 This is grounded in the reasoning that \nonce the acquisition process begins, it can impact the valuation of \nthe  land,  rendering  subsequent  sale  exemplars  to  be  potentially \ninaccurate reflections of the true valuation of the acquired land. This \n\n3 \n\n4 \n\n5 \n\n[1959] Supp. 1 SCR 404 : AIR 1959 SC 429\n\nShaji Kuriakose v. Indian Oil Corporation Ltd. (2001) 7 SCC 650.\n\nGeneral  Manager,  Oil  and  Natural  Gas  Corporation  Ltd.  v.  Rameshbhai  Jivanbhai  Patel,  2008  (14) \nSCC 745; Maya Devi v. State of Haryana (2018) 2 SCC 474. \n\nHorrmal (Deceased) Through His LRs & Ors. v.  State of Haryana & Ors.\f1720 \n\n[2024] 10 S.C.R.\n\nprinciple was cogently addressed by this Court in A. Natesam Pillai \nv. Tahsildar,6 which held that the commencement of acquisition often \nleads to an increase in the market values of adjacent lands, thereby \ndiscrediting post-notification transactions as reliable indicators of the \nacquired land’s value.\n\n21.  Having  been  equipped  with  the  factors  to  be  considered  while \nselecting  a  comparable  sale  instance  to  draw  an  estimate  from,  it \nis perhaps suitable to tackle the core issue and ascertain which of \nthe sale exemplars produced before us may be most appropriate to \nbe utilised in this exercise.\n\n22. \n\nIn the case at hand, the High Court and the Reference Court have \ndisagreed on what sale exemplars could be used to determine fair \ncompensation.  While  the  Reference  Court  relied  on  Ex  P76,  the \nHigh  Court  has  rejected  the  same  because  it  was  executed  after \nthe  issuance  of  the  Section  4  notification.  Nevertheless,  the  High \nCourt  has  fallen  prey  to  the  same  error  and  has  relied  upon  the \nRespondents’  sale  exemplars,  which  were  also  executed  after  the \nacquisition had already begun.\n\n23.  As discussed above, post-notification sales can only be considered \nwhen better evidence is not available on record and when the party \nrelying on it can convincingly demonstrate that there has been no \nupward trend in market prices due to the acquisition.7 Consequently, \nin light of this analysis, the sale deeds numbered P9, P76, R15 and \nRW1/C-H, which were executed after the date of the issuance of the \nSection 4 notification, will invariably have to be excluded from any \nfurther consideration, save and except for exceptional and compelling \ncircumstances.\n\n24.  Apart  from  these  sale  deeds  that  were  not  proximate  temporally, \nwe also deem it appropriate to exclude the sale deeds that are not \ncomparable geographically. It is now a firmly entrenched principle of \nlaw that, in the ordinary course, sale exemplars of lands located in \nthe surrounding villages should generally not be relied upon, as land \nvaluation may vary significantly by locality. In the landmark decision of \n\n6 \n\n7 \n\n[2010] 10 SCR 1 : (2010) 9 SCC 118\n\nKaran Singh v. Union of India (1997) 8 SCC 186; Rishi Pal Singh v. Meerut Development Authority (2006) \n3 SCC 205\n\nDigital Supreme Court Reports\f[2024] 10 S.C.R.  \n\n1721\n\n25. \n\nKanwar Singh v. Union of India,8 this Court held that sale exemplars \nof lands situated in an adjacent village cannot be used to determine \nthe market value of the acquired land since such lands may differ in \nterms of quality and other attributes. On this ground, the sale deeds \nenumerated  Ex.  R8  to  Ex.  R16  and  Ex.  R18  shall  also  have  to  be \nexcluded  from  consideration,  as  they  pertain  to  a  different  village, \nnamely Gwarka, whereas the acquired land is situated in village Tauru.\n\nIn  light  of  the  exclusions  made  thus  far,  we  are  presently  left  with \nsale deeds numbered Ex. P2 to Ex. P8 and Ex. P10. In this context, \nthe  Respondents  have  sought  to  argue  that  considering  the  total \narea of the land in these sale deeds being very small in size, they \nare  also  liable  to  be  discarded.  True  it  is,  that  such  sale  deeds \nought not to directly form the basis for determining the rate at which \ncompensation is to be awarded. Indeed, a thorough review of relevant \nprecedents  in  this  backdrop  does  reveal  that  smaller  parcels  of \nland  conventionally  command  higher  prices.  Relying  on  such  sale \nexemplars also, especially when only single solitary such instances \nare presented, may thus not be appropriate.9 \n\n26.  However, there is no bar in law against considering sale exemplars of \nsmaller plots, provided they are subjected to adequate developmental \ncharges.  The  rationale  behind  applying  such  cuts  lies  in  the \nfact  that  smaller  plots  often  command  higher  prices  due  to  their \ndeveloped nature, whereas a larger tract of land which is acquired \nfor development may require significant allocation for creating roads, \nparks,  essential  services,  etc.10 Accordingly,  these  sale  exemplars \ncan be relied upon only after applying appropriate cuts. This Court in \nChimanlal Hargovinddas v. LAO,11 authoritatively ruled that when \nvaluing a large block of land, appropriate deduction must be made \nfor setting aside areas for roads, open spaces and dividing the land \ninto smaller plots suitable for the construction of buildings.\n\n27. \n\nIn the instant case, there are multiple sale deeds of smaller plots, \nand  these  represent  the  best  available  evidence  for  estimating \ncompensation. Since there is no legal impediment to considering such \n\n8 \n\n9 \n\n10 \n\n11 \n\n[1998] Supp. 2 SCR 505 : (1998) 8 SCC 136\n\nAdministrator General of West Bengal v. Collector, Varanasi (1988) 2 SCC 150\n\nIbid; Atma Singh v. State of Haryana and Others (2008) 2 SCC 568\n\n[1988] Supp. 1 SCR 531 : (1988) 3 SCC 751\n\nHorrmal (Deceased) Through His LRs & Ors. v.  State of Haryana & Ors.\f1722 \n\n[2024] 10 S.C.R.\n\nsale deeds, the logical progression in the compensation estimation \nprocess  would  be  to  identify  the  most  suitable  sale  deed(s)  for \ndetermining the market value and subsequently, to apply adequate \ndeductions on the same. The solution to this state of flux may thus be \nfound in the case of Mehrawal Khewaji Trust v. State of Punjab,12 \nwhere this Court laid down as follows:\n\n“....It  is  clear  that  when  there  are  several  exemplars  with \nreference  to  similar  lands,  it  is  the  general  rule  that  the \nhighest of the exemplars, if it is satisfied that it is a bona fide \ntransaction, has to be considered and accepted. When the \nland is being compulsorily taken away from a person, \nhe  is  entitled  to  the  highest  value  which  similar  land \nin the locality is shown to have fetched in a bona fide \ntransaction entered into between a willing purchaser and \na willing seller near about the time of the acquisition.”\n\n[Emphasis supplied]\n\n28.  This  view  has  been  reiterated  in  Sh.  Himmat  Singh  v.  State  of \nM.P.,13 where a three-judge bench of this Court consolidated various \nprecedents to affirm that in circumstances where there are multiple \nsale  deeds  available  for  consideration,  the  Court  shall  rely  on  the \nhighest  valued  exemplars  unless  the  prices  fall  within  a  narrow \nrange,  in  which  case  calculating  an  average  of  the  values  therein \nmay be more congruous. \n\n29. \n\nIn these extenuating circumstances, there exists significant disparity \namong the sale exemplars presently under consideration. Amongst \nthese sale exemplars, being Ex. P2-P8 and Ex. P10, the highest sale \ninstance values the land at Rupees 1,81,33,867 per acre, whereas \nthe lowest values it at Rupees 16,94,000 per acre. Given this wide \nrange  and  in  light  of  the  judicial  precedents  cited  above,  we  are \nof the opinion that we should rely upon the highest sale exemplar, \nwhich is Ex. P5, rather than solely depending upon an average of the \nmultiple sale deeds produced before us. Despite the Respondents’ \nvehement contention that Ex. P5 should not be relied upon owing to \nit being a significantly smaller parcel of land—the detailed analysis \n\n12 \n\n13 \n\n[2012] 4 SCR 24 : (2012) 5 SCC 432\n\n(2013) 16 SCC 392\n\nDigital Supreme Court Reports\f[2024] 10 S.C.R.  \n\n1723\n\nconducted above indicates no reason why Ex. P5 cannot be utilised \nto  determine  the  amount  of  compensation  to  be  awarded  to  the \nAppellants for the acquired land.\n\n30.  Thus, having established the sale exemplar being relied upon and \nconsequentially the base price to be Rupees 1,81,33,867 per acre, we \nnow proceed to the aspect of deductions to be applied to the amount \nso determined. In this regard, there is no hard and fast rule on the \namount  of  deduction  to  be  applied  towards  development  charges. \nInstead,  such  deductions  may,  for  the  purpose  of  making  a  small \narea of land comparable to larger tracts, range from a minimum of \n20% to a maximum of 75%.14 \n\n31.  Since  the  degree  of  application  of  cuts  is  essentially  a  question \nof  fact  dependent  on  the  unique  circumstances  of  each  case,  the \nparticulars  to  be  reckoned  with  in  determining  the  extent  of  such \ndeduction  often  include  a  myriad  of  factors,  such  as  the  relative \ndifference in the size of the land in the sale exemplar vis a vis the \nacquired  land,  proximity  to  a  road,  nearness  to  developed  areas, \netc.15 Additionally,  several  decisions  have  also  taken  into  account \nthe  nature  of  the  lands  because  of  the  stark  difference  that  may \nexist between the valuation of an agricultural or undeveloped land \nand the sale price of a small developed plot in a private layout.16 \n\n32.  Circling back to the facts of the present case, it is evident that the \nland in Ex. P5 is similar in nature to the acquired land, both being \nagricultural  land.  Its  proximity  to  the  acquired  land  and  the  fact \nthat  it  is  situated  in  the  same  village  of  Tauru,  are  relevant  when \ndetermining the extent of deductions to be applied in calculating the \ncompensation to be granted to the Appellants. Additionally, what is \nalso of utmost importance is that the value of the land is corroborated \nby surrounding circumstances, which point towards its potentiality. \nAlthough Ex. P76 cannot be relied upon since it was executed after \nthe Section 4 notification, it nonetheless reflects the land’s potential \nfor  being  used  other  than  for  agricultural  purposes.  Moreover,  the \nacquired land’s strategic location near the Bus Stand, Grain Market \n\n14  Balwan Singh v. State of Haryana and others, 2022 SCC Online SC 637; Chandrashekar v. LAO (2012) \n\n1 SCC 390\n\n15  Subh Ram v. State of Haryana (2010) 1 SCC 444\n\n16 \n\nIbid.\n\nHorrmal (Deceased) Through His LRs & Ors. v.  State of Haryana & Ors.\f1724 \n\n[2024] 10 S.C.R.\n\nand Main Bazaar, besides being located near Palwal-Sohna-Rewari \nState  Highway,  as  well  as  its  proximity  to  the  Industrial  Township \nat Bhiwadi, and nearby schools and colleges, further supports the \nassertion that the land possesses immense potentiality. \n\n33.  On the face of these distinctive factors lies the challenge of ascertaining \nthe appropriate extent of deduction to be made. As already established, \njudicial precedents dictate that the amount of deduction to be applied \ntowards developmental charges can range from anywhere between \n20% to 75%. On the one hand, we must acknowledge and recognise \nthe stark disparity between the size of the land covered by the sale \nexemplar and the acquired land. On the other hand, it is incumbent \nthat we take note of the various advantageous factors associated with \nthe acquired land at the time of issuance of the Section 4 notification. \nA balanced approach in adjudicating this particular issue is therefore \nnecessary.  Considering  these  militating  aspects,  we  cannot  justify \napplying deduction at either extreme end of the spectrum. A prudent \ncourse of action might be to steer a middle path, aiming for a range \napproximately between 46% to 50%.\n\n34.  Having said that, even if we were to apply the higher end of deductions \nfrom this middle course, at 50%, the compensation to be granted to \nthe Appellants would still surpass the amount initially determined by \nthe LAC and would in fact, be closer in range to the rate granted by \nthe Reference Court. \n\n35.  Alternatively, and only to bolster our above arrived conclusion, even \nif  the  principle  of  averaging  were  applied,  the  most  suitable  sale \ninstances for this purpose, as discussed earlier, would be Ex. P2 to \nEx. P8 and Ex. P10, which are noted to be in close proximity to the \nacquired land. Upon evaluation, the average price of these lands is \nRupees 1,49,71,733 per acre, which exceeds the sale consideration \nshown in most comparable sale examples. This leaves no room for \ndoubt  that  the  compensation  awarded  by  the  Reference  Court,  at \nthe rate of Rupees 92,62,500 per acre, was neither excessive nor \nbeyond the fair and just value of the acquired land.\n\n36.  However, considering the totality of the circumstances and recognizing \nthat  the  subject  land  has  not  been  acquired  for  profiteering  or \ncommercial  purposes,  but  primarily  for  the  development  of  a \nresidential  area,  we  find  it  appropriate  to  rely  on  the  valuation \n\nDigital Supreme Court Reports\f[2024] 10 S.C.R.  \n\n1725\n\nreflected  in  the  best  exemplar,  Ex.  P/5,  as  a  fair  and  reasonable \nbasis for compensation.\n\n37.  Thus, upon careful consideration, we are of the considered opinion \nthat  the  High  Court  erred  in  reducing  the  valuation  of  the  land \nand affirming the figures granted by the LAC. As demonstrated by \nour  analysis  above,  the  evaluation  conducted  by  the  Reference \nCourt  was  nearly  accurate  and  aligned  with  the  evidence  of  the \nsale deeds and potentiality, despite the fact that the sale exemplar  \nEx.  P76,  on  which  it  relied  upon,  may  not  have  been  ideal,  given \nthe circumstances and its commercial nature.\n\nE.  Conclusion\n\n38.  For  the  reasons  stated  above,  these  appeals  are  allowed,  the \nimpugned  leading  judgment  dated  23.08.2022  of  the  High  Court, \nas well as all other judgments following the said leading judgment \nwhich are under challenge in this batch of appeals, are hereby set \naside,  and  the  compensation  amount  granted  by  the  Reference \nCourt is hereby restored.\n\n39.  The compensation amount, if already not paid, wholly or partly, as \nper the award of the Reference Court, shall be paid to the Appellants \nand other land-owners along with all the statutory benefits including \ninterest, within eight weeks.\n\n40.  All the matters stand disposed of in the aforementioned terms.\n\nResult of the case: Appeals allowed.\n\n†Headnotes prepared by:  Harshit Anand, Hony. Associate Editor \n\n(Verified by: Kanu Agrawal, Adv.)\n\nHorrmal (Deceased) Through His LRs & Ors. v.  State of Haryana & Ors.\f"}