Potentiality Of Land Is Also Taken Into Consideration While Assessing Market Value: Supreme Court

The Supreme Court reiterated that potentiality of the land is also taken into consideration while assessing the market value.

The Court was dealing with a batch of Civil Appeals, challenging the Judgment of the Punjab and Haryana High Court’s Single Bench which maintained the award of Rs. 55,71,010/- per acre as ordered by the Reference Court.

The two-Judge Bench comprising Justice B.R. Gavai and Justice K.V. Viswanathan elucidated, “It is also well settled that potentiality of the land is also to be taken into consideration while assessing the market value. It has been held that potentiality is the use to which the land is put to use or reasonably capable of being put to use.”

Senior Advocates S.B. Upadhyay, Kavita Wadia, and Gagan Gupta appeared for the Appellants while Additional Advocate General (AAG) Alok Sangwan appeared for the Respondents.

Facts of the Case

Out of the 27 matters in the batch, 11 matters pertained to the acquisition pursuant to the notifications under Sections 4 and 6 of the Land Acquisition Act, 1894 (LA Act). They pertained to the villages Malpura and Kapriwas. By a Judgment, the Supreme Court had allowed the Appeals of the land losers and enhanced the compensation to Rs. 1,49,14,975/- per acre along with other statutory benefits. Insofar as the other 16 matters were concerned, they pertained to the acquisition in village Dharuhera and were the subject matter of acquisition by a Section 4 notification. By the said notification, lands of the Appellants were proposed to be acquired for Institutional Sector 5A under the Haryana Urban Development Authority Act, 1977. A declaration under Section 6 was issued and the Land Acquisition Collector (LAC) determined the market value of the land at Rs. 21 lakhs per acre based on the Divisional Level Land Rate Fixation Committee report, though the demand of the landowners was Rs. 2 crores per acre. Other statutory benefits were allowed and a total compensation of Rs. 12,46,27,371/- was awarded to all the landowners whose lands were acquired pursuant to the notification.

The Appellants filed Petitions under Section 18 LA Act seeking a reference for appropriate enhancement. Applying 60% deduction for development costs, the Reference Court fixed the market value at Rs. 67,12,050/- per acre along with statutory benefits. In appropriate cases, compensation for super structure was also awarded. The land losers filed an Appeal and batch before the High Court and the Haryana State also filed Appeals challenging the award. Simultaneously, there were developments before the High Court in Appeals filed by the land losers and the beneficiary in the reference. The High Court allowed the Appeals of land losers and dismissed the cross objections of the beneficiary and enhanced the compensation from Rs. 67,12,050/- per acre to Rs. 1,21,33,320/- per acre. The land losers, being aggrieved, filed Special Leave Petitions (SLPs) before the Apex Court which were later converted into Civil Appeals. The High Court confirmed the judgment of the Reference Court and dismissed the Appeals of the landowners as well as the State. Hence, the landowners approached the Apex Court.

Reasoning

The Supreme Court in view of the facts and circumstances of the case, noted, “Having arrived at the base value unlike the Reference Court, we are inclined to apply de-escalation @ 12 p.a. for one year and for the remaining five months an additional 6% on the base value. So doing, we arrive at the figure of Rs.1,23,37,668/- per acre.”

The Court arrived at the figure of Rs. 1,18,37,668/- as the base value on which statutory benefits under Section 23(1-A), 23(2) & 28 of the LA Act in accordance with law has to be paid after deducting the amounts already paid to the landowners.

“The appellants shall be paid a sum of Rs.1,18,37,668/- per acre and statutory benefits under Section 23(1 A), 23(2) & 28 of the LA Act in accordance with law after deducting the amounts already paid. Civil Appeal Nos. arising out of the Special Leave Petitions will be covered by the Besco (supra) judgment, namely, Civil Appeal No. 5376 of 2023. However, they will not be entitled to interest for the period of delay in filing/delay in refiling after delayed filing of the appeal(s)”, it directed.

Accordingly, the Apex Court partly allowed the Appeals and set aside the High Court’s Judgment.

Cause Title- Ram Kishan (Since Deceased) Through His LRs Etc. v. State of Haryana & Ors. (Neutral Citation: 2025 INSC 441)

Appearance:

Appellants: Senior Advocates S.B. Upadhyay, Kavita Wadia, Gagan Gupta, AORs R. C. Kaushik, Sureshan P., Ajit Kumar Ekka, Nishant Kumar, Ananta Prasad Mishra, Advocates Varun Jangra, Rajinder Kataria, Twinkal Kataria, Anil Gaur, Tannu, Shivam Yadav, Tushar Mahajan, Rohan Yadav, Sunil Kumar, Gaurav Prakash Pathak, and Ashutosh Anand.

Respondents: AAG Alok Sangwan, AOR Akshay Amritanshu, Advocates Sumit Kumar Sharma, Rajat Sangwan, Shikhar Narwal, Pragya Upadhyay, and Drishti Saraf.

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