The Supreme Court said that land compensation should be based on principles of equity, justice, and fairness. The case involved land acquired in April 2008 for developing the Chaudhary Devi Lal Industrial Model Township.
New Delhi: The Supreme Court stated that compensation for land acquisition should not be determined mechanically but should be guided by principles of equality, equity, and justice.
A bench comprising Justices Surya Kant and Ujjal Bhuyan emphasized that a key principle in land acquisition law is that lands with similar location and development potential should receive equitable compensation unless clear and objective distinctions warrant otherwise.
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The bench cautioned against an “excessively positivist approach” in land acquisition matters, noting,
“It is well understood that the very exercise of assessing compensation is antithetical to rigid formalism. Compensation cannot be assessed in a mechanical or formulaic manner but must be guided by considerations of equality, equity, and justice.”
This ruling arose from a series of cross-appeals filed by the Haryana State Industrial and Infrastructure Development Corporation and various landowners disputing the amount of compensation awarded by the Punjab and Haryana High Court for land in the villages of Fazalwas and Kukrola in Gurugram district.
The bench observed that the acquisition process began in April 2008, with the stated public purpose being the construction of the Chaudhary Devi Lal Industrial Model Township. It added that determining compensation for compulsory acquisitions under the Land Acquisition Act of 1894 is fundamentally an exercise in equity.
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Instead of being a “precise science,” the law of compulsory acquisition in India aims to uphold principles of justice, equality, and fairness.
The bench stated,
“This ethos is reflected in the procedural framework of the 1894 Act and has been further refined by its successor statute, the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013,”
The court highlighted that it has consistently maintained that determining market value and corresponding compensation must take into account the increase in land prices over time.
It added,
“Given the inherently dynamic nature of real estate markets, any assessment of land value cannot remain static but must reflect prevailing economic conditions, infrastructural developments, and increasing demand,”
The bench partly allowed the appeals from the landowners of Kukrola Village and modified the High Court’s May 2022 ruling. It upheld the High Court’s decision to grant compensation for the “outer belt,” which refers to lands beyond five acres from NH-8, at Rs 62,14,121 per acre.
For the “inner belt,” which includes lands adjacent to NH-8 up to a depth of five acres, the bench awarded compensation equivalent to that of village Fazalwas, amounting to Rs 1,21,00,000 per acre. The High Court had essentially categorized the lands acquired from these two villages into the “inner belt” and the “outer belt.”
The apex court clarified that the “inner belt” pertains to lands adjacent to NH-8 within a depth of five acres, while the “outer belt” consists of lands beyond that boundary.
Case Title: Krishan Kumar v. State of Haryana