2025 INSC 638

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REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

Civil Appeal Nos. _________/2025

(Arising out of SLP (C) Nos. 9732-9734/2023)

Krishan Kumar …Appellant(s)

versus

State of Haryana and others …Respondent(s)

WITH

Civil Appeal No. ____/2025

(Arising out of SLP (C) No. …/2025 – Diary No. 39178/2022)

Civil Appeal No. ____/2025

(Arising out of SLP (C) No. …/2025 – Diary No. 39180/2022)

Civil Appeal No. ____/2025

(Arising out of SLP (C) No. 20055/2023)

Civil Appeal Nos. ____/2025

(Arising out of SLP (C) Nos. 20003-20006/2023)

Civil Appeal Nos. ____/2025

(Arising out of SLP (C) Nos. 20008-20009/2023)

Civil Appeal Nos. ____/2025

(Arising out of SLP (C) No. 9735-9739/2023)

Civil Appeal No. ____/2025

(Arising out of SLP (C) No. 20007/2023)

Civil Appeal Nos. ____/2025

(Arising out of SLP (C) Nos. 23895-23897/2023)

Civil Appeal No. ____/2025

(Arising out of SLP (C) No. …/2025 – Diary No. 48299/2023)

Civil Appeal No. ____/2025

(Arising out of SLP (C) No. …/2025 – Diary No. 50895/2023)

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J U D G E M E N T

SURYA KANT, J.

Leave granted.

2. The instant batch of cross-appeals have been preferred by the Haryana

State Industrial and Infrastructure Development Corporation (HSIIDC)

and various landowners, challenging the quantum of compensation

awarded by the High Court of Punjab and Haryana at Chandigarh

(High Court) for the land situated in the villages of Fazalwas and

Kukrola, Tehsil Manesar, District Gurgaon, State of Haryana.

3. The High Court has conclusively determined the quantum of

compensation through various identical impugned orders. However, for

the purposes of lucidity, we have sought to refer to HSIIDC v. Pinky

Yadav and others,

1

and Kanwar Sain Jain and another v. State of

Haryana and others,

2

which may be considered as the ‘lead

judgments’ for the villages of Kukrola and Fazalwas, respectively.

4. The aforementioned decisions have enhanced compensation for the

acquired lands in both villages, specifically for the lands abutting

National Highway-8 (Delhi-Jaipur Road) (NH-8), up to the depth of 5

acres to INR 87,24,885 per acre for Kukrola and INR 1,21,00,000 per

acre for Fazalwas. Further, the High Court has also retained the

compensation awarded by the Reference Court for lands situated

1 RFA-4959-2015 (O&M) and other connected cases.

2 RFA-4437-2014 (O&M) and other connected cases.

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beyond the marker of depth of 5 acres i.e. INR 62,14,421 per acre for

both the villages.

A. FACTS

5. At this juncture, it is imperative to briefly advert to the factual

circumstances giving rise to the instant appeals:

5.1 The acquisition proceedings for the subject lands commenced vide a

Notification, issued on 25.04.2008 by the State of Haryana, under

Section 4 of the Land Acquisition Act, 1894 (1894 Act), proposing the

acquisition of a total of 3510 acres 5 kanals and 1 marla of land,

spread across the villages of Fazalwas, Kukrola, Kharkhri, Bas Lambi,

Mokalwas, Seharavan, and Fakharpur, District Gurgaon. The public

purpose of the acquisition was to build Chaudhary Devi Lal Industrial

Model Township (Township). This Township was planned as an

integrated complex for industrial, commercial, and other public utilities

in this area.

5.2 Considering that the scope of adjudication in the present batch of

appeals is limited to the rates of compensation qua the lands of villages

of Kukrola and Fazalwas alone, we have deemed it fit to restrict this

factual reiteration to these villages only. It is pertinent to mention here

that out of the total area sought to be acquired by the common Section

4 Notification, 221 kanals and 4 marlas of land was situated within the

revenue estate of Kukrola, and 435 kanals 14 marlas of land was

situated within Fazalwas.

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5.3 Following the Section 4 Notification, a declaration came to be issued by

the State on 09.03.2009 under Section 6 of the 1894 Act, followed by

notices under Section 9 thereof. Subsequently, the District Revenue

Officer-cum-Land Acquisition Collector, Gurgaon (LAC) issued two

different Awards under Section 11 on the same date, i.e. on

24.08.2009. The Award No. 20 pertained to Fazalwas, and Award No.

21 dealt with Kukrola. Both Awards uniformly determined the quantum

of compensation for these villages to be INR 30,00,000 per acre, based

on prevalent rates supplied by the District Collector, Gurgaon.

Additionally, solatium at the rate of 30% as well as an additional

amount of 12% per annum formed part of the Awards.

5.4 Being dissatisfied with the amount of compensation awarded by the

LAC, landowners from both villages filed Reference Petitions under

Section 18 of the 1894 Act. The Reference Court, vide its common

Award passed on 19.10.2013 enhanced the compensation for Kukrola

from INR 30,00,000 to INR 62,14,421 per acre. While doing so, the

Reference Court primarily relied upon a sale deed, i.e. Ex. P-1 dated

05.06.2006, produced by the landowners. It granted an escalation of

10% per annum over the sale exemplar, noting the high potentiality of

the acquired lands, and citing their proximity to the NH-8 as well as the

Kundli-Manesar-Palwal Expressway (KMP Expressway), which at that

time was still at its planning stage. Over and above these

considerations, the Reference Court also deemed it fit to apply a

development cut of 30% on the determined quantum of compensation.

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5.5 Similarly, relying upon the above order enhancing compensation for

land acquired in Kukrola and having given due weightage to the fact

that these villages existed in close proximity to one another , the

Reference Court also enhanced the compensation for Fazalwas from

INR 30,00,000 to INR 62,14,421 per acre vide the Award dated

15.11.2013. The Reference Court found that in the absence of reliable

sale exemplars qua Fazalwas, the previously pronounced Award with

respect to the closely situated Kukrola was the most appropriate

yardstick to determine compensation.

5.6 However, it seems that the Reference Court’s Award(s) left both, the

State and the landowners, to be equally aggrieved, thus culminating in

several Regular First Appeals (RFA) before the High Court. In this

scenario, the High Court clubbed these RFAs and passed common self-

speaking judgments for each of the villages, which we have previously

referred to as the ‘leading judgments’. Any appeal that was not

specifically decided by the ‘leading judgments’, but related to the same

subject-acquisitions were settled thereafter via identical order(s)

following the same reasoning.

5.7 The High Court has, vide the impugned judgments, found it

appropriate to partly allow the landowners’ appeals, by modifying the

compensation for the acquired lands. The High Court arrived at its

conclusion having adopting the ‘belting’ method and assessing different

quanta of compensation for lands abutting the NH-8 up to a depth of 5

acres, and for lands situated beyond that depth. In regards to Kukrola,

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the High Court determined that lands closer to NH-8 were valued at

INR 87,34,885 per acre, and refused to apply any development cut on

them, placing reliance on a co-ordinate Bench’s decision in Jai Singh

vs. State of Haryana and others.

3

Whereas, insofar as Fazalwas was

concerned, the High Court diverged from the Reference Court’s view of

ignoring the sale deeds on record, and relied upon Ex. P -4 dated

13.04.2006 to arrive at INR 1,21,00,00 per acre as the just

compensation for lands abutting NH-8, after granting 10% escalation

per annum.

5.8 Needless to say, in both these cases, the compensation determined by

the Reference Court was sustained for acquired lands that were

situated beyond the depth of 5 acres calculated from NH-8, i.e. at INR

62,14,421 per acre. Notably, while the High Court was not inclined

towards applying a development cut for these lands, it nevertheless

thought it prudent to do so owing to the lack of any other evidence

reflecting the true value for such lands.

5.9 Both sides, namely the HSIIDC and the landowners from Kukrola and

Fazalwas, have approached this Court assailing the determination of

compensation by the High Court.

B. CONTENTIONS

6. Before we proceed to identify the issues requiring conclusive

determination, it is apposite to refer to the elaborate contentions

3 RFA-3000-2016 (15.11.2021).

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furthered on behalf of the parties. For convenience, we have clubbed

the parties into three distinct groups: (i) landowners from Kukrola; (ii)

landowners from Fazalwas; and (iii) HSIIDC/State of Haryana.

7. The landowners from village Kukrola, while assailing the impugned

judgment(s) and inter alia claiming enhancement of compensation ,

made the following submissions:

a) The villages of Kukrola and Fazalwas are adjacent to each other

and virtually indistinguishable as far as the market value of their

land is concerned. This fact was given credence by the LAC and

the Reference Court, which assessed the same market value for

both the villages. However, the value assessed by the High Court

for each village denotes a huge difference of approximately INR

34,00,000 per acre for the lands abutting NH-8 up to a depth of 5

acres, which is untenable and liable to be set aside.

b) Sale exemplar Ex. P-1 dated 05.06.2006 pertains to a large area of

4.5 acres within the acquired land, approximately two years prior

to issuance of Section 4 Notification, wherein market value was

INR 73,00,000 per acre. Hence, no development cut could be

applied on this value. However, the Reference Court arbitrarily

applied a 30% development cut on all of the acquired land, which

was thereafter accepted by the High Court, albeit only for land

beyond the depth of 5 acres. There was no rationale or good reason

for applying such a cut.

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c) Although village Kukrola is more proximate to the National Capital

Region than the village Fazalwas, the compensation for the land

acquired in Kukrola has been unjustly assessed at a rate lower

than that of Fazalwas.

d) The acquired lands form a compact block with access provided by

three roads including the MES Air Force Road (Taoru -

Mohammadpur Road). That apart, proximity to the KMP

Expressway and NH -8 speak to the high potentiality of these

lands. Potentiality of the land is further evident from the fact that

the present acquisition had been notified for the development of

the Township for industrial, commercial, and other public utilities.

e) The High Court has created an artificial classification and

accorded differing values to lands closer to the NH-8, and those

farther to the same.

8. The landowners of village Fazalwas, while building upon the

contentions of landowners belonging to Kukrola, likewise canvassed the

following submissions in a bid to seek further increase in the quantum

of compensation awarded by the High Court:

a) As per sale deed Ex. P-10, which is dated 25.07.2008, only 3

months after the preliminary notification, land in Fazalwas had

been sold at INR 2,05,71,428/- per acre. This establishes that

there was a phenomenal increase in that area in a short span of

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time, to the extent of 50%. However, the High Court has merely

granted an annual escalation of 10%.

b) Previous judgments of this Court in Udho Dass v. State of

Haryana & Ors. ,

4

General Manager Oil and Natural Gas

Corporation Ltd. v. Rameshbhai Jivanbhai Pat el & Anr.,

5

and

Anjali Molu Dessai v. State of Goa and Anr. ,

6

has well

acknowledged that the enhancement/escalation over the sale

exemplar can be to the extent of 25% to 30%.

c) It is a well-settled principle of law that landowners are entitled to

compensation in parlance with the highest sale transaction.

Reliance in this regard was placed on Mehrawal Khewaji Trust

(Registered) Faridkot & Ors. v. State of Punjab & Ors.

7

d) Certain sale deeds dated 21.12.2006, 07.03.2007, and

11.04.2008, which weren’t originally exhibited before the Reference

Court, showcase that the land in Fazalwas was valued and sold at

rates upwards of INR 2 crores.

9. In stark contrast, Mr. Alok Sangwan, learned Senior Additional

Advocate General for the State of Haryana, representing the HSIIDC,

sought to counter the plea for enhancement of compensation qua both

the villages. He vehemently advocated for upholding the LAC Award as

4 2010 (12) SCC 51.

5 2008 (14) SCC 745.

6 2010 (13) SCC 710.

7 2012 (5) SCC 432.

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the just quanta of compensation for the acquired lands. We may, in this

regard, advert to his submissions for each village, in seriatim:

i. Pertaining to Kukrola

a) Sale exemplar Ex. P-1 dated 05.06.2006, relied upon by the High

Court is a sale deed executed for commercial purpose; wherein

approximately 4 acres of land was purchased by a developer -

company at INR 73,00,000 per acre. Any reliance upon such an

instance would be highly unsafe as private developers generally

purchase land for speculative gains by maximizing profits on an

artificial market-rise.

b) It is settled law that when the market value of a large tract of

agriculture land is determined with reference to the sale

transaction of a smaller portion of land, as in the present case, it

is necessary to make deductions towards development cost to

arrive at an appropriate value for the undeveloped large tracts of

land.

c) This Court in Basavva v. LAO ,

8

Kanta Devi v. State of

Haryana,

9

and Subh Ram v. State of Haryana ,

10

has imposed a

cut of 50% to 75% towards development of such like acquired

lands. Despite the subject-land being undeveloped (leading to

HSIIDC’s added expenditure), the High Court has not imposed

8 (1996) 9 SCC 640.

9 (2008) 15 SCC 201.

10 (2010) 1 SCC 444.

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development cuts at an appropriate rate, in adherence with the

principles laid down by this Court.

d) Vide sale deed Ex. RW1/2 dated 11.01.2007, land in Kukrola was

sold at the rate of INR 18,46,153 per acre and vide sale deed Ex.

RW1/2 dated 12.11.2007, land was sold at INR 25,00,689 per

acre. These are the closest sale deeds prior to the date of Section 4

Notification, and thus the High Court ought to have relied upon

the same for determining market value of the acquired land(s). The

LAC, in this context, had in any case thus awarded more than the

just quantum of compensation, and its Award should have been

sustained by the High Court.

e) The landowners in the present acquisition do not suffer any

imagined ‘dual loss’ since there are several mitigating factors

which assure that their interests are safeguarded: compensation

for standing crops or trees at the time of Collector’s taking

possession; an additional 12% per annum of such market value for

the period commencing from the date of publication of Section 4

Notification up to the date of the Collector’s Award/date of taking

possession of land; a 30% solatium on such market value; were all

provided to the landowners to ensure that they do not suffer any

loss due to compulsory acquisition of their lands.

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ii. Pertaining to Fazalwas

a) Vide sale deed Ex. R-4 dated 20.12.2007, more than 2 acres of

land was sold in Fazalwas @ INR 29,85,645 per acre. Ex. R-4 and

Ex. R-5 are the closest sale deeds prior to the date of notification,

which ought to have been made the basis by the High Court for

determining compensation. Be that as it may, the LAC has already

awarded compensation at a rate higher than the amounts reflected

in these exemplars, and it deserves to be upheld by this Court.

b) Sale exemplar Ex. P-4 dated 13.04.2006, which was relied upon by

the High Court, is a sale deed executed for a commercial purpose

where approximately 2 acres of land in Fazalwas were purchased

by one M/s Viroma Infrastructure Pvt. Ltd. at the rate of INR 1

crore per acre. Such a sale instance should have been outrightly

eliminated from consideration by the High Court. Similarly, sale

deeds Ex. P-3 and P-5 also related to lands purchased for

commercial purposes by one Rising Reality Pvt. Ltd.

c) The High Court has erroneously mentioned in para 7.6 of the

impugned judgment that the HSIIDC has not filed any appeal

against the enhancement of compensation by the Reference Court.

It is a fact that HSIIDC also filed RFAs against the Reference

Court’s Award dated 15.11.2013 and the same were also decided

by the High Court vide the same impugned judgment(s).

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C. ISSUES

10. Having tendered our conscientious consideration to the rival

contentions, the material on record and the factual circumstances that

contextualise the present appeals, we find that the following issues fall

for our deliberation:

i. Whether the High Court erred in awarding differing compensation

amounts for lands acquired in the villages of Kukrola and

Fazalwas?

ii. Whether the quantum of compensation awarded is appropriate for

both these villages; and if not, on what basis should the market

value be assessed?

D. ANALYSIS

D.1. Issue No. 1: Concerning the distinctive compensation amounts

awarded to landowners from Kukrola and Fazalwas

11. The landowners from Kukrola have earnestly contended for parity with

the compensation awarded to landowners from Fazalwas. It is

undisputed that both the LAC and the Reference Court uniformly

assessed the value of the acquired lands across both villages. The High

Court, however, was the first forum to disturb this equality. We shall

now examine whether this disparity is justified or if parity ought to be

restored.

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12. As noted earlier, the High Court, through the ‘leading judgments’,

calculated compensation by adopting the belting method and

accordingly awarded differing amounts to lands situated closer to the

NH-8, in comparison to those farther away. To further explicate, the

High Court essentially categorized the lands acquired from the villages

of Kukrola and Fazalwas into ‘two belts’: the ‘inner belt’ and the ‘outer

belt.’ The inner belt refers to the lands abutting NH-8 up to a depth of 5

acres, while the outer belt comprises the lands beyond that depth.

13. The High Court created further distinction within the ‘inner belt’

category of lands by granting different rates of compensation to those

situated in the revenue estate of Kukrola from those in Fazalwas.

Pursuantly, the compensation was fixed at INR 1,21,00,000 per acre for

Fazalwas and INR 87,34,885 per acre for Kukrola.

14. It is trite law that adjacent lands or villages possessing similar potential

and advantages must be compensated equitably, unless distinctions

are clearly and substantially justified.

11

In this context, this Court in

Land Acquisition Officer v. Karigowda ,

12

aptly encapsulated the

legal position regarding compensation for adjacent villages:

“75. It is a settled principle of law that lands of adjacent

villages can be made the basis for determining the fair

market value of the acquired land. This principle of law is

qualified by clear dictum of this Court itself that

whenever direct evidence i.e. instances of the same

villages are available, then it is most desirable that

the court should consider that evidence. But where

such evidence is not available court can safely rely

11 Mehrawal Khewaji Trust v. State of Punjab, (2012) 5 SCC 432.

12 2010 (5) SCC 708.

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upon the sales statistics of adjoining lands provided

the instances are comparable and the potentiality and

location of the land is somewhat similar. The evidence

tendered in relation to the land of the adjacent villages would

be a relevant piece of evidence for such determination. Once

it is shown that situation and potential of the land in two

different villages are the same then they could be awarded

similar compensation or such other compensation as would

be just and fair.

…

77. In this regard we may also make a reference to the

judgment of this Court in Kanwar Singh v. Union of

India [(1998) 8 SCC 136 : AIR 1999 SC 317 : JT (1998) 7 SC

397] where sale instances of the adjacent villages were

taken into consideration for the purpose of determining the

fair market value of the land in question and their

comparability, potential and acquisition for the same purpose

was hardly in dispute. It was not only permissible but

even more practical for the courts to take into

consideration the sale statistics of the adjacent

villages for determining the fair market value of the

acquired land.”

[Emphasis supplied]

15. Turning to the facts of the case in hand, it is undisputed that the lands

in both villages were acquired through a common Section 4 Notification

for a common purpose, namely, the establishment of the Township. It is

equally incontrovertible that the lands in Kukrola and Fazalwas, which

are the subject of these appeals, abut either the KMP Expressway or

NH-8, and in some areas, both. This geographical factum also

differentiates these villages, from other villages whose lands were also

acquired for construction of the subject-Township.

16. We may, in this respect, also advert to the findings of the Reference

Court in its Award concerning Fazalwas, wherein it unequivocally relied

on the enhancement of compensation in Ku krola and, mutatis

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mutandis, applied the same to Fazalwas, as can be gleaned from the

following passages:

“16. … However this court has already assessed the market

value of the acquired land of adjoining village Kukrola in

award Ex.R1/X of this Court at the rate of Rs.6214421/- per

acre alongwith all statutory benefits. A perusal of the said

award Ex.R1/X passed by this court on 19.1.13 in case Pinki

Yadav Vs. Hr. State clearly shows that the date of

notification under section 4 of the Act in that case was

identical that is 25.4.08. In this case the date of

announcement of award is also identical that is 4.8.2009.

The purpose in both the awards is i dentical and

market value as assessed by LAC was also same that is

at the rate of Rs.30 lac per acre.

17. It is evidence from the site plan Ex.R6 placed on file by

the respondents that the land of village Fajalwas, involved in

this case is opposite to the land of village Kukrola towards

the southern side on KMP express highway. National

Highway No.8 passes through village Kukrola, Fazalwas,

Fakarpur. Both the villages Kukrola and Fazalwas are

situated within the close proximity, therefore, I have

no hesitation to assess the market value of the

acquired land at the rate of Rs.6214421/- per acre.”

[Emphasis supplied]

17. Viewed collectively, the foregoing facts clearly indicate that the lands

acquired from Kukrola and Fazalwas were virtually indistinguishable

and that their trajectories before various judicial fora were undeniably

intertwined. The LAC initially assessed these lands homogeneously,

relying on Circle Rates. Similarly, the Reference Court engaged in a

tautological exercise, wherein the compensation awarded for Kukrola

formed the basis for that granted to Fazalwas. Despite these

considerations, the High Court proceeded to substantially differentiate

the compensation awarded to the two villages as far as the lands

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abutting NH-8 were concerned, creating a disparity of approximately

INR 35 lakhs per acre.

18. The sole apparent justification for this differentiation appears to be the

existence of distinct sale deeds for Kukrola and Fazalwas. In

Karigowda (supra), this Court recognized that sale exemplars from

adjacent villages may only be relied upon in the absence of direct

evidence. However, in our considered view, a rigid adherence to this

principle is unwarranted in the present case. We say so for the

following reasons:

a) A fundamental principle in land acquisition jurisprudence is that

lands with similar locational and developmental potential must be

compensated equitably unless clear, objective distinctions justify

otherwise. Neither the LAC nor the Reference Court in this case

have returned any specific finding that the potential or advantages

of the acquired lands in the two villages differ significantly. No

cogent evidence or expert report has been placed on record to

justify the lower compensation awarded to Kukrola or the higher

rate granted to Fazalwas. The ‘leading judgments’ instead provide

no factual basis to support this artificial classification between the

two sets of landowners. In such an evidentiary vacuum, the High

Court ought not to have relied solely on differing sale deeds to

assign vastly disparate compensation rates. Arbitrary

differentiation in compensation, based on superfic ial

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considerations, necessarily violates settled constitutional

principles of fairness and equality.

b) The High Court should have refrained from proceeding on the

basis of a singular sale deed to award widely divergent

compensation between the two villages. In the absence of

corroborative evidence—such as multiple comparable sale

transactions, expert valuation reports, or any factual finding

indicating a genuine difference in market potential—the use of an

isolated transaction to justify such a disparity is per se erroneous.

Without further evidence to establish that the lands in Kukrola

differ in their developmental potential from those in Fazalwas, the

differential compensation lacks a sound logical foundation and

cannot be sustained.

c) Moreover, a glaring inconsistency arises in the present case: while

lands abutting NH-8 within a depth of 5 acres have been awarded

markedly different rates of compensation, lands situated beyond

this depth have been treated uniformly. What is particularly

problematic is that the most homogeneous and comparable

category—namely, the lands adjacent to NH -8—have been

assessed disparately, whereas the more heterogeneous lands

farther from the highway, which ostensibly vary significantly in

terms of location and developmental potential, have been treated

alike. Such an approach not only appears incongruous but also

contrary to the principles of equality and fairness that must govern

Page 19 of 37

the exercise of determining compensation under the 1894 Act.

Consistency, therefore, demands the application of a uniform

standard across both villages Kukrola and Fazalwas. This is

especially true when we consider their relative distances from the

National Capital Region, with Kukrola being closer thereto.

d) In any case, we must caution against an excessively positivist

approach in matters of land acquisition. 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.

19. It is thus evident that irrespective of whether the sale deed relied upon

pertains to Kukrola or Fazalwas, the same set of exemplars must be

applied uniformly across both villages. Artificial boundaries created for

administrative convenience cannot be allo wed to obstruct the

application of the fundamental principle of fairness.

20. Consequently, we find no justification for the disparity in compensation

for lands from both villages situated in the inner belt. The High Court

itself has offered no factual finding to support the conclusion that lands

abutting NH-8 in Kukrola must be valued differently from those in

Fazalwas. Accordingly, we hold that the differential compensation is

unsustainable and must be set aside. The quantum of compensation

across both villages should remain at par.

Page 20 of 37

D.2. Issue No. 2: Ascertaining the quantum of compensation for the

acquired lands

21. Having established the interdependent nature of these appeals, we now

proceed to examine the correctness of the compensation awarded to the

landowners. We find that this issue necessitates a two-pronged inquiry:

i. Whether the High Court was justified in adopting the belting

method for determining compensation?

ii. Whether the quantum of compensation awarded for the acquired

lands was correct?

D.2.1: Determining the correctness of applying the belting method

22. The ‘belting method’ is a recognized technique in land acquisition

whereby the land is divided into distinct zones based on its proximity to

key infrastructural assets, such as a National Highway. This method

operates on the principle that lands closer to such assets inherently

possess greater market potential and thus warrant a higher

compensation as compared to those situated further away.

13

In

essence, it constitutes an exception to the general rule of uniformity in

awarding equitable compensation. Typically, the belting method is

applied in large-scale acquisitions where the land is non-homogeneous

and the benefits of proximity to major infrastructure can be clearly

delineated.

13 Bijender v. State of Haryana, AIR 2017 SC 5811.

Page 21 of 37

23. It is well established that the belting method must be grounded in

objective evidence of differential developmental potential.

14

We are

inclined to endorse its use in the present cases for several reasons.

Firstly, the tracts of land acquired—approximately 28 acres from

Kukrola and 54 acres from Fazalwas—are sufficiently large to warrant

an internal sub-classification. Secondly, the potential for development

varies markedly across these lands, particularly given their proximity to

NH-8 and the KMP Expressway. Thirdly, the documentary evidence

indicates that lands closer to these highways have historically fetched

significantly higher sale rates compared to those located further away,

where values seemingly approximate t he prevailing circle rates.

Fourthly, market data consistently show that properties within the

inner belt command a premium, further justifying a differential

valuation. Lastly, we may also observe that the yardstick of

differentiating the belts being a depth of 5 acres, calculated from NH-8,

is reasonable, considering the site plans and the total area sought to be

acquired.

24. In light of the foregoing analysis, we find that this is a fit case for the

application of the belting method, and the High Court was wholly

correct in its artificial division of the acquired lands into two categories

for the purposes of awarding differential compensation for the same.

14 Ibid.

Page 22 of 37

D.2.2. On quantum of compensation

25. Having concurred with the High Court’s view on the adoption of the

belting method, we shall now test the appropriateness of the amounts

of compensation awarded in these appeals.

26. The determination of compensation for compulsory acquisitions under

the 1894 Act is fundamentally an exercise in equity. Rather than being

a precise science, the law of compulsory acquisition in India strives to

uphold the enduring principles of justice, equality, and fairness. This

ethos is reflected in the procedural framework of the 1894 Act and has

been further refined by its successor-statute, i.e. the Right to Fair

Compensation and Transparency in Land Acquisition, Rehabilitation

and Resettlement Act, 2013. The 1894 Act used to provide clear

guidelines for the Land Acquisition Officer/Collector to arrive at a fair

quantum of compensation and balance the competing interests of the

acquiring authority and the expropriated landowner(s). These

guidelines, which are kept deliberately open-ended, therefore, act as a

compass for the LAC to navigate the complex task of determining fair

compensation for landowners whose property is being appropriated by

the State for public purposes.

27. In particular, Section 23 of the 1894 Act enumerates the factors that

are to be considered for determining compensation. The foremost

consideration this provision mandates is the market-value of the land

at the date of the publication of the Section 4 Notification. ‘Market

Page 23 of 37

value’ itself is as nebulous a term as it is well-defined. This Court has

laid down, through its consistent opinions, that the market value must

be understood as that price or rate which a willing buyer would pay to

a willing seller at any given point in time. That being said, it is

important to caveat that this price reflects the land’s conditions,

advantages, disadvantages, location, and potentialities.

28. There is no gainsaying that the willing buyer-willing seller dynamic as

well may invite a lot of subjectivity, due to the fiction it seeks to

perpetuate. As a counter-measure, over the course of various decades,

this Court has come to recognise the ‘comparable sales method’ as

perhaps the best mode of determining compensation for an acquired

land. While the reasons for this may be manifold, it seems to us that

the advantage of using the comparable sales method in land acquisition

is that it provides the Court with tangible, real-world examples of

transactions, eliminating the need for speculation about how a willing

buyer and seller might negotiate a price. In Shaji Kuriakose v. Indian

Oil Corporation Ltd.,

15

this Court occasioned to lay down certain

descriptive factors that must be fulfilled before a sale deed can be used

for the comparison set-out hereinabove. These include, inter alia: (i)

temporal proximity of the sale exemplar to the date of the Section 4

Notification of the subject-acquisition; (ii) genuineness of the

transaction; (iii) geographical nearness of the land sold via the sale

15 (2001) 7 SCC 650.

Page 24 of 37

exemplar to the land sought to be acquired; (iv) comparable sizes of

lands; and (v) similarity in the nature of the lands.

29. Reverting to the facts of the case at hand, the parties before us have

tendered several sale deeds in evidence, which we shall meticulously

examine to ascertain if the High Court’s awarded compensation merits

interference. However, before we can initiate the comparative process, it

seems imperative that we first reproduce the tables prepared by the

Reference Court and relied upon by the High Court, concerning the

relevant sale exemplars pertaining to Kukrola and Fazalwas. The

following tables, thus, aptly summarise the sale instances brought on

record:

i. Kukrola

Sr.

No.

Ex.

No.

Vasika

No.

Dated Area of

Land Sold

(K-M)

Sale

Consideration

(INR)

Rate per

acre

Village

Sale Deeds Produced by the Landowners:

1. P-1 5316 05.06.2006 36-6 3,31,23,750 73,00,000 Kukrola

2. P-2 951 13.04.2006 17-11 2,19,37,500 1,00,00,000 Fazalwas

3. P-3 18897 07.12.2006 12-17 1,66,87,500 1,03,89,105 Fazalwas

4. P-4 18629 04.12.2006 14-5 1,78,12,500 1,00,00,000 Fazalwas

Sale Deeds Produced by the HSIIDC:

1. RW1/2 21211 11.01.2007 1-6 3,00,000 18,46,153 Kukrola

2. RW1/3 16465 12.11.2007 2-18 9,06,500 25,00,689 Kukrola

Page 25 of 37

ii. Fazalwas

Sr.

No.

Ex.

No.

Vasika

No.

Dated Area of

Land Sold

(K-M)

Sale

Consideration

(INR)

Rate per

acre

Village

Sale Deeds Produced by the Landowners :

1. P-3 18629 04.12.2006 14-5 1,78,12,500 1,00,00,000 Fazalwas

2. P-4 951 13.04.2006 17-11 2,19,37,500 1,00,00,000 Fazalwas

3. P-5 18897 07.12.2006 12-17 1,66,87,500 1,03,89,105 Fazalwas

4. P-10 - 25.07.2008 1-8 36,00,000 2,05,71,428 Fazalwas

Sale Deeds Produced by the HSIIDC:

1. R-4 - 20.12.2007 20-18 78,00,000 29,85,645 Fazalwas

2. R-5 - 05.12.2007 1-6 4,35,000 26,76,923 Fazalwas

30. As mentioned earlier, this Court has found on several occasions that

comparable sale deeds may only be considered if they pre -date the

Section 4 Notification, which would consequently be truly reflective of

the market value of the acquired land at the relevant time. Since the

Section 4 Notification in the instant case was issued on 25.04.2008, it

is apparent that, with the notable exception of Ex. P -10 dated

25.07.2008, none of the sale deeds produced on record fall beyond that

pivotal date. Consequently, we cannot eliminate these sale exemplars

on the ground of temporal proximity alone, except for Ex. P-10, which

we are inclined to discard. Although a growing body of jurisprudence

now favours considering even post-Section 4 Notification sale deeds

with the appropriate deductions,

16

the instant case does not call for

16 Chimanlal Hargovinddas v. Spl. LAO, Poona & anr., (1988) 3 SCC 751.

Page 26 of 37

such a departure because several other sale transactions on record

clearly satisfy the criteria of temporal proximity. Having sufficiently

characterised this factual context, we now proceed to ass ess the

correctness of the High Court’s determination of compensation.

31. In undertaking this inquiry, we find it most appropriate to bifurcate the

process of compensation determination, assessing the appropriate

compensation for each of the aforementioned ‘belts’ separately and in

turn:

D.2.2.1. The Outer Belt

32. We shall first consider the outer belt, wherein the High Court uniformly

maintained the rates finalised by the Reference Court, i.e. at INR

62,14,121 per acre for all lands situated beyond a depth of 5 acres

calculated from NH-8. It is best reiterated that to arrive at this figure,

the High Court relied upon sale exemplar Ex. P-1 dated 05.06.2006,

and applied a uniform escalation of 10% per annum on the same, apart

from a 30% development cut. It merits noting that while strictly

maintaining the Reference Court’s award for the outer belt, the High

Court commonly found that there existed no sound evidence on record

that spoke about the true market value of these lands.

33. The first question that captures our attention is which sale deed should

be considered as the most relevant sale exemplar for the purpose of

assigning a fair market value to the outer belt. The relevant exemplars

on record which may be examined are Ex. RW -1/2 dated 11.01.2007,

Page 27 of 37

Ex. R-4 dated 20.12.2007, and Ex. R-5 dated 05.12.2007—as these

parcels of land do not abut NH-8 or the KMP Expressway, and are also

located in the interiors of either of these villages, thus most closely

approximating the make-up of the outer belt.

34. We further find that Ex. RW-1/2 and Ex. R-5 merit rejection at the

threshold. We say so in view of the well-settled principle that sale

transactions involving smaller plots of land do not provide a reliable

basis for valuing large-scale acquisitions.

17

The sale deeds in question

pertain to plots measuring only 0.1625 acres each, a minute fraction of

the vast tracts of land acquired in the present case. This conclusion is

further reinforced by the fact that these sale deeds do not constitute

the best available evidence, particularly when more appropriate and

comparable sale transactions are available on record.

35. Likewise, we find Ex. R-4 to be unreliable, despite its apparent

comparability. A brief examination of the relevant site plans and Khasra

Nos. clearly establishes that the land covered under this sale deed is

situated at a considerable distance from both NH-8 and the then-

planned KMP Expressway . This distinguishing factor renders it

unsuitable for determining the compensation for the lands acquired

from Kukrola and Fazalwas, which enjoy significantly greater locational

advantages. Accordingly, Ex. R-4 is also liable to be excluded from

consideration.

17 Administrator General of West Bengal v. Collector, Varanasi, (1988) 2 SCC 150; ONGC

Ltd. v. Rameshbhai Jivanbhai Patel, (2008) 14 SCC 745.

Page 28 of 37

36. Having excluded the aforementioned sale deeds, we are left with the

exemplar that was relied upon by both the Reference Court and the

High Court, namely, Ex. P-1. Preliminarily, it is noteworthy that this

sale deed pertains to the largest tract of land on record, measuring

approximately 4.54 acres. Furthermore, a perusal of the site plans

confirms that the land conveyed under this transaction not only abuts

NH-8 but also extends significantly into the interiors of Kukrola. In our

considered view, Ex. P-1 constitutes the best available evidence for

determining compensation for the outer belt , a conclusion rightly

arrived at by the High Court. This is particularly so given the admitted

fact that no other comparable sale exemplar from the relevant time

period exists for this region. Indeed, the Courts below have categorically

found that no documentary evidence is produced to establish the

prevailing market value of lands situated in the interiors of Kukrola and

Fazalwas, as also pointed out earlier.

37. Having identified the relevant sale deed for analysis, we now turn to the

correctness of the escalation rates applied by the High Court. This

Court has consistently held that the determination of market value and

corresponding compensation must necessarily factor in the escalation

of land prices over time.

18

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. Accordingly, the application of

18 A. Natesam Pillai v. Special Tahsildar, Land Acquisition, Tiruchy, 2010 INSC 494.

Page 29 of 37

escalation rates serves the critical purpose of ensuring that landowners

receive fair compensation aligned with actual market trends , rather

than being constrained by outdated valuations.

38. In this instance, the significant temporal gap between the date of the

selected sale deed and that of Section 4 Notification necessitates the

application of an appropriate annual escalation to the sale price

disclosed by the exemplar. This Court has previously sanctioned

escalation rates ranging from 7.5% to 15%;

19

here, the High Court has

applied a rate of 10%, which seems to be just and fair. It is pertinent to

note that the lands in the subject villages were not centres of industrial

activities prior to Section 4 Notification—except for a few small

factories. The landowners, therefore, could not adduce any compelling

evidence to the contrary before the Reference Court. Nonetheless, given

the planning of the KMP Expressway , the proposed four-legged

intersection between NH-8 and the KMP Expressway and other

approach roads such as the MES-Air Force Road, it is inevitable that

land prices in these areas would not remain stagnant. We, therefore,

affirm the escalation rate of 10% applied over the chosen sale exemplar

as a balanced and appropriate adjustment.

39. Lastly, we ought to also analyse the deductions made on the

determined compensation, for the purposes of development —

colloquially known as a ‘development cut’. It goes without saying that to

determine the market value of a large tract of undeveloped agricultural

19 Valliyammal & Anr. vs Spl. Tahsildar (Laq) & Anr., (2011) 10 SCR 293.

Page 30 of 37

land (with potential for development) from a sale exemplar of a smaller

plot of land, deductions usually range from 20 to 75%.

20

That is not to

say, however, that such cuts are mandatory in all factual scenarios.

The rationale for applying such deductions is that smaller, developed

plots typically command higher prices, whereas a larger tra ct of

undeveloped land necessitates significant allocation for roads, parks,

and essential services. These sale exemplars can thus be relied upon

only after making appropriate deductions.

21

40. The High Court has, vide the impugned judgment(s), levied a

developmental cut of 30% on the acquired lands of Kukrola and

Fazalwas. While doing so, the Court has made an interesting

observation in the order pertaining to Kukrola:

“7.1 With regard to the land located in the interiors

beyond the depth of 5 acres, some amount of deduction

is required to be made in order to determine the true

market value. Therefore, 30% deduction as ordered by the

RC is maintained, though, the reasons given by RC are

different. Though, this Court is not inclined to apply

30% development cut, however, keeping in view the

fact that there is no evidence to prove the market value

of the land located beyond the depth of 5 acres,

therefore, going by the thumb rule, this Court applies

30% cut and the assessment made by the RC at the rate of

Rs.62,14,421/- is maintained.”

[Emphasis supplied]

41. Though the High Court has affirmed the 30% development cut without

any supporting reasons and only as a thumb rule, there is notably no

specific evidence led by the landowners to support the true price of the

20 Sajan v. State Of Maharashtra and ors., 2020 INSC 302; Lal Chand v. Union of India,

(2009) 15 SCC 769.

21 Chimanlal Hargovinddas v. Spl. LAO, Poona & anr., (1988) 3 SCC 751.

Page 31 of 37

lands, apart from the factum that the subject -acquisition is quite

sizeable. We, therefore, have no hesitation in upholding the reasonable

deductions applied by the High Court.

42. In summary, we find no reason to interfere with the High Court’s

determination of compensation for the outer belt. The sale exemplar

relied upon is both valid and comparable, while the escalation rate

applied and the development cut levied are fair and reasonable.

Accordingly, the compensation awarded for these lands warrants no

modification.

D.2.2.2: The Inner Belt

43. We lastly turn to perhaps the most contentious issue in these batch of

appeals, pertaining to the compensation awarded to the inner belt. In

this vein, the High Court has deemed it fit to award differing

compensations to landowners from Kukrola and Fazalwas at INR

87,34,885 and INR 1,21,00,000 per acre, respectively. It is thus

apparent that the High Court considered it appropriate to award lands

in the inner belt a premium, and interfered with the compensation

awarded by the Reference Court to arrive at the final figure.

44. Having already laid out the relevant legal principles and guidelines,

apart from having found that the compensation determination for both

these villages must be at par, the short question that still remains for

our consideration is as to which sale exemplar should be applied to the

Page 32 of 37

inner belt, and what escalation rate or deductions should it be

subjected to, to arrive at a fair and just final amount of compensation.

45. To that end, the sale deeds which merit our closer scrutiny are Ex. P-1

dated 05.06.2006, Ex. P -2 dated 13.04.2006, Ex. P -3 dated

07.12.2006, Ex. P-4 dated 04.12.2006, and Ex. RW-1/3 dated

12.11.2007—as these sale deeds abut the NH-8, similar to the

geographical make-up of the lands in the inner belt.

46. We first turn to the sale deeds produced by HSIIDC qua Kukrola, i.e.

Ex. RW-1/2 and RW-1/3, where lands were sold at rates approximating

INR 18,46,153 and INR 25,00,689 per acre, respectively. Pertinently,

the Reference Court ignored these sale exemplars due to the confines of

Section 25 of the 1894 Act, while the High Court refused to rely upon

the same as they were statedly o n the other side of NH-8, thus

disqualifying them from consideration. We are unable to foment

agreement with either of these stances, as these findings are largely

unsubstantiated.

47. The HSIIDC in this regard has vehemently urged that the

aforementioned sale deeds were in all probability the basis of the LAC

Award, who had granted compensation higher than that forming these

transactions @ INR 30 lakhs per acre. It is thus claimed that that the

market value assessed by the LAC deserves to be upheld, being just

and fair.

Page 33 of 37

48. Having bestowed our consideration to the reasons assigned by both the

Courts for rejecting the sale deeds produced by HSIIDC qua Kukrola,

we find that the same are not without their lacunae. Having said that,

we are also unable to find these sale exemplars reliable for our present

determination. We say so as one of the relied upon sale deeds, i.e. Ex.

RW-1/2 showcases a transaction at the rate of INR 18,46,153 per acre

for land that abuts NH-8, which seems prima facie unreliable as this

area has otherwise yielded substantially higher prices.

49. Moreover, as already noted above, several dozen acres of land were

acquired from village Kukrola alone through a common Section 4

Notification. In stark contrast, sale exemplars RW-1/2 and RW-1/3

both contemplate the sale of lands admeasuring a mere 0.1625 acres

and 0.3625 acres, respectively. While sale deeds of substantially

smaller plots generally depict higher prices, these sale deeds strangely

carry compensation rates which are lower than even the LAC’s Award.

We are, therefore, not inclined to rely upon these exemplars as well.

50. It seems to us that these errant sale exemplars do not represent the

true market value of the sold lands, especially when one considers the

statutory criteria of assessment of market value as envisaged under the

1894 Act. The fact that these sale deeds reflect market valuations

falling below even the compensation assessed by the LAC further

reinforces our determination to exclude them entirely. We hold so also

for the reason that the LAC’s Award for both villages was based entirely

on the Collector’s rates, i.e., INR 30 lakhs per acre for all types of land.

Page 34 of 37

It is well-established that the Collector’s rates, often referred to as the

statutory minimum, serve only as a baseline for compensation and

should not ordinarily be relied upon as the sole basis for determining

the Award.

22

In our considered view, these instances may have been

distress sales or outliers, which cannot be relied upon for arriving at

the rate of compensation with any modicum of certainty.

51. Having discarded the sale deeds HSIIDC sought to place reliance upon,

we turn to the various exemplars proffered by the landowners before

us, across both villages. A closer examination of the tables reproduced

in paragraph 29 above provides that Ex. P-3 dated 07.12.2006 denoted

the highest sale consideration, at INR 1,03,89,104 per acre, which

should be the chosen sale exemplar considering the relevant principles

elucidated hereinabove. We have also already put quietus on the issue

of parity between the villages, and thus it is irrelevant that the parcel of

land conveyed vide this deed lies in Kukrola or Fazalwas.

52. That being so, we are inclined to agree with the High Court’s approach

in the case of Fazalwas, where it chose to rely upon Ex. P-2 dated

13.04.2006 by virtue of which land abutting NH -8 was sold at INR

1,00,00,000 per acre. In other words, Ex. P -2 contemplates a

marginally lower sale price than Ex. P-3. The reason for this preference

lies squarely in the comparable sizes of these lands, with Ex. P -2

dealing with a larger plot of land, i.e. approx. 2.193 acres as compared

to the approx. 1.606 acres conveyed by Ex. P-3.

22 Ranvir Singh v. Union of India, (2005) 12 SCC 59; Mehrawal Khewaji Trust v. State of

Punjab (2012) 5 SCC 432.

Page 35 of 37

53. As regards the escalation rates, we are again unable to find fault with

the High Court’s reasoning in the case of Fazalwas, which applied a

generous escalation of 10% per annum, as there was a gap of about 2

years between the chosen sale exemplar and issuance of the Section 4

Notification in the present instance.

54. Finally, the HSIIDC has also pressed in aid the application of a

development cut/deduction on the inner belt, which the High Court

refused to apply. However, we are unable to concur with these

submissions, and instead see eye-to-eye with the view taken by the

High Court in the case of Kukrola. The inner belt—comprising lands

abutting NH-8 up to a depth of 5 acres—already commands a premium

due to its superior locational advantage and inherent develo pment

potential. The sale exemplars for this category reflect a market value

that fully incorporates these advantages. Typically, a development cut

is applied to account for the deficiencies or the cost of further

development in undeveloped land. However, in this instance, the inner

belt lands are broadly development-ready due to their proximity to

major infrastructure, which naturally elevates their market value. As

such, applying a development cut would unjustifiably reduce the

compensation, failing to reflect the true, enhanced value of these lands.

Consequently, we find no justification for imposing any development

cut on the inner belt.

55. Before parting with the consideration of the various sale deeds, we may

also at this stage note the submissions advanced on behalf of certain

Page 36 of 37

villagers from Fazalwas, who seek to place additional sale deeds on

record and benefit from the same. However, we decline to take any

additional evidence on record, which comprises such sale instances

which were never exhibited before the LAC or the Reference Court. It is

also noteworthy that these novel sale deeds deal with exceptionally

small parcels of land, thus necessarily fetching exorbitant prices and

rendering them utterly unworkable for any valid comparative effort.

56. Considering the foregoing analysis, it is evident that the differential

compensation awarded to Kukrola and Fazalwas for lands in the inner

belt lacks a sound evidentiary basis and violates the principle of equal

treatment for similarly situated landowners. The High Court’s reliance

on isolated sale exemplars, without sufficient justification for the

disparity, cannot be sustained. Given the established principles that

adjacent lands with comparable potential must be awarded parity i n

compensation, we find it appropriate to rectify this anomaly.

Accordingly, the compensation for lands abutting NH-8 up to a depth of

5 acres in Kukrola is enhanced to INR 1,21,00,000 per acre, bringing it

at par with Fazalwas. Thus, while the claims for enhancement beyond

this rate stand rejected, the appeals concerning Kukrola’s inner belt

lands succeed to the extent indicated above.

E. CONCLUSION

57. For the afore-stated reasons, we partly allow the appeals preferred by

the landowners from the village of Kukrola and modify the impugned

Page 37 of 37

judgment of the High Court dated 30.05.2022, with the following

directions:

i. The compensation granted for the ‘outer belt’, i.e. lands beyond 5

acres from NH-8 by the High Court at INR 62,14,121 per acre, is

upheld;

ii. The compensation granted for the ‘inner belt’ i.e. lands situated in

Kukrola and abutting the NH-8 up to a depth of 5 acres are

awarded parity with that of village Fazalwas, i.e. INR 1,21,00,000

per acre.

58. The appeals preferred by the landowners of village Fazalwas, and those

preferred by the State of Haryana/HSIIDC are dismissed on merits.

59. The instant appeals are thus disposed of in the above terms.

60. Consequently, pending interlocutory applications, if any, are also

disposed of.

61. Ordered accordingly.

..………….………..J.

(SURYA KANT)

..………….………..J.

(UJJAL BHUYAN)

NEW DELHI

DATED: 07.05.2025