2025 INSC 408 Civil Appeal No. 3998 of 2024 & Ors. Page 1 of 45

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 3998 OF 2024

MADHYA PRADESH ROAD DEVELOPMENT

CORPORATION

.....

APPELLANT

VERSUS

VINCENT DANIEL AND OTHERS ..... RESPONDENTS

W I T H

CIVIL APPEAL NO. 3999 OF 2024

CIVIL APPEAL NO. 4004 OF 2024

CIVIL APPEAL NO. 4005 OF 2024

CIVIL APPEAL NO. 4012 OF 2024

CIVIL APPEAL NO. 4002 OF 2024

CIVIL APPEAL NO. 4013 OF 2024

CIVIL APPEAL NO. 4006 OF 2024

CIVIL APPEAL NO. 4001 OF 2024

CIVIL APPEAL NO. 4000 OF 2024

Civil Appeal No. 3998 of 2024 & Ors. Page 2 of 45

CIVIL APPEAL NO. 4014 OF 2024

A N D

CIVIL APPEAL No.4003 OF 2024

J U D G M E N T

SANJIV KHANNA, CJI.

The issue raised in the present batch of appeals filed by the

appellant, Madhya Pradesh Road Development Corporation, relates to

the applicability of the “theory of deduction” for determining the

compensation payable under The Right to Fair Compensation and

Transparency in Land Acquisition, Rehabilitation and Resettlement

Act, 2013.

1

2. Before examining the legal position, it would be appropriate to set out

the facts in brief:

• By a Gazette Notification dated 12.09.2014, the Central

Government declared its intention of acquiring the stretch of land

falling within 3.4 km to 22.8 km of the Jabalpur-Mandla-Chilpi

1

Hereinafter, “Acquisition Act, 2013”.

Civil Appeal No. 3998 of 2024 & Ors. Page 3 of 45

section, in the district of Jabalpur, State of Madhya Pradesh. The

purpose of the acquisition was stated to be widening, four-laning,

maintenance, management and operation of National Highway

No.12-A. On 30.10.2014, the notification was also published in two

newspapers.

• By a Gazette Notification dated 02.02.2015, the land was declared

to have been acquired.

• On 31.08.2015, the Competent Authority and Land Acquisition

Officer, Collectorate, Jabalpur passed an award determining the

compensation payable for the land acquired. The award relies on

the mandate of Section 105(3) of the Acquisition Act, 2013 (as

amended).

2

It accordingly holds that for the acquisition in question,

provisions relating to the determination of compensation shall

apply in accordance with the First Schedule of the Acquisition Act,

2013. Further, provisions for rehabilitation and resettlement would

apply as per the Second Schedule, and those relating to

2

Section 105 (3) – The provisions of this Act relating to the determination of compensation in

accordance with the First Schedule, rehabilitation and resettlement in accordance with the

Second Schedule and infrastructure amenities in accordance with the Third Schedule shall apply

to the enactments relating to land acquisition specified in the Fourth Schedule with effect from 1st

January, 2015.

Civil Appeal No. 3998 of 2024 & Ors. Page 4 of 45

infrastructural amenities shall apply as per the Third Schedule of

the Acquisition Act, 2013.

• The First Schedule of the Acquisition Act, 2013 states that the

market value of the land has to be determined in accordance with

Section 26 of the Acquisition Act, 2013. Clause (a) to Section 26(1)

adopts the market value as specified under the Indian Stamp Act,

1899

3

. Based on the date of the Gazette Notification published as

per Section 11 of the Acquisition Act, 2013, i.e., on 12.09.2014, the

Competent Authority deemed it appropriate to compute the market

value according to the Collector’s Guidelines for the year 2014-

2015

4

. These guidelines have been formulated in the exercise of

the powers conferred under the Stamp Act. The Collector’s

Guidelines have been annexed as ‘Annexure P-1’ to the present

appeal.

• Paragraph 4.1 of the Collector’s Guidelines deals with municipal

corporation areas of Jabalpur amongst other districts. It provides

for the valuation of two kinds of land – converted agricultural land

and non-converted agricultural land. These are further divided into

3

Hereinafter, “Stamp Act”.

4

Hereinafter, “Collector’s Guidelines”.

Civil Appeal No. 3998 of 2024 & Ors. Page 5 of 45

Categories (A) and (B). Category (A) applies when the area of land

is less than or equal to 1000 square meters, while Category (B)

applies when the area of land exceeds 1000 square meters.

• The Competent Authority determined the concerned area to be

non-converted land of more than 1000 square meters, which

would fall under Category (B). According to the method prescribed

under Category (B), the first 1000 square meters are to be valued

in accordance with Category (A). This corresponds to the rate

applicable to residential plots set out in Form-1 of the Collector’s

Guidelines. The remaining area is to be valued at the rate for

agricultural land as specified in Form-3 of the Collector’s

Guidelines. In the present case, the Competent Authority applied

the rate for Village Katiyaghat, which is specified as

Rs.1,50,00,000 per hectare under Form-3. The Competent

Authority determined the value of the land to be Rs. 97,50,000.

Over this amount, the Competent Authority also factored in assets

attached to the land and the solatium payable.

• By following the aforesaid procedure, the total compensation

payable for the acquisition of the land belonging to Respondent

No. 1, Vincent Daniel, was calculated to be Rs. 2,05,42,164/-.

Civil Appeal No. 3998 of 2024 & Ors. Page 6 of 45

• Dissatisfied with the compensation, Respondent No. 1, Vincent

Daniel, as the other landowners, appealed to the Commissioner

against the decision of the Competent Authority. One of the

grounds raised in the appeal was that the rate at which the

compensation was awarded was significantly lower than the

market rate.

• The appellant, Madhya Pradesh Road Development Corporation,

filed its reply raising several contentions. They submitted that for

an undeveloped piece of land, the compensation was

disproportionately high. A portion of the land would have to be

foregone to develop roads, drainage, electricity poles, etc., which

would come at a significant expense. Therefore, it was argued that

the principles of compensation for developed lands would not

apply in the present case.

• The Commissioner in his arbitral award held that the Collector’s

Guidelines were binding. However, the Competent Authority had

made an error in applying the same. For 0.650 hectares of land

situated inside the Katiyaghat road, at Khasra No. 53 of

village/mauja Katiyaghat, Jabalpur, the rate of Rs. 12,000 per

square meter should have been applied for the first 1000 square

Civil Appeal No. 3998 of 2024 & Ors. Page 7 of 45

meters, while applying the rate of Rs. 1,50,00,000 per hectare for

the balance land. After adding 100% solatium and interest, an

additional amount of Rs. 2,21,11,562/- was found to be payable.

• Against the Commissioner’s award, the appellant, Madhya

Pradesh Road Development Corporation, preferred objections

before the District Court under Section 34(3) of the Arbitration and

Conciliation Act, 1996

5

. One of the contentions raised was that the

compensation should not have been awarded by solely relying

upon the Collector’s Guidelines, as the land was undeveloped.

• The objections were dismissed by the District Judge. It was

observed that the land in question was situated within the

municipal areas on which the Collector’s Guidelines were

applicable. It was noted that the compensation was enhanced in

compliance with the Collector’s Guidelines. Form-1 of the

Collector’s Guidelines prescribes the rate of Rs. 20,000 per square

meter for residential plots and Rs. 40,000 per square meter for

commercial ones on the Katiyaghat road. However, for the

residential areas inside the Katiyaghat road, the rate is Rs. 12,000

per square meter, which was rightly applied by the Commissioner.

5

Hereinafter, “Arbitration Act”.

Civil Appeal No. 3998 of 2024 & Ors. Page 8 of 45

It was also observed that the award passed was not in violation of

public policy and, therefore, Clause (b)(ii) to Section 34(2) of the

Arbitration Act would not be applicable.

• Consequently, the appellant, Madhya Pradesh Road Development

Corporation, preferred appeals under Section 37 of the Arbitration

Act before the High Court, which were dismissed by the impugned

judgment dated 13.04.2022.

• The impugned judgment dated 13.04.2022 passed by the High

Court of Madhya Pradesh, inter alia, distinguishes between the

provisions of the Land Acquisition Act, 1894

6

and the Acquisition

Act, 2013. It holds that according to Section 26(1) of the

Acquisition Act, 2013, if the market value as determined under the

Stamp Act is the highest of the other computed values, it will be

binding. The theory of deduction as applied by the courts in

determining the market value under the Acquisition Act, 1894, will

not apply when determining compensation under Section 26(1) of

the Acquisition Act, 2013. Thus, the judgments applying the theory

of deduction under the Acquisition Act, 1894 do not have any

precedential value under the Acquisition Act, 2013. The impugned

6

Hereinafter, “Acquisition Act,1894”.

Civil Appeal No. 3998 of 2024 & Ors. Page 9 of 45

judgment also refers to the Madhya Pradesh Preparation and

Revision of Market Value Guideline Rules, 2018

7

for the procedure

of calculating of the market value of land under the Stamp Act.

Lastly, the High Court states that it has limited power and

jurisdiction under Section 37 read with Section 34 of the Arbitration

Act to interfere with the award passed by the Commissioner.

3. In order to answer the issue before us, we would first refer to the theory

of deduction and the reasons for its application by this Court under the

Acquisition Act, 1894.

4. To compute compensation under the Acquisition Act, 1894, the general

threshold applied by the courts is to ascertain the market value of the

acquired land. This also includes its potential value with reference to

the conditions prevailing at the time of making a declaration under

Section 4(1) of the Acquisition Act, 1894.

8

The International Valuation

7

Hereinafter, “2018 Rules”.

8

4. Publication of preliminary notification and powers of officers thereupon.—(1) Whenever

it appears to the appropriate Government that land in any locality is needed or is likely to be

needed for any public purpose or for a company a notification to that effect shall be published in

the Official Gazette and in two daily newspapers circulating in that locality of which at least one

shall be in the regional language and the Collector shall cause public notice of the substance of

such notification to be given at convenient places in the said locality (the last of the dates of such

publication and the giving of such public notice, being hereinafter referred to as the date of

publication of the notification).

Civil Appeal No. 3998 of 2024 & Ors. Page 10 of 45

Standards Council states that the market value of the land represents

the estimated amount that a willing buyer would pay prudently to a

willing seller in an arm’s length transaction, without compulsion, on a

particular valuation date.

9

This estimate includes characteristics unique

to the land that would inflate or deflate its price but excludes special

concessions or considerations granted by anyone associated with the

sale. The buyer here refers to one who is motivated but is neither over-

eager nor determined to buy irrespective of the price quoted. Similarly,

the seller here is neither over-eager nor forced. Both parties are

assumed to be conducting the transaction in keeping with market

realities, rather than terms that are hypothetical or cannot be

anticipated to exist. The factual circumstances of the parties are not

part of this consideration.

5. In Smt. Tribeni Devi and Others v. Collector of Ranchi and Vice

Versa,

10

this Court acknowledged several methods for ascertaining the

market value of land, such as – (i) the opinion of experts; (ii) the price

paid in bona fide transactions for the purchase of adjacent lands

9

International Valuation Standards Council, International Valuation Standards 2025, effective 31

January 2025.

10

(1972) 1 SCC 480.

Civil Appeal No. 3998 of 2024 & Ors. Page 11 of 45

possessing similar advantages and disadvantages; and (iii)

capitalization of the actual and immediate prospective annual profits

from the land. However, this exercise must take into consideration

subjective features and special circumstances. Land values vary

based on their qualitative and quantitative attributes, location, proximity

to developed land, potential, etc. The lack of reliable local sale data,

coupled with variable land conditions, undermines accurate

assessment. Nevertheless, framing objective standards can help

arrive at an empirical value that most closely reflects the true market

price.

6. The theory of deduction, though not statutorily prescribed, has been

applied by courts to compute the compensation payable under the

Acquisition Act, 1894 primarily for two reasons. First, consideration of

the potential value of the land can result in arriving at an enhanced or

increased value, especially for undeveloped lands. Secondly, in

acquisitions of large underdeveloped lands, a significant portion of the

land would have to be utilised for making minimum amenities like

roads, drains, sewers, water and electrical lines available. Thus,

making the land usable would involve a substantial expense for the

buyer in the form of development charges.

Civil Appeal No. 3998 of 2024 & Ors. Page 12 of 45

7. The theory of deduction was applied in the case of Tribeni Devi

(supra), which was decided in 1971. Recently, in a 2017 decision in

Jag Mahender and Another v. State of Haryana and Others

11

as

well, the theory of deduction was applied to arrive at a fair and

reasonable market value. This judgment also states that the

prospective prices of smaller developed plots cannot be adopted to

determine the value of underdeveloped tracts of land. Further, the

peculiarities of the land – whether the same is plain or uneven, the soil

is soft or hard, whether the land is situated on a hill or is low-lying, etc.

are all relevant factors. A given parcel of land has multiple dimensions

– social, economic, territorial, and environmental. Accordingly, the

market value must be computed through a valuation model based on

attribute pricing rather than fixed prices. In some cases, sale deeds for

adjoining lands can be an ‘exemplar’, i.e., lands that are similarly

placed and have comparable attributes. However, computation of the

market value may require calibration, taking into consideration the

advantages and disadvantages of the acquired land relative to the

exemplars. The exemplars must be carefully chosen, especially as

11

(2017) SCC Online SC 2160.

Civil Appeal No. 3998 of 2024 & Ors. Page 13 of 45

lands are often heuristically grouped in localities at the same rate due

to a lack of specific data.

8. On the question of the quantum of deduction, in Jag Mahender

(supra), this Court held that the computed value can be reduced by

one-third to account for development charges, though in certain cases

deduction up to 50% has also been allowed while applying the theory

of deduction.

12

In Tribeni Devi (supra) this Court had deducted 33.3%

towards the cost of development.

9. In Lal Chand v. Union of India and Another,

13

this Court stated that

‘fair deduction’ for development has two components. First, the area

required to be utilised for development, and second, the cost of such

development. For instance, the Delhi Development Authority is

required to utilise as much as 40% of the area in the layout for roads,

drains, parks, playgrounds, civic amenities, community facilities, etc.

The cost of developing an underdeveloped land into a developed

layout is substantial and, in some cases, can be as much as 75% of

12

Haryana State Agricultural Market Board v. Krishan Kumar,

(2011) 15 SCC 297; Dy. Director,

Land Acquisition v. Malla Atchinaidu and Others, (2006) 12 SCC 87; Mummidi Apparao (DEAD)

THROUGH LRS. v. Nagarjuna Fertilizers and Chemicals Limited and Another, AIR 2009 SC 1506

and Lal Chand v. Union of India, (2009) 15 SCC 769.

13

(2009) 15 SCC 769.

Civil Appeal No. 3998 of 2024 & Ors. Page 14 of 45

the cost of the developed plot. At the same time, it was observed that

if the acquired land is in a semi-developed urban area and not in an

underdeveloped rural area, the deduction for development would be

minimal. Thus, the theory of deduction is fact and situation-specific.

10. This Court has also applied other principles, such as the “principle of

belting”, to arrive at an accurate market value. In Bijender and Others

v. State of Haryana and Another,

14

this Court observed that the

principle of belting is a judicially accepted method for determining the

market value of the acquired land fairly. It is applied when different

parcels of land with different survey numbers, having different

locations, are acquired and put together to form a large chunk of land.

This large chunk cannot be taken as a compact block. The acquired

land is usually divided into two or three belts depending upon the facts

of each case. The market value of the front road abutting the main road

is taken to fetch the maximum value whereas the second belt fetches

lesser value and the third belt, if carved out, would command a value

lower still.

14

(2018) 11 SCC 180.

Civil Appeal No. 3998 of 2024 & Ors. Page 15 of 45

11. The decision in Lal Chand (supra) is relevant for another reason. It

analyses whether the circle rates or guideline values fixed under the

Stamp Act can be relied upon for computing the market value, which

forms the basis for determining the compensation payable. It refers to

a series of judgments, including Jawajee Nagnatham v. Revenue

Divisional Officer, Adilabad, A.P. and Others

15

and Krishi Utpadan

Mandi Samiti. Sahaswan, District Badaun v. Bipin Kumar and

Another

16

, which, inter alia, hold that the market value under Section

23 of the Land Acquisition Act, 1894 cannot be fixed solely on the basis

of the rates mentioned in the basic valuation registers. These registers

are maintained to curb the under-valuation of land, a practice adopted

to evade the payment of proper stamp duty. Jawajee Nagnatham

(supra) observes that the basic valuation register is maintained to

ensure the collection of stamp duty under Section 47A of the Stamp

Act, as amended in Andhra Pradesh. Section 47A confers no express

power on the Government to determine the market value of land.

12. In its ratio, Lal Chand (supra) observes that the circle rate or guideline

value rate can only be considered a prima facie basis for ascertaining

15

(1994) 4 SCC 595.

16

(2004) 2 SCC 283.

Civil Appeal No. 3998 of 2024 & Ors. Page 16 of 45

the market value. The purpose of determination of circle rates through

the relevant guidelines is to protect the State’s revenue collection. The

judgment in Lal Chand (supra) also refers to R. Sai Bharathi v. J.

Jayalalitha and Others,

17

a case pertaining to the Prevention of

Corruption Act, 1988, wherein this Court observes that circle or

guideline rates fixed by the authorities under the Stamp Act are merely

prima facie rates prevailing in the area and are not final and

determinative. Thus, the guideline or circle rate fixed by the Collector

does not take away the right of a person to show that the property in

question is correctly valued. It is open, both to the registering authority

as well as the person seeking registration, to prove the actual market

value of the land/property before the authorities.

13. Lal Chand (supra) also draws a distinction between guideline values

prescribed by non-statutory valuation registers, and circle rates

determined by expert committees constituted under the Stamp Act.

State legislations can lay down a detailed procedure, assigning the

task of valuation to expert committees. The expert committees

comprise valuation specialists and officers from the Departments of

17

(2004) 2 SCC 9.

Civil Appeal No. 3998 of 2024 & Ors. Page 17 of 45

Revenue, Survey and Settlement, Public Works, etc. They must follow

a scientific process for the assessment of market values of different

types of lands. The valuation framework must prescribe distinct

methods for valuing land, plots, houses, and buildings, accounting for

variable factors. For agricultural land, such variables would include the

nature of the soil, location, nature of the crop, the yield for specified

years, proximity to roads, markets, etc. The valuation committees are

required to invite objections and suggestions from the public both

before the initial fixation of rates and during their periodic revision.

Circle rates computed through a detailed and scientific exercise would

be a relevant piece of evidence for determining the market value, being

equivalent to expert evidence.

14. As observed above, to account for the unique factors affecting a piece

of land, methods such as the comparative sale/exemplar method,

belting method and expert opinion method have been evolved through

judicial pronouncements to arrive at the accurate market value. The

computation of circle rates and market values is a complex exercise

that involves detailed research, data collection, and the use of scientific

methods. International standards reflect this complexity, noting that the

concept of market value takes on different colours depending on the

Civil Appeal No. 3998 of 2024 & Ors. Page 18 of 45

subject to which it is applied.

18

For example, the valuation of land

involves entirely different considerations from the valuation of financial

instruments. These standards also recognise the wide range of

variables that influence land valuation specifically, and the need for

distinct approaches to determine accurate market value. Authorities

and institutions must be cognizant of these aspects while forming

policies, as well as when giving meaning to legislation and interpreting

the law.

15. We now turn our attention to the statutory provisions of the Acquisition

Act, 1894 and the Acquisition Act, 2013. At the outset, we must observe

that the impugned judgment primarily refers to Section 23 of the

Acquisition Act, 1894 and Section 26 of the Acquisition Act, 2013 and

draws a distinction between the language of the two sections.

However, to address the issue before us, we must refer to a few other

provisions as well. We would like to refer to Sections 11, 15, 24 and 25

in addition to Section 23 of the Acquisition Act, 1894. For the

Acquisition Act, 2013, we would like to refer to Sections 23, 27 and 28

in addition to Section 26. However, for clarity, we have juxtaposed

18

Supra note 10.

Civil Appeal No. 3998 of 2024 & Ors. Page 19 of 45

Section 28 of the Acquisition Act, 2013 with Section 23 of the

Acquisition Act, 1894 as they are similar, and Section 27 of the

Acquisition Act, 2013 with Section 25 of the Acquisition Act, 1894.

1894 Act 2013 Act

11. Enquiry and award by

Collector.— (1) On the day so fixed,

or on any other day to which the

enquiry has been adjourned, the

Collector shall proceed to enquire into

the objection (if any) which any

person interested has stated pursuant

to a notice given under section 9 to the

measurements made under section 8,

and into the value of the land at the

date of the publication of the

notification under section 4, sub-

section (1), and into the respective

interests of the persons claiming the

compensation and shall make an

award under his hand of-

(i) the true area of the land;

(ii) the compensation which in his

opinion should be allowed for the

land; and

(iii) the apportionment of the said

compensation among all the persons

known or believed to be interested in

the land, or whom, or of whose claims,

he has information, whether or not

they have respectively appeared

before him:

Provided that no award shall be made

by the Collector under this sub-

section without the previous approval

of the appropriate Government or of

such officer as the appropriate

23. Enquiry and land acquisition

award by Collector.— On the day so

fixed, or on any other day to which the

enquiry has been adjourned, the

Collector shall proceed to enquire into

the objections (if any) which any person

interested has stated pursuant to a

notice given under Section 21, to the

measurements made under Section 20,

and into the value of the land at the date

of the publication of the notification, and

into the respective interests of the

persons claiming the compensation

and rehabilitation and resettlement,

shall make an award under his hand

of—

(a) the true area of the land;

(b) the compensation as determined

under Section 27 along with

Rehabilitation and Resettlement award

as determined under Section 31 and

which in his opinion should be allowed

for the land; and

(c) the apportionment of the said

compensation among all the persons

known or believed to be interested in

the land, or whom, or of whose claims,

he has information, whether or not they

have respectively appeared before him.

Civil Appeal No. 3998 of 2024 & Ors. Page 20 of 45

Government may authorize in this

behalf:

Provided further that it shall be

competent for the appropriate

Government to direct that the

Collector may make such award

without such approval in such class of

cases as the appropriate Government

may specify in this behalf.

(2) Notwithstanding anything

contained in sub-section (1), if at any

stage of the proceedings, the

Collector is satisfied that all the

persons interested in the land who

appeared before him have agreed in

writing on the matters to be included

in the award of the Collector in the

form prescribed by rules made by the

appropriate Government, he may,

without making further enquiry, make

an award according to the terms of

such agreement.

(3) The determination of

compensation for any land under sub-

section (2) shall not in any way affect

the determination of compensation in

respect of other lands in the same

locality or elsewhere in accordance

with the other provisions of this Act.

(4) Notwithstanding anything

contained in the Registration Act,

1908 (16 of 1908), no agreement

made under subsection (2) shall be

liable to registration under that Act.

15. Matters to be considered and

neglected.— In determining the

amount of compensation, the collector

shall be guided by the provisions

contained in section 23 and 24.

26. Determination of market value

of land by Collector.— (1) The

Collector shall adopt the following

criteria in assessing and determining

the market value of the land, namely:—

Civil Appeal No. 3998 of 2024 & Ors. Page 21 of 45

(a) the market value, if any, specified in

the Indian Stamp Act, 1899 (2 of

1899) for the registration of sale deeds

or agreements to sell, as the case may

be, in the area, where the land is

situated; or

(b) the average sale price for similar

type of land situated in the nearest

village or nearest vicinity area; or

(c) consented amount of compensation

as agreed upon under sub-section (2)

of Section 2 in case of acquisition of

lands for private companies or for public

private partnership projects,

whichever is higher:

Provided that the date for determination

of market value shall be the date on

which the notification has been issued

under Section 11.

Explanation 1.—The average sale price

referred to in clause (b) shall be

determined taking into account the sale

deeds or the agreements to sell

registered for similar type of area in the

near village or near vicinity area during

immediately preceding three years of

the year in which such acquisition of

land is proposed to be made.

Explanation 2.—For determining the

average sale price referred to in

Explanation 1, one-half of the total

number of sale deeds or the

agreements to sell in which the highest

sale price has been mentioned shall be

taken into account.

Explanation 3.—While determining the

market value under this section and the

average sale price referred to in

Explanation 1 or Explanation 2, any

price paid as compensation for land

Civil Appeal No. 3998 of 2024 & Ors. Page 22 of 45

acquired under the provisions of this

Act on an earlier occasion in the district

shall not be taken into consideration.

Explanation 4.—While determining the

market value under this section and the

average sale price referred to in

Explanation 1 or Explanation 2, any

price paid, which in the opinion of the

Collector is not indicative of actual

prevailing market value may be

discounted for the purposes of

calculating market value.

(2) The market value calculated as per

sub-section (1) shall be multiplied by a

factor to be specified in the First

Schedule.

(3) Where the market value under sub-

section (1) or sub-section (2) cannot be

determined for the reason that—

(a) the land is situated in such area

where the transactions in land are

restricted by or under any other law for

the time being in force in that area; or

(b) the registered sale deeds or

agreements to sell as mentioned in

clause (a) of sub-section (1) for similar

land are not available for the

immediately preceding three years; or

(c) the market value has not been

specified under the Indian Stamp Act,

1899 (2 of 1899) by the appropriate

authority,

the State Government concerned shall

specify the floor price or minimum price

per unit area of the said land based on

the price calculated in the manner

specified in sub-section (1) in respect of

similar types of land situated in the

immediate adjoining areas:

Civil Appeal No. 3998 of 2024 & Ors. Page 23 of 45

Provided that in a case where the

Requiring Body offers its shares to the

owners of the lands (whose lands have

been acquired) as a part compensation,

for acquisition of land, such shares in

no case shall exceed twenty-five per

cent of the value so calculated under

sub-section (1) or sub-section (2) or

sub-section (3) as the case may be:

Provided further that the Requiring

Body shall in no case compel any

owner of the land (whose land has been

acquired) to take its shares, the value

of which is deductible in the value of the

land calculated under sub-section (1):

Provided also that the Collector shall,

before initiation of any land acquisition

proceedings in any area, take all

necessary steps to revise and update

the market value of the land on the

basis of the prevalent market rate in

that area:

Provided also that the appropriate

Government shall ensure that the

market value determined for acquisition

of any land or property of an

educational institution established and

administered by a religious or linguistic

minority shall be such as would not

restrict or abrogate the right to establish

and administer educational institutions

of their choice.

23. Matters to be considered on

determining compensation.— (1) In

determining the amount of

compensation to be awarded for land

acquired under this Act, the Court

shall take into consideration

first, the market-value of the land at

the date of the publication of the

28. Parameters to be considered by

Collector in determination of

award.— In determining the amount of

compensation to be awarded for land

acquired under this Act, the Collector

shall take into consideration—

firstly, the market value as determined

under Section 26 and the award

Civil Appeal No. 3998 of 2024 & Ors. Page 24 of 45

[notification under section 4, sub-

section (1)];

secondly, the damage sustained by

the person interested, by reason of

the taking of any standing crops trees

which may be on the land at the time

of the Collector's taking possession

thereof;

thirdly, the damage (if any) sustained

by the person interested, at the time

of the Collector's taking possession of

the land, by reason of serving such

land from his other land;

fourthly, the damage (if any)

sustained by the person interested, at

the time of the Collector's taking

possession of the land, by reason of

the acquisition injuriously affecting his

other property, movable or

immovable, in any other manner, or

his earnings;

fifthly, in consequence of the

acquisition of the land by the

Collector, the person interested is

compelled to change his residence or

place of business, the reasonable

expenses (if any) incidental to such

change, and

sixthly, the damage (if any)

bona fide resulting from diminution of

the profits of the land between the

time of the publication of the

declaration under section 6 and the

time of the Collector's taking

possession of the land.

(1A) In addition to the market value of

the land, as above provided, the Court

shall in every case award an amount

calculated at the rate of twelve per

centum per annum on such market

amount in accordance with the First and

Second Schedules;

secondly, the damage sustained by the

person interested, by reason of the

taking of any standing crops and trees

which may be on the land at the time of

the Collector's taking possession

thereof;

thirdly, the damage (if any) sustained by

the person interested, at the time of the

Collector's taking possession of the

land, by reason of severing such land

from his other land;

fourthly, the damage (if any) sustained

by the person interested, at the time of

the Collector's taking possession of the

land, by reason of the acquisition

injuriously affecting his other property,

movable or immovable, in any other

manner, or his earnings;

fifthly, in consequence of the

acquisition of the land by the Collector,

the person interested is compelled to

change his residence or place of

business, the reasonable expenses (if

any) incidental to such change;

sixthly, the damage (if any) bona fide

resulting from diminution of the profits

of the land between the time of the

publication of the declaration under

Section 19 and the time of the

Collector's taking possession of the

land; and

seventhly, any other ground which may

be in the interest of equity, justice and

beneficial to the affected families

Civil Appeal No. 3998 of 2024 & Ors. Page 25 of 45

value for the period commencing on

and from the date of the publication of

the notification under section 4, sub-

section (1), in respect of such land to

the date of the award of the Collector

or the date of taking possession of the

land, whichever is earlier.

Explanation. - In computing the period

referred to in this sub-section, any

period or periods during which the

proceedings for the acquisition of the

land were held up on account of any

stay or injunction by the order of any

Court shall be excluded.

(2) In addition to the market value of

the land as above provided, the Court

shall in every case award a sum of

[thirty per centum] on such market

value, in consideration of the

compulsory nature of the acquisition.

24. Matters to be neglected in

determining compensation. - But

the Court shall not take into

consideration—

first, the degree of urgency which

has led to the acquisition;

secondly, any disinclination of the

person interested to part with the land

acquired;

thirdly, any damage sustained by him

which, if caused by a private person,

would not render such person liable to

a suit;

fourthly, any damage which is likely to

be caused to the land acquired, after

the date of the publication of the

declaration under section 6, by or in

consequence of the use to which it will

be put;

Civil Appeal No. 3998 of 2024 & Ors. Page 26 of 45

fifthly, any increase to the value of the

land acquired likely to accrue from the

use to which it will be put when

acquired;

sixthly, any increase to the value of

the other land of the person interested

likely to accrue from the use to which

the land acquired will be put;

seventhly, any outlay or

improvements on, or disposal of the

land acquired, commenced, made or

effected without the sanction of the

Collector after the date of the

publication of the [notification under

section 4, sub-section (1); or

eighthly, any increase to the value of

the land on account of its being put to

any use, which is forbidden by law or

opposed to public policy.

25. Amount of compensation

awarded by Court not to be lower

than the amount awarded by the

Collector.— The amount of

compensation awarded by the Court

shall not be less than the amount

awarded by the Collector under

section 11.

27. Determination of amount of

compensation.—The Collector having

determined the market value of the land

to be acquired shall calculate the total

amount of compensation to be paid to

the land owner (whose land has been

acquired) by including all assets

attached to the land.

16. Under the Land Acquisition Act, 1894, Section 11 deals with enquiry

and the award of the Collector. The award should state (i) the true area

of the land; (ii) the compensation which in the Collector’s opinion

should be allowed for the land; and (iii) the apportionment of the

compensation among interested persons. Section 15 states that in

Civil Appeal No. 3998 of 2024 & Ors. Page 27 of 45

determining the amount of compensation, the Collector shall be guided

by the factors stated in Sections 23 and 24. Section 23 sets out the

factors that must be considered while determining the amount of

compensation. The first factor specified is the market value of the land,

which must be determined as on the date of publication of the

notification under Section 4(1) of the Acquisition Act, 1894. For the

present decision, we need not refer to the other clauses, except noting

that they deal with relevant aspects for determining compensation,

such as the damage sustained by the owner, payment of solatium for

compulsory acquisitions, etc. Section 24 lists the factors to be ignored

while calculating the compensation. These include urgency,

unwillingness to part with the land, or any such damage that would not

be actionable if caused by a private person. It also excludes any outlay,

improvements, or sale made without the Collector’s approval after

publication of the notification under Section 4(1). Increases in value

due to unlawful use of the land are also to be ignored. Section 25 states

that the amount of compensation awarded by the court cannot be less

than the compensation awarded by the Collector under Section 11.

17. Under the Acquisition Act, 2013, Section 23 states that after conducting

an enquiry into the objections raised by interested persons, the

Civil Appeal No. 3998 of 2024 & Ors. Page 28 of 45

Collector shall make an award as to (i) the true area of the land; (ii) the

compensation determined under Section 27, along with the

Rehabilitation and Resettlement Award as per Section 31 of the

Acquisition Act, 2013, and which in the Collector’s opinion should be

allowed for the land; and (iii) the apportionment of the said

compensation among interested persons. In particular, the appellant,

Madhya Pradesh Road Development Corporation, relies upon the

expression “which in his (Collector’s) opinion should be allowed for the

land” under Section 23(b), referring to the compensation under Section

27 and Section 31 of the Acquisition Act, 2013. We will elaborate on

this submission subsequently.

18. Section 26 deals with the determination of the market value of the land

by the Collector. Sub-section (1) to Section 26 consists of three

Clauses, (a), (b) and (c), each prescribing a criterion or standard for

assessing the market value. Clause (a) prescribes the consideration of

the market value specified in the Stamp Act for the registration of

agreements/sale deeds in the area where the concerned land is

situated.

Civil Appeal No. 3998 of 2024 & Ors. Page 29 of 45

19. Clause (b) to Section 26(1) requires the Collector to consider the

average sale price for similar types of land situated in the nearest

village or the nearest vicinity. This test of average sale price is similar

to the exemplar test which is adopted and applied in cases of

acquisition under the Land Acquisition Act, 1894, but with modifications

in terms of Explanations 1 to 4. Computation under Clause (b) is in

relative terms. Therefore, while drawing a comparison with the average

price of the other lands under Clause (b), the Collector must consider

all such factors that have been held to be relevant for accurate

valuation by this Court. These include the theory of deduction, the

principle of belting, and accounting for other advantages or

disadvantages of the acquired land, in comparison to the lands existing

in the same vicinity.

20. Clause (c) to Section 26(1) of the Acquisition Act, 2013 requires the

Collector to take into consideration the amount of compensation

agreed upon by the parties under Section 2(2) of the Acquisition Act,

2013 in cases involving the acquisition of land for private companies

or public-private partnership projects. These agreements are entered

Civil Appeal No. 3998 of 2024 & Ors. Page 30 of 45

into voluntarily, based upon consent terms, and reflect the market

value as settled inter se the parties.

21. It is important to note that the values computed in terms of Clauses (a),

(b) and (c) of Section 26(1) of the Acquisition Act, 2013 are not to be

averaged. The highest of the values as determined by Clauses (a), (b)

and (c), is to be treated as the market value under Section 26(1) of the

Acquisition Act, 2013.

22. There are four Explanations to Section 26(1) of the Acquisition Act,

2013. Explanations can form part of the main provision and, when so,

can be as central as the provision itself. This Court in The Bengal

Immunity Co. Ltd. v. State of Bihar and Others

19

stated that an

explanation appended to a Section or Clause gets incorporated into it,

becomes an integral part of it, and has no independent existence apart

from it. There is, in the eye of law, only one enactment, of which both

the Section and the Explanation are two inseparable parts. They move

in a body if they move at all. Similarly, in Coromandel Fertilizers Ltd.

v. Union of India and Others,

20

this Court, in the context of an

19

AIR 1955 SC 661.

20

1984 Supp SCC 457.

Civil Appeal No. 3998 of 2024 & Ors. Page 31 of 45

Explanation attached to a notification, observed that the

notification/provision has to be read as a whole and should not be

construed in terms that are contrary to the main provision.

Explanations to Section 26(1) are equally important as the main

provision. Apart from clarifying the procedure under Clauses (a), (b)

and (c), the Explanations also confer and refer to the discretion which

the Collector may exercise in determining the market value of the

acquired land. Thus, while the statutory language makes the procedure

under Clauses (a), (b) and (c) mandatory, the value as computed

according to the Explanations can be increased, decreased or even

discarded.

23. Explanation 1 states that the determination of the average sale price

under Clause (b) must be based on sale deeds or agreements to sell

registered for similar type of lands in the same vicinity, during the

immediately preceding three years from the year in which acquisition

was proposed. Thus, transactions older than three years would be

excluded. Explanation 2 states that to determine the average sale price

under Explanation 1, one-half of the total sale deeds or agreements to

sell in which the highest sale price is mentioned, shall be taken into

account. This also implies that there should be multiple deeds available

Civil Appeal No. 3998 of 2024 & Ors. Page 32 of 45

for reference. Singular deals may not supply adequate and reliable

data. Explanation 3 states that while determining the market value

under Section 26 and the average sale price referred to in Explanation

1 or 2, the price paid as compensation for land acquired under the

provisions of this Act on an earlier occasion in the district, shall not be

taken into consideration. Thus, referring to compensation paid for an

earlier acquisition in the concerned district is expressly barred.

24. Explanation 4 requires specific attention, as it brings the element of

discretion while computing the market value under Section 26(1) to the

forefront. Explanation 4 is divided into two parts. The first part refers to

sub-section (1) to Section 26 – the higher value determined as per

Clauses (a), (b) and (c) of Section 26(1) of the Acquisition Act, 2013.

The second part is specific to the average sale price referred to in

Clause (b) to Section 26(1) read with Explanations 1 and 2. In either

case, where the Collector is of the opinion that the value/price

computed by applying these provisions is not indicative of the actual

prevailing market value, they may discount or enhance it to arrive at

the accurate market value.

Civil Appeal No. 3998 of 2024 & Ors. Page 33 of 45

25. Explanation 4 uses the word “and” in conjoining the values referred to

in the two parts of the Explanation. This is done to expand the scope

of application of the Collector’s discretion to the entire provision, as is

also evident from the phrase “while determining the market value under

this section”. The discretion should not be interpreted as restricting the

discretion to only the average sale price under Explanations 1 and 2.

The two parts must be given a disjunctive reading, attracting the

application of Explanation 4 when either of the values does not reflect

the actual market value. Thus, though the word “and” is used to

connect the two parts, it should be read as “or” to effectuate the

legislative intent.

21

26. This interpretation is also supported by the use of the same phrase in

both Explanations 3 and 4. The first part of Explanation 3, which refers

to determining the market value under this Section, will apply with

equal vigour to both Clauses (b) and (c) of Section 26(1) of the

Acquisition Act, 2013. The latter part of Explanation 3 – as in the case

21

Maharishi Mahesh Yogi Vedic Vishwavidyalaya v. State of Madhya Pradesh and Others, (2013)

15 SCC 677. See also, Justice G. P. Singh, Principles of Statutory Interpretation, 14

th

Edition.,

530-534.

Civil Appeal No. 3998 of 2024 & Ors. Page 34 of 45

of Explanation 4, which refers to Explanations 1 and 2 – will specifically

apply to Clause (b).

27. Under Explanation 4, the formation of the Collector’s opinion and any

discounting or enhancing of the value must be supported by recorded

reasons. At this stage, if the Collector chooses to make adjustments to

the market value under Explanation 4, the theory of deduction, the

principle of belting and other material factors will also be taken into

account. The reason for this is two-fold. First, because the calculation

of accurate market value is not an exact science, and therefore the

Collector must be mindful of the unique factors which affect the

valuation of a piece of land. Secondly, apart from Clause (b) to Section

26(1), the mandatory procedure of computation under the other two

Clauses, (a) and (c), does not take into account these theories and

factors, which may result in inaccuracy. Though not determinative in

the facts of the present case, a contrary interpretation may cause

injustice to the landowners in many situations.

28. Sub-section (2) to Section 26 provides that the market value computed

under sub-section (1), including any adjustment under Explanation 4,

Civil Appeal No. 3998 of 2024 & Ors. Page 35 of 45

shall be multiplied by the factors set out in the First Schedule of the

Acquisition Act, 2013.

29. Sub-section (3) to Section 26 applies when the market value cannot

be determined under sub-sections (1) and (2) for the three reasons

stated in Clauses (a), (b) and (c) to Section 26(3) – (a) when land

transactions in the area are restricted by or under any law for the time

being in force; (b) if registered sale deeds and agreements to sell for

similar lands are not available for the preceding three years as required

by Clause (b) to sub-section (1); and (c) when the market value has

not been specified under the Stamp Act by the appropriate authority. In

the statutory language of Clause (b) to Section 26(3), reference to

Clause (a) to Section 26(1) appears to be in error. The consideration

of sale deeds or agreements to sell from the preceding three years, as

required by Explanation 1 to Section 26(1) is for calculating the

average sale price under Clause (b) to Section 26(1) and not Clause

(a) to Section 26(1).

30. If any of the three situations stated in Clauses (a) to (c) to Section 26(3)

are attracted, the State Government is required to specify the floor

price per unit area for the land. This floor price must be based on the

Civil Appeal No. 3998 of 2024 & Ors. Page 36 of 45

price of similar types of land situated in the immediately adjoining

areas, calculated according to the procedure under Section 26(1). We

are not concerned and need not interpret the first proviso or the second

proviso. The third proviso states that the Collector, before initiating a

land acquisition process in any area, shall take all necessary steps to

revise and update the market value on the basis of the prevalent

market rate in that area.

31. Section 27 relates to the determination of the amount of compensation.

The Collector having determined the market value of the land under

Section 26, has to calculate the amount of compensation to be paid to

the land owner, as mandated in terms of Section 23 of the Acquisition

Act, 2013. While Section 26(1) of the Acquisition Act, 2013 uses the

word “criteria” for computing the highest value under Clauses (a) to (c),

and mandates that the exercise is undertaken applying the four

Explanations, the final determination vests with the Collector under

Section 27 of the Acquisition Act, 2013. This is also evident from the

language of Section 26(1) as well as Section 23(b), which use the

expression “which in his (Collector’s) opinion should be allowed for the

land.”

Civil Appeal No. 3998 of 2024 & Ors. Page 37 of 45

32. Section 28 sets out the parameters to be considered by the Collector

in determining the award. It refers to seven factors for computing the

amount payable as compensation. The very first factor is the market

value as determined under Section 26, and the award amount

computed in accordance with the First and the Second Schedules to

the Acquisition Act, 2013. Other clauses cover damage sustained due

to factors such as loss of standing crops or trees, severance of land,

adverse effects on other property, loss of income, and costs or losses

from change in residence or place of business. Losses, if any, bona

fide resulting from the diminution of the profits are also to be accounted

for. The seventh ground is particularly important. It states that the

Collector can take into consideration any other ground which may be

in the interest of equity, justice and beneficial to the affected families.

This clause will not apply to reduce the market value of land

determined under Section 26, but the Collector can apply it to enhance

the market value in the interest of equity and justice if it is beneficial to

the affected families.

33. During the course of the hearing before us, our attention was drawn to

the process of fixing circle rates in the State of Madhya Pradesh. The

State of Madhya Pradesh formulated the Madhya Pradesh Preparation

Civil Appeal No. 3998 of 2024 & Ors. Page 38 of 45

and Revision of Market Value Guideline Rules, 2000, in accordance

with the powers conferred by the Stamp Act, which now stand revised

as the 2018 Rules. The Collector’s Guidelines dated 03.03.2014,

formed under these rules, have been relied upon by the competent

authority to determine the market value.

34. The impugned judgment refers to the revised 2018 Rules applicable to

the State of Madhya Pradesh and has quoted Rule 6, which reads as

under:

“Procedure to prepare Market Value Guideline– While

working out the values of immovable property, the

committees shall take into account the following facts:-

(1) The case of lands:-

(a) classification of land as unirrigated or irrigated,

diverted or non-diverted and the like;

(b) classification under various categories in the

settlements register;

(c) the rate of revenue assessments for each

classification;

(d) other factors which influence the valuation of the

land in question;

(e) points, if any, mentioned by the parties to the

instrument or any other person which required

special consideration;

(f) value of adjacent land or lands in vicinity;

(g) average yield from the land, proximity to road and

market, distance from village site, level of land

transport facilities, facilities available for irrigation

in any form;

Civil Appeal No. 3998 of 2024 & Ors. Page 39 of 45

(h) the nature of Crops raised on the land;

(i) Use of land as residential, commercial or

industrial;

(j) the relative position of urban area and investment

area or development of the town.

(2) In case of house sites:-

(a) The general value of house sites in locality;

(b) Proximity to roads, railway stations, bus routes;

(c) Proximity to market, shop and the like;

(d) Amenities available in the place like, Public

Offices, Hospitals and Educational Institutes;

(e) Development activities, industrial improvements

in the vicinity;

(f) Any special feature having a special bearing on

the valuation of the site; and

(g) Commercialization of home location and affiliation

of these with reserved area by master plan or town

and country planning.

(3) In case of buildings:-

(a) type and structure,

(b) locality in which constructed,

(c) plinth area,

(d) year of construction,

(e) kind of material used,

(f) rate of depreciation,

(g) fluctuation in rates,

(h) any special feature having a special bearing on

the valuation of the site;

(i) the purpose for which the building is being used,

and the income, if any, by way of rent per annum

secured on the building; and

(j) relative position and reputation of the area where

the building is located.

(4) Other factors which the Committee considers

necessary.”

Civil Appeal No. 3998 of 2024 & Ors. Page 40 of 45

The factors noted above are relevant for computation and fixing the

circle rates.

35. In the last few decades, the Union of India and the State Governments

have laid emphasis on enhancing the ease of living and doing

business. Fixing fair and accurate circle rates has a direct impact on

each citizen. An inflated rate results in an unfair financial burden on

purchasers. Conversely, an undervalued rate leads to inadequate

stamp duty collection, adversely affecting the State’s revenue. Circle

rates which reflect the market price ensure proper revenue collection

for the State by preventing under-valuation of properties.

36. Sections 43CA, 45, 49, 50C, and 55 of the Income Tax Act, 1961

22

refer

to circle rates, incorporating the stamp duty value of assets. We need

not, for the purpose of the present decision, interpret the aforesaid

sections. However, we have referred to these provisions to point out

the significance and importance of circle rates for the direct tax

administration as well. The Central Government had to amend the

Income Tax Act when it was noticed that the circle rates at times in

22

Hereinafter, “Income Tax Act”.

Civil Appeal No. 3998 of 2024 & Ors. Page 41 of 45

certain localities were higher than the prevailing market value.

Accordingly, the safe harbour rule under the Income Tax Act was

amended and the limit was enhanced to 10% from 5%.

23

Circle rates

often become a politically and economically contentious issue. This is

reflected in the frequent litigations across various jurisdictions, which

discuss the circle rates applicable to properties.

24

37. Circle rates, when determined while accounting for factors that cause

variations in the market price of land, can facilitate predictability in

transactions and curtail litigation. The standardized circle rates should

be fixed at the floor or baseline price, as it would be grossly unfair to

ask the public to pay stamp duty on over-valued circle rates.

38. It would be advisable that the circle rates be fixed by expert

committees, which not only have officers from the government but also

other specialists who understand the market conditions. Methodically

and scientifically fixed circle rates can contribute to strengthening the

economy and boosting tax collections. While serving the interests of

23

See Section 43CA of the Income Tax Act.

24

See also Govt of NCT of Delhi Collectors of Stamps v. CTA Apparels Pvt. Ltd., LPA 278/2019

(High Court of Delhi); Sameer Vasudev Morajkar and Another v. State of Goa, 2024 SCC OnLine

Bom 303 (High Court of Bombay); Narendra Kumar Berlia and Others v. Om Prakash Berlia and

Others, 2021 SCC OnLine Cal 2667 (Calcutta High Court); K. Natarajan v. District Collector and

Another, 2019 SCC OnLine Mad 26166 (Madras High Court).

Civil Appeal No. 3998 of 2024 & Ors. Page 42 of 45

honest taxpayers, accurate circle rates would simultaneously deter

non-compliant taxpayers by preventing under-valuation. Rational and

fair circle rates reflect and are a prerequisite for good governance.

25

Given the financial implications of fixation of circle rates on each

member of the society, the data and details for computation of circle

rates should be made public.

26

Regrettably, proper fixation of circle

rates has not received adequate attention from public authorities.

39. The 2018 Rules framed by the State of Madhya Pradesh attempt to

comprehensively address the variable factors that influence the price

of land, and, therefore, lay the foundation for a more accurate valuation

of land prices. In our opinion, other State Governments would also be

well advised in formulating guidelines that can act as a ready reference

for determining and revising circle rates regularly, in order for them to

reflect market realities.

25

Germany, like India, uses reference values to compute the market value of a property. This

task is undertaken by expert committees in the relevant area, and they are required to update the

values every two years. These expert committees are neutral and independent from the public

authorities. Reference values for various localities are also published online for public access.

Regular revisions and transparency have facilitated the reduction of market volatility in Germany.

Public knowledge of the variables affecting property value has increased predictability and

created a more stable land market.

26

We wish to clarify that our reasons should not be read as a bar or prohibition on the Central

Government/local authorities from changing the circle rates as fixed by the State Government,

when they are not in accord with the market rate of the acquired land.

Civil Appeal No. 3998 of 2024 & Ors. Page 43 of 45

40. We now proceed to apply the above analysis to the facts of the present

case, which is an acquisition under the Acquisition Act, 2013. To

determine the compensation, the market value of the land must first be

computed under Section 26 of the Acquisition Act, 2013. This requires

the application of Clauses (a), (b), and (c) of Section 26(1). Clause (b)

would have no application in the present case as there are no

exemplars in the vicinity to draw a comparison and arrive at the

average sale price in terms of Explanations 1 and 2 to Section 26(1).

Further, as this acquisition does not involve private companies or

public-private partnerships, Clause (c) would also not apply. Therefore,

the highest value would be the one determined under Clause (a), i.e.,

the market value specified under the Stamp Act. In the present case,

this value would be the circle rate fixed for the year 2014-2015 under

the Collector’s Guidelines framed under the Stamp Act. The

Commissioner has applied the Collector’s Guidelines by using the rate

provided for non-converted agricultural land. The Commissioner has

further supplemented this amount by accounting for the assets

attached to the land and adding the solatium payable.

41. In view of the above-stated reasons, we hold that the compensation

has been calculated in accordance with the mandate of the Acquisition

Civil Appeal No. 3998 of 2024 & Ors. Page 44 of 45

Act, 2013. Thus, no reduction in the amount can be granted by applying

the theory of deduction. It has been left to the Collector’s discretion to

make adjustments to the market value determined through Section

26(1), if deemed necessary in the opinion of the Collector. In the facts

of the present case, there was no such formation of opinion by the

Competent Authority or the Commissioner.

42. In the absence of any material to support the same, we cannot accept

the argument advanced by the appellant, Madhya Pradesh Road

Development Corporation, that this circle rate is not the baseline or

floor rate, and is too high. Concerned authorities should fix circle rates

scientifically and in accordance with the law. It is their responsibility to

ensure that circle rates are neither inflated nor disproportionately low.

When the citizens are required to pay stamp duty on the notified circle

rate, the public authorities, including state development corporations

acquiring land from private individuals, must adhere to the same. We

do not appreciate the appellant, Madhya Pradesh Road Development

Corporation complaining about the circle rate fixed by the State

Government. If the circle rate is inflated or does not reflect the true

market value, it is incumbent upon the State Government to take

corrective steps. The State Government or the development

Civil Appeal No. 3998 of 2024 & Ors. Page 45 of 45

corporation under the State Government cannot complain that they

have been compelled to acquire land at the circle rate fixed by the

State.

43. Thus, while we disagree with the ratio and the reasoning of the High

Court, albeit for the reasons and findings recorded above, we uphold

the computation in the award passed by the Commissioner directing

payment of compensation on the basis of the circle rate. The appeals

filed by the appellant, Madhya Pradesh Road Development

Corporation, are accordingly, dismissed. There will be no order as to

costs.

................................CJI.

(SANJIV KHANNA)

....................................J.

(SANJAY KUMAR)

NEW DELHI;

MARCH 27, 2025.