Supreme Court of India
Manohar vs The State Of Maharashtra on 28 July, 2025
Author: B.R. Gavai
Bench: B.R. Gavai
2025 INSC 900 REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.___________ OF 2025
(Arising out of SLP(C) No. of 2025)
Diary No. 26900 of 2023
MANOHAR AND OTHERS …APPELLANTS
VERSUS
THE STATE OF MAHARASHTRA AND
OTHERS …RESPONDENTS
WITH
CIVIL APPEAL NO.___________ OF 2025
(Arising out of SLP(C) No. of 2025)
Diary No. 25104 of 2025
CIVIL APPEAL NO.___________ OF 2025
(Arising out of SLP(C) No. of 2025)
Diary No.25109 OF 2025
JUDGMENT
B.R. GAVAI, CJI
1. Delay condoned.
2. Leave granted.
3. The present batch of appeals challenge the common
Signature Not Verified
Digitally signed by
DEEPAK SINGH
Date: 2025.07.28
15:53:29 IST
judgment and final order dated 21st April, 2022, passed by a
Reason:
learned Single Judge of the High Court of Judicature at
1
Bombay, Bench at Aurangabad (hereinafter, “High Court”),
whereby the First Appeals filed by the claimants/Appellants
came to be dismissed.
FACTS
4. The facts, in brief, giving rise to the present appeals are
as given below:
4.1. The Appellants, in the lead matter, are farmers and
were owners of land bearing Survey No. 103 and 104,
admeasuring 16 Hectare 79 Are situated at Village Pungala,
Taluq and District Parbhani, Maharashtra.
4.2. It appears that the land of the Appellants and other
adjoining lands were sought to be acquired in the 1990s under
the provisions of the Maharashtra Industrial Development Act,
1961 (hereinafter, “Act of 1961”) for setting up an Industrial
Area near Jintur town in Parbhani District.
4.3. On 16th January, 1992, the Land Acquisition Officer &
Deputy Collector, Hingoli (hereinafter, “Land Acquisition
Officer”) issued a notice under sub-section (2) of Section 32 of
the Act of 1961.
2
4.4. On 6th December, 1994, the Respondent-State took
possession of the Appellants’ land and an Award came to be
passed by the Land Acquisition Officer. In terms of the said
Award, the total area subject matter of the acquisition was 89
Hectares and 44 Are and the total compensation awarded was
Rs. 45,70, 508/-.
4.5. Being aggrieved by the quantum of compensation
awarded, the Appellants accepted the compensation under
protest and simultaneously filed a Reference under Section 18
of the Land Acquisition Act, 1894 (hereinafter, “LA Act”) in the
year 1997.
4.6. Vide judgment and award dated 7th June 2007, in
L.A.R. No. 61 of 1997, the Court of Principal District Judge,
Parbhani (hereinafter, “Reference Court”), partly allowed the
reference with proportionate costs and directed the
Respondent-State to pay the Appellants an amount of Rs.
46,26,013/- along with future interest @ 15% per annum from
the date of award until the payment is made on the additional
market value of Rs. 16,43,224/-.
4.7. Aggrieved still, the Appellants filed a First Appeal
bearing No. 1179 of 2008 before the High Court.
3
4.8. Vide impugned judgment and final order, the learned
Single Judge of the High Court dismissed the First Appeal.
4.9. Being aggrieved thereby, the present appeals came to
be filed by way of special leave.
4.10. Vide order dated 22nd September, 2023, this Court
issued notice on the application for condonation of delay in
filing Special Leave Petition as well as on the Special Leave
Petition.
SUBMISSIONS
5. We have heard Mr. Bharat Thakorlal Manubarwala,
learned counsel for the Appellants, Ms. Rukhmini Bobde,
learned counsel for Respondent Nos. 1 and 2 and Ms.
Shyamali Gadre, learned counsel for Respondent No. 3.
6. Mr. Manubarwala submitted that the Appellants are
farmers, who lost their only source of sustenance and ever
since are prosecuting their claim for fair, just and reasonable
compensation based on the highest exemplar dated 31st March
1990. He further submitted that the Reference Court having
found the highest exemplar sale to be a bona-fide transaction
erred in ignoring the same without any reasoning. He,
therefore, submitted that the finding of the High Court, that
4
the Reference Court considered the highest exemplar sale
deed, is contrary to the record.
7. Mr. Manubarwala submitted that Reference Court and
High Court ought to have given benefit of the highest exemplar
sale deed to the Appellants. He further submitted that the
Courts having found that, the lands acquired in the
acquisition are situated near T-point of Nashik-Nirmal State
Highway adjacent to Jintur town which is a prime location
with percolation tank just opposite to the lands with sufficient
water, ought to have enhanced the compensation based on the
highest exemplar sale deed dated 31st March, 1990.
8. To buttress his submissions, Mr. Manubarwala placed
reliance on the judgments of this Court in the cases of State
of Punjab and Another v. Hans Raj (Dead) by LRs. Sohan
Singh and Others,1 Mehrawal Khewaji Trust (Registered),
Faridkot and Others v. State of Punjab and Others,2
Mohammad Yusuf and Others v. State of Haryana and
1 (1994) 5 SCC 734
2 (2012) 5 SCC 432
5
Others,3 and Anjani Molu Dessai v. State of Goa and
Another.4
9. Per contra, Ms. Bobde appearing on behalf of the
Respondent Nos. 1 and 2 submitted that the Land Acquisition
Officer had considered the sale instances of similar lands in
the vicinity of the acquired lands and arrived at a proper
valuation. She, accordingly, submitted that the compensation
of acquired lands is fair and reasonable.
10. Ms. Gadre appearing on behalf of the Respondent No.
3 submitted that the Appellants owned dry crop land which
was subject matter of acquisition by Maharashtra Industrial
Development Corporation (hereinafter, “MIDC”). She
submitted that before the Reference Court, the Appellants
relied on ten sale exemplars and the sale exemplars at Serial
Nos. 1 to 4 are pre-notification sale exemplars from Jintur
town. She further submitted that considering the total area
under acquisition by MIDC, the sale exemplars relied upon,
being of an area less than 1 Hectare, are of small plots in
Jintur town.
3 (2018) 16 SCC 105
4 (2010) 13 SCC 710
6
11. Ms. Gadre submitted that the Reference Court has not
entered any finding that the highest exemplar sale deed dated
31st March, 1990, is a bona-fide transaction. She further
submitted that the Reference Court was justified in not
considering the highest exemplar sale deed dated 31st March,
1990, showing market value of Rs. 72,900/- per Acre, as it
reflected an unusually high rate. She further submitted that
the sale exemplars at Serial Nos. 8 to 10 show that even after
the acquisition, the market value of land had not increased in
the same proportion.
12. In support of her submissions, Ms. Gadre placed
reliance on the judgments of this Court in the cases of Major
General Kapil Mehra and Others v. Union of India and
Another,5 Shawal Singh (Dead) Through Legal
Representatives v. Land Acquisition Collector, Himachal
Pradesh and Another,6 Anjani Molu Dessai (supra), and
Nirmal Singh and Others v. State of Haryana Through
Collector.7
5 (2015) 2 SCC 262
6 (2016) 12 SCC 619
7 (2015) 2 SCC 160
7
ISSUE FOR CONSIDERATION
13. On a perusal of the material placed on record, in light
of the submissions advanced by the learned counsel appearing
on behalf of the parties, the only issue that falls for our
consideration is whether the impugned judgment and final
order dated 21st April, 2022, passed by the High Court is
sustainable or not?
ANALYSIS
14. The land of the Appellants and other adjoining lands
were acquired in the 1990s under the provisions of the Act of
1961 for setting up an Industrial Area near Jintur town in
Parbhani District of Maharashtra. The Land Acquisition
Officer, on 6th December, 1994, awarded compensation to the
tune of Rs. 10,800/- per Acre (or Rs. 27,000/- per Hectare).
However, not being satisfied with the compensation awarded,
the Appellants preferred a petition under Section 18 of the LA
Act before the Reference Court, claiming enhancement of
compensation determined by the Land Acquisition Officer.
15. On a perusal of the judgment and award passed by the
Reference Court dated 7th June, 2007, it appears that the case
of the Appellants was that the Land Acquisition Officer has not
8
considered that the land in question is touching the outskirts
of municipal limits of Jintur city and having non-agricultural
potential. It was further their case that Village Pungala is only
one kilometre away from Jintur city so the Appellants, being
farmers, had a good market for selling their agricultural
produce.
16. It is pertinent to note that to substantiate their claim,
the Appellants led evidence by way of affidavit. They placed on
record the following sale instances:
S. No. Date of Sale Name of Area Sold Price per Acre
Deed Village
1. 28/04/1989 Jintoor 20 R Rs. 40,000/-
2. 22/05/1989 Jintoor 39 R Rs. 41,000/-
3. 22/05/1989 Jintoor 80 R Rs. 40,000/-
4. 31/03/1990 Jintoor 96 R Rs. 72,900/-
5. 28/05/1990 Wazur 20 R Rs. 40,000/-
6. 05/10/1990 Bhogaon 40 R Rs. 25,000/-
7. 11/02/1992 Panghari 11 R Rs. 54,500/-
8. 16/04/1992 Panghari 47 R Rs. 18,000/-
9. 31/12/1992 Jintoor 26 R Rs. 61,500/-
10. 06/03/1993 Jintoor 12 R Rs. 60,000/-
17. It is further to be noted that though the Respondent-
State denied the correctness of the above documents (sale
9
instances), but no rebuttal evidence was placed on record by
them.
18. After deciding the issue of limitation in the favour of
the Appellants, the Reference Court found that the lands
under acquisition are located at a short distance from Jintur
town, which is a district headquarter; the purpose for which
the lands were acquired was for development of Industrial
Area and that the lands which were acquired were having non-
agricultural potential. Further, the Reference Court found that
the location of the lands is suitable for industrial units and
that a water facility is available just adjacent to the lands.
19. From paragraph 28 onwards, the Reference Court has
dealt with the most material piece of evidence placed on record
by the Appellants viz., the sale instances as specified above in
tabular form. The Reference Court observed that the material
date on which the market value of land is to be determined will
be 19th July, 1990, when firstly the notification under sub-
section (2) of Section 32 of the Act of 1961 was issued. The
Court, accordingly, came to the finding that the sale instances
prior to the aforesaid date of notification will be of relevance to
the matter. Thereafter, the Reference Court observed that the
10
sale instances at Sr. Nos. 1 to 3 and 4 to 6 are prior to or
nearby to the notification under the Act of 1961 and that the
lands which are covered under the sale deeds are from Jintur
town. The Court, therefore, came to the finding that the sale
instances relied on by the claimants can be relied on and acted
upon and that the sale deeds of lesser area of land can also be
considered for determining the market value.
20. Pertinently, the Reference Court found that the
claimants have placed on record certified copies of the sale
deeds and that the same has got presumptive value under
Section 51A of the LA Act. The Court further found that no
rebuttal evidence has been led by the Respondent-State.
Accordingly, the Reference Court came to the conclusion that
the sale instances covered under the sale deeds came to be
effected in due course of business in routine manner between
willing purchaser and seller and, therefore, the transaction
covered therein can be relied upon and acted upon to
determine the market value of the land.
21. Surprisingly, after reaching till this point, the
Reference Court in paragraph 31, while determining the price
of the claimants’ land, came to the finding that since the price
11
of land sold under the sale deeds at Sr. Nos. 1, 2, 3 and 5,
was around Rs. 40,000/- per Acre i.e., Rs. 1,00,000/- per
Hectare so by applying the deduction of 20% in the price, the
market value of dry crop land, at the time of acquisition, was
ascertained as Rs. 32,000/- per Acre (or Rs. 80,000/- per
Hectare) and the price of irrigated land, at the time of
acquisition, was ascertained as Rs. 40,000/- per Acre (or Rs.
1,00,000/- per Hectare). In the result, compensation to be
awarded for the land of the Appellants was enhanced to Rs.
32,000/- per Acre.
22. It can, therefore, be seen that the highest exemplar sale
deed dated 31st March, 1990, showing market value of Rs.
72,900/- per Acre, available at Sr. No. 4 and relied upon by
the claimants as a bona-fide sale instance was completely
overlooked by the Reference Court. It would, however, have
been a different matter if the Reference Court, for reasons to
be recorded by it, came to a finding that the sale instance at
Sr. No. 4 was not a bona-fide one or a sham/bogus one which
could not be relied upon.
23. Being aggrieved by the judgment and award of the
Reference Court, the claimants/Appellants filed a First Appeal
12
before the High Court. The learned Single Judge of the High
Court, however, finding no error in the approach and/or
outcome of the judgment and award passed by the Reference
Court dismissed the batch of appeals filed by the claimants.
Aggrieved thereby, the Appellants filed the present appeals by
way of special leave.
24. To ascertain whether the impugned judgment and final
order passed by the learned Single Judge of the High Court is
sustainable or not, it would be apposite to refer to paragraphs
45-46 and 49-50 thereof, which read thus:
“45. Now coming to the determination of the market
value of the acquired lands and sale instances
produced by the claimants. It is not in dispute that
the acquired lands are situated at village Pungala.
The compulsory land acquisition is made according
to the Act of 1961 for the public purpose for
establishment of Jintur industrial area. According to
the evidence of claimants, village Pungala is at a
distance of 2 k.m. away from Jintur, which is a
taluka place, where the market committee, Wakhar
Mahamandal, dairy business and other basic
facilities are available. The oral evidence of claimants
regarding distance in between the acquired land and
Jintur town is not at all challenged by way of cross-
examination initiated by the learned A.G.P. As such,
there is no difficulty to accept the oral evidence
produced by the claimants that the acquired
lands are at a distance of 2 k.m. away from the
Jintur town. Jintur is a town. There is a
municipality and all the facilities are available. It
is a taluka headquarter.
13
46. It is material to note that the acquired lands are
selected for acquisition. It is evident from the
testimony of the claimants that the acquired
lands are more convenient for the establishment
of M.I.D.C. Jintur. Water facility is also available
at a short distance from the acquired lands. The
stock of evidence produced by the claimants
regarding the proximity of the acquired lands
with Jintur town coupled with facilities available
and advantages is not any way challenged by way
of cross-examination. Certainly, the argument
advanced by the learned counsel for the M.I.D.C. that
the acquired lands are at a distance of 5 k.m. away
from the Jintur town cannot be accepted. The
claimants have also placed on record the
documentary evidence in the nature of village map of
Pungala and map of Jintur town in order to show the
proximity. The learned reference Court has rightly
considered the village map of Pungala and map of
Jintur town and the location of acquired lands in
para 11 of the impugned judgment. It is rightly held
by the reference Curt (sic) that the acquired lands
are adjacent to Jintur town. There are hills in
between the lands and village Pungala and the
acquired lands and they are near to Jintur town
rather than from Pungala. The acquired lands are
situated near T-point of Nashik-Nirmal State
Highway. It is also observed by the reference
Court that the acquired land has N.A.
potentiality. The percolation tank is just opposite
to the acquired lands, it has sufficient water. As
such, selection of the acquired lands for
acquisition for establishment of M.I.D.C.
indicates their prime location as observed by the
reference Court.
…
49. Now, the source which is available is exemplars,
which are on record to determine the market value of
the acquired lands. On going through the
impugned judgments, it is noticed that the
reference Court has considered in all ten
exemplars as shown in para 10 of the impugned14
judgment. However, not considered the sale
instance at Sr. No. 4 dated 31.03.1990, which is
from Jintur pertaining to 96 R land sold for the
consideration of Rs. 72,900/-, which is found to
be the highest sale instance in the chart. As
pointed earlier, the market value of the acquired land
is to be determined on the date of notification under
Section 32 of the Act of 1961, which is published in
the Government gazette on 19.07.1990.
50. Even though the sale instance at Sr. No. 8 of the
chart is from the village Pungala, it is of post
notification and must be kept out for consideration.
The reference Court has considered the sale
instances at Sr. Nos. 1, 2, 3, 4 and 6 since they
are found nearby to the notification under
Section 32(2) of the Act of 1961. In para No. 31 of
the impugned judgment, the reference Court has
also considered the sale instance at Sr. No. 4
referred above. On going through para nos. 29 to
32 of the impugned judgment, it would be clear
that the reference Court has rightly considered
the sale instances at Sr. No. 1 to 3 and 4 to 6 for
determination of market value. The reference
Court has also rightly deducted 20% by considering
the proximity of the land with Jintur town coupled
with advantages and determined the market value of
the acquired lands at Rs. 1,00,000/- per Hectare for
irrigated lands and Rs. 80,000/- per Hectare for dry
lands, which appear to be adequate and reasonable
having regard to the location, geographical situation
coupled with advantages and proximity to Jintur
town and nearby rates. The exercise of determining
the market value of the acquired lands made by
the reference Court cannot be said to be
erroneous. The reference Curt (sic) has attempted to
award adequate compensation to the claimants,
whose lands came to be acquired by way of
compulsory acquisition for the industrial area of
Jintur town. The reference Court has also awarded
the statutory benefits available under the Land
Acquisition Act, 1894 including solatium.”
(emphasis supplied)
15
25. It can thus be seen that though the High Court
recorded, in paragraph 49, that the Reference Court
considered in all ten exemplars and that it did not consider
the sale instance at Sr. No. 4 dated 31st March 1990, which is
from Jintur, in the immediate next paragraph i.e., paragraph
50, the High Court takes a diametrically opposite view that the
Reference Court has considered the sale instance at Sr. No.
4 since they are found nearby to the notification under the Act
of 1961. Not only that but the High Court, placing reliance on
paragraph 31 of the judgment and award passed by the
Reference Court, reiterated that it has considered the sale
instance at Sr. No. 4.
26. Having already referred to paragraph 31 of the
judgment and award passed by the Reference Court
hereinbefore, we have no difficulty in holding that the finding
recorded by the learned Single Judge of the High Court in
paragraph 50 of the impugned judgment and final order is
erroneous.
27. The Reference Court having taken note of the ten sale
exemplars ought to have dealt with the sale instance at Serial
No. 4, however, it did not. That being the case, the High Court
16
should have taken note of the same and taken into
consideration the sale instance at Sr. No. 4, however, the High
Court having clearly observed that the Reference Court did not
take into consideration the sale instance at Sr. No.4, in
paragraph 49, recorded an incorrect finding in paragraph 50
by holding that the Reference Court took into consideration
the sale instance at Sr. No. 4.
28. Taking note of the same, we have no hesitation in
holding that the impugned judgment and order dated 21st
April, 2022, is not at all sustainable.
29. Having come to the above conclusion, we could have
very well remitted the matter back to the High Court for
consideration afresh, however, taking into consideration the
fact that the Appellants are farmers and that their land was
acquired by the Respondent-State in the early 1990s, we are
of the view that it would be appropriate that we ourselves
consider the case of the Appellants as to whether they ought
to be granted compensation on the basis of the highest
exemplar sale deed dated 31st March, 1990, showing market
value of Rs. 72,900/- per Acre.
17
30. In this respect, it will be appropriate to refer to the
judgments of this Court relied upon by the learned counsel for
the parties.
31. In the case of Anjani Molu Dessai (supra) this Court,
while referring to two previous decisions of this Court, held
thus:
“20. The legal position is that even where there
are several exemplars with reference to similar
lands, usually the highest of the exemplars, which
is a bona fide transaction, will be considered.
Where however there are several sales of similar
lands whose prices range in a narrow bandwidth,
the average thereof can be taken, as representing
the market price. But where the values disclosed
in respect of two sales are markedly different, it
can only lead to an inference that they are with
reference to dissimilar lands or that the lower
value sale is on account of undervaluation or
other price depressing reasons. Consequently,
averaging cannot be resorted to. We may refer to
two decisions of this Court in this behalf.
21. In M. Vijayalakshmamma Rao
Bahadur v. Collector [(1969) 1 MLJ 45 (SC)] , a three-
Judge Bench of this Court observed that the proper
method for evaluation of market value is by taking
the highest of the exemplars and not by averaging of
different types of sale transactions. This Court held:
(MLJ pp. 46-47)
“It seems to us that there is substance
in the first contention of Mr Ram
Reddy. After all when the land is being
compulsorily taken away from a person,
he is entitled to say that he should be
given the highest value which similar
land in the locality is shown to have18
fetched in a bona fide transaction
entered into between a willing
purchaser and a willing seller near
about the time of the acquisition. It is
not disputed that the transaction
represented by Ext. R-19 was a few
months prior to the notification under
Section 4 that it was a bona fide
transaction and that it was entered into
between a willing purchaser and a willing
seller. The land comprised in the sale deed
is 11 grounds and was sold at Rs. 1961
per ground. The land covered by Ext. R-27
was also sold before the notification but
after the land comprised in Ext. R-19 was
sold. It is true that this land was sold at
Rs. 1096 per ground. This, however, is
apparently because of two circumstances.
One is that betterment levy at Rs. 500 per
ground had to be paid by the vendee and
the other that the land comprised in it is
very much more extensive, that is about
93 grounds or so. Whatever that may be,
it seems to us to be only fair that where
sale deeds pertaining to different
transactions are relied on behalf of the
Government, that representing the highest
value should be preferred to the rest
unless there are strong circumstances
justifying a different course. In any case
we see no reason why an average of two
sale deeds should have been taken in this
case.”
22. In State of Punjab v. Hans Raj [(1994) 5 SCC 734]
this Court held: (SCC p. 736, para 4)
“4. Having given our anxious
consideration to the respective
contentions, we are of the considered view
that the learned Single Judge of the High
Court committed a grave error in working
out average price paid under the sale19
transactions to determine the market
value of the acquired land on that basis.
As the method of averaging the prices
fetched by sales of different lands of
different kinds at different times, for fixing
the market value of the acquired land, if
followed, could bring about a figure of
price which may not at all be regarded as
the price to be fetched by sale of acquired
land. One should not have, ordinarily
recourse to such method. It is well
settled that genuine and bona fide sale
transactions in respect of the land
under acquisition or in its absence the
bona fide sale transactions proximate
to the point of acquisition of the lands
situated in the neighbourhood of the
acquired lands possessing similar value
or utility taken place between a willing
vendee and the willing vendor which
could be expected to reflect the true
value, as agreed between reasonable
prudent persons acting in the normal
market conditions are the real basis to
determine the market value.””
(emphasis supplied)
32. Next, in the case of Mehrawal Khewaji Trust (supra),
this Court held thus:
“17. It is clear that when there are several exemplars
with reference to similar lands, it is the general rule
that the highest of the exemplars, if it is satisfied that
it is a bona fide transaction, has to be considered and
accepted. When the land is being compulsorily taken
away from a person, he is entitled to the highest
value which similar land in the locality is shown to
have fetched in a bona fide transaction entered into
between a willing purchaser and a willing seller near
about the time of the acquisition. In our view, it20
seems to be only fair that where sale deeds pertaining
to different transactions are relied on behalf of the
Government, the transaction representing the
highest value should be preferred to the rest unless
there are strong circumstances justifying a different
course. It is not desirable to take an average of
various sale deeds placed before the authority/court
for fixing fair compensation.”
33. It can thus be seen that it is a settled position of law
that when there are several exemplars with reference to
similar land, usually the highest of the exemplars, which is a
bona-fide transaction, will be considered. The same was
reiterated in the judgment of this Court in the case of
Mohammad Yusuf (supra).
34. The learned counsel for the Respondent No. 3 (MIDC),
arguing in support of the impugned judgment and final order
dated 21st April, 2022, in addition to relying on the judgment
of this Court in Anjani Molu Dessai (supra) referred to three
other judgments of this Court.
35. Firstly, she relied on paragraph 20 of the judgment of
this Court in the case of Kapil Mehra (supra), which reads
thus:
“20. Where the lands acquired are of different type
and different locations, averaging is not permissible.
But where there are several sales of similar lands,21
more or less, at the same time, whose prices have
marginal variation, averaging thereof is permissible.
For the purpose of fixation of fair and reasonable
market value of any type of land, abnormally high
value or abnormally low value sales should be
carefully discarded. If the number of sale deeds of
the same locality and the same period with short
intervals are available, the average price of the
available number of sale deeds shall be considered as
a fair and reasonable market price.”
(emphasis supplied)
36. It was sought to be contended that sale exemplar at Sr.
No. 4 gave an abnormally high figure of Rs. 72,900/- per Acre
and that this sale exemplar has rightly been excluded from
consideration by the Courts below. Further, it was also
contended that even the maximum increase in sale
consideration in the later years i.e., till 1993 does not match
up to the amount of sale exemplar at Sr. No. 4.
37. Secondly, relying on the judgment of this Court in the
case of Shawal Singh (supra), specifically paragraph 7
thereof, it was sought to be contended by the learned counsel
for Respondent No. 3 (MIDC) that the claimants/Appellants
did not lead any evidence to show that the sale exemplar at
Sr. No. 4 is a bona-fide transaction. Paragraph 7 of Shawal
Singh (supra) reads thus:
22
“7. The decision of this Court in Mehrawal Khewaji
Trust [Mehrawal Khewaji Trust v. State of Punjab,
(2012) 5 SCC 432 : (2012) 3 SCC (Civ) 177] with
regard to highest rate of comparable sales is subject
to certain well-defined and well-understood
exceptions apart from the necessity of proving
such sales to be bona fide as indicated in the
decisions of this Court. The extent of the area
transferred would certainly be a relevant factor which
issue stands concluded by findings of fact recorded
by the learned Reference Court.”
(emphasis supplied)
38. Thirdly, relying on paragraph 20 of Anjani Molu
Dessai (supra) which has been reproduced hereinbefore so
also paragraph 18 of Nirmal Singh (supra), the learned
counsel for Respondent No. 3 (MIDC) contended that the
Reference Court has rightly used the principle of averaging of
sale price of sale exemplars at Sr. Nos. 1 to 3 and 5 for
determination of market value of the acquired land as the same
is a well-established principle of law laid down by this Court in
several cases. For ease of reference, paragraph 18 of Nirmal
Singh (supra) is reproduced and it reads thus:
“18. Keeping in mind the guidelines laid down by
this Court in the catena of cases referred to supra,
we are of the opinion to determine just and
reasonable compensation for the acquired land on
the basis of the sale instances as submitted by the
appellants by taking the average of the sale
considerations mentioned therein that are relevant
to the date of issue of notification under Section 4 of23
the Act. However, the same is to be determined
keeping in mind that developmental costs are higher
for larger areas of land as compared to small portions
of land. The rate of compensation must be subject to
deductions towards developmental purpose that will
have to be incurred by the respondent State.”
(emphasis supplied)
39. Insofar as the contention of the learned counsel for
Respondent No. 3 (MIDC) that the Courts below rightly
excluded the sale exemplar at Serial No. 4 on account of it
being of an abnormally high value is concerned, we outrightly
reject the said contention.
40. It is well-settled that the compensation payable to the
owner of the land is determined by reference to the price which
a seller might reasonably expect to obtain from a willing
purchaser. It is further settled law that the land acquired has
to be valued not only with reference to its condition at the time
of notification under Section 4 of the LA Act but its potential
value must be taken into account. In this respect, the sale
deeds of lands situated in the vicinity and the comparable
benefits and advantages which they have, provide a ready
method of computing the market value.
41. In the instant case, it is not in dispute that the land
was acquired for public purpose for the establishment of Jintur
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Industrial Area. Further, the lands in question are situated at
village Pungala, which is at a distance of 2 kilometres from
Jintur, a taluka place and where the market committee,
Wakhar Mahamandal, dairy business and other basic facilities
are available. Not only that but the Courts below found that
the lands acquired are situated near T-point of Nashik-Nirmal
State Highway; that the acquired land has non-agricultural
potential and that a percolation tank just opposite to the
acquired lands, having sufficient water, could be found. It
would also be relevant to note that the sale instances at Sr.
Nos.1, 2 and 3 are of April/May of 1989 and the notice under
Section 32(2) of the Act of 1961 was issued on 19th July 1990,
as such, the sale exemplar at Sr. No.4 i.e., the sale instance
dated 31st March 1990, is the most proximate to the date of
transaction. Further, the sale instances at Sr. Nos.9 and 10,
from Jintur, show that after the notice under the Act of 1961,
there has been a very high rise in the prices of the land in the
nearby areas. We are, therefore, of the considered opinion that
the land of the Appellants was situated in a prime location and
they deserve the benefit of the highest sale exemplar.
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42. On the same lines, the contention of the learned
counsel for the Respondent No. 3 (MIDC) that the maximum
increase in the sale consideration in the later years (i.e., till
1993) does not match up to the amount of sale exemplar at Sr.
No. 4 dated 31st March 1990 is also liable to be rejected. It can
clearly be seen from the aforementioned table that the sale
instances at Sr. Nos. 9 and 10 are from Jintur and they reflect
sale consideration of Rs. 61,500/- and 60,000/- respectively,
which are closer to the highest sale exemplar at Sr. No. 4
having value of Rs. 72,900/-, than they are to the sale
instances at Sr. Nos. 1, 2, 3 and 5 which are having value of
around Rs. 40,000/-.
43. Insofar as the contention of the learned counsel for
Respondent No. 3 (MIDC) qua sale instance at Sr. No. 4 not
being a bona-fide transaction is concerned, the same is also
rejected on the basis of the provision contained in Section 51A
of the LA Act as per which the certified copy of a document can
be accepted as evidence of transaction recorded in the said
document.
44. Further, it is clear from the judgment and award
passed by the Reference Court that though the Respondent-
26
State denied the correctness of above documents, it did not
lead any rebuttal evidence. In light of the same, the contention
of the learned counsel for Respondent No. 3 (MIDC) on this
count is also rejected.
45. Finally, insofar as the contention of the learned counsel
for the Respondent No. 3 (MIDC) qua the method of
computation of the compensation is concerned, we are of the
view that the same does not merit acceptance.
46. It was sought to be contended by the learned counsel
for the Respondent No. 3 (MIDC) that the Reference Court has
rightly used the principle of averaging of sale price of sale
exemplars at Sr. No. 1, 2, 3 and 5 for determination of market
value of acquired land. However, it is clear from a reading of
paragraph 20 of the judgment of this Court in the case of
Anjani Molu Dessai (supra) that the legal position is that even
where there are several exemplars with reference to similar
lands, usually the highest of the exemplars, which is a bona-
fide transaction will be considered. Further, only where there
are several sales of similar lands whose prices range in a
narrow bandwidth, the average thereof can be taken, as
representing the market price. The said position of law was
27
reiterated in the judgment of this Court in the cases of
Mehrawal Khewaji Trust (supra) and Mohammad Yusuf
(supra).
47. Even in the case of Kapil Mehra (supra), relied upon
by the learned counsel for Respondent No. 3 (MIDC), it has
been held that where there are several sales of similar lands,
more or less, at the same time, whose prices have marginal
variation, averaging thereof is permissible.
48. The position of law being thus and further on account
of the fact that the lands acquired in the present case are in a
prime location, we are of the considered opinion that no
occasion arose for the Reference Court to deviate from the well-
settled position of law and that the claimants/Appellants
deserve the benefit of the highest sale exemplar dated 31 st
March 1990. Not only that but in the event, the values of the
sale instances taken into consideration by the Reference Court
had a “marginal variation”, averaging thereof would have been
permissible. But the sale exemplars taken into consideration
by the Reference Court, in the present case, were the ones from
Sr. Nos. 1 to 6 and they ranged from Rs. 25,000/- per Acre to
28
Rs. 72,900/- per Acre. In such a case, the averaging thereof
was clearly not permissible.
49. It is further to be noted that only because the Reference
Court, without recording any reason, decided to completely
overlook/omit the sale instance at Sr. No. 4 and only took into
consideration the sale instances at Sr. Nos.1, 2, 3 and 5, which
are having value of Rs.40,000/- per Acre, Rs.41,000/- per
Acre, Rs.40,000/- per Acre and Rs.40,000/- per Acre
respectively; the averaging of these sale instances, having a
marginal variation, could have been envisaged by the
Reference Court. We are, however, of the considered opinion
that such an approach taken by the Reference Court was
completely impermissible. Even in the case of Nirmal Singh
(supra), relied upon by the learned counsel for Respondent No.
3 (MIDC), where this Court took the average of the sale
considerations mentioned therein, the range of prices was in a
narrow bandwidth. The contention of the learned counsel for
Respondent No.3 (MIDC) qua the method of computation of the
compensation is, therefore, also rejected.
50. Having held thus, we, however, cannot lose sight of the
aspect that the ten sale exemplars placed before the Reference
29
Court by the claimants/Appellants are of small plots of land in
Jintur town, each of them being less than 1 Hectare. The
Reference Court, therefore, correctly came to the conclusion
that while accepting the sale instances a reasonable reduction
requires to be made. As such, the land which is acquired being
much larger in area, the Reference Court applied a deduction
of 20% in the price determined. Being in agreement with the
same, while accepting the sale exemplar at Sr. No. 4 dated 31st
March 1990, and having market value of Rs. 72,900/- per
Acre, we deem it appropriate to apply a deduction of 20% i.e.,
Rs. 14,580/- per Acre.
51. In the result, we pass the following order:
i. The present batch of appeals are allowed;
ii. The judgment and final order dated 21st April, 2022,
passed by the learned Single Judge of the High
Court is quashed and set aside;
iii. The judgment and award dated 7th June, 2007
passed by the Reference Court is quashed and set
aside;
30
iv. We direct that the compensation granted to the
Appellants be enhanced from Rs. 32,000/- per Acre
to Rs. 58,320/- per Acre; and
v. We further direct that all other consequential
benefits of solatium and interest on the enhanced
compensation in terms of Section 23(1-A), 23(2) and
28 of the Land Acquisition Act, 1894, be granted to
the Appellants.
52. Pending applications, if any, are disposed of.
…………………………CJI
(B.R. GAVAI)
………………………………………J
(AUGUSTINE GEORGE MASIH)
NEW DELHI;
JULY 28, 2025.
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