The Supreme Court held that when multiple sale exemplars exist, the highest bona fide transaction must be used to determine market value for compensation, and averaging is impermissible unless prices fall within a narrow range. The Court emphasized that certified sale deeds have presumptive value under Section 51A of the Land Acquisition Act, 1894, and the absence of rebuttal evidence strengthens their validity.
Facts Of The Case:
The appellants were farmers whose land, Survey Nos. 103 and 104 admeasuring 16.79 Hectares in Village Pungala, Parbhani, Maharashtra, was acquired in the early 1990s under the Maharashtra Industrial Development Act, 1961 for setting up an industrial area near Jintur town. The Land Acquisition Officer awarded compensation at Rs. 10,800 per acre in an award dated December 6, 1994. Dissatisfied, the appellants accepted the compensation under protest and sought a reference under Section 18 of the Land Acquisition Act, 1894. The Reference Court, in 2007, partly allowed the reference and enhanced the compensation to Rs. 32,000 per acre. The High Court subsequently dismissed the appellants’ first appeal, upholding the Reference Court’s decision. The core dispute before the Supreme Court was the rejection of the appellants’ highest sale exemplar from March 31, 1990, which showed a market value of Rs. 72,900 per acre for a comparable plot, in favor of averaging lower-value sale instances. The appellants argued this exemplar represented the true market value of their prime land, which was located just 2 km from Jintur town, near a state highway and a water source, and had non-agricultural potential.
Procedural History:
The procedural history began with the Land Acquisition Officer’s award dated 6th December 1994, fixing compensation. The appellants, dissatisfied, filed a reference under Section 18 of the Land Acquisition Act, 1894 before the Reference Court (Principal District Judge, Parbhani) in 1997. The Reference Court, vide its judgment dated 7th June 2007, partly allowed the reference and enhanced the compensation. Still aggrieved, the appellants filed a First Appeal before the High Court of Judicature at Bombay (Aurangabad Bench), which dismissed the appeal vide its impugned judgment dated 21st April 2022. The appellants then filed Special Leave Petitions in the Supreme Court, which granted leave and, after condoning a delay in filing, heard the civil appeals arising from those petitions. The Supreme Court allowed the appeals on 28th July 2025, setting aside the orders of the courts below and granting enhanced compensation.
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Court Observation:
The Court observed that when multiple bona fide sale exemplars for similar lands exist, the law mandates consideration of the highest value transaction to determine market value for compensation, and averaging is only permissible if the prices fall within a narrow bandwidth. It found the Reference Court and High Court erred in completely overlooking the highest exemplar from 31st March 1990 without recording any reason to doubt its bona fides, especially since the certified copy carried a presumptive value under Section 51A of the Land Acquisition Act and the State led no rebuttal evidence. The Court further noted the acquired land’s prime location near a town and highway with non-agricultural potential justified applying the highest exemplar, albeit with a standard 20% deduction for development costs due to the larger area acquired.
Final Decision & Judgement:
The Supreme Court allowed the appeals and set aside the judgments of the High Court and the Reference Court. It directed that the compensation for the acquired land be enhanced from Rs. 32,000 to Rs. 58,320 per acre, applying the highest bona fide sale exemplar of Rs. 72,900 per acre from 31st March 1990 with a 20% deduction for development costs. The appellants were also granted all consequential statutory benefits, including solatium and interest on the enhanced compensation as per Sections 23(1-A), 23(2), and 28 of the Land Acquisition Act, 1894.
Case Details:
Case Title: Manohar and Others vs. The State of Maharashtra and Others Citation: 2025 INSC 900 Date of Judgement: 28 July 2025 Judges/Justice Name: Justice B.R. Gavai and Justice Augustine George Masih
Download The Judgement Here