The Supreme Court ruled that adjacent villages with similar locational advantages must receive equal compensation in land acquisition cases, rejecting artificial disparities. It upheld the “belting method” for valuation but emphasized parity between villages Kukrola and Fazalwas near NH-8. The Court affirmed 10% annual escalation on sale exemplars and disallowed development cuts for highway-adjacent “inner belt” lands, while maintaining 30% cuts for interior plots. The judgment reinforces equitable compensation principles under the Land Acquisition Act, 1894.
Facts Of The Case:
The case arose from land acquisition proceedings initiated by the Haryana government in 2008 for developing the Chaudhary Devi Lal Industrial Model Township near Gurgaon. A common Section 4 notification under the Land Acquisition Act, 1894 proposed acquiring 3,510 acres across multiple villages, including Kukrola and Fazalwas adjacent to NH-8 (Delhi-Jaipur Highway). The Land Acquisition Collector initially awarded uniform compensation of ₹30 lakh/acre for both villages in 2009. Dissatisfied landowners sought references, leading the Reference Court in 2013 to enhance compensation to ₹62.14 lakh/acre for all lands, applying a 30% development cut.
The Punjab & Haryana High Court subsequently adopted the “belting method” in 2022, granting higher rates for NH-8 adjacent lands (₹87.34 lakh/acre for Kukrola and ₹1.21 crore/acre for Fazalwas up to 5 acres depth) while retaining the Reference Court’s rate for interior lands. This created a ₹34 lakh/acre disparity between the two villages for similarly located lands. Both landowners (seeking parity/enhancement) and HSIIDC (challenging the enhancements) appealed to the Supreme Court. The apex court noted both villages were acquired through a common notification for the same project, shared similar proximity to NH-8 and KMP Expressway, and had been treated uniformly by lower authorities until the High Court’s divergent valuation.
Procedural History:
The procedural history began with the 2008 acquisition notification under Section 4 of the Land Acquisition Act, 1894 for 3,510 acres across Gurgaon villages, including Kukrola and Fazalwas. The Land Acquisition Collector awarded uniform compensation of ₹30 lakh/acre in 2009. Dissatisfied landowners filed reference petitions under Section 18, leading the Reference Court in 2013 to enhance compensation to ₹62.14 lakh/acre for both villages while imposing a 30% development cut. Both parties appealed to the Punjab & Haryana High Court through Regular First Appeals (RFAs).
In 2022, the High Court adopted the belting method, creating a compensation disparity – awarding ₹87.34 lakh/acre for Kukrola and ₹1.21 crore/acre for Fazalwas (for NH-8 adjacent lands up to 5 acres depth) while maintaining ₹62.14 lakh/acre for interior lands. This prompted cross-appeals to the Supreme Court by landowners (seeking parity/enhancement) and HSIIDC (challenging the enhancements). The Supreme Court in 2025 consolidated these appeals, examining whether the High Court’s differential valuation violated principles of equitable compensation for similarly situated lands acquired through a common notification for the same public purpose.
Court Observation:
The Supreme Court made several key observations in its judgment. It emphasized that adjacent villages with similar locational advantages and developmental potential must receive equal compensation under land acquisition laws, unless justified by clear, objective distinctions. The Court noted the High Court created an artificial disparity of ₹34 lakh/acre between Kukrola and Fazalwas without evidentiary basis, violating principles of equality. While approving the belting method’s application (differentiating between highway-adjacent and interior lands), the Court stressed such classification must be evidence-based and non-arbitrary.
It upheld the 10% annual escalation rate applied to sale exemplars as reasonable but rejected development cuts for NH-8 adjoining “inner belt” lands, noting their premium value already accounted for infrastructure proximity. The judgment clarified that mechanical reliance on isolated sale deeds, without considering comparability factors like size, purpose and transaction genuineness, leads to inequitable outcomes. Importantly, the Court held that common acquisition for identical public purpose through single notification creates strong presumption for parity in compensation between similarly situated villages. These observations reinforce that compensation determination must balance statutory methodology with fundamental principles of fairness and non-discrimination.
Final Decision & Judgement:
The Supreme Court delivered a landmark judgment harmonizing compensation principles for adjacent villages under land acquisition laws. It partially allowed landowners’ appeals by directing parity in compensation between Kukrola and Fazalwas villages, enhancing Kukrola’s NH-8 adjacent land value from ₹87.34 lakh to ₹1.21 crore per acre (matching Fazalwas). The Court upheld: (1) the belting method’s validity for differentiating between highway-adjacent (inner belt) and interior lands (outer belt); (2) the High Court’s 10% annual escalation rate on sale exemplars; and (3) the 30% development cut for outer belt lands while eliminating it for premium inner belt parcels.
All appeals by HSIIDC challenging compensation enhancements were dismissed. The judgment established that artificial disparities in valuing similarly situated lands violate constitutional equality principles, especially when acquired through common notification for identical public purpose. The Court ordered compliance within three months, balancing landowners’ rights with the state’s infrastructure development objectives through this equitable resolution.
Case Details:
Case Title: Krishan Kumar vs. State of Haryana & Others Citation: 2025 INSC 638 Civil Appeal No.: (Arising out of SLP (C) Nos. 9732-9734/2023) Date of Judgment: May 7, 2025 Judges/Justice Name: Justice Surya Kant & Justice Ujjal Bhuyan
Download The Judgement Here