An important decision was handed down by the Supreme Court of India in April 2025 about the matter of Ram Kishan Through His LRs v. State of Haryana and Others. Ram Kishan has since passed away on. Within the jurisdiction of Haryana, the case that was presided over by Justice K.V. Viswanathan concerned the valuation of lands that had been acquired. The verdict gained significance due to the fact that it provided a comprehensive study of comparative land compensation, the principles of escalation and de-escalation, and the treatment of land potentiality. As a result of this ruling, the manner in which landowners are compensated when their land is acquired by public efforts is altered.
Details on the situation
The case involved a number of appeals that were brought about by the acquisition of land in two key regions of Haryana, namely Dharuhera and the neighboring villages of Malpura and Kapriwas. Specifically, the area Acquisition Act of 1894 had been utilized in order to acquire the area in question.
According to the Haryana Urban Development Authority Act, 1977, a notification under Section 4 was issued on December 12, 2008, for the purpose of acquiring property in order to establish Institutional Sector 5A. This notification was for the village of Dharuhera. A valuation of ₹21,000,000 per acre was assigned to the land by the Land Acquisition Collector.
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On the other hand, land in the villages of Malpura and Kapriwas was acquired at a later time by a notification that was issued on May 13, 2010. In that particular case, the Reference Court granted a sum of ₹67,12,050 per acre. Subsequently, the High Court increased the amount to ₹1,21,33,320, and the Supreme Court ultimately increased it to ₹1,49,14,975 per acre, ensuring that the entire statutory benefits were granted.
In the case of Ram Kishan, the primary question that needed to be answered was whether or not landowners in Dharuhera were entitled to compensation that was comparable to or equivalent to that which was provided to landowners in Malpura and Kapriwas. This was crucial because of the proximity and nature of the lands that were purchased.
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Core Concerns and Concerns
The case raised a number of significant legal concerns, including the following:
The question of whether or not the land in Dharuhera and Malpura/Kapriwas was equivalent for the purposes of compensation.
The question at hand is whether or not the Reference Court correctly employed a de-escalation principle in order to assess reimbursement.
the question of whether or not the High Court made a mistake by disregarding similar sale deeds that demonstrated a higher land value.
Whether or not the prospective uses of the land were taken into account in an appropriate manner while assessing its market value.
Consider the reasoning of the court.
₹55,71,010 per acre was the amount that the Reference Court had decided to pay as compensation for the land in Dharuhera. The previous award for Malpura, which was ₹67,12,050 per acre, served as the basis for this award; however, a 12% de-escalation was imposed to account for the 17-month gap between the acquisition notices. The court placed a strong emphasis on the principle of fairness and proximity, keeping in mind that both acquisitions served comparable development aims (industrial and institutional) and involved villages that were located in close proximity to one another.
The Decision of the High Court
The compensation that was awarded by the Reference Court was upheld by the Punjab and Haryana High Court, although the court did not agree with the reasoning behind the decision. In order to evaluate the value of the land, it was decided that the Malpura and Dharuhera lands were not strictly comparable in terms of geography and land use. Instead, it relied on a single sale deed (Exhibit PW4/D) to make its determination.
For this particular selling document, the per-acre rate was ₹40,55,000. Following an annual rise of 12% to correspond with the acquisition year, the High Court determined the value to be around ₹54,42,653, which it considered to be relatively near to the amount that was granted by the Reference Court. Because of this, it decided to uphold the compensation of ₹55,71,010, although for different reasons.
The Decisions of the Supreme Court
As part of his decision, Justice K.V. Viswanathan conducted an in-depth analysis of the logic used by the High Court and overturned significant sections of its judgments. Important decisions were made by the Supreme Court, including the following:
Comparable Characteristics of the Property
Furthermore, the court determined that the lands in Dharuhera and Malpura/Kapriwas were comparable to one another. There was evidence in the form of maps and sale deeds that the lands were next to one another, had comparable potential for development, and were included in the same urbanization plan in Dharuhera. Both of these regions were in close proximity to residential, commercial, and industrial developments.
Possibilities that the Land Offers
The Supreme Court confirmed, with reference to previous case law, that the “potentiality” of land, which refers to the various uses that could be considered for the land, is an essential component in assessing the market value of the land. The fact that the property in Dharuhera was surrounded by urban infrastructure such as schools, highways, and residential colonies demonstrated that it was suitable for development.
Comparable Sale Deeds Should Be Utilized
For arbitrarily relying solely on one sale document (PW4/D), the Supreme Court reprimanded the High Court for neglecting other sale deeds, such as PW4/E and PW4/F, which had larger values and were geographically just as close. It was as early as 2006 when these examples displayed values that reached as high as ₹95 lakhs per acre. By applying an annual escalation rate of 12%, the Court observed that the value of land in 2008 might be reasonably estimated to be greater than ₹1.17 crore per acre using this method.
The process of escalation and de-escalation
The Court agreed with the Reference Court’s decision to employ a mechanism known as reverse deduction, sometimes known as de-escalation. Specifically, it was confirmed that the application of a 12% deduction from the more recent acquisition in Malpura, which was priced at ₹67,12,050, was both legitimate and equitable.
Nevertheless, considering that the Supreme Court had previously raised the compensation for the land in Malpura to ₹1,49,14,975, it is reasonable to assume that the land in Dharuhera should likewise be eligible for proportional adjustment.
The Final Decision
The appeals that were filed by the landowners of Dharuhera were granted by the Supreme Court. At the same time that it maintained consistency with past rulings and ensured fairness, it increased the compensation to ₹1,23,24,000 per acre.
The Court came to the conclusion that the preceding decisions in the cases of BESCO Ltd. and M/s Habitat Estates Pvt. Ltd. offered a comprehensive basis for determining the value of lands that are close to one another. In addition to this, it underlined the importance of using the principles of de-escalation and parity in an equitable manner.
The Establishment of Legal Principles
The following important ideas in Indian land acquisition law were reinforced and clarified as a result of this case:
Similar Sale Examples: The courts are required to take into consideration a number of other sale documents, giving preference to those that are comparable to the land that was bought in terms of time, location, and probable use.
Potential of Land: The value of land is substantially impacted by its potential uses in the future as well as its strategic location, particularly in areas designated for urban expansion.
The valuation of land that was acquired earlier or later can be adjusted by the courts through the use of acceptable percentage increases or deductions. This process is known as escalation and de-escalation.
According to the principles of judicial fairness and parity, compensation must be comparable when land is acquired for similar objectives and is situated in a similar manner. This is done to prevent discrimination among landowners.
In the area of land acquisition law, the decision that the Supreme Court made in the case of Ram Kishan v. State of Haryana can be considered an important precedent. The document provides a comprehensive study of the computation of compensation, which is founded on equitable principles and is in line with previous rulings or decisions. It is the purpose of this case to ensure that landowners are not unfairly disadvantaged as a result of procedural gaps or superficial discrepancies in land classification. This verdict is likely to have an impact on the manner in which future acquisition disputes are resolved, particularly with regard to the fairness of compensation and the uniformity of remuneration across locations that are comparable.
