Barla Ram Reddy vs State of Telangana 2025 INSC 531 - Land Acquisition -Sale Instances & Market Value
Land Acquisition Act 18994 - Section 23- The computation of compensation for acquisition must be guided by the “market value of the land as on the date of publication of the Section 4 notification” - ‘Market value’ to represent ‘the price that a willing buyer would pay to a willing seller in light of the land’s condition and potentiality'-Of course, in ordinary circumstances, the best way to identify this price is by considering instances of sale of similar or comparable lands. Such exemplars can serve as a foundation for determining compensation, so long as they fulfil the following requirements: i. The sale exemplar depicts a genuine, open-market transaction; ii. The land covered by the sale deed is in the vicinity of the acquired land; iii. The land covered by the sale deed is similar in nature to the acquired land; and iv. The sale was executed at a time proximate to the date of the notification issued under Section 4 of the 1894 Act. Any sale exemplar which is presented to the Court ought to be considered on the touchstone of these requirements, so that the most representative sale instance can be determined. 15. Sale instances, however, cannot guide us to the market value of the land with exactitude. In some cases, direct examples of sale of comparable land may not be available, while in other cases, there may be relevant distinguishing features between the sale exemplar and the acquired land. In such cases, Courts adopt the process of guesstimation to apply the evidence and arrive at an equitable price for the acquired land. (Para 12-15) As a rule of thumb, sale instances which take place after the initiation of the acquisition are not reliable sources to compute land acquisition compensation. This position arises from the tendency of land value in the area to appreciate upon acquisition, expecting benefits from the public purpose of the acquisition. For example, the acquisition of land for development of commercial hubs, residential projects, and arterial roads would inevitably shoot up the price of the other nearby land. As such, post-Section 4 sale instances are bound to be skewed. (Para 25)
