HORRMAL (DECEASED) THROUGH HIS LRS & ORS. versus STATE OF HARYANA & ORS.
[2024] 10 S.C.R. 1709, Supreme Court of India, 2024
Outcome: Appeal(s) allowed (Granted)
Segment: Issues
[2024] 10 S.C.R. 1709 : 2024 INSC 797
Horrmal (Deceased) Through His LRs & Ors. 
v.  
State of Haryana & Ors.
(Civil Appeal No. 11758 of 2024)
21 October 2024 
[Surya Kant* and K.V. Viswanathan, JJ.]
Issue for Consideration
(1)	
Whether the appellants are entitled to higher compensation 
for their acquired lands, and if so, to what extent; and 
(2)	
Whether the methodology for calculating the quantum of such 
compensation has been appropriately applied.
Headnotes†
Land Acquisition Act, 1894 – ss.4, 6, 23(1) – Assessment 
of Market Value for Acquired Lands – Comparable Sales 
Method – Deduction for Developmental Charges:
Held: Compensation for acquired lands must reflect their fair 
market value as of the date of the Section 4 notification – The 
"comparable sales method" is the preferred approach, using 
bona fide sales exemplars of similar land – The ‘market value’ is 
to be assessed with reference to factors such as standing crops 
and trees, the severance of part of the land, damage to movable 
or immovable property or earnings, the need to relocate one’s 
residence or business, and any loss of profits from the land 
between the publication of the declaration under Section 6 and 
the Collector's assumption of possession – Sale deeds of smaller 
parcels can be considered but must undergo appropriate deductions 
to account for developmental charges – Deductions may range from 
20% to 75%, depending on the nature and location of the land.  
[Paras 18, 19, 26, 30]
Compensation – Reliance on Best Sale Exemplars – Judicial 
Guidelines for Determination of Fair Value:
Held: When multiple comparable sale exemplars exist, the highest 
bona fide exemplar should be preferred, provided it meets legal 
* Author
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criteria – Even when averaging values, the highest exemplar may 
be considered to ensure fair compensation – The Reference Court’s 
valuation of ₹92,62,500 per acre aligns with market potential and 
statutory requirements, and the High Court erred in reducing it. 
[Paras 28, 35, 37]
Principle of Potentiality – Strategic Location of Acquired 
Land – Enhancement of Compensation:
Held: The acquired land’s strategic location and potential for non-
agricultural development must be factored into the compensation. 
Lands situated near urban areas, major highways, or industrial 
zones have higher potential value – Deductions should not 
undermine this potentiality. [Paras 32, 33, 36]
Case Law Cited
Mehrawal Khewaji Trust v. State of Punjab [2012] 4 SCR 24 : 
(2012) 5 SCC 432; A. Natesam Pillai v. Tahsildar [2010] 10 SCR 
1 : (2010) 9 SCC 118; General Manager, Oil and Natural Gas 
Corporation Ltd. v. Rameshbhai Jivanbhai Patel [2008] 11 SCR 
927 : (2008) 14 SCC 745; Kanwar Singh v. Union of India [1998] 
Supp. 2 SCR 505 : (1998) 8 SCC 136; Subh Ram v. State of 
Haryana [2009] 15 SCR 287 : (2010) 1 SCC 444; Chimanlal 
Hargovinddas v. LAO [1988] Supp. 1 SCR  531 : (1988) 3 SCC 
751; Shaji Kuriakose v. Indian Oil Corporation Ltd. [2001] Supp. 1 
SCR 573 : (2001) 7 SCC 650; Administrator General of West 
Bengal v. Collector, Varanasi [1988] 2 SCR 1025 : (1988) 2 SCC 
150; Atma Singh v. State of Haryana and Others [2007] 12 SCR 
1120 :
(2008) 2 SCC 568; Balwan Singh v. State of Haryana and 
others, 2022 SCC Online SC 637; Karan Singh v. Union of India 
[1997] Supp. 4 SCR 237 : (1997) 8 SCC 186; Rishi Pal Singh 
v. Meerut Development Authority [2006] 2 SCR 508 : (2006) 3 
SCC 205; Sh. Himmat Singh v. State of M.P., (2013) 16 SCC 
392 – relied on.
Dollar Co. v. Collector of Madras, AIR 1975 SC 1670; Special 
Land Acquisition Officer v. T. Adinarayan Setty, AIR 1959 SC 429; 
Maya Devi v. State of Haryana [2018] 1 SCR 225 : (2018) 2 SCC 
474 – referred to.
[2024] 10 S.C.R. 
1711
Horrmal (Deceased) Through His LRs & Ors. v.  
State of Haryana & Ors.
List of Acts
Land Acquisition Act, 1894; Haryana Urban Development Authority 
Act, 1977.
List of Keywords
Land Acquisition; Market Value; Comparable Sales Method; 
Development Charges; Potentiality of Land.
Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 11758 of 2024
From the Judgment and Order dated 23.08.2022 of the High Court 
of Punjab & Haryana at Chandigarh in RFA No. 13554 of 2018
With
Civil Appeal Nos. 11759-11760, 11761, 11762-11766, 11767-11770, 
11771-11772, 11773-11779, 11780-11786, 11787-11796, 11797, 
11798, 11799, 11800-11806, 11807, 11808, 11809, 11810, 11811-
11812, 11813,11814, 11815, 11816, 11817, 11818-11819, 11820, 
11821, 11822, 11823, 11824, 11825-11828, 11829-11830, 11831-
11832, 11833, 11834, 11835, 11836-11838, 11839-11840, 11841, 
11842, 11843, 11844, 11845-11846, 11847-11848, 11849-11850, 
11851-11852, 11853-11854, 11855-11856, 11857, 11858, 11859-
11860, 11861-11862, 11863-11869, 11870-11871, 11872, 11873-
11874, 11875-11876, 11877-11878, 11879, 11880-11881, 11882-
11883, 11884-11890, 11891-11894, 11895-11917, 11918-11947, 
11948-11951, 11952-11953, 11954-11955, 11956-11959, 11960-
11961, 11962, 11963-11964, 11965-11966, 11967-11968, 11969, 
11970-11971, 11972-11973, 11974-11975, 11976-11977, 11978, 
11979-11980, 11981-11987, 11988-11989, 11990-11991,11992-
11993, 11994-11995, 11996-11997, 11998-11999 and 12000 of 2024
Appearances for
Parties
Narender Hooda, Rameshwar Singh Malik, Gagan Gupta, Sunil 
Dalal, Sr. Advs., Tishampati Sen, Ms. Riddhi Sancheti, Anurag 
Anand, Mukul Kulhari, Pardeep Dahiya, Ms. Mahima Benipuri, 
Deepak Goel, Ms. Harshita Maheshwari, Ms. Urvashi Sharma, 
Ms. Alka Goyal, Ms. Archana Preeti Gupta, Jitesh Malik, Gaurav 
Pratap Singh, Arjun Singh, Mrs. Leelawati Suman, Satish Kumar, 
Ajay Gupta, Ashok Anand, Ms. Manisha Saroha, Nikhil Beniwal,
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Navish Bhati, Vikram Singh Dalal, Ms. Rakhi Ray, Deepkaran Dalal, 
Raunaq Dalal, Karan Singh Dalal, A. Venayagam Balan, Gaurav 
Pal, R.V.Kameshwaran, C. M. Sundaram, Kiritkumar Govindlal 
Sheth, Ashray Behura, Deepak Parashar, Prakhar Singh, Dipak 
Kumar Jena, Prasanna Kumar Parhi, R.K. Poswal,  Ranjita Dhal, 
Pradeep Kumar Verma, Parmod Kumar, Sunil Kumar Mund, Raj 
Sekhar Jena, Ms. Sandhya Mishra, Siddharth Mittal, Abhijeet 
Varshney, Deepak Agarwal, Darshan, Prabhat Kumar, Mrs. Shilpa 
G Mittal, Devesh Pratap Singh, N S Dalal, Anshuman Nayak, Rahul 
Kulhare, Ms. Rachana Dalal, Krishan Mourya, Abhishek Kumar,  
Ms. Sweta Kadyan, Sharad Mrinal, Tanishq Tyagi, Ms. Ankita 
Pandey, Sanjay Tyagi, Ms. Disha Singh, S.K. Pabbi, Shivendu 
Gaur, Ms. Nidhi Sharma, Ms. Nisha Sharma, Ajay Kumar Singh, 
Somvir Singh Deswal, Manoj Kumar, Neeraj Singh, Diwan Singh 
Chauhan, Ms. Amit Kumari Saroha, Nischal Kumar Neeraj, Davesh 
Bhatia, Ms. Chaya, Rakesh Dahiya, Aditya Dahiya, Akaash Dahiya, 
Aditya Singh, Gagan Gupta, Ananta Prasad Mishra, Saurabh Gupta, 
Advs. for the Appellants.
Vikramjit Banerjee, A.S.G., Samar Vijay Singh, Keshav Mittal, Ms. 
Sabarni Som, Fateh Singh, R.K. Singh, Rajeev Kumar Gupta, 
Parminder Singh Bhullar, Advs. for the Respondents.
Judgment / Order of the Supreme Court
Judgment
Surya Kant, J.
Delay condoned. 
Leave granted.
2.	
These appeals are preferred by the expropriated landowners 
(hereinafter ‘Appellants’),
impugning the judgement dated 
23.08.2022 passed by the Punjab and Haryana High Court at 
Chandigarh (hereinafter, ‘High Court’), whereby their appeals 
seeking further enhancement in compensation for their acquired 
lands, have been dismissed. As a necessary corollary, the High 
Court has allowed the cross appeals filed by the Respondent 
State, challenging the enhancement in compensation made by 
the Reference Court. Consequently, the Awards passed by the
[2024] 10 S.C.R. 
1713
Horrmal (Deceased) Through His LRs & Ors. v.  
State of Haryana & Ors.
Reference Court have been set aside and the compensation as 
was granted by the Land Acquisition Collector (hereinafter, ‘LAC’) 
has been restored. 
A.	
Facts
3.	
The instant dispute regarding the grant of just and fair compensation 
originated with the issuance of a notification under Section 4 of the 
Land Acquisition Act, 1894 (hereinafter, ‘1894 Act’) on 11.02.2011, 
for the acquisition of approximately 302.75 acres of land by the 
Respondent State. This land, including the Appellants’ lands, is 
situated in the revenue estate of Tauru village in Mewat District. 
The acquisition process was initiated for the development and 
utilisation of land for public purposes, specifically for carving out 
Residential and Utility Areas in Sectors 7, 8 and 11 in Mewat 
District under the Haryana Urban Development Authority Act, 
1977. A notification under Section 6 of the 1894 Act was thereafter 
issued on 10.02.2012. 
4.	
The LAC passed the award on 22.10.2013 in respect of the land 
admeasuring 302.75 acres and estimated the compensation at 
Rupees 45,00,000/- per acre, along with 30% solatium and an 
additional amount of 12% per annum for the acquired land. Further, 
compensation for the lands abutting the Mohammadpur—Sohna—
Tauru bypass road were enhanced by 20% and 25%, respectively, 
over the already fixed rate. The LAC assessed the compensation 
primarily based on the rates fixed by
the Divisional Level Rate 
Fixation Committee in the following manner: (a) 2057 Kanal at 
Rupees 45,00,000/- per acre; (b) 113 Kanals and 9 Marlas at 
Rupees 54,00,000/- per acre; and (c) 251 Kanals and 11 Marlas at 
Rupees 56,25,000/- per acre. In addition to this, the LAC also affixed 
compensation for building structures and trees wherever subsisting 
on the acquired lands. 
5.	
Aggrieved by the award dated 22.10.2013, the Appellants filed 
Reference(s) under Section 18 of the 1894 Act before the Additional 
District Judge, Mewat (hereinafter, ‘Reference Court’). The 
Reference Court, vide separate awards, enhanced the market value 
of the acquired land to Rupees 92,62,500/- per acre, in addition 
to granting other statutory benefits. The Reference Court, in this
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instance, relied upon a sale exemplar, Ex. P76, to assess the 
market value of the acquired land as on the date of the issuance of 
Section 4 notification, and subsequently increased the compensation 
amount. Both the Appellants and the Respondent, being dissatisfied 
with the decision of the Reference Court, preferred appeals before 
the High Court.
6.	
In this vein, the High Court allowed the appeals preferred by the 
Respondent State while dismissing those filed by the Appellants. 
The High Court held that the Reference Court had incorrectly 
estimated the market value and enhanced the compensation as it 
ignored various sale instances of comparable parcels of land that 
had been produced by the Respondents. Additionally, the High 
Court also doubted the reliability of Ex. P76, which was the basis 
of the Reference Court’s decision, on the ground that this sale deed 
belonged to a commercial plot of land and was post the notification 
issued under Section 4 of the 1894 Act. Accordingly, the High Court 
set aside the award(s) of the Reference Court and reverted the 
compensation amount to that initially granted by the LAC. Hence, 
these appeals. 
B.	
Contentions of the parties
7.	
We have heard Learned Senior Counsel for the parties at a 
considerable length and meticulously perused the documents 
submitted on record.
8.	
S/Shri Narender Hooda, Sunil Dalal and Gagan Gupta, Learned Senior 
Counsel appearing on behalf of
the Appellants, first demonstrated 
the potentiality of the acquired land. They contended that the High 
Court had overlooked the fact that the acquired lands fell squarely 
within the municipal limits of Tauru city and were surrounded by 
civic amenities such as a Bus Stand, Hospital, School, College, a 
Power Station and Industrial as well as Residential establishments. 
They further asserted that the acquired land was located on the 
Sohna-Tauru bypass and was in close proximity to the Gurgaon-
National Capital Region, as also the Industrial Township established 
at Bhiwadi, Rajasthan. Additionally, the land is situated between the 
Sohna—Rewari metal road on one side and the KMP Highway on 
the other. This strategic location, they argued, indicated that the
[2024] 10 S.C.R. 
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Horrmal (Deceased) Through His LRs & Ors. v.  
State of Haryana & Ors.
market value of the acquired land, having immense potential at the 
time of acquisition, could not have been valued at less than Rupees 
5,00,00,000/- per acre.
9.	
It was contended that the sale exemplars, particularly Ex. RW1/D and 
RW1/F, which have been relied upon by the LAC and the High Court 
while assessing the rate of compensation at Rupees 45,00,000/- per 
acre, appertained to the smaller pieces of land and were inferior in 
nature, as the sale consideration mentioned therein was lower than 
the rate estimated by the LAC itself. Instead, they urged that Ex. P76 
and Ex. P3 ought to have been relied upon, owing to their similarity 
and proximity to the acquired land, as well as their temporal proximity 
to the date of issuance of the Section 4 notification. They further 
emphasised that these sale exemplars are the best sale instances 
to be considered since Ex. P76 was registered only a few months 
after the Section 4 notification, whereas Ex. P3 was executed prior 
to the said notification. 
10.	 Given what had been adduced, Learned Senior Counsels relied on 
a plethora of decisions in support of their arguments, including the 
judgment of this Court in Dollar Co. v. Collector of Madras,1 wherein 
it was held that a sale deed of a recent date could be considered 
the best evidence. Additionally, they placed reliance on the decision 
in Special Land Acquisition Officer
and another v. M.K. Rafiq 
Saheb,2 where this Court held that sale deeds pertaining to smaller 
areas could be taken into consideration by applying a cut. 
11.	 Conversely, Mr. Vikramjit Bannerjee, learned Additional Solicitor 
General of India, representing the Respondents, contended that 
the sale deeds produced by the Appellants could not be relied upon 
as they pertained to sale instances of tiny plots of land constituting 
only a few Marlas. More specifically, he argued that Ex. P3 was not 
reliable since it measured only 1 Kanal and 10.5 Marlas, making it 
significantly smaller in comparison to the acquired land. Similarly, 
with respect to Ex. P76, which was also heavily relied upon by 
the Appellants, he asserted that it ought to be discarded, not only 
1	
[1975] Supp. 1 SCR 403 : AIR 1975 SC 1670
2	
[2011] 8 SCR 1088 : (2011) 7 SCC 714
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because it was subsequent to the Section 4 notification but also 
since the land therein was purchased for a commercial purpose by 
a private company for warehousing, and thus would not accurately 
reflect the market value of the acquired land.
12.	 Instead, Mr. Bannerjee urged that the sale instances placed on 
record by the Respondents should be relied upon despite having 
been recorded post the Section 4 notification, as they lend proper 
guidance for estimating the market value of the acquired land on 
the crucial date of 11.02.2021. Lastly, he asserted that even if the 
Court were to consider the sale instance of a smaller parcel of land, 
only those sale exemplars where the land has been used towards 
developmental purposes should be relied upon, and after applying 
the appropriate deduction towards development charges. 
C.	
Issues
13.	 Having considered the factual background out of which the dispute 
has arisen and the contentions put forth, the questions that fall for 
our deliberation are set out as follows:
i.	
Whether the Appellants are entitled to higher rate of compensation 
and if so, to what extent; and 
ii.	
How should the quantum of such compensation be calculated?
D.	
Analysis
14.	 As already elucidated in the facts of this case, there has been a 
significant difference in the evaluations conducted by the Reference 
Court and, subsequently, the High Court. The High Court has reduced 
the valuation
affixed by the Reference Court by half and, instead, 
restored the compensation amount granted by the LAC. Given the 
differences in the approaches adopted by these courts and the 
variation in outcomes faced by the Appellants, it becomes imperative 
for us to assess the evidence placed on record by both parties and 
determine whether sufficient grounds subsist for us to enhance the 
compensation so awarded. 
15.	 In this regard, it would be appropriate to refer to the table prepared 
by the High Court, which, in its decision, has aptly summarised the 
different evidence produced by the parties as follows:
[2024] 10 S.C.R. 
1717
Horrmal (Deceased) Through His LRs & Ors. v.  
State of Haryana & Ors.
Sr. 
No.
Ex. No Vasika 
No.
Dated
Sale 
Consideration 
(In Rs.)
Area of 
Land Sold 
(K.M.S)
Rate Per 
acre
Village
Sale Deeds Produced by the respective parties in the Award dated: 
06.01.2017,01.03.2017, 19.07.2017, 20.07.2017, 03.10.2017, 01.08.2017
Sale Deeds Produced by the Landowners
1.
P2
1539
2.2.2010
1,75,000
50 Sq. 
Yds.
1,69,40,000 Tauru
2.
P3
960
27.8.2010
32,27,000
922 Sq. 
Yds.
1,69,40,000 Tauru
3.
P4
387
31.5.2010
3,36,000
96 Sq. 
Yds.
1,69,40,000 Tauru
4.
P5
1725
17.12.2010 2,81,000
75 Sq. 
Yds.
1,81,33,867 Tauru
5.
P6
1707
9.3.2010
2,62,500
75 Sq. 
Yds
1,69,40,000 Tauru
6.
P7
2076
24.1.2011
5,25,000
150 Sq. 
Yds.
1,69,40,000 Tauru
7.
P8
2187
7.2.2011
3,50,000
100 Sq. 
Yds.
1,69,40,000 Tauru
8.
P9
4633
18.1.2012
7,50,000
140 Sq. 
Yds.
2,59,28,571 Tauru
9.
P10
2186
7.2.2011
2,10,000
30 Sq. 
Yds.
16,94,000
Tauru
10
P76
1220
4.7.2011
10,18,87,500 66k (1320 
M)
1,23,50,000 Tauru
Sale Deeds Produced by the State
11
RW1/C 2481
29.8.2011
3,25,000
12.5 M
41,60,000
Tauru
12
RW1/D 1220
21.06.2012 60,00,000
1 Acre 4 K 
(240 M)
40,00,000
Tauru
13
RW1/E 1802
6.8.2012
17,25,000
3K-9M 
(69M)
40,00,000
Tauru
14
RW1/F 3798
25.11.2011 60,00,000
1 Acre 4k 
(240 M)
40,00,000
Tauru
15
RW1/G 1779
3.8.2012
18,25,000
3K-13M 
(73 M)
40,00,000
Tauru
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16
RW1/H 4339
13.03.2013 8,32,500
225 Sq. 
Yds.
1,79,08,000 Tauru
17
R8
1724
17.12.10
2,00,000
10 M
32,00,000
Gvarka
18
R9
1591
01.12.10
4,80,000
17 M
45,17,648
Gvarka
19
R10
1304
20.10.2010 10,23,750
4K-11M 
(91M)
18,00,000
Gvarka
20
R11
1396
3.11.2010
1,05,000
5M
33,60,000
Gvarka
21
R12
2116
31.1.2011
2,31,000
330 Sq. 
Yds.
33,88,000
Gvarka
22
R13
1851
29.12.2010 1,05,000
5M
33,60,000
Gvarka
23. R14
2124
1.2.2011
53,000
2.5M
33,92,000
Gvarka
24. R15
2243
14.2.2011
1,63,350
9M
29,04,000
Gvarka
25
R16
1404
8.11.2010
75000
6M
20,00,000
Gvarka
26
R18
2211
9.2.2011
36,300
2M
29,04,000
Gvarka
16.	 Upon further examination of the details of this table, it seems to 
us that these exemplars can be classified in the following manner: 
(a) sale instances executed prior to the issuance of Section 4 
notification; and (b) sales instances executed after the issuance 
of the Section 4 notification. Thereupon, we have taken the liberty 
of further representing this recalibrated categorisation in a tabular 
form as follows:
Pre-Section 4 
notification
Post Section-4 
notification
Appellants
P2-P8, P10
P9 and P76
Respondents
R8-14, R16, R18
R15, RW1/C-H
17.	 Having distinguished between the two sets of sale instances executed 
before and after the issuance of the Section 4 notification, we would 
now proceed to determine whether the Appellants are entitled to 
compensation at a rate higher than the one determined by the High 
Court. 
18.
The process of assessing or affixing compensation is not tethered 
to precision but is rather aimed at a nuanced estimation of pertinent 
factors. This task is governed by Section 23(1) of the Land Acquisition 
Act of 1894, which mandates that, in determining compensation for
[2024] 10 S.C.R. 
1719
Horrmal (Deceased) Through His LRs & Ors. v.  
State of Haryana & Ors.
acquired land, the Court must consider the ‘market value’ of the land 
as of the ‘date of publication of the notification under Section 4’. The 
‘market value’ is to be assessed with reference to factors such as 
standing crops and trees, the severance of part of the land, damage 
to movable or immovable property or earnings, the need to relocate 
one’s residence or business, and any loss of profits from the land 
between the publication of the declaration under Section 6 and the 
Collector’s assumption of possession.
19.	 This Court has through various judicial precedents, including a 
three-judge bench decision in Special Land Acquisition Officer v. 
T. Adinarayan Setty,3 held that the ‘market value’ connotes the 
price that a willing buyer would pay to a willing seller, taking into 
account the land’s current conditions and its advantages and 
potentialities. For this, typically, the best approach is the comparable 
sales method, under which the bona fide sale exemplars of similar 
lands are relied upon to ascertain the market value of the land 
under acquisition. However, to ensure that the valuation is just 
and proper, this Court has explained that such sale exemplars 
must satisfy certain criteria, including that: (a) the sale must be a 
genuine transaction; (b) the sale deed must have been executed 
around the time of the Section 4 notification; (c) the land must 
be
situated near the acquired land; (d) the nature of the land 
covered in the sale instance must be similar to the acquired land; 
and (e) the size of the plot covered by the sale instance should 
be comparable to the land acquired.4 
20.	 Apart from satisfying these factors, it is also imperative that the sale 
exemplars reflect the price of the land on the ‘date of publication of 
the notification under Section 4’. On account of this express condition, 
there are numerous instances where this Court has laid down that 
the sale exemplars executed after the Section 4 notification should 
not ordinarily be relied upon.5 This is grounded in the reasoning that 
once the acquisition process begins, it can impact the valuation of 
the land, rendering subsequent sale exemplars to be potentially 
inaccurate reflections of the true valuation of the acquired land. This 
3	
[1959] Supp. 1 SCR 404 : AIR 1959 SC 429
4	
Shaji Kuriakose v. Indian Oil Corporation Ltd. (2001) 7 SCC 650.
5	
General Manager, Oil and Natural Gas Corporation Ltd. v. Rameshbhai Jivanbhai Patel, 2008 (14) 
SCC 745; Maya Devi v. State of Haryana (2018) 2 SCC 474.
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principle was cogently addressed by this Court in A. Natesam Pillai 
v. Tahsildar,6 which held that the commencement of acquisition often 
leads to an increase in the market values of adjacent lands, thereby 
discrediting post-notification transactions as reliable indicators of the 
acquired land’s value.
21.	 Having been equipped with the factors to be considered while 
selecting a comparable sale instance to draw an estimate from, it 
is perhaps suitable to tackle the core issue and ascertain which of 
the sale exemplars produced before us may be most appropriate to 
be utilised in this exercise.
22.	 In the case at hand, the High Court and the Reference Court have 
disagreed on what sale exemplars could be used to determine fair 
compensation. While the Reference Court relied on Ex P76, the 
High Court has rejected the same because it was executed after 
the issuance of the Section 4 notification. Nevertheless, the High 
Court has fallen prey to the same error and has relied upon the 
Respondents’ sale exemplars, which were also executed after the 
acquisition had already begun.
23.	 As discussed above, post-notification sales can only be considered 
when better evidence is not available on record and when the party 
relying on it can convincingly demonstrate that there has been no 
upward trend in market prices due to the acquisition.7 Consequently, 
in light of this analysis, the sale deeds numbered P9, P76, R15 and
RW1/C-H, which were executed after the date of the issuance of the 
Section 4 notification, will invariably have to be excluded from any 
further consideration, save and except for exceptional and compelling 
circumstances.
24.	 Apart from these sale deeds that were not proximate temporally, 
we also deem it appropriate to exclude the sale deeds that are not 
comparable geographically. It is now a firmly entrenched principle of 
law that, in the ordinary course, sale exemplars of lands located in 
the surrounding villages should generally not be relied upon, as land 
valuation may vary significantly by locality. In the landmark decision of 
6	
[2010] 10 SCR 1 : (2010) 9 SCC 118
7	
Karan Singh v. Union of India (1997) 8 SCC 186; Rishi Pal Singh v. Meerut Development Authority (2006) 
3 SCC 205
[2024] 10 S.C.R. 
1721
Horrmal (Deceased) Through His LRs & Ors. v.  
State of Haryana & Ors.
Kanwar Singh v. Union of India,8 this Court held that sale exemplars 
of lands situated in an adjacent village cannot be used to determine 
the market value of the acquired land since such lands may differ in 
terms of quality and other attributes. On this ground, the sale deeds 
enumerated Ex. R8 to Ex. R16 and Ex. R18 shall also have to be 
excluded from consideration, as they pertain to a different village, 
namely Gwarka, whereas the acquired land is situated in village Tauru.
25.	 In light of the exclusions made thus far, we are presently left with 
sale deeds numbered Ex. P2 to Ex. P8 and Ex. P10. In this context, 
the Respondents have sought to argue that considering the total 
area of the land in these sale deeds being very small in size, they 
are also liable to be discarded. True it is, that such sale deeds 
ought not to directly form the basis for determining the rate at which 
compensation is to be awarded. Indeed, a thorough review of relevant 
precedents in this backdrop does reveal that smaller parcels of 
land conventionally command higher prices. Relying on such sale 
exemplars also, especially when only single solitary such instances 
are presented, may thus not be appropriate.9 
26.	 However, there is no bar in law against considering sale exemplars of 
smaller plots, provided they are subjected to adequate developmental 
charges. The rationale behind applying
such cuts lies in the 
fact that smaller plots often command higher prices due to their 
developed nature, whereas a larger tract of land which is acquired 
for development may require significant allocation for creating roads, 
parks, essential services, etc.10 Accordingly, these sale exemplars 
can be relied upon only after applying appropriate cuts. This Court in 
Chimanlal Hargovinddas v. LAO,11 authoritatively ruled that when 
valuing a large block of land, appropriate deduction must be made 
for setting aside areas for roads, open spaces and dividing the land 
into smaller plots suitable for the construction of buildings.
27.	 In the instant case, there are multiple sale deeds of smaller plots, 
and these represent the best available evidence for estimating 
compensation. Since there is no legal impediment to considering such 
8	
[1998] Supp. 2 SCR 505 : (1998) 8 SCC 136
9	
Administrator General of West Bengal v. Collector, Varanasi (1988) 2 SCC 150
10	
Ibid; Atma Singh v. State of Haryana and Others (2008) 2 SCC 568
11	
[1988] Supp. 1 SCR 531 : (1988) 3 SCC 751
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sale deeds, the logical progression in the compensation estimation 
process would be to identify the most suitable sale deed(s) for 
determining the market value and subsequently, to apply adequate 
deductions on the same. The solution to this state of flux may thus be 
found in the case of Mehrawal Khewaji Trust v. State of Punjab,12 
where this Court laid down as follows:
“....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.”
[Emphasis supplied]
28.	 This view has been reiterated in Sh. Himmat Singh v. State of 
M.P.,13 where a three-judge bench of this Court consolidated various 
precedents to affirm that in circumstances where there are multiple 
sale deeds available for consideration, the Court shall rely on the 
highest valued exemplars unless the prices fall within a narrow 
range, in which case calculating an average of the values therein 
may be more congruous. 
29.	 In these extenuating circumstances, there exists significant disparity 
among
the sale exemplars presently under consideration. Amongst 
these sale exemplars, being Ex. P2-P8 and Ex. P10, the highest sale 
instance values the land at Rupees 1,81,33,867 per acre, whereas 
the lowest values it at Rupees 16,94,000 per acre. Given this wide 
range and in light of the judicial precedents cited above, we are 
of the opinion that we should rely upon the highest sale exemplar, 
which is Ex. P5, rather than solely depending upon an average of the 
multiple sale deeds produced before us. Despite the Respondents’ 
vehement contention that Ex. P5 should not be relied upon owing to 
it being a significantly smaller parcel of land—the detailed analysis 
12	
[2012] 4 SCR 24 : (2012) 5 SCC 432
13	
(2013) 16 SCC 392
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Horrmal (Deceased) Through His LRs & Ors. v.  
State of Haryana & Ors.
conducted above indicates no reason why Ex. P5 cannot be utilised 
to determine the amount of compensation to be awarded to the 
Appellants for the acquired land.
30.	 Thus, having established the sale exemplar being relied upon and 
consequentially the base price to be Rupees 1,81,33,867 per acre, we 
now proceed to the aspect of deductions to be applied to the amount 
so determined. In this regard, there is no hard and fast rule on the 
amount of deduction to be applied towards development charges. 
Instead, such deductions may, for the purpose of making a small 
area of land comparable to larger tracts, range from a minimum of 
20% to a maximum of 75%.14 
31.	 Since the degree of application of cuts is essentially a question 
of fact dependent on the unique circumstances of each case, the 
particulars to be reckoned with in determining the extent of such 
deduction often include a myriad of factors, such as the relative 
difference in the size of the land in the sale exemplar vis a vis the 
acquired land, proximity to a road, nearness to developed areas, 
etc.15 Additionally, several decisions have also taken into account 
the nature of the lands because of the stark difference that may 
exist between the valuation of an agricultural or undeveloped land 
and the sale price of a small developed plot in a private layout.16 
32.	 Circling back to the facts of the present case, it
is evident that the 
land in Ex. P5 is similar in nature to the acquired land, both being 
agricultural land. Its proximity to the acquired land and the fact 
that it is situated in the same village of Tauru, are relevant when 
determining the extent of deductions to be applied in calculating the 
compensation to be granted to the Appellants. Additionally, what is 
also of utmost importance is that the value of the land is corroborated 
by surrounding circumstances, which point towards its potentiality. 
Although Ex. P76 cannot be relied upon since it was executed after 
the Section 4 notification, it nonetheless reflects the land’s potential 
for being used other than for agricultural purposes. Moreover, the 
acquired land’s strategic location near the Bus Stand, Grain Market 
14	
Balwan Singh v. State of Haryana and others, 2022 SCC Online SC 637; Chandrashekar v. LAO (2012) 
1 SCC 390
15	
Subh Ram v. State of Haryana (2010) 1 SCC 444
16	
Ibid.
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and Main Bazaar, besides being located near Palwal-Sohna-Rewari 
State Highway, as well as its proximity to the Industrial Township 
at Bhiwadi, and nearby schools and colleges, further supports the 
assertion that the land possesses immense potentiality. 
33.	 On the face of these distinctive factors lies the challenge of ascertaining 
the appropriate extent of deduction to be made. As already established, 
judicial precedents dictate that the amount of deduction to be applied 
towards developmental charges can range from anywhere between 
20% to 75%. On the one hand, we must acknowledge and recognise 
the stark disparity between the size of the land covered by the sale 
exemplar and the acquired land. On the other hand, it is incumbent 
that we take note of the various advantageous factors associated with 
the acquired land at the time of issuance of the Section 4 notification. 
A balanced approach in adjudicating this particular issue is therefore 
necessary. Considering these militating aspects, we cannot justify 
applying deduction at either extreme end of the spectrum. A prudent 
course of action might be to steer a middle path, aiming for a range 
approximately between 46% to 50%.
34.	 Having said that, even if we were to apply the higher end of deductions 
from this middle course, at 50%, the compensation to be granted to 
the Appellants would still surpass the amount initially determined by 
the LAC and would in
fact, be closer in range to the rate granted by 
the Reference Court. 
35.	 Alternatively, and only to bolster our above arrived conclusion, even 
if the principle of averaging were applied, the most suitable sale 
instances for this purpose, as discussed earlier, would be Ex. P2 to 
Ex. P8 and Ex. P10, which are noted to be in close proximity to the 
acquired land. Upon evaluation, the average price of these lands is 
Rupees 1,49,71,733 per acre, which exceeds the sale consideration 
shown in most comparable sale examples. This leaves no room for 
doubt that the compensation awarded by the Reference Court, at 
the rate of Rupees 92,62,500 per acre, was neither excessive nor 
beyond the fair and just value of the acquired land.
36.	 However, considering the totality of the circumstances and recognizing 
that the subject land has not been acquired for profiteering or 
commercial purposes, but primarily for the development of a 
residential area, we find it appropriate to rely on the valuation
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Horrmal (Deceased) Through His LRs & Ors. v.  
State of Haryana & Ors.
reflected in the best exemplar, Ex. P/5, as a fair and reasonable 
basis for compensation.
37.	 Thus, upon careful consideration, we are of the considered opinion 
that the High Court erred in reducing the valuation of the land 
and affirming the figures granted by the LAC. As demonstrated by 
our analysis above, the evaluation conducted by the Reference 
Court was nearly accurate and aligned with the evidence of the 
sale deeds and potentiality, despite the fact that the sale exemplar 
Ex. P76, on which it relied upon, may not have been ideal, given 
the circumstances and its commercial nature.
E.	
Conclusion
38.	 For the reasons stated above, these appeals are allowed, the 
impugned leading judgment dated 23.08.2022 of the High Court, 
as well as all other judgments following the said leading judgment 
which are under challenge in this batch of appeals, are hereby set 
aside, and the compensation amount granted by the Reference 
Court is hereby restored.
39.	 The compensation amount, if already not paid, wholly or partly, as 
per the award of the Reference Court, shall be paid to the Appellants 
and other land-owners along with all the statutory benefits including 
interest, within eight weeks.
40.	 All the matters stand disposed of in the aforementioned terms.
Result of the case: Appeals allowed.
†Headnotes prepared by: Harshit Anand, Hony. Associate Editor 
(Verified by: Kanu
Agrawal, Adv.)