MALA ETC. ETC. versus STATE OF PUNJAB AND OTHERS
[2023] 11 S.C.R. 121, Supreme Court of India, 2023
Outcome: Dismissed (Dismissed)
Segment: Issues
[2023] 11 S.C.R. 121 : 2023 INSC 735
121
CASE DETAILS
MALA ETC. ETC.
v.
STATE OF PUNJAB AND OTHERS
(Civil Appeal Nos. 3992-4000 of 2011)
AUGUST 17, 2023
[BELA M. TRIVEDI AND DIPANKAR DATTA, JJ.]
HEADNOTES
Issue for consideration : Whether the order passed by the High Court 
conferring the total amount of compensation payable to the land owners at 
Rs. 2,400/- per marla for the land Chahi, for the remaining kinds of land for 
the village Purhiran, and for all kinds of land for village Sutehri, along with 
all statutory beneﬁ ts available under the Land Acquisition Act, by applying 
one third cut on the assessed market value of Rs. 3,000/- per marla, towards 
development charges; and by not relying upon the sale deeds executed for 
the shops prior to the date of acquisition, warrants any inference u/Art. 136 
of the Constitution.
Land Acquisition: Compensation – Award of – Assessment of 
market value of the lands by the High Court – Deduction of one third 
amount towards development charges – Correctness of:
Held : High Court considered the relevant factors prescribed under the 
Act – It duly considered all the sale instances in the light of the evidence on 
record and relied upon sale instances executed in close proximity to the date 
on which the lands in question were acquired – Assessment of market value 
so determined after imposing cut of one third towards development charges 
was rightly done, thus, does not warrant any interference. [Paras 10 and 15]
Land Acquisition :
Compensation – Award of – Deduction towards 
development charges – Determination of:
Held : Courts should keep in mind the nature of land, area under 
acquisition, the development of land and its extent of development, the purpose
122
SUPREME COURT REPORTS 
[2023] 11 S.C.R.
of acquisition etc – While determining the market value of large chunk of 
land, the value of smaller pieces of land could be taken into consideration, 
however, after making appropriate deduction in the value of lands or setting 
apart land required for carving out roads, leaving open spaces, plotting out 
smaller plots etc – Percentage of deduction or the extent of area required 
to be set apart has to be assessed by the courts having regard to the size, 
shape, situation, user etc. of the lands acquired – It is essentially a kind of 
guess work the courts are expected to undertake. [Para 11]
Land Acquisition – Market value of the land – Determination 
of – Guiding principles: 
Held : For ascertaining the market value of the land, its existing 
condition, location and user, its proximity to residential, commercial or 
industrial area etc. are the factors to be considered – Size and nature of 
the lands acquired and size and nature of the lands in respect of which sale 
instances are produced, are also an important aspects – Sale instances of 
small piece of land cannot form reasonable basis to determine the market 
value of large chunk of land, unless suitable deductions are made in respect 
of development charges – Deductions to be made would depend on the 
nature of land, its topography, special features and state of its development 
so as to make it suitable for the purpose for which it is acquired. [Para 8]
Constitution of
India: Art. 136 – Extra-ordinary jurisdiction 
under – Exercise of:
Held : Under Art. 136, plenary jurisdiction exercisable on assuming 
appellate jurisdiction has been conferred upon the Supreme Court – 
However, it is an extraordinary jurisdiction which must be exercised in 
exceptional circumstances with great care and caution. [Para 7]
LIST OF CITATIONS AND OTHER REFERENCES
Haryana State Industrial Development Corporation vs. Pran 
Sukh and Others (2010) 11 SCC 175; Chimanlal Hargovinddas v. 
Special Land Acquisition Officer, Poona and Anr. (1988) 3 SCC 751 : 
[1988] 1 Suppl. SCR 531; Lal Chand v. Union of India and Anr. (2009) 
15 SCC 769 : [2009] 13 SCR 622; Kasturi and Ors. v. State of Haryana
(2003) 1 SCC 354 : [2002] 4 Suppl. SCR 117; ig. Sahib Singh Kalha
123
MALA ETC. ETC. v. STATE OF PUNJAB AND OTHERS
and Ors vs. Amritsar Improvement Trust and Others AIR (1982) SC 
940 – referred to.
OTHER CASE DETAILS INCLUDING IMPUGNED 
ORDER AND APPEARANCES
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 3992-4000 
of 2011.      
From the Judgment and Order dated 17.08.2010 of the High Court 
of Punjab and Haryana at Chandigarh in CWP Nos.20433, 20318, 20319, 
20320, 20321, 20329, 20330, 20333 OF 2009 and CWP No.154 of 2010.
With
Civil Appeal Nos. 5218, 5219 and 10693 of 2011.
Appearances:
P. S. Patwalia, Sr. Adv., Yadav Narender Singh, Satish Kumar, Kamal 
Mohan Gupta, Sudarshan Singh Rawat, S. Suni, Sunny Sachin Rawat, Ms. 
Saakshi Singh Rawat, Ms. Pragati Neekhra, Aditya Bhanu Neekhra, Advs. 
for the Appellants.
Ajay Pal, Mayank Dahiya, Kuldip Singh, Advs. for the Respondents.
JUDGMENT/ORDER OF THE SUPREME COURT
JUDGMENT
BELA M. TRIVEDI, J.
1. This batch of 12 appeals arise out of the common judgment and order 
dated 17.08.2010 passed by the High Court of Punjab and Haryana at Chandigarh 
in Civil Writ Petition No.20433/2009 and others (in all 40 writ petitions). Before 
the High Court, 14 writ petitions were ﬁ led by the land owners and 26 writ petitions 
were ﬁ led by the Improvement Trust, Hoshiarpur. Vide the impugned judgment, 
the High Court allowed the writ petitions ﬁ led by the land owners by enhancing the 
market value of the acquired land to Rs.2,000/- per marla and granted all statutory 
beneﬁ ts available under the Land
Acquisition Act 1894 (hereinafter referred to as 
the said Act). The High Court also granted the beneﬁ t of Rs.400/- at 10% per marla 
to the assessed amount for two years.Meaning thereby, the High Court accorded
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SUPREME COURT REPORTS 
[2023] 11 S.C.R.
the total amount of compensation payable to the land owners at Rs.2,400/- per 
marla along with all statutory beneﬁ ts available under the Act. The High Court 
dismissed the writ petitions ﬁ led by the Improvement Trust.
2. The Hoshiarpur Improvement Trust (Respondent No.3 herein) 
prepared a scheme for the purpose of Development Scheme (residential) 
under Sections 24, 25 and 28 of the Punjab Town Improvement Act 1922 
in an area admeasuring 291 kanals 7 marlas situated within the Municipal 
limits in village Purhiran and Sutehri. Out of the said land, 230 kanals 
9 marlas belonged to the Municipal Committee, Hoshiarpur, which 
were taken over by the Respondent No.2, Land Acquisition Collector 
(Improvement Trust) through negotiations. To acquire the rest of the 
lands admeasuring 59 kanals 3 marlas, a notiﬁ cation under Section 36 
of the Improvement Act was issued on 29.07.1994. After completing the 
formalities of hearing the objections etc, the notiﬁ cation under Section 41 
of the Improvement Act was issued on 10/14.07.1995. The respondent/ 
Land Acquisition Collector passed an award on 11.07.1997 awarding the 
compensation at Rs 1.07 lakhs per acre for Chahi (Rs.668.75 per marla) 
and Rs.1.10 lakh per acre for the remaining kinds of lands (Rs.687.50 
per marla) for village Purhiran and Rs.1.50 lakh per acre for all kinds of 
land (Rs.714.30 per marla) for the village Sutehri. The Land Acquisition 
Collector also assessed Rs.
46,61,760/- for 52 structures/buildings standing 
at the spot, Rs.70,300/- towards the cost of tube wells, Rs.30,069/- towards 
fruit bearing trees and Rs.37,824.54 paisa towards compensation of rest 
of the trees existing at the spot. The Land Acquisition Collector further 
awarded the statutory beneﬁ ts under the said Act. The Land owners being 
dissatisﬁ ed by the award passed by the respondent (LAC) had preferred 
reference under Section 18 of the said Act. The Reference Court/Tribunal 
vide common award dated 17.04.2009 enhanced the compensation from 
Rs.668.75/- per marla to Rs.1337.50 per marla for the land Chahi and 
from Rs.687.50/- per marla to Rs. 1375/- per marla for remaining kinds of 
land in village Purhiran, and enhanced the compensation from Rs.714.30 
to Rs.1428.60 per marla for all kinds of land for the village Sutehri. The 
Tribunal further awarded the statutory beneﬁ ts under the Act.
3. The petitioners/land owners being dissatisﬁ ed by the said award 
passed by the Reference Court/Tribunal, preferred fourteen Civil writ 
petitions before the High Court. The respondent Improvement Trust also ﬁ led
125
MALA ETC. ETC. v. STATE OF PUNJAB AND OTHERS
[BELA M. TRIVEDI, J.]
26 writ petitions challenging the said award passed by the said Tribunal. The 
High Court disposed of all the writ petitions vide the impugned common 
judgment as stated hereinabove.
4. The Learned Senior Advocate Mr. P.S. Patwalia for the appellants 
submitted that the lands in question were being used both for commercial 
and residential purposes and the High Court had erred in not relying upon 
the sale deeds executed for the shops prior to the date of acquisition, which 
showed continuous rise in the prices.
5. He further submitted that the High Court had committed gross error 
in applying one third cut on the assessed market value of Rs.3,000/- per 
marla, towards development charges though admittedly the lands acquired 
were situated within the Municipal limits of the villages. The structures/
buildings standing thereon, clearly established that the acquired lands were 
neither undeveloped nor underdeveloped lands. He relied upon the case of 
Haryana State Industrial Development Corporation vs. Pran Sukh and 
Others1 to buttress his submissions.
6. The learned counsel for the respondent state however submitted 
that when a large chunk of land is being acquired, a suitable deduction is 
required to be made towards the development charges as per the settled legal 
position, which has rightly been done by the High Court.
7. In view of the above, let us see whether the impugned judgment 
warrants any
inference of this Court exercising extraordinary jurisdiction 
under Article 136 of the Constitution of India. Undoubtedly, a plenary 
jurisdiction exercisable on assuming appellate jurisdiction has been conferred 
upon the Supreme Court under Article 136, nonetheless it is an extraordinary 
jurisdiction which must be exercised in exceptional circumstances and that 
too with great care and caution.
8. The guiding principles for determining the market value of the land 
at the date of the publication of the notiﬁ cation under Section 4(1) in view 
of Section 23(1) of the said Act, are well settled by this Court in catena of 
decisions. Accordingly, the determination of market value is the process 
of predicting an economic event that is assuming a price a willing vendor 
would oﬀ er to a willing purchaser in normal market conditions, but not an 
event of anxious dealing at arm’s length nor a facade of sale nor ﬁ ctitious 
sale brought about in quick succession or otherwise to inﬂ ate the market 
value. No doubt, for ascertaining the market value of the land, its existing 
1 
(2010) 11 SCC 175
126
SUPREME COURT REPORTS 
[2023] 11 S.C.R.
condition, location and user, its proximity to residential, commercial or 
industrial area etc. are the major factors required to be considered. The size 
and nature of the lands acquired and size and nature of the lands in respect 
of which sale instances are produced on record, also would be an important 
aspects in as much as normally the sale instances of small piece of land can 
not form reasonable basis to determine the market value of large chunk of 
land, unless suitable deductions are made in respect of development charges. 
How much deductions should be made would depend on the nature of land, 
its topography, special features and state of its development so as to make 
it suitable for the purpose for which it is acquired.
9. In the instant cases, the Tribunal after recording the submissions 
of the counsels for the parties and recording the sale instances on record, 
without any further analysis of evidence or discussion, abruptly enhanced 
the market rates of the acquired lands to almost double the rates at which 
the compensation was assessed by the Land Acquisition Collector. The 
Tribunal enhanced the rates from Rs. 668.75/- to Rs. 1337.50/- per marla 
for the land Chahi and from Rs. 687.50/- to Rs. 1375/- per marla for the 
remaining kinds of land for the village Purhiran, and enhanced from Rs. 
714.30/- to Rs. 1428.60/- per marla for all kinds of land for village Sutehri. 
The said rates have been further enhanced
by the High Court to Rs. 3,000/- 
per marla for all the lands in question.
10. Though the Learned Senior Counsel Mr. Patwalia had sought to 
submit that the High Court had failed to consider the sale instance of the 
shop executed in close proximity of the date on which the lands in question 
were acquired, we do not ﬁ nd any merit in the said submission. The High 
Court has duly considered all the sale instances in the light of other evidence 
on record and after duly reasoning out as to why the other sale instances 
should not be relied upon, has relied upon the sale instances dated 31.08.1992 
(Ex. P/30) and dated 14.08.1992 (Ex. P/32) which were executed in close 
proximity to the date on which the lands in question were acquired. The 
solitary sale instance of shop has rightly been ignored, the other sale instances 
more germane and relevant of the lands situated in nearby area of the area 
of acquisition being available on record.
11. The next submission made by Mr. Patwalia with regard to the 
one third cut imposed by the High Court has also hardly any force. The 
High Court after determining the market value of the lands acquired at
127
Rs. 3000/- per marla, has deducted one third amount therefrom towards the 
development charges taking into consideration the settled legal position. 
It is well settled position of law that while determining the deduction for 
development charges, the courts should keep in mind the nature of land, 
area under acquisition, whether the land is developed or not, if developed 
to what extent, the purpose of acquisition etc. Though, it is true that while 
determining the market value of large chunk of land, the value of smaller 
pieces of land could be taken into consideration, however, after making 
appropriate deduction in the value of lands or setting apart land required for 
carving out roads, leaving open spaces, plotting out smaller plots etc. The 
percentage of deduction or the extent of area required to be set apart has to 
be assessed by the courts having regard to the size, shape, situation, user 
etc. of the lands acquired. It is essentially a kind of guess work the courts 
are expected to undertake.
12. In Chimanlal Hargovinddas v. Special Land Acquisition Ofﬁ cer, 
Poona and Anr.2, this Court held as under:
“8. ……. The ﬁ rst two grounds are devoid of merit. It is common 
knowledge that when a large block of land is required to be valued, 
appropriate deduction has to be made for setting aside land for carving 
out roads, leaving open spaces, and plotting out smaller plots suitable 
for construction of buildings. The extent of the area required to be 
set apart in
this connection has to be assessed by the court having 
regard to the shape, size and situation of the concerned block of land 
etc. There cannot be any hard and fast rule as to how much deduction 
should be made to account for this factor. It is essentially a question 
of fact depending on the facts and circumstances of each case. It does 
not involve drawing upon any principle of law.”
13. In Lal Chand v. Union of India and Anr.3, this Court held that:
“14. The “deduction for development” consists of two components. 
The ﬁ rst is with reference to the area required to be utilised for 
developmental works and the second is the cost of the development 
works. For example, if a residential layout is formed by DDA or 
similar statutory authority, it may utilise around 40% of the land area 
2 
(1988) 3 SCC 751
3 
(2009) 15 SCC 769
MALA ETC. ETC. v. STATE OF PUNJAB AND OTHERS
[BELA M. TRIVEDI, J.]
128
SUPREME COURT REPORTS 
[2023] 11 S.C.R.
in the layout, for roads, drains, parks, playgrounds and civic amenities 
(community facilities), etc.
15. The development authority will also incur considerable expenditure 
for development of undeveloped land into a developed layout, which 
includes the cost of levelling the land, cost of providing roads, 
underground drainage and sewage facilities, laying water lines, 
electricity lines and developing parks and civil amenities, which would 
be about 35% of the value of the developed plot. The two factors taken 
together would be the “deduction for development” and can account 
for as much as 75% of the cost of the developed plot.
16 to 21…….
22. Some of the layouts formed by the statutory development 
authorities may have large areas earmarked for water/sewage treatment 
plants, water tanks, electrical substations, etc. in addition to the usual 
areas earmarked for roads, drains, parks, playgrounds and community/
civic amenities. The purpose of the aforesaid examples is only to show 
that the “deduction for development” factor is a variable percentage 
and the range of percentage itself being very wide from 20% to 75%.”
14. This Court in the judgment reported as Kasturi and Ors. v. State 
of Haryana4, held that there may be various factual factors which may 
have to be taken into consideration while applying the cut in payment of 
compensation towards developmental charges, maybe in some cases it is 
more than 1/3rd and in some
cases less than 1/3rd. This Court held as under:
“7 ……. However, in cases of some land where there are certain 
advantages by virtue of the developed area around, it may help in 
reducing the percentage of cut to be applied, as the developmental 
charges required may be less on that account. There may be various 
factual factors which may have to be taken into consideration while 
applying the cut in payment of compensation towards developmental 
charges, maybe in some cases it is more than 1/3rd and in some 
cases less than 1/3rd. It must be remembered that there is diﬀ erence 
between a developed area and an area having potential value, 
which is yet to be developed. The fact that an area is developed or 
4 
(2003) 1 SCC 354
129
adjacent to a developed area will not ipso facto make every land 
situated in the area also developed to be valued as a building site or 
plot, particularly when vast tracts are acquired, as in this case, for 
development purpose.”
15. The High Court in the impugned judgment after applying 
the ratio of decisions in case of Brig. Sahib Singh Kalha and Ors vs. 
Amritsar Improvement Trust and Others5 and other decisions to the facts 
of these cases, came to the conclusion that a cut of one third was required 
to be imposed on the amount of compensation awarded by it. When the 
impugned judgment of High Court reveals that the High Court has taken into 
consideration the relevant factors prescribed under the Act, as interpreted 
by this Court, the assessment of market value so determined does not 
warrant any interference of this Court in the appeals under Article 136 of 
the Constitution of India.
16. In that view of the matter, the appeals being devoid of merits are 
dismissed.
Headnotes prepared by:

Appeals dismissed.
Nidhi Jain
5 
AIR (1982) SC 940
MALA ETC. ETC. v. STATE OF PUNJAB AND OTHERS
[BELA M. TRIVEDI, J.]