Supreme Court: Large Land Areas Won’t Get Same Price as Small Plots in Land Acquisition Cases

The Supreme Court recently held that large chunks of land acquired cannot be awarded the same market rate as small plots. Some deduction is permissible due to the largeness of the area.

The bench of Justices Pankaj Mithal and SVN Bhatti observed that while determining compensation, deductions for development charges and other factors can be made when large areas of undeveloped land are acquired. This is because the market rate of small, fully developed plots cannot be applied directly to large chunks of undeveloped land.

The case was related to the land acquired by the Gujarat Industrial Development Corporation (GIDC). The appellants had sought higher compensation by comparing their large agricultural land to smaller commercial plots in the vicinity.

The Court noted that such comparison is not appropriate since large tracts of land have less marketability and require development before they can fetch similar prices. Therefore, some deduction is justified while awarding compensation.

The Court approved a 40% deduction towards development charges and an additional 10% deduction due to the large size of the land. The compensation awarded by the Reference Court and upheld by the High Court was found to be fair and reasonable.