25 March 2025 Civil Appeals >> Civil & Consumer Law   |   Land Acquistion >> Property & Real Estate  

In a significant ruling of Manilal Shamalbhai Patel (Deceased) Through His Legal Heirs & Others v/s Officer On Special Duty (Land Acquisition) & Another, the Supreme Court of India has enhanced the compensation for agricultural land acquired in Ranoli, Vadodara, Gujarat, for the benefit of the Gujarat Industrial Development Corporation (GIDC). The decision came in an appeal challenging a High Court order that had upheld a lower compensation amount.

The land, measuring approximately 98 square meters, was notified for acquisition under the Land Acquisition Act in 1989. While the Special Land Acquisition Officer (SLAO) initially offered Rs. 11 per square meter in 1992, the Reference Court later increased it to Rs. 30 per square meter in 2011. Dissatisfied, the landowners appealed to the High Court, which dismissed their plea.

The appellants argued for a substantially higher compensation, citing an allotment letter from GIDC itself for a nearby plot (Plot No. 7/1) for a petrol pump at Rs. 450 per square meter. They also contended that the income from fruit-bearing trees on their land was not adequately considered.

The Supreme Court meticulously analyzed the evidence, particularly the GIDC allotment letter. It clarified that while the initial tentative price for Plot No. 7/1 was different, GIDC had, from March 25, 1988, revised the premium price for industrial land in the Ranoli Industrial Estate to Rs. 180 per square meter. The Court considered this Rs. 180 rate as the most suitable benchmark.

Acknowledging a one-year gap between this benchmark and the acquisition notification, the Court applied a 5% increase for rising prices, bringing the rate to approximately Rs. 190 per square meter. However, recognizing that the acquired land was agricultural and required development for industrial use (including roads, infrastructure, and plot demarcation), the Court applied a 40% deduction for development charges. An additional 10% deduction was made for the largeness of the acquired area, totaling a 50% deduction.

Applying these deductions, the Supreme Court determined the fair market value of the acquired land to be Rs. 95 per square meter. Regarding the fruit-bearing trees, the Court found insufficient evidence from the appellants to demonstrate annual yield or income beyond what the SLAO had already offered (Rs. 1,06,300), and thus, no further compensation was awarded for the trees.

Consequently, the Supreme Court set aside the High Court's order and modified the awards of the SLAO and the Reference Court, fixing the compensation for the acquired land at Rs. 95 per square meter, along with all permissible statutory benefits, including interest.

LAND ACQUISITION ACT, 1894