SCOI Clarifies Land Acquisition Compensation in 100 Years Old Case

The Supreme Court of India, in Divyagnakumari Harisinh Parmar & Ors. v. State of Gujarat & Ors., revisited a recurring issue in land acquisition law: the determination of fair compensation for landowners whose property was acquired by the State.

The petitioners, heirs of the original landowners, challenged the compensation awarded on the grounds that it was inadequate and failed to reflect both the prevailing market value and the statutory entitlements under the Land Acquisition Act.

The case reached the Supreme Court after the Gujarat High Court upheld the State’s assessment, leaving the petitioners dissatisfied. Central to the dispute was whether the Reference Court and the High Court had erred in failing to apply comparable sale instances properly and in undervaluing the potential of the acquired land.

The appellants also argued that the benefits under Sections 23(1A), 23(2), and 28 of the Land Acquisition Act—such as solatium, additional compensation, and interest had not been fully recognized.

The Supreme Court, while carefully examining precedents, reaffirmed that courts must strike a balance between ensuring just compensation for landowners and preventing inflated awards unsupported by evidence. It emphasized that compensation must be based on reliable market data, not speculative estimates, and that all statutory benefits form an integral part of “just compensation.”

In its ruling, the Court modified the compensation by directing a reassessment aligned with comparable sale deeds from the relevant period, and it reiterated that solatium and interest cannot be treated as discretionary but are statutory entitlements.

The judgment thus reinforced the principle that land acquisition is not merely an administrative exercise but one deeply tied to constitutional guarantees of property rights and fairness under Article 300A.

This decision highlights the judiciary’s continuing role in ensuring that landowners are not deprived of property without equitable recompense. It also sends a reminder to acquiring authorities that undervaluation and technical errors in compensation calculations will not withstand judicial scrutiny.