12% annual escalation in land value cannot be mechanically applied absent evidence of market appreciation.

The appeals under Section 54 of the Land Acquisition Act, 1894, were filed by landowners seeking enhancement of compensation awarded for land acquired for defence purposes in Village Haripur, Tehsil and District Jalandhar. The Section 4 notification was issued on 19 March 1990, the Section 6 notification on 7 September 1990, and the Collector assessed compensation at ₹70,000 per acre. The Reference Court, by award dated 3 December 2001, enhanced the market value to ₹85,000 per acre.

The landowners contended that the Reference Court had relied on an earlier award relating to a Section 4 notification dated 14 March 1989, and that the one-year interval justified a 12% annual escalation. They also relied on certain sale deeds allegedly showing a value exceeding ₹1,00,000 per acre. The appeals were instituted after substantial delay, which was attributed to the death of the advocate engaged by the appellants.

The Union of India opposed the appeals on the grounds of delay, finality of the compensation determination, and the inadmissibility or unreliability of post-notification sale deeds. It further contended that this Court had already dismissed the Union’s appeals against the Reference Court’s award on 5 December 2016, thereby affirming the market value of ₹85,000 per acre.

Whether the substantial delay in filing the landowners’ appeals ought to be condoned so as to permit a claim for enhanced compensation?

Whether the appellants were entitled to enhancement of compensation beyond ₹85,000 per acre on the basis of 12% annual escalation from the earlier award or on the basis of the relied-upon sale deeds?

Whether the post-notification sale deeds could be relied upon for determining the market value under the Land Acquisition Act, 1894?

The Court applied Section 54 of the Land Acquisition Act, 1894, governing appeals from awards of the Reference Court.

In determining market value, the Court considered the principles under Sections 23 and 24 of the 1894 Act, including the limited relevance of post-notification transactions.

It relied on New Okhla Industrial Development Authority v. Rameshwar alias Ramesh Chandra Sharma (Dead) through Legal Heir, 2022 SCC OnLine SC 1599, for the rule that where delay is condoned in a belated compensation appeal, the claimant may be denied interest for the delayed period and statutory benefits.

It also relied on Ram Kishan (Since Deceased) v. State of Haryana, 2025 SCC OnLine SC 715, for the principle that escalation in land value may be allowed in appropriate cases, but cannot be applied mechanically.

The Court further recognised that Article 14 may justify condonation of delay where similarly situated landowners have obtained enhanced compensation, but found that such considerations did not apply because the existing compensation had already been upheld on appeal.

The Court held that the appeals were liable to fail both because of the extraordinary delay and on merits. Although courts have, in appropriate cases, condoned delays exceeding twenty years to maintain parity with similarly situated landowners, that rationale was absent here because the Reference Court’s determination of ₹85,000 per acre had already been affirmed when the Union of India’s appeals were dismissed on 5 December 2016.

The appellants’ reliance on the sale deeds was rejected because they were executed after the Section 4 notification and therefore could not properly establish the market value as on the relevant acquisition date under Sections 23 and 24.

The Court also declined to apply a mechanical 12% escalation to the earlier award. It took judicial notice of the militancy prevailing in Punjab during 1989–90 and found that agricultural land values had not necessarily increased during that period; the absence of reliable contemporaneous sale exemplars supported the rejection of escalation.

In view of the delay, the Court additionally observed that the appellants would not be entitled to interest for the delayed period or statutory benefits.

All the connected appeals were dismissed on the grounds of delay and merits. Pending miscellaneous applications, if any, were also disposed of.