Comparable market value of adjacent village land serves as a valid basis for land compensation enhancement.

The Appellants (State) acquired lands in village Aangadia, Taluka Godhra, for the Kali Kuva Irrigation Pond Canal Work under the Land Acquisition Act, 1894.

Notifications under Sections 4 and 6 were issued, and the Special Land Acquisition Officer (SLAO) passed an award on 18.03.2008 granting compensation at ₹69,000 per hectare.

The respondent-claimants, dissatisfied with the amount, filed references under Section 18 of the Act (LAR Nos. 556, 558, and 564 of 2008).

On 05.02.2011, the Reference Court, Panchmahal at Godhra, enhanced the compensation to ₹300 per sq. mt.

The State appealed this enhancement, contending that the land was undeveloped agricultural land and that the claimants failed to provide sufficient evidence of fertility or irrigation facilities.

1. Whether the Reference Court was justified in enhancing the compensation from ₹69,000 per hectare to ₹300 per sq. mt based on comparable sale instances of adjacent villages.

2. Whether the award passed in a previous reference (LAR No. 52/2003) regarding the adjacent village of Vavdi Buzarg constitutes a valid basis for determining the market value of the land in village Aangadia.

The court applied Section 54 of the Land Acquisition Act, 1894, read with Section 96 of the Code of Civil Procedure, regarding the appellate jurisdiction over compensation awards.

The Court relied on the principle of "comparable sales/instances," wherein the market value of land can be determined based on previous awards or sale deeds of adjacent lands with similar potentiality and geographical proximity.

The High Court examined the Appellants' contention that the distance between village Vavdi Buzarg and village Aangadia rendered them incomparable.

The Court found that the primary basis for the Reference Court’s fixation of market value was the award in LAR No. 52/2003, which concerned land acquired in the adjacent village of Vavdi Buzarg for a by-pass road.

In that case, compensation of ₹287 per sq. mt had been upheld by the High Court in First Appeal Nos. 1637-1641 of 2012.

The Court noted a government communication dated 27.05.2025, which confirmed that the State had accepted the judgment for the adjacent village.

Consequently, even though the SLAO relied on five-year sale instances, the Court held that the judicial precedent for adjacent land provided a more reliable measure for market value.

The High Court dismissed the appeals, confirming the compensation of ₹300 per sq. mt. The Court directed the registry to return the Record & Proceedings and ordered the Reference Court to handle the apportionment of compensation if necessary.