Comparable sale deeds must be assessed by actual land extent, not building area, when fixing acquisition compensation.

The claimants’ lands were acquired under the Tamil Nadu Highways Act, 2001, for grade-separator construction in Chennai. The Land Acquisition Officer awarded compensation at ₹3,400 per sq. ft.; the claimants sought enhancement, relying on registered sale deeds and the commercial location of the acquired lands.

The Reference Court relied on Ex.C3, a sale deed relating to an apartment, and enhanced compensation to ₹5,500 per sq. ft.

The claimants challenged the valuation, while the State separately sought to set it aside.

Whether the Reference Court erred in calculating the land value under Ex.C3 by treating the building extent as the land extent, and whether compensation should consequently be enhanced.

Whether the State established grounds to reduce the compensation fixed by the Reference Court, including by relying on the Land Acquisition Officer’s data sale and the decision in Lal Chand v. Union of India.

The Court considered the acquisition and reference proceedings under the Tamil Nadu Highways Act, 2001, including the Section 15(2) notification and the Section 19(5) and 19(7) enquiries.

In determining market value, it considered comparable sale evidence and stated that the highest value should be adopted where the evidence supports it.

It distinguished Lal Chand v. Union of India, (2009) 15 SCC 769, which concerned deductions for development when valuing large tracts of undeveloped agricultural land by reference to small developed plots; the Court held that the principle did not warrant a development deduction for these already-developed urban lands.

Ex.C3’s annexure showed that 2,120 sq. ft. was the building extent, while the land extent was 838.3 sq. ft. The Reference Court had therefore used the wrong area; applying the land extent produced a land value of approximately ₹10,079.92 per sq. ft.

However, because Ex.C3 concerned an eighth-floor apartment, the Court considered that its value could not be adopted without accounting for the apartment’s characteristics, and fixed compensation at ₹10,000 per sq. ft.

It rejected the State’s reliance on the lower data sale and distinguished Lal Chand, finding no basis for a development deduction in the developed commercial locality.

It directed payment of 30% solatium, 12% additional market value for the specified period, and interest at 9% for the first year after possession and 15% thereafter, with credit for amounts already paid or deposited. No costs were awarded.