Market value of large land cannot be determined solely on isolated sale deeds of small plots.

The Power Grid Corporation of India Ltd. (Respondent No. 2) proposed the acquisition of 15.4811 hectares of land in Village Puhana, District Haridwar, for setting up a 400 K.V. Sub-Station

Notifications under Section 4(1) and Section 6 of the Land Acquisition Act, 1894, were published in 2005 and 2006, respectively

The Special Land Acquisition Officer (SLAO) determined compensation at a flat rate of ₹445.68 per sq. metre by selecting a sale deed dated 03.06.2005 (Serial No. 34) as an exemplar, while applying a 20% deduction for development

The Appellants/Claimants, dissatisfied with the rate and seeking ₹650 per sq. metre, filed a reference under Section 18 of the Act

The Reference Court (5th Additional District Judge, Haridwar) dismissed the reference on 18.12.2013, upholding the SLAO’s determination

1. Whether the Reference Court was justified in upholding the market value of the land determined at the rate of ₹445.68 per square metre by the SLAO

2. Whether the deduction at the rate of 20% of the land value as per the exemplar sale deed is justifiable and proper

The Court applied Section 23 of the Land Acquisition Act, 1894, which mandates market value determination as of the date of the Section 4 notification

It followed the principle from Mehrawal Khewaji Trust v. State of Punjab that among several bona fide exemplars of similar lands, the highest value should generally be preferred

The court balanced this with Ranvir Singh v. Union of India, which establishes that sale prices of small plots cannot be the sole basis for valuing large tracts of land

Regarding deductions, the court applied principles from Major General Kapil Mehra v. Union of India and Lal Chand v. Union of India, which allow for development deductions ranging from 20% to 75% for large undeveloped agricultural tracts even if they possess future potential

The Court analyzed the Appellants' reliance on a sale deed dated 22.09.2005 (₹750/sq.m.) and another from Village Karondi (₹960/sq.m.). It rejected the first because it was executed after the Section 4 notification date and involved a tiny fraction (120.81 sq.m.) of the 15.4811 hectares acquired

The second was discarded as it pertained to a different village

The Court found the SLAO's choice of an exemplar (718 sq.m. plot proximate to the acquired land) rational for a large-scale acquisition

Regarding the 20% deduction, the Court noted that while the land had building potential, it was being used for agriculture at the time of acquisition

Applying "guesswork" to balance equities, the Court held that since the Respondent would need to develop infrastructure (roads, drains) for a Sub-Station on a vast tract, a 20% deduction was reasonable and significantly lower than the one-third (33.3%) deduction often upheld by the Supreme Court

The appeal was dismissed, and the judgment and order of the Reference Court dated 18.12.2013 were affirmed