Sangrur Landowners’ Compensation Raised To ₹41 Lakh Per Acre As P&H HC Allows Their Appeals, Dismisses Trust’s

The matters concerned land acquired under the Punjab Town Improvement Act, 1922, following a notification dated 15 May 2006 for 17 acres, 5 kanals and 5 marlas in Sangrur.

The Collector awarded compensation at ₹25 lakh per acre on 9 May 2008. On references under Section 18 of the Land Acquisition Act, 1894, the Land Acquisition Tribunal enhanced the rate to ₹35 lakh per acre by award dated 8 August 2018.

The Improvement Trust challenged the enhancement, while landowners sought higher compensation. They relied, among other things, on exemplar sale deeds and the Trust’s 2002 sale of land to the Income Tax Department at ₹1,400 per square yard. The Trust argued that development costs and the difference in the size of the plots and acquired land justified deductions

The acquisition proceeded under the Punjab Town Improvement Act, 1922: Section 36 corresponds to Section 4 of the Land Acquisition Act, 1894, and Section 41 corresponds to Section 6 of that Act; the landowners’ compensation claims were referred under Section 18 of the 1894 Act.

In assessing market value, the Court considered comparable sale evidence and recognised that development deductions may be required when comparing developed or small plots with a larger acquired area; it noted that Supreme Court judgments permit development cuts ranging from 20% to 70%. It also considered escalation in land value over time. No specific precedent was named in the judgment.

The Court considered the 2002 sale of 4,397.25 square yards to the Income Tax Department at ₹1,400 per square yard relevant, given the acquired land’s location within municipal limits and proximity to a residential colony developed by the Trust and to the Income Tax Department’s office.

It accepted that the sale involved developed land and that development and size deductions were relevant; the small exemplar plots could not be compared mechanically with the 17-acre acquisition. However, the four-year interval between the 2002 sale and the 2006 notification required consideration of escalation. Balancing development and size deductions against that escalation, and noting that the exemplar sale deeds also supported the result, the Court fixed the market value at ₹41 lakh per acre.

The landowners’ appeals were allowed to that extent, and the Improvement Trust’s appeals were dismissed. Pending applications were also disposed of.