Severance charges require evidence-based assessment of diminished value, not mechanically applied percentage rates.

The State of Haryana acquired 3.14 acres of land in Village Jhopra, District Sirsa, along with land in four other villages, for construction of the Sirsa bypass road pursuant to notifications under Sections 4 and 6 of the Land Acquisition Act, 1894, dated 12 September 2008 and 15 June 2009, respectively.

The Land Acquisition Collector assessed the market value at ₹12,00,000 per acre by award dated 29 June 2011.

On reference under Section 18, the Reference Court enhanced the market value to ₹21,00,000 per acre and granted severance charges at 60% where less than two acres were acquired and 40% where more than two acres were acquired.

Both the landowners and the State preferred appeals/cross-objections. The landowners relied principally on an award concerning Village Meerpur, where compensation had been assessed at ₹50,00,000 per acre, while the State relied on sale deeds indicating lower values.

Whether the market value of the acquired land in Village Jhopra should be enhanced by relying on the award concerning Village Meerpur or the valuation relating to Village Nezadela.

Whether the Reference Court correctly awarded severance charges at fixed rates of 60% or 40% of the compensation without determining the actual effect of severance on the remaining land.

Whether statutory benefits under Sections 23(1A) and 23(2) of the Land Acquisition Act, 1894, could be granted on severance charges.

Appeals under Section 54 of the Land Acquisition Act, 1894, permit reconsideration of the compensation determined by the Reference Court.

Market value should ordinarily be determined on the basis of reliable and comparable exemplar sale deeds; previous awards are relevant evidence but are not binding and cannot be followed mechanically.

The court relied on Manoj Kumar v. State of Haryana, 2018 (13) SCC 96, which held that previous awards must be examined with reference to the nature, location, similarity and evidentiary basis of the land, and on Ram Krishan (Since Deceased) v. State of Haryana, 2025 SCC OnLine SC 715, which clarified that previous awards may be considered as a piece of evidence.

Section 25 of the 1894 Act and the principles discussed in Lal Chand v. Union of India, (2009) 15 SCC 769, were also considered in relation to valuation evidence.

Severance compensation must reflect the actual diminution in value or utility of the remaining land and cannot be awarded mechanically by applying a uniform percentage.

Benefits under Sections 23(1A) and 23(2) are payable on the market value and not on severance charges.

The Court rejected reliance on the Meerpur award because Meerpur possessed locational advantages that were not available to Village Jhopra, although the two areas were in proximity and were acquired under the same notification.

The State’s sale deeds were not accepted as determinative because they disclosed values below even the Collector’s assessment and did not represent the true market value in the prevailing circumstances.

Since the Reference Court had assessed the value of the adjoining Village Nezadela at ₹21,50,000 per acre, and this Court had independently revised that valuation to ₹26,01,500 per acre, the same revised rate was considered appropriate for the acquired land in Village Jhopra.

On severance, the Court found that the Reference Court had applied the 60%/40% formula without examining the size and location of the severed portion, the area and possession of the remaining land, its use before and after acquisition, and the possible increase in its value due to construction of the bypass.

Such factual determination was necessary before awarding severance compensation. The Reference Court had also incorrectly extended statutory benefits to severance charges.

The award of severance charges at the uniform rates of 60% or 40% was set aside for reconsideration.

The matter was remanded to the Reference Court, limited to determining severance charges after permitting both parties to lead or address evidence regarding the bifurcation and diminution, if any, of the unacquired land; statutory benefits under Sections 23(1A) and 23(2) were not to be calculated on severance charges.

Any delay in the connected appeals was condoned, but the appellants were held disentitled to interest for the delayed period.

Pending applications were disposed of.