Severance compensation requires redetermination after assessing bifurcation, land use, and impact on remaining land.

The State of Haryana acquired 21.06 acres of land situated in five villages, including Vaidwala, Tehsil and District Sirsa, for construction of the Sirsa bypass road. Notification under Section 4 of the Land Acquisition Act, 1894 was issued on 12 September 2008, followed by the declaration under Section 6 on 15 June 2009.

The Land Acquisition Collector assessed the market value at ₹35,00,000 per acre by award dated 29 June 2011. On references under Section 18, the Reference Court enhanced the market value to ₹50,00,000 per acre and awarded severance charges at 60% of the market value on account of bifurcation of the remaining land.

The landowners sought further enhancement, while the State challenged both the enhanced market value and the award of severance charges.

The connected appeals and cross-objections involved common questions concerning market value and severance compensation arising from the same acquisition proceedings.

Whether the Reference Court correctly assessed the market value of the acquired land at ₹50,00,000 per acre, or whether the compensation required further enhancement or reduction?

Whether the award of severance charges at 60% of the market value was legally and factually justified without determining the extent and effect of bifurcation of the unacquired land?

Whether the delay, if any, in filing the appeals and connected proceedings ought to be condoned, and if so, on what terms?

The Court applied Section 54 of the Land Acquisition Act, 1894, governing appeals to the High Court against awards of the Reference Court, along with Sections 4, 6 and 18 concerning acquisition notifications and references against the Collector’s award.

For determining market value, the Court applied the comparable-acquisition principle and the doctrine permitting escalation in land value at approximately 12% per annum where there is a time gap between relevant notifications; it also relied upon the Supreme Court’s orders dated 19 November 2024 and 28 July 2025, which restored an award assessing land in the same village at ₹62,00,000 per acre after applying 24% cumulative escalation to ₹50,00,000 per acre.

For severance compensation, the applicable principle was that compensation cannot be fixed mechanically as a percentage of the acquired land’s market value; the authority must examine the extent of the remaining land, the area actually severed, its use before and after acquisition, and the diminution or enhancement in its value resulting from the acquisition and construction of the bypass.

Delay was condoned by consent, but the appellants were denied interest for the delayed period.

The Court upheld the Reference Court’s valuation of ₹50,00,000 per acre. The Supreme Court had relied upon the same Reference Court award as Exhibit P-7 while determining compensation for a later acquisition in the same village and had found no material locational difference between the acquired parcels.

Although the later notification was dated 23 August 2010, nearly two years after the notification in the present case dated 12 September 2008, the Supreme Court’s approval of the ₹50,00,000 per acre base valuation, together with the applicable escalation principle, supported rather than undermined the Reference Court’s assessment.

The Court declined to rely upon the ₹96,00,000 per acre award relating to the 15 January 2008 notification because that acquisition had been de-notified and the legal validity of the de-notification was pending before the Supreme Court.

However, the Court found that the Reference Court had awarded severance charges at 60% without undertaking the necessary factual and legal assessment.

It was necessary to determine the landowners’ total holding, the precise portion severed from the unacquired land, the utility and use of the severed portion, and the effect of the bypass on the value of the remaining land.

The Court noted that construction of a bypass or road could, in some circumstances, increase the value of the remaining land, and that a fixed percentage might exceed the actual loss caused by severance.

It set aside the determination of severance charges at 60% and remanded the matter to the Reference Court solely for fresh determination of severance compensation after examining the relevant factual and legal factors concerning bifurcation of the unacquired land.

The remand was expressly limited to severance charges. Any delay in filing the appeals or connected proceedings was condoned, subject to denial of interest for the delayed period.

The appeals and cross-objections were accordingly disposed of, and pending applications, if any, were also disposed of.