In a ruling with wide ramifications for land acquisition by governments and industrialists, the Supreme Court has ruled that land owners whose land is acquired are entitled to the highest prevailing market rate at the time of acquisition.
A bench of Justices P Sathasivam and J Chelameswar said, "When a land is being compulsorily taken away from a person, he is entitled to the highest value which similar land in the locality is shown to have fetched in a bonafide transaction entered between a willing purchaser and a willing seller near about the time of the acquisition."
In the judgment delivered on Friday, Justice Sathasivam said, "In our view, it seems to be only fair that where sale deeds pertaining to different transactions are relied on behalf of the government, the transaction representing the highest value should be preferred to the rest unless there are strong circumstances justifying a different course. It is not desirable to take an average of various sale deeds before the authority/court for fixing fair compensation."
Justice Sathasivam further noted, "It seems to be only fair that where sale leads pertaining to different transactions are relied upon on behalf of the government, the transaction representing the highest value should be preferred to the rest unless there are strong circumstances justifying a different course."
The court's observations came in respect of the land of the erstwhile ruler of Faridkot state which was acquired by Punjab government for extending an existing grain market at Faridkot by a notification of December 22, 1979, under the Land Acquisition Act, 1894.
Earlier too on several occasions, the apex court had repeatedly disaproved of the acquisition of land by the state in the name of land development at throwaway prices, only to sell it to further to builders and colonisers.