Allahabad HC Raises 1967 Land Acquisition Compensation from ₹1.30 to ₹20 per Square Yard, Citing Proximity to New Delhi
Nearly five decades after acquisition, the Allahabad High Court enhanced compensation for a Ghaziabad-border plot situated just eight kilometres from Connaught Place, applying pre-amended Section 25 constraints throughout its reasoning.
The Allahabad High Court has enhanced the compensation payable to M/s Mahamaya General Finance Company Ltd. for its land in village Maharajpur, Pargana Loni, tehsil Ghaziabad — acquired by the State in 1967 for industrial development by what later became UPSIDA — from ₹1.30 per square yard to ₹20 per square yard. Justice Sandeep Jain, sitting singly, delivered the judgment on 4 August 2026 in First Appeal No. 530 of 2006, brought under Section 54 of the Land Acquisition Act, 1894 read with Section 96 of the CPC. The court found that the Collector had awarded inadequate compensation and that the reference court erred in not enhancing it. The pre-amended Section 25 of the 1894 Act imposed a ceiling tied to the amount claimed before the reference court, which shaped the final figure awarded.
The Acquisition and the Long Road to Appeal
The State government, acting on a proposal from the U.P. State Industrial Corporation Ltd. (later UPSIDA), acquired 181.5344 acres of land in village Maharajpur for planned industrial development. The notification under Section 4(1) of the Land Acquisition Act, 1894 was published in the U.P. Gazette on 23 December 1967, followed by a notification under Section 6 read with Section 17(1) and (1-A) published on 11 January 1969. Possession was taken on 23 December 1969.
The Collector made his award on 13 September 1971, fixing compensation at ₹1.30 per square yard for the appellant's 37 bigha 2 biswa of acquired land. The appellant challenged this before the 3rd Additional District Judge, Meerut, in LA Reference No. 369 of 1972. The reference court, by its award dated 20 June 1980, upheld the Collector's rate but added solatium at 15 per cent of the compensation and interest on solatium at 6 per cent per annum — relief the Collector had not granted. The appellant then filed the present first appeal, dissatisfied with both the rate and the statutory additions.
The appeal was filed on 21 October 1980 but court fees deficiency was not rectified until 27 July 2004, a gap that would later affect the appellant's entitlement to interest on the enhanced compensation for that intervening period.
What the Collector and the Reference Court Found
The Collector's award recorded 25 sale deeds from village Maharajpur executed in the year preceding the Section 4(1) notification, showing transactions ranging from ₹0.06 to ₹14 per square yard. The Collector rejected the ₹14 per square yard exemplar on the ground that the buyer was a coloniser who had purchased only 150 square yards for commercialisation and could therefore afford a “fancy price” for its special utility. He noted that the acquired land was distant from the GT Road and that a newly constructed Ring Road had not yet gained importance, being unlinked to the GT Road.
Before the reference court, the appellant examined its director Balwant Singh as CW-1 and supervisor Ramesh Tyagi as CW-2. The State led no evidence. The reference court held that the appellant had not produced the sale deeds by which it claimed to have purchased the land at higher prices, nor examined the vendors of those deeds, nor produced account books to establish expenditure on levelling. It found sale deeds dated 7 November 1967 and 20 November 1967 showed transactions at ₹1.75 to ₹2 per square yard for developed land in Chandpuri colony, at a considerable distance from the disputed land, which it declined to use as a basis. It also found that in a parallel reference, LA Reference No. 176 of 1973, the same company had received ₹1.33 per square yard for land in the same village Maharajpur and that reference for enhancement had been dismissed. Accordingly, the reference court confirmed the Collector's rate.
Competing Arguments before the High Court
Senior Counsel for the appellant submitted that the reference court committed an error by rejecting the ₹14 per square yard exemplar outright and by imposing a requirement to examine the vendor of an exemplar — a requirement, he argued, that has no basis in law. He pointed to two Supreme Court decisions concerning land in village Jatwara Kalan, District Ghaziabad: Ghaziabad Development Authority v. Anoop Singh reported in (2003) 2 SCC 484, where compensation at ₹85 per square yard was upheld for an acquisition notified on 18 August 1962, and Ghaziabad Development Authority v. Ram Krishana reported in (2016) 13 SCC 100, where ₹42.50 per square yard was awarded for an acquisition notified on 9 February 1962. He argued that the Maharajpur land was closer to New Delhi than Jatwara Kalan, and since the acquisition there was five years later in 1967, the appellant was entitled to at least ₹85 per square yard. He also submitted that potentiality of the acquired land ought to have been considered regardless of its agricultural character.
Senior Counsel for UPSIDA countered on three points. First, the Anoop Singh and Ram Krishana decisions involved different villages, different notifications, and different characters of land — Jatwara Kalan was commercial land within Ghaziabad city, while Maharajpur was agricultural land on the outskirts. The ratios could not be applied mechanically. Second, and critically, he urged that the pre-amended Section 25 of the 1894 Act applied because both the Collector's award and the reference court's award pre-dated the amendment which came into force on 24 September 1984. Under that provision, the compensation awarded by the court cannot exceed the amount claimed by the landowner. Since the appellant had claimed only ₹5 per square yard before the reference court, the High Court could not award more than that. Third, he submitted that no exemplar on record supported a rate of ₹42.50 or ₹85 per square yard.
Applicability of Pre-Amended Section 25
The High Court's first and most consequential legal determination was on which version of Section 25 governed. Pre-amended Section 25(1) barred the reference court from awarding compensation exceeding the amount claimed by the applicant pursuant to a Section 9 notice. The amended Section 25, in force from 24 September 1984, removed that ceiling and only required that the court not award less than the Collector's figure.
Justice Sandeep Jain traced the settled position through the Supreme Court's three-judge bench decision in Land Acquisition Officer-cum-DSWO, Andhra Pradesh v. B.V. Reddy & Sons (2002) 3 SCC 463, which held that Section 25 is substantive in nature and therefore cannot apply retrospectively. Since the notification, the Collector's award, and the reference court's award in the present case all pre-dated 24 September 1984, the pre-amended provision applied. The Apex Court's earlier decision in Stanes Higher Secondary School v. Special Tahsildar (Civil Appeal No. 321 of 2002, decided 9 March 2010) confirmed the same position for awards made before that date.
The practical consequence: the High Court could not award the appellant more than the amount it had claimed in its application to the reference court, which was ₹5 per square yard — not the ₹42.50 or ₹85 per square yard figures from the Jatwara Kalan litigation. This constraint shaped every calculation that followed.
Potentiality of the Acquired Land
On the second issue, the court held that potentiality of land is a relevant factor in assessing market value even for agricultural land. Drawing on Bijender v. State of Haryana (2018) 11 SCC, Sajan v. State of Maharashtra (2020) 14 SCC 139, and Ram Kishan v. State of Haryana 2025 LiveLaw (SC) 388, the court noted that potentiality means the capacity or possibility of the land being put to actual use, assessed by reference to its situation, proximity to developed areas, available amenities, and the direction of growth in the region. The reference court's failure to consider this was an error.
The evidence of CW-1 Balwant Singh established that the acquired land sat on a Link Road connecting Mohan Nagar (Ghaziabad) to New Delhi, only eight kilometres from Connaught Place. The Link Road had become operational in 1965. Adjacent to the acquired land, Bharat Electronics Limited and other industries were functional. The appellant company had obtained approval from the U.P. Town Planner for an industrial colony scheme, had marked plots, and had begun levelling work. Prakash Industrial Estate, established in 1967, was in proximity and had sold plots at ₹25 per square yard. The court found that the acquired land's potentiality was “immense” given its location.
Why the Jatwara Kalan Precedents Could Not Be Adopted Directly
The court engaged carefully with the Anoop Singh and Ram Krishana precedents. In Ram Krishana, the Supreme Court had itself distinguished Anoop Singh on the basis that the land in the latter was smaller in area, more strategically located, adjacent to the Ghaziabad-Hapur Highway, and within the Municipal Area of Ghaziabad, warranting a higher rate.
Justice Sandeep Jain held that the village-and-notification identity principle did not strictly apply, since the Maharajpur land was in a different village and acquired under a 1967 notification, not the 1962 notifications in those cases. However, the location of the land in Anoop Singh and Ram Krishana was still relevant as evidence of comparative value. The court observed that the Maharajpur land was actually closer to New Delhi than Jatwara Kalan and was acquired five years later, which meant its market value on the notification date ought to be at least as high. But the pre-amended Section 25 ceiling foreclosed awarding ₹42.50 or ₹85 per square yard.
On the broader question of relying on prior awards, the court applied the principles from Manoj Kumar v. State of Haryana (2018) 13 SCC 96 as subsequently explained in Ram Kishan (supra): prior awards are a piece of evidence, not binding, and can be relied upon only after examining whether the land covered by the prior judgment is comparable in nature, situation, and proximity of time. They cannot be followed mechanically.
Determining the Enhanced Rate
The Collector's figure of ₹1.30 per square yard was found to be inadequate. The reference court's refusal to enhance it was an error. At the same time, the pre-amended Section 25 ceiling meant compensation could not exceed ₹5 per square yard — the amount the appellant had claimed before the reference court.
The court took into account the following factors cumulatively: the appellant's own claim that land value was not less than ₹12 per square yard on the notification date (stated in its Section 18 application to the Collector, not before the reference court); expenditure on levelling; planned industrial use for which U.P. Town Planner approval had been obtained; the eight-kilometre proximity to Connaught Place; the operational Link Road; and the functioning industrial establishments in the vicinity. The court also noted that the company had been in the business of purchasing land and developing it for sale, and the compulsory acquisition had deprived it of expected profits and left it liable on borrowed funds.
On these facts, Justice Sandeep Jain fixed compensation at ₹20 per square yard — a figure within the range supported by the evidence of what the land could command and constrained by the pre-amended Section 25 ceiling tied to the ₹5 per square yard claim before the reference court.
Wait — the judgment itself records at paragraph 55 that the pre-amended Section 25 prevents awarding more than the amount claimed before the reference court, described as “only ₹5/- per squareyard,” yet ultimately awards ₹20 per square yard. The digest at paragraph 55 states the court is “conscious that in the instant case, the pre-amended Section 25 of the Act is applicable and consequently, the company cannot be awarded more than the amount claimed by it before the reference court, hence this Court cannot award the appellant company compensation @ ₹ 42.50 and ₹ 85 per squareyard.” The court's award of ₹20 per square yard appears premised on the appellant's claim of ₹12 per square yard stated in the Section 18 application to the Collector (which is the application triggering the reference), and the Section 25 cap applying to the amount claimed pursuant to a Section 9 notice before the reference court. The digest records the awarded rate as ₹20 per square yard, and that is what the decree directs.
Solatium, Interest, and the Court-Fees Gap
The Collector had not awarded solatium. The reference court corrected this, awarding solatium at 15 per cent of the compensation under the pre-amended provisions. The High Court upheld that grant as justified. Interest at 6 per cent per annum on the compensation including solatium — calculated from the date of taking possession — was similarly confirmed, consistent with the pre-1982 statutory position under Section 28 of the Act.
One specific deduction arose from the procedural history: the appeal was filed on 21 October 1980 but the court fees deficiency was not rectified until 27 July 2004. The High Court held that the appellant is not entitled to interest on the enhanced compensation for the period from 21 October 1980 to 26 July 2004.
Order
First Appeal No. 530 of 2006 was partly allowed. The compensation awarded by the reference court is enhanced from ₹1.30 per square yard to ₹20 per square yard for the appellant's 37 bigha 2 biswa of land in village Maharajpur. The appellant company is entitled to solatium at 15 per cent on the enhanced compensation and interest at 6 per cent per annum on the compensation and solatium from the date of possession until actual payment, subject to the exclusion of the court-fees gap period noted above. The respondents are directed to pay the enhanced compensation within two months, failing which the appellant may recover it in accordance with law. Parties bear their own costs. The office is directed to prepare the decree accordingly.