Justice H. Manuja Punjab & Haryana HC TERMINATION Reference Authority not shackledby Collector's Section 26
[ High Court of Punjab and Haryana ]

Section 26 of the 2013 Land Acquisition Act Binds Only the Collector, Not the Reference Authority or Court: Punjab & Haryana HC

Justice Harkesh Manuja holds that the Reference Authority under Section 64 of the RFCTLARR Act 2013 retains full independent power to assess market value beyond Section 26 parameters, and enhances compensation to Rs. 608 per sq. yard for land acquired in Village Barara, Ambala.

— High Court of Punjab and Haryana at Chandigarh — 20 June 2026 — 11 min read

A batch of nineteen first appeals arising from a common land acquisition in Village Barara, District Ambala, has produced a detailed ruling from the Punjab and Haryana High Court on a question that cuts across every reference proceeding under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (the 2013 Act): whether the Reference Authority or the Court, when adjudicating a reference under Section 64 of the 2013 Act, is absolutely bound by the market-value parameters prescribed under Section 26 of that Act. Justice Harkesh Manuja, sitting singly at Chandigarh, answered that question in the negative. The court held that Section 26 prescribes a methodology exclusively for the Collector and does not extend to or bind the Authority or the Court, which retain full and independent power to assess market value on the basis of all material placed on record. The impugned award of the Additional District Judge, Ambala, dated 02.08.2024 was modified, and the landowners were held entitled to market value at Rs. 608 per sq. yard along with statutory benefits under the Land Acquisition Act, 1894.

The Acquisition and the Dispute Before the High Court

The acquisition originated with a notification under Section 4 of the Land Acquisition Act, 1894 dated 03.05.2012, followed by a final declaration under Section 6 dated 17.10.2012. The public purpose was the construction of a Mini Secretariat for Sub Division Barara. The total extent acquired was 20 acres 6 Kanal 15 Yards in Village Barara, Had Bast No. 203, Tehsil and District Barara and Ambala.

By the time the Land Acquisition Collector (LAC) passed Award No. 1 on 13.10.2014, the 2013 Act had come into force with effect from 01.01.2014. The LAC assessed market value at Rs. 15 lakhs per acre, purportedly applying the parameters under Section 26 of the 2013 Act. Dissatisfied, the landowners filed objections which were entertained under Section 64 of the 2013 Act and referred to the Additional District Judge, Ambala, functioning as the Reference Court.

The Reference Court, by its award dated 02.08.2024, enhanced compensation to Rs. 390 per sq. yard along with other statutory benefits. The landowners found this insufficient and preferred the present nineteen appeals under Section 54 of the 1894 Act, seeking further enhancement. The State of Haryana filed neither a cross-appeal nor cross-objections, so the Reference Court's application of a factor of 1.5 attained finality.

Before the High Court, Senior Counsel for the landowners argued that the Reference Court erred in discarding the sale deeds produced by the landowners, particularly because the majority of those sale deeds pertained to the acquired land parcel itself. Counsel also contended that the parameters under Section 26 of the 2013 Act regulate only the Collector and do not restrict the adjudicatory jurisdiction of the Authority under Section 64. The State countered that the Reference Court had properly relied on sale exemplars Exhibits R-1 and R-2 and that the objections before the Reference Court were to be dealt with strictly within the terms of Section 26.

The Legal Question

Before examining the facts, Justice Manuja framed the question of law squarely: whether the Authority or the Court, while adjudicating a reference under Section 64 of the 2013 Act, is absolutely bound by the parameters prescribed under Section 26 for determination of market value.

The answer required a comparative reading of the 1894 Act and the 2013 Act across several provisions: Section 11 of the 1894 Act against Section 26 of the 2013 Act; Section 23 of the 1894 Act against Section 28 of the 2013 Act; and Sections 64 and 69 of the 2013 Act.

How the Bench Reasoned

Plain language of Section 26. The court began with the text. Section 26 of the 2013 Act, both in its heading and body, uses the word “Collector” and conspicuously omits the words “Authority” or “Court”. The court drew on the Supreme Court's observation in Officer on Special Duty (Land Acquisition) v. Shah Manilal Chandulal, (1996) 9 SCC 414, that the 1894 Act draws a clear and conscious distinction between the Collector and the Court. The same distinction is maintained in the 2013 Act: Section 3(g) defines “Collector” and Section 3(f) defines “Authority” as the Land Acquisition and Rehabilitation and Resettlement Authority constituted under Section 51. The court noted that the Supreme Court in Deputy Commissioner and Special Land Acquisition Officer v. M/s S.V. Global Mill Limited, 2026(1) RCR(Civil) 843, had recognised the Authority as the first judicial forum under the 2013 Act, exercising powers of a Civil Court under Sections 60 and 61, with proceedings deemed to be judicial proceedings. The Collector, by contrast, acts as an executive or quasi-judicial authority. The roles cannot be equated.

Legislative purpose behind Section 26. Under Section 11 of the 1894 Act, the Collector was required to award compensation that “in his opinion should be allowed for the land”—an entirely unregulated discretion. The Supreme Court in Ambya Kalya Mhatre v. State of Maharashtra, (2011) 9 SCC 325, had observed that Collectors invariably offer compensation far below true market value, compelling landowners into protracted litigation. Section 26 of the 2013 Act was enacted precisely to regulate the Collector's discretion by laying down specific codified parameters. The legislative purpose was to constrain the executive authority, not to restrict the adjudicatory forum.

Interplay of Sections 26, 64 and 69. Section 64 provides for a reference to the Authority in respect of, among other things, “the amount of compensation”—an expression broad enough to encompass the full determination of market value and not confined to examining whether the Collector complied with Section 26. Section 69(1), which governs the Authority's determination of the award, requires it to “take into consideration” whether the Collector has followed the parameters under Sections 26 to 30. The court identified three significant features of this language. First, the use of “shall” makes it mandatory for the Authority to examine the Collector's compliance, casting it as a supervisory and corrective forum. Second, the Authority is required to consider whether the Collector followed Section 26; it is not required to itself follow those parameters. Third, the Legislature used “take into consideration” and not “shall only take into consideration” or “shall be bound by”—a deliberate choice indicating that the Collector's compliance is one of several factors, not an exhaustive or binding standard.

Infirmities in applying Section 26 to the Authority. The court then examined each parameter under Section 26 and found each problematic if applied as a binding standard on the Authority.

On Clause (a) (circle rates under the Stamp Act): The court relied on U.P. Jal Nigam, Lucknow v. M/s. Kalra Properties (P) Ltd., 1996(3) SCC 124, and Lal Chand v. Union of India, (2009) 15 SCC 769, which held that circle rates and guideline values are maintained for revenue purposes and cannot be determinative of true market value. They constitute only a prima facie basis. Binding the Authority to such rates would be contrary to settled law.

On Clause (b) (average sale price): The court noted that sale deeds are frequently executed at a consideration lower than prevailing market price to reduce stamp duty liability, as recognised in Haryana State Industrial Development Corporation v. Pran Sukh, (2010) 11 SCC 175. Averaging without scrutiny of reliability would not yield true market value. Explanation 1 restricts consideration to sale deeds registered within the immediately preceding three years, which becomes unworkable if no such deeds exist—a difficulty recognised by the Kerala High Court in K.C. Aleyas v. State of Kerala, 2025 NCKERHC 8449. Explanation 2's averaging methodology fails to account for appreciation in land value over time, a factor the Supreme Court recognised in G.M., Oil & Natural Gas Corporation Ltd. v. Rameshbhai Jivanbhai Patel, (2008) 14 SCC 745. Explanation 4's discretion to discount prices is subjective and vested in the very authority whose determinations the 2013 Act seeks to check. Explanation 3 prohibits reliance on “price paid as compensation” in earlier acquisitions, but the court read this as excluding only the total compensation amount (which includes solatium, interest and other heads) and not the market value determined in earlier proceedings in the same village—a contrary reading would violate Article 14 as recognised in Nagpur Improvement Trust v. Vithal Rao, (1973) 1 SCC 500.

Adjudication cannot be a mathematical exercise. The court drew on Bharat Petroleum Corpn. Ltd. v. Phoolvati Dharambir Agarwal, 2023 SCC Online SC 2162, where the Supreme Court held that courts must apply the principle of guesstimate for fixation of just and fair market value, acknowledging that no mathematical formula can yield a precise answer. In Madhya Pradesh Road Development Corporation v. Vincent Daniel and Others, 2025(7) SCC 798, the Supreme Court held that a parcel of land carries social, economic, territorial and environmental attributes and that market value must be computed through an attribute-based valuation model. Reducing the Authority's adjudication to a ministerial exercise of procuring figures and performing arithmetical calculations would deprive the landowner of any meaningful opportunity to place material on record—an outcome neither intended by the Legislature nor supported by a conjoint reading of Sections 26 and 64.

The court also noted that an interpretation binding the Authority to Section 26 would render obsolete settled jurisprudence permitting reliance on allotment letters (Manilal Shamalbhai Patel v. Officer on Special Duty (Land Acquisition), 2025(2) RCR(Civil) 413), auction rates (Karnataka Housing Board v. Land Acquisition Officer, (2011) 2 SCC 246), and previous awards (Manoj Kumar v. State of Haryana, (2018) 13 SCC 96).

Beneficial legislation. The court applied the rule of liberal construction. Relying on Delhi Development Authority v. Virender Lal Bahri, (2020) 15 SCC 328, it held that the 2013 Act, being a beneficial legislation, must be construed in a manner that furthers its object of ensuring just and fair compensation. Where two interpretations are possible, the one that accords with the beneficial object must be preferred. An interpretation restricting the Authority to Section 26 parameters would defeat that very objective.

The court accordingly answered the question of law: Section 26 prescribes the methodology for determination of market value exclusively for the Collector and does not extend to or bind the Authority or the Court. The criteria under Section 26 can serve only as guiding factors for the Authority or the Court and cannot be elevated to binding parameters circumscribing their jurisdiction.

Applying the Law to the Facts: Sale Instances and Market Value

The landowners produced eight sale instances before the Reference Court, all pertaining to Village Barara, District Ambala. Seven of the eight sale deeds related to land parcels that were part of the acquired land itself. The eighth, Exhibit P-5 dated 19.04.2012, pertained to land in Rectangle No. 48, Killa No. 5, which abutted the acquired land as shown in the site plan (Exhibit P-1). This fact was not seriously disputed by the State.

The site plan also showed that the acquired land was surrounded by commercial establishments, carrying locational advantage and potential for residential and commercial use. The small size of the parcels in the sale deeds further indicated commercial and residential potential.

The court rejected the State's sale exemplars Exhibits R-1 and R-2, finding that the land parcels forming part of those deeds were situated at a substantial distance from the acquired land and therefore not comparable.

The eight sale instances reflected values ranging from Rs. 1,000 per sq. yard to Rs. 1,803 per sq. yard—a narrow bandwidth. Relying on Anjani Molu Dessai v. State of Goa, (2010) 13 SCC 710, and Horrmal v. State of Haryana, 2024(4) RCR(Civil) 758, the court held that where sale prices fall within a narrow range, averaging is appropriate. The court applied appreciation at 12% per annum to account for the time gap between each sale deed and the Section 4 notification date of 03.05.2012. No appreciation was applied to Exhibit P-5, as the gap between that deed (19.04.2012) and the notification was only 14 days.

After applying appreciation, the eight adjusted values were:

  • Exhibit P-2 (25.02.2008, Rs. 1,000/sq. yd): Rs. 1,503
  • Exhibit P-3 (28.03.2008, Rs. 1,000/sq. yd): Rs. 1,492
  • Exhibit P-A (25.03.2009, Rs. 1,002.70/sq. yd): Rs. 1,377
  • Exhibit P-B (22.09.2009, Rs. 1,002.70/sq. yd): Rs. 1,317
  • Exhibit P-C (23.11.2010, Rs. 1,206.50/sq. yd): Rs. 1,416
  • Exhibit P-D (28.04.2011, Rs. 1,555.50/sq. yd): Rs. 1,745
  • Exhibit P-4 (13.05.2010, Rs. 1,200/sq. yd): Rs. 1,484
  • Exhibit P-5 (19.04.2012, Rs. 1,803/sq. yd): Rs. 1,803

The total of the eight adjusted values was Rs. 12,137. Dividing by eight yielded Rs. 1,517.13, rounded off to Rs. 1,520 per sq. yard as the base market value.

The court then applied a deduction of 60% towards the smallness of the area reflected in the sale instances (approximately 4 kanals) relative to the total acquired area of 20 acres 6 Kanal 15 Yards. This brought the figure to Rs. 608 per sq. yard (Rs. 1,520 minus Rs. 912).

No deduction towards development cost was applied. The court reasoned that the acquisition was for a public purpose—construction of a Mini Secretariat—and the State neither suffered any loss of land nor incurred cost towards additional infrastructural amenities.

Order

Justice Harkesh Manuja modified the award of the Additional District Judge, Ambala, dated 02.08.2024. The landowners in all nineteen appeals are held entitled to market value at the rate of Rs. 608 per sq. yard. They are also awarded consequential statutory benefits and interest as provided under the 1894 Act (as amended), including interest on solatium. The Reference Court's application of a factor of 1.5 was not disturbed, having attained finality in the absence of any cross-appeal or cross-objections by the State.

Where a landowner has died after filing the appeal