Madhya Pradesh High Court
The State Of Madhya Pradesh vs Sureshchandra on 20 February, 2026
NEUTRAL CITATION NO. 2026:MPHC-IND:5272
1 FA-65-2015
IN THE HIGH COURT OF MADHYA PRADESH
AT INDORE
BEFORE
HON'BLE SHRI JUSTICE PAVAN KUMAR DWIVEDI
ON THE 20th OF FEBRUARY, 2026
FIRST APPEAL No. 65 of 2015
THE STATE OF MADHYA PRADESH AND OTHERS
Versus
SURESHCHANDRA
Appearance:
Shri Dinesh Singh Chouhan - Government Advocate for the
appellant/State.
Shri Somesh Gobhuj - Advocate for the respondent.
ORDER
This appeal has been filed by the appellant/State under the provisions
of Section 54 of the Land Acquisition Act, 1894 being aggrieved by the
award dated 17.02.2014 passed by the Reference Court in proceedings under
Section 18 of the said Act.
2. The relevant facts of the case are that the land belonging to
respondent Suresh Chandra was situated in Survey No.1299, admeasuring
0.20 Aare, and Survey No.1307, admeasuring 0.22 Aare, totaling 0.42 Aare,
located at Village Makodi, Tehsil Gulana, District Shajapur (M.P.).
2.1 The State Government under the Makodi Talab submergence area
project, issued notification in terms of Section 4(1) thereby issuing
preliminary notification under Section 17(1) of the Land Acquisition Act,
thereby declaring urgency for the acquisition of land on 11.12.2009.
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Thereafter, notification under Section 6 of the said Act was issued on
14.05.2010 declaring that the land was required for public purpose.
2.2 The aforesaid land of the respondent was also acquired for the said
project after following the due procedure. An award was passed by the Land
Acquisition Officer on 30.11.2010, determining the rate at Rs.2,77,000/- per
hectare for irrigated land and Rs.1,67,000/- per hectare for unirrigated land.
Based on this calculation, compensation of Rs.1,01,651/- was awarded to the
respondent Suresh Chandra. Being aggrieved by the said award, he filed
application under Section 18 of the Land Acquisition Act.
2.3 The respondent before the reference Court in proceedings under
Section 18 demonstrated by placing on record sale deed (Ex.P-7) executed
on 31.03.2009 that the value of the land was substantially higher than the
value assessed by the Land Acquisition Officer in the award dated
30.11.2010 (Ex.P-1).
2.4 In support of his submissions, respondent No.1 examined himself
as PW-1 and also examined one Ishwar as PW-2. Through their evidence, it
was demonstrated that 0.31 Aare of land was purchased by the said Ishwar
on 31.03.2009 for a sale consideration of Rs.3,00,000/- in Village Makodi
itself.
3. The State sought to rebut the said claim by examining one Jugal
Kishore Choudhary Patwari who deposed in Para 2 of his cross examination
that Village Makodi is inhibited in area of around 2-3 km. However, nothing
substantial was stated by him with respect to the sale deed placed on record
by the respondent (Ex.P-7) so as to establish that the said land was not
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situated near the land of the respondent, which was acquired by the State.
The land purchased vide Ex.P-7 is situated in survey Nos. 822 and 823 of
village Makodi, whereas the land acquired by the State from the respondent
is situated in survey Nos.1299 and 1307 of the said village.
3.1 The reference Court had framed as many as 8 issues out of which
issue No.2 is relevant for the purposes of the present appeal. The said issue
pertains to the determination of the market value of the acquired land. After
considering the evidence led by both the parties, the Reference Court
recorded its findings in Paras 7 to 12 of the impugned award. The reference
Court found that the Land Acquisition Officer had awarded compensation on
the basis of the guidelines for the year 2009-10, the basis for determining the
market value was the said guideline. However, in para 8, the Reference Court
specifically recorded that the sale deed (Ex.P-7) was executed on 31.03.2009,
whereas the preliminary notification under Section 4 of the Act was issued
on 11.12.2009. Thus, the sale deed Ex.P-7 was executed much prior to the
issuance of the notification.
3.2 Thus, the Court after relying on the judgments of the Hon’ble Apex
Court as well as orders passed by this Court concluded in Para 10 that as per
Ex.P-7 the market value of the acquired land ought to be Rs.9,67,741/- per
hectare for irrigated land and Rs.4,83,871/- per hectare for unirrigated land.
As such, the award dated 17.02.2014 was modified and the amount of the
compensation was directed to be enhanced. Being aggrieved by the said
award, the appellant / State has come before this Court in the instant appeal.
4. The main contention of the learned counsel for the State is that the
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Land Acquisition Officer determined the market value of the land acquired
on the basis of guidelines of the year 2009-10 which according to the learned
counsel was not only appropriate but also the only correct method available
for determination of the market value of the land. It is further submitted that
since the preliminary notification in terms of Section 4(1) of the Act was
issued on 11.12.2009, the guidelines for the year 2009-10 were taken into
consideration.
4.1 The reference Court erred in relying on the sale deed on the
ground that it was a singular document placed on record and on the basis of a
single sale deed, the Court could not have enhanced the compensation.
5 . Per contra, learned counsel for the respondent supported the
impugned award and stated that it is settled position of law that highest bona
fide exemplar has to be taken into consideration for determining the
compensation. He further submits that in the present case, neither before the
Reference Court nor before this Court was the State able to establish any
strong circumstances to indicate that the sale deed produced by the
respondent was not reliable or that it could not form a valid basis for
determining the market value of the acquired land.
6. Heard learned counsel for the parties and perused the record.
7. Under the erstwhile Land Acquisition Act, 1894, for the purpose of
determining adequate compensation on account of acquisition of landowner’s
land, the matters to be considered include the market value of the land as on
the date of publication of the notification under Section 4(1) of the said Act
along with the other parameters contained in Section 23 thereof. Section 23
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of the said Act provides as under :
“23. Matters to be considered in determining compensation
(1) In determining the amount of compensation to be awarded for land
acquired under this Act, the Court shall take into considerationfirst, the market value of the land at the date of the publication of the
[notification under section 4, sub-section (1)] [Substituted by Act 38 of
1923, Section 7, for “declaration relating thereto under section 6“.];
secondly, the damage sustained by the person interested, by reason of
the taking of any standing crops or trees which may be on the land at the
time of the Collectors taking possession thereof;
thirdly, the damage (if any) sustained by the person interested, at the
time of the Collectors taking possession of the land, by reason of
severing such land from his other land;
fourthly, the damage (if any) sustained by the person interested, at the
time of the Collectors taking possession of the land, by reason of the
acquisition injuriously affecting his other property, movable or
immovable, in any other manner, or his earnings;
fifthly, if, in consequence of the acquisition of the land by the Collector,
the person interested is compelled to change his residence or place of
business, the reasonable expenses (if any) incidental to such change; and
sixthly, the damage (if any) bona fide resulting from diminution of the
profits of the land between the time of the publication of the declaration
under section 6 and the time of the Collectors taking possession of the
land.
[(1-A) In addition to the market value of the land, as above provided, the
Court shall in every case award an amount calculated at the rate of
twelve per centum per annum on such market value for the period
commencing on and from the date of the publication of the notification
under section 4, sub-section (1), in respect of such land to the date of the
award of the Collector or the date of taking possession of the land,
whichever is earlier.
Explanation. In computing the period referred to in this sub-section, any
period or periods during which the proceedings for the acquisition of the
land were held up on account of any stay or injunction by the order of
any Court shall be excluded.] [Inserted by Act 68 of 1984, Section 15
(w.e.f. 24.9.1984).]
(2) In addition to the market value of the land as above provided, the
Court shall in every case award a sum of [thirty per centum] [Substituted
by Act 68 of 1984, Section 15, for ” fifteen per centum” (w.e.f.
24.9.1984).] on such market value, in consideration of compulsory
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nature of the acquisition.”
8. This Court while considering the provisions of Section 23 has held
in the case of Sitabai Vs. State of M.P. and Another in ILR (2009) MP 843
in paras 12 to 14 as under :
12. The determination of the compensation by the Reference Court by
averaging the price which was recorded in the office of Registrar in the
sale and purchase register prior to 3 years of the date of notification for
arriving the market value of the acquired land cannot be accepted more
particularly when the Sale-deeds Exs.P/6 and P/7 were available before
it.
“13. In the present case, the appellant examined village Patwari
Phoolsingh (PW-1), Rameshwar (PW-2), Ashok Kumar (PW-3) and
Sawarmal (PW-4). (PW-3) and (PW-4) are the purchasers of lands vide
Sale-deeds Exs. P/6 and P/7. They have proved the Sale-deeds Exs. P/6
and P/7 executed on 31.03.1989 and 30.03.1989, respectively. Sale-deed
Ex.P/7 demonstrate the market value of per Hectare of land at village
Banbana to be Rs.35,365/-. Ex.P/6 is the Sale-deed of 31.03.1989
according to which the market value per Hectare of the land at village
Banbana is Rs.47,337/-. Applying the ratio of Supreme Court market
price of the higher of the Sale-deeds has to be taken which is market
price as per the Sale-deed Ex.P/6 in respect of the land which is for
Rs.47,337/- per Hectare.
14. The Sale-deed Ex.P/6 is of 1 year 6 months and 12 days prior to the
date of notification. The appreciation of the market value to the extent of
15% per year of the land in between the period of execution of the Sale-
deed Ex.P/6 and the date of notification under Section 4 of the Act,
having regard to the fact that it is situated near Nagda an industrial town,
near the Ujjain-Nagda Highway in the light of the judgment passed by
the Supreme Court in Krishi Utpadan Mandi Samiti Sahaswan, District
Badaun Vs. Bipin Kumar and another (supra) can be accepted as rate of
increase of the price of the land from the date of sale-deed to the date of
notification. Thus, taking into consideration sale-deed Ex.P/6 by which
on 31.03.1989 the market value of land was Rs.47,337/- per Hectare and
adding 15% per annum as appreciation of the rate of the land for 1 year
6 months and 12 days the market value of acquired land of Banbana
comes to Rs.47,337 + Rs.10,888/- = Rs.58225/- per Hectare.”
8.1 Similarly in the case of State of M.P. and Anr. Vs. Ramlal in ILR
(2016) MP 1456, the Court while considering the provisions of Section 23 of
the Act has held in Paras 11 and 12 as under:
“11. When there are several exemplars with reference to the similar land,
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then as a general rule, highest of the exemplar has to be considered and
accepted if it represents bona-fide transaction. Where sale deeds
pertaining to different transaction are relied upon, the transaction
representing the highest value is required to be preferred as against
others unless there are strong circumstances for taking a different course.
In a series of judgments, now it has been settled that the averaging of
various sale deeds for fixing the fair compensation is not the proper
course of action. (See Meharwal Khewaji Trust (Registered), Faridkot
and others Vs. State of Punjab and others (2012) 5 SCC 432, Anjani
Molu Desai Vs. State of Goa and others (2010)13 SCC 710,
Bakhtavarsingh Vs. Union of India (1995)2 SCC 495, Sitabai and Others
Vs. State of MP and others 2010(1) MANISHA 33(MP), judgment of
this Court dated 30/1/2009 in FA No, 542/2002 Kailash Chandra Vs.
Executive Engineer and another and the judgment of this court dated
12/1/2015 in FA No.901/2008 Hiralal (dead) through L.Rs Vs. State of
MP and connected appeals.
12. It is also settled that for determining the market value of larger area,
the sale deed of smaller area can also be considered if there is no other
cogent material available, but while relying on the sale deed for a
smaller area, a suitable percentage is to be deducted for determining the
market value of the larger area. See Ahsanul Hoda Vs. State of Bihar
AIR 2013 SC 3463, Ravinder Narain and another Vs. Union of India
(2003)4 SCC 481 and Aatmasingh (Dead) through L.Rs Vs. State of
Haryana AIR 2008 SC 709, the judgment of this Court dated 9/11/2001
passed in FA No.360/2000 in the matter of Laxminarayan deceased
through L.Rs and others Vs. Union of India as also the judgment dated
19th December, 2014 in FA No.497/2012 in the matter of Subhash Vs.
State of MP and another and connected bunch of appeals.”
9. It is thus clear that this Court has repeatedly held that the sale deed
showing the market price of land situated in close proximity and executed
just prior to the acquisition are to be relied and that compensation should be
determined on the basis of the highest price bona fide sale exemplar. It has
further been held that it is the duty of the Land Acquisition Officer to
determine proper compensation and that transactions reflecting the highest
value are required to be preferred unless strong circumstances exist for
adopting different course.
10. In the present case, no such strong circumstances have even been
pleaded, let alone proved by the State Government.
11. The State Government has also not been able to establish that the
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land purchased under the sale deed (Ex. P-7) was not situated in close
proximity of the land acquired by the State Government.
12. The aspect of determination of compensation on the basis of
market value in terms of Section 23 of the Land Acquisition Act has also
been considered by the Hon’ble Apex Court in several cases. In the case of
Chindha Fakira Patil vs. Special Land Acquisition Officer in (2011) 10 SCC
787, the Hon’ble Apex Court has held in paras 14 to 21 as under :
“14. In our view, the approach adopted by the High Court was clearly
erroneous. There is no basis for the assumption that the purchaser of the
land must have offered higher price for special reasons. Exhibit 28 was
proved by Shri Arjun Sukdeo Patil, who had appeared as witness on
behalf of the appellants. It was open to the counsel for the respondent to
cross-examine the witness and elicit the special reasons, if any, for sale
of land allegedly at a higher price. However, the fact of the matter is that
no such question was put to the witness.
15. As a matter of fact, it is neither the pleaded case of the respondent
nor has it been argued before us that the sale deed Exhibit 28 had not
been proved or that the price mentioned therein was not the highest price
paid for jirayat land in the area. Therefore, we have no hesitation to hold
that the High Court was not right in interfering with the fixation of
market value by the Reference Court for jirayat land at the rate of Rs 3
lakhs and for bagayat land at the rate of Rs 6 lakhs per hectare. The mere
fact that average sale price of the transactions relied upon by the
respondent was substantially less could not be made a ground for
discarding Exhibit 28.
1 6 . In M. Vijayalakshmamma Rao Bahadur v. Collector of Madras
[(1969) 1 MLJ 45 (SC)] , this Court considered a question similar to the
one raised in this appeal and observed: (MLJ pp. 46-47)“… After all when the land is being compulsorily taken away
from a person, he is entitled to say that he should be given the
highest value which similar land in the locality is shown to have
fetched in a bona fide transaction entered into between a willing
purchaser and a willing seller near about the time of the
acquisition. It is not disputed that the transaction represented by
Ext. R-19 was a few months prior to the notification under Section
4 that it was a bona fide transaction and that it was entered into
between a willing purchaser and a willing seller. The land
comprised in the sale deed is 11 grounds and was sold at Rs 1961
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the notification but after the land comprised in Ext. R-19 was sold.
It is true that this land was sold at Rs 1096 per ground. This,
however, is apparently because of two circumstances. One is that
betterment levy at Rs 500 per ground had to be paid by the vendee
and the other that the land comprised in it is very much more
extensive, that is, about 93 grounds or so. Whatever that may be, it
seems to us to be only fair that where sale deeds pertaining to
different transactions are relied on behalf of the Government, that
representing the highest value should be preferred to the rest
unless there are strong circumstances justifying a different course.
In any case we see no reason why an average of two sale deeds
should have been taken in this case.”
17. In State of Punjab v. Hans Raj [(1994) 5 SCC 734] , this Court held
as under: (SCC p. 736, para 4)
“4. Having given our anxious consideration to the respective
contentions, we are of the considered view that the learned Single
Judge of the High Court committed a grave error in working out
average price paid under the sale transactions to determine the
market value of the acquired land on that basis. As the method of
averaging the prices fetched by sales of different lands of different
kinds at different times, for fixing the market value of the acquired
land, if followed, could bring about a figure of price which may
not at all be regarded as the price to be fetched by sale of acquired
land. One should not have, ordinarily recourse to such method. It
is well settled that genuine and bona fide sale transactions in
respect of the land under acquisition or in its absence the bona fide
sale transactions proximate to the point of acquisition of the lands
situated in the neighbourhood of the acquired lands possessing
similar value or utility taken place between a willing vendee and
the willing vendor which could be expected to reflect the true
value, as agreed between reasonable prudent persons acting in the
normal market conditions are the real basis to determine the
market value.”
18. In Anjani Molu Dessai v. State of Goa [(2010) 13 SCC 710 : (2011)
1 SCC (Civ) 788] , the Court again considered the same issue and held:
(SCC p. 717, para 23)
“23. Therefore, we are of the view that the averaging of the prices
under the two sale deeds was not justified. The sale deed dated 31-
1-1990 ought to have been excluded for the reasons stated above.
That means compensation for the acquired lands had to be fixed
only with reference to the sale deed dated 30-8-1989 relied upon
by the Land Acquisition Collector which will be Rs 57.50 per
square metre. As the said market value has been fixed with
reference to comparable bharad land with fruit trees, the question
of again separately awarding any compensation for the trees
situated in the acquired land does not arise.”
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19. In view of the law laid down in the abovenoted three judgments, it
must be held that the High Court committed an error by refusing to rely
upon Exhibit 28 on the ground that the average sale price of the
transactions relied upon by the respondent was far less than the price for
which land was sold vide Exhibit 28.
20. The High Court was also not right in upsetting the finding of the
Reference Court on the issue of nature of land. In his deposition, Arjun
Sukdeo Patil categorically stated that there were wells in the lands of the
appellants and there were jujube, tamarind, mango, pomegranate trees.
This was supported by the entries contained in 7/12 extracts. The High
Court discarded the evidence of the appellants by observing that they
had not cultivated sugarcane and wheat.
21. When it was not in dispute that there were wells in the acquired land,
the mere fact that the appellants had not cultivated sugarcane or wheat
cannot lead to an inference that the land was not irrigated and, in our
view, there was no valid reason for the High Court to interfere with the
finding recorded by the Reference Court that parts of the lands were
bagayat and for such land they were entitled to compensation @ Rs 6
lakhs per hectare.”
12.1 Again, the Hon’ble Apex Court, while considering the provisions
of Sections 18 and 23 of the Land Acquisition Act in the case of Meharwal
Khewaji Trust v. State of Punjab reported in (2012) 5 SCC 432 held in para
17 as under :
“17. It is clear that when there are several exemplars with reference to
similar lands, it is the general rule that the highest of the exemplars, if it
is satisfied that it is a bona fide transaction, has to be considered and
accepted. When the 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 bona fide transaction entered into
between a willing purchaser and a willing seller near about the time of
the acquisition. 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 placed before the authority/court for fixing fair compensation.”
13. As such, not only this Court but even the Hon’ble Apex Court has
repeatedly held that that the transaction representing the highest value is to
be preferred over others, unless there are strong circumstances justifying
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different course.
14. There is one more aspect of the matter, namely, the existence of
guidelines issued by the State for the year 2009-10. The said guidelines
though relevant are issued only with the object of ascertaining the collection
of revenue. By issuance of such guidelines, the State ensures that stamp duty
is paid at the minimum rate mentioned therein. However, it cannot be said
that the guidelines so issued by the State are binding for the purpose of
determination of market value nor can they be used to ignore the market
value of the property which may be demonstrated by producing sale deeds
relating to land situated in close proximity to the acquired land.
15. In such circumstances, in the considered view of this Court, the
Reference Court has correctly determined the value of the land hence, no
interference is warranted in the impugned award passed by the Reference
Court.
16. Resultantly, the present appeal fails and is hereby dismissed.
No order as to costs.
Certified copy as per rules.
(PAVAN KUMAR DWIVEDI)
JUDGE
vidya
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