The Bombay High Court has partly allowed a batch of appeals filed by landowners whose agricultural lands in Village Parhar (Khurd), Pune district, were acquired for the Neera Deoghar Irrigation Project. Holding that the Reference Court had wrongly limited annual appreciation in land value to 6%, the Court enhanced the compensation by applying a 12% annual escalation while maintaining the base market value adopted from an earlier judgment concerning Village Dabkeghar.
Background of the Case
The appeals arose from a common land acquisition proceeding involving agricultural lands in Village Parhar (Khurd), Taluka Bhor, District Pune, acquired for the public purpose of the Neera Deoghar Project.
The acquisition notification under Section 4 of the Land Acquisition Act, 1894, was published on 9 October 1997, followed by Award No. LAQ/17/SR/1/95 dated 17 May 1999. Dissatisfied with the compensation awarded by the Land Acquisition Officer, the landowners sought references under Section 18 of the Act, claiming that the market value of their lands had been significantly undervalued.
Before the Reference Court, both sides relied on documentary and oral evidence, including earlier judgments relating to acquisitions in neighbouring villages such as Dabkeghar and Deoghar, along with comparable sale transactions.
Court's Observations
Justice Amit Borkar noted that the Reference Court had already accepted that Village Parhar (Khurd) and Village Dabkeghar were comparable villages and had adopted the market value determined for Dabkeghar as the base rate. The principal dispute before the High Court, therefore, was whether the annual escalation should remain at 6% or be increased to 12% until the notification dated 9 October 1997.
The Court observed that there was no convincing basis for restricting annual appreciation to 6% when the evidence on record, the methodology adopted by the Land Acquisition Officer, and the earlier Coordinate Bench judgment all supported annual escalation at 12%.
The Bench observed that the market value of agricultural lands could not be expected to remain static during the four-year gap between the acquisition notifications, and once the Reference Court accepted that land prices would naturally increase over time, there was no sufficient reason to deny the higher rate of escalation supported by the evidence.
The Court also found that the Land Acquisition Officer himself had relied on sale instances from neighbouring villages such as Nandgaon, Nirgudghar and Apti while determining compensation, reinforcing the conclusion that those villages were suitable comparators for assessing the market value of lands in Village Parhar (Khurd).
At the same time, the Court declined the landowners' request to calculate compensation solely on the basis of the highest sale transaction. It held that once the earlier judgment fixing the market value for Village Dabkeghar at ₹2,05,000 per hectare had been accepted as the foundation, the proper exercise was to determine the appropriate annual appreciation rather than reopen the entire valuation process.
Decision
The High Court partly allowed the appeals filed by the claimants and dismissed the appeals preferred by the Maharashtra Krishna Valley Development Corporation (MKVDC).
Modifying the Reference Court's award, the Court held that the claimants were entitled to compensation for the acquired jirayat lands at ₹3,13,981 per hectare, instead of ₹2,54,000 per hectare awarded by the Reference Court. The enhanced amount was calculated by applying 12% annual escalation to the base market value determined in the earlier Dabkeghar acquisition judgment.
The Court further directed that the claimants would be entitled to all statutory benefits available under the Land Acquisition Act, 1894, including the additional amount under Section 23(1A), solatium under Section 23(2), and interest under Section 28.
The Court also directed the MKVDC and the State Government to deposit the balance compensation, after giving credit for amounts already paid, before the Reference Court within twelve weeks, following which the claimants would be permitted to withdraw the amount in accordance with law.
Case Details:
Case Title: Raghu Bhagu Sane & Others v. The Land Acquisition Officer No. 17, Pune & Others
Case Number: First Appeal No. 194 of 2021 along with connected First Appeals
Judge: Justice Amit Borkar
Decision Date: 10 July 2026
