The Supreme Court has reduced the compensation awarded to a pharmaceutical company whose land was acquired for expansion of National Highway 547-E, holding that compensation under land acquisition law cannot be based on a single sale deed of a different category of land.
A Bench of Justice Sanjay Kumar and Justice K. Vinod Chandran passed the ruling in Project Director, National Highways Authority of India v. Alfa Remidis Ltd. & Ors. on May 12, 2026.
Background of the Case
The dispute arose after land belonging to Alfa Remidis Ltd. in Nagpur district was acquired for widening National Highway 547-E under the National Highways Act. Initially, the competent authority classified the land as agricultural land and fixed compensation at ₹161.63 per square meter based on nearby agricultural sale transactions.
The company challenged the valuation before the Arbitrator, arguing that the land was actually being used for industrial purposes for manufacturing paracetamol medicines. It also relied on the government Ready Reckoner rate of ₹2,020 per square meter and a sale deed of a nearby residential plot valued at ₹3,588 per square meter.
Accepting the company’s plea, the Arbitrator enhanced compensation to ₹3,588 per square meter in 2021.
Later, the District Judge set aside that award, observing that the Arbitrator had ignored the method prescribed under Section 26 of the Right to Fair Compensation and Transparency in Land Acquisition Act, 2013.
However, the Bombay High Court restored the Arbitrator’s award in 2025, prompting the National Highways Authority of India (NHAI) to approach the Supreme Court.
Court’s Observations
The Supreme Court examined Section 26 of the 2013 land acquisition law, which lays down the process for determining market value of acquired land. The Bench noted that compensation must be based on the higher of the officially notified market value or the average sale price of similar land in nearby areas.
The Court found fault with the Arbitrator’s approach of relying on a single sale deed concerning a small residential plot while the acquired land was industrial in nature.
“The two lands were not of a ‘similar type’ for the purposes of Section 26(1)(b),” the Bench observed.
The Court further clarified that the law contemplates reliance on multiple sale transactions for calculating average market value and not a solitary transaction. It referred to earlier Supreme Court precedents which held that a single sale deed may not provide reliable market data.
The Bench also noted that Alfa Remidis itself had relied on the government Ready Reckoner rate of ₹2,020 per square meter applicable to highway-side lands in the concerned zone. According to the Court, this statutory benchmark should have been adopted instead of the residential sale exemplar.
Decision
Allowing NHAI’s appeal, the Supreme Court modified the compensation payable to Alfa Remidis Ltd. and fixed the rate at ₹2,020 per square meter instead of ₹3,588 per square meter.
The Court directed that the company would also receive all consequential statutory benefits under the 2013 land acquisition law. It further ordered that the ₹50 lakh already withdrawn by the company during the pendency of the case should be adjusted while releasing the remaining compensation amount.
Case Title: Project Director, National Highways Authority of India v. Alfa Remidis Ltd. & Ors.
Case Number: Civil Appeal arising out of SLP (C) No. 33773 of 2025
Judges: Justice Sanjay Kumar and Justice K. Vinod Chandran
Decision Date: May 12, 2026
