In a significant ruling dated July 28, 2025, the Supreme Court of India allowed a batch of civil appeals filed by farmers from Parbhani district, Maharashtra, who had challenged inadequate compensation for their land acquired for an industrial area. The apex court set aside earlier decisions of both the High Court and the Reference Court, enhancing compensation based on the highest available sale deed, which had been wrongly ignored.
Background of the Case
The appellants, primarily farmers, owned land in Survey Nos. 103 and 104, Village Pungala, near Jintur town. Their lands, measuring over 16 hectares, were acquired by the Maharashtra Industrial Development Corporation (MIDC) in the early 1990s under the Maharashtra Industrial Development Act, 1961.
- Initial compensation: ₹10,800 per acre
- Award date: December 6, 1994
- Dispute: Farmers accepted payment under protest and filed a reference under Section 18 of the Land Acquisition Act, 1894 in 1997.
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The Reference Court, in 2007, partly allowed their claim and awarded enhanced compensation of ₹32,000 per acre, but failed to consider the highest sale deed of ₹72,900 per acre dated March 31, 1990.
“The highest exemplar sale deed dated 31st March, 1990, was completely overlooked by the Reference Court,” the SC noted.
The Supreme Court found that both the Reference Court and the High Court made a factual error by not adequately considering this bona fide sale deed. Despite placing this deed on record, neither court gave clear reasons for dismissing its relevance.
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- The sale deed was for 96R of land in Jintur sold at ₹72,900 per acre—much higher than other exemplars.
- The courts had wrongly averaged lower sale deeds (₹40,000–₹41,000 per acre), which deviated from the legal principle of taking the highest bona fide transaction when it shows a realistic market value.
After analyzing multiple precedents, including Anjani Molu Dessai v. State of Goa and Mehrawal Khewaji Trust v. State of Punjab, the Supreme Court held:
“Where several exemplars are available, the highest bona fide transaction must be considered unless strong reasons exist to exclude it.”
Since the land was in a prime industrial location near the Nashik-Nirmal Highway and equipped with adequate water from a percolation tank, the Court deemed it fit to base the valuation on the highest sale exemplar.
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- Appeals allowed in favor of the farmers
- High Court's April 2022 judgment quashed
- Reference Court’s 2007 award also set aside
- Enhanced compensation granted:
From ₹32,000 to ₹58,320 per acre (after 20% deduction on ₹72,900) - All statutory benefits under Sections 23(1-A), 23(2), and 28 of the Land Acquisition Act, 1894, to be granted
This ruling not only provides overdue relief to affected farmers but also reinforces a key legal precedent:
Fair market value must prioritize the highest genuine sale instance, especially in compulsory land acquisition cases.
It sends a strong message that procedural shortcuts or averaging methods cannot replace justice when livelihood and rightful compensation are at stake.
Case Title: Manohar & Others vs. State of Maharashtra & Others
Date of Judgment: 28 July 2025
Appeal Type: Civil Appeal (Arising out of SLP (C) Diary No. 26900 of 2023)