The Supreme Court has restored a uniform market value of Rs 5,00,000 per acre for farmland acquired in six Fazilka villages of Punjab for a drainage project. A Bench of Justice Dipankar Datta and Justice Sheel Nagu disposed of 47 connected appeals, led by Surinder Ahuja & Anr. v. State of Punjab & Anr., partly setting aside a High Court order.
Background
The land was taken for the Aspal Extension Drain, an 18.42-km channel passing through Karni Khera, Odian, Awa, Kotha, Alamshah and Salem Shah. The Collector's award of August 6, 2001 fixed Rs 2,25,000 per acre and gave nothing for severance, meaning the loss caused when acquisition splits a farmer's holding. The Reference Court raised the rate to Rs 5,00,000 in several villages and granted severance charges. In March 2019, the Punjab and Haryana High Court lowered the rates to between Rs 2,99,000 and Rs 3,39,000 and cut severance to 40% of the acquired land's value.
The Bench found the High Court's radial model unsustainable. That model reduced the rate by Rs 20,000 per acre for each village farther from Awa and Kotha. The Court pointed to a 1996 acquisition at Sultanpur on the same road, valued at Rs 5,00,000, and to Karni Khera's place in the "special villages" list, which attracted 9% urban registration charges. It also noted that the model gave a village 10 km from the border a lower rate than one directly on the border. Lands acquired for one purpose, it said, should not be treated differently without strong reasons.
The Court held that the High Court erred by calculating severance on the acquired strip instead of the remaining land. For the lead claimant, 79 Kanals 2 Marlas were acquired, leaving 249 Kanals 17 Marlas divided by the drain. Bridges were only about seven feet wide and two kilometres apart. The Court observed:
"The physical barrier of the Aspal Extension Drain - measuring 100 to 130 feet in width with banks up to a minimum of 10 feet extending to 30 feet constitutes an insurmountable gap, because modern mechanized farming machinery (such as tractors and combine harvesters) cannot physically cross a 7-feet bridge, the unacquired remaining land on the opposite bank was left in a state of absolute, practical isolation."
Severance at 50% of the market value of the remaining unacquired land was therefore restored.
The Court upheld the High Court on the remaining issues. Tree compensation stays at Rs 5,38,300, limited to the 280 trees the landowners had pleaded, since evidence cannot go beyond pleadings. Solatium (a statutory 30% top-up) and additional interest apply only to the land's market value, not to trees, severance or structures, following State of Punjab v. Amarjit Singh. On tubewells, the Court said:
"Furthermore, mechanical components such as electric motors, diesel engines, and surface pumps represent movable property that are not destroyed during acquisition and thus can be uninstalled, shifted, and reused on remaining holdings. Standardizing compensation at a flat rate of Rs. 50,000/- appropriately balances private inflation against government underestimation to arrive at a realistic, uniform displacement figure across all contiguous revenue estates."
The Supreme Court restored the Rs 5,00,000 per acre rate and 50% severance on the remaining land, and affirmed the High Court on trees, statutory benefits and the Rs 50,000 tubewell compensation.
Additional compensation must be paid within six months. Any amount found recoverable will be recovered within nine months, after written notice and an opportunity to be heard. No order as to costs was made.
