Punjab & Haryana HC Upholds 30% Development Cut on Small Plot Sale Deeds in Large Land Acquisitions

The Punjab and Haryana High Court has reinforced the judicial mandate that large-scale land acquisitions based on small-sized exemplar sale deeds necessitate a reasonable development cut, even when the land is intended for reservoir construction. In a decisive ruling that balances the interests of the State and landowners, the court affirmed that the 2018 Haryana Rules under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 govern the multiplier factor for compensation, effectively overriding inconsistent prior notifications.

In a Single-Bench proceedings, Justice Jagmohan Bansal adjudicated a massive bunch of 80 appeals involving the State of Haryana and various landowners from Akera village. The Court was tasked with resolving the third round of litigation concerning compensation for 108 acres of land acquired for irrigation purposes.

Court Upholds 30% Development Cut and 1.25 Multiplier

The Court dismissed both the State’s plea for a higher development cut and the landowners' objections against any deduction. It observed that since the State relied on sale deeds of small plots to determine the value of a massive 107-acre tract, a 30% cut was legally sound. Furthermore, the Court rejected the State's attempt to apply a lower multiplier factor, holding the State to its own previous stance during the reference proceedings.

The Court, in its reasoning, observed: "In view of size of land acquired vis-à-vis size of land comprised in relied upon sale deeds, the Reference Court was justified in imposing cut of 30%. Supreme Court’s aforecited judgments are applicable to present case with full force. There is no illegality in the impugned decision. Cut imposed neither appears to be on the higher nor lower side."

The Court has the following directions:

"In the wake of above discussion and findings, appeals of State as well as landowners deserve to be dismissed and accordingly dismissed. It is hereby made clear that landowners, in view of statutory provision i.e. Section 80 of 2013 Act, shall be entitled to interest."

Background:

The dispute originated from a 2013 notification issued under Section 4 of the Land Acquisition Act, 1894 for acquiring 108 acres in village Akera for a reservoir. Following the enactment of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, the compensation determination underwent multiple rounds of litigation. The Land Acquisition Collector had originally fixed the value at ₹22 Lakhs per acre.

The landowners sought enhancement to ₹1 Crore per acre, citing proximity to the KMP Expressway and industrial hubs. After two previous remands, the Additional District Judge, Nuh, enhanced the compensation by applying a multiplier of 1.25 and a 30% development cut on a base value derived from small exemplar sale deeds. The State challenged the multiplier and the cut, while landowners challenged the very concept of a 'cut' under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.

The Court analyzed the Haryana Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Rules, 2014 and Haryana Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Rules, 2018, concluding that the 2018 notification properly aligned with the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 schedule, which requires rural land multipliers to range between 1 and 2 based on distance from urban areas.

Key Takeaways:

Validity of Development Cuts

While the purpose of a reservoir might not require internal roads, the Court affirmed that a cut is necessary when valuing large tracts using small plot prices to prevent artificial inflation.

Supremacy of 2018 Rules

Procedural actions taken under the 2014 Rules are deemed to be under the 2018 Rules, ensuring that the updated multiplier factors apply to pending compensation awards.

Interest Mandate

Landowners remain legally entitled to interest as per Section 80 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, ensuring that delays in the three-round litigation process do not unfairly prejudice their financial recovery.

Ratio Decidendi:

The court held that when determining the market value of large acreage based on small exemplar sale deeds, a deduction for development or 'size difference' is permissible under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, consistent with principles established under the Land Acquisition Act, 1894. Further, the State cannot retrospectively seek a lower multiplier if it had already conceded to a higher factor during the reference stage.

Case Details:
Case No.: RFA-366-2025 (O&M)
Case Title: Financial Commissioner & Principal Secretary to Government of Haryana and others v. Jamila (and connected matters)
Appearances:
For the Petitioner(s): Mr. Abhinash Jain, Additional Advocate General, Haryana; Mr. Anas Ahmed, Advocate; Mr. Munfaid Khan, Advocate
For the Respondent(s): Mr. Anjum Ahmed, Advocate

Source: 2026 CaseBase(PNH) 136