Supreme Court Orders Parity in Compensation for Lands Abutting NH‑8; Kukrola Rate Enhanced to Match Fazalwas

A Bench of Justices Surya Kant and Ujjal Bhuyan on 7 May 2025 heard a batch of cross‑appeals by the Haryana State Industrial and Infrastructure Development Corporation (HSIIDC) and various landowners challenging the quantum of compensation awarded by the High Court of Punjab and Haryana for lands in the villages of Kukrola and Fazalwas, Gurgaon, acquired for the Chaudhary Devi Lal Industrial Model Township.

The Court affirmed the High Court’s use of the “belting” method to differentiate lands abutting NH‑8 up to a depth of five acres (the “inner belt”) from lands beyond that depth (the “outer belt”), but set aside the High Court’s disparate valuations for the inner belt and directed parity between the two villages. The Supreme Court held that the differential award lacked factual foundation and enhanced the compensation for Kukrola’s inner‑belt lands to INR 1,21,00,000 per acre to match Fazalwas, while upholding INR 62,14,421 per acre for the outer belt. The Court, in its reasoning, observed: “Consequently, we find no justification for the disparity in compensation for lands from both villages situated in the inner belt. The High Court itself has offered no factual finding to support the conclusion that lands abutting NH‑8 in Kukrola must be valued differently from those in Fazalwas. Accordingly, we hold that the differential compensation is unsustainable and must be set aside. The quantum of compensation across both villages should remain at par.” The Court also noted the High Court’s approach to deductions for interior lands: “...going by the thumb rule, this Court applies 30% cut and the assessment made by the RC at the rate of Rs.62,14,421/- is maintained.”

Background The acquisition process commenced with a Section 4 notification dated 25.04.2008 under the Land Acquisition Act, 1894 for about 3,510 acres to develop the Township. The Land Acquisition Collector (LAC) initially fixed compensation at INR 30,00,000 per acre (with statutory benefits). Landowners filed References under Section 18; the Reference Court enhanced compensation to INR 62,14,421 per acre largely relying on sale exemplar Ex. P‑1 (05.06.2006) and applied a 30% development cut and 10% annual escalation in parts. The High Court, in consolidated appeals, adopted the belting method: it fixed higher rates for the inner belt—INR 87,34,885 per acre for Kukrola and INR 1,21,00,000 per acre for Fazalwas—while maintaining the Reference Court’s rate for lands beyond 5 acres. Both HSIIDC and landowners challenged those conclusions before the Supreme Court.

The Supreme Court analysed comparability of sale exemplars, temporal proximity to the notification, plot sizes and genuineness of transactions, and precedent on applying development cuts and escalation. It accepted the belting method as appropriate in the circumstances but found no adequate evidentiary basis to treat Kukrola’s inner‑belt lands differently from Fazalwas. The Court rejected certain small‑plot sale exemplars as unreliable, upheld a 10% per annum escalation over suitable exemplars, sustained a 30% development cut for the outer belt, and refused a development cut for the inner belt where locational advantage already reflected market value. The appeals by Fazalwas landowners and HSIIDC/State were dismissed; Kukrola landowners’ appeal succeeded to the extent of enhancement to INR 1,21,00,000 per acre for inner‑belt lands. Pending interlocutory applications were disposed of.

Case Details: Case No.: 2025 INSC 638 Case Title: Krishan Kumar v. State of Haryana and others Appearances: For the Petitioner(s): (Advocates not indicated in the reported portion) For the Respondent(s): Mr. Alok Sangwan, Senior Additional Advocate General (for State of Haryana/HSIIDC)