The Supreme Court has reiterated that courts cannot mechanically grant enhanced compensation without cogent evidence supporting higher market value, cautioning against reliance on speculative or unrelated sale transactions.
The bench of Justice M. M. Sundresh and Justice Satish Chandra Sharma has observed that market value must be determined on objective criteria, supported by comparable sale deeds of similarly situated land proximate in time to the acquisition notification. Courts cannot enhance compensation based on conjecture, assumptions, or unrelated transactions that do not reflect the true market conditions. Merely because land is acquired for an industrial or commercial project, higher compensation cannot be presumed unless substantiated by credible evidence.
The judgment was delivered in Deputy Commissioner and Special Land Acquisition Officer v. M/s S.V. Global Mill Limited, where the Court examined the legality of compensation enhancement awarded by the Karnataka High Court.
The case arose from the acquisition of land belonging to M/s S.V. Global Mill Limited for a public purpose under the Land Acquisition Act, 1894. The Land Acquisition Officer (LAO) had determined compensation based on prevailing market rates, which was subsequently challenged by the landowner seeking higher compensation.
The Reference Court enhanced the compensation, and the Karnataka High Court further upheld the increase. Aggrieved by this escalation, the State authorities approached the Supreme Court, contending that the enhancement lacked evidentiary backing and was based on improper valuation methods.
The principal issue before the Supreme Court was whether the High Court was justified in enhancing compensation without reliable evidence establishing higher market value of the acquired land as on the date of notification under Section 4 of the Land Acquisition Act.
The Court observed that the High Court had failed to scrutinize whether the sale instances relied upon were comparable in terms of location, size, potential use, and timing. It emphasized that judicial sympathy cannot substitute statutory requirements for determining compensation.
The Supreme Court concluded that the enhancement granted by the High Court was unsustainable in law. It accordingly set aside the judgment and restored the compensation as originally determined by the Land Acquisition Officer, holding that the statutory valuation method had been correctly applied.
Case Details
Case Title: The Deputy Commissioner And Special Land Acquisition Officer Versus M/S S.V. Global Mill Limited
Case No.: SLP (C) No(s). 215-216 of 2023
Date: 09/02/2026
