Compensation in Land Acquistion

CA No. 2170-2171 OF 2020 (Arising out of SLP(C) Nos.16945-46 of 2018) titled SAJAN V/s V/s State of Maharastra & Ors dated 17.03.3030 held 

Major General Kapil Mehra and Others vs. Union of India and Another (2015) 2 SCC 262, the Supreme Court held as under:-
“36. While determining the market value of the acquired land,normally one-third deduction i.e. 33 1/3% towards development charges is allowed. One-third deduction towards development was allowed in Tehsildar (LA) v. A. Mangala Gowri (1991) 4 SCC 218, Gulzara Singh v. State of Punjab (1993) 4 SCC 245, Santosh Kumari v. State of Haryana (1996) 10 SCC 631, Revenue Divl. Officer and LAO v. Sk. Azam Saheb (2009) 4 SCC 395, A.P. Housing Board v. K. Manohar Reddy (2010) 12 SCC 707, Ashrafi v. State of Haryana (2013) 5 SCC 527 and Kashmir Singh v. State of Haryana (2014) 2 SCC 165
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37. Depending on the nature and location of the acquired land,extent of land required to be set apart and expenses involved for development, 30% to 50% deduction towards development was allowed in Haryana State Agricultural Market Board v. Krishan Kumar (2011) 15 SCC 297, Director, Land Acquisition v. Malla Atchinaid (2006) 12 SCC 87, Mummidi Apparao v. Nagarjuna Fertilizers & Chemicals Ltd. (2009) 4 SCC 402 and Lal Chand v. Union of India (2009) 15 S.C.C. 769.”

16. Rule of one-third deduction towards development is the general rule. But depending upon the purpose of acquisition and taking note of well planned layouts, if any, the deduction for development cost may vary from 20% to 75%. Observing that deduction towards development can range from 20% to 75% of the price of the plot, in Lal Chand vs. Union of India and Another (2009) 15 S.C.C. 769, the Supreme Court held as under:-
“19. If the acquired land is in a semi-developed urban area, and not an undeveloped rural area, then the deduction for development may be as much less, that is, as little as 25% to 40%, as some basic infrastructure will already be available. 
…….
22. Some of the layouts formed by the statutory development authorities may have large areas earmarked for water/sewage treatment plants, water tanks, electrical substations, etc. in addition to the usual areas earmarked for roads, drains, parks, playgrounds and community/civic amenities. The purpose of the aforesaid examples is only to show that the “deduction for development” factor is a variable percentage and the range of percentage itself being very wide from 20% to 75%.”

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