Land Acquisition | Radial ‘Hub-And-Spoke’ Valuation Models For Contiguous Lands Are Legally Unsustainable: Supreme Court

"The doctrine of parity in project-wide acquisitions mandates that when lands are situated in the same vicinity and acquired for an identical public purpose, it is improper to discriminate between landowners unless there are strong, objective reasons for doing so." Supreme Court, in a judgment delivered on September 29, 2026, has ruled that for contiguous tracts of land acquired for a unified public project, the application of arbitrary mathematical formulas—such as a radial "hub-and-spoke" model—to vary compensation based on distance from an urban center is legally impermissible.

A bench comprising Justice Dipankar Datta and Justice Sheel Nagu emphasized that such models create artificial disparities that violate the constitutional mandate of fairness and equality in land acquisition.

Project-Wide Parity in Valuation

The Court held that once land is acquired for a single, integrated project, the "belting" or "radial" method of valuation—which penalizes landowners in interior or border regions—must be discarded in favor of a uniform market rate. Relying on its earlier ruling in Krishan Kumar v. State of Haryana, the bench observed that administrative or revenue-based classifications cannot obstruct the fundamental principle of equitability.

Rejection of Radial Pricing

The High Court had previously applied a radial spatial model, reducing compensation for villages based on their distance from Fazilka town and proximity to the international border. The Supreme Court set aside this model, finding it to be an abstract mathematical construct that ignored the actual potentiality of the land, including its frontage on National Highways and its designation as "Special Villages" for registration purposes.

Evidence Beyond Pleadings

Regarding compensation for fruit-bearing trees, the Court upheld the High Court’s decision to restrict damages to the 280 trees specifically pleaded in the reference petition under Section 18 of the Act of 1894. The Court reiterated the settled principle that a party cannot lead evidence on claims not substantiated by their pleadings, effectively rejecting the oral claims for an additional 482 trees.

Restoration of Severance Charges

The apex court clarified the methodology for calculating severance charges under Section 23(1) of the Act of 1894. The Court held that the High Court erred by calculating severance as a percentage of the acquired land’s value, whereas the law requires compensation for the diminution in value of the unacquired remaining land. The bench restored the Reference Court’s award of 50% severance charges, noting that the construction of a large drain had effectively rendered the remaining holdings inaccessible.

Exclusion of Statutory Benefits for Auxiliary Assets

On the question of whether statutory solatium and additional interest are payable on auxiliary assets like tubewells and fruit trees, the Court ruled in the negative. Relying on State of Punjab v. Amarjit Singh, the bench held that such benefits are strictly restricted to the market value of the bare land under Section 23(1) of the Act of 1894. Auxiliary assets are independent heads of damage and do not attract additional statutory benefits.

Standardization of Tubewell Compensation

The Court affirmed the High Court’s decision to standardize tubewell displacement compensation at a flat rate of Rs. 50,000 per unit. The bench observed that private valuation reports were rightly rejected by the High Court, as the authors of such reports were never produced for cross-examination to prove the veracity of their valuations.

The Supreme Court allowed the 47 civil appeals in part, setting aside the High Court’s modified awards regarding market value and severance charges. The respondents were directed to process the recalculated compensation within six months, with a timeline of nine months for the recovery of any excess amounts paid, after providing the concerned landowners due notice and an opportunity to be heard.

Date of Decision: 29 September 2026