Uniformity in Compensation Must Prevail: Once Market Value Fixed by Common Judgment, It Can't Be Reopened or Reduced: Madras High Court

“To perpetuate a lower rate would run counter to the principle of equality and uniformity in compensation,” Madras High Court reaffirmed the binding nature of uniform compensation in land acquisition cases when dismissing an appeal by the Special Tahsildar, Land Acquisition Unit–II, challenging the enhancement of market value in proceedings related to land acquired for the Tamil Nadu Cements Corporation Limited (TANCEM) in Ariyalur District. The Court raised the compensation from ₹1,200 per cent to ₹1,500 per cent in alignment with a series of prior consistent judgments, holding that such parity is legally obligatory and cannot be selectively disregarded.

The judgment underscores the finality of prior High Court rulings that fixed ₹1,500 per cent as the market value for lands acquired under the same government acquisition scheme, and rejects arguments seeking lower compensation through piecemeal litigation.

“The issues relating to comparability of sales, belt system and valuation stand concluded and cannot be reopened.”

Cement Factory Acquisition Triggers Land Disputes

The appeal arose from the acquisition of lands in Ariyalur District for the establishment of a Government Cement Factory under TANCEM. A notification under Section 4(1) of the Land Acquisition Act, 1894, was issued on 16.04.1996. Subsequently, an award was passed on 06.04.1999 by the Land Acquisition Officer, fixing the market value at ₹200 per cent based on dry land sale data.

Dissatisfied, the landowner sought reference under Section 18 of the Act. The Reference Court (Sub Court, Ariyalur), by award dated 03.02.2017, enhanced compensation to ₹1,200 per cent, along with benefits under Sections 23(1-A), 23(2), and 28 of the Land Acquisition Act.

The acquiring authority challenged this enhancement before the High Court, questioning the comparability of sale deeds relied upon, non-application of belt system, absence of development deductions, and entitlement to interest on statutory additions.

Can Compensation Be Lowered When Higher Market Value Is Already Judicially Settled?

The core questions were:

1. Whether the enhancement to ₹1,200 per cent required interference given the subsequent common judgments fixing ₹1,500 per cent in related acquisition cases?

2. Whether any deduction towards development charges was permissible when all similar cases were resolved on a flat rate basis?

The Court answered both in the negative, citing established precedent and the acquiring body’s own acceptance of the higher rate.

Common Judgment Has Finality, Cannot Be Relitigated

Justice Dr. A.D. Maria Clete placed heavy reliance on the common judgment dated 29.01.2024 in A.S. No. 916 of 2019 and related appeals, where the High Court enhanced compensation from ₹1,200 to ₹1,500 per cent for lands acquired under the same scheme. That judgment had attained finality and had been implemented by TANCEM through a board resolution dated 13.03.2024.

The resolution specifically recorded:

“Resolved that the proposal of TANCEM to settle the LAOP Cases by payment of compensation fixed by Hon'ble High Court, Madras in the judgment dated 29.01.2024 at the rate of ₹1,500/- per cent besides interest entitled as per section 23(2) of LA Act,1894 be and is hereby approved.”

The Court also cited orders dated 23.08.2024 and 23.10.2024 by Justices S.M. Subramaniam and Sathi Kumar Sukumara Kurup, respectively, reiterating that all landowners under the same acquisition must receive uniform compensation of ₹1,500 per cent.

“This shows that a conscious decision has been taken by the acquiring authority to maintain parity and avoid any discrimination among the affected landholders,” the Court observed.

No Deduction for Development in Industrial Acquisition

Rejecting the appellant’s plea for applying deductions toward development, the Court clarified that the acquisition was for industrial and mining purposes, not for residential layouts, and hence no such deductions were warranted.

“Any deduction at this stage would break the uniformity already settled by this Court,” noted Justice Maria Clete, citing previous decisions that adopted a flat rate without such deductions.

Statutory Benefits Granted on Enhanced Compensation

The Court upheld the landowner’s entitlement to additional amount, solatium and interest under Sections 23(1-A), 23(2), and 28 of the Land Acquisition Act. It directed the acquiring authority to deposit the balance compensation within eight weeks, with statutory additions, to the credit of L.A.O.P. No.30 of 2003 before the Sub Court, Ariyalur.

“Any sum already deposited shall be given due credit. The balance compensation, together with all statutory additions and interest, shall be deposited...within eight weeks from the date of receipt of this Judgment.”

Equal Treatment Is Not Optional

By dismissing the appeal and enhancing the compensation in line with prior rulings, the High Court reinforced that once a binding common judgment establishes a compensation standard, it must be applied uniformly to all similarly situated landowners. Attempts by the State or acquiring agencies to carve exceptions were flatly rejected as legally untenable.

Date of Decision: 02.02.2026