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Supreme Court of India· 29 September 2026

Are contiguous tracts of land acquired for a unified public purpose under the same scheme awarded consistent, non-discriminatory compensation?

SURINDER AHUJA & ANR v. STATE OF PUNJAB & ANR
2026 INSC 1068 · CIVIL APPEAL NOS.3800-3803 OF 2026
Coram: Justice Dipankar Datta · Justice Sheel Nagu
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Answer

Contiguous tracts of land acquired for a unified public purpose under the same scheme are awarded consistent, non-discriminatory compensation.

Yes. In determining market value under Section 23(1) of the Land Acquisition Act, 1894 the Court must evaluate both positive potentiality factors, such as proximity to developed urban centers, access to national highways and institutional expansion, and negative factors, while ensuring that contiguous tracts of land acquired for a unified public purpose under the same scheme are awarded consistent, non-discriminatory compensation. The Court held that the High Court's radial hub-and-distance step-down model, which ignored transaction-based local evidence, created an artificial, legally unsustainable disparity, and it restored the uniform market value of Rs.5,00,000 per acre across the villages.

Headnote

Land Acquisition Act, 1894 — s.23(1) — s.23(1A) — s.23(2) — Market value — Contiguous tracts — Severance damage — Solatium — Pleadings — Land Acquisition Act, 1894 — s.23(1) First — Market value — Contiguous tracts — Non-discriminatory compensation — Held: Contiguous tracts of land acquired for a unified public purpose under the same scheme must be awarded consistent, non-discriminatory compensation; a radial step-down model that ignores transaction-based local evidence is arbitrary, and the uniform market value stands restored. (¶5) Land Acquisition Act, 1894 — s.23(1) Thirdly — Severance damage — Remaining unacquired land — Held further: Severance damage compensates the diminution in value of the unacquired remaining land and is calculated on its market value, not on the acquired land; a rule of thumb based on distance from the village abadi that ignores the physical barrier is unsustainable. (¶7) Land Acquisition Act, 1894 — s.23(1A) — s.23(2) — Solatium — Auxiliary assets — Held further: Solatium and the additional amount are payable only on the market value determined under Section 23(1) First Clause, not on damages for trees, severance, tubewells or structures under the second to sixth factors. (¶8, 9) Land Acquisition Act, 1894 — s.18 — Reference petition — Evidence beyond pleadings — Held further: A reference petition strictly defines the dispute and evidence cannot be led beyond pleadings, so tree compensation is restricted to the trees pleaded. Appeals disposed of with market value and severance charges restored. (¶6, 11)

Headnote

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In the Court's own words
Paragraph 5DETERMINATION ON ISSUE 1: MARKET VALUE
Acts & Sections
s.23(1) Land Acquisition Act, 1894s.23(1A) Land Acquisition Act, 1894s.23(2) Land Acquisition Act, 1894s.18 Land Acquisition Act, 1894Art. 136 Constitution of India

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Also decided in this judgment
Is severance damage under the Land Acquisition Act, 1894 calculated on the market value of the remaining unacquired land, not the acquired land?Are solatium and the additional amount under the Act of 1894 payable only on the market value determined under Section 23(1) First Clause?Can evidence be led beyond pleadings in a reference petition under Section 18 of the Act of 1894?
Plain-language answer prepared by the LexStreak Editorial Desk — verify against the judgment. Source: Supreme Court of India. Corrections