“Doctrine of the Highest Bona-Fide Exemplar” Reaffirmed

Comprehensive Commentary on Manohar & Others v. State of Maharashtra & Others
(2025 INSC 900, Supreme Court of India, 28 July 2025)

1. Introduction

The Supreme Court’s decision in Manohar v. State of Maharashtra once again places the compensation calculus in compulsory land acquisition under the spotlight. At its core, the judgment revisits a recurring controversy: Whether courts must invariably grant compensation based on the highest bona-fide sale exemplar or may deploy an averaging method when exemplars display wide variation?

The dispute arose out of acquisition of 16.79 hectares of agricultural land belonging to farmer-claimants of Village Pungala, Parbhani District, Maharashtra, in the early 1990s for establishing an industrial area under the Maharashtra Industrial Development Act, 1961 (MIDC Act). Dissatisfied with the Land Acquisition Officer’s paltry award of INR 10,800 per acre, the claimants pursued statutory remedies all the way to the Supreme Court.

2. Summary of the Judgment

• The Supreme Court (CJI B.R. Gavai & Masih J.) allowed the appeals, setting aside both the High Court and Reference Court determinations.
• It ruled that the highest bona-fide pre-notification sale deed dated 31 March 1990 (INR 72,900 per acre) ought to have been the starting point.
• After applying a 20 % deduction for largeness of the acquired tract, the Court fixed the market value at INR 58,320 per acre (≈ INR 1,44,000 per ha).
• Consequential statutory benefits—solatium @ 30 %, additional amount @ 12 % p.a., and interest under section 28—were directed to be paid on the enhanced sum.
• The Court declined to remand, citing inordinate delay and the claimants’ socio-economic condition.

3. Analytical Discussion

3.1 Precedents Cited and Their Influence

1. State of Punjab v. Hans Raj (1994) 5 SCC 734 – Condemned averaging in presence of disparate exemplar values; emphasised selection of highest bona-fide sale.
2. Mehrawal Khewaji Trust v. State of Punjab (2012) 5 SCC 432 – Articulated the “general rule” that the highest bona-fide exemplar prevails unless strong contra-circumstances exist.
3. Anjani Molu Dessai v. State of Goa (2010) 13 SCC 710 – Clarified when averaging is permissible (i.e., narrow variance).
4. Mohammad Yusuf v. State Of Haryana (2018) 16 SCC 105 – Follow-up endorsement of the highest-exemplar rule.
5. Major Gen. Kapil Mehra v. Union of India (2015) 2 SCC 262; Shawal Singh v. LAO, HP (2016) 12 SCC 619; Nirmal Singh v. State of Haryana (2015) 2 SCC 160 – Relied on by the State/MIDC to defend averaging and discard “abnormally high” transactions. The Court distinguished these on facts, noting: wide variation existed (INR 25k – 72.9k) and the impugned exclusion of the highest sale was unsupported by evidence.

3.2 Court’s Legal Reasoning

The judgment proceeds along four logical steps:

1. Identification of the Material Date: 19 July 1990 – date of Section 32(2) MIDC notification. Proximity in time of the 31 March 1990 exemplar made it the most representative indicator.
2. Authenticity of the Exemplar: Under Section 51-A of the Land Acquisition Act, certified copies of sale deeds carry presumptive evidentiary value. The State adduced no rebuttal evidence impeaching genuineness; ergo, the exemplar stood unrebutted.
3. Rejection of Averaging: Variance among exemplars was not “marginal” (≈ almost 3-fold). Hence, resort to averaging by the Reference Court was a legal error contradicting Hans Raj, Mehrawal Khewaji and Anjani.
4. Deductions for Large Block Acquisition: Recognising that exemplars were for sub-hectare urban plots, the Court applied a 20 % deduction—consistent with earlier jurisprudence—to balance developmental and formation costs for the larger tract.

3.3 Impact Assessment

• Strengthened Precedent: The decision decisively re-affirms that courts cannot disregard the highest bona-fide exemplar on mere perception of “abnormally high” price without cogent evidence.
• Appellate Scrutiny Intensified: High Courts must accurately verify whether Reference Courts have in fact considered each exemplar. Erroneous adoption of averaging invites reversal.
• Speedier Relief in Prolonged Acquisitions: The Supreme Court’s willingness to decide merits instead of remand—citing 30-year pendency— signals a pragmatic, claimant-centric approach likely to be emulated in future.
• Implications for Industrial Corridor Projects: MIDC-type agencies will have to account for sharply escalated compensation outlays whenever urban-fringe acquisitions involve heterogeneous exemplar data.
• Section 51-A Presumption Fortified: Unless the acquiring authority leads rebuttal evidence, certified sale deeds will be presumed genuine, tipping the balance towards land-owners.

4. Complex Concepts Simplified

Exemplar Sale Deed

A comparison sale of a similar parcel executed close to the acquisition date, used to ascertain prevailing market price.

Highest Bona-Fide Exemplar Rule

Jurisprudential principle that, absent evidence to the contrary, the highest genuine sale price should anchor compensation, reflecting what a willing buyer would have paid.

Averaging Method

Computing mean value of multiple exemplars. Permissible only where price spread is narrow and parcels are comparable. Not allowed where values diverge widely.

Deduction for Large Block Acquisition

Percentage reduction (commonly 20–33 %) applied because infrastructure, layout and developmental costs for big tracts differ from small urban plots used as comparators.

Section 51-A, Land Acquisition Act, 1894

Allows courts to receive certified copies of sale deeds as evidence of the transactions they record, without calling the vendor/vendee unless authenticity is specifically challenged.

5. Conclusion

Manohar cements the doctrinal hierarchy between “highest bona-fide exemplar” and “averaging” in land-valuation disputes. By quashing the lower-court adoption of averaging amidst a broad price spectrum, the Supreme Court underscores that fairness to the dispossessed owner overrides administrative convenience. The judgment simultaneously manifests judicial sensitivity towards protracted litigation faced by rural landholders, choosing to finally determine compensation rather than remit.

Going forward, acquiring bodies must marshall concrete evidence if they seek to deny the highest exemplar its normative primacy. Conversely, claimants should strategically produce authentic, proximate, high-value sale deeds to secure optimal recompense.

© 2025 — Prepared for academic and professional reference.