“Parity over Proximity” – The Supreme Court’s New Compass for Differential Compensation in Belting Cases

1. Introduction

In Krishan Kumar v. State of Haryana (2025 INSC 638) the Supreme Court of India has laid down an important restatement – and in parts a refinement – of the guiding principles for determining compensation in large scale compulsory acquisitions. The case revolves around approximately 83 acres of land (28 in village Kukrola and 54 in village Fazalwas) acquired in 2008 for developing the Chaudhary Devi Lal Industrial Model Township abutting National Highway-8 (NH-8) and the proposed KMP Expressway in Gurugram District. Although the High Court applied the familiar “belting method” (inner belt within five acres of NH-8 and outer belt beyond) it awarded two different rates for the inner belt:

Kukrola – ₹87,34,885/acre
Fazalwas – ₹1,21,00,000/acre

Both the State/HSIIDC and the landowners cross-appealed. The Supreme Court, speaking through Surya Kant, J., equalised the inner-belt compensation for both villages (fixing ₹1,21,00,000/acre) while upholding the outer-belt rate of ₹62,14,421/acre. In doing so the Court articulated a “Parity Principle”: adjacent lands acquired under the same notification for identical public purpose and enjoying similar locational advantages must ordinarily receive equal compensation unless cogent evidence establishes a real difference.

2. Summary of the Judgment

The Court accepted the belting method adopted by the High Court (two belts, five-acre depth) as appropriate given the proximity to NH-8/KMP.
However, it found the High Court’s disparate inner-belt rates “unsupported by any objective material” and “contrary to constitutional principles of fairness and equality.”
Choosing sale deed Ex.P-2 (13-04-2006, ₹1 crore/acre for 2.19 acres abutting NH-8) as the most reliable exemplar, the Court granted 10 % annual escalation (≈2-year gap), refused any development cut for inner-belt land, and fixed ₹1,21,00,000/acre for both villages.
For the outer belt the Court accepted sale deed Ex.P-1 (05-06-2006, 4.54 acres, ₹73 lakh/acre), applied 10 % escalation and a 30 % development cut, thereby upholding ₹62,14,421/acre.
Appeals by Kukrola landowners partly allowed (enhancement); appeals by Fazalwas landowners and by HSIIDC dismissed.

3. Detailed Analysis

3.1 Precedents Cited & Their Influence

Land Acquisition Officer v. Karigowda (2010) 5 SCC 708 – emphasised that land in adjacent villages with similar potential may be valued on comparable basis. The Court relied heavily on this to impute equality of potential between Kukrola and Fazalwas.
Mehrawal Khewaji Trust v. State of Punjab (2012) 5 SCC 432 – reiterated the principle that highest bona fide sale instance provides a safe guide. Used to prefer Ex.P-3/P-2 over low-value exemplars.
Shaji Kuriakose v. IOCL (2001) 7 SCC 650 – laid down five checks (time, genuineness, proximity, size, similarity). Guided selection/ rejection of sale deeds.
Chimanlal Hargovinddas (1988) 3 SCC 751 and Valliyammal (2011) 10 SCR 293 – cited for permissible escalation range and development-cut jurisprudence.
Earlier Haryana cases (Jai Singh; Subh Ram; Kanta Devi; Basavva) were discussed in arguments to show past deduction patterns; Court distinguished them or treated them contextually.

3.2 Legal Reasoning

Identification of Comparable Evidence
The Court filtered sale exemplars through Shaji factors. Small-parcel or distress-sale deeds (e.g., RW-1/2, RW-1/3) discarded; Ex.P-10 (post-notification) rejected.
Belting Affirmed
Given varied proximity to NH-8/KMP and 83-acre spread, belting was considered “an exception justified by objective developmental potential.” Five-acre depth was deemed reasonable.
Parity Principle Formulated
Once belting confirmed, the Court asked: Is there a rational basis for two different rates within the same belt? Holding no, it declared that without “clear, objective distinctions,” constitutional fairness demands parity.
Escalation & Deduction
10 % p.a. escalation approved (consistent with moderate market rise). For inner belt, zero development cut since land was already “development-ready”; for outer belt, 30 % maintained as thumb rule in absence of interior sale data.
Rejection of Additional Evidence at Apex Stage
Fresh sale deeds never exhibited below were refused, citing evidentiary discipline and their marginal relevance (tiny plot size, high values).

3.3 Impact Assessment

Uniformity Mandate: High Courts must furnish cogent reasons for any deviation in compensation between contiguous villages. Expect appeals in pending Haryana & NCR matters where inner-belt parity was denied.
Belting Clarified: Judgment balances flexibility (belting permitted) with equality (same rate across similar belts of adjoining villages). This nuanced approach will influence acquisition projects around industrial corridors, expressways, smart-city clusters.
Development Cut Doctrine: Decision re-emphasises that cuts are not routine; if land is “location advantaged” and sale exemplar already reflects that, cuts may be nil.
Process Discipline: Apex Court’s refusal to entertain fresh sale deeds underscores the importance of producing best evidence before the Reference Court itself.
Negotiation Leverage: Enhanced inner-belt rate (≈39 % rise for Kukrola) becomes a benchmark for ongoing negotiations between landowners and authorities in similarly placed villages.

4. Complex Concepts Simplified

Belting Method: Picture a rainbow of value bands radiating from a main road. The closest strip (inner belt) is more expensive because businesses and industries want highway frontage. Land further in (outer belt) sees lower demand and value.

Development Cut: Suppose you buy a fully built apartment versus raw land that still needs roads, drains, parks. The latter requires cost to “develop.” A court therefore subtracts a percentage from small-plot prices before applying them to large raw tracts.

Section-4 Notification: The government’s first public announcement that it intends to acquire land. Market value is generally “frozen” as on this date to prevent speculative rise.

Escalation Rate: Adjustment added to past sale prices to reflect time-based appreciation upto the Section-4 date—like adding interest to account for rising property prices.

Comparable Sale Exemplar: A real sale deed used as a yardstick. Think of it as the “price tag” of a similar product recently sold in the same neighbourhood.

5. Conclusion

Krishan Kumar v. State of Haryana stands out not because it invents brand new doctrine, but because it re-calibrates and harmonises existing ones. It re-affirms belting yet refuses to let belting mask unjustifiable discrimination. By elevating parity over mere proximity and insisting on objective evidence before awarding differential compensation, the Court has given land acquisition jurisprudence a more predictable compass. Future benches and Reference Courts are now guided to:

Apply belting only when differential potential is demonstrably evident.
Use the highest bona fide comparable sale while minding plot size & genuineness.
Ensure development cuts are logically tied to actual development deficiencies.
Maintain equality of treatment for similarly situated landowners absent clear distinctions.

In an era of rapid infrastructure build-out, this judgment will resonate beyond Haryana, shaping compensation debates along expressways, freight corridors, and new industrial townships nationwide.

— Commentary prepared by LexSense Analytics, 2025.