The Bombay High Court has reinforced a critical principle in land acquisition proceedings: when an independent private valuer’s report is unchallenged and supported by documentary evidence, courts cannot arbitrarily disregard it in favor of arbitrary or mechanically reduced compensation. This judgment clarifies the evidentiary weight accorded to expert valuation in compensation disputes under the Land Acquisition Act.
Background & Facts
The Dispute
The appellant, a landowner from Itgyal village in Nanded district, challenged the compensation awarded by the Reference Court for his residential property acquired under the Lendi Project. The Special Land Acquisition Officer (SLAO) had initially awarded ₹3,56,532, but the Reference Court reduced it to ₹1,42,612 - just 40% of the SLAO’s figure. The appellant contended that this reduction ignored the valuation report submitted by a qualified private valuer, Anil Fhulari, whose assessment was significantly higher and based on PWDSR 2006-2007 guidelines.
Procedural History
- 2007: Notification under Section 4 of the Land Acquisition Act issued for Lendi Project.
- 2010: SLAO passed award of ₹3,56,532.
- 2012: Claim filed before Reference Court (LAR No. 445 of 2012).
- 2019: Reference Court awarded only ₹1,42,612, disregarding the private valuer’s report.
- 2020: First Appeal filed before Bombay High Court (Aurangabad Bench).
- 2026: Co-ordinate bench in First Appeal No. 3098 of 2021, involving identical facts and same valuer, upheld the private valuation report.
Relief Sought
The appellant sought enhancement of compensation to ₹11,90,856 as per the private valuer’s report (Exhibit 31), along with interest under Sections 28 and 34 of the Land Acquisition Act.
The Legal Issue
The central question was whether a Reference Court may reject a duly proved private valuation report, supported by affidavit and unchallenged on substantive grounds, merely on the basis of discretion or without assigning specific reasons.
Arguments Presented
For the Appellant
The appellant’s counsel relied on State of Maharashtra v. Kailash Shiva Rangari [2016 AIR (Bom.) 141] for interest entitlement and cited First Appeal No. 3098 of 2021, decided by a co-ordinate bench, where the same valuer’s report was accepted for identical property in the same village under the same notification. He argued that the Reference Court’s failure to engage with the valuation report constituted a patent illegality under Section 11 of the Land Acquisition Act, which mandates fair and just compensation.
For the Respondent
The State and acquiring authority contended that private valuer reports are not binding and that the Reference Court has the discretion to assess evidence holistically. They argued that the valuer’s methodology was not independently verified and that the higher valuation lacked corroboration from official records.
The Court's Analysis
The Court examined the nature of evidence presented by the private valuer, Anil Fhulari, who was examined as PW-2 and submitted his report as Exhibit 31. The report was based on PWDSR 2006-2007 standards, a recognized methodology for residential property valuation in Maharashtra. The Court noted that the respondent failed to adduce any contrary evidence or challenge the methodology, assumptions, or data used in the report.
"There is absolutely no proper challenge to the report of the valuation and considering the order dated 12th February 2026, in which the valuation report was relied upon and consequently the compensation was enhanced, I am of the view that similar course can be adopted."
The Court emphasized that the burden to disprove a private valuation report lies with the acquiring authority, and mere skepticism or preference for lower official rates does not suffice. It distinguished the Reference Court’s approach from the consistent jurisprudence of this Court, which has repeatedly held that uncontroverted expert evidence must be accepted unless demonstrably flawed. The Court further noted that the valuer’s report in this case mirrored the one accepted in the earlier co-ordinate bench decision involving the same village, same notification, and same valuer - making the refusal to accept it arbitrary and inconsistent.
The Court also reaffirmed that compensation under Section 11 must reflect market value, not administrative convenience, and that reliance on private valuers is not only permissible but often necessary where official rates are outdated or inadequate.
The Verdict
The appellant succeeded. The Court held that uncontroverted private valuation reports must be accepted as the basis for compensation unless rebutted by credible contrary evidence. The compensation was enhanced to ₹11,90,856, with interest under Sections 28 and 34 of the Land Acquisition Act.
What This Means For Similar Cases
Private Valuation Reports Are Presumptively Reliable
- Practitioners must insist that Reference Courts record specific reasons for rejecting private valuations, not merely cite "discretion."
- Where no rebuttal evidence is tendered, courts cannot reduce compensation below the private valuer’s figure without violating Section 11.
- Valuation reports must be challenged on technical grounds (e.g., methodology, date, site inspection), not on general skepticism.
Consistency Across Similar Acquisitions Is Mandatory
- When multiple claims arise from the same notification and locality, courts must ensure uniformity in compensation.
- A prior judgment accepting a valuer’s report in an identical factual matrix binds subsequent cases unless distinguished on material grounds.
- Failure to follow co-ordinate bench rulings on identical facts may amount to arbitrariness under Article 14.
Burden of Disproof Rests on the Acquiring Authority
- The State cannot rely on its own lower official rates to override expert evidence.
- Acquiring authorities must proactively commission counter-valuations if they dispute private reports.
- Silence or non-appearance by the State in valuation disputes constitutes waiver of right to challenge.
