Comparable sale evidence governs land acquisition valuation, with deductions required where acquisition effects may inflate prices.

For compensation under Section 23 of the Land Acquisition Act, 1894, the best evidence of market value is a bona fide sale of similar land at or about the Section 4 notification. A sale instance proved by an agreement to sell and sale deed may be relied on even if it is post-notification, if it is reasonably proximate and there is no proof of speculative or abnormal price rise. Where the comparable land adjoins the purchaser's land or acquisition-related factors may have affected price, appropriate deductions are required. The SC treated the proved sale as the proper valuation guide, while rejecting other instances as distress sales or unreliable comparables.

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Issues: Whether the market value of acquired land should be determined on the basis of the comparable sale instance proved by the agreement to sell and sale deed, and whether deductions were required from that rate before fixing compensation.

Analysis: The acquired land was situated near an urban area and was taken for an industrial estate. For fixing compensation under Section 23 of the Land Acquisition Act, 1894, the best evidence of market value is a bona fide sale of similar land at or about the time of the Section 4 notification. The sale evidenced by Exhibit 152, supported by the prior agreement to sell, was reasonably proximate to the notification and could not be ignored merely because it was after the acquisition, especially in the absence of proof of any speculative or sharp rise in prices. At the same time, appropriate deductions had to be made because the sold land adjoined the purchaser's land and some rise in prices may have occurred due to the acquisition itself. The other relied-upon instances were either distress sales or lacked reliable proof and were not dependable comparables.

Conclusion: The comparable sale under Exhibit 152 was the proper guide for valuation, subject to deductions, and the market value was fixed at Rs. 8,800 per acre.

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