COMPENSATION FOR LAND ACQUIRED TO BE BASED ON FAIR MARKET VALUE - SUPREME COURT
The compensation for land acquired should be based on the fair market value received for similar land in the neighborhood, but not sold in auction. This was because auction sales stood on a different footing. In auction, there is an element of competition triggered by "human ego, and desire to do better than other competitors. This leads to high prices. On the other hand, when the auction is by banks, financial institutions or courts, "there is an element of distress, a cloud regarding title, and a chance of litigation." These factors depress the price. Therefore, auction price should not be the criterion for calculating compensation for acquired land.