The Supreme Court has urged state governments to set land circle rates with scientific precision, ensuring they reflect actual market conditions. The court emphasized the need for expert committees—including market specialists alongside government officials—to determine these rates fairly, preventing both overvaluation and undervaluation.
A bench led by Chief Justice Sanjiv Khanna and Justice Sanjay Kumar underscored the significance of accurate circle rates, stating that inflated values place an undue financial burden on buyers, while undervaluation results in revenue losses for the state. Fairly assessed rates not only prevent tax evasion but also promote transparency in land transactions and reduce litigation.
The court’s remarks came while dismissing an appeal by the Madhya Pradesh Road Development Corporation, which had contested inflated circle rates that increased land acquisition costs. The ruling clarified that if a government entity believes rates are too high, the responsibility lies with the state to adjust them, rather than seeking deductions in court.
The decision reinforces the importance of maintaining realistic land valuation mechanisms, ensuring both citizens and government bodies adhere to the same standards when acquiring property.
