A division bench of justices Devi Prasad Singh and Rajiv Sharma passed the judgement on a writ petition filed by Praveen Kumar Jain.
The petitioner had challenged the earlier order on the ground that it had been issued "arbitrarily and without following due process of law".
"The impugned circular does not assign any reason for enhancement of circle rate. It suffers from voice of arbitrariness," the bench observed.
It further said that it appears that the district magistrates all over the state changed the circle rates mechanically without taking a note of the legal proposition.