A bench of justices P Sathasivam and J Chelameshwar passed the ruling while enhancing the compensation value at the Rs 1.44 lakh per acre of an over 33 acre land to the legal heirs of the former royal family of Colonel Sir Harindar Singh in Punjab's Faridkot district.
But such value has to be determined provided the transaction is of a bona fide nature, the apex court said.
"When the land is being compulsorily taken away from a person, he is entitled to the highest value which similar land in the locality is shown to have fetched in a bona fide transaction entered into between a willing purchaser and a willing seller near about the time of the acquisition.
"In our view, it seems to be only fair that where sale deeds pertaining to different transactions are relied on behalf of the government, the transaction representing the highest value should be preferred to the rest unless there are strong circumstances justifying a different course," Justice Sathasivam writing the judgement said.
According to the apex court, it was not desirable for the authorities to consider the average of the various sale deed over a period of time and then arrive at a figure.
"It is clear that when there are several exemplars with reference to similar lands, it is the general rule that the highest of the exemplars, if it is satisfied, that it is a bona fide transaction has to be considered and accepted.