STATE OF MAHARASHTRA vs DIGAMBAR BHIMASHANKAR TANDALE .

The Supreme Court held that the determination of compensation for land acquisition under the Land Acquisition Act must reflect the market value of the land, not be based on an illegal principle of compensation per square foot. The Court found that the reference Court's reliance on small land sales to determine compensation for a larger tract was improper, as no reasonable purchaser would buy land on a square foot basis. The Court emphasized that as of the notification date, the lands had no potential value for development, thus ruling that the compensation awarded was inadequate and must be reassessed.