Farmers, whose land is being acquired by government, should be compensated not only for their land but also for the plantation on the land, the supreme court has said.

A three-judge bench headed by Justice R V Raveendran set aside the order of the Bombay high court which had held that once the compensation is awarded for the land, there cannot be additional or separate compensation for the trees.

"If the land value had been determined with reference to the sale statistics or compensation awarded for a nearby vacant land, then necessarily, the trees will have to be valued separately," the bench, also comprising justices H L Gokhale and Gyan Sudha Misra, said.

"But if the value of the land has been determined on the basis of the sale statistics or compensation awarded for an orchard, that is land with fruit-bearing trees, then there is no question of again adding the value of the trees. Further, if the market value has been determined by capitalising the income with reference to yield, then also the question of making any addition either for the land or for the trees separately does not arise," the bench said.

The bench emphasised the need to compensate the farmers as per the market value of the land.

"Compensation given by the government to farmers while acquiring their land should be decided on the basis of its market value," it said.

"We are afraid that the high court has misread the said decision in regard of valuing the land and trees separately," the apex court bench said while asking the high court to again hear the plea of farmers on the enhanced compensation for their land.