Neutral Citation No. ( 2025:HHC:44486 ) 1 IN THE HIGH COURT OF HIMACHAL PRADESH AT SHIMLA RFA No. 403 of 2015 with C.O. No. 08 of 2016 a/w RFA No. 404 of 2015 with C.O. No. 09 of 2016 and RFA No. 405 of 2015 with C.O. No. 10 of 2016 Reserved on: 15.12. 2025 Date of decision: 18.12.2025 ________________________________________________ 1. RFA No. 403 of 2015 with C.O. No. 08 of 2016: State of Himachal Pradesh & another. …..Appellants/Non-cross-objectors. Versus Yudhbir Singh ……Respondent/cross-objector. 2. RFA No. 404 of 2015 with C.O. No. 09 of 2016: State of Himachal Pradesh & another. …..Appellants/Non-cross-objectors. Versus Yudhbir Singh & another ……Respondent/cross-objectors. 3. RFA No. 405 of 2015 with C.O. No. 10 of 2016: State of Himachal Pradesh & another. …..Appellants/Non-cross-objectors. Versus Yudhbir Singh & another. ……Respondent/cross-objectors. ________________________________________________ Coram The Hon'ble Mr. Justice Sushil Kukreja, Judge. 1 Whether approved for reporting? 1 Whether reporters of Local Papers may be allowed to see the judgment? 2 Neutral Citation No. ( 2025:HHC:44486 ) In all the appeals: For the appellants/ non-cross-objectors: Ms. Archna Negi, Deputy Advocate General. For the respondents/ Cross-objectors: Mr. Ajay Sharma, Senior Advocate, with Mr. Atharv Sharma, Advocate. Sushil Kukreja, Judge. Since all these appeals are the offshoots of award dated 31.08.2013, passed by learned Additional District Judge-I, Kangra at Dharamshala, H.P. hereinafter referred to as “the learned Reference Court”), they are taken up together for disposal. 2. The instant appeals have been maintained by the appellants/State, who were respondents before the learned Court below, under Section 54 of the Land Acquisition Act, 1894 (for short “the Act”), against award dated 31.08.2013, passed by District Judge-I, Kangra at Dharamshala, H.P. (hereinafter referred to as “the learned Reference Court”), in Reference Case RBT No. 176-N/2006/2010, whereby the claim petitions filed by the petitioners/claimants (respondents herein) were allowed and they were held entitled for enhanced compensation @ of Rs.9,00,000/- per kanal alongwith solatium and interest. 3 Neutral Citation No. ( 2025:HHC:44486 ) 3. The brief facts of the case are that the Government of Himachal Pradesh issued Notification, dated 17.04.2003, under Section 4 of the Act, for acquiring the land of the petitioners/claimants for construction of Chaki bridge/road. The said notification was published in newspapers, i.e., Himachal Pradesh Rajpatra on 25.04.2003, and n Divya Himachal on 14.05.2003. Subsequently, notification under Sections 6 and 7 of the Act was also published and the Land Acquisition Collector passed the award. As per the petitioners/claimants, the Land Acquisition Collector awarded compensation for the acquired land by assessing lesser market value of the land and they averred that the market value of the acquired land was more than Rs.13,00,000/- per kanal. They further averred that the acquired land was situated on the entry point of Himachal Pradesh and the same was got assessed by them by one Shri J.C. Mahajan, Superintendent Engineer (Retd.), Registered Valuer of Government of India, who assessed the value of the land @ Rs.13,00,000/- per kanal in the year 2005 and State Bank of Patiala accepted the valuation made by him. 4. The petitioners/claimants, feeling aggrieved with 4 Neutral Citation No. ( 2025:HHC:44486 ) the award of the Land Acquisition Collector preferred Reference Petitions under Section 18 of the Act before the learned Reference Court for enhancement of the compensation mainly on the ground that the Land Acquisition Collector had not assessed the value of the land properly and inadequate compensation was awarded. As per the petitioners, the value of the land was much higher at the time of issuance of Notification under Section 4 of the Act, as the land was situated on the entry point of Himachal Pradesh and the value of the land was more than Rs.13,00,000/- per kanal. Lastly, the petitioners sought enhanced compensation alongwith all the statutory benefits. 5. The learned Reference Court, allowed the petitions and held the petitioners/claimants entitled for enhanced compensation @ of Rs.9,00,000/- per kanal for the acquired land. In addition to the above, the petitioners were also held entitled to all the statutory benefits, i.e., solatium, compulsory acquisition allowances and interest etc.. Hence, the appellants/State preferred the appeals, i.e., RFAs No. 403 to 405 of 2015. The petitioners/claimants also preferred Cross Objections No. 8 to 10 of 2016 in the aforesaid RFAs, with a prayer to quash and set-aside the impugned award 5 Neutral Citation No. ( 2025:HHC:44486 ) dated 31.08.2013, passed by the learned Reference Court. 6. I have heard the learned Deputy Advocate General for the appellants/State (non-cross-objectors), learned Senior Counsel for the respondents/cross-objectors and also carefully examined the records. 7. As per the settled principle of law, compensation for the land acquired has to be determined at market value. Market value is the price that a willing purchaser would pay to a willing seller for the property having due regard to its existing condition with all its existing advantages and its potential possibilities when led out in most advantageous manner excluding any advantage due to carrying out of the scheme for which the property is compulsorily acquired. The determination of market value is the prediction of an economic event viz. a price outcome of hypothetical sale expressed in terms of probabilities. For ascertaining the market value of the land, the potentiality of the acquired land should also be taken into consideration. Potentiality means capacity or possibility for changing or developing into state of actuality. 8. In Mehta Ravindrarai Ajitrai (deceased) through his heirs and LRs & others vs. State of Gujarat 6 Neutral Citation No. ( 2025:HHC:44486 ) (1989) 4 SCC 250, the Hon’ble Supreme Court held that the market value of a property for the purpose of Section 23 of the Act is the price at which the property changes hands from a willing seller to a willing purchaser, but not too anxious a buyer, dealing at arms length. The relevant portion of the aforesaid judgment reads as under: “4. ……….The market value of a piece of property for purpose of Section 23 of the Land Acquisition Act is stated to be the price at which the property changes hands from a willing seller to a willing, but not too anxious a buyer, dealing at arms length. Prices fetched for similar lands with similar advantages and potentialities under bona fide transactions of sale at or about the time of the preliminary notification are the usual and, indeed the best, evidences of market value.” 9. In Atma Singh & others vs. State of Haryana & another (2008) 2 SCC 568, the Hon’ble Supreme Court held that the market value is the price that a willing purchaser would pay to a willing seller for the property having due regard to its existing conditions with all its existing advantages and its potential possibilities when led out in most advantages manner, excluding any advantage due to carrying out of the scheme for which the property is compulsorily acquired. In considering market value, disinclination of the vendor to part with his land and the urgent necessity of the purchaser to buy should be disregarded. The question whether a land has potential 7 Neutral Citation No. ( 2025:HHC:44486 ) value or not, is primarily one of the facts depending upon its condition, situation, user to which it is put or is reasonably capable of being put and proximity to residential, commercial or industrial areas or institutions. The existing amenities like, water, electricity, possibility of their further extension, whether near about town is developing or has prospect of development have to be taken into consideration. The relevant portion of the aforesaid judgment reads as under: “4. ……The expression “market value” has been the subject-matter of consideration by this Court in several cases. The market value is the price that a willing purchaser would pay to a willing seller for the property having due regard to its existing condition with all its existing advantages and its potential possibilities when led out in most advantageous manner excluding any advantage due to carrying out of the scheme for which the property is compulsorily acquired. In considering market value disinclination of the vendor to part with his land and the urgent necessity of the purchaser to buy should be disregarded. The guiding star would be the conduct of hypothetical willing vendor who would offer the land and a purchaser in normal human conduct would be willing to buy as a prudent purchaser in normal human conduct would be willing to buy as a prudent man in normal market conditions but not an anxious dealing at arm’s length nor façade of sale nor fictitious sale brought about in quick succession or otherwise to inflate the market value. 5. For ascertaining the market value of the land, the potentiality of the acquired land should also be taken into consideration. Potentiality means capacity or possibility for changing or developing into state of actuality. It is well settled that market value of a property has to be determined having due regard to its existing condition with all its existing advantages and its potential possibility when led out in its most advantageous manner. The question whether a land has potential value or not, is primarily one of fact depending upon its condition, situation, user to which it is put or is reasonably capable of being put and proximity to residential, commercial or industrial areas or institutions. The existing amenities like water, electricity, possibility of their further extension, whether near about town is developing or has prospect of development have to be taken into consideration.” 8 Neutral Citation No. ( 2025:HHC:44486 ) 10. For ascertaining market value of the acquired land, the Court can no doubt rely upon such sale transactions, which would offer a reasonable basis to fix the price, for which purpose, a sale transaction relating to a smaller parcel of land can be considered for the purpose of assessing the market value in respect of a large tract of land, after making appropriate deductions such as for development of land, for providing space for roads, sewers, drains, expenses involved in formation of a layout, lump- sum payments, as well as for the waiting period required for selling the sites that would be formed and other expenses involved therein, but before doing so, the evidentiary value of such a sale deed is required to be carefully scrutinized. As held in the case of Land Acquisition Officer vs. Nookala Rajamallu reported as (2003) 12 SCC 334, in order to adopt the price reflected in the sale deed, the following conditions are required to be met: "9. It can be broadly stated that the element of speculation is reduced to a minimum if the underlying principles of fixation of market value with reference to comparable sales are made: (i) when sale is within a reasonable time of the date of notification under Section 4(1); (ii) it should be a bona fide transaction; (iii) it should be of the land acquired or of the land adjacent to the land acquired; and 9 Neutral Citation No. ( 2025:HHC:44486 ) (iv) it should possess similar advantages 10. It is only when these factors are present, it can merit a consideration as a comparable case (see Special Land Acquisition Officer v. T. Adinarayan Setty AIR 1959 SC 429)." 11. In Union of India vs. Pramod Gupta (dead) by LRs & others, 2005 (12) SCC 1, the Hon’ble Supreme Court held that the best method, as is well-known, would be the amount which a willing purchaser would pay to the owner of the land. In the absence of any direct evidence, the Court, however, may take recourse to various other known methods. Evidence admissible therefor inter alia would be the sale deeds, judgments and awards passed in respect of acquisitions of lands made in the same village and/or neighboring villages. Such a judgment/award in the absence of any other evidence like deed of sale, report of the expert and other relevant evidence would have only evidentiary value. The relevant portion of the aforesaid judgment reads as under: “24 While determining the amount of compensation payable in respect of the lands acquired by the State, the market value therefor indisputably has to be ascertained. There exist different modes therefor. 25. The best method, as is well known, would be the amount which a willing purchaser would pay to the owner of the land. In absence of any direct evidence, the court, however, may take recourse to various other known methods. Evidences admissible therefor inter alia would be judgments and awards passed in respect of acquisitions of lands made in the same village and/or neighboring villages. Such a judgment and award, in the absence of any other 10 Neutral Citation No. ( 2025:HHC:44486 ) evidence like the deed of sale, report of the expert and other relevant evidence would have only evidentiary value.” 12. In the instant case, the petitioners had examined PW-1 Vinod Kumar, the then Clerk, State Bank of Patiala at Nurpur, who deposed that as per loan valuation report, Ex. PW-1/A, of Swadesh Singh (one of the petitioners) son of Shri Kesar Singh, which was prepared by Shri J.C. Mahajan, Evaluator, he assessed the value of the land to the tune of Rs.13,00,000/- per kanal. PW-2 Yudhbir Singh tendered in evidence his affidavit, Ex. PW-2/A. He supported the contents of his reference petition. The respondents have failed to lead any evidence. 13. However, the learned Reference Court had held that since report, Ex. PW-1/A, which was an expert opinion and was accepted by State Bank of Patiala, Nurpur, in the year 2005, and the award had to be assessed keeping in view the report of Shri J.C. Mahajan, Ex. PW-1/A, wherein he has assessed the value of the land Rs.13,00,000/- per kanal, but it was reasonable and appropriate and in the fitness of things to assess the value of the land to the tune of Rs.9,00,000/- per kanal, which appeared to be genuine and reasonable. 14. The perusal of the record reveals that Evaluator, 11 Neutral Citation No. ( 2025:HHC:44486 ) Shri J.C. Mahajan, who had prepared the report, Ex. PW-1/A, has not been examined by the petitioner for the reasons best known to them. It is a settled law that mere production and marking of a document as an exhibit by the Court cannot be held to be due proof of its contents as it has to be proved in accordance with law. The Hon'ble Supreme Court in case Sait Tarajee Khimchand & others, AIR 1971 (SC) 1865, has authoritatively laid down that mere marking of a document as an exhibit does not dispense with its proof. In S. Gopal Reddy v. State of A.P., (1996) 4 SCC 596, the Hon’ble Supreme Court has held thus: "29. ……The ordinary method of proving a document is by calling as a witness the person who had executed the document or saw it being executed or signed or is otherwise qualified and competent to express his opinion as to the handwriting. There are some other modes of proof of documents also as by comparison of the handwriting as envisaged under Section 73 of the Evidence Act or through the evidence of a handwriting expert under Section 45 of the Act, besides by the admission of the person against whom the document is intended to be used. The receiver of the document, on establishing his acquaintance with the handwriting of the person and competence to identify the writing with which he is familiar, may also prove a document. These modes are legitimate methods of proving documents but before they can be accepted they must bear sufficient strength to carry conviction……….” 15. In Neeraj Dutta v. State (Govt. of N. C. T. of Delhi), (2023) 4 SCC 731, the Constitutional Bench of Hon'ble Supreme Court has held as under: "60……..When a document is produced as primary evidence, it will have to be proved in the manner laid down in Sections 67 to 73 of the Evidence Act. Mere production and marking 12 Neutral Citation No. ( 2025:HHC:44486 ) of a document as an exhibit by the court cannot be held to be due proof of its contents. Its execution has to be proved by admissible evidence………..." 16. In the present case, as observed earlier, Shri J.C. Mahajan, who had prepared the report, Ex. PW-1/A, has not appeared in the witness-box. Thus, the contents of Ext. PW- 1/A have not been proved by the claimants by leading any admissible evidence at all as and in that view of the matter its contents have not been proved. 17. No other evidence has been led by the petitioners in order to establish the market value of the acquired land. The respondents/State also not led any evidence. 18. The perusal of the impugned award shows that it is self contradictory, as in para 14 of the impugned award, the learned Reference Court had assessed the market value of the land @ Rs.9,00,000/- per hectare, whereas in relief clause, the learned Reference Court had held that the petitioners are entitled to compensation @ Rs.9,00,000/- per kanal alongwith all statutory benefits. 19. At this stage, it would be apt to reproduce relevant portion of para 14 and para 15 of the impugned award, which are as under: “14. Therefore, in such cases where the nature of land 13 Neutral Citation No. ( 2025:HHC:44486 ) and purpose for which this land has been acquired are similar as were as held above, and the Court has allowed a compensation on uniform basis, therefore, in this case also this Court finds it expedient to allow the rate, i.e., Rs.9,00,000/- per hectare.” … … “RELIEF 15. In view of my findings on the issues above,, the petitioners are entitled to compensation at the rate of 9,00,000/- per kanal. The applicants are also entitled to interest at the rate of 12% per annum on the enhanced amount of compensation under Section 23(1-A) from the date of notification under section 4 upto the date of announcement of award dated 21.07.2004 by the LAC under section 11 of the Act. Further the petitioners are entitled to solatium at the rate of 30% on account of compulsory acquisition of land on the enhanced amount of compensation. Apart from this, the petitioners are entitled to interest at the rate of 9% per annum for one year from the date of announcement of award by LAC i.e. 21.7.2004 and thereafter at the rate of 15% per annum till the amount of compensation is deposited in the Court. Memo of costs be prepared accordingly.” … … … 20. As such, impugned award dated 31.08.2013, passed by learned Additional District Juge-I, Kangra at Dharamshala, H.P., in land reference petitions in question, is quashed and set-aside and the matters are being remanded back to the learned Reference Court with following directions: 1. Reference petitions are ordered to be revived to their original numbers and position; 2. Parties shall appear before the learned Reference Court on 16.01.2026; 3. It shall be open for the parties to lead evidence oral or documentary. However, the learned Reference court is directed not 14 Neutral Citation No. ( 2025:HHC:44486 ) to grant more than two opportunities to the parties to lead evidence; 4. Save and except official witnesses, parties undertake to produce evidence at their own responsibility; and 5. Reference Court shall decide the reference petitions afresh, as expeditiously as possible, in any event not later than 30.06.2026. 21. Learned Registrar (Judicial) shall ensure that the entire record be remitted to the learned Reference Court forthwith. 22. In view of the above, the instant appeals as well as cross-objections stand disposed of accordingly, so also pending application(s), if any. ( Sushil Kukreja ) Judge 18th December, 2025 (virender)