1 Neutral Citation No. ( 2026:HHC:20402 ) IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA RFAs No. 117 & 119 of 2021 Reserved on: 22.05.2026 Decided on: 29.05.2026 Dated of uploading on website: 29.05.2026 1. RFA No. 117 of 2021: Mamta Devi ....Appellants. Versus Land Acquisition Collector (Railways) & another. …Respondents. 2. RFA No. 119 of 2021: Mamta Devi ....Appellants. Versus Land Acquisition Collector (Railways) & another. …Respondents. Coram: The Hon’ble Mr. Justice Sushil Kukreja, Judge. Whether approved for reporting?1 _________________________________________________ In both the appeals: For the appellant(s): Mr. Ajay Sharma, Sr. Advocate, with Mr. Atharv Sharma, Advocate. For respondent No. 1/State: Mr. Raj Kumar Negi, Additional Advocate General. For respondent No. 2: Mr. Nand Lal Thakur, Senior Panel Counsel. Sushil Kukreja, Judge. Since both these appeals are the offshoots of award, dated 01.08.2019, passed by learned Additional District 1 Whether reporters of Local Papers may be allowed to see the judgment? 2 Neutral Citation No. ( 2026:HHC:20402 ) Judge-II, Una, District Una, H.P. (hereinafter referred to as “the learned Reference Court”), the same are taken up together and being disposed of by a common judgment. 2. The appellant, who was petitioner/claimant (hereinafter referred to as “the petitioner/claimant”), preferred the instant appeals under Section 54 of the Land Acquisition Act (for short “the Act”) against award dated 01.08.2019, passed by learned Reference Court, in LAC Petitions No. 15 and 16 of 2007, whereby the above petitions filed by petitioner, i.e., Smt. Mamta Devi were allowed with costs and she was awarded compensation @ Rs.1000/- per square meter, irrespective of the location, category and classification of the acquired land alongwith interest @ 12% per annum on the enhanced amount of compensation under Section 23(1-A) of the Act from 25.02.2005 to 05.10.2006 alongwith solatium and interest. 3. The facts giving rise to the instant appeals are that the land of petitioner-Smt. Mamta Devi, i.e., (1) measuring 0- 32-15 hectares, khasra No. 3074/445/1, 3676/446/1, 3078/450/1, 3080/451/1, 3082/453, 3084/454, 3086/455/2, measuring 0-17-89 hectares, khasra No. 3967/424/2, land measuring 0-03-12 hectares, khasra No. 419 to 421, 422 and 3 Neutral Citation No. ( 2026:HHC:20402 ) 423 and (2) land measuring 0-32-15 hectares, khasra No. 3074/445/1, 3676/446/1, 3078/450/1, 3080/451/1, 3082/453, 3084/454, 3086/455/2 and land measuring 0-17-89 hectares, khasra No. 3967/424/2 and land measuring 0-03-12 hectares, bearing khasra No. 419 to 421, 422 and 423 situated in village Katohar Khurd, Tehsil Amb, District Una, H.P. was acquired for the purpose of construction of Nangal-Talwara Railway line under the Act vide Award No. 5, dated 05.10.2006, passed by Acquisition Officer (Railway), Una. 3(a). 3(a). The petitioner assailed the aforesaid award before the learned Reference Court by filing petitions under Section 18 of the Act, wherein she averred that the Land Acquisition Collector published Notification Under Section 4 of the Act on 25.02.2005 qua acquisition of land in village Katohar Khurd, Tehsil Amb, Una, for construction of Railway Line from Nangal to Talwara (Una-Churru). Thereafter, notification under Section 6 of the Act, dated 23.06.2005, was issued. On 05.10.2006 the Land Acquisition Collector passed award under Section 11 of the Act and following compensation was awarded: Sr. No. Class of Land Market rate of land touching State Highway per square meter in rupees Market rate of land touching link road per square meter in rupees Other land in rupees 4 Neutral Citation No. ( 2026:HHC:20402 ) 1. Chahi abbal 1000/- 800/- 600/- 2. Barani abbal and banjer kadim 800/- 700/- 500/- 3. Banjer kadim, kharkana, kharetar 400/- 350/- 300/- 4. Giar mumkin 250/- 200/- 155/- 5. Gair mumkion abadi and sehan ahata (if classified chahi abban before construction) 1000/- 800/- 600/- 6. Gair mumkin abadi and sehan ahata 800/- 700/- 500/- 3(b). The petitioner/claimant averred that the Land Acquisition Collector did not assess the market value of the land correctly and she claimed that the aforesaid land was surrounded by abadies of village inhabitants on all sides and was also abutting to Una Dharamshala National Highway on the eastern side and a link road on the southern side. She further averred that the land was having a factory over it under the name and style of Himalayan Steel and General Products, which was engaged for extraction of resin and the building constructed for the factory was also acquired, for which very less compensation was paid. As per the petitioner/claimant, the Collector had not adopted proper criteria for calculating the compensation of the acquired land, as required under the law 5 Neutral Citation No. ( 2026:HHC:20402 ) and the value of the acquired building was stated to be Rs.8,50,000/-. Lastly, she prayed for enhanced compensation. 4. The learned Reference Court after hearing the learned counsel for the parties and considering the record allowed the claim petitions and awarded the compensation @ Rs.1000/- per square meter, irrespective of location, category and classification of the acquired land alongwith interest @ 12% per annum on the enhanced amount of compensation from 25.02.2005 to 05.10.2006. The petitioner was also held entitled to solatium @ 30% on the enhanced amount of compensation and interest @ 9% from 06.10.2006 till the amount of compensation is deposited in the Court. 5. The petitioner, still feeling aggrieved, preferred the instant appeals under Section 54 of the Act against the impugned award with the prayer to allow the same. 6. The learned Senior Counsel for the appellant contended the compensation granted by the learned Reference Court is on lower side, therefore, compensation be enhanced to the tune of Rs.1100/- per square. He further contended that the learned Reference Court had not granted all the statutory benefits. 6 Neutral Citation No. ( 2026:HHC:20402 ) 7. Conversely, learned Additional Advocate General and learned Senior Panel Counsel for respondents No. 1 and 2, respectively, supported the impugned award and contended that the impugned award does not suffer from any legal infirmity and the same has been passed by the learned Reference Court after properly appreciating the facts and law. They prayed that the instant appeals, being without merits, be dismissed. 8. I have heard the learner Senior Counsel for the appellant(s), learned Additional Advocate General, learned Senior Panel Counsel for the respondents and carefully examined the entire records. 9. 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 7 Neutral Citation No. ( 2026:HHC:20402 ) 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. 10. In Mehta Ravindrarai Ajitrai (deceased) through his heirs & LRs & others v. State of Gujarat (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.” 11. In Atma Singh (Dead) through LRs & others vs. State of Haryana & another, (2008) 2 Supreme Court Cases 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 8 Neutral Citation No. ( 2026:HHC:20402 ) 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 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 9 Neutral Citation No. ( 2026:HHC:20402 ) 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………….” 12. 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 10 Neutral Citation No. ( 2026:HHC:20402 ) 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 (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)." 13. 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 11 Neutral Citation No. ( 2026:HHC:20402 ) 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 evidence like the deed of sale, report of the expert and other relevant evidence would have only evidentiary value.” 14. In the instant case, the petitioner examined Architect Shri Neeraj Kumar, who stepped in the witness-box as PW-1, he proved abstract of cost of the factory of the petitioner, Ex. PW-1/A, and details of measurement, Ex. PW- 1/B. He further deposed that he had measured the building and assessed its total value as Rs.8,07,117/-. PW-2 Smt. Renu Thakur, the then Lamberdar, tendered her affidavit, wherein she supported the version of the petitioner and deposed that the petitioner had installed a factory on the acquired land and this land was abutting National Highway. As per this witness, the value of the land was not less than 1,50,000/- per marla. 12 Neutral Citation No. ( 2026:HHC:20402 ) 15. In addition to the above witnesses, the learned counsel for the petitioner, before the learned Reference Court, tendered in evidence copy of judgment, dated 09.05.2016, passed by co-ordinate Bench of this Court, in RFA No. 24 of 2017, titled as Vidya Sagar vs. LAC. 16. On the other hand, respondents examined Shri Joginder Lal, the then Kanungo, as RW-1 who deposed that the land of the petitioner was acquired and as per the revenue record, there was a Gair Mumkin factory, house and compensation to the tune of Rs.16,80,800/- was paid and the value of the building and well was assessed from PWD and IPH Departments. He further deposed that the value of the land was stated to be assessed on the basis of average sale deed and adequate compensation was paid to the owners and no objection had been raised. He also tendered a copy of award, Ex.R-1, and copy of annual average of sale, Ex.R-2. This witness, in her cross-examination, admitted that the acquired land was on the road side and factory was existing over khasra No. 420 and well on khasra No. 422. 17. This is the entire evidence led by the parties on record. While determining the market value of the acquired land @ Rs.1000/- per square meter, the learned Reference 13 Neutral Citation No. ( 2026:HHC:20402 ) Court has placed reliance upon the judgment passed by a co- ordinate Bench of this Court in RFA No. 24 of 2017, titled as Vidya Sagar vs. LAC, copy whereof is Ex. P-11, wherein nature and location as well as potentiality of the acquired land were same and the land was also acquired for the same purpose. Therefore, no fault can be found with the market value determined by the learned Reference Court @ Rs.1000/- per square meter irrespective of the location, category and classification of the acquired land on the basis of judgment rendered by a co-ordinate Bench of this Court in Vidaya Sagar’s case (supra). However, the perusal of the impugned award reveals that all the statutory benefits have not been awarded to the petitioner. Therefore, the petitioner(s) is entitled to the following statutory benefits: (a). the petitioner(s) shall be entitled to solatium @ 30% on the market value of the land assessed above; (b). additional compensation @ 12% per annum under Section 23(1-A) of the Act w.e.f. 25.02.2005, i.e., the date of publication of notification till the date of the award of the Collector, i.e., 0510.2006; & (c). interest under Section 28 of the Act on the enhanced amount of compensation under sub-section (1) of Section 23 of the Act, the additional compensation worked out under sub-section (1-A) of Section 23 of the Act, plus, solatium awarded under Section 23(2) of the Act, @ 9% per annum from the date of 14 Neutral Citation No. ( 2026:HHC:20402 ) award of the Collector, i.e., 05.10.2006, for one year and thereafter @ 15% per annum till the date of payment/deposit of the amount of compensation in accordance with Section 34 of the Act. 18. In view of what has been discussed hereinabove, the impugned award, passed by the learned Reference Court, stands modified, as above. The instant appeals are disposed of accordingly. Pending application(s), if any, shall also stand(s) disposed of. ( Sushil Kukreja ) Judge 29th May, 2026 (virender)