1 Neutral Citation No. ( 2026:HHC:22017 ) IN THE HIGH COURT OF HIMACHAL PRADESH AT SHIMLA RFA No. 248 of 2014 Reserved on: 29.05.2026 Date of decision: 05.06.2026 Date of uploading on website: 05.06.2026 ________________________________________________ Piar Chand (deceased) through LRs …..Appellants. Versus Land Acquisition collector & others ……Respondents. ________________________________________________ Coram The Hon'ble Mr. Justice Sushil Kukreja, Judge. 1 Whether approved for reporting? For the appellants: Ms. Devyani Sharma, Senior Advocate, with Mr. Shivam Sharma, Advocate. For the respondents: Mr. Manoj Chauhan, Additional Advocate General. Sushil Kukreja, Judge. The instant appeal has been preferred by the appellant-Piar Chand (since deceased, through his legal representatives), who was petitioner/claimant before the learned Court below (hereinafter referred to as “the petitioner/claimant”) under Section 54 of the Land Acquisition Act, 1894 (for short “the Act”) against award dated 09.06.2014, passed by learned District Judge, Hamirpur, H.P. 1 Whether reporters of Local Papers may be allowed to see the judgment? 2 Neutral Citation No. ( 2026:HHC:22017 ) (hereinafter referred to as “the learned Reference Court”) in Land Reference No. 03 of 2011, whereby the Reference Petition filed by the petitioner/claimant under Section 18 of the Act was dismissed. 2. The brief facts of the case are that on 04.01.2006 the Government of Himachal Pradesh issued Notification under Section 4 of the Act qua acquisition of the land situated in village Anu Khurd Mauza Bajuri, Tehsil & District Hamirpur, H.P., for the purpose of construction of Baru to Hamirpur via Mohin Road. The said notification was published in H.P. Rajpatra on 04.02.2006 and in news papers, i.e., in Amar Ujala and Ajit Samachar on 09.02.2006. Thereafter, on 08.11.2006 Notification under Sections 6 and 7 of the Act was issued, which was published in H.P. Rajpatra on 04.02.2006 and in news papers, i.e., in Amar Ujala on 02.12.2006 and in Dainik Tribune on 05.12.2006. The Land Acquisition Collector, vide impugned award granted compensation of the acquired land @ Rs.1,90,003/-, i.e., Rs.17,273/- per marla. 2(a). As per the petitioner/claimant, the acquired land was situated in heart of Hamirpur town and it had future potential value due to its location. The acquired land had 3 Neutral Citation No. ( 2026:HHC:22017 ) very high market value from commercial point of view. The petitioner averred that less compensation was granted by the Land Acquisition Collector and the compensation be enhanced. 3. The Reference Court, after hearing the learned counsel for the parties and after examining the entire record, dismissed the reference petition of the petitioner/claimant. Hence, the instant appeal preferred by the petitioner/claimant, who during the pendency of the instant appeal died and the instant appeal is not being pursued by his legal representatives. 4. The learned Senior Counsel for the appellant vehemently contended that the nature of the land comprised in khasra No. 288/1/1, measuring 0-5 marlas, was barani do fasli, whereas the nature of the land comprised in khasra No. 301/2/1, measuring 0-6 marlas was gair mumkin bagicha. She further submitted that the appellant has confined the enhancement of compensation only with respect to the gairmumkin bagicha, measuring 0-6 marlas, the market value of which ought to have been assessed @ Rs.75000/- per marla. 5. On the other hand, the learned Additional 4 Neutral Citation No. ( 2026:HHC:22017 ) Advocate General for the respondents/State supported the impugned award. He contended that the learned collector has passed a well reasoned award which was affirmed by the reference court and the same does not need any interference by this Court. 6. 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. 7. In Mehta Ravindrarai Ajitrai (deceased) through his heirs & LRs & others v. State of Gujarat 5 Neutral Citation No. ( 2026:HHC:22017 ) (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.” 8. 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 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 6 Neutral Citation No. ( 2026:HHC:22017 ) 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 7 Neutral Citation No. ( 2026:HHC:22017 ) 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………….” 9. 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 8 Neutral Citation No. ( 2026:HHC:22017 ) 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)." 10. 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. 9 Neutral Citation No. ( 2026:HHC:22017 ) 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.” 11. In the instant case, in order to prove his case, the petitioner, examined PW-1 Shri Bihari Lal and himself as PW-2 and had also produced sale deeds, Ex. PW-1/A, Ex. PW-1/B and Ex PW-1/C. The perusal of the aforesaid sale deeds shows that sale deed, Ex.PW-1/A, was executed on 14.06.2011, Ex.PW-1/B was executed on 07.09.2009 and sale deed, Ex. PW-1/C, was executed on 09.03.2010 whereas notification under Section 4 of the Act, was issued on 04.02.2006. Thus, all the above sale deeds having been executed after the date of issuance of notification under Section 4 of the Act cannot be taken into consideration. No other evidence has been led by the petitioner. 12. The onus was upon the petitioner to prove that the market value of the land comprised in khasra No. 301/2/1 was not less than 75,000/- per marla. However, no cogent and satisfactory evidence has been led by the petitioner in this respect. 10 Neutral Citation No. ( 2026:HHC:22017 ) 13. The Land Acquisition Collector has passed the award on the basis of the highest amount, in comparison to the prices of all kinds of land. Hence, in the absence of any evidence on record, the learned Reference court had rightly held that there was no scope for enhancement of the awarded amount assessed by the Land Acquisition Collector. 14. In view of what has been discussed hereinabove, no interference in the impugned award is required. The appeal, which sans merits, deserves dismissal and is accordingly dismissed. Pending application(s), if any, shall stand(s) disposed of. ( Sushil Kukreja ) Judge 5th June, 2026 (virender)