( 2026:HHC:25406 ) IN THE HIGH COURT OF HIMACHAL PRADESH AT SHIMLA RFA No. 293 of 2016 Reserved on: 25.05.2026 Date of decision: 29.06.2026 Date of uploading on website: 29.06.2026 ___________________________________________________ Kesri Devi and others ....Appellants Versus State of HP and others …Respondents _____________________________________________________ Coram Hon'ble Mr. Justice Sushil Kukreja, Judge 1 Whether approved for reporting? For the appellants: Mr. Ramesh Sharma, Advocate. For the respondents: Mr. Manoj Chauhan, Additional Advocate General with Mr. Ankush Thakur, Deputy Advocate General. Sushil Kukreja, Judge The instant appeal has been preferred under Section 54 of the Land Acquisition Act (for short, ‘the Act’) by the appellants-petitioners (hereinafter is referred to as the petitioners) against the award dated 10.06.2016, passed by the learned District Judge, Kinnaur Civil Division at Rampur Bushahr, District Shimla, HP (for short ‘the Reference Court’), whereby the reference petition preferred by the petitioners for 1 Whether reporters of Local Papers may be allowed to see the judgment? 2 ( 2026:HHC:25406 ) enhancement of the amount of compensation, has been dismissed. 2. Briefly sated the facts of the case are that the Government of Himachal Pradesh had issued a notification under Section 4 (1) of the Act on 03.05.2006 for acquisition of the land situated in Village Khakhrola, Tehsil Rampur, District Shimla for the construction of Kumsu-Kamlahu-Kareri road, which was published in Rajpatra on 10.06.2006 as well as in two daily newspapers ‘Amar Ujala’ and ‘Ajeet Samachar’ on 04.06.2006. Notification under Sections 6 & 7 of the Act was also published in Rajpatra on 28.10.2006 and in newspapers ‘Amar Ujala’ and ‘Danik Jagran’ on 31.10.2006 and after detailed inquiry, the Land Acquisition Collector announced Award No.13, dated 14.07.2008, whereby he awarded the compensation as under:- (i) Market Value of land Rs.3,52,425.00 u/s-23(1) First Clause. (ii) 12% Additional amount on Market value Rs.77,051.00 of land w.e.f. 10.06.2004 to 04.04.2008 i.e. 665 days. (iii) 30% Solatium u/s-23(2) of the Act Rs.1,05,727.00 Total compensation Rs.5,35,203.00 3 ( 2026:HHC:25406 ) 3. Feeling aggrieved and dissatisfied with the aforesaid award dated 14.07.2008, the petitioners preferred a reference petition under Section 18 of the Land Acquisition Act, with a prayer that the matter be referred to learned District Judge, Rampur for payment of enhanced, reasonable, fair and adequate compensation alongwith interest. However, the learned Reference Court dismissed the reference petition, vide the impugned award dated 10.06.2016. Again, feeling aggrieved/dissatisfied with the impugned award, the petitioners (appellants herein) preferred the instant appeal, with the prayer to quash and set aside the impugned award, by enhancing the amount of compensation on the basis of market value of the land as per the provisions of the Act. 4. Learned counsel for the appellants contended that impugned award is based on surmises and conjectures as the learned Reference Court has committed an error while ignoring the sale deed Ext.PW2/E dated 29.05.2006 of village Kalna as well as the sale deed Ext. PW2/D of adjoining village Kumsu. He further contended that the learned Reference Court has not appreciated the fact that the statutory interest was not awarded 4 ( 2026:HHC:25406 ) by the Land Acquisition Collector. He also contended that the possession of the land was taken in the year 1982, whereas the land was acquired in the year 2006, therefore, the appellants/petitioners are entitled to damages for the aforesaid long period as the interest from the date of possession was not granted to them. 5. On the other hand, learned Additional Advocate General supported the impugned award passed by the learned Reference Court and prayed for dismissal of the instant appeal. 6. I have heard the learned counsel for the appellants as well as the learned Additional Advocate General for the respondents-State and have also carefully gone through 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 5 ( 2026:HHC:25406 ) 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 (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.” 6 ( 2026:HHC:25406 ) 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 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 7 ( 2026:HHC:25406 ) 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.” 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 8 ( 2026:HHC:25406 ) 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 (iv) it should possess similar advantages. 10. It is only when these factors are present, it can merit a consideration as a comparable case." 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 9 ( 2026:HHC:25406 ) 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 evidence like the deed of sale, report of the expert and other relevant evidence would have only evidentiary value.” 12. The onus is upon the petitioners/claimants to prove the true and correct market value of the land at the time of the issuance of the notification under Section 4 of the Act. They are 10 ( 2026:HHC:25406 ) expected to lead cogent and satisfactory evidence in support of their claim. In Special Land Acquisition Officer vs. Karigowda & others, (2010) 5 SCC 708, it has been held that the onus to prove entitlement to receive higher compensation is upon the claimants but it cannot be said that there is no onus whatsoever upon the State in such reference proceedings. The court cannot lose sight of the facts and clear position of documents, that obligation to pay fair compensation is on the State in its absolute terms. The relevant portion of the aforesaid judgment reads as under: “29. It is a settled principle of law that the onus to prove entitlement to receive higher compensation is upon the claimants. In Basant Kumar v. Union of India [(1996) 11 SCC 542] this Court held that the claimants are expected to lead cogent and proper evidence in support of their claim. Onus primarily is on the claimants, which they can discharge while placing and proving on record sale instances and/or such other evidences as they deem proper, keeping in mind the method of computation for awarding of compensation which they rely upon. In this very case, this Court stated the principles of awarding compensation and placed the matter beyond ambiguity, while also capsulating the factors regulating the discretion of the Court while awarding the compensation. This principle was reiterated by this Court even in Gafar v. Moradabad Development Authority [(2007) 7 SCC 614] and the Court held as under: (SCC p.620, para 12) “12. As held by this Court in various decisions, the burden is on the claimants to establish that the amounts awarded to them by the Land Acquisition Officer are inadequate and that they are entitled to more. That burden had to be discharged by the claimants and only if the initial burden in that behalf 11 ( 2026:HHC:25406 ) was discharged, the burden shifted to the State to justify the award.” Thus, the onus being primarily upon the claimants, they are expected to lead evidence to revert the same, if they so desire. In other words, it cannot be said that there is no onus whatsoever upon the State in such reference proceedings. The court cannot lose sight of the facts and clear position of documents, that obligation to pay fair compensation is on the State in its absolute terms. Every case has to be examined on its own facts and the courts are expected to scrutinise the evidence led by the parties in such proceedings.” 13. In the instant case, the petitioners have placed reliance upon sale-deeds Ext. PW2/D and Ext. PW2/E. Perusal of the record reveals that in this case, notification under Section 4 of the Act was published on 10.06.2006 and the sale-deed Ext. PW2/D was executed on 19.09.2006, i.e. after publication of the notification under Section 4 of the Act, whereas, the sale- deed Ext. PW2/E pertains to village Kalna. 14. In Horrmal (deceased) through his LRs and others Vs. State of Haryana and others, 2024 SCC Online SC 2990, the Hon’ble Supreme Court has held as under:- “23. As discussed above, post-notification sales can only be considered when better evidence is not available on record and when the party relying on it can convincingly demonstrate that there has been no upward trend in market prices due to the acquisition.7 Consequently, in light of this analysis, the sale deeds numbered P9, P76, R15 and RW1/C-H, which were executed after the date of the issuance of the Section notification, will invariably have to be excluded from any further consideration, save and 12 ( 2026:HHC:25406 ) except for exceptional and compelling circumstances. 24. Apart from these sale deeds that were not proximate temporally, we also deem it appropriate to exclude the sale deeds that are not comparable geographically. It is now a firmly entrenched principle of law that, in the ordinary course, sale exemplars of lands located in the surrounding villages should generally not be relied upon, as land valuation may vary significantly by locality. In the landmark decision of Kanwar Singh vs. Union of India, this Court held that sale exemplars of lands situated in an adjacent village cannot be used to determine the market value of the acquired land since such lands may differ in terms of quality and other attributes. On this ground, the sale deeds enumerated Ex. R8 to Ex. R16 and Ex. R18 shall also have to be excluded from consideration, as they pertain to a different village, namely Gwarka, whereas the acquired land is situated in village Tauru.” 15. Therefore, in view of the aforesaid decision of the Hon’ble Supreme Court in Horrmal’s case, since the aforesaid sale-deed Ext. PW2/D is pertaining to the period after the issuance of the notification under Section 4 of the Act, hence, it cannot be taken into consideration for determining the market value of the acquired land. It is also to be noted that there is no satisfactory and convincing evidence of the petitioners on record to establish that the nature, value and potentiality of the land which is the subject matter of sale-deed Ext. PW2/E, is similar to that of the acquired land. The land, which is the subject matter of sale deed Ext. PW2/E, is situated at village Kalna, whereas, the land under acquisition is situated at Khakhrola. Therefore, 13 ( 2026:HHC:25406 ) sale-deed Ext. PW2/E cannot be taken into consideration for determining the market value of the land. No other sale instance has been placed on record by the petitioners to prove their plea that the Collector has not assessed the value of the acquired land properly as such, it cannot be held that the market value of the acquired land as assessed by the Collector is inadequate. 16. Learned counsel for the appellants next contended that the possession of the land under acquisition was taken in the year 1982, whereas the same was acquired in the year 2006 and for this period, the landowners were entitled to damages, but no damages have been granted by the learned Reference Court for this long period. However, this contention of the learned counsel for the appellants deserves to be rejected, as except for the self-serving statement of petitioner No.1-Kesri Devi (PW-2), no evidence has been led by the petitioners in support of their case that the possession of the land was taken in the year 1982. Hence, in the absence of any cogent and satisfactory evidence on record, no amount of compensation can be granted to the petitioners in this respect. 17. Therefore, in view of the facts and circumstances of 14 ( 2026:HHC:25406 ) the present case and also in the absence of any cogent and satisfactory evidence led by the parties on record, the learned reference Court has rightly held that the value of the land has been properly assessed by the Land Acquisition Collector. 18. Hence, in view of the above, no interference is required in the impugned award dated 10.06.2016, passed by the learned District Judge, Kinnaur, Civil division at Rampur Bushahr, District Shimla, HP. Consequently, the instant appeal, being devoid of merits, deserves dismissal and is accordingly dismissed. Pending application(s), if any, shall also stand disposed of. (Sushil Kukreja) June 29, 2026 Judge (V.Himalvi)