Neutral Citation No. ( 2026:HHC:361 )

1

IN THE HIGH COURT OF HIMACHAL PRADESH AT

SHIMLA

RFA No. 224 of 2014 with

Cross Objection No. 71 of

2018

Reserved on: 22.12. 2025

Date of decision: 01.01.2026

________________________________________________

General Manager, Northern Railway

…..Appellant/Non-cross-objector.

Versus

Krishan Dev Singh & others

……Respondents/cross-objectors.

________________________________________________

Coram

The Hon'ble Mr. Justice Sushil Kukreja, Judge.

1

Whether approved for reporting?

For the appellant/

non-cross-objector: Mr. Shiv Pal Manhans, Senior

Panel Counsel.

For respondents No. 1 to 9/

cross-objectors: Mr. Ajay Kumar, Sr. Advocate,

with Mr. Rohit, Advocate.

For respondent No. 12/

State: Mr. Balwinder Singh, Deputy

Advocate General.

Sushil Kukreja, Judge.

The instant appeal has been maintained by the

appellant-General Manager, Northern Railways, who was

respondent No. 2 before the learned Court below (hereinafter

referred to as “the appellant”), under Section 54 of the Land

1

Whether reporters of Local Papers may be allowed to see the judgment?

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Acquisition Act, 1894 (for short “the Act”), against award

dated 31.07.2012, passed by learned District Judge, Una,

District Una, H.P. (hereinafter referred to as “the learned

Reference Court”), in Land Reference Petition No. 38 of

2009, whereby the claim petition filed by the

petitioners/claimants (respondents No. 1 to 10 herein) was

allowed and they were held entitled for enhanced

compensation @ of Rs.700/- per square meter, irrespective

of the kind/classification of the acquired land alongwith

solatium, additional compensation and interest etc..

2. The brief facts of the case are that the

Government of Himachal Pradesh, the Department of

Planning, vide Notification, dated 25.10.2004, issued under

Section 4 of the Act, which was published in H.P.

Government Gazette on 13.11.2004, intended to acquire

land of the petitioners for construction and laying of Nangal-

Talwara Broad Gauge Railway Line. The acquired land was

measuring 0-03-76 hectares, comprised in Khewat No. 447

min, Khatauni No. 980 min, khasra No. 3501/1, situated in

village Kuthiari, Tehsil Amb, District Una, H.P.. Thereafter,

notification under Section 6 of the Act was issued on

28.03.2005, which was published in H.P. Government

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Gazette on 23.04.2005 and ultimately the Land Acquisition

collector (Railways), Una, passed the award by assessing

the market value of the land ‘Banjar Qudim and Khadater’ @

Rs.10/- per square meter.

3. The petitioners/claimants, feeling aggrieved with

the award of the Land Acquisition Collector (Railways), Una,

preferred Reference Petition 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 acquired land was situated near abadies

village Thathal and village Katohar Khurd and it was abutting

village road. The acquired land was valuable and fit for

commercial purposes and it was located in close proximity of

Sub-Division, Amb. The petitioners further averred that

government offices, like Tehsil, Treasury, PWD, Irrigation,

Electricity and other authorities were located near the

acquired land and there were various industrial units as well

as educational institutions. The acquired land was suitable

for development of shopping centre and picnic spot and the

value of the same was not less than Rs.2,00,000/- per marla,

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whereas very less compensation was awarded to them. The

petitioners/claimants also averred that the acquired land was

irrigated one and compensation for valuable crops and the

trees standing thereon was not assessed and paid to them.

Lastly, the petitioners sought enhanced compensation

alongwith all the statutory benefits.

4. The learned Reference Court, allowed the

petitions and held the petitioners/claimants entitled for

enhanced compensation @ of Rs.700/- per square meter,

irrespective of kind/classification of the 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 appellant/General

Manager, Northern Railways preferred the instant appeal.

The petitioners/claimants also preferred Cross Objection No.

71 of 2018 in the instant appeal, with a prayer to allow their

Cross Objection and enhance the compensation @ Rs.900/-

pr square meter with all consequential statutory benefits.

5. I have heard the learned Senior Panel Counsel

for the appellant, learned Senior Counsel for respondents

No. 1 to 9/cross-objectors, learned Deputy Advocate General

for respondent No. 12/State and also carefully examined the

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records.

6. Learned Senior Panel Counsel for the appellant

contended that the impugned award is based on conjectures

and surmises and the findings so recorded by the learned

Reference Court are not supported by the evidence on

record. He further contended that the learned Reference

Court had ignored the material evidence on record and

granted excessive amount of compensation arbitrarily

without any reason. He also contended that the learned

Reference Court had erred in awarding uniform rate for the

entire land by ignoring the classification and nature of the

land. Lastly, he submitted that the appeal be allowed and

impugned award dated 31.07.2012 passed by the learned

Reference Court be quashed and set-aside.

7. Conversely, learned Counsel for respondents No.

1 to 9/claimants/cross-objectors contended that

compensation qua the acquired land was inadequate and

meager and the learned Reference Court had erred gravely

in assessing the market value of the acquired land by

ignoring the evidence. He further contended that the findings

of the learned Reference court are based on surmises and

conjectures and the claimants are entitled to enhanced

6 Neutral Citation No. ( 2026:HHC:361 )

compensation @ Rs.900/- per square meter. Lastly, he

submitted that the cross-objections of the claimants be

allowed and the compensation be enhanced to Rs.900/- per

square meter with all consequential statutory benefits.

8. 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.

9. In Mehta Ravindrarai Ajitrai (deceased)

through his heirs and LRs & others v. State of Gujarat

(1989) 4 SCC 250, the Hon’ble Supreme Court held that the

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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.”

10. 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

8 Neutral Citation No. ( 2026:HHC:361 )

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.”

11. The onus was upon the petitioner/claimant to

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prove the market value of the land at the time of the issuance

of the notification under Section 4 of the Act. In order to

assess the market value of the land in question, the

petitioners had placed on record two sale deeds, Ex. P1 and

Ex. P2. The petitioners have also tendered in evidence

copy of award, Ex.PX, passed in Reference Petition No. 3 of

2010, titled as Himmat Kumar & others vs. Land Acquisition

Collector & others.

12. On the other hand, respondent No. 2- (appellant

herein) had produced sale deeds, Ex.R1 to R4, and as per

these sale deeds, the land in village Kuthiari was sold at less

than Rs.10/- per square meter. However, in view of Section

25 of the Act, the learned Reference Court had rightly

ignored sale deeds, Ex.R-1 to R-4, for the reason that the

sale instances thereof were of rates less than what was

awarded by the Land Acquisition Collector, through award

No. 10 of 2006-2007, Ex. RW-1/A.

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,

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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.”

14. Thus, in absence of any direct evidence, the

court, may take recourse to judgments and awards passed in

respect of acquisitions of lands made in the same village

and/or neighboring villages. In the instant case, the perusal

of the record reveals that the learned Reference court had

assessed the market value of the land in question after

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placing reliance upon award Ex.PX, which pertains to the

land situated in adjoining village Thathal. As per the

evidence on record, the acquired land was in village Kuthiari,

which was adjoining to the land situated in village Thathal.

The date of notification under Section 4 of the Act in the

present case is 25.10.2004, whereas in award Ex.PX, the

date of notification was 14.07.2005, meaning thereby that the

land of the petitioners/claimants was acquired about 8-9

months prior to that of village Thathal and vide award Ex.PX,

compensation for the acquired land in village Thathal was

enhanced at the rate of Rs.800/- per square meter. Since,

the land of the petitioners/claimants was acquired about 8-9

months prior to that of village Thathal, the learned Reference

Court had rightly assessed the market value of the acquired

land @ Rs.700/- per square meter on the basis of award

Ex.PX. The cross-objectors have failed to produce any

cogent and satisfactory evidence on record to prove that the

market value of the land at the time of issuance of

notification under Section 4 of the Act was Rs.900/- per

square meter.

15. The learned Counsel for the appellant next

contended that the Reference Court had erred in awarding

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uniform rate for the entire land by ignoring the classification

and nature of the land. However, this contention of the

learned counsel for the appellant is devoid of any force, as it

is a settled law that where the entire area is similarly

situated, the value of the land under acquisition is to be

assessed as a single unit irrespective of its classification and

nature ignoring the purpose to which it was being put prior to

the acquisition, as well as to the one it is likely to be put

thereafter. In Gulabi & etc. vs. State of H.P., AIR 1998 HP 9,

it has been held as under:

“As a result of this discussion it is held that the market value

of the land on the date of acquisition is Rs.4,000/- per biswa.

In this context it is further held that the value of the land

under acquisition is to be assessed irrespective of its

classification and nature ignoring the purpose to which it was

being put prior to the acquisition, as well as to the one it is

likely to be put thereafter, Consequently, the appellants are

held entitled to compensation at the rate of Rs. 4,000/- per

biswa uniformally for all qualities of land and it is ordered

accordingly. In taking this view, we are guided by the

judgment of the Hon''ble Apex Court reported in Bhagwathula

Samanna and others Vs. Special Tahsildar and Land

Acquisition Officer, Visakhapatnam Municipality, and the

relevant abstracts from the said judgment are as under (paras

7, 11, 13):--

“In awarding compensation in acquisition

proceedings, the Court has necessarily to

determine the market value of the land as on

the date of the relevant Notification. It is

useful to consider the value paid for similar

land at the material time under genuine

transactions. The market value envisages the

price which a willing purchaser may pay

under bona fide transfer to a willing seller.

The land value can differ depending upon the

extent and nature of the land sold. A fully

developed small plot in a important locality

may fetch a higher value than a larger area in

an undeveloped condition and situated in a

remote locality. By comparing the price

13 Neutral Citation No. ( 2026:HHC:361 )

shown in the transactions all variables have

to be taken into consideration. The

transaction in regard to smaller property

cannot, therefore, be taken as a real basis for

fixing the compensation for larger tracts of

property. In fixing the market value of a large

property on the basis of a sale transaction for

smaller property, generally a deduction is

given taking into consideration the expenses

required for development of the larger tract to

make smaller plots within that area in order to

compare with the small plots dealt with under

the sale transaction.

The principle of deduction in the land value

covered by the comparable sale is thus

adopted in order to arrive at the market value

of the acquired land. In applying the principle

it is necessary to consider all relevant facts. It

is not the extent of the area covered under the

acquisition, the only relevant factor. Even in

the vast area there may be land which is fully

developed having all amenities and situated

in an advantageous position. If smaller area

within the large tract is already developed and

suitable for building purposes and have in its

vicinity roads, drainage, electricity,

communications etc., then the principle of

deduction simply for the reason that it is part

of the large tract acquired, may not be

justified.

The proposition that large area of land cannot

possibly fetch a price at the same rate at

which small plots are sold is not absolute

proposition and in given circumstances it

would be permissible to take into account the

price fetched by the small plots of land. If the

larger tract of land because of advantageous

position is capable of being used for the

purpose for which the smaller plots are used

and is also situated in a developed area with

little or no requirement of further

development, the principle of deduction of the

value for purpose of comparison is not

warranted.

In the instant case it has been satisfactorily

shown on the evidence on record that the

land has facilities of road and other amenities

and is adjacent to a developed colony and in

such circumstances it is possible to utilize

the entire area in question as house sites. In

respect of the land acquired for the road, the

same advantages are available and it did not

require any further development. Therefore,

no deduction could be made on ground, that

large tract of land is required.”

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16. In Land Acquisition Officer vs. L Kamalamma

(1998) 2 SCC 385, H.P. Housing Board vs. Ram Lal &

others 2003(3) Sim.L.C. 64, Executive Engineer & Anr.

Vs. Dilla Ram Latest HLJ 2008 (HP) 1007) it was held that

when the entire land acquired belongs to one block,

classification of the same into different categories is not

reasonable. In case acquired land is to be used/developed

as a single unit for a purpose having no relevancy with

quality of land, the classification of land completely loses its

significance.

17. Therefore, in view of the aforesaid authoritative

pronouncements of law, the contention of the learned

Counsel for the appellant that the learned Reference Court

had erred in awarding uniform rate for the entire land by

ignoring the classification and nature of the land deserves to

be rejected, as in the instant case also the land has been

acquired as the single unit for the public purpose, i.e., for

construction of Nangal-Talwara Broad Gauge Railway Line.

18. Hence, in view of what has been discussed

hereinabove, no fault can be found in the impugned award

dated 31.07.2012, passed by the learned Reference Court.

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Therefore, the instant appeal as well as the cross-objections,

being devoid of merits, deserve dismissal and are

accordingly dismissed.

Pending application(s), if any, shall also stand(s)

disposed of.

( Sushil Kukreja )

Judge

1

st

January, 2026

(virender)