Small Gap Between Exemplar Sale Deed And Land Acquisition Notice Leaves No Scope For Granting Cumulative Increase In Market Value: Himachal Pradesh High Court
The High Court held that when the sale exemplar relied upon precedes the notification by only a short period, no cumulative rate of annual increase can be applied while determining market value under the Land Acquisition Act.
Justice Sushil Kukreja, Himachal Pradesh High Court
The Himachal Pradesh High Court has held that where the time gap between the sale deed relied upon and the issuance of the Section 4 notification under the Land Acquisition Act is only a few months, no cumulative rate of increase can be granted while determining the market value of the acquired land.
The Court was hearing two regular first appeals arising out of an award of the Reference Court enhancing compensation for land acquired for the construction of the Kaithlighat–Basha road.
A Bench comprising Justice Sushil Kukreja dismissed the appeals filed by the landowners, holding that “in view of very small gap between the date of issuance of the notification and the date of execution of the sale deed, while assessing the market value of the land, no cumulative rate of increase can be granted.”
Senior Advocate P.S. Goverdhan, assisted by Advocate Rakesh Thakur, appeared for the appellants. Balvinder Singh Ballu, Deputy Advocate General, represented the State.
Background
The appellants’ land, located in the village Shungal, Tehsil Kandaghat, District Solan, had been acquired for the construction of a road. A notification under Section 4 was issued on 15.02.2000. The Land Acquisition Collector assessed compensation under various land classifications and granted statutory benefits.
Dissatisfied landowners sought reference under Section 18 of the Act. The Reference Court assessed the market value at a uniform rate of Rs. 1,40,000 per bigha across categories, relying primarily on the sale deed dated 24.05.1999 executed for land in the same village.
Still aggrieved, the landowners filed the present appeals under Section 54 seeking further enhancement, arguing that the awarded value was inadequate and that cumulative escalation should have been applied.
Court’s Observation
The Himachal Pradesh High Court, upon hearing the matter, reiterated that market value must be assessed with reference to the price prevailing on the date of the Section 4 notification and that comparable sale transactions form the best basis where available.
The Bench reviewed the statutory principles under Section 23 of the Act and cited precedents including Mehta Ravindrarai Ajitrai v. State of Gujarat, Atma Singh v. State of Haryana, UOI v. Pramod Gupta, Land Acquisition Officer v. Nookala Rajamallu, and others, noting that sale exemplars from the same village and close in time to the notification carry the highest evidentiary value.
The Court held that the sale deed pertaining to village Shungal was the appropriate exemplar because it related to the same village where the acquired land was situated, and no other superior evidence was available on record. Sale deeds from neighbouring villages were therefore excluded from consideration.
Regarding the contention that the sale was between close relatives, the Court held that since the appellants themselves relied on the sale deed and no other evidence existed for village Shungal, the transaction could not be discarded on that ground.
Further, relying on decisions such as Gulabi v. State of H.P. and Bhagwathula Samanna v. Special Tahsildar, the Bench affirmed that where land is acquired as a single block for one public purpose, classification into different categories becomes irrelevant and a uniform market value can be awarded. It
On the issue of cumulative increase, the Court applied the principles in ONGC v. Rameshbhai Jivanbhai Patel and emphasised that the base year of the exemplar must be excluded when computing escalation. It then examined the time gap between the exemplar sale and the Section 4 notification.
Since the exemplar remained valid and the time difference was small, the Court held that there was no basis to apply annual escalation to the value reflected.
Conclusion
Holding that the Reference Court had correctly determined the market value and applied settled principles of land acquisition law, the High Court declined to interfere with the awarded compensation.
The appeals were dismissed along with all pending applications.
Cause Title: Bhagwan Dutt & Others v. State of Himachal Pradesh & Others (Neutral Citation: 2025:HHC:37586)
Appearances
Appellants: P.S. Goverdhan, Senior Advocate, with Advocate Rakesh Thakur
Respondents: Balvinder Singh Ballu, Deputy Advocate General