State of Hp and Others Vs Kanshi Ram

( 2026:HHC:30237 )

1

IN THE HIGH COURT OF HIMACHAL PRADESH AT SHIMLA RFA No.382 of 2018 Reserved on: 29.06.2026 Date of decision: 22.07.2026 Date of uploading on website: 22.07.2026

¶4

_________________ State of HP and othe Kanshi Ram	____________________________________ rs ....Appellants Versus …Respondent
_________________ Coram	____________________________________
Hon'ble Mr. Justice 1 Whether approved for rep	Sushil Kukreja, Judge orting?
For the appellants:	Mr. Balwinder Singh Ballu, Deputy Advocate General.
For the respondent:	Mr. Sunil Kumar, Advocate.

¶5

Sushil Kukreja, Judge

¶6

The instant appeal has been preferred under Section 54 of the Land Acquisition Act, 1894 (for short, ‘the Act’), by the appellants/ State against the award dated 31.10.2017, passed by the learned Additional District Judge-II, Shimla, HP (for short ‘the Reference Court’), whereby the respondent (hereinafter referred to as the petitioner) was held entitled to enhanced compensation @ Rs.50,000/- per biswa, irrespective of the classification of the

¶7

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

¶8

2

¶9

( 2026:HHC:30237 )

¶10

acquired land alongwith all statutory benefits, with the prayer that the impugned award may be set aside and the reference petition be ordered to be dismissed.

¶11

The facts of the case, in brief, are that a notification under Section 4 of the Act was issued by the Government of Himachal Pradesh on 25.07.1996, for acquisition of land of the petitioner comprised in Khasra Nos.295/249/75 & 300/247/72, Kita 2, measuring 0-14-02 hectares, situated in Village Kachhi, Tehsil Theog, District Shimla, for the purpose of construction of NarailKayartoo- Dharampur road, which was published in Rajpatra on 24.08.1996 as well as in two newspapers, i.e. ‘ Punjab Kesari’ and ‘Uttam Hindu’ on 12.08.1996. Notification under Sections 6 & 7 of the Act was also published on 06.05.1997 and in compliance thereof, notice under Section 9 of the Act was issued to the right holders. The Land Acquisition Collector had assessed the market value of the land @ Rs.646/- per biswa irrespective of classification and categorization of the land.

¶12

Feeling aggrieved and dissatisfied with the aforesaid award dated 07.03.1998, the petitioner preferred a reference petition under Section 18 of the Land Acquisition Act, with the

¶13

3

¶14

( 2026:HHC:30237 )

¶15

prayer that the reference petition be referred to the learned District Judge, Shimla for grant of just and equitable compensation @ Rs.60,000/- per biswa alongwith all statutory benefits.

¶16

The learned Reference Court, vide the impugned award dated 31.10.2017, allowed the reference petition and the petitioner was held entitled to enhanced compensation at the rate of Rs.50,000/- per biswa, irrespective of the classification of the acquired land, alongwith solatium, additional compensation, interest on the enhanced amount of compensation etc. Hence, the appellants/State preferred the instant appeal with a prayer to setaside the impugned award dated 31.10.2017, passed by the learned Reference Court.

¶17

I have heard learned Deputy Advocate General for the appellants as well learned counsel for the respondent and have also carefully gone through the records.

¶18

Learned Deputy Deputy Advocate contended that the Land Acquisition Collector had assessed the market value of the acquired land on the basis of one year average, however, the learned Reference Court has arrived at an erroneous conclusion about the market value of the land, without any basis. He further

¶19

4

¶20

( 2026:HHC:30237 )

¶21

contended that the learned Reference Court has erred in assessing the flat rate at the rate of Rs.50,000/- per biswa and has caused extra burden upon the State exchequer, besides leading to abnormal enhancement as such the impugned award passed by the learned Reference Court deserves to be set aside.

¶22

Conversely, learned counsel for the respondent supported the impugned award by contending that the learned Reference Court had rightly assessed the market value of the acquired land.

¶23

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

¶24

5

¶25

( 2026:HHC:30237 )

¶26

acquired land should also be taken into consideration. Potentiality means capacity or possibility for changing or developing into state of actuality.

¶27

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: -

¶28

“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.”

¶29

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

¶30

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

¶31

6

¶32

( 2026:HHC:30237 )

¶33

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

¶34

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:

¶35

“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

¶36

7

¶37

( 2026:HHC:30237 )

¶38

succession or otherwise to inflate the market value.

¶39

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.”

¶40

For ascertaining market value of the acquired land, the

¶41

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

¶42

( 2026:HHC:30237 )

¶43

8

¶44

Officer vs. Nookala Rajamallu reported as (2003) 12 SCC 334 ,

¶45

in order to adopt the price reflected in the sale deed, the following conditions are required to be met:-

¶46

"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:

¶47

(i) when sale is within a reasonable time of the date of notification under Section 4(1);

¶48

(ii) it should be a bona fide transaction;

¶49

(iii) it should be of the land acquired or of the land adjacent to the land acquired; and

¶50

(iv) it should possess similar advantages.

¶51

10. It is only when these factors are present, it can merit a consideration as a comparable case."

¶52

In Union of India vs. Pramod Gupta (dead) by LRs

¶53

& others, 2005 (12) SCC 1 , the Hon’ble Supreme Court held that

¶54

the best method, as is well-known, would be the amount which a

¶55

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

¶56

passed in respect of acquisitions of lands made in the same village and/or neighboring villages. Such a judgment/award in the

¶57

absence of any other evidence like deed of sale, report of the expert and other relevant evidence would have only evidentiary

¶58

9

¶59

( 2026:HHC:30237 )

¶60

value. The relevant portion of the aforesaid judgment reads as

¶61

under:

¶62

“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.

¶63

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.”

¶64

In the instant case, the petitioner examined four witnesses. PW-1 Roop Ram is the Kanungo, who placed on record copy of the statement of petitioner Ext. PW1/A. He proved on record copy of notice under Section 9 of the Act. Ext. PW1/B, copy of letters Ext. PW1/C & Ext.PW1/D and copy of award Ext. PW1/E. Petitioner Kanshi Ram, while appearing in the witness-box as PW-2, reiterated the claim as set up in the petition, by stating that his land was acquired for the construction of Narail-KayartooDharampur road and possession of the land was taken in the year 1995. He produced on record copy of notice under Section 9 of the Act Ext. PW2/A, copy of Jamabandi Ext. PW2/B, certificate

¶65

10

¶66

( 2026:HHC:30237 )

¶67

Ext. PW2/C and copy of sale deed Ext. PW2/D. He furthet deposed that at the time of acquisition, the market value of the land was Rs.50,000/- to Rs.60,000/- per biswa. PW-3 Gian Singh deposed that he purchased two biswas of land for Rs.15,000/and placed on record sale deed Ext.PW2/B. PW-4 Raghuvir Singh, Patwari, deposed that he had issued certificate Ext.PW2/C, to the effect that in the year 1995-96, no sale transaction had taken place in Chak Kechhi. He further deposed that he had issued Khaka Dasti Ext. PW4/A, as per which, Kenchi chak was adjacent to Patwar Circles Kalenda, Lafughatti and Annu.

¶68

In support of their case, the respondents examined three witnesses. RW-1 Dalbir Singh is the Kanungo, who deposed that as per record, a sum of Rs.17,443/- was given as compensation to petitioner Kanshi Ram. RW-2 Shiv Vardhan Gupta, Junior Engineer, PWD Section Shilaroo, tendered in evidence his affidavit Ext. RW2/A, wherein he stated that adequate compensation, alongwith all statutory benefits stood already paid to the petitioner. He further stated that the rate of the land under acquisition was rightly awarded to the interest holders of the vicinity @ Rs.646/- per biswa uniformly, irrespective of

¶69

11 ( 2026:HHC:30237 )

¶70

classification of the land. RW-3 M.L. Sharma, who remained posted as Junior Engineer from the year 1998 to 2008, deposed that the petitioner was adequately compensated for the acquired land as per the rates approved by the District Collector, Shimla.

¶71

The onus is upon the petitioner 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. The petitioner is expected to lead cogent and satisfactory evidence in support of his claim. In

¶72

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:

¶73

“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

¶74

12

¶75

( 2026:HHC:30237 )

¶76

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)

¶77

“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 was discharged, the burden shifted to the State to justify the award.”

¶78

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.”

¶79

In the instant case, the perusal of the impugned award

¶80

shows that the learned Reference Court has assessed the market value of the land under acquisition @ Rs. 50,000/- per biswa. However, in the opinion of this Court, in the absence of any cogent and satisfactory evidence on record, the market value of the land under acquisition assessed by the learned Reference Court is much on the higher side.

¶81

Now, the question which arises for consideration before

¶82

this court is as to how the market value of the land in the present case is to be assessed in view of the evidence available on record.

¶83

13 ( 2026:HHC:30237 )

¶84

Admittedly no sale transaction had taken place in Chak Kechhi in

¶85

the year 1995-96. The District Collector, Shimla had conveyed

¶86

one year average for this village, i.e. Chak Kachhi as under:-

¶87

	*Classification of land*	*Rate per biswa*
1.	Bakhal Abbal	Rs.13890.80
2.	Bakhal Doyam	Rs.12224.00
3.	Bagich Bakhal Doyam	Rs.12224.00
4.	Krali Awal	Rs.8612.00
5.	Bagicha Krali Awal Jaded	Rs.8612.40
6.	Ghasni/Bani	Rs.833.40
7.	Gair Mumkin and Bani	Rs.833.40

¶88

However, the Land Acquisition Collector had assessed the market value of the land under acquisition @ Rs.646/- per biswa uniformly, irrespective of the classification of the land.

¶89

It is also 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:-

¶90

“11. 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.

¶91

14

¶92

( 2026:HHC:30237 )

¶93

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):--

¶94

“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 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.

¶95

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 de- veloped having all amenities and situated in an ad-

¶96

15

¶97

( 2026:HHC:30237 )

¶98

vantageous 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.

¶99

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.

¶100

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 re- quired.”

¶101

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

¶102

16

¶103

( 2026:HHC:30237 )

¶104

relevancy with quality of land, the classification of land completely loses its significance.

¶105

A co-ordinate bench of this Court in Dinesh Chhetry v. State of H.P. and others, RFA No.156 of 2003 , and connected matters, decided on 20.8.2007, has uniformly awarded the highest amount of compensation determined by the Collector, with regard to all categories of acquired land. In fact, the Court observed as under:

¶106

“The learned Advocate General submitted that keeping in view the ratio of law laid down by this Court in LAC, Solan and another vs. Bhoop Ram, reported in 1997 (2) Sim.L.C. 229, the highest amount of compensation awarded by the Collector should be uniformly applied to all the landowners whose land stand acquired in terms of the awards in question and are subject matter of the present appeals regardless of classification of the land as the purpose of acquisition is same and similar. Therefore, according to him all the claimants in the present appeal whose land has been acquired for the construction of Kumarhatti – Oachghat road should be awarded Rs.1,33,333.20 or say Rs.1,33,330.00 per bigha. His submission is based on the fact that there is enough evidence on record to show that the acquired land in different villages are having the same advantage and potentiality of increase in value due to its location in and around the areas where the land is put to commercial use.

¶107

In Bhoop Ram (supra), this Court has held as under:-

¶108

“The Land Acquisition Collector and the District Judge have determined the market value at a lesser rate for the acquired land, which was classified as Bangar Doem, Bangar Kadim, Ghasni, Charand and Gair Mumkin but in our view the classification of acquired land for the

¶109

( 2026:HHC:30237 )

¶110

agricultural purpose is not relevant looking to the common purpose of acquisition for the construction of road and uniform rate of Rs.40 per sq. metre or Rs.30,000/- per Bigha should be awarded irrespective of the classification of the acquired land.”

¶111

The aforesaid judgment has been consistently followed by the Court and in RFA No.2 of 1995, titled Phul Singh vs. LAC, this Court has held that if the and has potential for setting up of industry, the whole of it, irrespective of the kind and class of the land can legitimately presumed to be same market value.

¶112

In my view, the submission of the learned Advocate General is extremely fair and totally in consonance with the principles of law laid down by the Apex Court.

¶113

Perusal of the some of the award shows that the Court below has already held that even if one category of the land is better than the other category for the agricultural purposes, however, in view of the probable further use of the land for the public purpose, the land of different categories would be deemed to be having similar potentiality and as such similar rate is required to be awarded uniformly irrespective of the category of land. In these cases, I am in agreement with the view taken by the Court below and do not find any infirmity in the decision so arrived. The amount offered by the Collector for the best value of the land i.e. Rs.1,33,330/-, therefore, is fair. Needless to add that I have not gone into the various exhibited sale deeds for determining the just, fair and reasonable market value of the acquired land in view of the submission made by the learned counsel for the parties at the Bar.”

¶114

In the case on hand, as discussed above, no sale transaction had taken place in Chak Kechhi in the year 1995-96.

¶115

Admittedly the land as acquired was being cultivated prior to its conversion to gair mumkin sadak . Further, it is also evident from

¶116

18

¶117

( 2026:HHC:30237 )

¶118

the revenue record that apart from cultivated land, the said land was also having apple orchard which was also acquired by the respondents for the construction of the said road. It has come in the statement of PW-4 Sh.Raghuvir Singh, Patwari Patwar Circle Lafughati that the acquired land is merely 500-600 meters away from the National Highway. The nearby acquired land is having school and dispensary. The extension of Theog bazar is also towards the land of the petitioner. On the oral evidence of the petitioner, it becomes clear that the acquired land is just at a distance of 500-600 meters away from national highway which has developed areas having government school and dispensary and having great commercial value. The said area is also having great potential for agriculture and horticulture. In such circumstances, it becomes clear that acquired land was having greater market value than the one, as determined by the Land Acquisition Collector at the rate of Rs.646/ per biswa. As per the rates approved by the District Collector, Shimla, the highest rate of the land acquired at the time of issuance of notification under Section 4 of the Act was Rs.13,890.80 per biswa.

¶119

The perusal of the record reveals that the land has

¶120

19 ( 2026:HHC:30237 )

¶121

been acquired as the single unit for the public purpose, i.e., for the construction of Narail-Kayartoo-Dharampur Road. Therefore, in view of the aforesaid decision rendered by a co-ordinate bench of this court, in Dinesh Chhetry’s case (supra) highest amount assessed by the District Collector in the sum of Rs.13,890.80/per biswa for the best category of land ought to have been granted to the petitioner by the Land Acquisition Collector irrespective of its classification. Hence, the market value of the land is re-determined as Rs.13,890.80 per biswa, irrespective of its classification.

¶122

The learned counsel for the respondent-petitioner next contended that the possession of the land was taken by the appellants-State in January, 1995, but no additional interest, as damages for the period from the date of dispossession till the date of issuance of notification under Section 4 of the Act has been granted. According to him, respondent need not file separate cross-objections, as Order XLI, Rule 33, CPC gives ample power to this Court to do complete justice between the parties .

¶123

Before examining the entitlement of the petitioner to the grant of compensation for the period w.e.f. taking-over of the possession of the land till the issuance of the notification under

¶124

20

¶125

( 2026:HHC:30237 )

¶126

Section 4 of the Act, the question, which arises for consideration before this Court in the instant case, is as to whether the exercise of the discretionary power given under Order XLI, Rule 33 of CPC can be invoked and exercised by this court for granting damages to the petitioner for the period with effect from the date of dispossession till the date of issuance of notification under Section 4 of the Act .

¶127

Order XLI, Rule 33 of CPC reads as under:-

¶128

"O. XLI, R.33 - Power of Court of Appeal- The Appellate Court shall have power to pass any decree and make any order which ought to have been passed or made and to pass or make such further or other decree or order as the case may require, and this power may be exercised by the Court notwithstanding that the appeal is as to part only of the decree and may be exercised in favour of all or any of the respondents or parties, although such respondents or parties may not have filed any appeal or objection and may, where there have been decrees in cross suits or where two or more decrees are, passed in one suit, be exercised in respect of all or any of the decrees, although an appeal may not have been filed against such decrees:

¶129

Provided that the Appellate Court shall not make any order under Section 35A, in pursuance of any objection on which the Court from whose decree the appeal is preferred has omitted or refused to make such order."

¶130

The scope of the above provision has been examined by

¶131

the Hon’ble Supreme Court in a catena of judgments. In Nirmala Bala Ghose and another Vs. Balai Chand Ghose, AIR 1965 SC

¶132

21 ( 2026:HHC:30237 )

¶133

1874, the Hon’ble Supreme Court observed that the aforesaid Rule is primarily intended to confer power upon the Appellate Court to do justice by granting relief to a party who has not appealed, when refusing to do so, would result in making inconsistent, contradictory or unworkable orders. Relevant paragraph thereof is extracted below:-

¶134

"23.....When a party allows a decree of the Court of First Instance to become final, by not appealing against the decree, it would not be open to another party to the litigation, whose rights are otherwise not affected by the decree, to invoke the powers of the appellate Court under Order 41 Rule 33, to pass a decree in favour of the party not appealing so as to give the latter a benefit which he has not claimed. Order 41 Rule 33 is primarily intended to confer power upon the appellate court to do justice by granting relief to a party who has not appealed, when refusing to do so, would result in making inconsistent, contradictory or unworkable orders. We do not think that power under Order 41 Rule 33 of the Civil Procedure Code can be exercised in this case in favour of the deities."

¶135

The issue was subsequently considered by the Hon'ble

¶136

Supreme Court in K. Muthuswami Gounder v. N. Palaniappa

¶137

Gounder, (1998) 7 SCC 327 . The relevant portion of the judgment is extracted below:-

¶138

"12. Order 41 Rule 33 enables the appellate court to pass any decree or order which ought to have been made and to make such further order or decree as the case may be in favour of all or any of the parties even though (1) the appeal is as to part only of the decree; and (ii) such party or parties may not have filed an appeal. The necessary condition for exercising the power under

¶139

22

¶140

( 2026:HHC:30237 )

¶141

the Rule is that the parties to the proceeding are before the Court and the question raised properly arises (sic out of) one of the judgments of the lower Court and in that event, the appellate Court could consider any objection to any part of the order or decree of the Court and set it right. We are fortified in this view by the decision of this Court in Mahant Dhangir v. Madan Mohan, 1987 Supp. SCC 528. No hard and fast rule can be laid down as to the circumstances under which the power can be exercised under Order 41, Rule 33, Civil Procedure Code and each case must depend upon its own facts…… .”

¶142

28. In Banarsi and others v. Ram Phal, (2003) 9 SCC

¶143

606 , wherein the Hon’ble Supreme Court held as under:-

¶144

“14.The learned counsel for the respondent forcefully argued that even in the absence of appeal preferred by the plaintiff or cross objection taken by the plaintiff-respondent the Appellate Court was not powerless to grant the decree which it has done in exercise of the power conferred by Rule 33 of Order 41 of the CPC…………

¶145

15. Rule 4 seeks to achieve one of the several objects sought to be achieved by Rule 33, that is, avoiding a situation of conflicting decrees coming into existence in the same suit. The abovesaid provisions confer power of widest amplitude on the appellate court so as to do complete justice between the parties and such power is unfettered by consideration of facts like what is the subject matter of appeal, who has filed the appeal and whether the appeal is being dismissed, allowed or disposed of by modifying the judgment appealed against. While dismissing an appeal and though confirming the impugned decree, the appellate court may still direct passing of such decree or making of such order which ought to have been passed or made by the court below in accordance with the findings of fact and law arrived at by the court below and which it would have done had it been conscious of the error committed by it and noticed by the Appellate Court. While allowing the appeal or otherwise interfering with the decree or order appealed against, the appellate court may pass or make such further or other, decree or order, as the case would require being done, consistently with the findings arrived at by the appellate court. The object sought to be achieved by conferment of such power on the

¶146

23

¶147

( 2026:HHC:30237 )

¶148

appellate court is to avoid inconsistency, inequity, inequality in reliefs granted to similarly placed parties and unworkable decree or order coming into existence. The overriding consideration is achieving the ends of justice. Wider the power, higher the need for caution and care while exercising the power. Usually the power under Rule 33 is exercised when the portion of the decree appealed against or the portion of the decree held liable to be set aside or interfered by the appellate court is so inseparably connected with the portion not appealed against or left untouched that for the reason of the latter portion being left untouched either injustice would result or inconsistent decrees would follow. The power is subject to at least three limitations: firstly, the power cannot be exercised to the prejudice or disadvantage of a person not a party before the Court; secondly, a claim given up or lost cannot be revived; and thirdly, such part of the decree which essentially ought to have been appealed against or objected to by a party and which that party has permitted to achieve a finality cannot be reversed to the advantage of such party. A case where there are two reliefs prayed for and one is refused while the other one is granted and the former is not inseparably connected with or necessarily depending on the other, in an appeal against the latter, the former relief cannot be granted in favour of the respondent by the appellate court exercising power under Rule 33 of Order 41.”

¶149

In Pralhad and others Vs. State Of Maharashtra and another, reported in 2010 (10) SCC 458, the Hon’ble

¶150

Supreme Court held as under :-

¶151

“17. Now, the only question which remains is whether the landowners, without filing an appeal before the High Court from the order of the Reference Court, are entitled to the aforesaid benefit on the basis of their application under Order 41 Rule 33 of CPC.

¶152

18. The provision of Order 41, Rule 33 of CPC is clearly an enabling provision, whereby the Appellate Court is empowered to pass any decree or make any order which ought to have been passed or made, and to pass or make such further or other decree or order as the case may require. Therefore, the power is very wide and in this

¶153

24

¶154

( 2026:HHC:30237 )

¶155

enabling provision, the crucial words are that the Appellate Court is empowered to pass any Order which ought to have been made as the case may require. The expression Order ought to have been made' would obviously mean an Order which justice of the case requires to be made. This is made clear from the expression used in the said Rule by saying the court may pass such further or other Order as the case may require.' This expression `case' would mean the justice of the case. Of course, this power cannot be exercised ignoring a legal interdict or a prohibition clamped by law.

¶156

19. In fact, the ambit of this provision has come up for consideration in several decisions of this Court. Commenting on this power, Mulla (CPC, 15th Edition, pg. 2647) observed that this Rule is modelled on Order 59, Rule 10(4) of the Supreme Court of Judicature of England, and Mulla further opined that the purpose of this rule is to do complete justice between the parties.

¶157

20. In Banarsi vs. Ramphal, AIR 2004 SC 1989, this Court construing the provisions of Order 41 Rule 33 of CPC held that this provision confers powers of the widest amplitude on the appellate court so as to do complete justice between the parties. This Court further held that such power is unfettered by considerations as to what is the subject matter of appeal or who has filed the appeal or whether the appeal is being dismissed, allowed or disposed of while modifying the judgments appealed against. The learned Judges held that one of the objects in conferring such power is to avoid inconsistency, inequity and inequality in granting reliefs and the overriding consideration is achieving the ends of justice. The learned Judges also held that the power can be exercised subject to three limitations: firstly, this power cannot be exercised to the prejudice of a person who is not a party before the Court; secondly, this power cannot be exercised in favour of a claim which has been given up or lost; and thirdly, the power cannot be exercised when such part of the decree which has been permitted to become final by a party is reversed to the advantage of that party. (See para 15 at pg. 1997). It has also been held by this Court in Samundra Devi and others vs. Narendra Kaur and others, (2008) 9 SCC 100 (para 21) that this power under Order 41, Rule 33 of CPC cannot be exercised ignoring a legal interdict.

¶158

21. In the instant case, the right of the landowner to receive the benefit under section 23(1A) of the Principal

¶159

25 ( 2026:HHC:30237 )

¶160

Act is legally permissible in view of the majority decision in Paripoornan (supra). Therefore, the law declared by this Court in Paripoornan (supra) is binding on the High Court under Article 141 of the Constitution and High Court is bound to follow the same, especially when an application has been made by the landowner under Order 41 Rule 33 of CPC.”

¶161

Thus, a conspectus of the above pronouncements

¶162

establishes that Order XLI, Rule 33 of CPC confers power of widest amplitude on the Appellate Court so as to do complete justice between the parties. but however, discretion to use such power is to be exercised judiciously with care and caution. The underlying object of the provisions of Order XLI, Rule 33 would clearly go to show that the Parliament has enacted such a provision with a view that the court could rise to the occasion and render substantial justice between the parties even in absence of cross-objections or appeal. Therefore, in absence of the crossobjections filed by the petitioner, this court can invoke the provisions of Order 41, Rule 33 CPC to grant compensation to the petitioner for the period w.e.f. taking-over of the possession of the land till the issuance of the notification under Section 4 of the Act.

¶163

Now, the question which arises for consideration is as to whether the petitioner is entitled to additional interest, as

¶164

26

¶165

( 2026:HHC:30237 )

¶166

damages for the period with effect from the taking-over of the possession of the land till the issuance of the notification under Section 4 of the Act. In the reference petition filed under Section 18 of the Act, the petitioner had averred that the Land Acquisition Collector had not cared to award the compensation from the date of possession, i.e. January, 1995, as possession had been taken on the given date by the respondents on the spot from the petitioner, whereas the notification under Section 4 of the Act was issued on 25.07.1996. In the reply, the respondents have not specifically denied the averments made by the petitioner in this respect. Perusal of the record reveals that petitioner Kanshi Ram, while appearing in the witness-box as PW-2, has categorically deposed that the possession of the land was taken in the year 1995, for the constructions of Kayartoo-Dharampur-Narail road. However, no cross-examination was conducted on behalf of the State on this aspect. Therefore, in view of the stand taken by the appellant/State, it has become clear that the possession of the land was taken in the year 1995. Admittedly the notification under Section 4 of the Act was issued on 25.07.1996 and published in State Rajpatra on 24.08.1996.

¶167

27 ( 2026:HHC:30237 )

¶168

This issue of granting use and occupation charges for the period w.e.f. taking-over of the possession of the land till the issuance the notification under Section 4 of the Act is no longer res integra. In Madishetti Bala Ramul (dead) by LRs vs. Land Acquisition Officer (2007) 9 SCC 650 Hon’ble Supreme Court allowed the interest @ 15% per annum on the market value assessed by the Reference Court on the ground that the land was utilized for public purpose without acquisition and payment of compensation for considerable long period. The relevant extract from the aforesaid judgment is quoted for reference as under:

¶169

“9. The short question which, therefore, arises for consideration is as to whether Section 25 of the Act will have any application in the fact of the present case. Two notifications were issued separately. The second notification was issued as the first notification did not survive. Valuation of the market rate for the acquired land, thus, was required to be determined on the basis of the notification dated 23.12.1991. The earlier notification lost its force. If the notification issued on 16.03.1979 is taken into consideration for all purposes, the subsequent award awarding market value of the land @ Rs. 65/per square yard cannot be sustained. As the said market value has been determined having regard to the notification issued on 23.12.1991, possession taken over by Respondent in respect of 3 acres 5 guntas of land, pursuant to the said notification dated 16.03.1979 was in the eye of law, therefore, illegal. The High Court evidently directed grant of additional market value @ 12% per annum on the enhanced market value from the date of the publication of the notification dated 23.12.1991 as

¶170

( 2026:HHC:30237 )

¶171

28

¶172

also interest thereupon from the said date instead and place of 18.05.1979. We generally agree therewith.

¶173

15. The Land Acquisition Officer took possession of the land on the basis of a notification which did not survive. Respondent could not have continued to hold possession of land despite abatement of the proceeding under the 1984 Act. It was directed to be decided by the High Court upon a reference made by the Collector in terms of Section 30 of the Act. The State, therefore, itself realized that its stand in regard to the ownership of 3 acres and 5 guntas of land was not correct. It, therefore, had to issue another notification having regard to the provisions contained in the Land Acquisition (Amendment) Act, 1984. Whereas the High Court may be correct in interpreting the question of law in view of the decision of this Court, but the same would not mean that Appellants would not get anything for being remaining out of possession from 1979 to 1991.

¶174

20. In the peculiar facts and circumstances of the case, although the proper course for us would have to remand the matter back to the Collector to determine the amount of compensation to which the Appellants would be entitled for being remained out of possession since 1979, we are of the opinion that the interest of justice would be met if this appeal is disposed of with a direction that additional interest @ 15% per annum on the amount awarded in terms of award dated 02.01.1999 for the period 16.03.1979 till 22.12.1991, should be granted, which, in our opinion, would meet the ends of justice.”

¶175

33. In Tahera Khotoon & others vs. Revenue Divisional

¶176

Officer/Land Acquisition Officer & others, (2014) 13 SCC 613,

¶177

the Hon’ble Supreme Court has held as under:

¶178

“14. In the instant case, it is not in dispute nor can it be disputed by either side that the property in dispute was in possession of the Warangal Municipal Committee. In fact the said Municipal Committee had developed the aforesaid land into a part. Since

¶179

( 2026:HHC:30237 )

¶180

29

¶181

there was a dispute among the owners of the land with the Municipal Committee, the Municipal Committee had sought the assistance of the State Government to acquire the property and to hand over the same to the Municipal Committee for its use and development.

¶182

15. It is also not in dispute that the Municipal Committee was in possession of the aforesaid property right from 1-1-1938 till the Notification was issued by the State Government on 10-1-1996. Keeping in view the observations made by this Court in Madeshetti Bala Ramul (2007 (9) SCC 650), we direct the State Government to pay rents/damages at the rate of 15% on the compensation awarded from the date the landowners were dispossessed, namely, from 1-11938 till the date of issuance of the preliminary Notification i.e. 10-1-1996. The calculations shall be made by the State Government as expeditiously as possible and disburse the aforesaid amount to the appellants as early as possible, at any rate, within three months from the date of receipt of copy of this order.”

¶183

In Balwan Singh & others vs. Land Acquisition

¶184

Collector & another, (2016) 13 SCC 412, the same view was reiterated by the Hon’ble Supreme Court and a direction was issued to the acquiring authority to award additional interest by way of damages from the date when the respondents-claimants were dispossessed till the date of notification under Section 4 of

¶185

the Act. Relevant paras of Balwan Singh’s judgment (supra) for

¶186

the sake of ready reference are extracted hereunder:

¶187

“1. The short issue arising for consideration in this appeal is whether the appellants are entitled to interest for the

¶188

30

¶189

( 2026:HHC:30237 )

¶190

period from the date of dispossession to the date of Notification under Section 4(1) of the Land Acquisition Act, 1894 (For short 'the Act'). That issue is no more res integra. In R.L. Jain Vs. DDA (2004) 4 SCC 79 at para 18, this Court has taken the view that the land owner is not entitled to interest under the Act. However, it has been clarified that the land owner will be entitled to get rent or damages for use and occupation for the period the Government retained possession of the property. 2. Noticing the above position, this Court in Madishetti Bala Ramul Vs. Land Acquisition Officer (2007) 9 SCC 650, took the view that it may not be proper to remand the matter to the Collector to determine the amount of compensation to which the appellants therein would be entitled for the period during which they remained out of possession and hence, in the interest of justice, this Court directed that additional interest at the rate of 15% per annum on the amount awarded by the Land Acquisition Collector, shall be paid for the period between the date of dispossession and the date of Notification under Section 4(1) of the Act.

¶191

3. The said view was followed by this Court in Tahera Khatoon Vs. Land Acquisition Officer (2014) 13 SCC 613.

¶192

4. Following the above view taken by this Court, these appeals are disposed of directing the respondents to award additional interest by way of damages, at the rate of 15% per annum for the period between 1.7.1984, the date when the appellants were dispossessed till 2.9.1993, the date of Notification under Section 4(1) of the Act. Needless to say, that this compensation will be on the basis of land value fixed by the Reference Court. The amount as above, shall be calculated and deposited before the Reference Court within a period of three months from today.”

¶193

In the case on hand, as observed earlier, the

¶194

possession of the land in question was taken in the year 1995, whereas, the notification qua acquisition under Section 4 of the Act was issued on 25.07.1996. Hence, in view of the aforesaid

¶195

31 ( 2026:HHC:30237 )

¶196

authoritative pronouncements of the law laid down by the Hon’ble Supreme Court on the subject, this Court is of the view that since the possession of the land in question was taken in January, 1995, whereas, the notification qua the acquisition under Section 4 of the Act was issued on 25.07.1996, therefore, the petitioner is entitled to additional interest, as damages, @ 15% per annum for the period from January, 1995 (the date when the petitioner was actually dispossessed from the land in question) till 25.07.1996 (the date of issuance of notification of acquisition of the land in question, under Section 4 of the Act).

¶197

No other point was urged before me.

¶198

Hence, in view of what has been discussed hereinabove, the instant appeal is partly allowed and the impugned award dated 31.10.2017, passed by the learned Reference Court, is modified to the extent that the market value of the land is assessed at Rs.13,890.80 per biswa, irrespective of its classification. The petitioner is also entitled to interest at the rate of 12% per annum on the market value from the date of notification under Section 4 of the Act till the date of award. In addition to the market value, the petitioner is held entitled to get solatium or

¶199

32 ( 2026:HHC:30237 )

¶200

compulsory acquisition charges at the rate of 30% on such market value as provided under Section 23(2) of the Act and interest at the rate of 9% per annum from the date of notification under Section 4 of the Act upto one year and thereafter at the rate of 15% per annum till payment is made, as provided under Section 28 of the Act. The petitioner is further entitled to additional interest, as damages, at the rate of 15% per annum for the period from January, 1995 (the date when the petitioner was actually dispossessed from the land in question) till 25.07.1996 (the date of issuance of notification of acquisition of the land in question, under Section 4 of the Act).

¶201

The appeal stands disposed of, so also the pending application(s), if any.

¶202

(Sushil Kukreja) July 22, 2026 Judge (V.Himalvi)

State of Hp and Others v. Kanshi Ram

Case brief

What is this about?

State of Hp and Others v. Kanshi Ram

Case brief

What is this about?

What did the court decide?

Why is it important?

What the court decided

Issues for consideration

Cases cited

Statutes considered

Procedural history

Parties & counsel

Coram

Case details

Similar cases

Santokh Singh Vs Ashwani Kumar Sharma

Shriram Gic Vs Rasina and Ors.

National Insurance Company Vs Savina

Land Acquisition Collector Hppwd Mandi and Anr. Vs Satya Devi

Land Acquisition Collector Hppwd Mandi and Anr. Vs Himi Devi

State of Hp and Others Vs Yoginder Chand