JUDGMENT Sanjay Karol, J. Both the claimants and the beneficiary are aggrieved of the award dated 22.9.2008 passed by the District Judge, Shimla, H.P. in Land Reference petitions filed by the claimants. The land reference petitions were consolidated by the District Judge in terms of its order dated 14.6.2006 and the evidence recorded in Land Reference Petition No.16-S/4 of 2008/2006 titled as Deepak Rohal & Anr. vs. State of H.P. & Ors. was directed to be read as evidence in all the connected files and the parties were directed to lead evidence in the said reference petition. 2. The common impugned award was passed by the Court below, hence, the present appeals filed by the H.P. Housing Board (beneficiary) as also the claimants have been heard and decided together. 3. The details of the land reference petitions and the appeals arising there from is as under:- 4. Heard learned counsel for the parties and perused the record. Land Ref. Nos. Name of Parties RFAs No. 16-S/4 of 2008/2006 Deepak Rohal v. State of H.P. & Ors. 372/2008 &373/2008 17-S/4 of 2008/2006 Med Ram v. L.A.C. & Anr. 374/2008 & 23/2009 18-S/4 of 2008/2006 Santosh v. L.A.C. & Anr. 375/2008 & 24/2009 19-S/4 of 2008/2006 Shiv Ram & Anr. v. L.A.C. & Anr. 376/2008 3 20-S/4 of 2008/2006 Roshan Lal & Anr. v. L.A.C. & Anr. 377/2008 & 25/2009 21-S/4 of 2008/2006 Mathri @ Dwarkoo v. L.A.C. & Anr. 378/2008 & 26/2009 From the award passed by the Land Acquisition Collector (SDO (C), Shimla (Rural), Distt. Shimla,H.P. in Case No. 1/98, dated 26.2.2001, it is evident that for public purpose, namely, ‘construction of residential Colony’, on 10.3.1998, the State Government issued Notification under Section 4 of the Land Acquisition Act, 1894 (hereinafter referred to as ’the Act’), which was published in the Official Gazette on 21.3.1998. Initially, the Government had intended to acquire 81.7 bighas of land situated in Mahal Pateog, Tehsil & Distt. Shimla, but, however, in terms of the Notification dated 23.7.1999, 42.8 bighas of land was de-notified and only 38.19 bighas of land was acquired for the said public purpose. In terms of the award, the extent and the classification of the acquired land is as under:- 1.. Bakhal Awal: 12-13 bighas 2. Bakhal Doem: 03-05 bighas 3. Ghasani: 20-4 bighas 4. Banjar Kadim: 0-6 bighas 5. Gair Mumkin: 2-11 bighas” 5. In terms of the award, the extent and the classification of the acquired land is as under:- 1.. Bakhal Awal: 12-13 bighas 2. Bakhal Doem: 03-05 bighas 3. Ghasani: 20-4 bighas 4. Banjar Kadim: 0-6 bighas 5. Gair Mumkin: 2-11 bighas” 5. The Collector Land Acquisition, while passing the award observed that the land owners did not produce any Sale Deed for putting up their claim regarding the market value of the land, hence, the one year average price, based on different land transactions which had taken place at the time of publication of the Notification under Section 4 of the Act, as obtained from the Revenue Field Agency, was taken into consideration and made basis for determining the market value. Consequently, on the basis of one year average between 1.4.1997 to 31.3.1998, the market value of the land was determined as under:- 1. Bakhal Awal : 8,87,264.00 per bigha 2. Bakhal Doem : 5,99,503.00 3. Ghasani /Banjar Kadim/ : 1,99,834.00 Gair Mumkin 6. Aggrieved of the same, the claimants filed Land Reference Petitions claiming compensation of Rs.10 lacs per bigha, considering that the instant acquired land is situated in an area which is commonly known as New Shimla, a new and separate township set up by the State where all developmental activities had already taken place. Prior to the acquisition of the land large number of housing complexes had been constructed by the Shimla Development Authority and thereafter by its successor H.P. Housing Board. At the time of acquisition of the land, Mauza Pateog, where the acquired land is situate, had all facilities of road, telephone, electricity, water supply, Government offices, Banks public offices. These factors were not taken into consideration by the Collector while passing the award. Further, acquisition of part of the land, pursuant to the de-notification has resulted into severance of property, thus, diminishing and reducing its value apart from causing extra burden in maintaining the same. 7. While opposing further enhancement, the respondent-state in its reply admitted the existence of the infrastructure created by the Himachal Pradesh Housing Board in village Pateog prior to the initiation of the acquisition proceedings. 8. 7. While opposing further enhancement, the respondent-state in its reply admitted the existence of the infrastructure created by the Himachal Pradesh Housing Board in village Pateog prior to the initiation of the acquisition proceedings. 8. Original respondent No.3, H.P. Housing Board, pursuant to an enactment having been reconstituted and renamed as Himachal Pradesh Housing and Urban Development Authority (HIMUDA), by filing its reply inter alia denying that neither the market value of the land in village Pateog to be Rs.10 lacs per bigha or that complete developmental activity in Mauza Pateog, had taken place prior to the initiation of the acquisition proceedings. In the judgment HIMUDA be inter changeably read as Housing Board also. 9. The Court below, based on the pleadings of the parties, framed the following issues:- 1. Whether petitioners are entitled to enhanced compensation as alleged, if so to what extent? ….OPP 2. Whether respondent No.2 is not liable to pay interest as alleged in preliminary objection No.2? ….OPR-2. 3. Relief. 10. In support of their claim, the claimants examined 5 witnesses, namely, Mrs. Amrita Bhardwaj (PW-1), Shri Deepak Rohal (PW-2), Shri Krishan Gopal (PW-3), Shri Med Ram (PW-4) & Shri Bhagat Ram (PW-5) and proved on record the Lease Deeds executed by the respondent-HIMUDA in favour of the allottees to whom the plots in a fully developed Colony set up in Mauza Pateog itself were allotted. The details thereof are as under:- 11. In rebuttal, the respondents examined Shri Rajinder Singh (RW-1), Shri Kesar Singh (RW-2), Shri Bimal (RW-3), Shri Des Raj Gandhi (RW-4), Mrs. Kanta Sharma (RW-5), Shri Durga Dutt Sharma (RW-6) and Shri Kamal Jeet (RW-7) and produced on record the letter approving rates by the State Government, the one year average of Mauza Pateog for the period 1.4.97 upto Ext.PW-1/A Lease Deed dated 15.5.1997 196.18 Sq.Mtrs. Rs.2010/-Mtrs. per Sq. Ext.PW-1/B Lease Deed dated 15.5.1997 140.38 Sq.Mtrs. Rs.3638/-Mtrs. per Sq. Ext.PW-1/C Lease Deed dated 15.5.1997 257.12 Sq.Mtrs. Rs.1869/-Mtrs. per Sq. Ext.PW-1/D Lease Deed dated 15.5.1997 265.76 Sq.Mtrs. Rs.1869/-Mtrs. per Sq. Ext.PW-1/E Lease Deed dated 15.5.1997 160.67 Sq.Mtrs. Rs.2010/-Mtrs. per Sq. 31.3.98 and the Sale Deeds, details of which are as under:- RW-1/A Rates of Approval RW-1/B One year average 1.4.97 to 31.3.98 RW-2/A Sale Deed 24.10.97 Pateog 0-4 biswas 42000/- 279.03 Sq.Mtrs. per RW-2/B Sale Deed 5.5.97 Pateog 0-4 biswas 42000/- 279.03 Sq.Mtrs. per RW-2/C Sale Deed 8.4.97 Pateog 0-4 biswas 35000/- 232.52 Sq.Mtrs. Rs.2010/-Mtrs. per Sq. 31.3.98 and the Sale Deeds, details of which are as under:- RW-1/A Rates of Approval RW-1/B One year average 1.4.97 to 31.3.98 RW-2/A Sale Deed 24.10.97 Pateog 0-4 biswas 42000/- 279.03 Sq.Mtrs. per RW-2/B Sale Deed 5.5.97 Pateog 0-4 biswas 42000/- 279.03 Sq.Mtrs. per RW-2/C Sale Deed 8.4.97 Pateog 0-4 biswas 35000/- 232.52 Sq.Mtrs. per RW-2/D Sale Deed 24.11.97 Pateog 0-4 biswas 45000/- 298.96 Sq.Mtrs. per RW-2/E Sale Deed 13.6.97 Pateog 0-4 biswas 44000/- 292.31 Sq.Mtrs. per RW-2/F Sale Deed 28.6.97 Pateog 0-4 biswas 36000/- 239.17 Sq.Mtrs. per RW-2/G Sale Deed 30.3.98 Pateog 0-4 biswas 40220/- 267.20 Sq.Mtrs. per Ext.PX-1 Award Dated Notification 287.70 per 29.9.2003 u/s 4 dt. Sq.Mtrs. 28.7.2001 12. Appreciating the material on record, the Court below rejected the claim for payment of compensation with regard to severance of property for the reason that no evidence with respect thereto was led by the claimants. 13. However, accepting the prayer for enhancement of the market rate, the Court below in principal accepted Lease Deeds Ext.PW-1/A to Ext.PW-1/E to be made basis for determining the market value. In terms thereof, the market value worked out to be Rs.2076 per sq. mtr. but however, considering the fact, as proved on record by the claimants’ witnesses, that the acquired land was required to be developed and only 45% of the same could be used for construction, deducted 2/3rd from the same and determined the market value of the acquired land to be Rs.700/- per Sq. Mtr. The Sale Deeds produced on record by HIMUDA were not considered for want of any material to justify the comparability of the exemplar land with that of the acquired land. Accordingly, the Court below enhanced the market value of the acquired land to be Rs.700/-per Sq.Mtr. irrespective of its nature, except for the land for which higher market value had been assessed by the Land Acquisition Collector. As noticed above, the Collector had awarded the amount lower than the enhanced amount only in respect of Ghasani/Banjar Kadeem/Gair Mumkin categories of land. 14. From the material on record (Ext.RW-3/A) as also the statements of the witnesses, it is evident that on the instant acquired land, the State had decided to establish a Housing Colony which was to be Part-II of the already established Phase-III of the Housing Colony set up by HIMUDA in the Satellite Township by the name of New Shimla. 14. From the material on record (Ext.RW-3/A) as also the statements of the witnesses, it is evident that on the instant acquired land, the State had decided to establish a Housing Colony which was to be Part-II of the already established Phase-III of the Housing Colony set up by HIMUDA in the Satellite Township by the name of New Shimla. Phase-III is adjacent to the road coming from the famous Bishop Cotton School, which is in the center of the new township and is also nearer to Phase-I of the said Township. From the statement of RW-3, it is clear that entry to Phase-I and II is at a distance of about 100 mtrs. from the entry to Phase-III of the New Shimla township. 15. Whether the Housing Colony to be set up on the acquired land was actually an extension of the earlier established Housing Colony or not, is not evident from the record but however, the record conclusively establishes the fact that the acquired land was having entrance and approach from the National Highway constructed by the State Government in the year 1980 itself, which is evident from the statements of RW-4 and PW-3 to PW-5. Further, the acquired land is just at a distance of 10 to 15 minutes of walk from Housing Colony is also evident from the statements of RW-3, RW-4, RW-7 as also the claimants witnesses. In one voice and without any contradiction the claimants witnesses have stated that prior to the initiation of the instant acquisition proceedings, land belonging to the claimants herein was partly acquired by the State Government in the years 1986,1988 and 1989 on which the Housing Colony had been established by HIMUDA. (PW-2, PW-3, PW-4 & PW-5). With the development of the land carried out by the respondent-State through its Agency, all modern amenities like electricity, water supply, telephone, public school, banks, corporate office, petrol pump, shopping centers, office of the State, Central Government and other multi national companies were established. 16. That the instant acquired land had all modern amenities, such as, electricity, water and in village Pateog, a residential Colony already stood established by the Housing Board is evident from the statements of almost all the witnesses examined by the parties. 16. That the instant acquired land had all modern amenities, such as, electricity, water and in village Pateog, a residential Colony already stood established by the Housing Board is evident from the statements of almost all the witnesses examined by the parties. Evidently, it has been established that the Housing Board had executed Lease Deeds Ext.PW1/A to Ext.PW1/E prior to 10.3.1998, the date of initiation of the acquisition proceedings. Lease Deed with regard to the plots allotted in a fully developed Housing Colony stands established by the Board itself. 17. From the statement of PW-4, it is further evident that the instant acquired land was adjacent to the township (New Shimla) and considering that it had all modern amenities and facilities and falling under the category of commercial and developed, no one was ready to sell the land. No doubt the part of the acquired land was Ghasani and not put to commercial use but however according to PW-2 the land was not having steep slope and therefore, it did not require much developmental activity. This of course does not mean that the claimants themselves had carried out any developmental activity on the acquired land which is also evident from the statements of PW-2 & PW-4. It is equally true that the instant acquired land was required to be developed before a Housing Colony could be established thereupon. 18. Thus with the passage of time, the instant acquired land came to be situated in a fully developed and commercial locality. Even in the absence of any developmental activity in existence on the instant acquired land, it had great potential of being put to commercial use. 19. The Lease Deeds Ext.PW-1/A to Ext.PW-1/E stand proved by Mrs. Amrita Bhardwaj (PW-1), Junior Assistant with the respondent authority who has admitted that these Lease Deeds were with respect to plots given on lease on the land acquired by the Government in Mauza Pateog, New Shimla and the lease money, determined on the basis of the market rates of a developed Colony stands received by the department. The average of all these lease deeds works out to be Rs.2279 per sq. mtr. The average of all these lease deeds works out to be Rs.2279 per sq. mtr. 20.Perusal of the Lease Deeds reveal that the residential plots in the Colony set up by the State stand allotted for a period of 99 years with restrictive rights of transfer and the lessor having all rights on the mines and minerals on the land underneath. 21. Considering the factual matrix, the exemplar lease deeds can definitely be made basis for determining the market value. However, the exemplar land being situated in a fully developed area, having all amenities and the restrictive nature of the rights flowing there from needs to be kept in mind while determining the compensation payable to the claimants herein. 22. The respondents have proved the execution of the Sale Deeds Ext.RW-2/A to Ext. RW-2/G through the statement of Shri Kesar Singh (RW-2), Registration Clerk, office of the Sub Registrar, Shimla. No doubt, RW-5, RW-6 & RW-7 have proved on record sale transactions Ext.RW-2/A to Ext. RW-2/C but, however, these witnesses could not prove the similarity of the exemplar sale land with that of the instant acquired land. RW-5 has not seen the acquired land purchased by him situated on a dhank (steep slope/cliff). Similarly, the testimonies of RW-6 & RW-7 are also to the said effect. None of these witnesses have deposed that they had actually seen the instant acquired land and, therefore, in the absence of any material to show the comparability of the instant acquired land with that of the exemplar sale land with regard to its potential, use, nature, the Sale Deeds placed on record by HIMUDA cannot be relied upon (Cement Corpn. of India Ltd. v. Purya & Ors. (2004) 8 SCC 270. 23. Testimony of RW-1 is of not much use as he has only proved letter Ext.RW-1/A whereby rates were approved by the State. Ext.RW-1/B as proved on record by him, is the one year average for the period 1.4.1997 to 31.3.1998 with respect to Mauza Pateog as maintained by the revenue authorities. 24. Why the Collector did not consider the Sale Deeds on the basis of which said one year average report was maintained has not been explained in the award. The Collector could have taken the same into consideration while determining the market value. 24. Why the Collector did not consider the Sale Deeds on the basis of which said one year average report was maintained has not been explained in the award. The Collector could have taken the same into consideration while determining the market value. That apart the Apex Court in Krishi Utpadan Mandi Samiti, Sahaswan v. Bipin Kumar (2004) 2 SCC 283, has held that one year average report cannot be made basis for determining the market value of the acquired land, for the reason that the same is maintained by the revenue authorities for the purposes of complying with the provisions of the Indian Stamp Act. Further Mauza Pateog is sufficiently big, comprising fully developed, commercial, non-agricultural and agricultural rural and urban areas. Hence, the Sale Deeds on the basis of which one year average report has been maintained cannot be said to be of the area in and around the place where the instant acquired land was situated or a fully developed residential Colony was established by HIMUDA. In any event there is no evidence to the said effect. 25. Shri Bimal (RW-3),Draughtsman, office of HIMUDA, and Shri Desh Raj Gandhi (RW-4), Assistant Engineer, office of HIMUDA, have deposed that only 45% of the total area acquired is likely to be used for construction of residential houses and the remaining area is to be utilized for road, path, parking and other basic amenities. He has admitted that atleast 20 private buildings are still in existence which are adjacent to the acquired land and that HIMUDA recovered from the allottees the price of the land as well as the price of the surplus land along with the development charges. 26. Undisputedly, the developmental activity for setting up of a road and providing basic amenities is required to be carried out on the instant acquired land. The acquired land was not having much gradient and not many retaining walls or other developmental activity of such like nature was required to be carried out on the same. Even though it could not be proved on record but however from the suggestion made by the claimants to the witnesses of HIMUDA, it appears that the Government had de-notified from acquisition certain area for which major development activity was required to be carried out. Even though it could not be proved on record but however from the suggestion made by the claimants to the witnesses of HIMUDA, it appears that the Government had de-notified from acquisition certain area for which major development activity was required to be carried out. Importantly, the claimants instant acquired land was meant only to develop 36 plots and 72 flats and it can be inferred that the land was acquired for setting up an extension Colony of the already established Housing Colony of the State. 27. The question however which needs to be considered is as to what is the amount which is necessarily required to be deducted from the market value determined on the basis of Lease Deeds Ext.PW-1/A to Ext.PW-1/E. 28. The principles of law for determining the market value of the land and payment of compensation are now settled. 29. The market value of a property for the purposes of Section 23 of the Act is 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. {Mehta Ravindrarai Ajitrai (Deceased) through his Heirs and LRs. and Others v. State of Gujarat (1989) 4 SCC 250, Nelson Fernandes & Ors. v. Special Land Acquisition Officer, South Goa & Ors. (2007) 9 SCC 447}. 30. 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 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 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. (Atma Singh and others v. State of Haryana and another (2008) 2 SCC 568). 31. The most reliable way to determine the value is to rely on the instances of sale portions of the same land as has been acquired or adjacent lands made shortly before or after the Section 4 Notification. {Panna Lal Ghosh & Ors. v. Land Acquisition Collector & Ors. (2004) 1 SCC 467}, 32. If there is evidence or admission on behalf of the claimants as to the market value commanded by the acquired land itself, the need to travel beyond the boundary of the acquired land is obviated. Instances of sale in respect of the similar land situated in the same village and/or neighbouring villages could be taken to be a guiding factors for determination of market value. {Shakuntalabai (Smt.) & Ors. v. State of Maharashtra (1996) 2 SCC 152, ONGC Limited v. Sendhabhai Vastram Patel & Ors. (2005) 6 SCC 454}. 33. In Union of India v. Harinder Pal Singh & Ors. [(2005) 12 SCC 564], it was observed that in the absence of any contemporaneous document, the market value of the acquired land in a village which was acquired at the same time as the lands in other villages, was considered to be correct comparative unit for determination of the market value of the acquired lands but however, in Kanwar Singh v. Union of India [(1998) 8 SCC 136], it cautioned that transactions of neighbouring village are not reliable where the situation and potentialities of lands in the two villages were different. 34. In Union of India v. Pramod Gupta (Dead) by LRs. & Ors. [(2005) 12 SCC 1], the Apex 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 absence of any direct evidence, the court, however, may take recourse to various other known methods. In Union of India v. Pramod Gupta (Dead) by LRs. & Ors. [(2005) 12 SCC 1], the Apex 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 absence of any direct evidence, the court, however, may take recourse to various other known methods. Evidence admissible therefor inter alia would be judgments and awards passed in respect of acquisitions of lands made in the same village and/or neighbouring villages. Such a judgment and 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. 35. Further it was reiterated that one of the modes of computing the market value would be with reference to judgments and awards passed in respect of acquisitions of similar land subject to such increase or decrease thereupon as may be applicable having regard to the accepted principles laid down therefor. The extent of the land, the nature thereof, advantages and disadvantages occurring therein amongst others would be relevant factors for determining the actual market value of the property. It was further reiterated that for the purpose of determining the market value of the acquired lands on the basis of the comparable sales method, the land sought to be compared must be similar in potentiality and nature. It also took note of the fact that the market value of agricultural lands is lower than that of the land suitable for commercial purposes. The Apex Court cautioned that the enormity of financial implication of enhancement in view of the size of the land acquired for a particular project should be kept in mind. 36. In Land Acquisition Officer, Kammarapally village, Nizamabad District, A. P. v. Nookala Rajamallu & Ors. [(2003) 12 SCC 334 (para 9)], the Apex Court observed: “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." 37. In Viluben Jhalejar Contractor (Dead) by Lrs. v. State of Gujarat [(2005) 4 SCC 789], the Apex Court reiterated that for determining the market value of the land under acquisition, suitable adjustment has to be made having regard to various positive and negative factors vis-a-vis the land under acquisition by placing the two in juxtaposition. The positive factors are (i) smallness of size (ii) proximity to a road; (iii) frontage on a road; (iv) nearness to developed area; (v) regular shape, (vi) level vis-a-vis land under acquisition and (vii) special value for an owner of an adjoining property to whom it may have some very special advantage and the negative factors are: (i) largeness of area; (ii) situation in the interior at a distance from the road; (iii) narrow strip of land with very small frontage compared to depth; (iv) lower level requiring the depressed portion to be filled up; (v) remoteness from developed locality and (vi) some special disadvantageous factors which would deter a purchaser. 38.In Suresh Kumar v. Town Improvement Trust, Bhopal [(1989) 2 SCC 329], the Apex Court has held that while determining the market value of the land acquired, it has to be correctly determined and paid so that there is neither unjust enrichment on the part of the acquirer nor undue deprivation on the part of the owner. 39. In Delhi Development Authority v. Bali Ram Sharma & Ors. [(2004) 6 SCC 533], it is held that in cases where the purpose of acquisition was the same but the notification under Section 4(1) was issued on a subsequent date, obviously there would be escalation of prices in regard to those lands. Hence, it would be just and appropriate to give an annual increase of 10% in the market value in respect of the lands which were acquired by a subsequent notification and further in The General Manager, Oil & Natural Gas Corporation Ltd. v. Rameshbhai Jivanbhai Patel & Anr. [JT 2008 (9) SC 480], it has been held that increase in market value in urban/semi-urban areas was about 10% to 15% per annum, the corresponding increase in rural areas would at best be around half of it, that is about 5% to 7.5% per annum, in the absence of evidence of sudden spurts or fall in prices. 40. [JT 2008 (9) SC 480], it has been held that increase in market value in urban/semi-urban areas was about 10% to 15% per annum, the corresponding increase in rural areas would at best be around half of it, that is about 5% to 7.5% per annum, in the absence of evidence of sudden spurts or fall in prices. 40. It is also a settled position of law that negative factors can be discounted by making a deduction by way of an allowance at an appropriate rate ranging approximately between 10% to 50%. The discounting would also depend on whether the area is Rural, Urban, or whether the building activity is picking up and whether the waiting period during which the capital of the entrepreneur would be locked up, will be longer or shorter as also in the other attending circumstances [Chimanlal Hargovinddas v. Special Land Acquisition Officer (1988) 3 SCC 751]. 41. In Atma Singh (supra), the Court was dealing with the case where the award passed by the District Judge awarding compensation at a flat rate of Rs.43,000/- per acre, relying upon two instances of sale deeds of adjoining village was considered and deduction to the extent of 25% was made for fixing the market value of the acquired land. In the claimants appeal, the High Court enhanced the market value from Rs.43,000/- per acre to Rs.1,20,000/- per acre but however by deducting 33%, the market value was determined to be Rs.80,000/- per acre. The Apex Court, after taking into account the various judicial pronouncements held that since the land was not acquired for Housing Colony or Govt. office/institution but for setting up of a sugar factory which is a commercial venture, the deduction to the extent of only 10% of the market value as determined on the basis of exemplar sale deeds was to be carried out. Thus, the compensation based on the market rate of Rs.1,08,000/- per acre was determined. 42. In Ram Piari & Anr. vs. Land Acquisition Collector, Solan & Ors.(1996) 8 SCC 338, the Court has allowed deduction to the extent of 33.3% towards development charges. 43. In K. Vasundara Devi v. Revenue Divisional Officer (LAO) (1995) 5 SCC 426 and H.P. Housing Board vs. Bharat S. Negi & Ors. 42. In Ram Piari & Anr. vs. Land Acquisition Collector, Solan & Ors.(1996) 8 SCC 338, the Court has allowed deduction to the extent of 33.3% towards development charges. 43. In K. Vasundara Devi v. Revenue Divisional Officer (LAO) (1995) 5 SCC 426 and H.P. Housing Board vs. Bharat S. Negi & Ors. (2004) 2 SCC 184, where the land was acquired for the purposes of establishing a Housing Colony, the Apex Court allowed deduction to the extent of 33%. 44. However, in Revenue Divisional Officer-cum-LAO vs. Shaik Azam Saheb & Ors. (2009) 4 SCC 395, where 25 acres land was acquired for the purposes of establishing a Post Graduation Centre of University, the Apex Court, after noticing the position in A.S. Krishna and Co.(P) Ltd. vs. Land Acquisition Officer (1992) 1 SCC 141, where deduction to the extent of 20% was upheld and in Mummidi Apparao vs. Nagarjuna Fertilizers and Chemicals Ltd. (2009) 4 SCC 402, where deduction to the extent of 50% was upheld and Viluben Jhalejar Contractor (supra), wherein principles laid down in Hasanali Khanbhai & Sons v. State of Gujarat (1995) 5 SCC 422, Kasturi v. State of Haryana (2003) 1 SCC 354, Tejumal Bhojwani v. State of U.P. (2003) 10 SCC 525, V. Hanumantha Reddy v. Land Acquisition Officer (2003) 12 SCC 642 and Kiran Tandon v. Allahabad Development Authority (2004) 10 SCC 745, Gulzara Singh & Ors. vs. State of Punjab & Ors. (1993) 4 SCC 245, was noticed and deduction to the extent of 33% was upheld, carried out deduction to the extent of 1/3rd towards development cost but however, in Mummidi Apparao (supra), the Apex Court upheld the deduction to the extent of 50% as development charges. This, however, was done in a case where the authority, in a public interest litigation had been directed to create extensive green belt around industrial unit which was required to be established on the acquired land. 45. In Land Acquisition Officer vs. B. Vijender Reddy and Ors. (2001) 10 SCC 669, the Apex Court has held as under:- “In the fixation of rate of compensation under the Land Acquisition Act, there is always some element of guesswork. But that has to be based on some foundation. 45. In Land Acquisition Officer vs. B. Vijender Reddy and Ors. (2001) 10 SCC 669, the Apex Court has held as under:- “In the fixation of rate of compensation under the Land Acquisition Act, there is always some element of guesswork. But that has to be based on some foundation. It must spring from the totality of evidence, the pattern of rate, the pattern of escalation and escalation of price in the years preceding and succeeding Section 4 notification etc. In other words, the guess work could reasonably be inferable from it. It is always possible to assess the rate within this realm.” 46. In K. S. Shivadevamma & Ors. v. Assistant Commissioner & LAO & Anr. [(1996) 2 SCC 62; Basavva (Smt.) & Ors. v. Spl. Land Acquisition Officer & Ors. (1996) 9 SCC 640 and in Kasturi (supra)}, the Apex Court has held that in respect of agricultural land or undeveloped land which has potential value for housing or commercial purposes, deductions between 53% to 33.33% should be deducted towards the cost of development out of the amount calculated with reference to market value of developed land. In some cases where the acquired land is semi-developed or having road and other facilities, the Apex Court has restricted the deduction to even 20%, but that is in exceptional circumstances. 47. In Bhagwathula Samanna & Ors. vs. Special Tehsildar and Land Acquisition Officer (1991) 4 SCC 506, the Apex Court held as under:- “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. While 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. The land value can differ depending upon the extent and nature of the land sold. While 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. But 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. A fully developed small plot in an important locality may fetch a higher value than a larger area in an undeveloped condition and situated in a remote locality. 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. 48. 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. However, in applying this principle of deduction, it is necessary to consider all relevant facts. It is not the extent of the area covered under the acquisition, the only relevant factor. If smaller area within the large tract is already developed and situated in an advantageous position suitable for building purposes and have all amenities such as 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.” 49. This view still holds the forte. In short, the extent of deduction depends upon the nature, location, extent of expenditure involved for development of the land so as to make the plots for residential or commercial purposes and the area required for laying out roads and other civic amenities. This view still holds the forte. In short, the extent of deduction depends upon the nature, location, extent of expenditure involved for development of the land so as to make the plots for residential or commercial purposes and the area required for laying out roads and other civic amenities. The general trend appears to be that where the land is required for the purpose of construction of a Housing Colony, necessary deduction to the extent of 33% is normally carried out. 50. In the instant case, there is no evidence that the instant acquired land was semi developed, hence, I am of the considered view that deduction to the extent of 30% is warranted. 51. Incidentally, the neighbouring areas in the present case are already developed where houses and commercial establishment have come up. The acquired land has great potential for being used both for commercial and residential purposes considering its advantageous position. It being situated in the already developed part of the New Shimla Housing Colony, the comparability of the acquired land with the exemplar lease deeds stands established. 52. As has already been noticed above, the mean of all the Lease Deeds Ext.RW-2/A to Ext.RW-2/G comes to Rs.2279/per square mtr. and if the amount is deducted to the extent of 30%, the market value comes to Rs.1596/- per square mtr. No doubt, the exemplar Lease Deeds are of a fully developed land, therefore, instead of 20%, deduction is carried out to the extent of 30%. Further, the Lease Deeds were executed in 1997 much after the allotment stood made and there being over all increase of the prices in and around the acquired land the increase would have been atleast 15%. It has been argued that in any event the development charges incurred by the State for developing the plots are to be recovered from the allottees. This however would not mean that no charges are to be deducted. In the present case, as stands established on record the category/classification of acquired land becomes irrelevant as the entire acquired land had great potential of being put to commercial use and had all modern amenities and facilities. It was well connected by National Highway and other roads. 53. The matter needs to be considered from another angle. The Collector has awarded the highestmarket rates for the best category of land at Rs.1582.71 per square mtr. 54. It was well connected by National Highway and other roads. 53. The matter needs to be considered from another angle. The Collector has awarded the highestmarket rates for the best category of land at Rs.1582.71 per square mtr. 54. This Court, in Gulabi and etc. vs. State of H.P. AIR 1998 HP 9, where the land was acquired for the purpose of construction of National Highway-21, held that the claimants would be entitled to compensation uniformly for all classes of land irrespective of its classification or quality. I am conscious that the facts are different in the instant case and the principle laid down therein cannot be applied stricto sensu. But however, this principle was followed and accepted by this Court in H.P. Housing Board vs. Ram Lal & Ors. 2003(3), Shim. L. C. 64, wherein the land was acquired for the purposes of setting up of a Housing Colony by the respondent authority itself. The Court held that “27. When the land is being developed for a housing colony, as in the present case, classification completely looses significance. Reason being that it has to be developed as a single unit i.e. for housing colony. Similarly allowing higher price for land near the road and for the one which is at a distance from the road also does not provide any reasonable, muchless rational basis to allow less price for the area. Reason being that a person may be interested to reside near the road side in a developed colony for so may reasons. Whereas another, may like to live in the vicinity which is away from the road to avoid husble and bustle of being near the roadside and for many other reasons. In these circumstances it cannot be said that location of the land and its distance from the road is a good criteria and/ or for that matter classification for the assessment of compensation. In my view entire land under acquisition should have been assessed at Rs.200 per sq. meter irrespective of its classification and/ or distance from the road.” 28. Faced with this situation, Mr. Deepak Gupta, Advocate, on behalf of Housing Board submitted, that it is matter of common knowledge that plots situated on the roadside carry higher price, as compared to the plots which are away from the road. meter irrespective of its classification and/ or distance from the road.” 28. Faced with this situation, Mr. Deepak Gupta, Advocate, on behalf of Housing Board submitted, that it is matter of common knowledge that plots situated on the roadside carry higher price, as compared to the plots which are away from the road. This argument cannot be accepted in view of the decision of the Supreme Court reported in the case of Land Acquisition Officer Revenue Divisional Officer, Chittor v. L. Kamlamma (Smt.) Dead by LRs and others K. Krishnamachari and others, (1998) 2 SCC 385. What was held and is relevant was as under:- “7. The argument advanced by Shri Nageswara Rao that the classification by the Land Acquisition Officer was in order and ought not to have been interfered with by the reference court or the High Court does not appeal to us. When a land is acquired which has the potentiality of being developed into an urban land, merely because some portion of it abuts the main road, higher rate of compensation should be paid while in respect of the lands on the interior side it should be at lower rate may not stand to reason because when sites are formed those abutting the main road may have its advantages as well as disadvantages. Many a discerning customer may prefer to stay in the interior and far away from the main road and may be willing to pay a reasonably higher price for that site. One cannot rely on the mere possibility so as to indulge in a meticulous exercise of classification of the land as was done by the Land Acquisition Officer when the entire land was acquired in one block and, therefore, classification of the same into different categories does not stand to reason.” 55. This judgment has attained finality as SLP (Civil) No. 15674-15675 of 2004 titled as Himachal Pradesh Housing Board vs. Ram Lal (D) by LRs & Others, filed by the H.P. Housing Board was dismissed by the Apex Court on 16.8.2004. 56. This judgment was subsequently referred to and relied upon by another Hon’ble Judge of this Court in Executive Engineer & Anr. 56. This judgment was subsequently referred to and relied upon by another Hon’ble Judge of this Court in Executive Engineer & Anr. vs. Dilla Ram {Latest HLJ 2008 HP 1007} and relying upon the decision of the Apex Court in Harinder Pal Singh (supra), wherein the market value of the land under acquisition situated in five different villages was assessed uniformly irrespective of its nature and quality, also awarded compensation on uniform rates. 57. Thus, I am of the considered view that the market value of the claimants land can reasonably be assessed and determined to be atleast what stands awarded by the Collector with respect to the best category of land i.e. 1582.71 per square mtr. 58. With regard to another land acquisition proceedings which stands conclusively decided by this Court in Vidya Parkash Singh Negi & Ors. vs. State of H.P. (2007) 2 Sim.LC 163, wherein 153 bighas of land also situated in Mauza Pateog acquired in terms of land acquisition proceedings initiated on 27.7.1988, this Court uniformly awarded compensation @ Rs.2,20,000/- per bigha for the land acquired in the year 1988. In the said case also the land was acquired for the purposes of developing a Housing Colony i.e. New Shimla It is a common knowledge that during the decades of 1980 and 1990 the prices of land have skyrocketed. Now, if for acquisition proceedings initiated in the year 1988, the market value of the land was assessed to be Rs.2,20,000/-per bigha then obviously, considering that the instant acquired land had great potential of being put to commercial use, the market value has to be much much more than what stands awarded by the Collector. 59. In the instant case, the Collector has obviously erred in awarding compensation to the claimants which has to be just, fair and reasonable. 60. No reliance can be placed on the decision rendered by the Apex Court in Shimla Development Authority & Ors. vs. Santosh Sharma & Anr. (1997) 2 SCC 637, as is sought by Mr. Bhupinder Gupta, learned senior counsel for the reason that it does not settle the principle of law. 61. He has also relied upon the ratio of law laid down by the Apex Court in Ranvir Singh and Anr. Vs. vs. Santosh Sharma & Anr. (1997) 2 SCC 637, as is sought by Mr. Bhupinder Gupta, learned senior counsel for the reason that it does not settle the principle of law. 61. He has also relied upon the ratio of law laid down by the Apex Court in Ranvir Singh and Anr. Vs. Union of India (2005) 12 SCC 59, and vehemently argued that the exemplar sales of a fully developed land cannot be made basis for fixing compensation in respect of the instant acquired land which was agricultural. 62. The Apex Court in Ranvir Singh (supra) was dealing with a case where the land was acquired for the purpose of “construction of a supplementary drain, sewage treatment plant, remodelling the Nangloi drain”, which was considered to be a planned development of Delhi. In the said case, the claimants had referred to and relied upon the Lease Deeds executed by the Delhi Development Authority in favour of the allottees in the Housing Complex known as Rohani, floated by the Delhi Development Authority. While awarding compensation, the High Court had taken into account the value with respect to 48 Sq. mtrs. of land and then multiplied the same by two, considering that the allotees had only lease hold rights which were restrictive in nature unlike free hold rights. The mean of the same was taken and by allowing deduction to the extent of 60% as costs for development charges, the market value was worked out to be Rs.80 per sq. mtr. It is in this background the Court held :- “26. While adopting the said method, in our opinion, the High Court committed manifest errors. The market value of fully developed land cannot be compared with wholly underdeveloped land although they may be adjoining or situated at a little distance. For determining the market value, it is trite, the nature of the land plays an important role. 27. In Bhim Singh and Others Vs. State of Haryana and Another [(2003) 10 SCC 529], this Court held: "10. It was next submitted that the claimants were entitled to higher compensation as the Respondents had in 1989 auctioned plots of land at the rate of Rs. 1725 to Rs. 2510 per square yard. In our view this submission merely needs to be stated to be rejected. State of Haryana and Another [(2003) 10 SCC 529], this Court held: "10. It was next submitted that the claimants were entitled to higher compensation as the Respondents had in 1989 auctioned plots of land at the rate of Rs. 1725 to Rs. 2510 per square yard. In our view this submission merely needs to be stated to be rejected. What price is fetched after full development cannot be the basis for fixing compensation in respect of land which was agricultural. 28. The High Court did not consider any relevant criteria on the basis whereof it could come to the conclusion that the value of the freehold lands would be double of the value of the leasehold lands. The fact that in terms of the brochure the leasehold was to be a perpetual one and the ground rent payable there for was absolutely nominal being Re.1/- per plot per annum for the first five years and thereafter at the rate 2½% of the total amount of the premium, which was to be enhanced only after every 30 years, was a relevant factor which should have been taken into consideration for arriving at a finding in that behalf. It is worth noting that the terms and conditions were set out for sale by the Delhi Development Authority on behalf of the President of India of perpetual lease-hold rights in the residential plots under the Rohini Scheme. 29. A large amount of money was spent for development of Rohini over a period of 20 years. A large area has been earmarked for schools, hospitals, community halls, etc. Many other advantages were also provided. In law it may be perceived that the scheme floated by the D.D.A. may not be viable and as such the possibility of reduction of the rate at a future date could not be ruled out.” 63. However, the Bench comprising of two Hon’ble Judges one of which was party to the aforesaid decision (Hon’ble Mr. Justice Ashok Bhan.J. (Retd.)) in a subsequent decision reported in Harinder Pal Singh (supra), while considering the said decision upheld the order passed by the High Court wherein the land was acquired in five different villages for the extension of Amritsar Cantonment and awarded a uniform rate of Rs.40,000/- per acre irrespective of their nature and quality. Justice Ashok Bhan.J. (Retd.)) in a subsequent decision reported in Harinder Pal Singh (supra), while considering the said decision upheld the order passed by the High Court wherein the land was acquired in five different villages for the extension of Amritsar Cantonment and awarded a uniform rate of Rs.40,000/- per acre irrespective of their nature and quality. This was so done after appreciating the material on record wherein it was proved that the land price in five villages was more or less of similar nature and character and well connected by road and had great deal of potentiality for development of the locality as apart from having houses and factories was also close to Guru Nanak Dev University. Appreciating the material on record, the Court held as under:- “15. We have carefully considered the submissions made on behalf of the respective parties and we see no justification to interfere with the decision of the Division Bench of the Punjab and Haryana High Court which, in our view, took a pragmatic approach in fixing the market value of the lands forming the subject-matter of the acquisition proceedings at a uniform rate. From the sketch plan of the area in question, it appears to us that while the lands in question are situated in five different villages, they can be consolidated into one single unit with little to choose between one stretch of land and another. The entire area is in a stage of development and the different villages are capable of being developed in the same manner as the lands comprised in Kala Ghanu Pur where the market value of the acquired lands was fixed at a uniform rate of Rs.40,000 per acre. The Division Bench of the Punjab and Haryana High Court discarded the belting method of valuation having regard to the local circumstances and features and no cogent ground has been made out to interfere with the same.” 64. Hence, the decision cannot be applied to the facts of the present case. The Division Bench of the Punjab and Haryana High Court discarded the belting method of valuation having regard to the local circumstances and features and no cogent ground has been made out to interfere with the same.” 64. Hence, the decision cannot be applied to the facts of the present case. In that case there was no material before the High Court to have come to the conclusion that the value of the free hold land had doubled and in the Rohini Housing Colony Project large area had to be earmarked for schools, hospitals, community halls, whereas in the present case, as is evident from Ext.PW-3/A, no such area is to be left out and in fact except for the arterial roads in the Colony the entire area is to be used for construction of houses/flats. 65. In the present case, as already stands established, land adjoining to the instant acquired land was acquired in the year 1988 where the HIMUDA had established a Housing Colony and the land after development stood allotted and Lease Deeds executed prior to the initiation of the instant acquisition proceedings. It stands established beyond doubt that the land in question had great potential for being put to commercial/ residential use being in close proximity with the already developed area. Hence the market value of the acquired land, as determined by the Court below is erroneous and needs to be enhanced. Simply because 45% of the acquired area could be used that by itself cannot be a ground for making corresponding deductions. 66. For the aforesaid reasons, the appeals filed by the claimants need to be allowed and the claimants are held entitled to compensation for their entire acquired land @ Rs.1582.71 per sq. mtr. The claimants shall also be entitled to additional compensation in accordance with the provisions of Section 23 of the Act, from the date of publication of the Notification in the official gazette and more particularly in accordance with the principles of law laid down by the Apex Court in Sunder vs. Union of India (2001) 7 SCC 211 and the appeals filed by HIMUDA are dismissed. Pending applications, if any, also stand disposed of.