VAKHARIA CHANDULAL FATECHAND SINCE DECD. THROUGH HEIRS vs STATE OF GUJARAT THROUGH COLLECTOR OF SABARKANTHA
- Court
- Gujarat High Court
C/FA/1757/2012 (GJHC240394152012) JUDGMENT DATED: 07/09/2026
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 1757 of 2012
With
R/FIRST APPEAL NO. 815 of 2012
With
R/FIRST APPEAL NO. 816 of 2012
With
R/FIRST APPEAL NO. 817 of 2012
With
R/FIRST APPEAL NO. 2892 of 2013
With
R/FIRST APPEAL NO. 2893 of 2013
With
R/FIRST APPEAL NO. 2894 of 2013
With
R/FIRST APPEAL NO. 2876 of 2014
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE ILESH J. VORA
and
HONOURABLE MR. JUSTICE R. T. VACHHANI
================================================================
Approved for Reporting Yes No
================================================================
VAKHARIA CHANDULAL FATECHAND SINCE DECD. THROUGH HEIRS &
ORS.
Versus
STATE OF GUJARAT THROUGH COLLECTOR OF SABARKANTHA & ANR.
================================================================
Appearance:
MR ASHOK PRAJAPATI WITH MR CHETAN PANDYA WITH MR MAULIK
VAKHARIYA WITH MR. MANISH SHAH for the Appellants
MS. SURBHI BHATI AGP for the Defendant(s) No. 1
MRS KRISHNA G RAWAL(1315) for the Defendant(s) No. 2
==========================================================
CORAM: HONOURABLE MR. JUSTICE ILESH J. VORA
and
HONOURABLE MR. JUSTICE R. T. VACHHANI
Date : 07/09/2026
COMMON ORAL JUDGMENT
(PER : HONOURABLE MR. JUSTICE ILESH J. VORA)
Page 1 of 17
Uploaded by P.S. JOSHI(HC00177) on Mon Sep 07 2026 Downloaded on : Tue Sep 08 10:45:29 IST 2026
C/FA/1757/2012 (GJHC240394152012) JUDGMENT DATED: 07/09/2026
1. In these first appeals under Section 54 of Land Acquisition Act,
1894 (L.A. Act), involving common questions of facts and law,
were taken up for hearing together and are being disposed of by
this common judgment.
2. The common award made by the Principal Civil Judge, at
Himmatnagar, Sabarkantha in LAR No.59 of 1999 to 62 of 1999,
dated 24.11.2011, has been challenged by the appellants-original
land owners as well as the respondent -Western Railway,
whereunder the Reference Court has partly allowed the
references and has granted the additional amount of
compensation @ Rs.305/- per square meter over and above the
compensation awarded by the SPLO @ Rs.45/- per square meter.
3. The facts in brief, necessary for the adjudication of the captioned
appeals are as follows:
The land owners had been allotted commercial plots for
doing business in the outskirt of City: Himmatnagar allegedly,
allotted by the State of Idar before 1955. In order to laying
down the meter gauge railway line as well as to construct
railway quarters, the State Government transferred the land
under acquisition to the respondent-Western Railway in the
year of 1960. The land owners on the basis of their allotments,
claimed their ownership of the plots under acquisition and in
legal battle, the matter went up to the Supreme Court and
finally, they succeeded in their claim. In such circumstances,
Page 2 of 17
Uploaded by P.S. JOSHI(HC00177) on Mon Sep 07 2026 Downloaded on : Tue Sep 08 10:45:29 IST 2026
C/FA/1757/2012 (GJHC240394152012) JUDGMENT DATED: 07/09/2026
the State had initiated re acquisition proceedings under the LA
Act. The necessary dates for the proceedings as well as the
process of awarding compensation are as follows:
(1) Section 4 Notification published on 20.04.1995, 30.05.1995,
01.06.1995 and 04.04.1996.
(2)Section 6 notification published on 20.07.1996.
(3)Section 11 Award dated 21.04.1997 was being passed by SLAO,
Himmatnagar, granting Rs.45/- per sq. mt.
(4) The land owners being dissatisfied with the amount of
compensation, sought Reference under Section 18 of the L.A. Act
claiming enhancement of compensation.
(5)The Reference Court (LAR Case No. 59 of 1999 to 62 of 1999)
vide its judgment and award dated 24.11.2011 awarded additional
compensation of Rs.305/- per sq.mt., over and above the
compensation of Rs.45/- per sq.mt. awarded by the Special Land
Acquisition Officer, along with the interest and other statutory
benefits under Section 23(1)(A) of the L.A. Act.
4. Before the Reference Court, deceased claimant Bhogilal Shah was
examined at Exh.32. In order to prove market rate, the claimants
had examined witness Sarlaben Shah at Exh.65 and relied upon the
order of the Collector, Sabarkantha and other documents produced
at Exh.66 and 67 to show that the market rate at the time of
Page 3 of 17
Uploaded by P.S. JOSHI(HC00177) on Mon Sep 07 2026 Downloaded on : Tue Sep 08 10:45:29 IST 2026
C/FA/1757/2012 (GJHC240394152012) JUDGMENT DATED: 07/09/2026
notification published under Section 4 was more than Rs.1000/- per
square meter. The appellants-claimants relied on the oral deposition
of Patel Devesh Ramanbhai at Exh.94 and documents pertaining to
allotment of land to the witness produced at Exh.95 and 96 to prove
the market rate of the surrounding lands adjacent to the lands under
acquisition. The claimants had also produced Government Jantri to
support their claim on the aspect of market rate. Against which, the
Deputy Collector Mr. Piyush T. Sadhu at Exh.101 and the Officers
of the Western Railway Mr. Kamalprasad Sahu examined at
Exh.153 to prove the market rate assessed by the SPLO @ Rs.45/-
per square meter.
5. The Reference Court after hearing the parties and appreciation of
the evidence, came to the conclusion that, the market rate of the
lands under acquisition assessed by the SPLO @ Rs.45/- is not just
and proper and having regard to the oral evidence of witness
Sarlaben Shah (Exh.65) and documents pertaining to the allotment
of land to the witness, produced at Exh.66 and 67, concluded that,
the sale instance of witness Sarlaben is a relevant indicator for
fixing market value of the land under acquisition. Admittedly, the
land price of witness Sarlaben assessed @ Rs.725/- per square
meter which was determined on the basis of Town Planning
Committee. However, while awarding the additional amount of
compensation to the claimants, the Land Reference Court,
considering the location of the lands under acquisition, reduced the
50% amount from the sale instance of witness Sarlaben and
accordingly, awarded additional amount of compensation @
Page 4 of 17
Uploaded by P.S. JOSHI(HC00177) on Mon Sep 07 2026 Downloaded on : Tue Sep 08 10:45:29 IST 2026
C/FA/1757/2012 (GJHC240394152012) JUDGMENT DATED: 07/09/2026
Rs.305/- per square meter over and above the rate awarded by the
SPLO.
6. Both the parties being aggrieved with the judgment of the Reference
Court, filed the captioned appeals.
7. We have heard learned counsel Mr. Ashok Prajapati, Mr. Manish
Shah, Ms. Surbhi Bhati, learned AGP and Ms. Krishna Raval,
appearing for the Union of India – Western Railway.
8. Mr. Ashok Prajapati and Mr. Manish Shah, learned counsel
appearing fort the appellants-claimants urged that;
(i) That, the Reference Court has committed error in not
considering the oral as well as documentary evidence in its
true spirit and prospective and therefore, the assessment of the
market value made by the Reference Court is not based on the
evidence adduced, but contrary to the evidence and settled
principle of law on the aspect of fixation of market rate in the
matter of land acquisition.
(ii) That, in the facts of the present case, enough material
available on record in the sale instances of the similar land in
the neighbourhood at or about the date of notification, the
Reference Court ought to have considered it as a relevant
indicator for determination of the market value of the land
under acquisition. Before the Reference Court, the Jantri rate
of the Government (Exh.24), the allotment of land to witness
Page 5 of 17
Uploaded by P.S. JOSHI(HC00177) on Mon Sep 07 2026 Downloaded on : Tue Sep 08 10:45:29 IST 2026
C/FA/1757/2012 (GJHC240394152012) JUDGMENT DATED: 07/09/2026
Sarlaben Shah at Exh.66 and 67 and allotment of land to the
Class-III Employee Association at Exh.95 and 96, were
available and it is evident that, the market rate of the lands
proximate of the lands under acquisition was more than
Rs.1,000/- per square meter. The Reference Court had
accepted that, the evidence with respect of allotment of land
to witness Sarlaben is the best comparable instance and
accordingly, it was taken into consideration for fixation of
market rate of the land under acquisition. However, while
accepting the evidence of base exemplar (Exh.66 and 67), the
Land Reference Court without any justification, reduced the
50% amount of sale exemplar and awarded additional amount
of compensation @ Rs.305/- per square meter which
suggestive of the fact that, the fixation made by the Land
Reference Court is arbitrary and contrary to the evidence on
record.
(iii) That, the lands under acquisition admittedly in proximate with
the Motipura area which is the part of the City: Himmatnagar
and in the surrounding area. The area under acquisition having
potentiality to develop commercial premises and it was fully
developed area at the time of notification as there was a
Cinema, schools, Law Colleges, shops and offices, despite of
this, the Reference Court failed to appreciate that, the lands
under acquisition had potential value on the date of
notification.
Page 6 of 17
Uploaded by P.S. JOSHI(HC00177) on Mon Sep 07 2026 Downloaded on : Tue Sep 08 10:45:29 IST 2026
C/FA/1757/2012 (GJHC240394152012) JUDGMENT DATED: 07/09/2026
9. In such circumstances, the counsels appearing for the land owners
submitted that, where direct evidence in the form of sale instances
of exemplars pertaining to the land, was available and such
evidence constitutes the most desirable preferred basis for
determination of market value, the Reference Court mechanically
without any justification, discarded the best available evidence and
arbitrarily reduced the 50% of the best exemplar for determination
of the market value and therefore, it was prayed that, by allowing
these appeals, the market rate assessed by the Reference Court
require to be modified and additional amount of compensation @
Rs.1,000/- per square meter be assessed and fixed along with the
other statutory benefits.
10. Opposing the appeals, the learned State counsel Ms. Surbhi Bhati
supported the impugned judgment and award. She submitted that
the compensation awarded by the Reference Court is fair and just
compensation and it needs no further indulgence by this Court. The
compensation awarded is duly supported by material on record.
The Reference Court has rightly reduced the 50% amount from the
sale instances Exh. 66 and 67, as the land acquired and the land
referred in the sale instance cannot be said to be land adjacent to
the land acquired. The land referred in sale instance was situated in
the developed area of Himmatnagar, whereas, the land under
acquisition is far away from the sale instance and as such the area
of the land under acquired, is not possessed similar advantages. In
addition to that, learned State counsel submitted that the Reference
Court after examining the location, nature, utility and other
Page 7 of 17
Uploaded by P.S. JOSHI(HC00177) on Mon Sep 07 2026 Downloaded on : Tue Sep 08 10:45:29 IST 2026
C/FA/1757/2012 (GJHC240394152012) JUDGMENT DATED: 07/09/2026
distinguishing character of the acquired parcel of lands, has rightly
reduced 50% amount from the market rate of the sale exemplar.
The possession of land under acquired was transferred to the
Western Railway way-back in the year 1960 and at that relevant
time, as such, there was no development in the vicinity of the area.
However, to avoid the technicality, the State Government
commenced re-acquisition proceedings in the year 1994-95. Thus,
having regard to the peculiar facts of the present case, the
Reference Court has not committed any error while fixing the
market rate. On the contrary, the determination was on higher side.
Thus, it was submitted that the findings arrived at by the Reference
Court on the subject of market rate of the land under acquisition
are based on the evidence on record and while assessing the market
rate, the Reference court has followed the settled principle of law
and as such, has not committed any error either on facts or law.
Thus, it was prayed that, the appeals of the claimants may not be
entertained.
11. On behalf of the Western Railway – original respondent no. 2 –
Ms. Krishna G. Raval has submitted that the land under acquire
was transferred to the Western Railway in the year 1960 and at
relevant time there was no any development with regard to road,
commercial building, etc. Thus, therefore, considering the year of
possession, the market rate awarded by the SLAO at rate of Rs.45/-
is the reasonable and just amount and reflect the market rate if the
willing purchaser would purchase from seller in open market. In
such circumstances, it was prayed that, by allowing the appeals
Page 8 of 17
Uploaded by P.S. JOSHI(HC00177) on Mon Sep 07 2026 Downloaded on : Tue Sep 08 10:45:29 IST 2026
C/FA/1757/2012 (GJHC240394152012) JUDGMENT DATED: 07/09/2026
filed by the respondent Railway the amount assessed and fixed by
the Reference Court is on higher side and same may be reduced,
altered and/or modified to the amount assessed by the SLAO.
12. On the aspect of enhancement of additional amount of
compensation claimed by the land owners is concerned, the
counsel Ms. Raval had adopted the contentions advanced by
learned State counsel herein.
13. We have heard at length the learned counsel for the respective
parties. Perused the impugned judgment and records and
proceedings of the Reference Court and upon re-appreciation of the
evidence, the issue falls for our consideration, as to whether market
rate determined by the Reference Court is fair and adequate?
14. Before adverting to the rival contentions, it may be germane to
refer the principles which are required to be kept in mind while
determining the market value of the acquired land as held by the
Supreme Court in Chimanlal Hargovinddas Vs. Special Land
Acquisition Officer, 1998 (3) SCC 751 , wherein, it has been held
thus:
“4. The following factors must be etched on the mental screen:
(1) A reference under Section 18 of the Land Acquisition Act is
not an appeal against the award and the court cannot take
into account the material relied upon by the Land
Acquisition Officer in his award unless the same material is
Page 9 of 17
Uploaded by P.S. JOSHI(HC00177) on Mon Sep 07 2026 Downloaded on : Tue Sep 08 10:45:29 IST 2026
C/FA/1757/2012 (GJHC240394152012) JUDGMENT DATED: 07/09/2026
produced and proved before the court.
(2) So also the award of the Land Acquisition Officer is not to
be treated as a judgment of the trial court open or exposed to
challenge before the court hearing the reference. It is merely
an offer made by the Land Acquisition Officer and the
material utilised by him for making his valuation cannot be
utilised by the court unless produced and proved before it. It
is not the function of the court to sit in appeal against the
award, approve or disapprove its reasoning, or correct its
error or affirm, modify or reverse the conclusion reached by
the Land Acquisition Officer, as if it were an appellate court.
(3) The court has to treat the reference as an original
proceeding before it and determine the market value afresh
on the basis of the material produced before it.
(4) The claimant is in the position of a plaintiff who has to
show that the price offered for his land in the award is
inadequate on the basis of the materials produced in the
court. Of course the materials placed and proved by the other
side can also be taken into account for this purpose.
(5) The market value of land under acquisition has to be
determined as on the crucial date of publication of the
notification under Section 4 of the Land Acquisition Act
(dates of notifications under Sections 6 and 9 are irrelevant).
Page 10 of 17
Uploaded by P.S. JOSHI(HC00177) on Mon Sep 07 2026 Downloaded on : Tue Sep 08 10:45:29 IST 2026
C/FA/1757/2012 (GJHC240394152012) JUDGMENT DATED: 07/09/2026
(6) The determination has to be made standing on the date line
of valuation (date of publication of notification under
Section 4) as if the valuer is a hypothetical purchaser willing
to purchase land from the open market and is prepared to pay
a reasonable price as on that day. It has also to be assumed
that the vendor is willing to sell the land at a reasonable
price.
(7) In doing so by the instances method, the court has to
correlate the market value reflected in the most comparable
instance which provides the index of market value.
(8) Only genuine instances have to be taken into account.
(Sometimes instances are rigged up in anticipation of
acquisition of land.)
(9) Even post-notification instances can be taken into account
(1) if they are very proximate, (2) genuine and (3) the
acquisition itself has not motivated the purchaser to pay a
higher price on account of the resultant improvement in
development prospects.
(10) The most comparable instances out of the genuine
instances have to be identified on the following
considerations: (i) proximity from time angle, (ii) proximity
from situation angle.
Page 11 of 17
Uploaded by P.S. JOSHI(HC00177) on Mon Sep 07 2026 Downloaded on : Tue Sep 08 10:45:29 IST 2026
C/FA/1757/2012 (GJHC240394152012) JUDGMENT DATED: 07/09/2026
(11) Having identified the instances which provide the index of
market value the price reflected therein may be taken as the
norm and the market value of the land under acquisition may
be deduced by making suitable adjustments for the plus and
minus factors vis-a-vis land under acquisition by placing the
two in juxtaposition.
(12) A balance-sheet of plus and minus factors may be drawn
for this purpose and the relevant factors may be evaluated in
terms of price variation as a prudent purchaser would do.
(13) The market value of the land under acquisition has
thereafter to be deduced by loading the price reflected in the
instance taken as norm for plus factors and unloading it for
minus factors.
The exercise indicated in clauses (11) to (13) has to be
undertaken in a common sense manner as a prudent man of the
world of business would do. We may illustrate some such
illustrative (not exhaustive) factors:
Plus factors Minus factors
1. smallness of size 1. largeness of area
2. proximity to a road 2. situation in the interior at a
distance from the road
3. frontage on a road 3. narrow strip of land with very
small frontage compared to depth
Page 12 of 17
Uploaded by P.S. JOSHI(HC00177) on Mon Sep 07 2026 Downloaded on : Tue Sep 08 10:45:29 IST 2026
C/FA/1757/2012 (GJHC240394152012) JUDGMENT DATED: 07/09/2026
4. nearness to developed area 4. lower level requiring the
depressed portion to be filled up
5. regular shape 5. remoteness from developed
locality
6. level vis-a-vis land under
6. Some special disadvantageous
acquisition
factor which would deter a
purchaser
7. special value for an owner of an
adjoining property to whom it may
have some very special advantage
15. In the case on hand, the Reference Court, relying upon the
exemplars Exh. 66 & 67, determined the market value of the
acquired lands. The Reference court has also considered the oral
evidence of witness Sarlaben Shah, Exh. 65. The witness Sarlaben
Shah was doing business in partnership in the name and style ‘Care
Well Traders’ on the land, which was adjacent to the land under
acquired. The land survey No. 437/112 paiki 221-58-75 sq.mt along
with 76-73-75 sq.mt land, totaling Rs.298.32 sq.mt land was
allotted to witness Sarlaben by State Government. The price of the
land was fixed by Office of the Town Planning, Himmatnagar and
it was fixed at the rate of Rs.1090/- per sq.mt. The order to this
regard is produced at Exh. 66 and the order of allotment dated
07.01.1998 along with the order of Collector, Himmatnagar
produced at Exh. 66 and 67. The Reference Court has taken into
consideration the land allotted to witness Sarlaben Shah as a best
Page 13 of 17
Uploaded by P.S. JOSHI(HC00177) on Mon Sep 07 2026 Downloaded on : Tue Sep 08 10:45:29 IST 2026
C/FA/1757/2012 (GJHC240394152012) JUDGMENT DATED: 07/09/2026
indicator to determine the land under acquisition. We are also in
complete agreement with the findings of the Reference Court with
respect to comparable instance relied upon by the Reference Court.
We are conscious about the size of the plots allotted to Sarlaben
Shah as against the largeness of the area of the land under
acquisition. However, fact remains that, the State Government by
considering the report of the Town Planning Committee, accepted
the market rate and then, allotted the land to witness Sarlaben.
Thus, the transaction of Sarlaben is not between private parties and
therefore, the sale example of Sarlaben can form basis for
determination of the compensation of a large extent of land. We
have also considered the other sale exemplars allotted to the
Employees Union Association but having regard to the distance and
other factors of the exemplar instance, it cannot be accepted as best
indicator to determine the market value of the land under
acquisition.
16. Now the issue is whether the Reference Court was justified in
deducting 50% from the market value fixed by the Government
with respect to the land allotted to witness Sarlaben, for
determination of the land under acquisition?
17. We have carefully examined the oral as well as documentary
evidence, as discussed above. The witness Sarlaben Exh. 65,
admitted in her evidence that the land allotted to her and the land
under acquisition are at the distance of 1000 sq.mt. Admittedly, the
land allotted to Sarlaben is in the market area of city Himmatnagar,
where the bus stand and other business entity including the
Page 14 of 17
Uploaded by P.S. JOSHI(HC00177) on Mon Sep 07 2026 Downloaded on : Tue Sep 08 10:45:29 IST 2026
C/FA/1757/2012 (GJHC240394152012) JUDGMENT DATED: 07/09/2026
commercial shops and offices are situated in the area, where the
plot is situated. So far as land under acquisition is concerned, it is
also located in the developed area of the city Himmatnagar, more
particularly the area known as ‘Motipura’ and therefore, the land
under acquisition can be said to be adjacent to the sale exemplar
Exh. 66 and 67 and having possessed similar advantage compare to
the comparable instance.
The Reference Court in its judgment, at page-34, while
determining the market value observed that ,
“there is a vast difference with regard to location of both
the lands i.e. land under acquired and sale exemplar and
therefore, considering the market value of sale exemplar at
Rs.725/-, it is reasonable and just to determine the
additional market value of the land in question at the rate
of Rs.305/- sq.mt.”
18. In our opinion, the Reference Court has not considered the price of
the sale exemplar in its proper prospective. The price fixed for the
sale exemplar by the Planning Committee was Rs.725/- per sq. mt
+ 50% rise per sq.mt, which would come to Rs.1090/- per sq.mt.
(Exh. 66). The Reference Court failed to appreciate the fact that
both the lands having been situated in the developed area of city
Himmatnagar and as such, there is no vast difference with regard
to location and distance of both the lands. Thus, the deduction of
50% is being made by the Reference Court without any justifiable
reasons. This case is unique case, because in the year 1960, the
possession was transferred without initiating any acquisition
proceedings to Western Railway by the State Government. In the
Page 15 of 17
Uploaded by P.S. JOSHI(HC00177) on Mon Sep 07 2026 Downloaded on : Tue Sep 08 10:45:29 IST 2026
C/FA/1757/2012 (GJHC240394152012) JUDGMENT DATED: 07/09/2026
year 1995, the process of re-acquisition of the land being
undertaken by the State Government. In such circumstances,
having regard to the date of notification and the market rate of the
sale exemplar Exh. 66 and 67, the appropriate market rate of the
land under acquisition can be considered at the rate of Rs.680/- per
sq.mt, instead of Rs.305/- per sq,.mt. determined by the Reference
Court, over and above the amount awarded by the SLAO. Thus,
the additional amount at the rate of Rs.680/- per sq.mt having
regard to the area, proximity to the area of the vicinity like road
and other admitted development of Motipura area, Himmatnagar is
the just and reasonable market value of the land under acquisition.
19. For the reasons aforementioned, the Appeals filed by the land
owners allowed in part. The appeals filed by the Western Railway
having no any merits and accordingly stand dismissed. The market
rate assessed and fixed by the Reference Court at Rs.305/- per
sq.mt is altered and/or modified to Rs.680/- per sq.mt. over and
above the amount awarded by the SPLO at the rate of Rs.45/- per
sq.mt. along with the interest as well as statutory benefits. The
appeals of the land owners to that extent shall stand allowed. The
rest of the common judgment and award of the Reference Court
shall remain unaffected. The amount deposited by the State is
permitted to be withdrawn by the landowners with accrued interest
thereon, if not already withdrawn. The Reference Court shall
release the amount of the enhanced compensation alongwith
statutory benefit, as and when deposited by the respondents. R&P
be transmitted to the concerned court forthwith. However, there
Page 16 of 17
Uploaded by P.S. JOSHI(HC00177) on Mon Sep 07 2026 Downloaded on : Tue Sep 08 10:45:29 IST 2026
C/FA/1757/2012 (GJHC240394152012) JUDGMENT DATED: 07/09/2026
shall be no order as to costs. Registry is directed to keep copy of
this judgment in each matter.
(ILESH J. VORA,J)
(R. T. VACHHANI, J)
P.S. JOSHI
Page 17 of 17
Uploaded by P.S. JOSHI(HC00177) on Mon Sep 07 2026 Downloaded on : Tue Sep 08 10:45:29 IST 2026