ivil Appeal No 696 of 1973
From the Judgment and Order dated 1471972 of the Orissa High Court in First Appeal No 117 of 1971
BP Singh and Ranjit Kutnar for the Appellants
Vijay Mohanty PN Misra SK Jaina for the Respondents
The Judgment of the Court was delivered by SINGH J
This appeal on certificate under article 1331a of the Constitution is directed against the Judg ment and Order of the High Court of Orissa at Cuttack set ting aside the order of the Subordi 291 nate Judge Cuttack and reducing the amount of compensation awarded to the appellants
The appellants are owners of plots in dispute which include Plot Nos
17716 17716 A 17717 and 17717 A and situate in village Jagbhairab having an area of about 12 acres
A notification under sec4 of the Land Acquisition Act 1894 was issued on 2267 and in pursuance thereof the appellants  land along with other land was acquired by the Government for the purpose of construction of Aviation Research Centre at Charbatiya
The Collector award compensa tion to the appellants at the rate of Rs2000 per acre
On a reference made at the instance of the appellants the Subordinate Judge Cuttack awarded compensation at the rate of Rs15000 per acre
On appeal by the respondents the High Court modified the order of the Subordinate Judge and directed that the appellants be paid compensation at the rate of Rs7500 per acre
Aggrieved the appellants have preferred this appeal after obtaining certificate from the High Court
Learned counsel for the appellants urged that the High Court was not justified in reducing the compensation awarded by the Subordinate Judge as there was ample evidence on record to show that the market value of the land was much more than determined by the High Court and developmental activities had taken near the land as result of which the value of the land had appreciated tremendously
The learned counsel brought to our notice a number of judgments of the High Court where compensation for adjacent land acquired by the same Notification was determined at the rate of Rs 15000 per acre
In those cases Advocate General appearing on behalf of the respondents before the High Court had conceded that the claimants were entitled to compensation at the rate of Rs15000 per acre in the area in question
Learned Counsel further urged that the appellants  land as well as the land of other claimants who have been awarded compensation at the rate of Rs 15000 per acre by the High Court are adjacent and there was no valid ground to award compensation to the appellants at a reduced rate
We have been taken through the judgment under appeal and other judgments of the High Court and the evidence on record
After hearing counsel for the parties and having perused the records we find merit in the appellants  submis sion
It is well settled that the owner of the acquired land is entitled to compensation on the basis of its market value
Section 23 of the Act lays down principles for deter mining compensation according to which the owner is entitled to receive 292 market value of the land
Market value means what a willing purchaser would pay to a willing seller for the property having regard to the advantages available to the land and the development activities which may be going on in the vicinity and the potentiality of the land
On the evidence on record it is apparent that the land in dispute is adja cent to the Industrial area of Charbatiya where a large number of factories including Orissa Textile Mills Kalinga Tubes Ltd a number of other factories are situate
The evidence on record further indicates that even though the land was being used for agriculture purposes but it was fit for non agricultural purposes and it had potentiality for future use as factory or building site
The learned Subordi nate Judge on perusal of the oral and documentary evidence on record determined the market value of the land at the rate of Rs 15000 per acre
The High Court held that since the State Government had been offering land situate in the adjacent Industrial Area to the industrialists at the rate of Rs7500 per acre the appellants were entitled to com pensation at that rate
In our opinion the High Court com mitted error in taking that approach as it had itself observed that the State Government had offered land to the industrialists to enable them to set up industries and the price of the land was offered to them at a concessional value with a view to induce them to set up factory
After making that observation High Court was not justified in determining the market value of the land at Rs7500 per acre as the offer of land to Industrial enterprenuers at concession rate could not reflect the market value of the land
Market value means the prince which a purchaser is willing to pay of the similar land to a willing seller
An offer of sale of land to industrialists on concessional rate with a view to induce them to set up their industries in a particular area do not reflect the prevailing market value of the land
The industrialists who were offered the land at concessional rates are not the willing purchasers
The High Court committed error in proceeding on the assumption that the concessional rate offered by the Govt
to the Industri alists indicated the market value of similar land
The High Court further held that since the appellants had purchased the land at the rate of Rs 100 per acre in the year 1956 they were not entitled in any event to compensation more than Rs7500 per acre this view is untenable
There is evidence on record to show that the land which was purchased in the year 1956 had no potentiality at that stage as Industrial acre had not developed near the land
After the setting up industrial area of Charbatiya the price of the land 293 situate in its vicinity had increased tremendously
It is a matter of common knowledge that price of land near the vicinity of industrial area is bound to rise
Admittedly the appellants  land is situate near the industrial area there fore its value had increased and the High Court committed error in ignoring this aspect by determining the compensa tion
Plot No 177 is a big plot having various sub plots which are owned by different persons
The appellants are owners of Plots Nos 17716 17716 A 17717 and 17717 A
The land contained in other sub plot Nos
17719 17710 and 1777 was also acquired and the compensation in respect thereof was determined by High Court uniformally at the rate of Rs 15000 per acre
There are five judgments of the High Court on record in respect of various sub plots of Plot No 177
On a perusal of those judgments it is evident the High Court has awarded compensation at the rate of Rs 15000 per acre for the land which is quite adjacent to the appellants land
The High Court has observed in its Judgment in First Appeal No 173 of 1971 connected with First Appeal No 174 of 1971 Collector Cuttack vs Karunakar Mahanty decided on October 21 1975 that the Advocate General appearing on behalf of the State conceded that in view of the decision of the High Court in respect of the similar land in the vicini ty it was not possible on his part to question the valuation of the acquired land as fixed by the Subordinate Judge at the rate of Rs 15000 per acre
In that case plot No 17713 was the subject matter of the acquisition
We have also perused a copy of the map which is on record
We find that the appellant s land is quite adjacent to those plots which were the subject matter of the decision in the appeals decided by tile High Court where compensation has been awarded at the rate of Rs 15000 per acre
In the circum stances there is no valid reason to award compensation to the appellant at a reduced rate specially so when the re spondents have failed to point out any material difference in the situation topography lay out of the appellants  land with that of the adjacent land in respect of which compensation has been awarded at the rate of Rs 15000 per acre
If the impunged order of the High Court under appeal is upheld an anomalous position would arise inasmuch as the appellants will be denied that amount of compensation which has been awarded to other claimants in respect of similar adjacent land
We are therefore of the opinion that the High Court committed error in interferring with the order of the Subordinate Judge and in determining the compensation at the rate of Rs7500 per acre
We hold that the appellants are entitled to compensation at the rate of Rs 15000 per acre as determined by the learned Subordinate Judge
The High Court has awarded solatium at the rate of 15 in 294 consideration of compulsory nature of acquisition and it has further awarded interest at the rate of 6 per annum from the date of taking over the possession till the date of deposite of amount of compensation Learned counsel for the appellants urged that in view of the amendment made in Section 23 and 28 of the Act by the Amending Act of 1984 appellants were entitled to solatium at the rate of 30 of the compensation and they are further entitled to interest at the rate of 9 per annum
He placed reliance on the decision of this Court in Bhag Singh vs Union Territory Chandigarh 1985 Suppl
2 115 where it was held that in view of Sec
302 of the Amending Act the amended Sec
232 which provided for solatium at the rate of 30 is applicable to all pending proceedings whether they may be pending before the Collector Court High Court or the Supreme Court
We are informed that this question has been referred to a larger Bench and a Constitution Bench has heard argument and the judgment is reserved
In this view we refrain from expressing any opinion on the question if and when judgment is delivered in the matter and if the appel lants are found entitled to the increased amount of solatium and interest they would also be entitled to receive the same in accordance with law
We accordingly allow the appeal set aside the judgment and order of the High Court and direct that the appellants shall be paid compensation at the rate of Rs 15000 per acre
The appellants are entitled to their costs
The re spondents are directed to pay the costs of the appeal to the appellants which we quantify Rs5000
AP S Appeal allowed


Summary:
Certain plots of land owned by the appellants were acquired by the Government for the purpose of construction of Aviation Research Centre
The Collector awarded compensa tion at the rate of Rs2000 per acre
On a reference the Subordinate Judge enhanced the compensation and awarded at the rate of Rs 15000 per acre
On appeal by the respond ents the High Court reduced the compensation holding that since the State Government had been offering land situate in the adjacent Industrial Area to the industrialists at the rate of Rs7500 per acre the appellants were entitled compensation at that rate and that the appellants had pur chased the land at the rate of Rs 100 per acre in the year 1956 they were not entitled to compensation more than Rs7500 per acre
In the appeal to this Court on behalf of the appellants it was contended that the High Court was not justified in reducing the compensation as there was ample evidence or record to show that the market value of the land was much more than determined by the High Court and developmental activities had taken place near the land as a result of which the value of the land had appreciated tremendously and that for adjacent land acquired by the same Notification was determined by the High Court itself at the rate of Rs 15000 per acre
Allowing the appeal HELD 1
The judgment and the order of the High Court is set aside and R is directed that the appellant shall be paid compensation at the rate of Rs 15000 per acre
294E 2
Section 23 of the Land Acquisition Act 1894 lays down principles for determining compensation according to which the owner is entitled to receive the market value for the land
291H 290 3
Market value means what a willing purchaser would pay to a willing seller for the property having regard to the advantages available to the land and the development activi ties which may be going on in the vicinity and the potenti ality of the land
292A B 4
An offer of sale of land to industrialists on conces sional rates with a view of induce them to set up their industries in a particular area does not reflect the pre vailing market value of the land
The industrialists who were offered the land at concessional rates were not the willing purchasers
292F 5
The High Court committed error in proceeding on the assumption that the concessional rate offered by the Govern ment to the industrialists indicated the market value of similar land
292F G 6
In the instant case on the evidence on record it is apparent that the land in question is adjacent to the indus trial area where a large number of factories are situate
Even though the land was being used for agricultural pur poses but it was fit for non agricultural purposes and it had potentiality for future use as factory or building site
292B C 7
There is no valid reason to award compensation to the appellants at a reduced rates specially so when the respond ents have failed to point out any material difference in the situation topography lay out of the appellants  land in respect of which compensation has been awarded at the rate of Rs 15000 per acre
293F