ivil Appeal No 1351 of 1976
From the Judgment and Order dated 2411
1975 of the Andhra Pradesh High Court in AS No 691 of 1972
TVSN Chari for the Appellant
A Subba Rao and ADN Rao for the Respondents
The Judgment of the Court was delivered by K RAMASWAMY J
This appeal by special leave arises against the Division Bench judgment dated November 24 1975 in AS No 691 of 1972 of the AP High Court fixing the market value  Rs I0 per square yard
The facts lie in a short compass are stated thereunder
By notification under section 41 of the Land Acquisition Act 1894 in short the Act  was published in the State Gazette on November 21 1963 to acquire 5 acres 589 13 sq yards in TS No 981 Block No 34 of Waitair Ward Vishakapatnam for a housing scheme
The Collector 475 awarded at Rs 158 per sq yard and on reference the Civil Court enhanced the compensation to Rs 10 per sq yard with solatium at 15 per cent and interest at 4 per cent
The respondent claimed  Rs 12 per sq yard
On appeal and cross appeals the High Court confirmed the award and dis missed the appeal as well as cross objections for enhance ment to Rs 12 per sq yard
Two contentions have been raised by Shri Narsimahachari the learned counsel for the appellant
Under exhibit B 6 dated August 3 1961 under exhibit B 7 dated Sept 5 1961 and exhibit B 8 dated Sept 8 1961 the respondent purchased one acre 1936 sq
yards in each docu ments in the same TS No 981  042 p per sq yard
He sold on January 24 1963 in an extent of one acre under exhibit B 10  Rs5 per sq yard
Therefore  the aforesaid sale deeds exhibit B 6 B 7 B 8 and B 10 will reflect the prevailing market value of the land in question
The Trial Court and the High Court committed grievous error in placing reliance on a decision of the High Court in AS No 191 of 1967 dated November 11 1970 awarding  Rs 10 per sq yard in respect of 6209 sq yards in TS No 1008 Block No 39 Waitair Beach Road which was acquired under a notifica tion dated March 19 1961 for the purpose of Caltex Oil Refinery
The price fixed therein does not reflect the correct market value while the bona fide sale deed of pur chase and sale by the respondents relating to the acquired land are available on records and form correct basis
The courts below committed grave error of law in completely excluding those sale transactions and relying upon that judgment
We find force in the contention though Shri Subba Rao learned counsel for the respondent vehemently resisted it
It is settled law by catena of decisions that the market value postulated in section 231 of the Act designed to award just and fair compensation for the lands acquired
The word market value would postulate price of the land prevailing on the date of the publication of the notification under section 41
This Court repeatedly laid the acid test that in determining the market value of the land the price which a willing vendor might reasonably expect to obtain from a willing purchaser would form the basis to fix the market value
For ascertaining the market rate the Court can rely upon such transactions which would offer a reasonable basis to fix the price
The price paid in sale or purchase of the land acquired within a reasonable time from the date of the acquisition of the land in question would be the best piece of evidence
In its absence the price paid for a land pos sessing similar advantages to the land in the neighbourhood of the land acquired in or about the time of the notifica tion would supply the data to assess the market value
It is not necessary to cite all the decisions suffice to state that in a recent judgment in Periya  Pareekanni Rubbers Ltd vs State of Kerala 1990 Supp 1 SCR 476 362 a bench of this Court to which one of us KRS J was a member surveyed all the relevant precedents touching the points
In the light of the settled legal position let us consider whether the High Court and the Civil Court are justified in excluding the sale deeds completely and to place reliance on another judgment of the Division Bench of the High Court of AP
Admittedly the claimant is a vendee in exhibit B 6 to B 8  042 paise
In a span of one year and four months they sold  Rs5 per sq yard It is common knowledge that proposal for acquisition would be known to everyone in the neighbourhood in particular to the owners of the property and it is not uncommon that sale transac tions would be brought into existence before the publication of section 41 notification so as to form the basis to lay higher claim for compensation
We do assume that exhibit B 10 is a genuine and bona fide sale transaction
In respect of one acre of the land in the self same land when sold at Rs5 per sq yard would it fetch in a short period of nine months double the market value namely  Rs 10 per sq yard
We have no doubt that it would not get that price for 5 acres and odd area
It is undoubted that in respect of a notification of 1961 in which another TS number in the locality namely TS No 1008 ultimately the High Court awarded  Rs 10 per sq yard
Perhaps had there been no bona fide or genuine sale transaction relating to the self same land the reliance placed on that judgment may be justified but exclusion of bona fide and genuine sale trans actions in respect of the same land under acquisition and to place reliance on the award of some other land is obviously illegal
When the claimants themselves sold as a willing seller of an acre of land  Rs5 per sq
yard large extent of five acres and odd under acquisition if it is offered to be sold as a block it would not fetch higher rate but surely be negotiated for a lesser rate if not the same market value  Rs5 due to time lag of nine months
No attempt was made by the respondent to explain under what circumstances they came to sell their lands  Rs5 per sq yard when they expect higher value  Rs 10 per sq yard
May be the payment of Rs 10 per sq yard be wind fall to the owner of the land in TS No 1008 Taking the totality of the facts and circumstance we hold that the High Court committed grave error to completely ignore the sale transac tions of the lands under acquisition
In view of the time lag we have no hesitation to conclude that the prevailing market value of the land as on the date of the notification would be Rs6 per sq yard
It is next contended by Shri Narsimahachari that when a large extent of land was acquired for a housing scheme at least 13 of the land should be deducted towards laying the roads setting up parks 477 drainage and other amenities
The High Court committed manifest error in omitting to deduct 13 of the land
Shri Subba Rao the learned counsel for the respondent contended that the High Court had noted this contention of the appellant and considered that the market value of the land would be Rs 12 per sq yard and after giving the deduction of 13 it would come to Rs 10
The reasoning of the High Court is proper and warrants no interference
In support thereof he placed reliance in Spl
Tehsildar Visha kapatnam vs Rednam Dharma Rao  Ors CA No 4187 of 1982 dated July 17 1990 wherein this Court had upheld the deduc tion of 15 from the market value towards developmental charges
It is settled law that the High Court and the Reference court when made wrong application of a principle or important points effecting valuation has been over looked or misapplied this Court would under article 136 correct the same vide The Spl
Land Acquisition Officer Bangalore vs
T Adinarayan Setty 1959 Suppl
1 SCR 404 Dattatrayaya Shankarbhat Ambalgi and Ors
vs The Collector of Sholapur and Anr AiR 3 SCC 431 The Dollar Co Madras vs Collector of Madras 1975 Supp
SCC 403 and Padma Uppal Etc
vs State of Punjab  Ors
  In Tribeni Devi  Ors
vs Collector of Ranchi  at 2 13 this Court held that in order to devel op that area at least the value of 13 of the land will have to be deducted for roads drainage and other amenities
On this basis the value of the land at Rs20813570 per acre would after the deduction of 13 come to Rs 138757 per acre
In Smt
Kaushalya Devi Bogre  Ors
vs The Land Acquisition Officer Aurangabad  this Court held that deduction of 13 was held to be reasonable
In Vijay Kumar Motilal vs State of Maharashtra 19 i3rd was deducted towards developmental charges in undeveloped area
In Vijaysingh Liladhar vs Special Land Acquisition Officer the deduction of i4th by the High Court which was not challenged in this court was upehld
In Spl
Land Acquisition Officer Bangalore vs T Adinarayan Setty supra deduction of 25 per cent was held to be reasonable
It is to be noted that in building Regula tions setting apart the lands for development of roads drainage and other amenties like electricity etc
are condi tion precedent to approve lay out for building colonies
Therefore based upon the situation of the land and the need for development the deduction shall be made
Where acquired land is in the midst of already developed land with ameni ties of roads drainage electricity etc
then deduction of 13 would not be justified
In the 478 rural areas housing schemes relating to weaker sections deduction 14 may be justified
On that basis this court in R Dharma Rao s case upheld deduction of 15 because the owner while obtaining the lay out had already set apart lands for road and drainage
Therefore deduction of 13 would be reasonable
In fact in The Tehsildar Land Acquisi tion Vishakapatnam vs
P Narasing Rao  Ors  a Division Bench of the High Court surveyed judgments of the High Court relating to housing schemes of Vishakapatnam upholding deduction of 13 to be reasonable
Accordingly we hold that 13 of the market value should be deducted for development of the lands
The High Court com mitted greivous error in giving a curious reasoning of valuing at Rs 12 and upholding Rs I0 to be the market value after deduction though he market value was deter mined at Rs 10
Accordingly the appeal is allowed
The market value is determined at Rs6 per sq yard and after deducting 13 the market value is Rs4 per sq yard
The respondents are entitled to 15 per cent Solatium on market value and 4 per cent interest thereon from the date of dispossession
But in the circumstances parties are directed to pay and receive their own costs
NPV Appeal al lowed


Summary:
The AP Engineering Subordinate Service Rules were amended in 1972 by way of Government order
It provided that supervisors who acquired BEAMIE degree while in service would be entitled to count 50  of the services rendered as Supervisors prior to acquiring the said qualification subject to a maximum of four years
However this was subject to certain conditions the Chief among them was that they should be considered to have been placed below the last of the Junior Engineer of the year after giving such weightage
Order dated 10676 required that the Supervisors who acquire the degree qualification while in service would be appointed as Junior Engineers with immediate effect
The abovesaid order was amended on 81176 giving benefit of the weightage to only those who acquired the degree qualification prior to 28272
In 1977 by another order of the State Government the post of Junior Engineer was made Gazetted post
In separate petition before the Andhra Pradesh Administrative Tribunal the Supervisors upgraded as Junior Engineers including those who acquired the degree qualification after 28272 as well as the State of AP agitated the issue regarding inter se seniority between the upgraded Junior Engineers and the direct recruit Junior Engineers
The Tribunal heard all the matters together and gave a finding that there was no bar to the retrospective regularisation 296 of the directly recruited Engineers from the dates of their initial appointments
The Tribunal also upheld the action of the Government in giving the benefit of the notional date of appointment to the upgraded Junior Engineers and the benefit of the date of regularisation of their services from the dates of their notional appointments subject to maintenance of order or ranking given by the Public Service Commission
The Tribunal also ordered that the ranking given by the Public Service Commission in respect of directly recruited Junior Engineers his to be maintained and each of them would be entitled to count has seniority from the date on which his service has been regularised or from the date of regularisation of the service of the person immediately below in the order of ranking given by the Public Service Commission whichever was earlier
In respect of upgraded Junior Engineers who acquired degree qualification after 2821972 the Tribunal gave a specific direction that their seniority has to be fixed on the basis of specific notional date of appointment given to them by interspersing their names among regular Junior Engineers as arranged in chronological order of dates from which such regular Junior Engineers are entitled to count their seniority
Aggrieved against the Tribunal s order the State Government and the supervisors upgraded as Junior Engineers preferred the present appeals
On behalf of the State it was contended that the direction of the tribunal particularly interspersing was not workable since the upgraded Junior Engineers have put in long years of service and were discharging the same duties as the directly recruited Junior Engineers and this factor should be taken into account in fixing the notional date of appointment and inter se seniority
On behalf of the upgraded Junior Engineers it was contended that in GO Ms No559 it is specifically laid down that Supervisors who have acquired graduate qualification may be appointed as Junior Engineers after 28275 and the weightage of four years should be reckoned from the date of acquiring the degree qualification ie28272 or thereafter and their seniority should not be fixed from the date of the order of appointment
On the order hand the direct recruit Junior Engineers contended that the upgraded Junior Engineers can under no 297 circumstances be treated as seniors to the directly recruited Junior Engineers for the appointment of Junior Engineers was suspended for some time and in view of the exigencies the degree holders were appointed on temporary basis and they have served for a number of years the Government decided to make regular appointments and accordingly a Special Qualifying Test was held in which they qualified and they were given the appointments and a seniority list strictly on the basis of performance in the test and on merit was prepared by the Public Service Commission and a retrospective effect was given
It was further contended that so far as the upgraded Junior Engineers are concerned all the relevant GOMs
make it clear that the crucial date has to be reckoned on the basis of the actual date of appointment and not on the date of acquiring the degree
Disposing of the matters this court HELD 11
The weightage of four years in respect of upgraded Junior Engineers as provided in GOMs
No559 has to be reckoned from the date of appointment and not the date of their acquiring the degree qualification
On the basis of that notional date their inter se seniority has to be fixed
311 B C 12GO
Ms No 559 makes it abundantly clear that the appointments of the upgraded Junior Engineers who acquired the graduate qualification while in service would be prospective only and that they would be entitled to the weightage of four years of service rendered before the appointment
It does not anywhere indicate that the weightage should be from the date of acquiring the degree qualification
It is only after acquiring such degree qualification that a Supervisor is appointed as Junior Engineer and having regard to the service rendered by him the Government as a policy decided to give weightage of four years for the purpose of considering the eligibility for promotion as Assistant Engineer
308 C D 21The regularisation of the degree holders Junior Engineers who passed the Special Qualifying Test by giving restrospective effect cannot be held to be illegal and their seniority among themselves shall be subject to the order of ranking given by the Public Service Commission on the basis of the Special Qualifying Test
311 D 22
The degree holders were appointed temporarily because of a ban and later the Government again as a policy decision decided 298 to make regular appointments by direct recruitment but enabled the degree holders who were in temporary service to appear in a Special Qualifying Test
Here again as a matter of policy the Government decided to give some weightage to the service rendered by them before the appointment by selection
Thus the Governement in fixing the seniority for the purpose of future promotion of the appointees both the upgraded Junior Engineers as well as those selected by the Public Service Commission in the Special Qualifying Test has taken into account the past service rendered by them
308 E F 3
In the case of upgraded Junior Engineers weightage of four years service was given and in the other case two years weightage was given
As a matter of policy the Government gave weightage to both the categories discharging the same duties
The upgraded Junior Engineers who having got the benefit of four years service therefore cannot say that similar weightage should not be given to the direct recruits who prior to the selection were working on temporary basis
B F Devi Prasad and Ors
vs Government of Andhra Pradesh and Ors
 AIR 1980 SC 1185 relied on
M Nirmala and Ors
vs State of Andhra Pradesh and Ors
   Ashok Gulati and Ors
vs BSJain and Ors 1986 Sup
SCC 597 Direct Recruit Class II Engineering Officers Association vs State of Maharashtra and Ors
   Masood Akhtar Khan and Ors
vs State of Madhya Pradesh and Ors  referred to
The Tribunal has rightly pointed out that under Rule 23 A of the AP State and Subordinate Service Rules 1962 if a person having been appointed temporarily under Rule 10 to a post borne on the cadre is subsequently appointed in the service in accordance with the rules he shall commence his probation from such subsequent date or the earlier date as the appointing authority may determine
The Tribunal was also right in holding that there was no bar to the retrospective regularisation of the service of the direct recruit Junior Engineers
308 G H 309 A 5
In the light of this Judgment the State Government shall prepare a common seniority list of the degree holder Junior Engineers and the upgraded Junior Engineers and that list shall be the 299 basis for all the subsequent promotions
Any promotion already given shall be reviewed and readjusted in accordance with the said seniority list
311 D E 6
Since this litigation has been pending for about two decades it is high time a finality has to be reached by resolving the controversies and in this context the approval of the Public Service Commission in respect of these appointments need not be sought if the Government has not already obtained the approval of the Public Service Commission
311 A B