THE HON'BLE SRI JUSTICE A.GOPAL REDDY and THE HON'BLE SRI JUSTICE B.CHANDRA KUMAR A.S.No.3429 of 2003 & Cross Objections (SR) No.98504 of 2003, A.S.No.3475 of 2003 & Cross Objections (SR) No.98511 of 2003, A.S.No.3476 of 2003 & Cross Objections (SR) No.98507 of 2003, A.S.No.3477 of 2003 & Cross Objections (SR) No.98502 of 2003, A.S.No.3478 of 2003 & Cross Objections (SR) No.98506 of 2003, A.S.No.3479 of 2003 & Cross Objections (SR) No.98499 of 2003, A.S.No.3480 of 2003 & Cross Objections (SR) No.98500 of 2003, A.S.No.3539 of 2003 & Cross Objections (SR) No.98965 of 2003, A.S.No.3540 of 2003 & Cross Objections (SR) No.98501 of 2003, A.S.No.3541 of 2003 & Cross Objections (SR) No.98509 of 2003, A.S.No.3542 of 2003 & Cross Objections (SR) No.98505 of 2003, A.S.No.3543 of 2003 & Cross Objections (SR) No.98508 of 2003, and A.S.No.3572 of 2003 & Cross Objections (SR) No.98510 of 2003 COMM18ON JUDGMENT (Per the Hon’ble Sri Justice A. Gopal Reddy) All these appeals are filed against the orders, dated 26.03.2003, passed by the Senior Civil Judge, Vikarabad, Ranga Reddy District in O.P.Nos.55, 56, 57, 58, 59, 60, 61, 62, 64, 65, 66, 67, and 63 of 1995 respectively. 2 . Since all these appeals and cross objections by the Land Acquisition Officer and claimants arise out of the same award covered by the same notification, they are taken up together and being disposed of by this common judgment. 3. The facts in brief are as follows: The Divisional Engineer (doubling), Vikarabad through his letter No.DB/3/VKB/Tel.GGD/LA, dated 04.03.1988, sent a requisition for acquisition of the land admeasuring Acs.27.11 guntas belonging to the claimants situated in Survey Nos.196, 223, 224, 225, 226, 227, 229, 302, 308, 314, 315, 316/2, 317, 318, 320, 321, 322 and 325 of Shankerpalli Village of Shankerpalli Mandal for the purpose of construction of New Double Railway line between Tellapur and Gollaguda. The possession of the land was taken on 01.02.1987, whereas the draft notification under Section 4(1) of the Land Acquisition Act, 1894 (for short ‘the Act’) was approved by the Government in G.O.Rt.No.141 (TR.&B) Dept., dated 25.01.1990, published in the Gazette on 01.02.1990 and the substance of the notification was published in the News Papers on 03.03.1990. The Land Acquisition Officer, after following the due procedure, passed Award dated 06.04.1992 vide Proceedings No.J/3098/88 fixing the market value of the acquired land at Rs.8,695/- per acre. Dissatisfied with the fixation of the market value, the claimants, who have received the amounts under pretest, sought for references under Section 18 of the Act for due determination of the market value of the acquired land. On references being made by the Land Acquisition Officer to the Civil Court, the claimants appeared before it and claimed compensation at the rate of Rs.150/- per square yard. 4 . On behalf of the claimants, though separate witnesses were examined, the same documents were marked as Exs.A.1 to A.13 in all the O.Ps. On behalf of the Referring Officer, he himself was examined as R.W.1 and the Land Acquisition Officer, who passed the award, dated 06.04.1992, was examined as R.W.2 and the Award dated 06.04.1992 was marked as Ex.B.1. 5 . The reference Court, after carefully analyzing the oral and documentary evidence adduced by the parties and particularly taking into consideration the sale deeds, modified the award passed by the Land Acquisition Officer and fixed the market value of the acquired land at Rs.48/- per square yard with all permitted benefits with deduction of 20% (i.e., 1/5th), and all statutory benefits. 6. Questioning the enhancement, the Special Deputy Collector, Land Acquisition (General) preferred the appeals, in which the Union of India, represented by Deputy Chief Engineer, Construction-I South Central Railway, Secunderabad, was impleaded as second appellant. Whereas, seeking further enhancement of compensation @ Rs.60/- per square yard with necessary deductions, the claimants preferred the Cross Objections. 7. The learned Government Pleader for Land Acquisition appearing for the first appellant submitted that the sale deeds under Exs.A.1 and A.8 to A.11 are of small bits of land, where 100 to 120 square yards of land was sold @ Rs.100/- to Rs.120/- per square yard, but in the instant cases large extents of lands were acquired, and therefore, the same cannot be taken into consideration for fixation of the market value of the acquired lands. He further contended that unless the earlier Preliminary Valuation (P.V) Report, under which Rs.40/- per square yard was recommended, is approved by the Joint Collector, the same cannot be taken into consideration for fixation of the market value. The lower Court erred in fixing the market value of the acquired lands at Rs.48/- per square yard with 1/5th deduction instead of 1/3rd deduction. He lastly contended that the interest awarded by the lower Court from the date of taking possession cannot be sustained, since the effective date for calculating the interest is the date of issuance of notification under Section 4(1) of the Act, but not the earlier date. 8. Sri R.S.Murthy, the learned counsel appearing for the second appellant contended that either before the Land Acquisition Officer or before the reference Court, the Requisition Department has not been impleaded and without issuing notice to the Requisition Department the award was passed by the Land Acquisition Officer. Therefore, the reference Court, before enhancing the compensation ought to have issued notice to the Requisition Department. In view of the same, the impugned orders are liable to be set aside and the matters be remitted to the reference Court to lead evidence in the light of the submissions as referred to above. 9 . Sri P.Sridhar Reddy, the learned counsel appearing for the claimants have taken us through the entire evidence including the evidence of R.W.1 and contended that basing on Ex.A.4 – P.V. Report, the Land Acquisition Officer himself recommended Rs.40/- per square yard, and also wrote to the Requisition Department for depositing the amount @ Rs.50/- per square yard for enabling him to pass the award, and the Requisition Department deposited Rs.1,71,94,100/- for the lands acquired and as well as the other lands covered by Ex.B.1, without any objection or hesitation. He also contended that the figure in the said P.V Report was changed from Rs.40/- to Rs.26/- in the year 1981. Even that amount of Rs.26/- per square yard was also not awarded and meager compensation of Rs.8,695/- per acre was awarded by the Land Acquisition Officer, and therefore, the lower Court is justified in enhancing the compensation relying upon Ex.A.4. He further contended that under Ex.A.1-sale deed, dated 12.09.1988, which was executed one year six months prior to the issuance of the present notification, the land was sold at Rs.100/- per square yard, and the same has to be taken into consideration for fixation of the market value of the acquired lands, after giving deduction @ 20%, which comes to Rs.80/- per square yard. Therefore, he sought to allow the Cross Objections filed by the claimants claiming compensation @ Rs.60/- per square yard. 10. In view of the above rival submissions, the points that arise for consideration in these appeals are whether the impugned orders are liable to be set aside and the matters be remitted to the reference Court; If the answer is ‘No’, what will be the compensation for which the claimants are entitled to as on the date of issuance of notification under Section 4(1) of the Act? 11. The Special Deputy Collector, Land Acquisition (General), who was examined as R.W.1 deposed that Ex.B.1-Award was passed by R.W.2; that the possession of the lands was taken over by the Railway Authorities on 01.02.1987 and all statutory benefits were given from that date; that the sale deeds, on which the claimants are relying upon, are not the genuine sale deeds and they are subsequent to the date of taking possession i.e., 01.02.1987, and therefore, they cannot be relied upon; that he personally inspected the acquired lands on 02.09.2002 and that the acquired lands and the neighbouring lands, where he found standing crops, are only agricultural lands. In the cross- examination, he admitted that before passing the final award, they will prepare P.V. Report and that in the case on hand the first P.V Report was dated 06.08.1990. He also admitted that as per the said P.V. Report, the data was collected as per yardage basis, and the compensation was proposed @ Rs.40/- per square yard; that in the said P.V Report, it was discussed that Ordinance Factory and its quarters were at a distance of one furlong, and Telephone Exchange, Hospital, High School, and other schools and colleges were at a distance of half furlong from the acquired land; that along with the said P.V Report a topo plan was also prepared and that the Land Acquisition Officer proposed the probable rate @ Rs.50/- per square yard and at that rate he called for the amount from the Railway Department, which has sent a cheuqe for Rs.1,71,94,100/- calculating the amount @ Rs.50/- per square yard. There is a revised P.V Report of August, 1991 and as per the revised P.V Report, the compensation proposed was @ Rs.26/- per square yard. In the said revised P.V Report, the sale data was collected on Acreage basis, but no award was passed as per the revised P.V Report. He further admitted that there is another P.V Report, which is of November, 1991, in which the sale data was collected on acreage basis only; and that in the said P.V Report, originally the compensation amount was typed as Rs.16,875/- per acre and later the figure was rounded off and written as “Rs.8,695/-“ with a pencil. As per the sale data collected and mentioned in the P.V Report, dated 06.08.1990, the lowest price was mentioned as Rs.40/- per square yard and the highest price as Rs.156/- per square yard. In Ex.B.1-Award, there is no mention about the sale deeds dated 06.02.1990 and 12.09.1988. 12. R.W.2, who passed the award under Ex.B.1, deposed that before passing the award, he had prepared the topo sketch of the acquired lands and also the other lands for fixing the market value; that as per the rules, the P.V Report has to be approved by the Joint Collector and the approval of the Joint Collector on the market value fixed by him was available on file; that he personally inspected the acquired lands before passing Ex.B.1-award; that the acquired lands are at a distance of about 1 to 1½ k.m from Ordinance Factory and its quarters, Telephone Exchange, and Hospital and that the P.V Reports exhibited by the claimants in these cases cannot be considered because they are for the plotted areas and the acquired lands are agricultural lands. In the cross-examination, he admitted that in Ex.B.1 he had not discussed the earlier award dated 03.05.1989 as it was not placed before him; that the earlier Land Acquisition Officer sent the P.V Report of November, 1991 proposing the market value at Rs.16,875/- per acre and the said report was not approved; that the acquired lands are adjacent to the lands acquired for laying the water pipe line and that there is a P.W.D road leading to Hyderabad in between Shankerpally and Bulkapur Villages. 13. From the above evidence adduced by the Land Acquisition Officer, it is clear that the earlier sale statistics were collected and the P.V Reports were forwarded to the Joint Collector for approval as per the proviso to Section 11-A of the Act, which was inserted by Act 68 of 1984, but the same presumed to have not been approved by the Joint Collector, and therefore, the award was passed for lesser amount. Further, on approving the P.V Reports by the Joint Collector, the Requisition Department was called upon to deposit the compensation amount for enabling the Land Acquisition Officer to pass an award, and accordingly the Requisition Department deposited the entire compensation amount @ Rs.50/- per square yard. In view of the same, the contention of the learned counsel for the second appellant that no notice was issued to the Requisition Department before passing the award, cannot be accepted. 14. It is fairly well settled that when a reference is made to the Civil Court under Section 18 of the Act at the instance of the land owners/claimants, it is the duty of the reference Court to issue notice to the Requisition Department before enhancing the compensation. But the reference Court neither issued any notice to the Requisition Department nor impleaded it as a party to the references. Since the Requisition Department was informed that the compensation payable for the acquired lands was Rs.50/- per square yard, they have deposited the entire compensation without any demur. Therefore, now it is not open for the Requisition Department to contend that the enhancement was made by the reference Court without issuing any notice to them and the impugned orders have to be set aside, since they have not been impleaded as party. 15. In the circumstances, and since the lands were acquired as early as on 01.02.1988 i.e., two decades ago, to put a quietus to the litigation, we deem it appropriate not to remit the matter to the reference Court on the ground that no notice was issued to the Requisition Department before enhancing the compensation. Point No.1 is accordingly answered in favour of the claimants and against the second appellant. 16. Now, the point that remains for consideration is what will be the compensation for which the claimants are entitled to as on the date of issuance of notification under Section 4(1) of the Act? 17. This Court in Revenue Divisional Officer, (Land Acquisition Officer), Karimnagar v. Maduganti Krishna Reddy[1], while dismissing the appeal preferred by the State and allowing the appeal of the claimant, fixed the market value of the land acquired therein at Rs.1,10,000/- per acre, after following the factors, which have to be kept in mind while determining the compensation, laid down by the Supreme Court in Chimanlal Hargovindas v. Special Land Acquisition Officer, Poona[2], and also the ratio laid down in the judgment of the Supreme Court in Administrator General of W.B v. Collector, Varanasi[3], wherein it is stated as under: “It is trite proposition that prices fetched for small plots cannot form safe bases for valuation of large tracts of land as the two are not comparable properties. (See Collector of Lakhimpur v. B.C.Dutta (1972) 4 SCC 236; Mirza Nausherwan Khan v. Collector (Land Acquisition), Hyderabad (1975) 1 SCC 238; Padma Uppal v. State of Punjab, (1977) 1 SCC 330; Smt.Kaushalya Devi Bogra v. Land Acquisition Officer, Aurangabad, (1984) 2 SCC 324). The principle that evidence of market value of sales of small, developed plots is not a safe guide in valuing large extents of land has to be understood in its proper perspective. The principle requires that prices fetched for small developed plots cannot directly be adopted in valuing large extents. However, if it is shown that the large extent to be valued does not admit of and is ripe for use for building purposes; that building lots that could be laid out on the land would be good selling propositions and that valuation on the basis of the method of hypothetical lay out could with justification be adopted, then in valuing such small, laid out sites the valuation indicated by sale of comparable small sites in the area at or about the time of the notification would be relevant. In such a case, necessary deductions for the extent of land required for the formation of roads and other civil amenities; expenses of development of the sites by laying out roads, drains, sewers, water and electricity lines, and the interest on the outlays for the period of deferment of the realization of the price; the profits on the venture etc. are to be made. I n Sahib Singh Kalha v. Amritsar Improvement Trust (1982) 1 SCC 419, this Court indicated that deductions for land required for roads and other developmental expenses can, together, come up to as much as 53 per cent. But the prices fetched for small plots cannot directly be applied in the case of large areas, for the reason that the former reflects the “retail” price of land and the latter the ‘wholesale’ price.” 18. This Court, in Revenue Divisional Officer, (Land Acquisition Officer), Karimnagar v. Maduganti Krishna Reddy (1 supra) also followed the judgment of the Supreme Court in Kasuri v. State of Haryana, (2003) 1 SCC 354, wherein the Supreme Court after extracting the above excerpt and scanning subsequent decisions on the issue uhpheld the deduction of 20% as against 1/3rd normal deduction and observed as under: “………..In order to convert the land into plots for the purpose of constructioslen of residential and commercial buildings certain area was to be earmarked for the above mentioned purposes in accordance with the law governing in the matter of creating lay outs in addition to incurring of expenditure for the development area. Hence the claim of the appellants that there should have been no deduction out of the compensation amount determined for the entire area acquired is unsustainable. Maybe, the acquired land with potentiality for construction of residential and commercial buildings had some advantages, which aspect is taken note of by the High Court in giving cut of only 20% as against 1/3rd normal deduction.” 19. The judgment of this Court in Revenue Divisional Officer, (Land Acquisition Officer), Karimnagar v. Maduganti Krishna Reddy (1 supra) has become final in view of rejection of permission to file appeal against the said judgment, by the Supreme Court in Special Leave Petition (Civil) CC 11935-11936/2007, dated 10.12.2007. 20. The Supreme Court in Green View Tea and Industries v. Collector, Golaghat, Assam[4] held that when the proposal of acquisition of land was mooted, the Deputy Commissioner himself was of the view that the compensation payable should be at the rate of Rs.55,000/- per bigha and the State Government considered the same and then agreed; that ultimately, the compensation would have to be paid by the beneficiary of the land acquisition, namely oil refinery; that the appellant-land owner had placed on record the awards made in the case of other similarly situated tea estates nearby showing that, in each of those cases, the Government had directed compensation at the rate of Rs.55,000/- per bigha; that the oral evidence on record showed that, at all stages, the Government was prepared to pay Rs.55,000/- per bigha, and it was only the appellant who had taken a rigid stand demanding a higher price and that unfortunately, the High Court while considering the question of initial compensation amount fixed by the State Government as Rs.55,000/- per bigha, has treated it as an issue of promissory estoppel and has held against the appellant; and accordingly set aside the matter and remitted the Review Application to the High Court for fresh consideration. 21. P.W.1, who is claimant No.2 in O.P.No.55 of 1995, deposed that his share of land, which is an extent of Acs.3.04 guntas, was acquired for construction of railway track and the matter was referred to the civil Court under Section 30 of the Act in O.P.No.70 of 1995 and the same was compromised before the Lok Adalat. He also deposed that he used to cultivate the said land through borewell before acquisition and used to raise cotton, mirchy and paddy and get about Rs.10,000/- to Rs.15,000/- per annum after deducting the expenses. There were B.D.L Factory, Ordinance Factory, and Sleeper Factory of Railways near the acquired lands. His land was costing Rs.100/- per square yard. Ex.A.1 is the certified copy of the sale deed, dated 12.09.1988, Ex.A.2 is the Award copy and Ex.A.3 is the map of Shankerpally. In the cross examination, he admitted that the Ordinance Factory is situated at a distance of 1 k.m, BDL Factory is situated at about 500 yards and Sleeper Factory is situated at a distance of 200 yards from the acquired land. He also admitted that he had not filed any documents to show that he had raised the above said crops in the acquired land. The land under Ex.A.1 is situated on the Southern side of their land at a distance of 20 yards. There was a lay out in respect of Survey No.303 and one Narsimulu had obtained the said lay out. He does not know the total extent of Survey No.303. Ex.A.1 is subsequent to the present acquisition. 22. P.W.2 is the vendor of the land under Exs.A.8 and A.9. He deposed that the total extent of the site under Ex.A.8 is 150 square yards and he sold the said site on 22.11.1984 for Rs.8,000/-, which works out to Rs.53/- per square yard. Similarly, under Ex.A.9, he sold 120 square yards of site on 19.01.1987 for Rs.4,800/-, which works out to Rs.40/- per square yard. Nothing was elicited in his cross examination disputing the sale deeds executed by him. 23. P.W.3, who is the vendor of the land under Ex.A.10, deposed that he converted his land in Survey No.181 into house plots in 1961 and obtained a layout; that he sold the land admeasuring 81 square yards situated in Plot No.14/A to one Gudishetty Shashidhar for Rs.4,000/- under registered sale deed dated 20.02.1987 and the said Shashidhar constructed a house therein long back, and that the land in Survey No.181 is at a distance of one furlong from the acquired land. 24. P.W.4 is the attestor of Ex.A.11, sale deed dated 19.01.1987, where an extent of 100 yards of site was sold by one Venkat Reddy to one Lalitha of Shankerpally Village for Rs.6000/-. 25. The evidence adduced by the claimants and the evidence of R.W.1 clearly go to show that R.W.1 admitted that under Ex.A.4, P.V Report of July 1990, the Land Acquisition Officer made some observations about the nature and potentiality of the acquired lands and that the earlier Land Acquisition Officer forwarded a proposal to the Requisition Department for deposit of the amount @ Rs.50/- per square yard and the Requisition Department accepted the said proposal and deposited the entire amount @ Rs.50/- per square yard without any demur. 26. Ex.A.4, the first P.V Report of July, 1990, which was extracted by the reference Court in paragraph 13 of its order, also shows that the lands under acquisition are starting from the end of Shankerpally Railway Station towards Hyderabad. Most of the lands in the vicinity of the lands under acquisition are plotted and have been sold as plots. Since B.D.L. Factory, Ordinance Factory and its quarters and colonies are nearer to the lands under acquisition, there is a great demand for the lands as house sites to meet the requirement of the employees. Post Office, Telephone Exchange, High School, College and Hospital etc., are within half furlong from the lands under acquisition. Therefore, while assessing the market value, all these factors were taken into consideration apart from the guidelines. In Ex.A.5-the second P.V Report of August, 1991, the Land Acquisition Officer made certain observations about the nature and potentiality of the land, and the said report was also reproduced by the Court below in the orders under appeals. In Ex.A.6-the third P.V Report of November, 1991 the Land Acquisition Officer has not mentioned about the potentiality of the land or its proximity to B.D.L Factory and Ordinance Factory etc. 27. The above evidence would show that the Land Acquisition Officer was forced to change his opinion and the value with regard to the earlier P.V Reports submitted by him under Exs.A.4 and A.5. 28. Under Ex.A.8-sale deed, dated 22.11.1984, 150 square yards of land was sold at Rs.53/- per square yard, and therefore, after five and half years, it is expected that there will be increase in the prices. Under Ex.A.1-sale deed dated 12.09.1988, 100 square yards of land was sold at Rs.100/- per square yard and the same can be taken into consideration in fixing the market value of the acquired land to know the upward trend, which does not seem to have