HON’BLE SRI JUSTICE N.V.RAMANA AND HON’BLE SRI JUSTICE K.S.APPA RAO L.A.A.S.Nos.2001 and 2006 of 2005, 821 and 854 of 2006 and 86 of 2007 Date: 14-7-2011 L.A.A.S.No.2001 of 2005: Between The Land Acquisition Officer And Spl. Dy. Collector (L.A.), O.N.G.C., Rajahmundry … Appellant/Referring Officer and Upadyayula Krishna Murthy … Respondent/Claimant L.A.A.S.No.2006 of 2005: Between The Land Acquisition Officer And Spl. Dy. Collector (L.A.), O.N.G.C., Rajahmundry … Appellant/Referring Officer and Upadyayula RamaKrishna Rao … Respondent/Claimant L.A.A.S.No.821 of 2006: Between The Land Acquisition Officer And Spl. Dy. Collector (L.A.), O.N.G.C., Rajahmundry … Appellant/Referring Officer and Siddani Surya Vanam Raju … Respondent/Claimant L.A.A.S.No.854 of 2006: Between The Land Acquisition Officer And Spl. Dy. Collector (L.A.), O.N.G.C., Rajahmundry … Appellant/Referring Officer and Upadyayula Subba Rao … Respondent/Claimant L.A.A.S.No.86 of 2007: Between The Land Acquisition Officer And Spl. Dy. Collector (L.A.), O.N.G.C., Rajahmundry … Appellant/Referring Officer and Upadyayula Subba Rao … Respondent/Claimant HON’BLE SRI JUSTICE N.V.RAMANA AND HON’BLE SRI JUSTICE K.S.APPA RAO L.A.A.S.Nos.2001 & 2006 of 2005, 821 & 854 of 2006 and 86 of 2007 Common Judgment: (per N.V.Ramana, J.) The issue involved in all these appeals is one and the same, and that being the reason, they are disposed of by this common judgment. 2. All these appeals are filed by the Land Acquisition Officer (LAO) and Special Deputy Collector (L.A), O.N.G.C., Rajahmundry against the common order and decrees dated 24-02-2004 in L.A.O.P.Nos.21, 20, 18, 23 and 22 of 1997 (along with L.A.O.P. Nos.19 and 24 of 1997), respectively, passed by the Senior Civil Judge, Narsapur, West Godavari district, enhancing the compensation for the acquired lands from Rs.1,04,900/- to Rs.1,60,000/- per acre along with tree value, additional market value at 12% per annum on the total market value and other additional statutory benefits. 3. The facts of the case are that the land to an extent of Ac.47- 80 cents in R.S.Nos.434, 436, 437, 438 and 439 of Rustumbada village of Narsapur Mandal was acquired by the Government for establishment of Tubular Pipe Yard (Industrial Complex), by ONGC at K.G. Project situated at Rustumbada village, by issuing notification under Section 4(1) of the Land Acquisition Act, 1894 (‘the Act’ for short) on 10-6-1993. The LAO having conducted award enquiry by following the procedure contemplated under the Act, passed Award No.1/94, dated 15-7-1994, fixing the compensation for the acquired land at Rs.1,04,900/- per acre along with other statutory benefits. The respondents-claimants received the compensation under protest and sought reference of the matter to the civil Court under Section 18 of the Act. Accordingly, the matter was referred to the reference Court. 4. The claimants as well as the respondent-LAO have appeared before the reference Court and adduced evidence. On behalf of the claimants, Exs.A-1 to A-5 were marked and on behalf of the respondent, Ex.B-1 was marked. The reference Court, taking into consideration the potentiality, fixed the market value of the acquired land, at Rs.1,60,000/- per acre and also granted additional market value at 12% per annum on the total market value (enhanced market value + tree value) from 10-6-1993 to 04-10-1993 and also additional statutory benefits including solatium on the enhanced market value and additional market value at the rate of 30% and also fixed the trees’ value. Contending that the compensation fixed by the reference Court for the acquired land is at the higher side and needs reduction, the Land Acquisition Officer and Special Deputy Collector, ONGC, as stated above, filed the present appeals. 5. It is mainly contended by the learned counsel for the appellant-LAO that the award of the reference Court fixing the compensation for the acquired land at Rs.1,60,000/- per acre is illegal and contrary to the settled principles of law. While admitting that the market value of the acquired land is in the range of Rs.1,45,000/- and Rs.1,50,000/- per acre, submitted that the reference Court instead of taking the said market value, committed an error in fixing the market value of the land at Rs.2,00,000/- per acre and the reducing the same to Rs.1,60,000/- per acre by deducting 20%. He submitted that since the trees were already cut and the respondents-claimants had given the acquired lands to ONGC on lease, the reference Court ought not to have awarded compensation for the trees. 6. On the other hand, the learned counsel for the respondents- claimants submitted that basing on the sale transactions that took place vide Exs.A-3 to A-5, the LAO has fixed the market value of the acquired land at Rs.1,45,000/- per acre and later deducted 1/3rd of the market value towards developmental charges, and finally arrived the market value of the acquired land at Rs.1,04,900/- per acre. The reference Court estimated the market value of the acquired land at Rs.1,50,000/- per acre as on the date of notification under Section 4(1) of the Act, and considering the potential value of the acquired land, added lump sum of Rs.50,000/- per acre and arrived the market value of the acquired land at Rs.2,00,000/- per acre, and after deducting 20% of the said amount towards developmental charges, finally fixed the market value of the acquired land at Rs.1,60,000/- per acre, and there is no reason for interfering with the same. 7. Heard the learned counsel for the appellant and the learned counsel for the respondents-claimants and perused the common order under appeals. 8. As can be seen from the award and the order under appeal, the LAO, while passing the award, took into consideration Exs.A-3 and A-4, which relate to sale transactions of surrounding lands. The sale of lands under Exs. A3, A4 and A5 took place on 22-4-1993, 19-1- 1993 and 22-4-1993. Ex. A3 is agreement of sale, while Exs. A4 and A4, are registered sale deeds. Under Exs. A3 and A4, an acre of land was sold at Rs.1,58,000/-, while under Ex.A-5, an acre of land was sold at Rs.1,45,000/-. Though the sale transactions under Exs. A3, A4 and A5 relate to small extents of land, but the fact remains, they are just two months prior to the issuance of the present acquisition notification and they are bona fide transactions. Considering the fact that the sale transactions under Exs. A3, A4 and A5, are just prior to the acquisition notification, the reference Court felt it appropriate to fix the market value of the acquired land at Rs.1,45,000/- per acre and deducted one- third towards developmental charges and fixed the market value at Rs.1,04,900/- per acre. 9. The reference Court, considering the fact that the LAO while fixing the market value of the acquired land, did not consider its potentiality, and considering the fact that the land was acquired for industrial purpose, which is a commercial activity, felt it appropriate to fix the market value of the acquired land at Rs.1,50,000/- per acre, and since the land under acquisition, is situated on the outskirts of the town, which is a fast growing and already developed town, the reference Court felt it appropriate to add another sum of Rs.50,000/- and ultimately fixed the market value of the acquired land at Rs.2,00,000/- per acre. Since the acquired land is located in a developed area, felt it appropriate to deduct 20% of the said value towards developmental charges, and ultimately fixed the market value of the acquired land at Rs.1,60,000/- per acre. Apart from the said amounts, the reference Court has granted Rs.500/- for each cashew nut tree, Rs.300/- for each mango tree, Rs.50/- for each sapota tree, Rs.100/- for each neem tree, Rs.50/- for each casuarina tree and Rs.50/- for each palmyrah tree. 10. Admittedly, the LAO, has himself fixed the market value of the acquired land at Rs.1,45,000/- per acre. The reference Court having taken the market value of the acquired land, basing on the evidence on record, approximately at Rs.1,50,000/- per acre, committed an error in adding another sum of Rs.50,000/- in lump sum, for fixing the market value of the acquired land at Rs.2,00,000/- per acre. Since there was a gap of one year between the sale transactions under Exs. A3, A4 and A5 and the date of acquisition of the land in question, the reference Court, considering the potential value and rise in land prices, ought to have fixed the market value of the acquired land, by giving an increase of 10% to the market value fixed by the LAO. If 10% is added to the market value fixed by the LAO, considering the time lag between the sale transactions under Exs. A3, A4 and A5 and the present acquisition notification, the market value of the acquired land would be Rs.1,60,000/- per acre. This can be the correct market value of the acquired land considering its potentiality and not as fixed by the reference Court. Therefore, we reduce the compensation for the acquired land as fixed by the reference Court from Rs.2,00,000/- to Rs.1,60,000/- per acre. Since the acquired land is taken for industrial purpose by ONGC i.e. for conducting drilling operations, and not for any developmental purpose, there is no need to deduct any amount towards developmental charges. 11. Since the trees existing on the acquired land were already cut, as is evident from Exs. A1 and A2, the reference Court ought not to have granted compensation for the trees. Hence, we are of the considered opinion that the respondents-claimants are not entitled to any compensation for the trees once again. Hence, that part of the order and decrees of the reference Court, which granted compensation for the trees again, is liable to be set aside. 12. Accordingly, we allow the appeals, reducing the compensation for the acquired land from Rs.2,00,000/- per acre to Rs.1,60,000/- per acre, and further set aside the part of the order and decrees that granted compensation for the trees once again. The claimants are entitled to other statutory benefits additional market value at 12% from 10-6-1993 to 04-10-1993 including solatium at 30% on the enhanced market value in accordance with law. 13. All the appeals filed by the LAO are allowed in part. No costs. ______________ N.V.RAMANA, J. _______________ K.S.APPA RAO, J. 14th July, 2011. Ak HON’BLE SRI JUSTICE N.V.RAMANA AND HON’BLE SRI JUSTICE K.S.APPA RAO L.A.A.S.Nos.2001 and 2006 of 2005, 821 and 854 of 2006 and 86 of 2007 (Common Judgment of the Division Bench delivered by NVR, J.) 14th July, 2011. (Ak)