HON’BLE SRI JUSTICE R.SUBHASH REDDY AND HON’BLE SRI JUSTICE A.SHANKAR NARAYANA APPEAL SUIT No.362 of 2005 JUDGMENT : (per Hon’ble Sri Justice R.Subhash Reddy) This appeal, under Section 54 of the Land Acquisition Act, 1894, is filed by the appellant/claimant aggrieved by the order and decree dated 23.9.2004 in L.A.O.P.No.44 of 1992 passed by the Senior Civil Judge, Nuzvid, Krishna District, whereby compensation for the subject land was enhanced from Rs.54,925/- to Rs.1,00,000/- per acre along with all other statutory benefits. 2. An extent of Acs.7.72 cents of land in R.S.No.135/2, situated at Nuzvid Village and Mandal of Krishna District, belonging to the appellant/claimant was acquired for the purpose of providing house sites to the weaker sections. At the first instance, Notification under Section 4(1) of the Land Acquisition Act, 1894 (for brevity “the Act”) was published on 10.7.1979 and possession of the land was taken on 25.5.1981. House site pattas were also granted in the month of October, 1981. The said acquisition proceedings were challenged by the appellant/claimant in W.P.No.7460 of 1981 and this Court disposed of the said writ petition by order dated 21.3.1986 quashing the Notification on the ground that the substance of the draft Notification was not published in the locality. In view of quashing of the earlier Notification, fresh proceedings were initiated and the Notification under Section 4(1) of the Act was published on 27.4.1989. The Land Acquisition Officer, after conducting necessary enquiry, passed Award No.1/1992, dated 4.3.1992 fixing market value of the subject land at Rs.54,925/- per acre along with all other statutory benefits. 3. Not satisfied with the market value fixed by the Land Acquisition Officer, the appellant/claimant sought reference under Section 18 of the Act, which was tried in L.A.O.P.No.44 of 1992 by the learned Senior Civil Judge, Nuzvid. 4. Before the reference Court, in support of his claim for compensation of Rs.4,84,000/- per acre, the claimant himself was examined as P.W.1 and examined other witnesses as P.Ws.2 to 6 and marked Exs.A.1 to A.20. On behalf of the referring officer, the Revenue Divisional Officer, Nuzvid, was examined as R.W.1 and marked Exs.B.1 – copy of the Award No.1/1991, dated 4.3.1992, Ex.B.2 – combined sketch showing the acquired land and its vicinity, and Ex.B.3 – copy of the extract of the sale deed dated 8.5.1987. The reference Court, having regard to the oral and documentary evidence on record, has passed the impugned order dated 23.9.2004 enhancing the compensation for the subject land from Rs.54,925/- to Rs.1,00,000/- per acre. Aggrieved by the same, the present appeal is filed by the claimant seeking enhancement of compensation at Rs.4,84,000/- per acre. 5. It is contended by Sri S. Srinivas Reddy, learned counsel for the appellant/claimant that the acquired land is situated in the town of Nuzvid and as on the date of issuing Notification on 27.4.1989 for acquisition of the subject land, the sites in and around the vicinity were sold on yardage basis. It is contended that inspite of adducing abundant oral and documentary evidence to show that the market value of the acquired land was Rs.100/- per square yard as on the date of Notification, the reference Court has discarded several important sale transactions on record without assigning any reasons and fixed the market value of the subject land on acreage basis at Rs.1,00,000/- per acre. It is contended by the learned counsel that if the sale transactions under Exs.A.5 to A.20 are taken into consideration, they show that there is a steep rise in the price of lands covered by Sy.Nos.135, 133 and 153/1 of Nuzvid Revenue Village and even by the date of Notification issued for acquisition of the subject land, the lands are being sold at Rs.100/- per square yard. It is also contended that though several comparable sale deeds, which reflect the true market value of the land, are filed for the purpose of fixing market value of the acquired land, the reference Court has discarded such sale transactions and erroneously fixed compensation for the subject land at Rs.1,00,000/- per acre. It is submitted that the subject land is in a developed area and in close vicinity of the acquired land, there are residential colonies and, as such, 1/3 deduction can be made while fixing the market value of the subject land. In support of his contention, the learned counsel relied on a judgment of the Hon’ble Supreme Court in VALLIYAMMAL v. TAHSILDAR[1]. He also placed reliance on another judgment of the Hon’ble Supreme Court in MADISHETTI BALA RAMUL v. LAND ACQUISITION OFFICER[2] in support of his contention for award of additional interest at 15% per annum from the date of taking possession pursuant to the first Notification upto the date of second Notification. 6. On the other hand, it is contended by the learned Government Pleader for Land Acquisition that the sale deeds relied on by the appellant/claimant relate to small extents of land and, as such, they cannot be considered as exemplars for fixing the market value of the large extent of subject land acquired, which is about Acs.7.72 cents. The learned Government Pleader contended that several sale transactions relied on by the appellant/claimant do not reflect the true market value of the acquired land. It is submitted that some of the sale deeds, particularly Exs.A.9, A.10 and A.11, are executed by the appellant/claimant himself and, as such, they cannot be taken into consideration for fixing market value of the subject land. It is clear from the award itself that the land covered by Sy.No.153/1, which is subject matter of Exs.A.12, A.13, A.14, A.15 and A.16, are situated in a greater advantageous location when compared to the subject land acquired, as such, those sale deeds cannot be taken into consideration for fixing the market value of the subject land. The learned Government Pleader also contended that in view of the subsequent judgments rendered by the Hon’ble Apex Court in R.L. JAIN (D) BY LRS. V. DDA AND OTHERS[3] and TAHERA KHOTOON AND OTHERS v. R.D.O. AND OTHERS[4], the appellant/claimant is not entitled for any statutory benefits on the compensation amount for the period prior to the issuance of Notification. It is further contended that the compensation fixed by the reference Court, on the basis of the market value existing as on the date of issuing Notification for acquisition of the subject land, is just and reasonable and that there are no grounds to enhance the compensation any further. 7. Having heard learned counsel for the parties, we have perused the impugned order and the material on record. 8. It is well settled that in acquisition proceedings under the provisions of the Act, the best piece of evidence for fixation of market value of the acquired land is the sale extracts of the lands in the vicinity of the acquired land at the time of issuing Notification for acquisition of the lands. Since the earlier Notification dated 10.7.1979 was already quashed by this Court and fresh Notification was issued on 27.4.1989, the appellant/claimant is entitled for the market value of the land existing as on the date of issuing fresh Notification. 9. It is to be seen that in support of his claim for enhancement of compensation, the appellant/claimant has filed sale deeds under Exs.A.5 to A.20, whereunder small bits of lands ranging from 150 to 1070 square yards were sold. Exs.A.1 to A.4 are FMB sketches dated 30.11.2001. Ex.A.5 is concerned, an extent of about 1,070 square yards of land covered by R.S.No.131 of Nuzvid village was sold on 3.5.1981 at Rs.20/- per square yard. Under Ex.A.6, an extent of 308 square yards of land in R.S.No.131 of Nuzvid village was sold on 6.2.1987 at Rs.40/- per square yard. So far as Exs.A.9, A.10 and A.11 are concerned, it is not in dispute that such documents are executed by the appellant/claimant himself. All these three documents relate to the sale transactions in R.S.No.153/1 of Nuzvid village, under which sites were sold at Rs.100/- per square yard. Further, Exs.A.12, A.13, A.14, A.15 and A.16 relate to the sale transactions in R.S.No.153/1 of Nuzvid village. It is to be noticed that in the Award dated 4.3.1992, the Land Acquisition Officer himself has considered the said sale transactions covered by R.S.No.153/1 of Nuzvid village and recorded a finding that the lands covered by the said survey number are in more advantageous position than the acquired lands, because they are situated on the eastern side of the Vagu that is running to Pedda tank and they are very nearer to the already built up dwelling locality, which is very nearer to Nuzvid town. In view of the said finding, it is clear that the subject land acquired is not located in an advantageous position as that of the lands covered by R.S.No.153/1 of Nuzvid town are located. The lands, which are nearer to the town, would fetch higher price when compared to the lands, which are located at a far away distance from the town. Having regard to the documentary evidence under Exs.A.14, sale deed dated 28.3.1988, Ex.A.13, sale deed dated 29.5.1988, Ex.A.12, sale deed dated 26.5.1988, Ex.A.15, sale deed dated 10.2.1989 and Ex.A.16, sale deed dated 20.3.1999, it is clear that small extent of lands in R.S.No.153/1 of Nuzvid village were sold for the value ranging from Rs.89/- to Rs.100/- per square yard. However, having regard to the location of the land, the value of the land reflected in the aforesaid documents cannot be adopted straight away for fixing the market value of the subject land. However, taking clue from such sale transactions, we are of the view that the market value of the subject land can be fixed at Rs.80/- per square yard. 10. It is to be noticed that as the subject land is acquired for the purpose of providing house sites, substantial portion of the land acquired is to be left towards roads and open spaces as per the Layout Rules. Coming to the quantum of deduction to be made in that regard, there cannot be any straight jacket formula. In an acquisition of this nature, deduction should be made not only on account of development of the land, but also on account of taking into consideration the sale transactions of small bits of land for fixing market value of the large extent of land acquired. Merely because the sale transactions relate to small extents of land, they cannot be totally discarded for fixing the market value of the subject land. 11. It is now well settled that even the exemplars of small extents of land can be taken into consideration for the purpose of fixing market value of the larger extents of land by giving suitable deductions. Therefore, composite deductions on both the counts may be extended. In this regard, the Hon’ble Supreme Court in LAL CHAND v. UNION OF INDIA AND ANOTHER[5] has held that the deduction is a factor of variable percentage and the range of percentage vary from 20% to 75% of the value of the land. 12. In the judgment relied on by the learned counsel for appellant/claimant in VALLIYAMMAL’s case (1 supra), the Hon’ble Apex Court has disapproved 40% deduction made by the High Court and held that 1/3rd can be the appropriate deduction towards development charges having noticed that the acquired land is situated in close vicinity of residential colonies, educational institutions, hospitals etc., and location at the junction of two important roads. The Apex Court further held that such percentage of deduction will differ from case to case having regard to the development, which has taken place in and around the acquired land. 13. Having regard to the evidence on record, we are of the view that a composite deduction (towards development of the area as the land is acquired for the purpose of providing house sites and also on account of adopting the sale transactions of small bits of land under the exhibits referred to above for fixing the market value of the acquired land, admeasuring Acs.7.72 cents) of 60% of the value of the land is appropriate for fixing the market value of the subject land acquired. By taking into consideration the price of the subject land acquired at Rs.80/- per square yard, per acre it comes to Rs.3,87,200/- (4,840 square yards per acre x Rs.80/-). If a deduction of 60% of the value of the land is made from the aforesaid amount of Rs.3,87,200/-, the market value of the subject land comes to Rs.1,54,880/- per acre. 14. Placing reliance on the judgment of the Hon’ble Apex Court in MADISHETTI BALA RAMUL’s case (2 supra), though the learned counsel for appellant/claimant claimed interest on the market value even for the period from the date of taking possession on 25.5.1981 to the date of fresh Notification published on 27.4.1989, in the subsequent judgments in R.L. JAIN’s case (3 supra) and TAHERA KHOTOON’s case (4 supra), the Hon’ble Supreme Court has held that the claimants are not entitled for any statutory benefits on the compensation amount for the period prior to the issuance of Notification. However, in the said judgments, the Hon’ble Apex Court held that in a case where possession was taken earlier to the Notification, the land owners are entitled for rent/damages upto 15% per annum on the compensation awarded, from the date of their dispossession till the date of issuance of preliminary notification. In that view of the matter, since the appellant/claimant was illegally dispossessed from the subject land as long back as on 25.5.1981 and thereby deprived of possession over the land unauthorisedly much prior to the issuance of fresh Notification, which was published on 27.4.1989, instead of directing him again for enquiry to ascertain the damages, we hold that the appellant/claimant is entitled for damages/rent at the rate of 10% per annum on the market value of Rs.1,54,880/- per acre for the period from the date of taking possession to the date of Notification i.e., from 25.5.1981 to 27.4.1989. 15. Accordingly, the appeal is allowed in part to the extent indicated above. It is needless to observe that the appellant/claimant is entitled to all the statutory benefits. So far as interest on solatium is concerned, as per the judgment of the Hon’ble Apex Court in SUNDER v. UNION OF INDIA[6], the appellant/claimant is entitled for interest on solatium with effect from the date of the said judgment i.e., on 19.09.2001 till the date of payment of market value of the land at Rs.1,54,880/- per acre. No order as to costs. 16. As a sequel, miscellaneous petitions pending, if any, shall stand closed. No order as to costs. ____________________________ JUSTICE R. SUBHASH REDDY ________________________________ JUSTICE A.SHANKAR NARAYANA 25.09.2014. Msr HON’BLE SRI JUSTICE R.SUBHASH REDDY AND HON’BLE SRI JUSTICE A.SHANKAR NARAYANA APPEAL SUIT No.362 of 2005 25.09.2014 Msr [1] (2011) 8 SCC 91 [2] (2007) 9 SCC 650 [3] AIR 2004 SC 1904 [4] 2014 (2) ALD 1 (SC) [5] (2009) 15 SCC 769 [6] (2001) 7 SCC 211