THE HONOURABLE SRI JUSTICE A.GOPAL REDDY and THE HONOURABLE SRI JUSTICE G.V.SEETHAPATHY A.S.No.1103 of 1999 Date of Judgment: 07-04-2010 Between: Gangineni Tirumla Rao …Appellant and The Land Acquisition Officer (RDO), Nellore ..Respondent The Court the following Judgment: THE HONOURABLE SRI JUSTICE A.GOPAL REDDY and THE HONOURABLE SRI JUSTICE G.V.SEETHAPATHY A.S.No.1103 of 1999 Oral Judgment: (Per Honourable Sri Justice A.Gopal Reddy) This appeal under Section 54 of the Land Acquisition Act, 1894 (for short “the Act”) by the claimant is directed against the judgment and decree of the I Additional District Judge, Nellore dated 03-03-1999 made in O.P.No.250 of 1985 seeking further enhancement of compensation. Notification under Section 4(1) of the Act, proposing to acquire Ac.8.51 cts. in Sy.No.328 and Ac.0.82 cts. in Sy.No.329/B of Nellore Bit situated within Nellore Municipality area for providing house sites to the weaker sections of the society, was published in the A.P.Gazette on 07-03-1979. The Land Acquisition Officer (LAO) after complying due formalities and after obtaining sales statistics of three years preceding to the notification passed an award dated 20-02-1980 fixing the market value of the acquired land at Rs.16,000/- per acre. On passing the award possession of the land was taken on 16-03-1980. The claimant being not satisfied with the fixation of the market value sought for a reference and the matter was referred to the civil court under Section 18 of the Act for due determination of the compensation payable to the claimant for the acquired land. The reference Court after considering the oral and documentary evidence adduced by the parties disposed of O.P. on 15-04-1986 fixing the market value at Rs.45,000/- per acre as against the claim of Rs.90,000/- claimed by the claimant. Aggrieved by the same the claimant filed A.S.No.2847 of 1986 and LAO filed A.S.No.2239 of 1986. This Court by common judgment dated 26-03-1997 disposed of both the appeals, setting aside the order of the civil court and remitted the matter to the civil court granting liberty to the parties to adduce further evidence in support of the sale deeds relied upon by them. After remand, P.Ws.2 to 9 were examined on behalf of the claimant to prove the sale deeds relied upon, which were filed and marked earlier. No further evidence has been adduced by the LAO. The learned I Additional District Judge by the impugned judgment, relying upon the sale deeds marked as Exs.A5, A6, A16 and post notification sale deeds—Exs.A8, A22, A23, A24 and A28, concluded that the market value in the acquired area ranging from Rs.60,000/- to Rs.90,000/- per acre; determined the market value at Rs.45,000/- per acre and after giving 1/3rd deduction fixed the market value at Rs.33,750/- per acre. Feeling aggrieved by the fixation of the market value the claimant preferred the present appeal claiming compensation at the rate of Rs.90,000/- per acre. Sri M.Ravindranath Reddy, learned counsel for the appellant contends that under Exs.A5, A6 and A16 which are pre- notification sale deeds, lands in Sy.Nos.325 and 322 were sold at Rs.90,000/- per acre. Under Ex.A8, which is 1½ years after issuance of notification an extent of Ac.0.42 Ankanams equivalent to 336 square yards was sold at Rs.7,315/- which works out Rs.1,04,140/- per acre. Whereas under Exs.A22 and A24, which are three months after issuance of notification, the lands in Sy.No.325/2 and 325 were sold at Rs.91,000/- and 89,000/- per acre respectively, which shows increase of the land value day by day. Similarly, under Exs.B6 and B7—sale deeds, which are 2½ years prior to issuance of notification, Ac.0.50 cts. of land was sold at Rs.90,000/- per acre. Though nobody connected with the said transactions has been examined, in view of insertion of Section 51-A, the contents of the same can be taken into consideration for fixation of the market value. Learned counsel further contends that the highest sale deed referred by the LAO in his award should be preferred for fixing the market value. If Exs.B6 and B7 are taken into consideration, the claimants are entitled to market value at Rs.90,000/-per acre. The lower court has not assigned any reasons for giving double deduction for the disadvantageous position and also for developmental charges, having held that market value at Rs.60,000/- per acre, In view of the same, claimant is entitled to just compensation at Rs.90,000/- per acre. Learned Government Pleader for appeals supported the reasoning adopted by the lower court contending that as per Ex.A20— plan there is no access to the lands in Sy.No.325 and 322, as no bridge was constructed over the channel to have free access to the acquired land. The lands covered under Exs.A5, A6 and A16 are nearer to the Nellore Mypadu road and acquired land is two to three furlongs separated by channel. Therefore, the lower court is justified in deducting 1/3rd having regard to the disadvantageous potion the acquired land is situated. When the sale under Exs.A5, A6 and A16 are small extents of 160, 160 and 484 square yards, necessary deductions have to be given from the market value towards developmental charges for laying roads and providing amenities. Therefore, fixation of the market value by the reference court does not call for any interference. In view of the above rival submissions, the only point that arises for consideration in this appeal is: “What is the true market value for which the claimant is entitled to the acquired land”. The learned reference Court earlier answered the reference in favour of the claimant enhancing the market value at Rs.45,000/- per acre and after deducting 20% towards developmental charges fixed the market value at Rs.36,000/- per acre. Not being satisfied with the enhancement the claimant filed A.S.No.2847 of 1986 and aggrieved by the enhancement made by the reference Court the State filed A.S.No.2239 of 1986. This Court by common judgment dated 26-03- 1997 set aside the judgment of the civil court and remanded the matter for fresh disposal on the ground that none connected with the sale deeds marked by the claimant as well as the LAO were examined and granted liberty to the parties to prove the sale deeds following judgment of the Supreme Court in P.RAMI REDDY v. L.A.O.[1]. On remand, P.Ws.2 to 9 were examined on behalf of the claimant. The father of the claimant, who examined as P.W.1, stated that he was looking after the properties under acquisition and the acquired land is adjoining to Jakir Hussain Nagar, which is a residential area. In the year 1977 an extent of Ac.10.00 of land in Sy.No.329/3-A was acquired by the Government, which is form part of Jakir Hussain Nagar, which was included in Nellore Municipality in the year 1978. There is black top road from Mypadu to Jakir Hussain Nagar, which was provided with electricity in the year 1976. Municipal Elementary School was established in Jakir Hussain Nagar. Protected water supply through taps was also provided to Jakir Hussain Nagar. Schools, colleges, hospitals, bus-stand and railway station are nearer to the acquired land, which is a plain and even one square in shape. He had a plan to prepare lay out and sell the same as house sites, but before he could take steps to obtain lay out the land was acquired. On establishing Jakir Hussain Nagar the building activities around the acquired land was increased apart from increasing of prices from 1977 onwards for house sites. Under Ex.A5 one A.Anjaneya Reddy sold 20 Ankanams of land in Sy.No.325/2 for Rs.3,000/-. Similar extent of land was also sold at the same price by one P.Venkatamma under original of Ex.A6, and one Kamamma sold 29½ Ankanams in the same survey number for Rs.6,000/- under the original of Ex.A7, dated16-09-1980. He speaks about the sale transactions under the sale deeds viz., Exs.A8, A22 and A45. The compensation awarded was payable in three instalments. As there was delay in payment of the amount, he filed a writ petition. On filing the same the last two instalments were paid on 13-08-1982. Due to cyclone effect in May, 1979 there was heavy damage to stocks, building and machinery of Solvent Extraction Industry established by him. Due to which he could not ascertain the exact market value of the acquired land and that is why he made a claim of Rs.60,000/- per acre during the award enquiry. In the cross-examination he admitted that except Jakir Hussain Nagar, which is to the north of Nellore Mypadu road, there was no built up area of Nellore town to the north of Jaffar Saheb Channel which emanates from Penna river and Nellore Mypadu road between check post bridge and Nawabpet bridge. He cannot deny the suggestion that houses in Kissan Nagar were constructed about 20 years back. Though the houses in Jakir Hussain Nagar were constructed subsequent to the buildings in Kissan Nagar, he cannot say how many years after. The house sites in Sy.Nos.326 and 327 were purchased, but only some houses were constructed and some plots are still vacant. The Government is constructing houses in Sy.Nos.322, which is to the east of Kissan Nagar. The lands in Sy.Nos.324 and 323 besides the acquired land were under cultivation till the date of acquisition. The land in between the acquired land and the road leading to Jakir Hussain Nagar is still vacant but the owner of the land is proposing to form plots in that land for the purpose of house sites. There is a channel to the south of the acquired land flowing towards east. There are no regular bridges over that channel connecting the acquired land and Kissan Nagar. The people are crossing the channel through the channel bed because of the facility available for crossing. After remand he was again examined. He stated that vendor under Exs.A5 and A6—sale deeds is one Mr.Anjaneya Reddy, who is no more and died two years ago. he scribe and the purchaser under Ex.A16—sale deed are died. Ramanamma one of the vendors under Ex.A16 died and he could not trace the other vendor Narasimha Rao. He has no personal acquaintance with the other vendors of Ex.A16, except the vendors under Exs.A5 and A6. P.W.7 deposed that he is the only son of Subba Reddy and he lived along with his father till his father’s death. His father purchased 20 Ankanams of land in Kissan Nagar under an agreement of sale dated 17-01-1977 for sale consideration of Rs.3,000/- and got sale deed registered in his name on 15-11-1978 under Ex.A5. One Audiseshaiah scribe of original Ex.A5 is no more. Kissan Nagar and Jakir Hussain Nagar are adjacent to one another and now they become one locality. The vendor under Ex.A5, Anjaneya Reddy, died two years back. P.W.4, who retired as Sub-Registrar, stated that he worked as clerk in Nellore Registrar’s office from 1977 to March, 1985. His father —Venkata Subbaiah purchased 10 cents of land in Sy.No.322/2-A of Nellore Bit—II for a consideration of Rs.6,000/- from Ambati Narasimha Rao and another lady. Ex.A16 is the registration copy of the sale deed under which his father purchased the said extent. His father paid the sale consideration. He attested the original of Ex.A16. His father died in the year 1984. The Government acquired the land purchased by his father and paid Rs.6,000/- for the entire extent of 10 cents. He denied the suggestion there were constructions on the date of purchase of land by his father. In the cross-examination he stated that Kissan Nagar is just adjacent towards west of the land purchased by his father and he do not know the distance between Jakir Hussain Nagar and Kissan Nagar and he do not where the acquired land is situated. P.W.6 deposed that his elder sister—Kamuri Kanthamma purchased 20 Ankanams of land from Addanki Srilakshmi for a consideration of Rs.3,100/- under original of Ex.A23, dated 12-12- 1979. Since his sister is deaf, he paid the consideration before the Sub-Registrar on her behalf. The said fact is also mentioned in Ex.A23, which bears his signature. His wife purchased 20 Ankanams in Kissan Nagar from Addanki Srilakshmi under original of Ex.A24 for a consideration of Rs.3,100/- on 12-12-1979 and the same was recited in Ex.A24. P.W.9 deposed that himself and his sister—Peddireddy Venkatamma jointly purchased 20 Ankanams of site in Kissan Nagar for a consideration of Rs.3,000/- from one Adam Anjaneyareddy under an agreement of sale in the month of January, 1977 and later obtained registered sale deed under Ex.A6 on 15-11-11978. In the cross- examination he stated that houses and roads were there in Kissan Nagar by 1970 itself. R.W.1, who worked as Joint Surveyor in Nellore Municipality, deposed that the acquired land is to the south of Jakir Hussain Nagar, which is situated at a distance from Nellore town and established in the year 1976. The built up area of Nellore town extends upto the Jaffar Saheb Canal, which runs from Penna river west to east. There is a bridge across Jaffar Saheb Canal by the side of check post. From the check post point one has to go a distance of one kilometre on Nellore Mypadu Road towards east and from that place there is a branch road leading to Jakir Hussain Nagar from Nellore Mypadu road towards North. Jakir Hussain Nagar is located in Sy.Nos.309, 329, 332/1 and 332/2 of Nellore Bit—II village. An extent of Ac.3.57cts. belonging to P.W.1 was acquired by the Government under Ex.B3—award dated 30-07-1977 fixing the market value at the rate of Rs.10,000/- per acre. By the date of acquisition of the land in question, Jakir Hussain Nagar was a well-developed colony. The acquired land was under cultivation prior to acquisition and lying to the south of Kodurupadu canal. Kissan Nagar colony was constructed in Sy.No.325/2 about 29 years back, which is a separate colony unconnected with the Nellore town. Under the original of Exs.B6 and B7 each an extent of Ac.0.50 cts. was sold for Rs.90,000/-, which appears to be wrong and we have verified from the sale deed which is Rs.9,000/-. A similar extent i.e. Ac. 0.50 cts. was sold at the same rate i.e.Rs.9,000/- by the same vendor under Ex.B8 sale deed. In the cross-examination he admitted that he was working as Town Surveyor and working in the same post from 1973 to 1977. The rice mill on the west side in Sy.No.327 is an old one and might have been constructed about 30 years back. A road was formed in a portion of the acquired land and on the portion of northern bund of Nellore—Kodurupadu canal. The first acquisition for Jakir Hussain Nagar was made in the year 1976. The acquired land is best suited for house sites because of its location in the midst of residential area. The prices of the lands adjoining Nellore town are on raising trend from 1977 onwards. A road was formed in private layout in Sy.No.311 connecting Nellore Mypadu road and the Jakir Hussain Nagar branch road. There was another lay out to the east of Sy.No.327 connecting Nellore Mypadu road on Kodurupadu channel. There are houses and house sites in the entire extent of Sy.No.326. The Deputy Tahsildar, who was examined as R.W.2, admitted in the chief examination that the prices of the house sites and the lands near the acquired land are raising from year to year. The Supreme Court in RANEE OF VUYYUR v. COLLECTOR OF MADRAS[2] held that when the land is being compulsorily taken away from the person, he is entitled to say that he should be given the highest value which similar land in the locality is shown to have fetched in a bona fide transaction entered into between a willing purchaser and a willing seller near about the time of the acquisition. Where sale deeds pertaining to different transactions are relied on behalf of the Government, that representing the highest value should be preferred to the rest unless there are strong circumstances justifying a different course. In CHIMANLAL v. SPL. LAND ACQUISITION OFFICER, POONA[3] the Supreme Court capsulized the factors, which must be etched on the mental screen while determining the compensation for the acquired land and held that every case must be dealt with on its own fact pattern bearing in mind all these facts as a prudent purchaser of land in which position the Judge must place himself, which are only general guidelines informed with common sense. Keeping in view the above guidelines enunciated by the Supreme Court we have to determine the market value payable to the claimants. Under Ex.20—plan, which is not disputed before the lower court, Jakir Hussain Nagar is nearer to the acquired land and it is on the northern side. Except Exs.A5, A6, A16 and A21 all the other sale deeds are post notification sale deeds. Under Ex.A16—sale deed an extent of Ac.0.10 cts. of land was sold at Rs.60,000/- per acre on 20- 11-1978, whereas 20 Ankanams of land under Exs.A5 and A6 was sold as house sites on acre wise which works out Rs.90,000/- per acre. The evidence of P.Ws.1, 7 and 9 clearly establishes that the lands covered by the sale deeds are within two furlongs distance away from the acquired land. The lands covered by sale deeds are in Sy.Nos.322 and 325 and they are nearer to Nellore Mypadu road. The findings recorded by the lower Court that there was no bridge across the channel and the acquired lands are disadvantageous position for want of access are contrary to the evidence adduced by the parties. Since the sale deeds covered under Exs.A1, A5, A6, A8 are small extents ranging 160 square yards to 480 square yards necessary deductions should be given, when large extents are acquired, apart from statutory deduction in making the plots. It is now fairly well-settled that when the sale transaction covered by sale deed relates to a small plot and the land in question acquired is large extent, the land comprising of large area is not developed although it has potential value for residential and commercial purposes, in order to develop this land, roads were to be laid, provisions for drainage was to be made and certain area was to be earmarked for other civic amenities and the said area had to be deducted for the purpose of determination of compensation. After leaving the area in the land required for the purposes mentioned above, plots were to be made for residential and commercial purposes by incurring expenditure for other developmental works, such as providing electricity, water, etc. If the acquired land is not a small plot located in such a way that no other development was required at all, the lands covered by exhibits relating to small plots can also be taken for fixing the market value with some nominal deduction keeping in view of the extent of land involved in acquisition. It is now fairly well- settled that in respect of agricultural land or undeveloped land which has potential value for housing or commercial purposes, normally 1/3 amount of compensation has to be deducted out of the amount of compensation payable on the acquired land subject to certain variations depending on its nature, location, extent of expenditure involved for development and the area required for roads and other civic amenities to develop the land so as to make the plots for the residential or commercial purposes. A claimant, who claims that his land is fully developed and nothing more is required to be done for developmental purposes, must show on the basis of evidence that it is such a land and it is so located. In the absence of such evidence, merely saying that area adjoining his land is developed area, is not enough particularly when the extent of the acquired land is large and even if a small portion of the land is abutting the main road in the developed area, does not give the land character of a developed area. The Supreme Court in ADMINISTRATOR GENERAL OF WEST BENGAL v. COLLECTOR, VARANSI[4] referring to earlier decisions has held that prices fetched for small plots cannot form basis for valuation of large tracts of land as the two are not comparable properties. Following the same and other cases, in GULZAR SINGH v. STATE OF PUNJAB[5], the Supreme Court upheld the deduction of 1/3 of the undeveloped land towards developmental charges. Further, in SPECIAL LAND ACQUISITION OFFICER, BANGALORE v. V. T. VELU AND ORS.[6] the Supreme Court held that at least 1/3 of the land acquired is to be set apart for road purpose, developmental purpose and other civic amenities. Keeping in view of the above principles, we can take into consideration Exs.A5, A6, A16 and its proximity for fixation of the market value, which works out to Rs.90,000/- per acre. Out of which 40% has to be deducted for laying roads, levelling the land, which is reasonable. For layout and open spaces etc. some expenditure is required to be incurred in developing the area including connecting the land to the other side of Nellore town. After deducting 40% (90,000 x 40/100 = 36,000), as aforementioned, the market value comes to Rs.54,000/- (90,000/- –36,000/-). Accordingly, we fix the market value of the acquired land at Rs.54,000/- per acre as against Rs.33,750/- awarded by the reference Court. It is not disputed that award was passed on 20-02-1980 prior to introduction of Act 68/1984 i.e. 30-04-1982. Therefore, the claimants are not entitled to additional market value under Section 23 (1-A) of the Act, but they are entitled to 30% solatium on the enhanced compensation and also interest at the rate of 9% per annum not only on the enhanced compensation but also on the solatium for a period of one year from the date of taking possession and thereafter 15% per annum. In the result, appeal is partly allowed as indicated above. No order as to costs. ________________ A.GOPAL REDDY, J. _________________ G.V.SEETHAPATHY,J. 07-04-2010 Murthy [1] (1995) 2 SCC 305 [2] 1969 MLJ 45 [3] AIR 1988 SC 1652 [4] (1988) 2 SCC 150 [5] (1993) 4 SCC 245 [6] (1996) 2 SCC 538