THE HON’BLE SRI JUSTICE GODA RAGHURAM AND THE HON’BLE SRI JUSTICE SANJAY KUMAR L.A.A.S.NO.751 OF 2005 DATED 18TH JANUARY, 2011 BETWEEN: The Special Deputy Collector, L.A. Unit, Huzurabad. (Now LMD Colony, Karimnagar) … Appellant/Referring Officer a n d Allam Swarupa and Others. … Respondents/Claimants THE HON’BLE SRI JUSTICE GODA RAGHURAM AND THE HON’BLE SRI JUSTICE SANJAY KUMAR L.A.A.S.NO.751 OF 2005 J U D G M E N T (Per Sri Justice Sanjay Kumar) An appeal by the State under Section 54 of the Land Acquisition Act, 1894 (for brevity, ‘the Act of 1894’) against the Order and Decree dated 01.12.2004 passed by the reference Court of the learned Senior Civil Judge, Huzurabad, in O.P.No.10 of 1999. By the said Order and Decree, the reference Court enhanced the market value of the acquired land from Rs.7,000/- per acre to Rs.25,000/- per acre and granted interest from the date possession of the acquired land was taken, though the same was prior in point of time to the date of the notification under Section 4(1) of the Act of 1894. Ac.0.12 guntas of dry land belonging to the respondents herein situated at Illanthakunta Village, Jammikunta Mandal, Karimnagar District, were acquired by the State for excavation of IL of IOL DBM 16 at K.Ms. 0.000 to 0.1000. The notification under Section 4(1) of the Act of 1894 was published on 17.05.1986. The acquired land was however taken possession of on 12.11.1984 itself. After due enquiry, the Land Acquisition Officer fixed the market value of the acquired land at Rs.7,000/- per acre. Aggrieved by the compensation awarded, the respondents herein sought reference under Section 18 of the Act of 1894. Before the reference Court, the respondents examined three witnesses and marked three documents. The State examined the Land Acquisition Officer as R.W.1 and adduced two documents in evidence. The claimants, speaking as P.Ws.1 to 3, sought enhancement of the compensation by fixing the market value of the acquired land at Rs.1,50,000/- per acre. The reference Court found that even going by the sales statistics relied upon by the Land Acquisition Officer during the Award proceedings, the determination at Rs.7,000/- per acre was inadequate. However, the reference Court did not accept Ex.A.1 sale deed dated 22.06.1984 relied upon by the claimants as no evidence was let in to show that the lands covered by it were proximate or similar in nature and potential to the acquired land. Similarly, the reference Court was not impressed by Ex.A.2, the certified copy of the order in O.P.No.34 of 1996 on its file, as no evidence was let in to show that the lands covered by the said O.P. were similar in nature to the acquired land. However, going by the sales statistics relied upon by the Land Acquisition Officer, which ranged from Rs.3,000/- per acre to Rs.1,68,000/- per acre, the reference Court was of the opinion that the determination of the market value by the Land Acquisition Officer at Rs.7,000/- per acre was meager and accordingly enhanced it to Rs.25,000/- per acre. Relevant to note, the sale deeds relied upon by the Land Acquisition Officer during the Award enquiry were not made part of the record before the reference Court. However, as the documents produced by the claimants were discounted by it, the reference Court relied upon the information gathered by the Land Acquisition Officer himself, while effecting enhancement of the market value. Considering the meager extent of the land involved, i.e., Ac.0.12 guntas, we are not inclined to interfere in the matter though the approach adopted by the reference Court is unorthodox, to say the least. We therefore confirm the determination of the market value at Rs.25,000/- per acre arrived at by the reference Court. It is however to be noticed that the reference Court granted interest upon the compensation awarded from the date of taking possession of the acquired land i.e., 12.11.1984, though the same was anterior in point of time to the notification under Section 4(1) of the Act of 1894. Payment of interest under Section 34 of the Act of 1894 is no doubt pegged to the date of taking possession of the acquired land but the scheme of the Act does not contemplate taking over of the possession prior to the date of the notification under Section 4(1) of the Act of 1894. That being so, possession taken prior to the said notification can only give rise to a claim for damages as per law but cannot be validated by grant of interest from such date under the provisions of the Act. The reference Court was therefore in error in awarding interest from the date of taking over possession of the land. The respondents would accordingly be entitled to interest upon the compensation awarded at 9% per annum for the first year from the date of the Section 4(1) Notification, i.e. 17.05.1986 and thereafter, at 15% per annum till realization. The Order and Decree under challenge shall stand modified to this extent. The Appeal is accordingly allowed in part but in the circumstances, without any order as to costs. ------------------------------ GODA RAGHURAM,J -------------------------- SANJAY KUMAR,J 18TH JANUARY, 2011. PGS