THE HON’BLE SRI JUSTICE GODA RAGHURAM AND THE HON’BLE SRI JUSTICE SANJAY KUMAR L.A.A.S.NO.830 OF 2005 DATED 19TH JANUARY, 2011 BETWEEN: The Tahsildar/Land Acquisition Officer, Nagarkurnool. … Appellant/Referring Officer a n d Y.Balram Reddy and others. … Respondents. THE HON’BLE SRI JUSTICE GODA RAGHURAM AND THE HON’BLE SRI JUSTICE SANJAY KUMAR L.A.A.S.NO.830 OF 2005 J U D G M E N T (Per Sri Justice Sanjay Kumar) Aggrieved by the Order and Decree dated 31.01.2005 passed by the reference Court of the learned Senior Civil Judger at Nagarkurnool, in O.P.No.14 of 1995, the State is in appeal. By the said Order and Decree the reference Court enhanced the market value determined for the acquired land from Rs.4,000/- per acre to Rs.15,000/- per acre. An extent of Ac.3-65 cents situated at Mahadevunipet Village, Bijinapally Mandal, Mahaboobnagar District, belonging to the respondents herein was acquired by the State for the purpose of providing house sites to the weaker sections of the village. The notification under Section 4(1) of the Land Acquisition Act, 1894 was published on 22.11.1984. After due enquiry, the Land Acquisition Officer fixed the market value of the acquired land at Rs.4,000/- per acre. Dissatisfied, the respondents sought reference under Section 18 of the Land Acquisition Act, 1894 (for brevity, ‘the Act of 1894’). Before the reference Court the respondents herein examined P.Ws.1 and 2 and marked Exs.A.1 to A.5. The Mandal Revenue Officer was examined as R.W.1 on behalf of the State and the Award was marked as Ex.R.1. It was the claim of the respondents herein that the market value of the acquired land would be Rs.1,00,000/- per acre. Exs.A.1 to A.5 sale deeds relied upon by the respondents pertained to small extents of land. These sale transactions took place just prior to the acquisition and were therefore relied upon by the reference Court. It is relevant to note that the extents sold under these sale deeds were in the range of 2 to 2½ guntas. The sale consideration obtaining therein put the market value of the lands sold at Rs.40,000/- per acre. These sale transactions were also considered by the Land Acquisition Officer during the Award enquiry, but were rejected on the ground that they pertained to smaller extents. However, the reference Court was of the opinion that these transactions could be relied upon for arriving at the correct market value. Having stated so, the reference Court straightaway concluded that it was of the view that the market value of the land was to be fixed at Rs.15,000/- per acre. There is no reason forthcoming from the order under appeal as to how the reference Court decided upon this figure. There is no discussion as to the similarity between the acquired land and the lands which were the subject matter of these sale transactions. There is also no discussion by the reference Court as to how it has effected deductions from the market value of Rs.40,000/- per acre obtaining under these sale transactions. The ipse dixit of the reference Court cannot be the basis for valid determination of the market value. Reference in this regard may be made to the observations of the Supreme Court in ADMINISTRATOR GENERAL OF WEST BENGAL V/s. COLLECTOR, VARANASI[1]: "It is trite proposition that prices fetched for small plots cannot form safe basis for valuation of large tracts of land as the two are not comparable properties. 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 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 a 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 notification would be relevant. In such a case, necessary deductions for the extent of land required for the formation of roads and other civic 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 realisation of the price; the profits on the venture etc., are to be made. In Brig. Sahib Singh Kalha vs. Amritsar Improvement Trust, (See (1982) 1 SCC 419 : (AIR 1982 SC 940)) this Court indicated that deductions for land required for roads and other developmental expenses can, together, come up to as much as 53%." The subjective exercise undertaken by the reference Court, bereft of reason and application of mind, cannot be the indicium for correct determination of the market value. We are therefore left with no option but to remand the matter to the reference Court for consideration afresh in accordance with law. The respondents herein were permitted to withdraw half the enhanced amount awarded by the reference Court pursuant to the interim order dated 29.11.2005 passed in this appeal. The amount so withdrawn shall abide by the decision afresh of the reference Court upon this remand. The appeal is accordingly allowed setting aside the Order and Decree dated 31.01.2005 passed by the reference Court of the learned Senior Civil Judge, Nagarkurnool, in O.P.No.14 of 1995. No order as to costs. ------------------------------ GODA RAGHURAM,J -------------------------- SANJAY KUMAR,J 19TH JANUARY, 2011. PGS [1] AIR 1988 Supreme Court 943