1 IN THE HIGH COURT OF BOMBAY AT GOA FIRST APPEAL NO. 283 OF 2003 1. Premnath Damodar Prabhudessai r/o. H.No. 49, Pajifond, Margao Goa (since deceased represented by LR's) 1(a) Smt. Savitribai Premnath Prabhudessai, widow (b) Shri Damodar Premnath Prabhudessai son, married to (c) Smt. Reshma Damodar Prabhudessai, (d) Shri Subhash Premnath Prabhudessai son, married to (e) Smt. Savita Subhash Prabhudessai (f) Smt. Sunita Ajit Sharaff daughter, married to (g) Ajit Gopalkrishna Sharaff (h) Smt. Pratibha Laxmikant Kudchodkar daughter, married to (i) Shri Laxmikant Prabhakar Kudchodkar (j) Smt. Vainita B. Rajadhaksha (k) Shri Vassant K. Rajadhaksha All the above from (b) to (k) represented by their Attorney Smt. Savitribai alias Kesarbai Premnath Prabhudessai. ... Appellants V/s 1. Deputy Collector & LAO Quepem, Goa. 2. The Divisional Engineer, Telegraphs, Panaji-Goa. 3. M/s. Shantilal Khushaldas Bros. Pvt. Ltd. Vasco Da Gama. .... Respondents Mr. Nitin Sardessai, Advocate for the Appellants. Mr. S.S. Kantak, Advocate General with Ms. R. Chodankar, Addl. Govt. Advocate for Respondent No.1. CORAM : S.A. BOBDE & N.A. BRITTO, JJ. 2 DATE : 30 th APRIL, 2008 ORAL JUDGMENT : This appeal is against the judgment dated 30/06/2003, passed by the District Judge, South Goa at Margao. The Government acquired appellants' land for construction of telephone exchange at Vasco and the proceedings initiated by Notification no. 22/61/83-RD dated 20/08/1983 under Section 4 of the Land Acquisition Act. The area which was notified for acquisition was 1708 square metres with an additional area of 133 square metres. An award dated 30/03/1986 was passed by the Land Acquisition Officer, who fixed the market rate at Rs. 150/- per square metre for the land admeasuring 1841 square metres out of survey no. 104/6 of Vasco city. The appellants preferred a Reference under Section 18 of the Land Acquisition Act having accepted the compensation under protest. Learned District Judge rejected the Reference, hence the appeal. 2. Mr. Sardessai, the learned Counsel for the appellants submitted that admittedly, the land was capable of development of commercial lines and FAR available at the relevant time was 2.5. According to the learned Counsel, the appellants proposed to develop the land for commercial purpose by building a complex. According to the appellants, after taking the costs of construction of commercial complex, they would have received and earned 3 about Rs. 66,69,800/-. The calculation is based on the value of a shop on the ground floor at the rate of Rs. 6,000/- per square metre and office premises at the rate of Rs. 2,500/- per square metre and the total income of Rs. 1,56,00,000/-, deducting therefrom the costs of construction of the complex at about Rs. 82,00,000/-, the appellants have claimed potential profit of about Rs. 66,69,800/-. 3. Having considered the submission and the circumstances of the case, we are unable to accept this argument. There is no doubt that the compensation would vary according to the permitted user of the land e.g. agricultural, commercial or other, but the compensation would be determined as is normally determined by taking into account the present market value of the land. There is no warrant for enhancing the market value on the basis of which compensation is payable, by adding to it the potential value of the land, after it is developed even though there is no actual development. In fact, no authority is brought to our notice where a Court of law has determined compensation on the basis of potential or projected income which the land would fetch to the land holder after development. 4. Mr. Sardessai, the learned Counsel for the appellants relied on a decision in the case of Raghubans Narain Singh V/s. Uttar Pradesh Government (AIR 1967 SC 465) where the Supreme Court has observed: 4 Market value means the price that a willing purchaser would pay to a willing seller for a property having due regard to the existing condition with all its existing advantages and its potential possibilities when laid out in the most advantageous manner, excluding any advantages due to the carrying out of the scheme for the purposes for which the property has been compulsorily acquired. The ratio of the decision does not in any way support the contention that the market value should be determined on the basis of the potential income which the landholder would make from the property. The price that a willing purchaser would pay to a willing seller for the property is obviously the price that would be payable in praesentii. 5. In fact, it appears that the contention of the appellants have been considered and rejected by the decision of the Supreme Court in State of Haryana V/s. Ram Singh (2001 (6) SCC 254) in which the Supreme Court has observed as follows: “11. We are left with the question whether the High Court could have granted a further amount on account of potential value over and above the market value by way of compensation. Under Section 23(1) of the Act, in determining the amount of compensation to be awarded for land acquired under the Act, the court shall take into consideration the market value of the land at the date of publication of the notification under Section 4, sub-section (1). The statute does not allow for payment of any further amount on account of “potential value” over and above the market value. Besides “market value” means exactly what it says viz. the price which the asset would or could be expected to fetch in the open market. Where a property has the potentiality of more profitable use, it will command a better price than a property without such potential. In other words, potentiality forms part of the market value and may be a 5 factor to be taken into account for the purpose of determining the market value. But once the market value is determined, there is no question of awarding any further amount in addition thereto by reason of any further future potential.” 6. In this view of the matter, we see no merit in the appeal, which is hereby dismissed. S.A. BOBDE, J. N.A. BRITTO, J. NH/-