THE HON’BLE SRI JUSTICE GODA RAGHURAM AND THE HON’BLE SRI JUSTICE SANJAY KUMAR L.A.A.S.NO.880 OF 2005 DATED 19TH JANUARY, 2011 BETWEEN: The Special Deputy Collector, L.A. Unit, Huzurabad. … Appellant/Referring Officer a n d Challa Rajaiah and others. … Claimants/Respondents THE HON’BLE SRI JUSTICE GODA RAGHURAM AND THE HON’BLE SRI JUSTICE SANJAY KUMAR L.A.A.S.NO.880 OF 2005 J U D G M E N T (Per Sri Justice Sanjay Kumar) This appeal by the State arises out of the Order and Decree dated 16.09.2004 passed by the reference Court of the learned Senior Civil Judge, Huzurabad, in O.P.No.41 of 1996. By the said Order and Decree, the reference Court enhanced the market value of the acquired land from Rs.5,000/- per acre to Rs.22,000/- per acre and also granted interest from the date of taking possession, a date prior to the publication of the Notification under Section 4(1) of the Land Acquisition Act, 1894. An extent of Ac.0-35 guntas of dry land situated at Dhandepalli Village of Elkathurthy Mandal, Karimnagar District, belonging to the respondents herein was acquired by the State for excavation of DBM-22 from kilometers 0.000 to 0.350. The notification under Section 4(1) of the Land Acquisition Act, 1894 (for brevity, ‘the Act of 1894’) was published on 24.03.1988. The possession of the land was however taken on 11.09.1984 prior to the Notification under Section 4(1) of the Act of 1894. After due enquiry, the Land Acquisition Officer fixed the market value of the acquired land at Rs.5,000/- per acre. Dissatisfied therewith, the respondents herein sought reference under Section 18 of the Act of 1894 claiming Rs.25,000/- per acre. Before the reference Court the claimants examined P.Ws.1 to 6 and marked Exs.A.1 to A.4 while the State did not choose to adduce any oral evidence but marked the Award proceedings and the Award as Exs.B.1 and B.2. The reference Court placed reliance on Ex.A.1 sale deed dated 31.12.1985 and Ex.A.2 - certified copy of the common order in O.P.Nos.430 and 435 of 1992 on the file of District Court, Karimnagar, as these two documents pertained to lands in Dhandepalli Village. Exs.A.1 and A.2 reflected that the value of the lands in Dhandepalli Village during the years 1984-1985 was between Rs.20,000/- and Rs.21,800/- per acre. However, insufficient evidence was let in to show that the lands covered by these documents were proximate in terms of situation to the acquired land and similarity in nature and potential. However, as these lands were situated in the same village and as the present acquisition was of the year 1989, well after the sale transaction under Ex.A.1 and the acquisition which formed the subject matter of Ex.A.2, the reference Court fixed the market value at Rs.22,000/- per acre for the acquired land. The reference Court went on to grant interest from the date of taking of the possession of the acquired land, i.e. 11.09.1984. In so far as the determination of the market value of the land is concerned, we are of the opinion that the approach adopted by the reference Court cannot be found fault with. Relevant to note, the reference Court eschewed from consideration Exs.A.3 and A.4 which pertained to a different village and only took into account Exs.A.1 and A.2 as they related to lands situated in the same village. Relying on the market value emerging therefrom, the reference Court also considered the fact that there was a time lapse and the fact that there was no evidence on record to show the proximity and similarity of the lands covered thereby and the acquired land. Taking all these facts into consideration, the reference Court fixed the market value of the acquired land at Rs.22,000/- per acre. We do not find any error in the reasoning or the exercise undertaken by the reference Court in this regard. It is however to be noticed that the possession of the acquired land was taken long before the notification under Section 4(1) of the Act of 1894. Taking over of possession in this manner is not envisaged by the Act of 1894 and cannot be validated by the reference Court by awarding interest from the date of such taking over of possession without reference to the fact that the actual acquisition proceedings commenced long thereafter. The land owners would have a cause of action for payment of damages in accordance with law for such illegal usurpation of their property by the State. However, the reference Court cannot award interest under the provisions of the Act of 1894 from the date of such taking over of possession, thereby legalizing the same. The Order and Decree of the reference Court shall therefore stand modified to the extent of directing payment of interest at 9% per annum for the first year commencing from the date of the publication of the notification under Section 4(1) of the Act of 1894 and at the rate of Rs.15% per annum thereafter till the date of realization. The Order and Decree shall stand confirmed in so far as the determination of the market value is concerned. The appeal is accordingly allowed in part to the extent indicated above but in the circumstances, without any order as to costs. ------------------------------ GODA RAGHURAM,J -------------------------- SANJAY KUMAR,J 19TH JANUARY, 2011. PGS