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PETITIONER: P.RAM REDDY ETC.

       Vs.

RESPONDENT: LAND ACQUISITION OFFICER HYDERABAD

DATE OF JUDGMENT27/01/1995

BENCH: VENKATACHALA N. (J) BENCH: VENKATACHALA N. (J) RAMASWAMY, K.

CITATION:  1995 SCC  (2) 305        JT 1995 (1)   593  1995 SCALE  (1)332

ACT:

HEADNOTE:

JUDGMENT: VENKATACHALA, J.: 1.    Having granted leave to appeal sought for in the above Special Leave Petitions directed against the common judgment and decree dated 19.4.1993 rendered in Appeal Nos. 1565  and 2087/91 by the High Court of Andhra Pradesh at Hyderabad and heard  arguments  of  learned  counsel  appearing  for   the contesting parties in the appeals, we propose to dispose  of all these appeals by this common judgment. 2.   Sri P. Ram Reddy, the appellant in appeals arising  out of S.L.P’s. Nos. 1336263/93 and respondent in appeal arising out of S.L.P. No. 18202/93, to be referred to hereinafter as ’the claimant’, was the owner in possession of dry land  of, as  large  an  extent as, IO acres 17  guntas  comprised  in Survey Nos. 48/24 and 48/26 of Katedhan Village lying in the outskirts of Hyderabad.  One acre 25 guntas of land out of 5 acres  22 guntas of land in Survey No. 48/24 and 2 acres  15 guntas  of land out of 4 acres 35 guntas of land  in  Survey No. 48/26 were the lands included in the total extent of  14 acres  and  35  guntas of land proposed to  be  acquired  by Hyderabad Urban Development Authority -"HUDA" for  formation of inner ring road required to connect Old Karnool Road with Hyderabad-Bangalore   National  Highway  No.7,  under   Land Acquisition  Act, 1894 as amended by Act 68 of 1994 --  ’the L.A.  Act’,  by a Notification under Section  4(1)  thereof, published in the modes prescribed thereunder, by issuance of public  notice in the locality on 2.9.1985. The  acquisition of the said lands having been completed 597 by  a declaration made and published under Section 6 of  the LA  Act, notice under section 9 was issued to  the  claimant calling  upon him to make his claim for compensation of  the acquired  land  before the Land Acquisition Officer  of  the HUDA  -hereinafter  to  be referred to  as  "the  LAO".   In response  to the said notice, the claimant claimed award  of compensation  by the LAO for his acquired lands at the  rate

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of  Rs.  1  50/- per square yard apart  from  the  statutory benefits which he was entitled to get under the LA Act.  The LAO,  by  his  award made under Section II of  the  LA  Act, determined the market value of the claimant’s acquired  land at  Rs. 12 per square yard and awarded to him the amount  of compensation  together with statutory benefits.  Since  that award  of the LAO was unacceptable to the claimant, he  made an application to the LAO under Section 18 of the LA Act and got the application referred to the Court of the Subordinate Judge,   Ranga   Reddy  District  --  "Civil   Court",   for determination  of the just compensation payable to him.   On that  reference registered as A.S. 129/88, the  Civil  Court held the inquiry as required by the LA Act and on the  basis of  the inquiry so held, determined the market value of  the claimant’s  lands at Rs.80 per square yard  and  accordingly made  an award and decree dated 18.4.1991 together with  the statutory  benefits.  That award and decree  being  appealed against  in  the  High Court by the  claimant  and  the  LAO respectively  in A.S. No. 1565/91 and A.S. No.2087/ 91,  the former  seeking grant of further enhanced  compensation  and the  latter seeking reduction in the  granted  compensation. Both  the  appeals being clubbed together and heard  by  the Division  Bench of the High Court, the market value  of  the claimant’s  land was reduced to Rs. 32 per square yard  with proportionate  reduction in the statutory benefits,  by  its common judgment and decree rendered on 19.4.1993. While  the claimant questioned the correctness of the said judgment and decree  of the High Court by filing appeals arising  out  of S.L.P’s.  Nos.  13362-13363/  93,  the  LAO  challenged  the correctness of the same judgment and decree by filing appeal arising out of S.L.P. No. 18202/93, as stated at the outset. The  above stated facts make it clear that the LAO,  by  his award (Ex.B-1) fixed the value of the acquired land at Rs.20 per square yard on the basis of the value fetched by sale of residential  building plots at Rs. 20 per square yard  under Sale  Deed  dated 14.10.1982whereunder 200 square  yards  of plot in Survey No.48/13 of Katedhan Village was sold at  Rs. 20  per square yard (Ex.  B-3); sale deed  dated  16.10.1982 whereunder  200  square yards plot in Survey No.  48/14  was sold at Rs. 20 per square yard (Ex.B-4), and Sale Deed dated 1.2.1983  whereunder  200 square yards plot  in  Survey  No. 48/12  had  been  sold at Rs.20  per  square  yard,  Ex.B-5. However,  he fixed the market value of the acquired land  at Rs. 12 per square yard by deducting 40% area towards lay-out losses.  He granted statutory benefits also payable for  the acquired  land.  It also becomes clear from that award  that the  sale deeds were seen and the local inspection had  been held by the LAO before making that award. 3.   The  Civil Court by its judgment and decree,  which  is referred to by us earlier, enhanced the market value of  the acquired  land  to Rs. 80 per square yard relying  upon  the amounts of consideration mentioned under sale deeds and gift deeds  (Exs.   A-1 to A-5) and also the  probable  value  of building plots in the locality of the 598 acquired  lands mentioned in Ex.  A6 - the extract of  Basic Valuation  Register,  after  making  certain  percentage  of deduction out of such amount or value towards what is called as "lay-out losses". 4.   When that award and decree of the Civil Court       was challenged in the High Court,it was found by the High  Court that  Exs.  A-1 to A-5, the Sale Deeds and Gift  Deeds  were unreliable and could not be acted upon by it for the reasons it  gave  in  that regard.  It also  refused  to  place  any reliance on Ex.A-6, the Basic Valuation Register extract, on

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its view that it was not safe to determine the market  value of  lands  acquired under the LA Act on the value  found  in Basic Valuation Register.  However, it found that the  value of  Rs.20 per square yard, on which the LAO  had  determined the  market  value of the acquired lands, was on  the  lower side  for  determining  the  market  value  of  that   land. Consequently,  it  increased the value of Rs.20  per  square yard  relied  upon by the LAO by another  Rs.20  per  square yard.  Thereafter, the High Court deducted 20% towards  lay- out  losses out of Rs.40 per square yard and determined  the market value of the acquired lands at Rs.32 per square yard. Therefore,  it  rendered  its judgment  and  decree  in  the appeals  by reducing the market value of the acquired  lands from  Rs.80  per square yard awarded by the Civil  Court  to Rs.32  per square yard of the claimant’s acquired land of  4 acres  and 3 guntas and granted in addition 30% solatium  on the market value, 12% additional amount on such market value from  the date of the notification i.e. 24.7.1985  till  the date  of  the  award  i.e. 14.7.1988  and  interest  on  the enhanced  amount of compensation under Section 28 of the  LA Act. 5.   Shri P.P. Rao, learned Senior Counsel,  who    appeared before us for the claimant,   raised   several   contentions against  the correctness of the judgment and decree  of  the High Court.  He contended, firstly, that the High Court  had failed to take into consideration the very statement of  the LAO  made  in  his award that the  acquired  land  had  high potentiality  for  developing  into  a  Housing  Colony,  in determining  its market value of the acquired land and  that non-consideration had resulted in reducing the market  value of  the  acquired lands instead of  enhancing  their  market value;  secondly,  when the Civil Court had  determined  the market  value of the acquired land of the claimant at  Rs.80 per square yard on the basis of amounts of consideration  of building plots mentioned under Exs.  A-1 to A-3 (Sale Deeds) and  Exs.  A2, A-4 and A-5 (Gift Deeds) and Ex.  A-6,  Basic Valuation Register extract, it should not have rejected Exs. A-1 to A-6 themselves as unreliable documentary evidence for fixing the market value of the acquired land; thirdly,  when the  Civil  Court  had determined the market  value  of  the acquired  land of the claimant at Rs.80 per square  yard  on the basis of the amounts of consideration mentioned in  Exs. A-1  and A-3 (Sale Deeds) and Exs.  A-2, A-4 and  A-5  (Gift Deeds), and Ex.  A-6 (Basic Valuation Register extract), the High  Court  should  not  have rejected  Exs.   A-1  to  A-6 themselves as unreliable documentary evidence for fixing the market  value  of  the  acquired  land,  particularly,  when nothing  damaging was elicited in the  cross-examination  of the   witnesses  who  had  spoken  about  those   documents; fourthly, when the High Court had held that the Sale  Deeds, Exs.   B-3  to B-5, the Certified copies of the  Sale  Deeds produced  in  evidence  on behalf of the LAO  had  not  been proved 599 by  examination  of the witnesses connected  with  them,  it could  not have determined the market value of the  acquired land  on the basis of the value of land fixed by the LAO  at the  rate  of Rs.20 per square yard particularly  when  that rate was referable to value of the plots of land sold  under Ex.  B-3 to B-5, marked in evidence under section 51 of  the LA  Act; fifthly, when the High Court had doubled the  value of  plots fetched under Ex.  B-3 to B-5 for arriving at  the correct market value of the acquired land, it could not have determined  the market value of the acquired land  at  Rs.32 per square yard, by deducting 20% out of it towards  lay-out

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losses;  and  lastly, that the High Court had  committed  an error  in not granting the amount calculated at the rate  of 12% per annum payable under section 23(1A) of the LA Act  on the  market value of the acquired land from the date of  the preliminary Notification till the date of taking  possession of the lands. 6.   Shri  G. Prabhakar, the learned counsel,  who  appeared before us for the LAO, while refuting the contentions raised for the claimant, submitted that although the High Court had held  that  the  Sale Deeds, Ex.  B-3 to B-5  had  not  been proved by examination of witnesses connected with them,  the High  Court  could not be found fault with, for  fixing  the market value of the acquired land on the basis of the  award of  the  LAO based on Exs.  B-3 to B-5 when  the  claimant’s evidence  adduced  in disproof of that award  had  not  been accepted  by it (the High Court).  It was further  submitted by  him that the High Court could not have doubled the  rate of Rs. 20 per square yard fixed as the value of the acquired land  by  the LAO when it had not adverted to the  basis  on which the value was so doubled.  The High Court, it was also submitted  by him, was not right in granting the  amount  in addition to the market value under Section 23 (IA) of the LA Act,  in  the manner in which it had done.   It  was  lastly submitted by him that the market value of the acquired  land determined  by  the High Court calls to be  reduced  to  the level of the market value of such land determined by the LAO and  such  market value should form the basis for  grant  of statutory benefits under the L.A. Act. 7.   In view of the aforesaid contentions and submissions of learned  counsel for the contesting parties,  the  questions which require to be considered and answered in deciding  the appeals, could be formulated thus :               (1)   Whether  the building potentiality of  a               land acquired under the LA Act requires to  be               taken   into  consideration   in   determining               its  market value, and if so, how has that  to               be done ?               (2)   Whether  the value of building plots  as               found   in   the  Basic   Valuation   Register               maintained  under the Stamp Act or its  Rules,               could form the basis for determination of  the               market  value of lands acquired under  the  LA               Act ?               (3)   Whether  the value of land mentioned  in               an  instance  of sale or an instance  of  gift               claimed  to  compare with  the  acquired  land               warrants  acceptance as the correct  value  of               such  land  merely because the  witnesses  who               will  have given evidence as regards them,  on               behalf  of the claimants had not  been  cross-               examined   or  effectively  crossexamined   on               behalf of the L.A.O.?               (4)   Whether  the value fetched by sale of  a               small extent of land can be made the basis for               determination of the 600               market value of a large extent of the acquired               land ?               (5)   Will  it  not be open to a  Court  which               rejects  the evidence adduced by the  claimant               in   support   of  his  claim   for   enhanced               compensation  for his acquired land made in  a               reference  under section 18 of the LA Act,  to               rely upon the contents of the award of the LAO               made  under section 11 thereof to enhance  the

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             compensation awardable for such land ?  If the               LAO’s  award is based on value  fetched  under               sale  deeds on their perusal as  contained  in               the    registers    maintained    under    the               Registration  Act, has he to prove those  sale               deeds in Court for sustaining his award ?               (6)   What  is  the  amount  which  could   be               awarded under section 23 (1-A) of the LA  Act,               in  addition  to  the  market  value  of   the               acquired land ?               (7)   Does  the  market value  in  respect  of               which  solatium  is  awardable  under  section               23(2) of the LA Act include the amount payable               under section 23 (1-A) of the LA Act ?               (8)   What  is  the  amount  of   compensation               awardable  for  the  lands  of  the   claimant               acquired  under  the  LA Act  which  could  be               regarded as just and reasonable? 8.   We  shall now proceed to consider and answer  the  said questions seriatum. Re:  Question (1) 9.   Building Potentiality of acquired land  Market value of land acquired under the LA Act is the main component of  the amount of compensation awardable for such land under section 23(1)  of  the LA Act.  The market value of such  land  must relate   to  the  last  of  the  dates  of  publication   of Notification or giving of public notice of substance of such Notification according to section 4(1) of the LA Act.   Such market  value of the acquired land cannot only be its  value with reference to the actual use to which it was put on  the relevant  date envisaged under section 4(1) of the  LA  Act, but  ought to be its value with reference to the better  use to  which  it  is reasonably capable of  being  put  in  the immediate or near future.  Possibility of the acquired  land put to certain use on the date envisaged under section  4(1) of  the LA Act, of becoming available for better use in  the immediate  or near future, is regarded as its  potentiality. It is for this reason that the market value of the  acquired land  when has to be determined with reference to  the  date envisaged under section 4(1) of the LA Act, the same has  to be done not merely with reference to the use to which it was put on such date, but also on the possibility of it becoming available  in the immediate or near future for  better  use, i.e.,  on its potentiality.  When the acquired land has  the potentiality  of  being used for building  purposes  in  the immediate  or near future it is such potentiality  which  is regarded  as  building potentiality of  the  acquired  land. Therefore,  if  the  acquired  land  has  the  building  po- tentiality,   its  value,  like  the  value  of  any   other potentiality  of the land should necessarily be  taken  into account  for  determining  the market value  of  such  land. Therefore,  when  a  land  with  building  potentiality   is acquired,   the  price  which  its  willing   seller   could reasonably expect to obtain from its willing purchaser  with reference to the date envisaged under section 4(1) of the LA Act, ought to necessarily include, that portion of the price of the land attributable to its building potentiality.  Such price of the acquired land then 601 becomes  its market value envisaged under section  23(1)  of the  LA  Act.  If that be the market value of  the  acquired land  with building potentiality, which acquired land  could be  regarded  to have a building potentiality  and  how  the market  value  of  such acquired  land  with  such  building potentiality  requires  to  be measured  or  determined  are

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matters which remain for our consideration now. 10.  An acquired land could be regarded as that which has  a building potentiality, if such land although was used on the relevant date envisaged under section 4(1) of the LA Act for agricultural or horticultural or other like purposes or  was on  that date even barren or waste, had the  possibility  of being  used  immediately or in the near future as  land  for putting  up  residential, commercial,  industrial  or  other buildings.   However,  the fact that the acquired  land  had been  acquired for building purposes, cannot  be  sufficient circumstance  to  regard it as a land with  building  poten- tiality,  in that, under clause (4) of section 24 of the  LA Act that any increase to the value of land likely to  accrue from  the  use  to which it will be put  when  acquired,  is required  to be excluded.  Therefore, wherever, there  is  a possibility  of  the  acquired land not  used  for  building purposes  on the relevant date envisaged under Section  4(1) of the LA Act, of being used for putting up buildings either immediately  or  in the near future but not in  the  distant future,  then such acquired land would be regarded  as  that which has a building potentiality.  Even so, when can it  be said  that  there is the possibility of  the  acquired  land being  used in the immediate or near future for  putting  up buildings, would be the real question.  Such possibility  of user of the acquired land for building purposes can never be wholly  a matter of conjecture or surmise or guess.  On  the other  hand, it should be a matter of inference to be  drawn based  on  appreciation  of material  placed  on  record  to establish such possibility.  Material so placed on record or made  available must necessarily relate to the matters  such as :               (i)   the  situation  of  the  acquired   land               vis-a-vis,  the  city of the town  or  village               which had been growing in size because of  its               commercial, industrial, educational, religious               or any other kind of importance or because  of               its explosive population;               (ii)  the suitability of the acquired land for               putting up the buildings, be they residential,               commercial or industrial, as the case may be;               (iii) possibility of obtaining water and elec-               tric  supply for occupants of buildings to  be               put up on that land;               (iv)  absence of statutory impediments or  the               like for using the acquired land for  building               purposes;               (v)   existence  of  highways,  public  roads,               layouts  of building plots or developed  resi-               dential  extensions in the vicinity  or  close               proximity of the acquired land;               (vi)  benefits  or advantages  of  educational               institutions, health care centres, or the like               in the surrounding areas of the acquired  land               which may become available to the occupiers of               buildings, if built on the acquired land; and               (vii) lands  around the acquired land  or  the               acquired  land  itself  being  in  demand  for               building purposes, to specify a few. 11.  The  material  to  be  so  placed  on  record  or  made available in respect of the 602 said   matters  and  the  like,  cannot  have   the   needed evidentiary  value  for concluding that  the  acquired  land being  used for building purposes in the immediate  or  near future unless the same is supported by reliable  documentary

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evidence,  as far as the circumstances permit.  When once  a conclusion is reached that there was the possibility of  the acquired  land  being used for putting up buildings  in  the immediate  or  near future, such conclusion  would  be  suf- ficient  to  hold  that the acquired  land  had  a  building potentiality  and  proceed  to determine  its  market  value taking  into account the increase in price  attributable  to such building potentiality. 12. Then, comes the question of determining the market value of  the acquired land with building potentiality.   Undoubt- edly  such market value of the acquired land  with  building potentiality  comprises  of  the market value  of  the  land having regard to the use to which it was put on the relevant date  envisaged  under Section 4(1) of the LA Act  plus  the increase in that market value because of the possibility  of the  acquired land being used for putting up  buildings,  in the  immediate or near future.  If there is any  other  land with  building  potentiality similar to  the  acquired  land which had been sold for a price obtained by a willing seller from  a willing purchaser, such price could be taken  to  be the  market  value of the acquired land, in that,  it  would have comprised of the market value of the land as was  being actually  used  plus increase in price attributable  to  its building  potentiality.   If the prices fetched by  sale  of similar land with building potentiality in the neighbourhood or   vicinity   of   the  acquired   lands   with   building potentiality,  as  on  the  relevant  date  envisaged  under Section  4(1)  of the LA Act, are  unavailable,  it  becomes necessary to find out whether any building plots laid out in a  land  similar  to the acquired land had been  sold  by  a willing  seller  to  a willing buyer on or  near  about  the relevant date under Section 4(1) when the acquired land  had been  proposed  for acquisition and then to  find  out  what would  be  the  price which the  acquired  land  would  have fetched  if had been sold by making it into  building  plots similar to those sold.  In other words, an hypothetical lay- out  of building plots in the acquired land similar to  that of  the layout of building plots actually made in the  other similar  land, has to be prepared, and the price fetched  by sale  of building plots in the lay-out actually made  should form  the basis for fixing the total price of  the  acquired land with building potentiality, to be got if plots  similar to other plots had been made in the latter land and sold  by taking into account plus factors and minus factors  involved in the process. 13.Prices  fetched  by  sales of building  plots  which  may become  available  could be of building plots  in  either  a fully  developed  layout  of building plots  or  in  an  un- developed layout of building plots, situated in the vicinity of  the  acquired land with building potentiality.   If  the market value of the acquired land with building potentiality has  to be fixed on. the basis of the evidence of  the  said prices, the first thing required to be done is to prepare  a hypothetical  layout of building plots of the acquired  land itself  Then,  how  much of land out of  the  acquired  land becomes available to be made into plots similar to those  in the developed layout of building plots or in the undeveloped layout  of  building  plots has to be  found  out.   If  the building plots which so become available were to be sold  at the prices at which the 603 building plots in the developed layout of building plots  or undeveloped layout of building plots could have been sold on the date envisaged in section 4(1) of the Act, what would be the  total amount of such prices which could have  been  ob-

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tained  has  to  be seen.  Then, what could  have  been  the losses suffered or expenses incurred for getting such  total amount  has  to  be  found out.  The  market  value  of  the acquired  land  with  building  potentiality,  can  then  be regarded  as the total amount of the prices of sales of  all the  building plots envisaged in the hypothetical layout  of building  plots in the acquired land minus the losses  which could  have been suffered or expenses which could have  been incurred in making the hypothetical layout of building plots in  the  acquired land on par with the developed  layout  of building plots or the undeveloped layout of building  plots, as the case may be.  If losses to be suffered or expenses to be  incurred  for making a layout of building plots  in  the acquired  land  with building potentiality for  purposes  of selling  such building plots at the prices to be fetched  by similar  building plots in the developed layout of  building plots or in the undeveloped layout of building plots are  to be  found out, the losses which might have been suffered  or expenses which might have been incurred by the owners of the lands  of either of a developed layout of building plots  or of  an undeveloped layout of building plots, in making  such lay outs, could prove to be the best evidence.  The evidence of  losses  suffered or expenses incurred in having  made  a layout of building plots may relate to lands lost for laying roads, drains, sewerages, parks etc., costs incurred in  the making of roads, drains, sewerages, providing water  supply, electric  supply,  losses  on  investments  and  paying   of conversion charges, development charges etc. in a  developed layout or an undeveloped layout in which building plots  had been  laid  and  sold and which sales  form  the  basis  for determining  the  market  value of the  acquired  land.   If evidence  to  be  adduced in the said regard  is  of  public authorities  or local boards or private developers who  will have  formed such layouts of building plots in the lands  in the  neighbourhood  of the acquired land and sold  them,  it could be of great value.  No difficulty arises when all  the materials  needed  to  determine the  market  value  of  the acquired  land with building potentiality on the basis of  a hypothetical  layout  of  building plots  to  be  formed  in respect  of  it  is made available to the Court,  so  as  to enable  it  to  find out the possible market  value  of  the acquired  land with reference to the price to be fetched  by sale of building plots to be made in such land.  But, owners of  the  acquired land with  building  potentiality,  rarely produce all the material or evidence needed for the Court to determine  the  market  value  of  the  acquired  land  with building potentiality on the basis of a hypothetical  layout of  building plots to be thought of by the Court in  respect of  such  land, although they rely on the price  fetched  by sale of plots in a developed layout or an undeveloped layout for  determining  the  market  value  of  their  lands  with building potentiality in the vicinity of such layout.  It is where, the Court may have to inevitably fix the market value of the acquired land with building potentiality on the basis of  the prices got in the sale transactions relating to  the building  plots  in a developed or  an  undeveloped  layout, relied upon by the owners of the land, if such  transactions are  found  to be genuine.  A simple method,  therefore,  is evolved by courts in determining the market 604 value  of the acquired land with building potentiality  with reference to the retail price to be fetched by sale of plots in a fully developed layout as on the date of publication of Notification  under  section  4(1)  of  the  Act  In  Bombay Improvement Trust v. Marwanji Manekji Mistry reported in AIR

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1926 Bombay 420, the said method is referred to by  Macleod, C.J. as that where the wholesale price of the acquired  land with  building potentiality could be fixed at  one-third  to one-half  of  the retail price fetched by sale  of  building plots  in  a developed layout of building  plots,  depending upon  the nature of development taken place in such  layout. Thus,  when it becomes inevitable for the Court to  fix  the market value of the acquired land with building potentiality on the basis of the price fetched by sale of a building plot in a developed layout of building plots in the vicinity,  it must,  in  our view, fix the wholesale market value  of  the acquired  land  with building potentiality at  one-third  to one-half  of the retail price got by genuine sales of  plots in  a  developed layout in the vicinity, by  deducting  two- thirds  to  onehalf out of the retail prices  of  plots,  as losses  or expenses involved in having made the  land  where the  plots are formed as developed, according to the  degree of  development.  For instance, if the retail price of  plot is  Rs.  12/- per square yard, the wholesale  price  of  the acquired  land with building potentiality could be fixed  at rupees varying between Rs.4/- and Rs.6/- depending upon  the nature  of development found in the layout of the plot  sold in retail.  Coming to fixation of the wholesale price of the acquired  land  with building potentiality on the  basis  of retail  price of a building plot sold out of an  undeveloped layout  of building plots, such wholesale price ought to  be fixed by deducting at least one-third of the retail price of the building plot in such layout, because such would be  the least  loss to be suffered in forming a layout  of  building plots in the acquired land with building potentiality, after leaving  out  land for roads, drains etc. by  obtaining  the needed  permissions from public authorities for making  such layout.  Therefore, the wholesale price of the acquired land could  be  fixed  at Rs.8/- per square  yard  if  the  price fetched or to be fetched by sale of building plot in an  un- developed  layout  is Rs. 12/-.  However, in either  of  the said  cases  whether it be the determination of  the  market value  of the acquired land with building potentiality  with reference  to the price fetched by sale of plots in  a  well developed  layout in the neighbourhood or whether it be  the determination of the market value of the acquired land  with building potentiality with reference to the price fetched by sale of building plots in an undeveloped layout of  building plots  in the neighbourhood, it becomes inevitable  for  the Court  to find out what will be the price fetched or  to  be fetched by the sales of plots in the layouts, relied upon by any  of  the parties with reference to the price  which  the plots  could  have  fetched  if sold  on  the  date  of  the publication  of the preliminary notification  under  Section 4(1)  of  the  Act.  Further, where  no  evidence  of  price fetched  by  the sales of the plots in layouts  of  building plots  in  the neighbourhood of the acquired  lands  becomes available, then what could be done is to find out the market value  of the acquired land with reference to  the  relevant date  of  publication  under Section 4(1)  of  the  LA  Act, according to the actual use to which it was put and increase its value by a small percentage having regard to the  degree of  its  building potentiality ascertained on the  basis  of evidence 605 to  be  made available in that regard.  A  small  percentage increase  to be given shall not exceed 1/5th of  the  market value  of  the land found out according to its  actual  user since  resort  to the method of giving increased  value  for such  building  potentiality arises only when  there  is  no

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evidence of sales of building plots in the neighbourhood  of the acquired land indicating that there was no immediate de- mand,  as  such, for building plots even if  formed  in  the acquired land. 14.  Hence,   whether   the  acquired  land   has   building potentiality or not, while has to be decided upon  reference to the material to be placed on record or made available  by the parties concerned, the market value of the acquired land with  building potentiality, is also required to  be  deter- mined with reference to the material to be placed on  record or  made available in that regard by the  parties  concerned and not solely on surmises, conjectures or pure guess. Re:  Question (2) 15.  Value  of building plots found in the  Basic  Valuation Register  The value of building plots mentioned in the Basic Valuation  Register can be of no assistance  in  determining the market value of the land acquired under the LA Act is no longer  res  Integra.  In  Jawajee  Nagnatham  Vs.   Revenue Divisional Officer, Adilabad, A.P. and Others [(1 994) 4 SCC 595], it is ruled by this Court that the value of lands men- tioned   in  the  Basic  Valuation  Register  prepared   and maintained  for the purpose of collecting stamp  duty  since lacks statutory base, the same cannot form the foundation to determine  the market value of the lands acquired under  the LA Act by observing thus:               "It is, therefore, clear that the Basic  Valu-               ation Register prepared and maintained for the               purpose  of  collecting  stamp  duty  has   no               statutory  base  or force.  It cannot  form  a               foundation  to  determine  the  market   value               mentioned thereunder in instrument brought for               registration.  Equally it would not be a basis               to determine the market value under Section 23               of the Act, of the lands acquired in that area               or town or the locality or the taluk etc." 16.  Therefore, the value of building plots  as found in the Basic Valuation Register maintained  under  the  Stamp   Act cannot  form the basis for determining the market  value  of the lands acquired under the LA Act. Re:  Question (3): 17.  Non cross-examination or ineffective  cross-examination of  witnesses for the claimant  Oral evidence  is  generally adduced  in the enquiry held by Court for  determination  of the  compensation  payable for lands acquired under  the  LA Act.  Such oral evidence, generally, comprises of either  of the claimants or their witnesses examined in support of  the claims  of  claimants for grant  of  enhanced  compensation, which  in its very nature, would be referable to matters  of situation  of the acquired lands, their surroundings,  their value or the like.  Several statements would be made by such claimants or their witnesses when they are examined-in-chief in  Court, on matters that may bear on the market  value  of acquired  lands.  If the witnesses who make such  statements arc  not subjected to cross-examination or effective  cross- examination or no contrary evidence is adduced, is the Court obliged to accept such state- 606 ments  to  be true in determining the market  value  of  the acquired  lands ? It is, no doubt true, that  whenever  oral evidence  is  adduced  by  parties  on  certain  matters  in controversy,  it may become difficult for Court to  overlook such  evidence,  if  it is not  shown  by  effective  cross- examination  of such witnesses who have given such  evidence or  by adducing contra-evidence, that the oral evidence  was unreliable  or  the  witnesses  themselves  are  not  credit

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worthy.   But, in land acquisition references  before  Civil Courts, when witnesses give oral evidence in support of  the claims of claimants for higher compensation the  ineffective cross-examination  of  such witnesses, is  not  an  uncommon feature  if regard is had to the manner in which claims  for enhanced compensation in land acquisition cases are defended in  courts on behalf of the State.  Indeed, when a  question arose before this Court whether the Court is bound to accept the statements of witnesses only because they have not  been effectively  cross-examined or evidence in rebuttal has  not been  adduced, it was observed by this Court  in  Chaturbhuj Pande and Others v. Collector, Raigarh, [AIR 1969 S.C. 255], thus :               "It  is  true that the witnesses  examined  on               behalf   of  the  appellants  have  not   been               effectively  cross-examined.  It is also  true               that   the  Collector  had  not  adduced   any               evidence  in rebuttal; but that does not  mean               that  the  court  is  bound  to  accept  their               evidence.   The Judges are not  computers.....               they   are  bound  to  call  into  aid   their               experience  of life and test the  evidence  on               the basis of probabilities." 18.Hence,   we  are  unable  to  think  that  whenever   the statements  made by claimants’ witnesses in courts  are  not got over on behalf of the Collector or the LAO by subjecting the  witnesses  to  effective  crossexamination  or  by  not adducing  evidence in rebuttal, the courts are obligated  to accept  such statements of witnesses as true, if  tested  on the  basis  of  probabilities, become  unreliable.   If  the courts  were to accept such statements of witnesses as  true merely  because they are not subjected to  cross-examination or  effective  cross-exam  nation  or  because  evidence  in rebuttal  thereof has not been adduced, it would  amount  to doling  out public money to the claimants far in  excess  of their  legitimate entitlement for just compensation  payable for  their lands.  If such situation is prevented by  courts dealing   with  claims  for  compensation  by  testing   the statements  of  witnesses  for claimants  on  the  basis  of probabilities, the Court will have performed the duty justly expected of them.  Hence, no Court which tests the oral evi- dence  of the claimants on the touch-stone of  probabilities calling  into aid, its experience of life, men  and  matters and find such evidence to be untrustworthy, the same  cannot be found fault with. Re:  Question (4) 19.  Market Value of large extents of acquired lands  vis-a- vis  value  fetched  by small extents - It is  a  matter  of common  knowledge that the large extents of lands if arc  to be sold, they cannot fetch the value which may be fetched by sale  of small extents of land.  It is for that  reason  the courts  do not ordinarily accept the value fetched by  small extents as the basis for determination of the value of large extents of acquired lands.  In fact, where the small  extent of  land  sold is in significant when  compared  with  large extent of land acquired, the market value of large extent of acquired lands shall not be determined 607 on  the  basis of value fetched by sale  of  infinitesimally small extent of land.  But, in exceptional cases when  small extent  of  land  sold  for a price  as  compared  with  the acquired large extent of land, the market value of which  is required to be determined is not so insignificant, the Court depending  upon the possibility of the large extent of  land of the claimant being sold as a small extent of land as that

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already  sold  for  a price the market value  of  the  large extent  could be fixed on the basis of the price fetched  by sale of small extent.  Even then, how far the price  fetched by  sale  of  small  extents  can  be  made  the  basis  for determining   the  market  value  of  large   extents   must necessarily  depend on the fact situation including that  as to  why the purchase was made, in each case, which has  come on  its  record.  However, when the value fetched  by  small extents, are of building plots, in a building lay-out formed of  a  large  plot,  it has to be  seen  whether  the  large acquired  land if is laid out into small building plots  and sold, whether they could fetch the price fetched by sale  of small building plots in the already formed building lay-out. Then,  the  market  value of the acquired  land  has  to  be determined  with reference to the value fetched by  sale  of small  plots by making allowances for various factors,  such as;  loss  of land required out of the acquired land  to  be used  for roads, drains, parks, the expenditure involved  in forming  the  layout waiting involved in sale of  plots  and several  other  factors which will  necessarily  reduce  the wholesale  price  of the acquired land.  Thus, how  far  the value  fetched by sale of small extents of lands could  form the  basis for determining the market value of the  acquired land has to inevitably depend upon the allowances to be made for  factors  which distinguish the acquired land  from  the plots  of  land sold and the sale value of which  is  relied upon  as the basis for determining the market value  of  the acquired land. Re:  Question (5) : 20.  Section 51-A of the Land Acquisition    Act  7  Section 51 -A of the LA Act reads     thus :               "51-A.    Acceptance  of  certified  copy   as               evidence.  In any proceeding under this Act, a               certified copy of a document registered  under               the  Registration  Act,  1908  (16  of  1908),               including  a  copy given under Section  57  of               that  Act, may be accepted as evidence of  the               transaction recorded in such document." 21.Certified  copy  of  a  document  registered  under   the Registration  Act, 1908, but for the above  provision  could have  been  only secondary evidence which  could  have  been accepted by the court when primary evidence relating to  the original documents were shown to be unavailable.  Section  5 1-A  of the LA Act, as seen therefrom, is enacted to  enable the parties in land acquisition cases, to produce  certified copies of documents, to get over the difficulty of  parties, in  that,  persons in possession of the  original  documents would not be ready to put them in courts, for when once they are put in Court, they cannot be sure, when they could  take their  return  from Court.  However, the mere  fact  that  a certified  copy of the document is accepted as  evidence  of the transaction recorded in such document does not  dispense with the need for a party relying upon the certified  copies of  such documents produced in court in examining  witnesses connected with documents to establish their genuineness  and the truth of their contents. 608 Therefore,  the  certified copies of  registered  documents, though accepted as evidence of transactions recorded in such documents,  the court is not bound to act upon the  contents of  those  documents  unless  persons  connected  with  such documents  give evidence in court as regards them  and  such evidence  is accepted by the Court as true.  But,  when  the LAO  or  the  Collector has made his  award,  based  on  the contents of documents, as found in the registers kept  under

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the  Registration  Act and produces registration  copies  of such documents in support of his award in Court, they  could be regarded acceptable as evidence by Court given in support of the award unless it is shown by contra-evidence on behalf of  the  claimants that such documents could not  have  been relied upon by the Collector or LAO in making the award.  It would  be  so for the reason that when the LAO  produces  in court  Registration  (certified) copies of  those  documents which  he  had  made the basis for  determining  the  market value,  that would be only to support his award and  not  to establish  something independent of the award.  If  that  be so, when such documents are produced on behalf of the LAO in court,  they cannot be rejected on the ground that the  wit- nesses associated with those documents cannot be examined by the LAO, inasmuch , even without producing such documents he can  rely  upon the award made by him to show  that  he  had looked into those documents and he had determined the market value  on their basis.  Hence, the mere fact that  witnesses associated with such certified copies of documents  produced as evidence in court were not examined on behalf of the  LAO will  not in any way affect the award of the LAO, if he  has determined  the  market value of the  acquired  land  having perused those documents as found in the Registers kept under the  Registration  Act  or their  certified  copies,  before determining the market value of those lands on the basis  of such documents. Re:  Questions (6) and (7): 22.  Section  23 (1-A) of the Land Acquisition Act   Section 23 (1-A) of the LA Act reads thus :               "23 (1-A). in addition to the market-value  of               the  land, as above provided, the Court  shall               in  every case award an amount  calculated  at               the  rate  of twelve per centum per  annum  on               such market-value for the period commencing on               and  from the date of the publication  of  the               notification under Section 4, sub-section (1),               in  respect  of such land to the date  of  the               award  of the Collector or the date of  taking               possession of the land, whichever is earlier.               Explanation  In computing the period  referred               to in this sub-section, any period or  periods               during   which   the   proceedings   for   the               acquisition  of  the  land  were  held  up  on               account of any stay or injunction by the order               of any court shall be excluded.  " 23.  -It  is clear from a reading of the above section  that in  addition to the market value of the land  awardable  for the  acquired land under first clause of sub-section (1)  of section  23, the Court shall in every case award  an  amount calculated at the tee of twelve per centum per annum on such market value for the period commencing on and from the  date of the publication of the Notification under section 4(1) of the LA Act, in respect of such land to the date of the award of  the  Collector or the date of taking possession  of  the land, whichever is earlier.  Explanation, merely 609 disentitles  the claimant for the amount during  the  period referred to in the subsection, that is, the proceedings  for the  acquisition  of the land were held up by  any  stay  or injunction by the order of any court.  The amount  awardable under sub-section (1-A) of section 23 of the LA Act,  there- fore,  would be an amount of 12 per centum per annum on  the market  value of the land determined under first  clause  of sub-section  (1)  of section 23 for the period  between  the date  of  publication  of Notification  under  section  4(1)

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(i.e.,  the  last of the dates of such publication  and  the giving  of such public notice) and to the date of the  award of  the  Collector or the date of taking possession  of  the land, whichever is earlier. 24.  In  this  context it has to be noted  that  the  amount payable  is 12 per centum per annum on the market  value  in the first clause of sub-section (1) of section 23 of the  LA Act.   It  has  also to be noted that  solatium  under  sub- section  (2)  is  not  payable  in  respect  of  the  amount awardable under sub-section (1-A), in that, sub-section  (2) says  that in addition to the market-value of the  land,  as above provided, the Court shall in every case award a sum of thirty per centum on such market-value, in consideration  of the compulsory nature of the acquisition. 25.  Since  the  amount payable under sub-section  (1-A)  of section 23 as well as the solatium payable under sub-section (2)  are  in addition to the market value of  the  land,  as above  provided, they necessarilY refer to the market  value of the land award able in the first clause of sub-section (1 of section 23 of the LA Act. Re:  Question (8) : 26.  Market  value  of the lands of the claimant   The  High Court  has refused to act upon documents.  Exs.  A-1 to  A-6 relied upon on behalf of the claimant for obtaining enhanced compensation for his acquired land.  Ex.  A-1 is a certified copy  of  Sale  Deed dated 16.2.1985. It was  sought  to  be proved  by  examination  of PW2  the  purchaser  under  that document.   The  amount of consideration passed  under  that document, though was mentioned as Rs.60,000/- for 250.80 sq. yards  of land sold thereunder, it had been said  that  that amount  had been paid before the witnesses.  The High  Court has  refused  to  believe  the evidence  as  to  passing  of consideration  of Rs.60,000/- under that document.   Whether the  consideration mentioned in a document, like  sale  deed did  pass  from  the buyer to the seller of  land,  being  a matter  of pure appreciation of evidence and when  the  High Court in appreciation of such evidence has refused to accept that  evidence  and  rejected  the  document,  we  find   it difficult to interfere with such finding of fact recorded by the High Court and take a contrary view in the matter. 27.  Similar is the view taken by the High Court in  respect of  Sale Deed dated 26.7.1985, Ex.  A-3, in proof  of  which the  vendor has been examined.  Here again, the  High  Court has  rejected the sale deed by refusing to accept  the  oral evidence  adduced.  Here also there is no justification  for us  to take a view in the matter contrary to the view  taken by the High Court in the matter.  Insofar as documents  Exs. A-2,  A-4  and A-5 are concerned, those are  gift  deeds  of different  dates.   The  claimant sought to  rely  upon  the amounts mentioned in them as the value of lands for purposes of registration of documents, as those which could be  taken for purposes of 610 determining  the  market value of the acquired land  in  the vicinity.  The High Court took the view that the parties  to the  gift  deeds, when were near relatives,  as  father  and daughter  or  husband and wife, consideration  mentioned  in them as the value of land which is solely for the purpose of registration  cannot represent the real market value of  any of  those  lands  and  hence  cannot  form  the  basis   for determination  of  the market value of  the  acquired  land. Consequently,  High  Court  rejected  the  gifts  deeds   as unhelpful  for  determination  of the market  value  of  the acquired land.  When rejection by the High Court of the gift deeds  is  made  on the basis of  appreciation  of  evidence

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available before it, there can be no justification for us to interfere with such rejection.  The other document on  which reliance  was placed by the claimant was Ex.  A-6, which  is an extract of the Basic Valuation Register.  As we have  al- ready held following an earlier judgment of this Court  that Basic   Valuation  Register  extracts  cannot  be   of   any assistance  in determination of market value of an  acquired land, the rejection by the High Court of Ex. A-6, the  basic register extract, on its view, that on its basis the  market value  of  the  acquired land cannot be  determined,  it  is difficult for us to hold that the High Court was unjustified in rejecting Ex A-6 as that which cannot form the basis  for determination  of  the market value of  the  acquired  land. Thus,  the  said  documents which were  made  the  bask  for determination  of the market value of the acquired  land  by the  civil  court  were  rejected  by  the  High  Court   on reappraisal  made  by  it of the oral  evidence  adduced  in respect  those  documents by taking into  consideration  the relevant  factors  to which we have already  referred,  such rejection,  cannot be found fault with.  However,  what  the High  Court has done in determining the market value of  the acquired  land is to double the amount of the  market  value disclosed in the sale deeds referred to in that award and on that  basis  to fix the market value of  the  acquired  land after  giving  deduction of 20 per cent out  of  it  towards allowance  of lay-out and then fix the market value  of  the acquired land at Rs.32/- per sq. yard. 28.  No  doubt,  as  pointed out on behalf of  the  LAO,  no specific  reason is given by the High Court in its  judgment as to why it doubled the amount of Rs.20/- per square  yard, the value fetched by sale deeds (Exhibits B-2, B-3 and  B-4) for fixing the market value of the acquired land.  But, then whether the award of the LAO himself lends support for  such doubling  of the value of plots of land sold under the  sale deeds, Exhibits B-2, B-3 and B-4, for determining the market value  of acquired lands which were notified  under  Section 4(1) of the Act a few years thereafter, requires to be seen. The  award  of the LAO (Ex.  B-1) insofar, it  concerns  the question reads thus:               "The land under acquisition is located between               the  National  Highway No. 7 and  Old  Kurnool               road and the proposed ring road connects these               two  roads.  The lands are also  located  near               Shivarampally  railway  station and  in  close               proximity  to  Katedan Industrial  Estate  and               fall  within  the newly  formed  Rajendranagar               Municipality.  The area is fast developing and               there  is  much demand for  residential  house               plots particularly after developing the N.G.Os               colony    at   Mylardevally    and    Madhuban               residential    complex   of   HUDA   in    the               neighbouring  area.  The area is  also  served                             with all modem amenities like power, transport ,               telephone  etc.,  with high  potentiality  for               developing housing colonies." 611 29.Therefore,  when the LAO himself has stated as  above  of the  fast development of the area where the  acquired  lands and adjoining building plots sold at Rs. 20 per square  yard were  situated  and  the  rush of  people  for  purchase  of residential  building  plots in that area,  ;he  High  Court cannot  be  said  to have gone wrong  in  stating  that  the building  plots sold under Exhibits B-2, B-3 and B-4 if  had been  sold at the time of acquisition concerned, could  have

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fetched double the rate of Rs.20/per square yard.  Even  so, the  High  Court,  in our view, could  not  have  fixed  the wholesale price of acquired lands of the claimant at Rs.32/- per square yard by deducting only 20% of Rs.40/- per  square yard  fixed  as the retail value of building  plots  in  the undeveloped  layout  of building plots formed  in  the  land adjacent to the acquired lands as on the date when they were notified for acquisition under Section 4(1) of the Act.   As we have pointed out earlier whenever the wholesale price  of the acquired land with building potentiality is required  to be  determined  on the basis of prices of  retail  sales  of building plots in an undeveloped layout of building plots in the  vicinity of the acquired lands, at least  one-third  of the  retail  price to be got by sale of plots  in  an  unde- veloped  layout  of  building plots had to  be  deducted  to arrive  at  the wholesale price of the acquired  lands  with building potentiality since the entire acquired land  cannot be  sold as building plots, and some expense will have  been incurred  by the owners of lands in laying it into  building plots and selling them even though they might not have spent any amount on development of the layout. 30.When  considered in the above perspective, the  wholesale price of the entire acquired lands of the claimant could  be fixed  at  Rs.27/-  per square yard, that  is,  Rs.40/-  per square  yard retail price to be got by sale of plots in  the undeveloped layout minus one-third of it to be deducted  for making of layout.  Thus, the market value of the entire land of the claimant would be Rs. 27/- per square yard and it has to be determined accordingly. 31.  In  the result, we determine the market  value  of  the claimant’s  acquired  land of 4 acres 3  guntas  i.e.  19723 square  yards at Rs.27/- per square yard and that  would  be Rs.5,32,521/-.  The  claimant  would  be  entitled  to   get solatium at the rate of 30 per cent on that market value  of the  land.  In addition to the market value of the  land  of Rs.5,32,521/-,  the  claimant would be entitled  to  get  an amount at the rate of 12 per cent per annum thereon from the date  of publication of Notification under section  4(1)  of the LA Act, i.e., 2.9.1985 till the date of the award, i.e., 14.7.1988.  Again,  the claimant would be  entitled  to  get interest  on the enhanced compensation at the rate of 9  per cent per annum from the date on which he gave the possession of  the land to the date of payment of such  excess  amount. However,  if such amount has not been paid by the expiry  of the  period  of one year from the date when  possession  was taken, enhanced compensation would be payable at the rate of 15  per  cent per annum from the date of the expiry  of  the period  of one year till the excess amount was paid  to  the claimant or paid into court. 32.  We, accordingly, allow Civil Appeal     arising out  of S.L.P (C) No. 18202 of 1993   partly   and   dismiss   Civil Appeals  arising  out of S.L.P. (C) Nos. 13362-63  of  1993. However, we make no order as to coos. 613