Judgment

FATHIMA BEEVI, J.:- The appellants are aggrieved that the High Court by the common judgment dated 20-1-1976 in two cases had substantially reduced on erroneous grounds the enhanced compensation allowed by the Subordinate Judge on reference under S. 18 of the Land Acquisition Act (for short the Act).

2. Civil Appeal No. 1222 of 1977 relates to acquisition of Ac.8.33 cents of land in Survey No. 2/1 of Dondaparthi village in pursuance to Notification under S. 4(1) of the Act published on 7-7-1966 for construction of quarters for the staff of Port Trust.

3. Civil Appeal No. 1221 of 1977 relates to acquisition of Ac.1.68 cents of land in Survey No. 2/2A of the same village in pursuance to the Notification published on 1-8-1968 for the purpose of formation of the national highway diversion road.

4. The appellants claimed land value at the rate of Rs. 10/- per sq. yard since the Land Acquisition Officer awarded only 0.88 paise per sq. yard. The learned Subordinate Judge determined the market value of the land at the rate of Rs. 11/-per sq. yard accepting as basis the value of land under the transactions evidenced by Exhibits A- 1 to A-4, but granted the compensation at the rate of Rs. 10/- per sq. yard as the claimants themselves had claimed compensation at the rate of Rs. 10/-per sq. yard. The State preferred appeal against the said judgment of the Subordinate Judge to the High Court of Andhra Pradesh. The High Court accepted Exhibits A-1 to A-4 as reflecting the value of land in the neighbourhood. It however following the decision of this Court in Tribeni Devi v. Collector, Ranchi, AIR 1972 SC 1417, that a deduction of 1/ 3 of the value is to be made when large extent of land is acquired under housing scheme, determined the market value of the appellants land at the rate of Rs. 6.50 paise per sq. yard and accordingly reduced the total compensation allowed by the Subordinate Judge.

5. The learned counsel for the appellants contended before us that the High Court had erroneously applied the principle laid down in Tribeni Devis case (supra) without properly appreciating the nature of the land in question and the purpose for which it had been acquired. It was submitted that the land in question was fully developed and eminently suitable for being used as house sites and, therefore, there was no justification for making any deduction. It is also pointed out that even in respect of the land acquired for the purpose of formation of the road, the High Court wrongly proceeded on the basis that expenses have to be incurred for development and thus in awarding the compensation, the High Court wrongly applied principles of deduction of 1/3 of the value. The learned counsel has taken us through the relevant evidence and maintained that the learned Subordinate Judge had reduced the land value to Rs. 10 / - per sq. yard though the market value was higher at Rs. 11 /-per sq. yard only because the appellants had themselves limited the claim to Rs. 10/- per sq. yard.

6. The learned counsel for the respondent maintained that the appellants land forms part of large tract acquired for the purpose of construction of houses, that the sale deed Exhibits A-1 to A-4 relate to small plots which are fully developed and when the transaction is compared, it is necessary to take into account the development that is required to be made for bringing the acquired land suitable for the purpose of construction and that the High Court was right in making the deduction of 1 / 3 of the value in. the facts and circumstances of the case.

7. In awarding compensation in acquisition proceedings, the Court has necessarily to determine the market value of the land as on the date of the relevant Notification. It is useful to consider the value paid for similar land at the material time under genuine transactions. The market value envisages the price which a willing purchaser may pay under bona fide transfer to a willing seller. The land value can differ depending upon the e