ORDER

1. Notification under Section 4(1) of the Land Acquisition Act, 1894 (for short, the Act) was published in the State Gazette of Gujarat on 17-3-1960,acquiring 7 acres and 28 gunthas of land to establish orphanage at the outskirts of Rajkot Municipality. The Land Acquisition Collector awarded compensation by his award dated 30-7-1962 at the rate of Rs 1.25 per sq. yard as against the claim of Rs 18 per sq. yard. Dissatisfied therewith, on appellants reference the civil court by its award and decree dated 31-7-1973 determined the compensation at the rate of Rs 2.05 per sq. yard. On appeal to the High Court under Section 54 of the Act, Gujarat High Court by its judgment dated 1-7-1975 in First Appeal No. 242 of 1973, while holding that the lands under acquisition are capable to fetch market value at the rate of Rs 10.00 per sq. yard, determined the compensation after 60% deduction, at the rate of Rs 4 per sq. yard. In appeal by special leave under Article 136 of the Constitution, appellants challenge the correctness of the deduction at 60% of the price determined to the lands under acquisition.

2. Shri Dholakia, learned Senior Counsel for the appellants strenuously contended that the reasoning of the Division Bench in giving deduction of 60% price are fallacious and legally unsustainable. It is contended that having accepted the sale transactions in Survey Nos. 334 and 335 to be genuine and offer to be comparable sales to determine the compensation, would indicate that in the year 1960 the market value was ranging between Rs 12 to 13 per sq. yard which were sold again in 1961 at the rates varying between Rs 13 to 18 per sq. yard. The same would indicate that a prudent willing purchaser would offer to purchase the lands at the rate of Rs 12-18 per sq. yard. Therefore, having determined the compensation at the rate of Rs 10 per sq. yard, the High Court was not justified in reducing 60% and wrongly fixed compensation at the rate of Rs 4 per sq. yard. He also further contended that the restrictive conditions which, in future, may be imposed by the appropriate authority on the development of the land were not a relevant circumstance to peg down the prevailing price. He also contended that the size of the land acquired and the location are not relevant since there is an indication that there was already steady development in the area and buildings were already constructed in the neighbourhood and that, therefore, the deductions were illegal. In support thereof, he placed strong reliance on Chimanlal Hargovinddas v. Special Land Acquisition Officer{(1988) 3 SCC 751} and Bhagwathula Samanna v. Special Tahsildar & Land Acquisition Officer, Visakhapatnam Municipality{(1991) 4 SCC}. 3. The learned counsel for the State strongly resisted the contention of Shri Dholakia. The question, therefore, is whether the High Court was right in deducting 60% of the price in determining the compensation. Since the State had not come in appeal against the determination of the compensation at Rs 10 per sq. yard, the need to go into its correctness is obviated. But suffice it to state that the High Court has rested its conclusion on diverse facts. The first, in our view, rightly is that the lands are situated far away from the municipal limits so as to use for building purpose; secondly, possibility of the restrictions to be imposed by the State under Section 74 of the Highways Act is always imminent. Thirdly, the vast extent of lands acquired. Lastly, the comparative extent of land under acquisition and the smallness of the lands covered by the sales in Survey Nos. 334 and 335. It had held that sales of small extent do not offer as a comparable instance in determination of the compensation of vast lands. The question is whether these principles are not relevant and germane to adjudge the market value ultimately to be fixed by the Court. It is true, as contended by Mr Dholakia, that the counsel appearing for the State in the reference court had not adve