JUDGMENT

1. Leave granted. We have heard learned counsel on both sides.

IA. The land to an extent of 1007 kanals and 6 marlas situated in village Safisoo in Tehsil and District Udhampur was initially requisitioned under Section 6 of the Janimu and Kashmir Requisitioning and Acquisition oi" Immovable Properly Act. On December 26, 1988, proceedings for acquisition of the land were initiated. The compensation was determined under Section 8 ofihe Act by the Land Acquisition Officer at the rate ofRs. 12,000/-, Rs. 10,000/- and Rs. 9,000/- per kanal to Warhal Changhi, Warhal Mandi and Banjar Kadeem lands respectively. Dissatisfied therewith, an application under Form G seeking reference was filed. The Arbitrator-was appointed under Rule 9 read with Section 8(1) of the Act. Thereatier the Arbitrator determined the compensation at the rale of 70,000/- per kana!. On appeal. the learned single Judge confirmed the same and the Division Bench held that ihe Letters Patent Appeal would lie. Thus, this appeal by special leave.

2. It is seen that the Land Acquisition Officer has adduced the oral "as well as documentary evidence. The claimants also filed the documentary evidence as well as the oral evidence. On consideration of the evidence, the Arbitrator as well as the High Court have held that the lands are situated in a developed area and possessed of and commanded good market value for sale in the open market to a willing purchaser and, therefore, they are capable of fetching market value ranging from Rs. I lakh to Rs. 2 lakhs per acre and in view of the fact Ihat the sale deeds relied on were in respect of small pieces of land they determined the compensation at the rate of Rs. 70,000/- per acre.

3. The question is: whether the view taken by Ihe Arbitrator as well as by the High Court is correct in law? It is settled law that under Seclion 8(3) of the Act, as amended by Act 6 of 1977, the compensation payable for ihe acquired property under Seclion 7 shall, in the absence of an agreement, bethe price which the requisitioned party would have fetched in the open market, if it had remained in the same condition as it was at the time of the requisition, and (had) been sold on the date of acquisition in the same condition, in other words, the principle required to be applied would be thai the existing conditions as on me dale of the acquisition (as if existed in conditions) in which the land existed on the dale of requisition, he ihe determining factor for fixing ihe compensation as per the market value prevailing as on the dale of the acquisition and compensation has to be determined accordingly.

4. This Court in Union ofIndia v. Had Krishan Khosla (dead) by LRs., JTl992 (5 )SC 574 , 1992 (2 )SCALE621 , 1993 Supp(2 )SCCI49, [1992 ]Suppl SCR620, (1993 )1 UPLBECI45 . considered the question under the Requisitioning and Acquisition of the Immovable Property Act. 1952 which is pari materia to the Act, and held thus:

"We are of the opinion that the amount of compensation can be fixed by agreement under Section 8(1 )(b). In the absence of such an agreement, it is left to the discretion of the arbitrator. The arbitrator under Section 8(1)( e) is to hear the dispute. Thereafter he is to determine the compensation which appears to him to be just. He must have regard to the circumstances of each case while applying the provisions of sub-section (3)(a) of Section 6 which reads as under:

"8.(3) The compensation payable for the acquisition of any property under Section 7 shall be-

(a) the price which the requisitioned properly would have fetched in the open market, if it has remained in the same condition as it was at the time of requisitioning and been sold on the date of acquisition, or

(b) • • •

In our view, the significant omISSIOn of solatium is indicative of the legislative intent necessitating stress on the expressions "just" and "circumstances of each case" occurring in subsection (I )( e) thereof.

Yet another distinguishing feature is the expres