JUDGMENT

GANGULY, J.

1. Heard learned counsel for the parties.

2. The deceased Shaikh Rasheed Shaikh Latik was the owner of the land gut no. 29 adms. 80 Aar situated at Thana Tq. Soyegaon. His entire land was acquired by the Land Acquisition Officer (hereinafter `LAO') for the development of tourism plan of Ajintha villages Fardapur and Thana, taluka Soyegaon, district Aurangabad. A notification was published under Section 4(1) of the Land Acquisition Act, 1894 (hereinafter `the Act') on 16.4.1990. It was followed by the notification under Section 6 published on 12.9.1991.

3. The LAO passed an award dated 22.7.1993 wherein he classified the lands into two groups, and the group within which the land of the deceased was classified was given compensation at the rate of Rs.300/- per Aar and Rs.3,79,498/- towards structures and Rs.6,300/- towards fruit-bearing trees.

4. Aggrieved, the claimants filed references before the Reference Court. The Reference Court, vide order dated 27.6.2001, partly allowed the reference petitions. It found that the land under acquisition was converted into non-agricultural land in 1993 and the LAO was wrong to ignore the said fact while granting compensation and taking the acquired land to be agricultural land. Thus, it enhanced compensation to an amount of Rs.650/- per Aar as cost of land. The Reference Court also gave specific findings to the following effect:

1. The claimant was unable to prove that he had constructed a hotel of 2400 sq. ft. on the acquired land. Thus, it concluded that the evidence of the claimant was insufficient to prove that the value of the structure was more than the compensation awarded by the LAO.

2. The evidence of the claimant was also insufficient to prove that bore or well existed on the land. Thus, the claimant was held not entitled to enhanced compensation towards well or bore.

3. The LAO had granted compensation for sitaphal, bor, coconut, mango and jamun trees. The claimant was unable to prove the existence of any more trees or plants on his lands and therefore he was held not entitled to enhanced compensation towards trees and flower plants.

4. The claimant claimed to be earning annual income of Rs.24,000/- from his hotel business. On perusal of evidence, the Court concluded that there was definitely no hotel in existence and an inference could only be drawn that he was running a small hotel like a tea stall, and that such business had no future prospects. Thus, he was not entitled to any compensation for loss of business.

5. Being still aggrieved, the claimants filed appeals before the High Court for further enhancement of compensation. The State also appealed before the High Court for reduction of compensation awarded by the Reference Court.

6. The High Court, vide its judgment dated 3.4.2003 dismissed the appeal of the claimants and partly allowed the appeal of the State. It upheld all the findings of the Reference Court, except the computation with respect to market value of the land, which it reduced to Rs.500/- per Aar. The reasoning High Court gave for the same was that while non-agricultural permission had been given for the acquired land, it could not be the sole basis to treat the entire land as being non-agricultural or being used for commercial purposes. The non-agricultural permission had been based on certain conditions, one of which was that the grantee would commence non-agricultural use of land within one year from the date of such order unless the same was extended, failing which the permission would be cancelled. According to the High Court, the construction of the hotel for which compensation had been granted was located on an area of 2400 sq. ft. and this by itself would not make the entire remaining land as non agricultural or used for commercial purposes. The High Court relied on Smt. Kamlabai Jageshwar Joshi and others v. State of Maharashtra and others [AIR 1996 SC 981] and State of Maharashtra and others v. Digamber Bhimashankar Tandale and others [1