The highest value fetched in a bona fide transaction should be used to determine the value of land acquired under the Land Acquisition Act.

JUDGMENT :

Mudholkar, J.

1. By a notification under Section 4 of the Land Acquisition Act 1894, (I of 1894), dated September 14, 1948 the Government of Madras decided to acquire 1145 grounds of land comprised in an area roughly bounded by St. Mary's Road on the north, by the Buckingham Canal in the east and south and by Chamier's Road and Pugh's Road on the west in the city of Madras. The land belonged to various owners and the acquisition was for the purpose of constructing houses under the Town Planning scheme which had already been settled. Out of these lands 74 grounds belonged to the appellant. The Land Acquisition Officer divided the lands to be acquired into five groups Groups I to Group V according to what he considered to be the best lands, the next best lands and so on. In grading the lands in this manner, the Land Acquisition officer bore in mind factors such as proximity to roads in existence, nearness to the Mylapore temple, the market, schools etc. level of land, its distance from the Buckingham canal (which is said to stink a great deal) as well as distance from pits or ponds and so on. This grading has been accepted throughout and is not challenged before us. What is, however, contended on behalf of the appellant is that her lands which are partly placed in Group III and partly in group IV should all have been placed in Group III. After dividing the lands into five groups the Land Acquisition Officer tentatively valued the lands in group I at a particular figure and then made deductions from this figure for the purpose of valuing lands falling in different groups. This method, though deprecated by the Judge of Small Causes Court, before whom an application was made by the claimants challenging the award of the Land Acquisition Officer, was actually adopted by him in valuing the lands. What he, however, did was to give the claimants a little more than what the Land Acquisition Officer had given. In appeal the High Court, while adhering to the classification of lands, has chosen to follow a different principle in valuing lands falling in Group I. What the High Court did was to take the average of the price ascertainable from two sale deeds, Exs. R-19 and Rule 27 and then deducted from it a certain amount in respect of betterment levy. In that way the High Court has regarded Rs. 1450 as the appropriate rate for valuing lands in Group I. According to it the value of land in Group III would be at Rs. 1400 per ground and Group IV at Rs. 1160 per ground. On behalf of the appellant Mr Ram Reddy contends that in taking an average price the High Court was wrong and that it should have based the valuation of land in Group I on Ex. Rule 19 alone. On that basis, according to him, the value of land in group III would work out at Rs. 1900 per ground and that of lands in group IV at Rs. 1700 per ground. His second contention is that in fixing compensation, betterment levy under the Madras town Planning Act, 1920 (7 of 1920) should not have been deducted. His third contention is that the appellant's lands should all have been placed in group III.

2. It seems to us that there is substance in the first contention of Mr Ram Reddy. After all when land is being compulsorily taken away from a person he is entitled to say that he should be given the highest value which similar land in the locality is shown to have fetched in a bona fide transaction entered into between a willing purchaser and a willing seller near about the time of the acquisition. It is not disputed that the transaction represented by Ex. Rule 19 was a few months prior to the notification under Section 4, that it was a bona fide transaction and that it was entered into between a willing purchaser and a willing seller. The land comprised in the sale deed is 11 grounds and was sold at Rs. 1951 per ground. The land covered by Rule 27 was also sold before the notification but after the land comprised in Ex. Rule 19 was sold. It is true that this land was sold at Rs. 1096 p