The market value of acquired lands for the purpose of compensation under the Land Acquisition Act should be determined by considering the potential value of the land for house-sites, making appropriate deductions for development costs, and taking into account the relevant facts and circumstances of each case.

( 1 ) THE lands in question comprised in an extent of acres 5. 00 in RS. No. 45/1 and acres 1-07 1/2 cents in R. S. Nos. 45/1, 2, 3 and 4 of bhavanipuram village, Vijayawada were acquired for providing house-sites to the weaker sections. The notification under section4 (l) of the Land Acquisition Act was issued on 5-1-1979. The Land Acqui- sion Officer, after conducting enquiry, passed an award on 26-3-1981 fixing compensation at Rs. 34,2007- per acre. The claimants being not satisfied with the said compensation sought reference to the civil court under Section 18 of the Land acquisition Act The claimants claimed compensation at Rs. 2,00,000/- per acre. On reference, the cases are numbered as o. P. Nos. 264, 265, 267, 266 and 263 of 1981. The civil court, after considering the oral and documentary evidence on record, and after hearing the arguments of both the sides, enhanaced compensation to rs. 1,52,875/- per acre. Assailing those judgments the Land Acquisition Officer preferred appeals - A. S. Nos. 2801/82, 2721/81, 2508/82, 506/83 and 3379/81. Except A. S. No. 506/83 all the other appeals were dismissed by a learned single judge of this Court vide order dated 23-11-1988 confirming the judgments of the civil court. Against the judgment in a. S. No. 3379/88 the present L. P. A. No. 71/90 was filed by the Land Acquisition officer. As A. S. No. 506/83 in not disposed of, it is also posted along with the present letters Patent Appeal. Therefore, both these are disposed of by this common judgment as the lands in both the cases were acquired by a single notification.

( 2 ) THE learned Government Pleader appearing for the Land Acquisition Officer contended that the enhancement of the compensation made by the civil court is too excessive; the lower court erred in relying on a sale-deed, Exa-1, dated 5-5-1978, which was in respect of a small extent of land of 573 sq. yards; the land under Ex. A-1 was sold for a consideration of Rs. 18,000/- which comes to Rs. 1,52,875/- per acre; the lower court ought not to have relied on a sale-deed which was in respect of a very small extent of land except when there is no other documentary evidence on record to show the market value of the land. He further contended that when there is no evidence on record, the civil court has to confirm the award; but the civil court erred in enhancing compensation; therefore, the present Letters Patent Appeal and the appeal suit were filed It is further contended that the acquired lands were agricultural lands and were not fit for sale as house-sites and that therefore fixation of market value basing on Ex. A-1 is not correct. It is further contended that the lower court erred in not deducting anything towards expenses for development when the acquired land is undeveloped agricultural land particularly when a sale deed of small plot is relied on.

( 3 ) THE learned counsel appearing for the Claimants contended that the village bhavanipuram is just adjacent to the vijayawada municipal area and the same was also included in the municipal area on 20-8-1981; therefore, the compensation awarded is too meagre compared to the market value of the land prevailing in that area. It is further contended that the appeals filed against the judgments of the civil court awarding the same compensation in respect of similar lands which were acquired under the same notification were already dismissed and became final and, therefore, those judgments would operate as res judicata and the present appeals have to be dismissed as the same cannot be proceeded with.

( 4 ) IN view of the above said contentions the main point that arises for decision is what is the proper market value to be paid as compensation for the acquired lands.

( 5 ) TO decide what is the proper market value to be paid to me claimants, the following points arise for consideration in these appeals. (1) Whether the sale under Exa-1 is a genuine sale or not?

( 6 ) IN respect of A. S. No. 506/83, p. Ws