JUDGMENT :

Kiranmayee Mandava, J.

1. This appeal is filed under Section 54 of the Land Acquisition Act, 1894, against the order dated 31.03.2001 in L.A.O.P. No.21 of 1999 on the file of the Court of the Senior Civil Judge, Rajam.

2. The claimants are the appellants herein.

3. Heard Sri S. Srinivas Reddy, learned counsel for the appellants and the learned Government Pleader for appeals, appearing for the respondents. Perused the material available on record.

4. For providing the house sites to the weaker sections, the land to an extent of Ac. 6.63 located in Sy.Nos.313/1, 2, 3, 319, 320 & 312 of Veeraghattam Village, were acquired. The draft notification and the draft declaration were issued between 22.03.1996 and 02.04.1996 under Section 6 of the Land Acquisition Act. The possession of the lands were taken by the Land Acquisition Officer on 22.05.1996. The Land Acquisition Officer passed an award fixing the compensation at Rs.37,000/- per acre for dry land and at Rs.39,000/- per acre for wet land. Not being satisfied with the compensation thus determined, the land owners filed a Writ Petition in W.P.No.6615 of 1999 before the erstwhile High Court of Andhra Pradesh, seeking a direction to make Reference under Section 18 of the Land Acquisition Act, 1894 (for short ‘the Act’) to the competent Civil Court.

5. The said Writ Petition was disposed of vide order dated 19.04.1999, directing Reference under Section 18 of the Act, to the competent Civil Court. Accordingly, the matter was referred to the learned Civil Judge, Rajam, and was numbered as L.A.O.P. No.21 of 1999.

6. The particulars of the extents of the land held by the claimants are as follows:

7. The contention of the claimants is that the compensation fixed was very low, having regard to the fact that the subject lands are located amidst the busy locality of a major grampanchayat surrounded by rice mills, cinema halls, agricultural market committee, Junior College and various industrial units etc. It is further contended that the acquired land has high potential value of house sites. It is located near Parvatipuram-Palakonda state high way. It is contended that the Land Acquisition Officer should have taken into consideration the potentiality of the land, locality of the land and should have determined the compensation on the basis of its location. Since the subject lands can be used as house sites, the compensation was claimed by the claimants at Rs.200/- per Square Yard.

8. In support of their contention, claimants got examined P.Ws.1 to 5 and marked Exs.A-1 to A-5, Exs.X-1 to X-2. The Land Acquisition Officer in support of the award examined RWs.1 to 2 and marked EXs.B-1 to B-3.

9. It was contended on behalf respondents that the burden lies on the claimants to prove that the compensation determined by the Land Acquisition Officer was not just and should substantiate their contention by cogent evidence. Thus it is argued that the claimants did not prove that subject lands would fetch more price in the market.

10. The learned Judge framed the following issues for consideration:

1. Whether the compensation fixed by the Land Acquisition Officer did not reflect the true market value?

2. Whether the claimants are entitled to have higher compensation?

11. After considering the contentions of both the parties and by placing reliance on the judgments of the Hon’ble Apex Court and the erstwhile composite High Court, the learned trial Judge observed that the Land Acquisition Officer treated the acquired land as an agricultural land without taking into consideration the potentiality of the land and erroneously fixed the market value as Rs.39,000/- per acre for wet land and Rs.37,000/- per acre for dry land. Thus observed that the market value fixed by the Land Acquisition Officer is not in accordance with the settled principles of law. Th