The main legal point established in the judgment is the application of the doctrine of potential value in determining the market value of acquired lands, considering their conversion status and potential for urban use.

( 1 ) MFA nos. 593, 58 and 68 of 1986 are represented by one counsel and the lands involved arc survey nos. 118/4 b1, b2, b3 and b4 in all measuring 3 acres 18 guntas. In mfa No. 896 of 1985 the land involved is survey No. 118/5-a and 5-b measuring 5 acres 32 guntas. There is no dispute that all these lands abut each other and are situated in the outskirts of davanagere town. These lands were sought to be acquired under a preliminary notification dated 12th january, 1978. The Provisions of Section 17 (1) was invoked and it seems the possession was taken on 21st april, 1978. These lands were acquired for the purpose of putting up ksrtc bus stand and depot at davanagere. The land acquisition officer awarded a compensation at the rate of Rs. 5,000/- per acre on17th may, 1979. On reference the civil court has awarded the compensation at the rate of Rs. 30,000/- per acre as per its common judgment dated 30th october, 1984. Before proceeding further a few more basic facts may be clarified. The award of the land acquisition officer actually works out at about re. 1. 03 ps. Per square yard and the award of the reference court works out at Rs. 6. 20 ps. Per square yard. The claimants in the first three appeals pertaining to survey No. 118/4 claim compensation at the rate of Rs. 135/- per square yard while the appellant in mfa No. 896 of 1985 has confined the claim to Rs. 100 per square yard. The claimants contend that the lands are situated in a developed area and in fact have been converted for non-agricultural use and therefore proper value based on the potential of the lands should be awarded. The appellants mainly rely on the following documents in support of their case: 1) exhibit p. 18, a registered sale deed, dated 30th may, 1974 executed by one of the claimants and his father in favour of one ravindran whereby a site measuring 130 ft. X 99 ft. Bearing municipal No. 113/1 formed in the very land was conveyed for Rs. 41,000/ -. This works out at Rs. 29/- per square yard. 2) exhibit p. 1 is an agreement to sell which is dated 8-12-1975 executed by the aforesaid ravindran in favour of one krishan gopal behal (p. w. 1) in respect of a portion out of the above land measuring 80 ft. X 99 ft. The sale consideration was Rs. 60,000/- and therefore the rate works out to Rs. 68. 19 ps. Per square yard. 3) exhibits p. 21 and p. 22 are the judgment and decree of this court dated 12th september, 1973 made in mfa No. 670 of 1971, whereunder this court awarded the compensation at a net rate of Rs. 35/- per square yard, in respect of a land acquired under a preliminary notification dated 24-4-1969 in survey No. 75/3-a measuring 1 acre 32 guntas and the rate was arrived at after deducting 53% from the gross rate towards the retail price. 4) exhibit p. 23 which is an order of the government dated 9th november, 1973 fixing an upset price of Rs. 100/- per square yard in respect of a land measuring 27. 5 ft. X 49. 5 ft. 5) exhibit p. 10, dated 5-1-1978 issued under Section 45-a of the Stamp Act fixing the market-value of the lands for the purpose of collecting stamp duty in respect of the sale deeds in the city of davanagere whereunder the minimum rate was Rs. 108/- per square yard abutting national highway No. 4 and the maximum rate was Rs. 135/- per square yard on the same national highway. The reference court has referred to these documents, but has not relied upon any one of them for the purpose of awarding compensation. The learned civil judge opined that, because r. t. c. clearly show that these are agricultural lands in which ragi, jowar, etc. Are being raised for the years 1973-74 to 1975-76 and that there is no other evidence to show that the land has been converted, the land shall have to be considered as agricultural land. The trial court further noticed that even though the claimant in the first batch of appeals have shown that some amount was paid for conversion as per exhibit 19, the claimants have failed to pro