TIRATH S. THAKUR, J.

( 1 ) LAND measuring 2 acres and 4 guntas situated in Survey Nos. 95/1 and 95/2 of Kunnal Village, Ramadurga Taluk was notified for acquisition in connection with the construction of Hidkal Dam Project under a preliminary notification dated 29-1-1998. The Land Acquisition Officer determined compensation at the rate of Rs. 20,000/- per acre which did not satisfy the landowners resulting in a reference to the Civil Court for determination of the just and fair compensation payable to them. The reference Court recorded evidence on behalf of the landowners and by adopting the capitalisation method came to the conclusion that the landowners were entitled to compensation at the rate of Rs. 1,94,560/- per acre. The Court, however, felt that since in a similar case arising out of an earlier acquisition made in the year 1994, the Court had determined compensation at Rs. 96,000/- per acre; only the said amount would meet the ends of justice. The Special Land Acquisition Officer has in this appeal assailed the said order. The owner has on the contrary filed cross objections claiming enhancement of compensation from Rs. 96,0007- to rs. 1,40,000/- per acre.

( 2 ) MR. Hatti, learned Counsel for the appellant and landowners submitted that having determined the compensation payable to the landowners at Rs. 1,94,560/- per acre on the basis of capitalisation of the yield from the land the Reference Court was not justified in reducing the same to Rs. 96,000/- per acre just because the said amount had been awarded as compensation to some other landowners for an acquisition made more than three years before the issue of the preliminary notification in this case. He submitted that a copy of the judgment in the said earlier ease had been produced by the landowners marked Exhibit P. 12 not because the said decision was conclusive insofar as the amount payable to the appellant was concerned but because the same showed that the amount of compensation awarded by the Land Acquisition officer was grossly incommensurate with the actual market value of the acquired lands. He urged that even if the Reference Court was to take the amount of Rs. 96,000/- determined for similar land in the year 1994 as a benchmark, the least which the said Court ought to have done was to give escalation at the rate of 10% p. a. for a period of 3 years and 4 months which represented the time-lag between the two notifications. The Reference Court had according to the learned Counsel failed to notice that such an escalation was essential to ensure parity in the compensation payable to the appellants with the amount awarded to the landowners in the earlier case referred to above. He also relied upon the judgment of the Reference Court marked Exhibits P. 14 and P. 15, dated 24-9-1998 in which compensation for similar land was awarded at the rate of Rs. 1,30,000/- per acre in respect of lands situated at Nipal village of Raibag Taluk.

( 3 ) MR. K. P. Ashok Kumar, Counsel for the respondent, on the other hand, submitted that the landowners having themselves produced a copy of the earlier judgment in LAC No. 7 of 1991, Exhibits P. 12 and P. 13, cannot find fault with the view taken by the Reference Court that the amount of compensation awarded in the said case could be a sound basis for any award made in favour of the appellants. He submitted that taking Rs. 96,000/- per acre as the threshold, the appellants could be given a reasonable amount of escalation for the time gap between the notifications issued in the said earlier case and the case of the appellants. According to the learned Counsel, escalation at 5% p. a. would be the optimum that this Court could award having regard to the facts and circumstances of the case and keeping in view the decision of this Court in Gundappa v State of Karnataka , where only 3% per annum was awarded towards escalation, over a previously determined amount.

( 4 ) THE material facts are not in dispute. The Reference Court has on the

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