The main legal point established in the judgment is the importance of the comparable sales method of valuation, factors to be considered for arriving at the correct market value, and the relevance of documents of transaction relating to the adjacent land in determining compensation under the Land Acquisition Act.

Common Judgment: (K.K. Sasidharan, J.)

1. These two first appeals are directed against the common order dated 14.09.1995 in LAOP Nos.14/1992 and 29/1992 on the file of the Subordinate Judge, Salem, whereby, the learned Subordinate Judge fixed the market value of the acquired property at Rs.6 per sq.ft.

Factual matrix :-

2. The Government of Tamil Nadu have issued a notification under Section 4(1) of the Land Acquisition Act on 05.01.1983 acquiring an extent of 29.40 acres of property situated in the village of Thiruchengode for the residential project of Tamil Nadu Housing Board. After complying with the statutory requirements, the Special Tahsildar, Land Acquisition Neighbourhood Scheme, Namakkal passed an award on 18.09.1986 fixing the market value of the property at Rs.17,077 per acre for un-irrigated land and Rs.14,000/- for manvari dry lands. The award was not acceptable to the land owners and as such, they have prayed for reference to the Civil Court as provided under Section 18 of the Land Acquisition Act, 1984. Accordingly, reference was made to the Civil Court in L.A.O.P.No.14/1992 and 29/1992. The claimants have prayed for compensation at the rate of Rs.50/- per sq.ft.

3. During the course of proceedings, on the side of the claimants, CW-1 to CW-5 were examined and Ex.C-1 to C-8 were marked. RW-1 was examined on the side of the Land Acquisition Officer and Exs.R-1 to R-7 were marked.

4. The Reference Court found that the property in Exs.C-1 and C-2 dated 10.06.1992 and 23.09.1982 were situated very near to the property acquired and the sale of the said property was also few months prior to issuance of Sec.4(1) notification. As per Exs.C-1 and C-2, sale price was Rs.10/- per sq.ft. Ex.C-1 property was having an area of 4118 sq.ft. and similarly, Ex.C-2 property was also having lesser extent and both the properties were sold as house sites. Reference Court also found that in the very same village, there was an earlier acquisition as per Sec.4(1) notification issued in the year 1978, which culminated in passing an award by the Reference Court in LAOP No.56/1979 on 12.09.1985 fixing the land value at Rs.1.75 per sq.ft. The said award was marked as Ex.C-4 and the property involved in the said award was also a house site. The Reference Court also found from the topo sketch marked as Ex.R-3 (A) that the property covered by the data sale deed relied on by the Land Acquisition Officer for fixing the market value was situated far away from the property, but on the other hand, the property in Exs.C-1 and C-2 were nearer to the acquired property and accordingly, the Reference Court was of the opinion that the sale value as reflected in Exs.C-1 and C-2 shows the prevailing market rate as on the date of Sec.4(1) notification and accordingly, Rs.10 per sq.ft was taken as the land value. The Reference Court was also of the opinion that certain deductions have to be made for the purpose of development and accordingly, 40% was given towards deduction and a sum of Rs.6 per sq.ft was fixed as the market value of the property acquired.

5. Being aggrieved by the order of the Reference Court, the Land Acquisition Officer has come up with the first appeals.

.Submission of the appellants:-

.6. Thiru. V. Ravi, learned Special Government Pleader contended that the basis adopted by the Reference Court for arriving at the market value was against the well established principles governing the determination of land value. According to him, in the face of the data sale deeds produced by the State as well as the earlier award in respect of the property in the very same village, the Reference Court was not justified in enhancing the compensation on the basis of two documents registered only few months before the issue of Sec.4(1) notification. According to the learned Government Pleader, the Reference Court should have allowed deduction of at least 50% towards development charges and a further deduction should have been given on accou