( 1 ) THIS first appeal arises out of an order passed on 19-10-1962 by the learned additional District Judge, Gwalior, awarding compensation to the respondent, as amended further by the order, dated 7-2 1963, awarding interest on the amount of compensation, on a reference made under Section 18 of the Land Acquisition act (hereinafter called the Act ).

( 2 ) THE land acquired measures 3 bighas and 15 bishwas situated at Dabra. The respondent held this land (bearing khasra Nos. 660 and 661) in pucca tenancy rights. The land was acquired for the public purpose of constructing a police station. Notification under Section 4 of the Act was issued and duly published on 11-2-1951. The Collector made the award on 6-2-1968 for payment of compensation to the respondent amounting to Rs. 802. 50 Np. only. The respondent unsuccessfully filed a review application before him. He, however, withdrew the amount of compensation under protest.

( 3 ) THE respondent had made an application for reference being made to Civil court. The Collector made the necessary reference under Section 18 of the Act, the learned Additional District Judge, vide his order, dated 19-10-1962, enhanced the amount of compensation to. Rs. 49,680 allowing compensation for the land which in all measured 9600 square yards at the rate of 0-8-0 per square foot. On an application made by the respondent under sec-lions 151 and 152 of the Code of civil Procedure read with Section 28 of the Land Acquisition Act, the learned additional District Judge directed on 7-2. 1963 that interest shall he paid to the respondent on the amount of compensation at 3 per cent per annum from the date of acquisition of the land till the amount was paid. Being aggrieved by the aforesaid orders, the State has filed this appeal under Section 54 of the Ac ).

( 4 ) THE first contention raised by Shri R. J. Bhave. Government Advocate, on behalf of the Stale, is that the land acquired was agricultural land and the compensation should have been fixed on the basis of its being agricultural land without considering the fact that it may he used for constructing Police Station. It IB also urged that the learned Additional District Judge crept into an error in valuing the large area on the basis of sales of small areas.

( 5 ) BEFORE considering the evidence adduced on these points, we may state some of the principles on which compensation is required to be determined. Under Section 23 (1) of the Act, compensation is to be determined on the basis of the market value of the land at the date of publication of the notification under Section 4 of the Act. The Tribunal assessing compensation is required to take into consideration not only the present purpose or the present use to which the land is applied but also any other more beneficial purpose to which it might reasonably he put by the owner. No doubt, it is true that regard can be had only to the existing conditions and what islikely to happen in reasonably near future and compensation cannot be fixed on the basis of what might happen in the dim and distant future. Where there is a reasonable possibility of the land being put to a more profitable use within a reasonable period, the same cannot he ignored in assessing its value. Compensation has always to be determined by reference to the price which a willing vendor may reasonably expect to obtain from a willing purchaser When the land possesses, some unusal, special or unique features as regards its location or potentialities, due weight must be attached to all these elements. After considering all the circumstances, the Court has to arrive at a fair estimate with reference to the surrounding circumstances and evidence in the case and to award a fair compensation on that basis. The Court further ought to be liberal in the sense that it should not he too meticulous or pedantic in dealing with the evidence. It is also true that ordinarily it is wrong to value large areas on the basis of small area sales and vice ve

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