The market value of land acquired under the Land Acquisition Act, 1894 is to be determined based on comparable sales and expert testimony, taking into account the potential use of the land and any increase in value due to the acquisition.

( 1 ) THIS is an appeal preferred by the State of Madhya Pradesh against the order dated 24-12-1970, passed on reference under Section 18 of the Land acquisition Act, 1894, by the Addl. District Judge. Mandsaur, whereby the compensation awarded by the Land Acquisition Officer has been enhanced.

( 2 ) FACTS essential for decision of this appeal are as under : Proceedings were started under the Land Acquisition Act, 1894 (for short, the Act) at the instance of the Madhya Pradesh Housing Board, Sub-Division, Ujjain, for acquisition of the land for constructing its hospital and staff quarters. In these acquisition proceedings besides other land the land measuring 1. 12 bighas, out of the land comprised in survey No. 394/1, situated at Mandsaur and 13 bighas out of the land comprised in survey Nos. 96 to 106, situated in village Kityani, belonging to the Nagar Palika, Mandsaur (respondent-herein) were proposed to be acquired. Notifications under Section 4 (1) and Section 17 of the Act were accordingly issued on 23-11-1962. Declaration under Section 6 of the Act was issued on 26-1-1963. Thereafter notices under Section 9 of the Act calling upon the persons interested in the lands proposed to be acquired were issued requiring them to submit their claims. The possession of the lands in question was duly handed over to the Housing Board on 2-5-1963 by the Land acquisition Officer, by award dated 31-3-1965, whereby (a) by way of compensation in respect of the land in area 1. 12 bighas, situated at Mandsaur, rs. 55. 15 as its market value together with Rs. 8. 27 being 15 pet cent to be paid on this market value in consideration of compulsory nature of the acquisition in all Rs. 63. 42 were awarded; and (b) in respect of the land situated at village Kityani Rupees 5250. 60 were awarded by way of compensation as its market value and Rs. 787. 59 to be paid on this market value by way of statutory addition --in all Rs. 6038. 19. In respect of the land situated in village Kityani it has been stated in the award that the same is adjacent to the land lituated in Mandsaur. In order to seek enhancement of the compensation so awarded, an application under Section 18 of the Act was made to the Collector by the respondent Nagar Palika requiring that the matter be referred by him for determination by the Court. In this application an amount of rs. 6,57. 000/- was claimed at the rate of Rs. 2/- per square feet.

( 3 ) ON reference to the Court, the appellant-State opposed the claim for enhancement of compensation on the grounds that the respondent-claimant has failed to submit their claim after service of notice under Section 9 of the Act on them. Accordingly, they cannot claim enhancement of the compensation awarded and that the compensation awarded is just and proper.

( 4 ) AFTER recording evidence the learned Addl. District Judge has by the impugned order enhanced the compensation in respect of the land situated in village Kityani to Rs. 91406. 25 and has awarded Rs. 13710. 60 in addition by way of 15% on this market value to be paid by way of statutory addition --in all Rs. 105116. 85; and in respect of the land situated at Mandsaur to Rupees 23850 and by way of statutory addition Rs. 3577. 50 --in all Rs. 27427. 50 paise. Out of the amount so determined, the amount of Rs. 5305. 75 paise, paid already under the award to the respondent, hat been ordered to be deducted. Thus, the remaining amount ordered to be paid to the respondent comes to Rs. 127235. 60 paise, besides interest at the rate of 6% per annum from 2-5-1963, the date on which the possession was taken, up to the date of realisation. This appeal is directed against the impugned order passed bv the Court.

( 5 ) IN this appeal it was contended by Shri S. R. Joshi, learned Government advocate, for the appellant-State that (i) the market value of the land acquired could not be enhanced by the Court because the respondent-claimant did not submit any claim after service of notice und