1. These appeals arise from the judgment of the High Court of Madhya Pradesh. On a difference of opinion among two learned Judges, third Judge on reference in Miscellaneous Appeal No. 82/75 and 83/75 enhanced the compensation. The notification under section 4 (1) of the Land Acquisition Act 1 of 1894 was published on January 17, 1964 acquiring 33 bighas 15 biswas of land belonging to two different individuals for industrial purpose. The Land Acquisition Officer by his award under section 11 determined compensation on March 14, 1966 at Rs. 3,150/- per bigha treating the lands to be agricultural lands. On reference under section 18, the Additional District Judge by his award and decree dated May 15, 1975 enhanced the compensation to Rs. 1/- per sq. ft. and also awarded statutory benefits. On appeal, learned Judge B.C. Verma, J. determined compensation at 0.90/- per sq. ft. deducted 15% towards developmental charges. Learned Judge R.C. Srivastava, J. determined the compensation at Rs. 0.50 per sq. ft. and deducted 25% towards developmental charges. On reference, learned Judge T.N. Singh, J. agreed with the determination of compensation by B.C. Verma, J. at Rs. 0.90 per sq. ft. but deducted 20% towards developmental charges. He also awarded enhanced solatium, interest and additional amount as available under the Amendment Act 68 of 1984. Thus these appeals by the State and also cross appeal by the claimants claiming compensation at Rs. 1/- per sq. ft.

2. The question that arises for consideration is as to what is the rate of compensation that the lands are capable to secure in an open market. It is not in dispute that though they were the agricultural lands as on the date of notification the respondents who are no other than the builders and developers had, after the purchase obtained sanction under section 172 of the Madhya Pradesh Revenue Code for conversion of the land into non-agricultural lands, but no sanction from the municipality for construction of any colonisation, was obtained. Even learned Judge B.C. Verma, J. had noted in his judgment that though the respondents claimants had entered into the agreement of sales with the prospective purchasers, they had not completed the sale transactions. Those agreements were brought into existence to bolster the claims. However, the learned Judge found that the lands were situated very near to the Vicky moped factory. They abut the Jhansi Road; Sitholi railway station is one mile from the acquired lands, but they are situated outside the municipal limits of Gwalior Municipal Corporation. Their lands are fit for developing industries, housing colonies, godown, petrol pumps etc. The evidence also disclosed that the land was not improved and it was not even land. Considered in this background, the learned Judge had accepted the sale deed executed by one of the claimants for a small extent of land at Rs. 0.50 per sq. ft. but having found that the lands were possessed of potential value, determined the compensation at Rs. 0.90 per sq. ft. and, as stated earlier, deducted 15% towards developmental charges. Learned Judge Srivastava, J. relied upon the very sale deeds put forth by the claimants and held that they could not claim higher than what they had put up, namely, Rs. 0.50 per sq. ft. and, therefore, determined the compensation on that premise and deducted 25% towards developmental charges. As seen, learned T.N. Singh, J. had agreed with B.C. Verma, J. in determining the compensation at Rs. 0.90 per sq. ft.

3. The question, therefore, is what would be the reasonable market value the lands are capable to fetch as on the date of the notification had it been sold in the open market to a willing purchaser? It is seen that when 33 and odd bighas of land was sought to be sold in the open market, no willing prudent purchaser would with any credulity agree to purchase it on sq. ft. basis. It is well settled law that the Judge determining compensation in a compulsory acquisition should e