The market value of land for the purpose of compensation under the Land Acquisition Act is to be determined by considering all the advantages and disadvantages of the land, including restrictions imposed on its user and enjoyment, and by taking into account the prices obtained for similar land in the vicinity.

T.P. Naik, J.

1. This is an appeal by the Collector, Jabalpur, against an award under the Land Acquision Act made by the Second Additional District Judge, Jabalpur, on 31st January 1957.

2. The plot in question is situate in plot No. 76, block No. 14 of Miloniganj, Jabalpur. The area to be acquired is 5,400 sq. ft. and is part of plot No. 76. The plot is held by the owner in permanent lease hold rights free of assessment. Though the area is not on the main road, it is situate in a busy locality and is easily accessible from schools, hospitals, police-stations. etc..... The advantages and disadvantages of the plot have been detailed by the Learned Additional District Judge as follows and are not in dispute. Its advantages are its situation in the heart of the town and its easy accessibility and its usefulness as a plot for leasing out to tenants by the owner himself, while its disadvantages are that it lies at the back of the main residential building occupied by the owner, has latrines on all its sides and abuts on a nala.

3. The Land Acquisition Officer assessed its value at -/12/- sq. ft. and that of semar tree at Rs.10/-, which with 15 % for compulsory acquisition came to Rs.4,669/-. He accordingly offered to the respondent Rs.4,669/-. Being dissatisfied with the award, the respondent Baboolal referred the matter to the Civil Court, and the learned Second Additional District Judge, Jabalpur, enhanced that figure by about Rs.3.892/12/-. He awarded Compensation for the plot at Rs. 1/6/- per sq. ft, and Rs.20/- for the semar tree, which together with additional compensation for compulsory acquisition came to Rs.8,561/12/.

4. The Collector has appealed against the enhancement, while the respondent Baboolal has filed a cross-objection claiming compensation at Rs. 2/- per sq. ft.

5. I agree with the learned Additional District Judge that the compensation awarded by the Land Acquisition Officer was on very inadequate data and could not furnish a reliable guide for determining the amount of compensation. Though the sale-deeds taken by him as a guide were more or less contemporaneous with the transaction in question, and were in respect of open plots of land, they related to plots which were neither in the locality nor near about it and ranged from -/4/- sq. ft. to Rs. 1/- sq. ft.. It was also not known if the plots were sold for any special reason or their sales were in the ordinary course to determine if the prices paid by the vendees for them were the market price. The assessment of compensation has to be somewhat arbitrary because it is not always easy to get the market price of a plot very nearly identically situated, but even so we are of opinion that the award by the Collector could not be accepted.

6. In South Eastern Railway Co. Vs. London County Council (1915) 2 Ch. 252. Eve. J. summarised the general principles relating to compensation as follows:-

(a) The value to be ascertained is the value to the vendor, not its value to the purchaser.

(b) In fixing the value to the vendor all restrictions imposed on the user and enjoyment of the land in his hands are to be taken into account, but the possibility of such restrictions being modified or removed for his benefit is not to be overlooked.

(c) Market price is not a conclusive test of red value.

(d) Increase in value consequent on the execution of the undertaking for, or in connection with which the purchase is made be disregarded.

(e) The value to be ascertained is the price to be paid for the land with all its potentialities and with all the use made of it by the vendor.

(f) The true contractual relation of the the parties..............that of purchaser and vendor............. is not to be observed by endeavouring to construe it as another contractual relation altogether ...............that of indemnifier and indemnified."

7. In Sri Raja Vyricherla Narayan Gajapatiraju Bahadur Garu Vs. The Revenue Divisional Officer Vizagapatam ILR (1936) Mad 532. Lord Romer, delivering the judgment