JUDGMENT

Bhide, J. - This is an appeal arising out of proceedings under the Land Acquisition Act. An area of 18 marlas belonging to the appellant Mohammad Ismail was acquired for the purpose of the Lahore-Lyallpur Road. It appears that possession was taken by the Government in anticipation of acquisition some time in 1925, though the preliminary notification relating to the acquisition under Section 4 of the Act was not issued till long afterwards, i.e. till 29th August 1933. Notification under Section 6 of the Act was issued on 10th October 1933. The appellant claimed compensation at the rate of Rs. 1,000 per marla, on the ground that his land was very favourably situated at the junction of two roads, viz. the Lahore-Lyallpur Road and the Sharakpur-Sheikhpura Road and was valuable as a suitable site for shops, petrol pumps, etc. The Collector admitted in his award the favourable situation of the plot in question, but considered the amount claimed by the appellant to be extravagant and awarded compensation only at the rate of Rs. 30 per marla, with 15 per cent for compulsory acquisition and also granted interest at 6 per cent per annum on the amount for the period of occupation prior to the actual acquisition. The amount due to the appellant on this basis worked out to Rs. 937-11-4. The appellant objected to this award and therefore a reference was made to the District Judge under Section 18, Land Acquisition Act. Before the District Judge the appellant only claimed Rs. 200 per marla. The District Judge found that the plot was suitable as a building site for shops and found the market price of the whole area to be Rs. 2,000 on the basis of 20 years rental for the shops in the neighbourhood. He, however, felt some difficulty in assessing the market price of the plot in dispute, as possession had been taken in 1925, and the land was since then under "the cloud of compulsory acquisition." He, therefore, deducted 50 per cent. from the market price arrived at by him, and granted Rs. 1,000 only as compensation to the appellant. He refused to grant any interest for the preceding period of occupation or even 15 per cent for compulsory acquisition, as required by the Act. The learned Judge left the parties to bear their costs. From this decision Mohammed Ismail has appealed and cross-objections have been filed on behalf of the Secretary of State for India in Council with regard to the enhancement of the award as well as the order relating to costs.

2. The learned District Judge seems to be clearly in error in refusing to give 15 per cent. in addition to the market price as fixed by him. The provisions of the Act are mandatory in this respect (vide Section 23 (2) and the learned Government Advocate frankly stated that he did not support the learned District Judge's award on this point. I am further of opinion that the learned District Judge was also in error in arbitrarily deducting 50 per cent. on account of what he called "the cloud of compulsory acquisition" hanging over the land since 1925. The market value of the land in this case must, I think, be considered apart from the effect thereon, if any, of the expected acquisition by Government. Although possession had been taken in 1925, there could be no certainty about the acquisition until the necessary notifications under the Act had issued and there is no evidence to show what effect, if any, the possibility of acquisition had on the market. It seems, moreover, obviously unfair that the Government should be able to reduce the compensation payable for compulsory acquistion by merely announcing in advance its intention of acquiring a piece of land and thus throwing a 'cloud' on its market price, before issuing notifications required by the Act. I find no authority in support of the view taken by the learned District Judge and the learned Government Advocate also did not attempt to support it. I accordingly hold that the market price must be fixed with reference to the date of the notif