The market value of acquired land should be determined based on the comparative market value of adjacent or nearby lands of similar fertility and potential, as established by contemporaneous sale deeds or judicial precedents, to ensure just and reasonable compensation for displaced land owners.

This Appeal filed under Section 54 of the Land Acquisition Act, 1894 (hereinafter referred to as “the Act”), is directed against the order and decree dated 16.04.2007 passed in O.P. No. 63 of 2002 on the file of the II Addl. Senior Civil Judge, Warangal (hereinafter referred to as the “Reference Court”).

2. By the impugned order, the Reference Court enhanced the compensation awarded by the Land Acquisition Officer (for short, “LAO”) in respect of the acquired lands from Rs.16,900/- per acre to Rs.22,500/- per acre. Aggrieved by the quantum of such marginal enhancement made by the Reference Court and seeking further increase in compensation, the claimants/land owners have preferred the present Appeal.

I. BRIEF FACTS:

3. The Land to an extent of Ac.3.34 gts. in Sy. No. 229 of Dharmapur Village, Dharmasagar Mandal of Warangal District was acquired for the purpose of construction and submergence of a check dam across stream near Dharmapur Village of Dharmasagar Mandal.

II. NOTIFICATION AND AWARD:

4. A notification under section 4(1) of the Act was published on 29.10.2001, pursuant thereto, notices under sections 9(3) and 10 of the Act, were issued. An award enquiry was thereafter conducted in accordance with law.

5. Subsequently, the LAO passed an award dated 28.06.2002, fixing the market value of the acquired lands at Rs. 16,900/- per acre. Not being satisfied with the said compensation, the claimants sought a reference under Section 18 of the Act, which came to be numbered as O.P. No. 63 of 2002 before the Reference Court.

III. POINT FOR CONSIDERATION BEFORE THE REFERENCE COURT:

6. The Reference Court, upon the pleadings, and material placed before it, framed the following Point for determination:

“Whether the market value fixed by the Land Acquisition Officer is inadequate, if so, what is the reasonable market value to be fixed for the acquired land?”

IV. EVIDENCE:

7. To substantiate their claim for higher compensation, the claimants examined PWs 1 and 2 and got marked Ex. A1 (certified copy of a sale deed), on their behalf.

8. On behalf of the respondent-State, RW1 was examined and Exhibits B1 and B2 were marked.

V. FINDINGS OF THE REFERENCE COURT:

9. The learned Reference Court, upon appreciation of the oral and documentary evidence, observed in the impugned order that though PW1 claimed to have been earning a net income of Rs.20,000/- per acre, per annum from commercial crops such as cotton, chillies, banana, and tobacco, no documentary proof such as crop yield records, sales receipts, or accounts was produced to substantiate such claim. Likewise, PW2 admitted in cross-examination that Ex. A1, the sale deed relied upon by the appellants pertained to Nashkal Village and not to Dharmapur Village, where the acquired lands are situated.

10. Nevertheless, the learned Reference Court took note of the fact that the acquired lands were fertile, irrigated, and capable of raising commercial crops, which indicated their higher potential value compared to dry lands. The learned Reference Court also found that agriculture was the only source of livelihood for the claimants, and that the acquisition of their lands had deprived them of their means of sustenance.

11. The learned Reference Court further noted that taking into account the fertility, potentiality, and locat