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IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
HONOURABLE SRI K.LAKSHMAN, HONOURABLE SRI VAKITI RAMAKRISHNA REDDY
A.P.S.R.T.C. – Appellant
Versus
Tammara Ahalya – Respondent
AS 603/2003

When land is acquired for a specific purpose (like a bus depot) and is already in a developed area, a 20% deduction for development charges is reasonable, not the standard 40% for undeveloped agricultural land.

Headnote:(A) Land Acquisition Act, 1894 - Sections 4(1), 18, 23, 54 - Compensation for land acquired - The reference court enhanced compensation from Rs.33,333/- per acre for wet land and Rs.28,888/- per acre for dry land to Rs.141.12/- per square yard (Rs.5,57,568/- per acre) - The court held that the reference court was justified in considering the advantageous location of the acquired lands abutting National Highway No.9 and situated within the developed limits of the town, while determining the enhanced market value. (Paras 21-27)

(B) Land Acquisition Act, 1894 - Section 23 - Determination of market value - The court must take into account not only the existing condition of the land but also its capacity for future development, having regard to its location, surroundings, and available amenities - The market value is the price that a willing purchaser would pay to a willing seller for the property having due regard to its existing condition with all its existing advantages and its potential possibilities. (Para 25, citing Atma Singh v. State of Haryana)

(C) Land Acquisition Act, 1894 - Section 23 - Sale exemplars - Sale instances of smaller extents cannot be ignored - They can be relied upon subject to appropriate deduction being provided towards development charges - When large extent of lands is acquired and if the sale exemplar for the large extent is available, it would be safer to rely on the same. (Paras 32-33, citing Ravinder Kumar Goel v. State of Haryana)

(D) Land Acquisition Act, 1894 - Section 23 - Deduction for development charges - A 20% deduction is reasonable when the land is already in a developed or semi-developed area with access to highway, electricity, and surrounding infrastructure - A 40% deduction applied to large tracts of undeveloped agricultural lands would not be appropriate in such cases. (Paras 35-36)

Facts of the case:
The appellant, a state road transport corporation, filed an appeal against the judgment of the Reference Court which enhanced compensation for land acquired for construction of a bus depot. The Land Acquisition Officer had fixed the market value at Rs.33,333/- per acre for wet land and Rs.28,888/- per acre for dry land. The Reference Court, relying on an exemplar sale deed (Ex.A4) dated 05.06.1984 at Rs.200/- per square yard for land in the same vicinity, and after applying a 20% deduction for development charges, fixed the market value at Rs.141.12/- per square yard. The appellant corporation contended that the enhancement was excessive and that a 40% deduction should have been applied.

Findings of Court:
The court found that the Reference Court had acted on settled principles of law, correctly appreciated the evidence, and determined a fair market value. The court held that the reliance on Ex.A4 as a comparable sale transaction was well-founded due to proximity, similarity in location, and proven commercial potential of the acquired lands. The deduction of 20% towards development charges was found reasonable given the existing infrastructure and the purpose of acquisition (construction of a bus depot, not residential layout). The appeal was dismissed and the claimants were held entitled to all statutory benefits.

Issues: 1. Whether the Reference Court was justified in enhancing the market value of the acquired lands? 2. Whether the enhancement granted is in accordance with law and supported by evidence? 3. Whether a 20% or 40% deduction towards development charges was appropriate?

Ratio Decidendi: The court determined that the land, abutting a National Highway and adjacent to an existing bus stand, possessed significant commercial potential, justifying valuation based on comparable pre-notification sale exemplars. The court ruled that a 20% deduction for development charges was reasonable because the acquisition was for a bus depot (requiring minimal development) and the land was already in a developed area, whereas a 40% deduction applies to large tracts of undeveloped agricultural land.

Result: The appeal was dismissed with no order as to costs, and the claimants were entitled to all statutory benefits including solatium, additional value, and interest. Pending miscellaneous applications were closed. (Paras 39-40)

Table of Content
1. determination of compensation for acquired land under the land acquisition act (Para 1 , 2 , 3)
2. points for consideration in reference case (Para 4)
3. evidence recorded in reference case (Para 5)
4. reference court's findings on land value and potential (Para 6 , 7 , 8)
5. appellant's submissions on compensation enhancement (Para 9 , 10 , 11)
6. respondents' submissions supporting enhancement (Para 12 , 13 , 14 , 15)
7. issues for determination in appeal (Para 16)
8. comparative chart of compensation awarded (Para 17 , 18)
9. analysis of acquisition facts and relevant legal section (Para 19 , 20)
10. admissibility and comparability of sale exemplar ex. a-4 (Para 21 , 22 , 23 , 24)
11. potentiality and other factors for determining market value (Para 25 , 26 , 27)
12. oral evidence supporting commercial potential and comparability (Para 28 , 29 , 30)
13. reliance on smaller extent sale exemplars (Para 31 , 32 , 33)
14. deduction towards development charges is 20% (Para 34 , 35 , 36)
15. reference court's compensation is fair and not excessive (Para 37 , 38)
16. appeal dismissed with no order as to costs (Para 39 , 40)

JUDGMENT

: (Per Hon’ble Sri Justice Vakiti Ramakrishna Reddy

This Appeal, filed by the APSRTC (presently TGSRTC) under Section 54 of the Land Acquisition Act, 1894 (for short, “the Act”), is directed against the judgment and award dated 18.07.2002 passed in O.P. No. 40 of 1991 on the file of Senior Civil Judge, at Suryapet (hereinafter called as ‘Reference Court), whereby the Reference Court enhanced the compensation awarded by the Land Acquisition Officer (for short, “LAO”) in respect of the acquired land.

I. BRIEF FACTS

2. The lands situated in Survey No. 787 to an extent of Ac. 1.17 guntas of wet land of Claimant No.1, Survey No. 789 to an extent of Ac. 1.07½ guntas and Ac. 1.07½ guntas of Claimant No.2 and 3 situated in Kodad Mandal headquarters, were acquired for the purpose of construction of bus depot at Mandal Headquarters. A notification under Section 4(1) of the Act was published on 03.02.1987.

3. The LAO passed an award dated 25.05.1990 fixing the market value of acquired lands at Rs. 33,333/- per acre for wet land of Claimant No.1 and Rs. 28,888/- per acre for the dry Bagayath land of Claimant No.2 and 3. Not being satisfied with the said compensation, the claimants sought a reference under Section 18 of the Act before the Reference Court.

II. POINTS FOR CONSIDERATION BEFORE THE REFERENCE COURT:

4. The following Point for consideration was framed for determination by the Reference Court:

1) Whether the Compensation awarded by the Land Acquisition Officer is not just and proper and if so, the same needs to be enhanced and if so at what relief?

2) To what result?

III. EVIDENCE ON RECORD:

5. Before the Reference Court, the claimants examined PWs 1 to 6 and marked Exs.A1 to A9, which included exemplar sale deeds relating to the adjacent lands. On behalf of the respondents, RWs 1 and 2 were examined and Ex. B1 to B6 were marked.

IV. FINDINGS OF THE REFERENCE COURT:

6. Upon appreciation of the oral and documentary evidence on record, the Reference Court observed that the acquired land, though classified as agricultural, possessed substantial non-agricultural and commercial potential owing to its strategic location abutting National Highway No.9, immediate proximity to the RTC Bus Stand and Bus Depot, and the presence of educational institutions, government offices, markets, industries, and dense residential developments in and around Kodad Town. It was further observed that the land could not be valued merely as wet or dry agricultural land and that its urban character and building potential had to be taken into consideration while determining the market value.

7. The Reference Court also observed that the sale transactions relied upon by the claimants under Exs.A4 to A7 were genuine and comparable, and could be used as guiding factors to ascertain the prevailing market value, whereas the sale deeds marked under Exs

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