THE HON’BLE SRI JUSTICE A.

RAJASHEKER REDDY
AND
THE HON’BLE SRI JUSTICE M.LAXMAN

I.A.NO.1 OF 2021
IN/AND
L.A.A.S No.483 OF 2007

COMMON JUDGMENT: (Per Hon’ble Sri Justice M.Laxman)

1. The appeal assails the order and decree dated 11.07.2006

in L.A.O.P.No.54 of 2004 on the file of the Court of the Senior

Civil Judge at Sathupally (for short, reference Court),

whereunder the reference was answered confirming the market

value fixed by the Land Acquisition Officer.

2. The appellant herein is the claimant and the respondent

herein is the respondent in the said LAOP.

3. The back ground of the facts show that the agricultural

land of the appellant to an extent of Ac.1-09 gunta in Sy.No.47,

situated at Rajerla Village, Sathupalli Mandal, Khammam

District, was acquired for excavation of Bethupalli flood flow

channel along with other lands. Notification under Section 4(1)

of the Land Acquisition Act was issued on 16.11.1996. After

award enquiry, the Land Acquisition Officer has passed an

Award dated 06.03.1997 fixing the market value for various

lands by categorizing them. The market value fixed for the land

of the appellant was Rs.23,400/- per acre, apart from granting

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other consequential benefits including the interest from the date

of taking the possession of the land. The appellant claimed

compensation @ Rs.1,50,000/- per acre, but the same was not

accepted by the Land Acquisition Officer. Thus, the claimant

sought reference.

4. Before the reference Court, the claimant to support his

case, examined P.Ws.1 and 2 and relied upon Exs.A-1 and A-2.

Ex.A-1 is the sale deed document No.1701/1995, dated

04.11.1995, covering an extent of land admeasuring Ac.0-10

guntas, which was sold for total amount of Rs.30,000/-. The

market value comes to Rs.1,20,000/- per acre. To support such

a sale transaction, the appellant examined P.W.2, the vendor of

the document. Ex.A-2 is the village map showing the location of

the appellant’s land as well as the land under Ex.A-1. The

respondent, to support his case, examined R.W.1, and no

documents were marked.

5. The reference Court, after appreciating the evidence on

record, discarded Ex.A-1 on the ground that it is for the smaller

extent, and accordingly, confirmed the market value fixed by the

respondent (Land Acquisition Officer). Challenging the same, the

present appeal has been filed.

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6. Pending the present appeal, the appellant filed I.A.No.1 of

2021 to receive the additional documents, including the

documents already marked and the depositions, except copy of

Award dated 06.03.1997, which is not part of evidence in the

reference Court.

7. The Award is not in dispute from the respondent’s side,

since it is the foundation document for the present litigation.

The Award is marked as Ex.A-3 and rest of the documents are

rejected. Accordingly, I.A.No.1 of 2021 is partly allowed.

8. The contention of the learned counsel for the appellant is

that the respondent, in his Award enquiry, though cited the

various sale transactions which were executed immediate three

years prior to the notification, in which the transaction under

Ex.A-1 was shown at Sl.No.26 at page No.5, did not rely upon it

to fix the market value on the ground that the market value

thereunder was inflated in anticipation of the acquisition

proceedings, since the possession of the land was taken well in

advance prior to the notification.

9. It is also his contention that the land in Sy.No.41 and the

land of the appellant in Sy.No.47 are having similar advantages

and are situated very near to each other. The land covered

under the transaction relied upon by the respondent pertaining

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to Sy.No.57/2 is far away to the land acquired and the same is

evident from the village map under Ex.A-2, whereas, the land of

the appellant is very near to the highway leading from

Sathupally to Vijayawada. It is also his contention that the

reference Court also did not believe Ex.A-1 transaction as a

genuine transaction and came to the conclusion that it relates to

smaller extent and it cannot be relied upon. Finally, he has

contended that the appellant is entitled for enhancement of the

compensation as per the market value mentioned under Ex.A-1

sale transaction.

10. The learned Government Pleader for Appeals, appearing for

the respondent, has contended that as per the own admission of

P.W.1, he sold the land in Sy.No.57, which is referred at

Sl.Nos.18 and 20 in the Award enquiry under Ex.A-3, for the

sale price of Rs.23,300/- per acre, whereas P.W.1 contrary to the

said recitals in the sale deed, claimed that he sold the land for

the sale price of Rs.65,000/- per acre, and hence, his evidence

cannot be taken into consideration.

11. It is also his contention that the sale transaction under

Ex.A-1, which relates to the land in Sy.No.41, is not a genuine

one and the sale price was inflated therein in anticipation of the

acquisition proceedings. Further, it relates to smaller extent,

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and hence, the same was not rightly relied upon by the

respondent as well as the reference Court. According to the

learned Government Pleader, the market value fixed by the

respondent, as confirmed by the reference Court, is a fair market

value with reference to its potentiality, fertility of soil and

prevailing market value as on the date of the notification.

Therefore, the appellant is not entitled for any enhancement.

12. A scrutiny of the evidence on record shows that the

possession of the land in the present case was taken on

18.10.1988 which is anterior to the notification i.e., notification

was issued on 16.11.1996. In his cross-examination, the

appellant admitted about the sale transactions dated 05.07.1995

in respect of his own land in Sy.No.57. This means, by the date

of the appellant own sales in respect of his own land in Sy.No.57,

the possession of the land in Sy.No.47 was taken over and the

appellant was very much aware of the acquisition proceedings.

If really he had intention to inflate the sale price, he himself

would have done so while executing the sale transactions

relating to Sy.No.57 which were done on 15.07.1995. This

conduct of P.W.1 shows that he never intended to inflate the

market value relating to the lands in Sy.No.57 which he has sold

in the year 1995. When he did not inflate the market value

pertaining to the sale transactions of Sy.No.57, it can be

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presumed that he never attempted to inflate the market value

under Ex.A-1, which is relating to land admeasuring Ac.0-10

guntas in Sy.No.41, which was executed by P.W.2, who is a third

party.

13. The evidence of P.W.2 shows that the sale price mentioned

therein was genuine. Though there is evidence to claim the

market value of Sy.No.41 @ Rs.1,20,000/- per acre, as reflected

under Ex.A-1, the admission of the appellant in his cross-

examination that he sold his own land in Sy.No.57 in the year

1995 @ Rs.65,000/- per acre cannot be ignored.

14. On scrutiny of Ex.A-2, the village map, the advantages of

lands in Sy.Nos.41 and 47 are similar, whereas the land in

Sy.No.57 is not similar to the land in Sy.No.47. The reason is

that the lands in Sy.Nos.41 and 47 are near to the State highway

leading from Sathupalli to Vijayawada. It is needless to say that

the lands which are near to the road access would fetch more

price than which are far away to the road access. Therefore,

while fixing the market value, this disadvantage of the land

cannot be ignored. At the same time, complete reliance on

Ex.A-1, which relates to land admeasuring Ac.0-10 guntas to fix

the market value, is also not safe and justified, in the light of the
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admission of P.W.1 with reference to sale of land in Sy.No.57

which he owned.

15. In view of the above facts and circumstances, considering

the advantage of land in Sy.No.47 when compared to land in

Sy.No.57, and considering the sale transaction under Ex.A-1 in

respect of land admeasuring Ac.0-10 guntas in Sy.No.41, and by

giving some escalation to the sale transaction referred to by

P.W.1 in respect of land in Sy.No.57, we are of the opinion that

fixation market value of Rs.75,000/- per acre is just and fair in

the facts and circumstances of the case. Accordingly, the

market value in respect of the subject property is enhanced from

Rs.23,400/- to Rs.75,000/- per acre.

16. The next question is what are the consequential benefits to

be extended to the appellant in terms of the statute. Admittedly,

in the present case, the possession of the land was taken over on

18.10.1988. The notification was issued on 16.11.1996 and

there was no urgency clause invoked to take the possession of

the land and Award was passed on 06.03.1997, on which date

the Government gets right to take possession of the land under

Section 16 of the Act. While dealing with the same set of facts,

this Court in Special Deputy Collector & Land Acquisition

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Office, SRSP L.A.Unit, Warangal v. Myakala Veera Reddy and

Others1, held as follows:

“30. At the cost of repetition, we say that the

ratio/principle laid down in R.L.Jain v. DDA2 which is of
three-Judges Bench, is that the land owners are entitle for
rent or damages towards use and occupation for the period
the Government retains possession not under the Act and any
possession prior to Section 4 (1) notification or invalid
notification is not the possession under the Act.

31. The valid possession under the Act is either under

Section 17 or Section 16 of the Act which can only be after
notification but not simultaneous with notification under
Section 4(1) of Act. This means, by issuance of notification
under the Act, the invalid possession of the Government
would not automatically become valid possession but it can
only be done when proceedings reach the stage of either
under Section 17 or Section 16 of the Act.

32. So, we are of the opinion that the benefit of 15%

additional interest for retention of possession by the
Government, which is not in terms of the Act, cannot be
restricted to the date of notification, but it terminates when
the Government gets right to take notional possession by
following the procedure either under Section 17 or under
Section 16 of the Act.

33. In the case on hand, the Government has not invoked

any urgency clause in the subsequent valid notifications
issued under the Act. This means, the Government gets no
right to take notional possession under Section 17 of the Act.
The only other provision is Section 16 of the Act, and such a

1
Appeal Suit No.3864 of 2004, dated 21.03.2022
2
(2004) 4 SCC 79
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notional possession can only be taken after passing of the

Award. This means, the Government has right to take
notional possession immediately after passing of the Award
under Section 11 of the Act.”

17. In the said case, this Court further held as follows:

“38. In Tahera Khotoon’s case (supra), the Apex Court

held as follows:

‘15. It is also not in dispute that the Municipal Committee

was in possession of the aforesaid property right from 1-1-
1983 till the Notification was issued by the State Government
on 10-1-1996. Keeping in view the observations made by this
Court in Madishetti Bala Ramul {(2007) 9 SCC 650}, we direct
the State Government to pay rents/damages at the rate of
15% on the compensation awarded from the date the land
owners were dispossessed, namely, from 1-1-1938 till the date
of issuance of the preliminary Notification i.e., 10-1-1996.
The calculations shall be made by the State Government as
expeditiously as possible and disburse the aforesaid amount
to the appellants as early as possible, at any rate, within three
months from the date of receipt of copy of this order.’

39. A close scrutiny of the above judgment would show

that additional amount @ 15% per annum was ordered to pay
on the compensation awarded.

40. In R.L.Jain’s case (supra), the Apex Court has given

the clarification as to what constitutes compensation. The
compensation constitutes market value of the land fixed
under Section 23(1) of the Act, additional market value fixed
under Section 23(1-A) of the Act and solatium granted under
Section 23(2) of the Act. This means, the compensation
embraces three components i.e., market value, additional
market value and solatium. Therefore, the
respondents/claimants are entitled for 15% additional
interest in the form of rent or damages for use and occupation
of the land from the date of invalid possession till the date of
Award on the above said three components.”
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18. In the present case, the Award was passed on 06.03.1997.

Thus, the additional benefit of interest @ 12% per annum

towards rent or damage for use and occupation of the land

commences from the date of possession, which is anterior to the

notification, and terminates with passing of the Award.

Therefore, the claimants are entitled for the additional benefit of

interest @ 12% per annum from 18.10.1988 to 16.03.1997.

19. In the result, I.A.No.1 of 2021 is partly allowed, as stated

supra, and the appeal is partly allowed as follows:

(i) The finding of the reference Court with regard to

fixation of market value is modified enhancing the
market value from Rs.23,400/- per acre to
Rs.75,000/- per acre;

(ii) The amount granted by the respondent/Land

Acquisition Officer in the form of 12% additional
interest from the date of taking possession (prior to the
notification) is modified to that of granting 12%
additional market value under Section 23(1-A) of the
Act from the date of notification till the date of Award
on the market value fixed under Section 23(1) of the
Act;

(iii) The grant of benefits under Section 34 of the Act by

the respondent /Land Acquisition Officer or under
Section 28 by the reference Court from the date of
taking possession which is prior to the notification is
modified by directing to pay such interest from the
date on which the Government gets right to take
notional possession either under Section 17 or under
Section 16 of the Act. In the present case, the
appellant/claimant is entitled for such interest from
the date of Award till the date of deposit. Such
interest is payable on three components i.e., market
value, additional market value and solatium;
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(iv) The appellant/claimant is also entitled to additional

interest @ 15% per annum on compensation i.e.,
market value, additional market value and solatium
towards rent/damages for use and occupation of the
land from the date of possession (prior to the
notification) i.e., 18.10.1988 till the date of passing of
Award i.e., 16.03.1997.

Miscellaneous petitions pending, if any, shall stand closed.

There shall be no order as to costs.

____________________________
A.RAJASHEKER REDDY, J

_______________
M.LAXMAN, J
Date: 01.04.2022
TJMR