N. NATESAM PILLAIversusSPL. TAHSILDAR, LAND ACQUISITION, TIRUCHY

                     (2010] 10 S.C.R. 1


                    N. NATESAM PILLAI                            A
                              v.
     SPL. TAHSILDAR, LAND ACQUISITION, TIRUCHY
              (Civil Appeal No. 36 of 2004)
                     AUGUST 11, 2010
                                                                 B
[DR. MUKUNDAKAM SHARMA AND ANIL R~ DAVE, JJ.]

      Land Acquisition Act, 1894 - ss. 4 (1) and 18·- Land
acquisition - Fixation of market value of the acquired land -
Reference court awarding compensation at Rs. 171- per sq. C
feet - However, High Court reduced the compensation to Rs.
91- per sq feet - Justification of - Held.· Acquired land has all
the potentiality to be used as building sites, even in the
immediate future - It is abutting the main road and is
surrounded by schools, Panchayat,_ union office, shops and D
residential buildings in all three sides - Even on giving a
discount in respect of the acquired land being a large tract -
as compared to the small portion of land sold under the sale
deed, rate of Rs. 11 /- is adequate and fair - Thus, land owner
entitled to compensation at Rs. 111- per sq. ft. for the acquired E
land with additional compensation and solatium on the
amount enhanced and fixed, including payment of interest.

     The State Government acquired certain land for
providing house sites. The Land Acquisition Officer
awarded compensation at the rate of Rs. 1.72 per sq. ft. F
to the land owners, for the acquired land. At the instance
of the appellant-land owner, reference was made uls. 18
of Land Acquisition Act, 1894 before the reference court.
He adduced evidence in the form of Sale Deeds-Exs. A1
to A4. The reference court fixed the market value of the G
acquired land at Rs. 17/- per sq. feet. However, the High
Court reduced the amount of compensation to Rs. 9/- per
sq. feet. Therefore, the appellant-original owner filed the
instant appeal.                                 -
                             1                              H
    2       SUPREME COURT REPORTS             [2010] 10 S.C.R.


A       Partly allowing the appeal, the Court

       HELD: 1:1 The first clause of Section 23 of the Land
  Acquisition Act, 1894 clearly provides that the amount of
  compensation awarded for the land acquired is required
  to be determined on the basis of market value of the lard
8
  at the time of publication of the Notification under Section
  4 of the Act. Therefore, it is the duty of both, the Land
  Acquisition Officer as also of the court, to determine the
  actual compensation payable for the land acquired by
  referring to evidence regarding fair and just
C compensation near about the proximate date or on the
  date itself of the publication of the notification under
  section 4 of the Act. At times, irl order to prove the actual,
  fair and just compensation for the land acquired, sale
  deeds of the adjacent land or nearabout adjacent land are
D produced to indicate the trend of the value of the land
  within the near vicinity of ,the acquired land. Such sale
  deeds are taken notice of generally when they are prior
  in point of time to the date of Notification, and any sale
  deed which is dated post Notification is generally
E ignored, unless evidence is led to show that there was
  no increase in price despite such acquisition. As a result
  of such acquisition, the market value of the adjacent land
  would generally, and in most cases, go up and, therefore,
  such post notification transaction may not be a sound
F criterion to determine and assess the value of the
  acquired land. (Paras 12 and 14] (8-F-H; 10-C]

       1.2 In the instant case, the appellant has not adduced
  any evidence to show that the market value of adjacent
G land has not increased in the interregnum. Ex. A1 and Ex.
  A4 are sale deeds executed subsequent to the date of
  notification under Section 4(1) and for this reason, the·
  High Court held these to be irrelevant for the purpose of
  determin.ing compensation. The reference court and the
  High Court were justified in rejecting these sale deeds
H
     N. NATESAM PILLAI v. SPL. TAHSILDAR, LAND            3
              ACQUISITION, TIRUCHY

from consideration. Therefore, the said sale deeds must        A
not be considered while assessing and determining the
just and fair compensation for the acquired land. Ex. A2
is also a sale deed but the same also is not a safe guide
as the price for the land covered therein was later on
increased to make- it in parity with the government            B
prescribed rate. [Para 14] .[10-C-E]

    Administrator General of W.B. v. Collector, Varanasi
(1988) 2 sec 150, referred to.
     2.1. The small area of land measuring 1710 sq. ft. was C
sold for Rs. 20,000/- as per Ex. A3 dated 15.7.92 which
works out to a value of Rs. 11/- per sq. ft. A comparison
of the two plots, namely, land in Ex. A3 and the acquired
land shows that they are not identical. While the land in
Ex. A3 may not be an excellent guide it is still a better D
guide than any other document exhibited on record. The
same could be used as a relevant yardstick to assess the
just and reasonable compensation in the instant case.
[Para 18] [12-B-C]
     2.2 It is found from the counter affidavit filed by the E
respondent-State that the land covered by Ex. A3 is
located out of the Municipal Corporation limit, whereas
the acquired land is located within the Municipal
Corporation limit.· Consequently, it cannot be disputed
that the acquired land, being in the heart of the city and F
having excellent prospects of being used as residential
site, definitely has an edge regarding the potential value
over the land covered by Ex. A3. This building potentiality
of acquired land must also be taken into consideration
while determining compensation. [Paras 19 and 20] [12- G
C·E]

     2.3 The potentiality of the acquired land, in so far as
it relates to the use to which it is reasonably capable of
being put in the immediate or near .future, must be given      H
    4      SUPREME COURT REPORTS           [2010] 10 S.C.R.

A due consideration. In the instant case, the acquired land
  has all the potentiality to be used as building sites, even
  in the immediate future, as it is located at a place in and
  around which building activity has already started. The
  evidence on record also clearly indicated that the
B acquired land is abutting the main rQad. The acquired land
  is also surrounded by schools, Panchayat union office,
  shops and residential buildings in all three sides. The
  High Court also found, as a matter of fact, that the area
  where the acquired land is situated is fit for construction
c of houses. On an overall consideration and appreciation
  of the records, the deduction due to the small size of the
  exemplar land can easily be set off with the
  corresponding increase in price of the acquired land
  when compared with the land in Ex. A3 from the point of
  view of potential value. [Para 22] [14-E-H]
0
       2.4 Although it is true that the land covered by Ex.
  A3 is a small tract of land and, therefore, cannot be
  compared in size with the large area of land acquired
  under the present notification, it is to be concluded that
E the land in question would definitely fetch a higher price
  than what is fixed by the High Court. A prospective
  purchaser would only be too willing to pay for the
  acquired land having immediate potentiality of being used
  as a residential site in a prime locale at almost the same,
F if not higher, price than the land covered by Ex. A3 which
  is located outside the Municipality area. [Para 23] [15-A-
  B]

      2.5 The conclusion of the High Court that the
G acquisition of a large tract of land merits a discount in
  compensation is accepted. However, the compensation
  granted by the High Court did not match the potentiality
  of the land, even after the discount was taken into
  consideration. Even on giving a discount in respect of the
  acquired land being a large tract as compared to the small
H portion of land sold under Ex. A3, the rate of Rs. 11/-
     N. NATESAM PILLAI v. SPL. TAHSILDAR, LAND             5
              ACQUISITION, TIRUCHY

would be adequate and just compensation for the same. A
By scaling down the rate of compensation to Rs. 91- from
Rs. 111- per sq. ft., the High Court denied just and
reasonable compensation to the appellant, thereby
resulting in a miscarriage of justice. Therefore, the
appellant would be entitled to compensation at Rs. 111- B
per sq. ft. for the acquired land which is considered to be
just and fair. The State would be liable to pay additional
compensation and solatium on the amount enhanced and
fixed in terms of this order including payment of interest
 in terms of the rate of interest awarded by the reference c
 court. [Paras 24, 25 and 26] [15-C-G]

     P. Ram Reddy v. Land Acquisition Officer, Hyderabad
Urban Development Authority (1995) 2 SCC 305; Hasana/i
Khanbhai and Sons v. State of Gujarat (1995) 5 SCC 422,
relied on.                                                      D

     Rishi Pal Singh and Ors. vs. Meerut Development
 Authority and Anr. (200S) 3 SCC 205; Administrator General
 of WB. v. Collector, Varanasi (1988) 2 SCC 150, referred to.
                     Case Law Reference:                        E

     (1988) 2 sec 150       Referred to.      Paras 13, 17
     (2006) 3 sec 205       Referred to.      Para 16
     (1995) 2 sec 305       Relied on.        Para 20           F
     (1995) 5 sec 422       Relied on.         Para 21
      CIVIL APPELLATE JURISDICTION: Civil Appeal No. 36
 of 2004.
                                                                G
     From the Judgment & Order dated 27.11.2002 of the High
 Court of Judicature at Madras in A.S. No. 116 of 2002.

     K.K. Mani, Ankit Swarup, K. Lakshminarayan for the
 Appellant.
                                                                H
    6        SUPREME COURT REPORTS                [2010) 10 S.C.R.


A       Promila, T.S. Kumaran, V.G. Pragasam for the
    Respondent.

        The Judgment of the Court was delivered by

       DR. MUKUNDAKAM SHARMA, J. 1. This appeal is
B directed against the judgment and order dated 27 .11.2002
  passed by the Madras High Court whereby the High Court·
  reversed the order passed by the Reference Court by reducing
  the amount of compensation granted by the Reference Court to
  the appellant from Rs. 17/- per sq. feet to Rs. 9/- per sq. feet.
c
        2. Before we deal with the contentions raised before us,
  brief facts leading to the filing of the present appeal are required
  to be stated. For providing house sites at Adi Dravidas, land
  measuring an extent of 3.90 acres comprised in Survey No. 118/
  A in Palangudi Village was acquired by the Government of Tamil
D Nadu by issuing a notification under Section 4(1) of the Land
  Acquisition Act which was published on 23.9.1992. The Land
  Acquisition Officer awarded a sum of Rs. 1. 72 per sq. ft. for the
  acquired land. At the instance of the aggrieved land owner, i.e.
  the appellant, reference was made under Section 18 of the Land
E Acquisition Act before the Additional Sub Court, Trichy.

          3. Before the Reference Court, the appellant adduced
    documentary evidence in the form of Sale Deeds Exs. A 1 to A4
    and examined two witnesses. The Revenue also produced
F   documents exhibited as Exs. B1 and B2, but no witness was
    examined from the side of the Revenue. The Reference Court
    after consideration and appreciation of the evidence adduced
    fixed the market value of the acquired land at Rs. 17/- per sq.
    feet.
G       4. Being aggrieved by the said order, the State preferred
  an appeal before the High Court. The question for consideration
  before the High Court was whether the amount of compensation
  for the acquired land fixed by the Reference Court i.e. Rs. 17/-
  per sq. feet is correct or not and whether the appeal filed by the
H State for reducing the amount of compensation be allowed.
    N. NATESAM PILLAI v. SPL. TAHSILDAR, LAND                          7
ACQUISITION, TIRUCHY [DR. MUKUNDAKAM SHARMA, J.]

     5. The High Court after consideration of the records came             A
to the conclusion that the amount of compensation Le. Rs. 17/-
per sq. feet is on the higher side, and that the appropriate amount
of compensation would be Rs. 9/- per sq. feet and accordingly
 reversed the order passed by the Reference Court with the
 aforesaid modification of the .rate of compensation fixing the            -a
 same at Rs. 9/- per sq. ft.

    6. The appellant, original owner of the land1, has filed this
appeal.praying f<;>r setting aside the order passed by the High
Court and has prayed for enhancement of the amount of
compensation taking into consideration the potential value of the          C
land.

      7. The learned couns'el appearing for the appellant
 contended that the High Court took notice of.the market value of
 the acquired land only with .reference to the actual use. According       D
 to the appellant, the Court failed to take notice of its value with
 reference to the better use to which it is reasonably capable of
 being put to in the immediate or near future and thereby failed to
  take into consideration future potentiality of the land and instead
  based i.tself only on the realized possibility and thus committed         E
  an error.
                          .      L                                 •
      8. The learned counsel appearing for the respondent, on the
 other hand, contended that the amount of compensation granted
 by the High Court is appropriate, and does not deserve to be
 interfered with,                                                           F

        9. The Reference Court granted compensation at Rs. 17/-
  per sq. feet after holding that the acquired land is a potential
  house. site being located in a v~ry important locality and that the
  amount of compensation graiitea by the Land Acquisition Officer,          G
  i.e., 1. 72 per sq. ft. was totallya•ri unjust and inadequate amount.

       10. The High Court, on the other hand, fixed the market value
  of the acquired land at Rs. 9/- per sq. ft. by setting aside the order
  passed by the Reference Court. The High Court while coming                   H
    8        SUPREME COURT REPORTS                [2010] 10 S.C.R.


A to the aforesaid conclusion held that Ex. A3 is a comparable
  sale transaction. Under Ex. A3, 1710 sq. ft. land was sold for Rs.
  20,000/-which would work out to Rs. 11 /-per sq. ft. Nonetheless,
  the Hig~ Court also pointed out the fact that the acquired land
  has got higher potential value, as the acquired land is abutting
B the main road and when compared with the land covered under
  Ex. A3, the acquired land is surrounded by Schools, Shops,
   Panchayat Union Office etc. However, considering the fact that
  the acquired land is a large tract of land wherein while making
   development there would be loss of land due to both internal and
c  external development like roads, etc., and that when compared
  with the land of Ex. A3 which is a very small area of land, there
   has to be deduction in value of the acquired land and so
   calculating the rate of compensation was scaled down to Rs. 9/
   - per sq. ft.

D        11. Therefore, it falls upon us to determine whether the High
    Court was correct and justified in scaling down the
    compensation to be given to the appellant. To this effect, we must
    give due consideration to the Sale Deeds Exs. A 1 to A4 placed
    by the appellant, in, order to determine the appropriate and just
E   compensation that must be given in pursuance of the instant land
    acquisition.

        12. It is important to note that Ex. A 1 and Ex. A4 are sale
  deeds executed subsequent to the date of notification under
F Section 4(1) and for this reason, the High Court held these to be
  irrelevant forthe purpose of determining compensation. The first
  clause of Section 23 of the Act clearly provides that the amount
  of compensation awarded       for the land acquired is required to
  be determined on the basis of fTlarket value of the land at the
G time of publication of the notification under Section 4 of the Act.
  Therefore, it is the duty of both of the Land Acquisition Officer
  as also of the Court to determine the actual compensation
  payable for the land acquired by referring to evidence regarding
  fair and just compensation near about the proximate date or on
  the date itself of the publication of the notification under Section
H
     N. NATESAM PILLAI v. SPL. TAHSILDAR, LAND                       9
 ACQUISITION, TIRUCHY [DR. MUKUNDAKAM SHARMA, J.]

4. At times, in order to prove the actual, fair and just                  A
compensation for the land acquired, sale deeds of the adjacent
land or nearabout adjacent land are produced to indicate the
trend of the value of the land within the near vicinity of the acquired
land. Such sale deeds are taken notice of generally when they
are prior in point of time to the date of notification, and any sale      s
deed which is post notification dated is generally ignored, unless
evidence is led to show that there was no increase in price despite
such acquisition.

    13.This Court in Administrator General of W 8. v. Collector,
Varanasi, reported at (1988) 2 SCC 150, has held:                         C

     "Such subsequent transactions which are not proximate in
     point of time to the acquisition can be taken into account
     for purposes of determining whether as on .the date of.
     acquisition there was an upward trend in the prices of land D
     in the area. Further under certain circumstances where it
     is shown that the market was stable and there were no
     fluctuations in the prices between the date of the
     preliminary notification and the date of such subsequent
     transaction, the transaction .could a/so be relied upon to E
     ascertain the market value. This Court in State of U.P. v.
     Jitendra Kumar, reported at (1982) 2 SCC 382 observed:
     (SCC p. 383, para 3)

             "It is true that the sale deed Ex. 21 upon which the
             High Court has relied is of a date three years later         F
             than the notification under Section 4 but no material
             was produced before the court to suggest thatthere
             was any fluctuation in the market rate at Meerut from
             1948 onwards till 1951 and if so to what extent. In
             the absence of any material showing any fluctuation          G
             in the market rate the High Court thought it fit to rely
             upon Ex. 21 under which the Housing Society itself
             had purchased land in the neighbourhood of the land
             in dispute. On the whole we are not satisfied that any
             error was committed by the High Court in relying             H
                                                                              I-
     10       SUPREME COURT REPORTS                 [2010] 10 S.C.R.


A'               upon the sale deed Ex. 21."

          But this principle could be appealed to only where there is
          evidence to the effect that there was no upward surge in
          the prices in the interregnum. The burden of establishing
          this would be squarely on the party re~ying on such
B
          subsequent transaction."

        14. As a result of such acquisition, the market value of the
  adjacent land would generally, and in most cases, go up and
  therefore, such post notification transaction may not be a sound
C criterion to determine and assess the value of the acquired land.
  In the present case, the appellant has also not adduced any
  evidence to show that the market value of adjacent land has not
  increased in the interregnum. The Reference Court and the High
  Court were justified in rejecting these sale deeds from
o consideration. We must, therefore, keep the aforesaid two sale
  deeds outside our consideration whUe assessing and
  determining the just and fair compensation for the acquired land.
  Ex. A2 is also a sale deed but the same also is not a safe guide .
  as the price for the land covered therein was later on increased
E to make it in parity with the government prescribed rate.

          15. Consequently, it is to be seen if Ex. A3 may be relied
     upon in determining the claim of the appellant. The High Court,
     while noting that Ex. A3 does indeed represent a comparable
     sales transaction also held that since the same concerns a very
F    small area of land, it could be applicable to the acquisition of a
     large tract of land as the one in question, once deduction as
     necessary and required is given.

       16. In Rishi Pal Singh and Others vs. Meerut Development
G Authority and Anr. reported in (2006) 3 SCC 205 this Court while
  dealing with the issue relating to a large "tract of land held as
  follows:-

          "5 ....... With respect to the first reason, that is, exemplars ·
          of small plots have been taken   . . into
                                                 .  consideration by the
H
    N. NATESAM PILLAI v. SPL. TAHSILDAR, LAND                     11
ACQUISITION, TIRUCHY [DR. MUKUNDAKAM SHARMA, J.]

    Reference Court, in the first instance our attention was            A
    invited to some judgments of this Court to urge that there is
    no absolute bar to e>,eemplars of small plots being
    considered provided adequate discount is given in this
    behalf. Thus there is no bar in law to exemplars of small plots
    being considered. In an appropriate case, specially when            s
    other relevant or material evidence is not available, such
    exemplars can be considered after making adequate
    discount. This is a case in which appropriate exemplars are
    not available. The Reference Court has made adequate
    discount for taking the exemplars of small plots into               c,
    consideration ............ " .

     17. Furthermore, in Administrator General of W.B. v.
Collector, Varanasi (cited hereinabove), this Court has held:

    "It is trite proposition that prices fetched fqr small plots        D
    cannot form safe bases for valuation of large tracts of land
    as the two are not comparable properties. The principle that
    evidence of market value of sales of small, developed plots
    is not a safe guide in valuing large extents of land has to be
    understood in its proper perspective. The principle requires        E
    that prices fetched for small developed plots cannot directly
    be adopted in valuing large extents. However, if it is shown
    that the large extent to be valued does not admit of and is
    ripe for use for building purposes; that building lots that could
    be laid out on the land would be good selling propositions          F
    and that valuation on the basis of the method of hypothetical
    lay out could with justification be adopted, then in valuing
    such small, laid out sites the valuation indicated by sale of
    comparable small sites in the area at or about the time of
    the notification would be relevant. Jn such a case, necessary
   ,deductions for the extent of land required for the formation        G
    of roads and other civil a1 nenities; expenses of development
    of the sites by laying out roads, drains, sewers, water and
    electricity lines, and the interest on the outlays for the period
    of deferment of the realis'ation of the price; the profits on the
                                                                        H
    12       SUPREME COURT REPORTS                [2010] 10 S.C.R.


A        venture etc. are to be made."

         18. The small area of land measuring 1710 sq. ft. was sold
    for Rs. 20,000/- as per Ex. A3 dated 15. 7 .92 which works out to
    a value of Rs. 11/- per sq. ft. A comparison of the two plots,
    namely, land in Ex. A3 and tbe acquired land shows that they are
8
    not identical. While the land in Ex. A3 may not be an excellent
    guide it is still a better guide than any other document exhibited
    on record. The same could be used as a relevant yardstick to
    assess the just and. reasonable compensation in the present
    case.
G
       19. We find from the counter affidavit filed by the respondent-
  State that the said land covered by the Ex. A3 is located out of
  the Municipal Corporation limit of Trichy, whereas the acquired
  land is located within the Municipal Corporation limit of Trichy.
D Consequently, it cannot be disputed that the acquired land, being
  in the heart of the city and having excellent prospects of being
  used as residential site, definitely has an edge regarding the
  potential value over the land covered by Ex. A3.

E       20. This building potentiality of acquired land must also be
    taken into consideration while determining compensation. In P.
    Ram Reddy v. Land Acquisition Officer, Hyderabad Urban
    Development Authority reported at (1995) 2 SCC 305, this
    Court held as follows: -

F        "8. Building potentiality of acquired land.- Market value of
         land acquired under the LA Act is-the main component of
         the amount of compensation awardable for such land under
         Section 23( 1) of the LA Act. The market value of such land
         must relate to the last of the dates of publication of
G        notification or giving of public notice of substance of such
         notification according to Section 4(1) of the LA Act. Such
         market value of the acquired land cannot only be its value
         with reference to the actual use to which it was put on the
         relevant date envisaged under Section 4( 1) of the LA Act,
H        but ougHt to be its value with reference to the better use to
    N. NATESAM PILLAI v. SPL. TAHSILDAR, LAND                   13
ACQUISITION, TIRUCHY [DR. MUKUNDAKAM SHARMA, J.]

    which it is reasonably capable of being put in the                A
   immediate or near future. Possibility of the acquired land
    put to certain use on the date envisaged under Section 4( 1)
    of the LA Act, of becoming available for better use in the
    immediate or near future, is regarded as its potentiality. It
    is for this reason that the market value of the acquired land     B
    when has to be determined with reference to the date
    envisaged under Section 4( 1) of the LA Act, the same has
    to be done not merely with reference to the use to which it
    was put on such date, but also on the possibility of it
    becoming available in the immediate or neiar future for better    c
    use, i.e., on its potentiality. When the acquired land has the
    potentiality of being used for building purposes in the
    immediate or near future it is such potentiality which is
    regarded as building potentiality of the acquired land.
    Therefore, ifthe acquired land has the building potentiality,
                                                                      0
    its value, like the value of any other potentiality of the land
   .should necessarily be taken into account for determining the
    market value of such land. :rhereforei, when a land with
    building potentiality is acquired, the price which its willing
    seller could reasonably expect to obtain from its willin~         E
    purchaser with reference to· the date envisaged under
    Section 4(1) of the LA Act, ought to necessarily include.that
    portion of the price of the land attributable to its building
    potentiality. Such price of the acquired land.then.becomes
    its market value envisaged under Section 23(1) of the LA
    Act. If that be the market value of the acquired land with        F
    building potehtiality, which acquiredJand could be regarded
    to have a building potentiality and how the market value of
    such acquired land with such building potentiality requires
    to be measured or determined are matters which remain
    for our consideration now."                                       G

    21. This Court in Hasanali Khanbhai & Sons v. State of
Gujarat reported in (1995) 5 SCC 422 also held that:-

    "3 ........ But it is settled
                                . law by
                                      . series of judgments of this   H
        14        SUPREME COURT REPORTS                (2010] 10 S.C.R.


A             Court that the court is not like an umpire but is required to
              determine the correct market value after taking all the
              relevant circumstances, evinces active participation in
              adductjon of evidence; calls to his aid his judicial
             ·experience; evaluate the relevant facts from the evidence
9 ...         on record ~pplying correct principles of law which would be
              just and proper for the: land under acquisition. It is its
              constitutional, statutory and social duty. ·The court should
              eschew aside feats of imagination but occupy the armchair
              of a prudent, willing but not too anxious, purchaser and
              always ask the question as to what are the prevailing
c             conditions and whether a willing purchaser would as a
              prudent man in the normal market conditions offer to
              purchase the acquired land at the rates mentioned in the
              sale deeds. After due e~aluation taking all relevant and
              germane facts into consideration, the Court must answer
D
              as to what would be the just and fair market value ...... "

        22. Therefore, it is clear from the aforementioned decisions
  of this Court that the potentiality of the acquired land, in so far as
  it relates to the use to which it is reasonably capable of being
E put in .the immediate or near future, must be given due
  consideration. The present acquired land has all the potentiality
  to be used as building sites, even in the immediate future, as it
  is located at a place in and around which building activity has
  already started. The evidence on record also clearly indicates
F that acquired land is abutting the main road. The acquired land
  is alsb surrounded by schools, Panchayat union office, shops
  and residential building in all three sides. The High Court also
  found, as a matter of fact, that the area where the acquired land
  is situated is fit for construction of houses. On an overall
G consideration' and appreciation of the records, we feel that the
  deduction due to the small size of the exemplar land can easily
  be set off with the corresponding increase in price of the acquired
  land when compared with the land in Ex. A3 from the point of view
  of potential value.
H
-~




          N. NATESAM PILLAI v. SPL. TAHSILDAR, LAND                    15
      ACQUISITION, TIRUCHY [DR. MUKUNDA~M SHARMA, J.]

             23. Although it is true that the land covered by Ex. A3 is a     A
      small tract of land and therefore cannot be compared in size with
      the large area of land acquired under the present notification, it
       is to be concluded that the land in question would definitely fetch
       a higher price than what is fixed by the High Court. A prospective
        purchaser would only be too willing to pay for the ac;quired land     B
        having immediate potentiality of being used as a residential site
        in a prime locale at almost the same:if not, higher price than the
     , land covered by Ex. A3 which is located outside the Municipality
        area.

           24. We are in agreement with the cone lusion of the High           C
      Court that the acquisition of a large tract of land merits a discount
      in compensation. However, in the present circumstance, it is
      significant to note that the compensation granted by the High
      Court does not match the potentiality of the land, even after the
      discount has been taken into consideration. Even on giving a            D
      discount in respect of the acquired land being a large tract as
      compared to the small portion of land sold under Ex. A~.
      according to us, the rate of Rs. 11 /-would 9e adequate and just
      compensation forthe same.
                                                                              E
           25. In our considered opinion, by scaling down the rate of
       compensation to Rs. 9/-from Rs. 11/- per sq. ft., the High Court
       denied just and reasonable compensation to appellant, thereby
       resulting in a miscarriage of justice.

            26. We, therefore, hold that the appellant shall be entitled      F
       to compensation at Rs. 11/- per sq. ft. for the acquired land which
       we consider to be just and fair. Needless to say that the State
       shall also be liable to pay additional compensation and solatium
       on the amount enhanced and fixed in terms of this order including
       payment of interest in terms of the rate of interest awarded by        G
       the Reference Court. The appeal stands allowed to the aforesaid
        extent without any costs.

        N.J.                                      Appeal partly allowed.