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The annual income of a coconut tree must now be seen PW1 would state that a good variety of coconut tree will yeild one in 45 days, that about 30 to 45 nuts can be fot, and there will be 8 harvest in a year and 100 nuts would sell from Rs. 350/- to Rs. 500/-. PW2 would state that the coconut trees had grown very well, that they yeilded good nuts, that it belongs to the fall variety, that the yeild is about 200 to 250 nuts in a year and each nut has been sold at Rs. 3.30 to Rs. 4/-. PW3 the owner of the lands adjacent to the acquired land in his evidence would state that the coconut trees were planted in the lands 17 years back, that it has red soil and each tree would yeild about 200 to 250 coconut in a year. PW4 the Vedasandur Agricultural Development Officer who has been in Government service for the past 19 years would state in his evidence that these coconut trees are of the tall variety, it has good growth, that there would be 12 to 13 flowerings in a year in these trees and each flowering would have 10 to 15 nuts and there would be an yeild of 100 to 150 coconuts in a single tree and the trees would be 17 years old and each tree would yeild 120 coconuts. He in his report Exhibit C3 given to the Commissioner has stated all about the income, age, and type of the coconut trees present in the land belonging to the claimant. Sarangapani which is near the acquired lands. PW7 Rathina Nadar of Chozhavandan has stated that he used to purchase coconuts for a price from Sarangapani and Exhibit C8 is the bill given to Sarangapani on 04.03.1983. He has purchased 15190 nuts for Rs. 37,644/-. He has stated that the rate of the nuts would be arounds Rs. 2.50 to Rs. 3.00. It is argued on behalf of the petitioner on the basis of the said evidence that the annual income from a tree is Rs. 375/- and excluding the expenses the income is Rs. 334/- and the same is of minimum scale and it is insisted that the annual income of a single coconut tree must be calculated on the above said basis.

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 NON-REPORTABLE

 IN THE SUPREME COURT OF INDIA

 CIVIL APPELLATE JURISDICTION

 CIVIL APPEAL NO.5797 OF 2002

R. Saragapani (Dead) through L.Rs. .......Appellants

 Versus

The Special Tahsildar,

Karur-Dindigul Broadguage Line .......Respondent

 With

 CIVIL APPEAL NO.5835 OF 2002

Soundararajan (Dead) through L.Rs. .......Appellants

 Versus

The Special Tahsildar,

Karur-Dindigul Broadguage Line .......Respondent

 J U D G M E N T

G.S. Singhvi, J.

1. These appeals are directed against judgment dated 5.10.2001 of the 

Madras High Court whereby the compensation determined by the Reference 

Court vide award dated 2.4.1993 passed in LAOP Nos. 29 and 30 of 1988 

was substantially reduced.

 2

2. On a requisition sent by Executive Engineer (Construction), Southern 

Railway for the acquisition of land for construction of Karur-Dindigul Broad 

Gauge Line, the Government of Tamil Nadu issued notification under 

Section 4(1) of the Land Acquisition Act, 1894 (for short, `the Act'), which 

was published in the official Gazette dated 30.5.1984 for the acquisition of 

19.72 acres land including land comprised in survey Nos. 658/2, 663/3B, 

664, 665/1, 667/1 and 668 owned by R. Saragapani and Soundararajan (both 

of whom are now represented by their legal representatives) situated in 

village Vembur, Vadasandur Taluk, Dindigul District. The Special 

Tahsildar inspected the acquired land and submitted report dated 6.1.1987 to 

District Revenue Officer, Anna, District Dindigul indicating therein that 

value of the acquired land and coconut trees available at the site including 

30% solatium would be Rs.3,70,190.50. 

3. Land Acquisition Officer and Special Tahsildar, Karur-Dindigul 

Broad Gauge Railway Line, Unit II, Dindigul (for short, `the Land 

Acquisition Officer') passed award dated 19.5.1987 and declared that the 

landowners are entitled to compensation at the rate of Rs.6,500/- per acre. 

He also awarded Rs.160/- per yielding coconut tree and Rs.30/- per young 

coconut tree (trees with flowers and flowering stage).

 3

4. Feeling dissatisfied with the award of the Land Acquisition Officer, 

the land owners filed applications under Section 18 of the Act. Thereupon, 

the Collector made reference to the Court for determination of the 

compensation payable to the landowners. The same were registered as 

LAOP Nos. 29 and 30 of 1988. In what was described as the counter 

statements filed by them, the landowners claimed that they were entitled to 

compensation at the rate of Rs.1,50,000/- per acre. They also claimed that 

the coconut trees were capable of giving crop for 50 years at the rate of 

Rs.500/- per annum.

5. During the pendency of reference, the Reference Court appointed an 

Advocate Commissioner for inspection of the acquired land to ascertain the 

number of trees and their age. The Court Commissioner took the assistance 

of Village Administrative Officer and Shri P. Nagarajan, Agricultural 

Development Officer Panchayath Union, Vedasandur and inspected the 

acquired land on 7.11.1992 after giving notice to both the parties. The 

landowners and their Advocate Shri K. Subramanian were present at the 

time of inspection but none appeared on behalf of the respondent. After 

inspecting the site, Shri P. Nagarajan submitted report dated 7.11.1992 with 

the finding that the trees were 17 years old and would give better yield for a 

further period of 70 years. He also opined that each tree will give a total 

income of Rs.29,890/-. Thereafter, the Advocate Commissioner submitted 

 4

report dated 20.11.1992 to the Reference Court endorsing the report of Shri 

P. Nagarajan.

6. The Reference Court first considered the question as to how many 

trees existed on the acquired land, referred to the evidence of the parties as 

also the Advocate Commissioner's report and observed:

 "What is the number of coconut trees present in the lands 

 acquired in L.A.O.P. No.29/1988?

 It is found that the number of trees mentioned in the award is 

 wrong Exhibit R6 would show that the same is wrong. Exhibit 

 R6 would show that the same is wrong. Exhibit R6 is the report 

 filed by the Land Acquisition Officer after inspection on 

 06.01.1987. It is shown in the report that there are 9 yielding 

 and 46 young coconut trees in S.F. No. 658/2, that in S.F. No. 

 665/1 there are 6 yielding coconut trees, 59 coconut trees with 

 flowers, 199 young coconut trees, that there are 11 coconut 

 trees in S.F. No. 668, that there are 56 coconut trees and 6 very 

 small coconut trees of not yielding and no value in S.F. No. 

 667/1. Thus it is shown in the above said document separately 

 the yielding coconut trees, coconut trees yielding stage, young 

 trees, nut yielding value less coconut trees. Hence the number 

 of trees as mentioned in the award is not correct. When the 

 railway line was being laid under this broad guage plan few 

 coconut trees were cut. Exhibit R8 is the letter dated 24.02.1987 

 written by the railway department to the Special Tahsildar. It is 

 stated in the said letter that 13 coconut trees were cut and 94 

 young coconut trees had dried/perished due to the hot sun and 

 want of water. Thus 107 coconut trees had been destroyed. The 

 property had been taken into possession is seen as 19.05.1987. 

 Thus 107 coconut trees has been destroyed before taking 

 possession, due to laying the railway line by the railway 

 department. It has to be seen as to how many trees belonging to 

 whom had been destroyed. Exhibit R1O would render much 

 help in that extent. The Land Acquisition Officer has mentioned 

 in Exhibit R7 as follows:

 5

 "It has been stated that the coconut trees in the 

 place where the present broad guage line has been 

 laid were cut by the railway department and then 

 the railway line laid up".

Further the Village Administrative Officer in his statement 

would state that it was true that coconut trees were cut but he 

does not know how much trees were cut. Therefore it can be 

confirmed after enquiring that there were more trees then that 

are present now. It is further stated in Page 6 that it has to be 

considered that 9 trees were cut in S.F. No. 658/2, that in S.F. 

No. 665/1: 12 trees were cut, 15 trees were cut in S.F. No. 668, 

37 trees were cut in S.F. No. 667/1. RW1 in his evidence has 

admitted in Exhibit R10 that it was stated that 64 trees were 

present in S.F. No. 658 and 9 trees were cut, 15 trees were cut 

in S.F. No. 668 and 11 were remaining. That there was a total 

of 276 coconut trees in S.F. No. 665/1 the trees cut were

12, that in S.F. No. 667/1, total of 99 trees cut were 37. Hence 

based on Exhibit R6 and on comparing Exhibits R7, R10 and 

the admission of RW1 the coconut trees present in the land has 

to be seen calculation. S.F. No. 658/2 belongs to the claimant in 

L.A.O.P. No. 29/88 and the claimant in L.A.O.P. No. 30/88. 

Hence taking into account, what has been stated in the award, I 

am allotting the balance to L.A.O.P. No. 30/88. Therefore in 

S.F. No. 658/2 there are 9 yielding trees and 13 young coconut 

trees. In S.F. No. 665/1 according to Exhibit R6 there are 6 

yielding trees, 59 flowering trees, young coconut trees 199. 12 

coconut trees which were cut were in this number. I included 

this cut down trees with young trees. Therefore the young trees 

are 199 + 12 = 211. Similarly in S.F. No. 668 there are 11 trees 

along with 15 cut trees the total is 26.(ie) the young trees 

present in this survey field. It is shown in Exhibit R6 that 56 

young coconut trees are present in S.F. No.667/1. It has also 

been stated that 6 coconut trees do not have any value in both 

L.A.O.P.s 29/88 and 30/88. 37 trees were cut from it, including 

the said trees the total comes to 93 trees. The statement in 

Exhibit R6 that there are 6 coconut trees of no value in S.F. No. 

667/1, is accepted. Thus after taking into consideration the 

character of the coconut trees the cut trees are included along 

with the number of young coconut trees."

 6

7. The Reference Court then adverted to the question as to what would 

be the annual income of the coconut trees and held that average annual 

income of one tree would be Rs.200/-. The process of reasoning by which 

the Reference Court arrived at this conclusion is reflected in paragraph 24 of 

its award, which is extracted below:

 "24. The annual income of a coconut tree must now be seen 

 PW1 would state that a good variety of coconut tree will yeild 

 one in 45 days, that about 30 to 45 nuts can be fot, and there 

 will be 8 harvest in a year and 100 nuts would sell from Rs. 

 350/- to Rs. 500/-. PW2 would state that the coconut trees had 

 grown very well, that they yeilded good nuts, that it belongs to 

 the fall variety, that the yeild is about 200 to 250 nuts in a year 

 and each nut has been sold at Rs. 3.30 to Rs. 4/-. PW3 the 

 owner of the lands adjacent to the acquired land in his evidence 

 would state that the coconut trees were planted in the lands 17 

 years back, that it has red soil and each tree would yeild about 

 200 to 250 coconut in a year. PW4 the Vedasandur Agricultural 

 Development Officer who has been in Government service for 

 the past 19 years would state in his evidence that these coconut 

 trees are of the tall variety, it has good growth, that there would 

 be 12 to 13 flowerings in a year in these trees and each 

 flowering would have 10 to 15 nuts and there would be an yeild 

 of 100 to 150 coconuts in a single tree and the trees would be 

 17 years old and each tree would yeild 120 coconuts. He in his 

 report Exhibit C3 given to the Commissioner has stated all 

 about the income, age, and type of the coconut trees present in 

 the land belonging to the claimant. Sarangapani which is near 

 the acquired lands. PW7 Rathina Nadar of Chozhavandan has 

 stated that he used to purchase coconuts for a price from 

 Sarangapani and Exhibit C8 is the bill given to Sarangapani on 

 04.03.1983. He has purchased 15190 nuts for Rs. 37,644/-. He 

 has stated that the rate of the nuts would be arounds Rs. 2.50 to 

 Rs. 3.00. It is argued on behalf of the petitioner on the basis of 

 the said evidence that the annual income from a tree is Rs. 375/- 

 and excluding the expenses the income is Rs. 334/- and the 

 same is of minimum scale and it is insisted that the annual 

 income of a single coconut tree must be calculated on the above 

 said basis. The evidences let in would show that the coconut 

 7

 trees in the acquired lands belong to a good variety. There was 

 proper irrigation facility. It is also shown that it has been 

 properly cultivated. But it is definite that the annual income 

 from a single tree has been shown to be very high on behalf of 

 the claimant. Because the cost to maintain the coconut trees 

 cannot be stated in a planned way. Further the annual income of 

 the coconut tree under Section 4(1) of the act as per notification 

 on 30.05.1984 amended as per order in I.A. No. 289, 290/93 of 

 30.04.1993, must be calculated as on that date. If the period for 

 calculating the income, the expenses involved in maintaining 

 the coconut tree and the evidence are taken into calculation then 

 I consider, it correct and justifiable to fix the annual income of 

 a coconut tree at Rs. 200/- Therefore I find the annual income 

 of a coconut tree to be Rs. 200/-."

8. The next question considered by the Reference Court was as to what 

would be the value of the remaining land, i.e. the land not covered by the 

trees. After examining the oral and documentary evidence produced by the 

parties, the Reference Court observed:

 "Exhibit R4 is the sale deed taken by RW1 for calculating the 

 market value. It is given in No. 9 in Exhibit R3. RW1 says that 

 on that basis the value of one acre is Rs. 6,500/- when it was 

 suggested to RW1 that it was a dry land and the well in it had 

 no water, he denied the same. But he has also said that he has 

 not seen the said land. The statement of RW1 that the said land 

 was equivalent land for calculating the market value without 

 seeing it cannot be accepted. He has only functioned in a 

 manner so as to show the value of the land as very low. The 

 land should be taken for comparison to be an irrigated garden 

 lands. The argument placed on behalf of the claimant that they 

 were not given an opportunity to cross examine the purchaser 

 or the seller of lands taken for comparison, regarding its nature 

 as they have not been examined on behalf of the government 

 and the seller and buyer have not been examined only because 

 of the lands are not eligible for comparison, has to be accepted. 

 PW5 states that she sold 21 cents of land for Rs. 41,500/- vide 

 Exhibit C4. PW6 would state that she purchased the land near 

 the acquired lands for Rs. 44,280/- vide Exhibit C5. The lands 

 8

 sold vide Exhibit C4 have again been sold vide Exhibit C5. 21 

 cents of land has been sold for Rs. 31,500/- as per Exhibit C4. 

 The value of the well is shown to be Rs. 5,000/-. The value of 

 the motor is shown as Rs. 5,000/-. The land sold is marked as 

 No. 25 in Exhibit R3. The land acquisition officer has taken 

 these lands for comparison. It is shown as No. 25 in the sale 

 deed taken up. But he has rejected it on the ground that it was 

 not similar. This is a dry land cultivated with irrigation facility. 

 Further Exhibit B3 would only show that these lands situate 

 near to the lands acquired. It is clear that only this land has to 

 be taken for comparison for a calculating the market value of 

 the land. Therefore the lands sold vide Exhibits C4 and 5 are 

 taken for comparison. This sale would show the market value. 

 21 cents has been sold for a sum of Rs. 31,500/- Therefore the 

 value of one cent is Rs. 1,500/-. The market value of one acre is 

 Rs.1,50,000/-. .........."

9. The respondent challenged the award of the Reference Court by filing 

appeals under Section 54 of the Act, which came to be registered as Appeal 

Suit Nos.976 and 977 of 1993. On being noticed by the High Court, the 

landowners filed Cross Objection Nos. 23/1995 and 111/2001 and claimed 

that they were entitled to additional compensation.

10. During the pendency of the appeals and the cross objections, the land 

owners filed CMP Nos. 15193 and 16047 of 1997 for placing on record 

letter dated 17.2.1995 sent by Deputy Chief Engineer (Southern Railway), 

Gauge Conversion Arasaradi, Madurai to the Special Tahsildar (Land 

Acquisition) in which it was mentioned that the Railway Department entered 

upon the acquired land comprised in survey Nos. 658/2, 663/3B, 664/2, 

 9

665/1, 667/1 and 668 of village Vembur, Vedasandur Taluk, Dindigul, Anna 

District on 11.3.1985.

11. The Division Bench of the High Court re-evaluated the evidence 

produced by the parties and held that the trees existing on the acquired land 

must have been 2 - 4 years old only. The reasons assigned by the High 

Court for recording this conclusion are extracted below:

 "It is pertinent to note that at the time of inspection, there were 

 only 354 numbers of trees (6 yielding trees and 325 young 

 trees) and as matter of fact, R-l in his statement given by the 

 claimant before the Award Officer dated 22.4.1987, he has 

 admitted the particulars of the land and the nature of his 

 cultivation. He had stated that he knew the extent of the land 

 that is sought to be acquired and he had also stated the extent of 

 the land that he was been in enjoyment and that he had no 

 objection for the land being taken over and agreed to receive 

 the compensation determined. All the tender or young trees 

 were planted after coming to know of the acquisition. The 

 claimant admits to have purchase 1500 tender/young trees, but 

 he had not obtained receipts for them. Though in his cross-

 examination as P.W.l he has stated that the said statement was 

 signed because he was asked to sign, it cannot be accepted. In 

 the light of the fact that the existing yielding trees in the extent 

 of the land, i.e. six will not constitute a thope, since minimum 

 80 trees per acre are required to claim it as thope and for 

 valuing it by capitalising the income of the trees by 20 years of 

 purchase. The Award Officer taking into account that the tender 

 or young trees were planted on or about the date of proposal 

 and considering its age, determined the value of the trees as 

 timber. We do not find any illegality in the same. Ex. A.7, the 

 report of the Agricultural Officer is based on the inspection 

 dated 7.11.1992 at the instance of the Advocate Commissioner 

 appointed before the sub court. The Reference Court failed to 

 take note of the fact of lapse of 8 years from the date of 

 notification and nearly 12 years from the date of proposals for 

 the Railways. The court did not go into the question of planting 

 10

 the coconuts during 1980's and in any event, at the time of 4 (1) 

 notification in the year 1984, these trees must have been 2-4 

 years old only. Hence there is no scope of valuing them on the 

 basis of capitalisation method. The decision of the Supreme 

 Court in K.A.A. Raja's case referred to above squarely applies 

 to this case."

12. The High Court did not agree with the method of valuation adopted by 

the Reference Court for determining market value of the acquired land and 

held that the landowners are entitled to compensation at the rate of 

Rs.1,00,000/- per acre. The reasons assigned by the High Court for 

recording this conclusion are as under:

 "The Reference Court has taken Exs A.4 and A.5 as data sale 

 deeds. By Ex. A.4 21 cents of land was sold on 8.9.1982 for a 

 sum of Rs. 41.500/-. The same land was sold by Ex. A.5 on 

 6.7.1983 for a sum of Rs. 41,500/-. The Court below has taken 

 this sale deed as representing the correct market value and 

 found that the value per cent will be Rs.31,500/-- '21=> Rs. 

 1,500/-. Based on that, he fixed the market value of the land per 

 acre at Rs. 1,50,000/-. In our view, the said method of valuation 

 is not correct as the said value cannot be taken for comparison. 

 Besides, the parties to the sale deed were not examined to find 

 out under what circumstances these 21 cents of land were sold. 

 From the Award and the judgment it is seen that the Land 

 Acquisition Officer has taken the valuation at the rate of Rs 

 6,500/- per acre. In his evidence as D.W.1, he has stated that 

 the document referred to in the Award dated 20.5.1982 was 

 taken as a data sale deed and the rate was fixed at Rs. 6,500/- 

 per acre. The Officer has not given full particulars as to how he 

 considered this as comparable to the acquired land. Hence the 

 said document cannot be relief on for fixing the market value. 

 Therefore, we are left with only Ex A.4. However, considering 

 the small extent of land, the value as determined on the basis of 

 this data sale land can be taken into account provided 

 development charges of 33.33% are deducted from this value. If 

 so deducted, the value will be Rs.1,00,000/- per acre. The 

 11

 claimant is entitled to get compensation at this rate for the 1.52 

 acres of land acquired from him, plus the value of trees as 

 assessed as timber by the Award Officer, i.e. Rs.24,375/-. The 

 claimant shall be entitled to interest and solatium on this 

 amount as per law on the value of the land plus trees."

13. Shri L. Nageswara Rao, learned senior counsel for the appellants 

argued that the impugned judgment is liable to be set aside because the 

determination of market value made by the High Court suffers from multiple 

errors and fallacies. Learned senior counsel submitted that the Reference 

Court had rightly relied upon the report of the Advocate Commissioner, 

which was founded on the report of Shri P. Nagarajan, Agricultural 

Development Officer for the purpose of determining the number, age and 

yielding potential of the coconut trees existing on the acquired land and the 

High Court committed serious error by upsetting the said finding by 

assuming that the trees were planted by the landowners after coming to 

know about the proposed acquisition of their land. Learned senior counsel 

submitted that this observation of the High Court is based on pure 

conjectures because no evidence was produced by the respondent to show 

that the landowners had prior knowledge of the requisition received from 

Executive Engineer (Construction), Southern Railway for the acquisition of 

their land. Shri Nageswara Rao further argued that the High Court was not 

at all justified in treating the flowering trees as timber for the purpose of 

fixing their value. He then submitted that the Reference Court had rightly 

 12

relied upon the sale deeds Exts. A4 and A5 vide which land measuring 21 

cents was sold in 1982 and 1983 for Rs.41,500/- and the High Court 

committed an error by discarding the two sale deeds only on the ground that 

the same related to small piece of land. Learned senior counsel emphasized 

that the respondent had not produced any evidence regarding the cost 

required to be incurred for making the land fit for construction of Broad 

Gauge Line and argued that the High Court was not at all justified in 

applying 1/3rd cut towards development charges. Shri Nageswara Rao then 

argued that both, the Reference Court and the High Court committed an 

error by awarding interest w.e.f. 20.5.1987 despite the fact that possession of 

the acquired land had been taken by the Railway Department on 11.3.1985. 

In the end, the learned senior counsel submitted that in terms of the 

judgment of this Court in Sunder v. Union of India (2001) 7 SCC 211, the 

appellants are entitled to interest on solatium and additional amount.

14. Shri R. Sundaravaradan, learned senior counsel for the respondent, 

supported the impugned judgment and argued that the determination of 

market value by the High Court is based on correct application of the settled 

principles of law and does not merit reconsideration by this Court. Learned 

senior counsel submitted that the Reference Court had erroneously fixed the 

age of coconut trees, which were newly planted and were only at the 

flowering stage. Shri Sundaravaradan submitted that the new trees could not 

 13

have been taken into consideration for fixing the value of yield of the total 

number of trees. He then argued that the determination of market value of 

the remaining land by the Reference Court was per se erroneous inasmuch 

as the sale instances relied upon by the land owners related to small parcel of 

land measuring 21 cents and the High Court rightly applied the rule of 1/3rd 

cut towards the development charges.

15. We have given serious thought to the respective arguments and 

scrutinized the record. At the outset, we consider it proper to observe that 

the High Court committed serious error in deciding the appeals without even 

adverting to CMP Nos. 15193/1997 and 16047/1997 along with which the 

appellants had placed on record letter dated 17.2.1995 written by Deputy 

Chief Engineer (Southern Railway), Gauge Conversion Arasaradi, Madurai 

to the Special Tahsildar (Land Acquisition) clearly indicating therein that 

possession of the acquired land had been taken on 11.3.1985. In our 

opinion, the letter of the Deputy Chief Engineer is conclusive of the date on 

which possession was taken, i.e. 11.3.1985 and both, the Reference Court 

and the High Court committed an error by awarding interest with effect from 

20.5.1987.

16. Adverting to the arguments of the learned senior counsel on the issue 

of fixing market value of the trees, we find that while the Reference Court 

 14

had relied upon reports dated 7.11.1992 and 20.11.1992 of Shri P. 

Nagarajan, Agricultural Development Officer and the Court Commissioner 

for the purpose of recording a finding that as on the date of notification 

under Section 4(1) of the Act, the age of the trees could be 8 to 9 years and 

in due course even the flowering trees would become fruit bearing trees and 

yield income for next 60 to 70 years. The High Court totally ignored the 

two reports and fixed market value of young trees by treating the same as 

timber. Learned senior counsel for the respondent could not put forward any 

tangible argument as to why the report of an expert should not be relied 

upon for the purpose of fixing value of the trees with reference to their 

expected yield. Therefore, we are convinced that the High Court 

committed an error by upsetting the view taken by the Reference Court on 

the issue of market value of the trees.

17. Equally erroneous is the approach adopted by the High Court in fixing 

market value of the remaining land. Although, the appellants' argument that 

the Reference Court should not have segregated land covered by the trees for 

the purpose of fixing market value of the remaining land may not be 

acceptable because once market value of the trees was separately fixed, there 

could be no justification for clubbing the two types of land for the purpose 

of fixing market value, the High Court committed serious error by ignoring 

the two sale instances - Ext. A4 and A5 and, at the same time, applying 1/3 rd 

 15

cut. It is true that the two sale instances related to a small parcel of land but, 

in the absence of any other exemplar, such sale instance could be relied upon 

for the purpose of fixing market value of the acquired land, on which trees 

had not been planted, after applying an appropriate cut. By Ext.A4 dated 

8.9.1982, 21 cents land was sold for a sum of Rs.41,500/-. The same piece 

of land was sold vide Ext. A5 dated 6.7.1983 at the same price, i.e. 

Rs.41,500/-. The notification under Section 4(1) was published on 

30.5.1984. If the rule of escalation in the land price evolved by this Court is 

applied, then a minimum increase of 10% is to be added to the price 

specified in Ext. A5. Thus, as on the date of Section 4(1) notification, the 

approximate value of 21 cents land would be Rs.45,550/-. This would be 

equivalent to approximately Rs.2,169/- per cent and Rs.2,27,750/- per acre. 

Though, the respondent did not produce any evidence to show the amount, 

which was likely to be spent on making the land useful for the purpose of 

laying Broad Gauge Line, if 1/3rd cut applied by the High Court is 

considered reasonable in view of the principles laid down by this Court in 

Kasturi v. State of Haryana (2003) 1 SCC 354, which were reiterated in 

Tejumal Bhojwani v. State of U.P. (2003) 10 SCC 525, V. Hanumantha 

Reddy v. Land Acquisition Officer & Mandal Revenue Officer (2003) 12 

SCC 642, H.P. Housing Board v. Bharat S. Negi (2004) 2 SCC 184 and 

Kiran Tandon v. Allahabad Development Authority (2004) 10 SCC 745, 

market value of the acquired land will be about Rs.1,50,000/- per acre.

 16

18. We also agree with Shri Nageswara Rao that the appellants should be 

given the benefit of the principles laid down by the Constitution Bench in 

Sunder v. Union of India (supra). It appears that attention of the High 

Court was not drawn to that judgment else it would have, in all probability, 

extended the benefit of that judgment to the appellants.

19. In the result, the appeals are allowed. The impugned judgments are 

set aside and the award passed by the Reference Court is restored with 

modification that the appellants shall be entitled to interest on the enhanced 

amount with effect from 11.3.1985, i.e. the date on which possession of land 

was taken by the Railway Department. They shall also be entitled to interest 

on solatium and additional amount in terms of the judgment in Sunder v. 

Union of India (supra). The respondent is directed to pay the balance 

amount of compensation and interest to the legal representatives of the 

landowners within a period of 3 months from the date of receipt/production 

of copy of this judgment.

 ..................................J.

 [G.S. Singhvi]

 ...................................J.

 [Asok Kumar Ganguly]

New Delhi

 17September 23, 2011.

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