Telangana High Court

Land Acquisition Officer Rdo vs A.Laxmareddy on 19 November, 2025

Author: K. Lakshman

Bench: K. Lakshman

       THE HONOURABLE SRI JUSTICE K. LAKSHMAN
                       AND
THE HONOURABLE SRI JUSTICE VAKITI RAMAKRISHNA REDDY

                    APPEAL SUIT No. 3841 of 2004

 JUDGMENT:

(Per Honourable Sri Justice Vakiti Ramakrishna Reddy)

This Land Acquisition 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 28.06.2004 passed in O.P. No. 16 of

2002 on the file of the Senior Civil Judge, Siddipet (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") from Rs.20,000/- per acre to Rs.1,40,000/- in respect of

acquired land and from Rs.74,000/- to Rs.99,000/- for each irrigation

well. Aggrieved thereby, the present Appeal is preferred by the Land

Acquisition Officer, Revenue Divisional Officer, Siddipet.

I. BRIEF FACTS:

3. The Land to an extent of Ac.0.26 guntas, Ac.3.36 guntas, Ac.

0.20 guntas in Sy. No. 281 of Vittalapur Village of China Kodur

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Mandal of Siddipet District were acquired for the purpose of

construction of an irrigation tank at Vittalapur village.

II. NOTIFICATION AND AWARD:

4. A notification under section 4(1) of the Act, was published on

04.12.2000, and pursuant thereto, notices under sections 9(3) and 10 of

the Act were issued. Thereafter, along with an award enquiry was

conducted by LAO in accordance with law.

5. Subsequently, the LAO passed an award dated 27.12.2001, fixing

the market value of the acquired lands at Rs. 20,000/- per acre and Rs.

74,000/-for each irrigation well. 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. 16 of 2002 before the

Reference Court.

III. POINTS BEFORE THE REFERENCE COURT:

6. The Reference Court, upon the pleadings, framed the following

points for determination:

1. Whether the market value estimated to the Agricultural wells belonging to claimantNo.1 and 2 is liable to be enhanced?

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2. Whether the market value fixed for the acquired land belonging to Claimants No.l to 3 can be enhanced?

IV. EVIDENCE BEFORE THE REFERENCE COURT:

7. To substantiate their claim for higher compensation, the

appellants examined PWs 1 to 3 and got marked Exhibit A1 to A6.

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 oral and

documentary evidence, particularly the sale deeds marked as Exs.A-3

and A-4, found them to be genuine and bona fide transactions

pertaining to lands situated in close proximity to the acquired lands.

Further, both the transactions under Exs.A-3 and A-4 were found to be

executed within three years preceding the publication of the Section

4(1) Notification, and thus fall within the permissible time frame for

consideration while determining the market value of the acquired lands.

Relying upon those sale deeds, the Reference Court observed that both

the above sale deeds reflected the prevailing market trend in the

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locality, and as such, they provided the most reliable basis for fixing the

compensation.

10. The learned Reference Court took note of the fact that in Ex. A-3,

dated 17.05.1999, the land in Sy.No.370/AA of Vittalpur village was

sold at a rate of Rs. 30/- per square yard, which is approximately

Rs.1,16,000/- per acre. Similarly, Ex.A-4, dated 11.05.2000, relating to

Sy.No.432 of the same village, reflected the sale of 0.09 guntas of land

at the same rate of Rs.30/- per square yard, which is approximately Rs.

1,41,000/- per acre. These transactions, being genuine, were considered

by the Reference Court, to be suitable sale exemplars of the prevailing

market value of the lands in the area during the relevant period.

11. The learned Reference Court held that the sale deeds (Exs.A-3

and A-4) were not only proximate in time to the Section 4(1)

Notification but also pertained to lands of similar nature, fertility, and

location as the acquired lands. Both the lands under Exs.A-3 and A-4

and the acquired lands, were situated in Vittalpur village and enjoyed

similar advantages in terms of irrigation facilities, fertility and

accessibility. Hence, the Reference Court held that the market value

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reflected in those documents should form the proper basis for

determination of market value.

12. Further, the learned Reference Court concluded that the sale

statistics relied upon by the L.A.O. could not be the basis for

determination of market value, inasmuch as they reflected the prices not

comparable either in quality or character of the acquired lands.

13. The learned Reference Court further directed payment of

statutory benefits under the Act, namely 30% solatium, 12% additional

market value from the date of the Section 4(1) Notification till the date

of award or possession (whichever earlier) and interest at 9% per annum

for the first year from the date of possession and 15% per annum

thereafter till realization.

14. Consequently, the Reference was allowed. Thus, upon

appreciation of the said evidence, the Reference Court enhanced the

market value of the acquired lands from Rs. 20,000/- per acre to

Rs. 1,40,000/- and Rs. 74,000/-for each irrigation well to Rs. 99,000/-.

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15. Being aggrieved by the order dated 28.06.2004 passed by the

learned Reference Court, the Respondent has preferred the present

Appeal.

VI. SUBMISSIONS OF THE PARTIES:

A) Contentions of the Appellant (State/LAO):

16. The learned Government Pleader for Appeals, appearing on

behalf of the Appellant, contended that the Reference Court failed to

appreciate that the LAO had determined the market value of the

acquired lands strictly in accordance with the procedure prescribed

under Section 23 of the Act. The assessment was made after due

consideration of all relevant factors, including the nature, fertility, and

potential of the lands.

17. It is submitted that the Reference Court has erred in placing

reliance upon Exs.A-3 and A-4 for determining the market value

inasmuch as the said sale deeds relate to small extents of land and could

not form a reliable basis for determining market value of larger tracts.

18. The learned Government Pleader further urged that the Reference

Court erred in placing reliance upon Exs.A-5 and A-6, which are merely

an estimation reports prepared by a private engineer and hence, not

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admissible in evidence. It is further submitted that the said reports,

being unsupported by any official record or technical verification, could

not have been the basis for enhancing the compensation.

19. It is further submitted that the Reference Court overlooked the

official report filed on behalf of the LAO, which specifically assessed

the value of the wells at only Rs.74,000/- in total. The Reference Court,

it is contended, failed to note that in view of the law laid down by the

Honourable Supreme Court, no separate compensation can be awarded

for wells existing in the acquired lands.

20. On the basis of the aforesaid submissions, the learned

Government Pleader for Appeals has prayed that, there being merit in

the appeal, the same may be allowed.

B) Contentions of the Respondents (Claimants):

21. The learned counsel for the Respondents/Claimants submitted

that the Reference Court has rightly assessed the compensation payable

for the acquired lands and agricultural wells. The acquired lands were

highly fertile, irrigated (wet) lands, suitable for cultivation of paddy,

sugarcane, tobacco, chillies, and other commercial crops up to three

times year, generating an annual yield of Rs.25,000/- per acre. Exs.A-3

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and A-4 categorically demonstrate that the prevailing market value of

comparable lands in the vicinity is at Rs.5,000/- per gunta, and as per

the technical estimation reports marked under Exs.A-5 and A-6, the

agricultural wells were valued at more than Rs. 3,00,000/- each.

22. It is submitted the LAO, while fixing the market value, ignored

the prevailing market rates in the vicinity, as demonstrated by the

registered sale deeds marked as Exs.A-3 and A-4 pertain to lands

situated in the same village and locality, identical in nature, fertility,

and productivity, and therefore, form reliable and comparable sale

exemplars for determining the market value of the acquired lands. It is

further urged that minor variation in extent or small scale transactions

as argued by the appellant, do not render such comparables irrelevant.

23. The learned counsel for the Respondents/Claimants further

submitted that the Reference Court was justified in taking note of

Exs.A-5 and A-6, the estimation reports prepared by a qualified private

engineer (P.W.-3). These reports provided a scientific and technical

assessment of the agricultural wells, establishing their value at

Rs.1,74,205/-per well.

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24. It is further contended that the Reference Court rightly held that

separate compensation for the agricultural wells is justified, as the wells

constitute valuable and permanent assets independent of the land,

enhancing its productivity and overall value of the acquired lands. The

Reference Court therefore, rightly observed that the market value of the

acquired property must be assessed with due regard to such

improvement, since the presence of irrigation wells directly contributes

to the fertility yield and income potential of the land, thereby

influencing its market value.

25. On the basis of the aforesaid submissions, the Learned Counsel

for Respondents has prayed that, there being no merit in the present

appeal, the same deserves to be dismissed.

VII. POINTS FOR DETERMINATION:

26. Having heard the learned counsel appearing for the respective

parties and having carefully examined the material placed on record, the

following points arise for determination in this Appeal:

(i) Whether the Reference Court was justified in enhancing

the market value of the acquired lands to Rs.1,40,000/- per Acre?

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(ii) Whether separate compensation for agricultural wells at

Rs.99,000/- per well is sustainable in law?

(iii) Whether any interference with the findings of the

Reference Court is warranted?

VIII. COMPARATIVE STATEMENT OF COMPENSATION:

27. For proper appreciation, the comparative chart of compensation, as

awarded by the LAO and as enhanced by the Reference Court, is

tabulated as under:

Item Compensation Compensation Difference Awarded by LAO Enhanced by (Enhanced (Rs. per Reference Court Award) acre/Well) (Rs. per (Rs. per acre/well) acre/well)

Land Rs. 20,000/- Rs. 1,40,000/- Rs. 1,20,000/- admeasuring Ac.

5.02 guntas

Wells (2 in Nos.) Rs. 37,000/- Rs. 99,000/- Rs. 62,000/-

28. From the above tabulation, and upon a careful reappraisal of the

evidence, it is manifest that the LAO had adopted a conservative

approach in fixing the market value, whereas the Reference Court, on

the other hand, took into account:

i. the location and potentiality of the lands;

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ii. the sale exemplars of the proximate period; and iii. the comparability of lands situated in the vicinity of the acquired lands.

29. The critical question, therefore, is whether the reliance placed by

the Reference Court on Ex. A3 and A4, and its ultimate fixation of

market value at Rs.1,40,000/- per acre and Rs.99,000/- per agricultural

well, can be said to be justified in law.

IX. ANALYSIS AND FINDINGS:

30. We have carefully considered the rival submissions advanced by

the learned Government Pleader for appeals appearing for the Appellant

and learned counsel for the Respondents/claimants and also perused the

entire record of the case, including the pleadings, oral evidence of PWs

1 to 3 and RW1, and the documentary evidence under Exs.A-1 to A-6

as well as Exs.B-1 and B-2.

31. At the outset, it is not in dispute that the lands, admeasuring

Ac.5.02guntas., belonging to the respondents were acquired for the

purpose of construction of an irrigation tank at Vittalapur Village,

pursuant to a notification under Section 4(1) of the Act dated

04.12.2000.The learned Government Pleader for appeals contended that

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the Reference Court erred in enhancing the compensation without

proper appreciation of the statutory parameters and procedure

prescribed under Section 23 of the Act.

32. It is pertinent to note that Section 23 of the Act, categorically

enumerates out the matters to be considered in determining

compensation, and reads as under:

"23. Matters to be considered in determining compensation (1) In determining the amount of compensation to be awarded for land acquired under this Act, the Court shall take into consideration first, the market value of the land at the date of the publication of the [notification under section 4, sub-

section (1)] [Substituted by Act 38 of 1923, Section 7, for " declaration relating thereto under section 6".]; secondly, the damage sustained by the person interested, by reason of the taking of any standing crops or trees which may be on the land at the time of the Collectors taking possession thereof;

thirdly, the damage (if any) sustained by the person interested, at the time of the Collectors taking possession of the land, by reason of severing such land from his other land;

fourthly, the damage (if any) sustained by the person interested, at the time of the Collectors taking possession of the land, by reason of the acquisition

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injuriously affecting his other property, movable or immovable, in any other manner, or his earnings; fifthly, if, in consequence of the acquisition of the land by the Collector, the person interested is compelled to change his residence or place of business, the reasonable expenses (if any) incidental to such change; and sixthly, the damage (if any) bona fide resulting from diminution of the profits of the land between the time of the publication of the declaration under section 6 and the time of the Collectors taking possession of the land. [(1-A) In addition to the market value of the land, as above provided, the Court shall in every case award an amount calculated at the rate of twelve per centum per annum on such market value for the period commencing on and from the date of the publication of the notification under section 4, sub-section (1), in respect of such land to the date of the award of the Collector or the date of taking possession of the land, whichever is earlier.

Explanation. In computing the period referred to in this sub-section, any period or periods during which the proceedings for the acquisition of the land were held up on account of any stay or injunction by the order of any Court shall be excluded.] [Inserted by Act 68 of 1984, Section 15 (w.e.f. 24.9.1984).] (2) In addition to the market value of the land as above provided, the Court shall in every case award a sum of [thirty per centum] [Substituted by Act 68 of 1984, Section 15, for " fifteen per centum" (w.e.f. 24.9.1984).]

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on such market value, in consideration of compulsory nature of the acquisition."

33. The Honourable Supreme Court in Shaji Kuriakose and others v.

Indian Oil Corporation Limited and others 1,laid down the method of

determination of the of the market value and further observed as under:

"3. It is no doubt true that courts adopt Comparable Sales Method of valuation of land while fixing the market value of the acquired land.

While fixing the market value of the acquired land, Comparable Sales Method of valuation is preferred than other methods of valuation of land such as Capitalisation of Net Income Method or Expert Opinion Method. Comparable Sales Method of valuation is preferred because is furnishes the evidence for determination of the market value of the acquired land at which a willing purchaser would pay for the acquired land if it has been sold in open market at the time of issue of notification under Section 5 of the Act. However, Comparable Sales Method of valuation of land for fixing the market value of the acquired land is not always conclusive. There are certain factors which are required to be fulfilled and on fulfilment of those factors the compensation can be awarded, according to the value of the land reflected in the sales. The factors laid down inter alia are: (1) the sale must be a genuine transaction, that (2) the sale deed must have been executed at the time proximate of the date of issue of notification under Section 4 of the Act, that (3) the land

(2001) 7 SCC 650

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covered by the sale must be in the vicinity of the acquired land, that (4) the land covered by the sales must be similar to the acquired land and that (5) the size of plot of the land covered by the sales be comparable to the land acquired. If all these factors are satisfied, then there is no reason why the sale value of the land covered by the sales be not given for the acquired land. However, if there is a dissimilarity is regard to locality, shape, site or nature of land between land covered by sales and land acquired, it is open to Court to proportionately reduce the compensation for acquired land than what is reflected in the sales depending upon the disadvantages attached with the acquired land."

34. The contention advanced by the learned Government Pleader that

the Reference Court erred in relying upon Exs. A3 and A4 for

determining the market value, on the ground that the said sale deeds do

not pertain to comparable lands, is wholly untenable. Inasmuch as, the

sale deeds relied upon relate to the lands situated within the same

village and locality as the acquired lands are identical in nature and

fertility. Hence, they constitute the most reliable and comparable sale

exemplars for determining the prevailing market value.

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35. The Honourable Supreme Court in Land Acquisition Officer v.

Karigowda 2, has categorically held that sale deeds pertaining to lands

situated in the same or nearby villages, sharing similar physical

characteristics, fertility, and development potential, provide the most

reliable basis for comparison in determining market value and observed

as follows:

"75. It is a settled principle of law that lands of adjacent villages can be made the basis for determining the fair market value of the acquired land. This principle of law is qualified by clear dictum of this Court itself that whenever direct evidence i.e. instances of the same villages are available, then it is most desirable that the court should consider that evidence. But where such evidence is not available court can safely rely upon the sales statistics of adjoining lands provided the instances are comparable and the potentiality and location of the land is somewhat similar. The evidence tendered in relation to the land of the adjacent villages would be a relevant piece of evidence for such determination. Once it is shown that situation and potential of the land in two different villages are the same then they could be awarded similar compensation or such other compensation as would be just and fair."

36. In the present case, the sale exemplars marked as Exs.A3 and A4

relate to lands situated within Vittalapur village itself, the very same

village, where the acquired lands are located. The evidence of PWs 1

and 2, supported by Exs.A1 and A2 (village maps), clearly establishes

(2010) 5 SCC 708

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that the lands covered under the said sale deeds are identical in nature,

fertility and location, and possess similar irrigation facilities. Hence,

these sale deeds constitute the most appropriate and proximate evidence

for assessing the market value of the acquired lands.

37. The contention of the Appellant that the sale deeds under Ex. A3

and Ex. A4 pertain to small extents and therefore cannot form the basis

for determination of market value is untenable. This Court is of the

view that merely because the land covered under a sale transaction is of

a smaller extent, the same does not become inadmissible or unreliable

for comparative purposes, provided the transaction is genuine,

proximate in time and relatable in situation and character.

38. In Ravinder Kumar Goel v. State of Haryana and others 3, the

Honourable Supreme Court while considering whether transactions

relating to smaller extents of land could be relied upon for determining

the market value of large acquired tracts, observed as follows:

"13. Therefore, since we have already indicated that the High Court was not justified in merely relying on the circular fixing the floor rates when other evidence was available on the record pursuant to the remand made, it is necessary for us to take note as to whether the Reference Court had committed an error in not relying on the sale

2023 SCC OnLine SC 147

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exemplars produced by the respondents without analysing the comparability. The position of law is well settled that when large extent of lands is acquired and if the sale exemplar, also for the large extent is available on record it would be safer to rely on the same if they are comparable transactions. However, as already noted above, this Court in Atma Singh (supra) has also held that the sale instances of smaller extents cannot be ignored. Further, this Court has reiterated in many cases that the sale exemplars for smaller extent can be relied upon subject to appropriate deduction being provided towards development charges."

39. It is pertinent to note that the sale instances relating to smaller

extents can form a legitimate basis for comparison while determining

the market value of larger holdings, subject to the application of

suitable deductions to account for developmental and situational

differences. In the present case, Exs.A3 and A4 relate to lands situated

in the same village, proximate in time to the notification under section

4(1) of the Act and identical in nature and fertility to the acquired lands.

Therefore, the Reference Court was justified in relying upon the said

sale deeds as a reliable guide for assessing the prevailing market value.

40. In Sabhia Mohammed Yusuf Abdul Hamid Mulla v. Land

Acquisition Officer 4, the Honourable Supreme Court observed that

deduction towards development is justified only in cases of

(2012) 7 SCC 595

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undeveloped or underdeveloped lands, generally to the extent of one-

third. However, where no development is required for implementation

of the public purpose, such deduction would be unwarranted. The

relevant passage reads as follows:

"19. In fixing the market value of the acquired land, which is undeveloped or underdeveloped, the courts have generally approved deduction of 1/3rd of the market value towards development cost except when no development is required to be made for implementation of the public purpose for which land is acquired."

41. In the present case, the lands acquired are fertile and fully

developed wet lands situated in Vittalapur village, acquired specifically

for the purpose of constructing an irrigation tank. As per the above

precedent, deduction towards development charges is justified only

where the acquired land is undeveloped or underdeveloped and requires

conversion into plots or layouts involving roads, drainage, and other

facilities. However, where the land is directly put to public use without

any such developmental activity, such deduction is wholly unwarranted.

42. In Subh Ram v. State of Haryana 5, the Honourable Supreme

Court while dealing with the deduction cost has observed as follows:

"16. Therefore, when deduction is made from the value of a small residential plot towards the development cost, to arrive at

(2010) 1 SCC 444

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the value of a large tract of agricultural or undeveloped land with development potential, the deduction has nothing to do with the purpose for which the land is acquired. The deduction is with reference to the price of the small residential plot, to work back the value of the large tract of undeveloped land. On the other hand, where the value of acquired agricultural land is determined with reference to the sale price of a neighbouring agricultural land, no deduction need be made towards "development cost".

32. The above observations in Atma Singh [(2008) 2 SCC 568] no doubt seems to suggest that where the acquisition is for a residential layout, deduction towards development cost is a must, but if the acquisition is for an industry which does not require forming a layout of sites, the market value of small residential plots may be adopted without any cuts towards development cost"

43. On applying the above principle to the present case, it is evident

that no deduction towards development cost is warranted. The

Honourable Supreme Court has categorically held that deduction

towards development is not a universal rule but depends upon the

nature and purpose of acquisition. Such deduction is required only

when the market value of a large undeveloped tract is inferred from the

price of small developed residential plots, and the deduction is applied

merely to "work back" the undeveloped land value from developed land

rates. However, when the acquired land and the exemplar lands are both

agricultural, or when the acquisition is for a public purpose such as

construction of an irrigation tank, which does not involve layout

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formation, plotting, or infrastructural development, no deduction can be

justified. In the present case, the Reference Court rightly placed reliance

on Ex. A3 and Ex. A4, i.e., the sale deeds of agricultural lands in the

same village, having similar fertility, potentiality, irrigation facilities

and refrained from applying any developmental deduction. Thus, the

market value fixed by the Reference Court based on comparable

agricultural sale exemplars is reasonable and in conformity with the

settled principles of law.

44. With regard to Exs.A5 and A6, this Court finds that they are

technical estimation reports prepared by PW3, a qualified private

engineer, who furnished a detailed account of the dimensions,

construction features, and functional value of the agricultural wells

situated in the lands of claimants No.1 and 2. These reports provide a

scientific assessment of the cost of construction and the irrigation

capacity of the wells, thereby reflecting the actual worth of the wells as

independent productive assets.

45. The contention of the Appellant that the above said reports are

inadmissible for want of official verification is unsustainable. There

exists no statutory prohibition against relying upon private expert

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opinion, particularly when the same is credible, supported by factual

observation, and not effectively rebutted by the other party. In the

present case, the valuation of the LAO at Rs.74,000/- per well was

unsupported by any technical data or on-site evaluation. Hence, the

Reference Court was justified in treating Exs.A5 and A6 as

corroborative and reliable evidence while determining the reasonable

value of the wells.

46. The further contention of the Appellant that no separate

compensation is payable for the wells is not sustainable in the present

case. It is important to note that the respondents/claimants themselves

had made a distinct or separate claim for the wells existing in their

acquired lands, and even LAO had granted separate compensation for

the same, fixing the value at Rs.74,000/- per well. Therefore, the

Reference Court rightly proceeded to assess the value of the wells

independently, based on the evidence placed on record. The wells are

permanent irrigation sources that directly improve the fertility and

productivity of the lands. They enable the cultivation of commercial

crops such as paddy, sugarcane, and chillies three times a year, and thus

form an essential part of the value of the land.

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47. As per the Act, the market value of the land to be acquired is

determined by calculating the total compensation payable to the

landowner, including all assets or improvements attached to the land.

Ordinarily, separate compensation is not granted for wells if their value

is already included in the overall market value. However, in the present

case, the land value was assessed separately, excluding the specific cost

of the wells. The wells were also proved by technical evidence through

Exs.A5 and A6, being detailed estimation reports prepared by PW3, a

qualified private engineer. The Reference Court, after considering these

reports and the rival submissions, found the estimated value of each

well to be Rs.1,74,205/-, but reasonably reduced it to Rs.99,000/- per

well by relying on Ex. B2. Hence, the Reference Court's finding in

granting separate compensation is well-supported by technical evidence

and is in line with Section 23(1) of the Act, which mandates that the

market value shall include both the land and the improvements made

thereon.

X. CONCLUSION:

48. In view of the foregoing discussion, this Court finds that the

Reference Court has properly appreciated both oral and documentary

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evidence placed before it and arrived at a just and reasonable

determination of compensation. The fixation of the market value of the

land at Rs.1,40,000/- per acre and the valuation of each agricultural well

at Rs.99,000/- are supported by evidence, including Exs.A3 to A6 and

Ex.B2, and are in consonance with the principles laid down under

Section 23(1) of the Act. The sale transactions relied upon pertains to

the same village and are comparable in nature, while the valuation of

the wells rests upon cogent technical estimation duly examined by the

Reference Court.

49. Further, the compensation granted separately for the wells and

the land cannot, by itself, be a ground to interfere with the well-

reasoned order of the Reference Court. The Reference Court has rightly

recognized that the wells directly contribute to the productivity of the

acquired lands, and that the separate valuation merely reflects a fair

computation of total compensation rather than duplication of benefits.

50. Though it is settled law that the value of the well should ideally

be an integrated component of the overall land valuation, a procedural

separation in the award does not, in itself, vitiate the entire decision,

provided that the total compensation determined is fair, reasonable and

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based on evidence. It is to be seen that only when the income

capitalization method is adopted for while assessing market value of

acquired lands, no separate compensation for wells can be granted,

since that method computes a composite value of the income generating

asset as a whole, is possible. However, where the valuation is not

strictly based on income capitalization, for wells may be permissible,

particularly when the wells constitute distinct and valuable

improvements that directly contribute to the productivity of the land.

Moreover, the intent of not awarding compensation separately for the

wells and the land is only to avoid double valuation. The rationale is

that the income capitalization method determines a composite market

value of the entire income-generating asset based on its potential

returns. Awarding separate compensation for individual items that

contribute to that income stream would amount to double valuation,

which is impermissible. In the instant case, since the market value of

the acquired lands was fixed based on the comparable sale exemplars

under Exs.A-3 and A-4, there is no instance of following capitalization

method. Thus, the approach of the Land Acquisition Officer and the

Reference Court in assessing the market value of the acquired land and

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the wells in the said acquired land separately cannot be termed as

erroneous or contrary to law so as to set aside the entire Award.

51. Furthermore, it is significant to note that even the Land

Acquisition Officer, who had passed award dated 27.12.2001,

calculated the compensation separately in respect of acquired land and

the wells. The appellant did not raise any objection to this methodology

before the Reference Court and has for the first time, sought to question

it before this Appellate Court which is impermissible. Even otherwise,

as discussed hereinabove, the compensation awarded by the Reference

Court is found to be just, reasonable and well supported by technical

and documentary evidence. Hence, awarding compensation in respect

of the acquired land and the wells therein separately or together is of no

material consequence, as long as the total amount represents the fair

market value of the acquired land. Accordingly, the above contention

advanced by the learned Assistant Government Pleader for Appeals is

devoid of merit and stands rejected.

52. An appellate court will ordinarily interfere with an award of the

Reference Court only on well-defined legal grounds, such as a manifest

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error in determining the market value or a violation of a fundamental

legal principle, and not a mere technicality in presentation. Merely

because the Reference Court awarded compensation separately in

respect of acquired land and the wells existing therein cannot, by itself

furnish a ground to set aside the award passed by the Reference Court.

Therefore, as long as the total enhanced compensation is justifiable

based on market value and evidence, the method of breaking it down

into separate heads for land and wells, cannot be faulted and is not a

valid basis for interference.

53. In view of the foregoing discussion, this Court finds no illegality,

perversity, or procedural irregularity in the findings of the Reference

Court warranting interference in the Appeal. The order of the Reference

Court is based on a proper appreciation of oral and documentary

evidence and represents a fair and reasonable determination of the

market value and the value of improvements. Accordingly, the appeal

is liable to be dismissed.

54. As regards to the statutory benefits, appellants/claimants are

entitled to solatium at 30% and additional market value at 12% per

annum from the date of notification till the date of award, together with

KL,J & VRKR, J AS_3841_2011

interest at 9% per annum for the first year from the date of taking

possession and 15% per annum thereafter till the date of realization, in

accordance with Sections 23(1-A), 23(2), and 28 of the Act.

XI. RESULT:

55. For the reasons recorded above, the Appeal Suit is dismissed

confirming the order and decree dated 28.06.2004 in O.P. No. 16 of

2002 on the file of the Senior Civil Judge, Siddipet. The Claimants shall

be entitled to all statutory benefits under the Act, including but not

limited to solatium, additional value and interest etc., as indicted

hereinbefore. In the circumstances, there shall be no order as to costs.

As a sequel, pending miscellaneous applications, if any, in this

Appeal shall also stand closed.

K. LAKSHMAN, J.

__________________________________ VAKITI RAMAKRISHNA REDDY, J.

Date: 19.11.2025 AS