Rondla Ranga Nayaki And 2 Ors, Warangal ... vs The Land Acquisition Officer Cum Rdo, ...
2025 Latest Caselaw 6589 Tel

Telangana High Court

Rondla Ranga Nayaki And 2 Ors, Warangal ... vs The Land Acquisition Officer Cum Rdo, ... on 19 November, 2025

Author: K. Lakshman

Bench: K. Lakshman

       THE HON'BLE SRI JUSTICE K. LAKSHMAN
                      AND
THE HON'BLE SRI JUSTICE VAKITI RAMAKRISHNA REDDY

      LAND ACQUISITION APPEAL SUIT No. 59 of 2011

JUDGMENT:

(Per Hon'ble Sri Justice Vakiti Ramakrishna Reddy)

This 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 16.04.2007 passed in O.P. No. 63 of 2002 on

the file of the II Addl. Senior Civil Judge, Warangal (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") in respect of the acquired lands from Rs.16,900/- per acre to

Rs.22,500/- per acre. Aggrieved by the quantum of such marginal

enhancement made by the Reference Court and seeking further

increase in compensation, the claimants/land owners have preferred

the present Appeal.

I. BRIEF FACTS:

3. The Land to an extent of Ac.3.34 gts. in Sy. No. 229 of

Dharmapur Village, Dharmasagar Mandal of Warangal District was

acquired for the purpose of construction and submergence of a check

dam across stream near Dharmapur Village of Dharmasagar Mandal.

II. NOTIFICATION AND AWARD:

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

29.10.2001, pursuant thereto, notices under sections 9(3) and 10 of the

Act, were issued. An award enquiry was thereafter conducted in

accordance with law.

5. Subsequently, the LAO passed an award dated 28.06.2002,

fixing the market value of the acquired lands at Rs. 16,900/- per acre.

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. 63 of 2002 before the Reference Court.

III.   POINT FOR CONSIDERATION                    BEFORE       THE
       REFERENCE COURT:

6. The Reference Court, upon the pleadings, and material placed

before it, framed the following Point for determination:

"Whether the market value fixed by the Land Acquisition Officer is inadequate, if so, what is the reasonable market value to be fixed for the acquired land?"

IV. EVIDENCE:

7. To substantiate their claim for higher compensation, the

claimants examined PWs 1 and 2 and got marked Ex. A1 (certified

copy of a sale deed), on their behalf.

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 the oral and

documentary evidence, observed in the impugned order that though

PW1 claimed to have been earning a net income of Rs.20,000/- per

acre, per annum from commercial crops such as cotton, chillies,

banana, and tobacco, no documentary proof such as crop yield

records, sales receipts, or accounts was produced to substantiate such

claim. Likewise, PW2 admitted in cross-examination that Ex. A1, the

sale deed relied upon by the appellants pertained to Nashkal Village

and not to Dharmapur Village, where the acquired lands are situated.

10. Nevertheless, the learned Reference Court took note of the fact

that the acquired lands were fertile, irrigated, and capable of raising

commercial crops, which indicated their higher potential value

compared to dry lands. The learned Reference Court also found that

agriculture was the only source of livelihood for the claimants, and

that the acquisition of their lands had deprived them of their means of

sustenance.

11. The learned Reference Court further noted that taking into

account the fertility, potentiality, and location of the lands, as well as

the compensation fixed by Civil Courts in similar acquisitions, the

value determined by the LAO was on the lower side. Therefore, the

learned Reference Court found it just and reasonable to enhance the

market value of the acquired lands from Rs.16,900/- to Rs.22,500/-

per acre.

12. The Court further directed payment of statutory benefits under

the Act, namely 30% solatium, 12% additional market value from the

date of 4(1) Notification till the date of award or possession

(whichever earlier), interest at 9% per annum for the first year from

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

together with interest on solatium and additional market value.

13. Consequently, the Reference was allowed enhancing the market

value of the acquired lands from Rs.16,900/- per acre to Rs.22,500/-

per acre.

14. Being aggrieved by the order dated 16.04.2007 passed by the

Reference Court, the claimants have preferred the present Appeal for

further enhancement.

VI. SUBMISSIONS OF THE PARTIES:

A) Contentions of the Appellants (Claimants):

15. The learned counsel for the appellants contended that the

Reference Court erred in not placing reliance upon Ex. A1, the

certified copy of the sale deed bearing Document No.153 of 1994

dated 09.05.1994, under which one Acre of land was sold for

Rs.1,42,500/-. It is further contended that the acquired lands are

abutting and similar in nature and fertility to the land covered under

Ex. A1, and are situated close to the National Highway connecting

Hyderabad and Warangal. Hence, the Reference Court, erred in not

fixing the market value of the acquired lands in accordance with the

rate reflected under Ex. A1.

16. The learned counsel for the appellants further contended that

the Reference Court erred in not considering documentary evidence

adduced by the respondent i.e., the Award under Ex.B2, wherein the

prevailing market value was shown as Rs.90,000/- per acre. It is urged

that the Reference Court ought to have adopted the said rate while

determining compensation, instead of fixing a much lesser value. The

learned counsel for the appellants further contended that the Reference

Court failed to appreciate the documentary and oral evidence available

on record, which clearly establishes that the acquired lands were of

high potential and capable of yielding substantial income.

17. It is further contend that the Reference Court failed to consider

that the land owner was earning an annual net income of Rs.25,000/-

per acre after deducting cultivation expenses, which demonstrates the

high fertility and commercial potential of the acquired lands. The

appellants further contend that the market value should have been

fixed at Rs.1,50,000/- per acre in accordance with the evidence on

record. The appellants also contend that the Reference Court erred in

not awarding interest on all components of compensation, including

solatium and additional market value, thereby rendering the award

inequitable and contrary to law.

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

for the appellants has prayed that, there being merit in the appeal, the

same may be allowed, by further enhancing the compensation.

B) Contentions of the Respondent (State/LAO):

19. The learned Government Pleader for Appeals, appearing on

behalf of the Respondent, contended that the LAO had fixed the

market value at Rs.16,900/- per acre, after a detailed inspection and

consideration of the physical features, potentiality, fertility, and

existing conditions of the acquired lands, including the registered sale

transactions of the same village for the preceding three years. The

fixation, it was submitted, was based on objective assessment and

available sale statistics, ensuring that the compensation reflected the

fair market value of the lands at the time of acquisition and was

neither arbitrary nor unreasonable.

20. It is further contended that the appellants failed to produce any

documentary evidence to substantiate their claim for enhancement or

for compensation towards commercial crops as alleged in their claim

petition. Hence, the market value fixed by the LAO as enhanced by

the learned Reference Court is reasonable, as such, the appellants are

not entitled for any enhancement of compensation and there being no

merit in the present appeal, the same deserves to be dismissed.

VII. POINTS FOR DETERMINATION:

21. 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 fixing the market value of the acquired lands at Rs.22,500/- per Acre, or whether the appellants are entitled to further enhancement in view of the evidence adduced under Exs.A1 and B2?

(ii) Whether the Reference Court failed to properly appreciate the documentary and oral evidence relating to the fertility, potentiality, and income-yielding capacity of the acquired lands?

(iii) To what relief, if any, are the claimants/appellants entitled?

VIII. COMPARATIVE STATEMENT OF COMPENSATION:

22. For proper appreciation, the comparative chart of compensation,

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

tabulated as under:

Extent Compensation Compensation Difference Awarded by LAO Enhanced by (Enhanced (Rs. per acre) Reference Court Award) (Rs. per acre) (Rs. per acre)

Ac. 3.34 gts Rs. 16,900/- Rs. 22,500/- Rs. 5,600/-

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

evidence, it is the contention of the appellants that the LAO had

adopted an unduly conservative approach in fixing the market value at

Rs.16,900/- per Acre, without properly appreciating the sale instances

of proximate period and the potential of the acquired lands. The

appellants assert that Ex.A1, a registered sale deed dated 09.05.1994,

clearly demonstrates that similar lands in the vicinity were sold at

Rs.1,42,500/- per Acre and that Ex.B2, the award relied upon by the

respondent itself shows the prevailing market value at Rs.90,000/- per

Acre. The appellants, therefore, contend that the Reference Court

erred in granting only a marginal enhancement to Rs.22,500/- per acre,

ignoring the fertility, irrigational nature and high commercial potential

of the acquired lands.

24. In the light of the above, the crucial question that arises for

consideration is whether the Reference Court was justified in

restricting the enhancement to Rs. 22,500/- per acre, despite the clear

evidentiary support under Exs.A1 and B2 indicating higher market

value. It must therefore, be examined whether the Reference court

failed to assign due weight to fertility, potentiality and advantageous

location of the acquired lands and whether the appellants are entitled

to a further enhancement of compensation consistent with the

prevailing market value as referred in the contemporaneous sale

transactions.

IX. ANALYSIS AND FINDINGS:

25. We have carefully considered the rival submissions advanced

by the learned counsel for the Appellants/Claimants and the learned

Government Pleader for Appeals appearing for the Respondent. We

have also examined the entire record of the case, including the

pleadings, the oral evidence of PWs 1 and 2 and RW1 and

documentary evidence in the form of Ex. A1, as well as Exs. B1 and

B2 relied upon by the LAO.

26. At the outset, it is not in dispute that the acquired lands,

admeasuring Ac.3.34gts., were acquired for the purpose of

construction of a check dam pursuant to a notification issued under

Section 4(1) of the Act dated 29.10.2001. The claimants contended

that the Reference Court erred in not placing reliance upon Ex. A1, the

certified copy of sale deed Document No.153 of 1994 dated

09.05.1994, under which One Acre of land in Nashkal village was

sold for Rs.1,42,500/-. It is their case that the acquired lands are

adjacent to the lands covered under Ex. A1, similar in fertility and

nature, and are advantageously situated near National Highway

No.202 connecting Hyderabad and Warangal. Therefore, it is

contended that the Reference Court ought to have determined the

market value in consonance with the rate reflected under Ex. A1.

27. The appellants/claimants further contended that the Reference

Court ignored the Award i.e. Ex. B2 filed by the respondent, which

indicated that the prevailing market value at the time of acquisition

was Rs.90,000/- per acre. It is urged that despite the said documentary

evidence being on record, the Reference Court enhanced the value

only to Rs.22,500/- per acre, which does not truly represent the

prevailing market value of the acquired lands. Having regard to the

material placed on record, it is evident that while Ex. B2 itself reflects

a substantially higher market value, the Reference Court adopted a

conservative approach, resulting in fixation of compensation at a

lower rate. Considering the comparative sale instance under Ex. A1

and the proven fertility and potentiality of the lands, this Court finds

that the rate of Rs.22,500/- per acre determined by the Reference

Court substantially undervalues the acquired lands. Therefore, the

contention of the appellants seeking further enhancement is well-

founded, and the claim for fixation of compensation at a higher rate is

justified.

28. It is pertinent to note that Section 23 of the Land Acquisition

Act, 1894 categorically specifies 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 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).] on such market value, in consideration of compulsory nature of the acquisition."

29. The Honourable Supreme Court in Kapil Mehra v. Union of

India 1 laid down the method of determination of the market value and

it was observed as under:

"10. Market Value: First question that emerges is what would be the reasonable market value which the acquired lands are capable of fetching. While fixing the market value of the acquired land, the Land Acquisition Officer is required to keep in mind the following factors: (i) existing geographical situation of the land; (ii) existing use of the land; (iii) already available advantages, like proximity to National or State Highway or road and/or developed area and (iv) market value of other land situated in the same locality/village/area or adjacent or very near to the acquired land.

11. The standard method of determination of the market value of any acquired land is by the valuer evaluating the land on the date of valuation publication of notification Under Section 4(1) of the Act, acting as a hypothetical purchaser willing to purchase the land in open market at the prevailing price on that day, from a seller willing to sell such land at a reasonable price. Thus, the market value is determined with reference to the open market sale of comparable land in the neighbourhood, by a willing seller to a willing buyer, on or before the date of preliminary notification, as that would give a fair indication of the market value."

30. Though Ex. A1 pertains to Nashkal village and not Dharmapur

village, the evidence on record establishes that the lands are in close

proximity, approximately within a distance of 0.5 to 1 kilometre and

share similar characteristics, such as fertility and capable of yielding

commercial crops. Therefore, Ex. A1 constitutes a valid and reliable

(2015) 2 SCC 262

comparative exemplar for determining the market value. Accordingly,

this Court holds that Ex. A1 is a relevant and dependable indicator for

fixing the proper compensation rate.

31. In Union of India v. Harinder Pal Singh and Others 2, the

Honourable Supreme Court has laid down the principle, wherein it

was held that lands situated in different villages, but forming a

contiguous or comparable area, can be treated as a single unit for the

purpose of fixing market value. The Court observed as follows:

"15. We have carefully considered the submissions made on behalf of the respective parties and we see no justification to interfere with the decision of the Division Bench of the Punjab and Haryana High Court which, in our view, took a pragmatic approach in fixing the market value of the lands forming the subject-matter of the acquisition proceedings at a uniform rate. From the sketch plan of the area in question, it appears to us that while the lands in question are situated in five different villages, they can be consolidated into one single unit with little to choose between one stretch of land and another. The entire area is in a stage of development and the different villages are capable of being developed in the same manner as the lands comprised in Kala GhanuPur where the market value of the acquired lands was fixed at a uniform rate of Rs 40,000 per acre. The Division Bench of the Punjab and Haryana High Court discarded the belting method of valuation having regard to the local circumstances and features and no cogent ground has been made out to interfere with the same.

16. In our view, in the absence of any contemporaneous document, the market value of the acquired lands of Village Kala Ghanupur which were acquired at the same time as the lands in the other five villages was correctly taken to be a comparative unit for determination of the market value of the lands comprising the lands forming the subject-matter of the acquisition proceedings under

(2005) 12 SCC 564

consideration. No interference is, therefore, called for in these appeals and they are all dismissed without any order as to costs".

32. Applying the above principle to the facts of the instant case, this

Court finds that although Ex. A1 pertains to Nashkal village and the

acquired lands are situated in Dharmapur village, both the lands are

adjacent, share similar nature and characteristics such as fertility,

irrigation facilities, and commercial potential. The evidence on record

clearly establishes that the acquired lands form part of the same

"valuation belt" and are capable of being put to identical agricultural

and commercial use. Therefore, Ex. A1 provides a valid and reliable

comparative basis for determining the fair market value of the

acquired lands.

33. In addition, this Court also takes judicial notice of the decision

of Division Bench of this Court rendered in G. Venkat Reddy v. The

State of Andhra Pradesh3, wherein, the State, vide notification

dated 29.05.1999, had acquired the land to an extent of Ac.5.00 in

S.No.461 of Raghunathpally Village, Zaffergadh Mandal, for the

construction of the very same check dam near Dharmapur village. The

LAO had initially fixed the compensation at Rs.14,300/- per acre,

L.A.A.S. No.1248 of 2005 decided on 21.10.2013

however, upon seeking reference, the compensation was enhanced to

Rs.25,000/- per acre by the Reference Court after considering the

prevailing market rates, documentary evidence of comparative sale

deeds, the nature and fertility of the lands. Ultimately, this Court in an

appeal filed by the claimants/land owners, had enhanced the

compensation to Rs. 1,00,000/- per acre along with all the statutory

benefits on the basis of Ex.A1.

34. Therefore, it is to be noted that the lands in Raghunathpally

were similar in nature, productivity, and commercial potential to the

lands in Dharmapur village. Applying the above said reasoning to the

present case, this Court finds that the lands acquired in Dharmapur

village, although located in a different village, are contiguous to

Nashkal village, abutting the lands covered under Ex. A1, and possess

comparable characteristics such as irrigation facilities, fertility and

capacity for raising commercial crops. Therefore, by applying the

principle of comparative assessment laid down in G. Venkat Reddy's

case (supra), this Court is of the view that fixation of the market

value of the present acquired lands at Rs.1,00,000/- per acre, would be

fair, reasonable, thereby ensuring uniformity and parity in

compensation for lands possessing similar fertility and potential.

X. CONCLUSION:

35. In view of the foregoing discussion, we find that the lands

acquired in Sy. No.229 of Dharmapuram village are contiguous to

Nashkal village lands and are similar in all relevant characteristics,

such as fertility, irrigation facilities, and potential for raising

commercial crops. The said lands are also advantageously situated in

close proximity to the National Highway connecting Hyderabad and

Warangal. The comparative sale deed marked as Ex. A1 coupled with

the precedent set in G. Venkat Reddy's case (supra) convincingly

supports the appellants' claim for enhancement. The enhancement of

the compensation to Rs.22,500/- per acre by the Reference Court,

though an improvement against the award passed by LAO,

nevertheless it failed to represent the actual market value having

regard to the fertility of the land, income-generating capacity, and

their proximity to developed areas and the National Highway.

36. In view of the above circumstances, this Court holds that the

true market value of the acquired lands, as on the date of Notification

under Section 4(1) of the Act, should reasonably be fixed at

Rs.1,00,000/- per acre, as claimed by the appellants.

37. As regards the statutory benefits, appellants/claimants shall be

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

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

together with 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:

38. In the light of the foregoing discussion, the appeal filed by the

appellants/claimants is allowed, enhancing the compensation for the

acquired land from Rs.22,500/- to Rs.1,00,000/- per acre. The

Claimants shall be entitled to all statutory benefits permissible under

the Act, including solatium, additional market value and interest as

directed herein. Accordingly, the Appeal is allowed. In the

circumstances of the case, 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