JUDGMENT Mithan Lal, J. - These are two connected first appeals u/Cl. (f) of sub S.(l) of S. 19 of the Defence of India Act against the same award dated 30-5-1948 given by Sri S.Z. Rahman arbitrator appointed u/Cl. (b)' of Sub-section (1) of S. 19 of the said Act. 2. Briefly stated, the facts are that the District Magistrate Banaras by his order dated the 29th October 1942 requisitioned (sic)02 acres of land covered by twenty shops in Topi Patti in Banaras town. Later on 26-4-1945 the Additional District Magistrate, Varanasi, passed an order u/R. 75(a)(2) of the Defence of India Rules for permanent acquisition of the said land with the shops. Out of the said shops fifteen lying to the north belonged to Sri Jagannath Pd. and another and are the subject matter of First Appeal No. 337 of 1946, while the other five lying to the south belonged to Sri S.N. Misra and another, Appellants in First Appeal No. 2/1947. The site of the shops in a narrow strip of land, and, according to the arbitrator who also made a local inspection, the maximum width of the land is 11 ft. on the northern side while the width of the southern most shop is only 2-1/4 ft. 3. The shops with the land were admittedly acquired for the Municipal Board, Banaras, for the public purpose of widening the main road leading to the chowk bazar. Soon after acquisition the shops were removed sometime in March 1943. 4. In the proceedings u/s 19 of the said Act Sri S.N. Misra claimed a sum of Rs. 30,000 as compensation, while the Appellants in F.A. No. 2 of 1947 claimed a sum of Rs. one lac before the Collector. The Collector determined the market value of the land at Rs. 20,320 under para 477 of the Revenue Manual. Since there was no agreement between the parties, the case was referred to the arbitration of Judge, Small Cause Court, Banaras. 5. In the proceedings before the Arbitrator the Appellants maintained their ground of objection that the land situated in the vicinity of chowk bazar was of great value because of its being a business centre. Sri S.N. Misra Appellant claimed a much higher figure of compensation and the total amount claimed by him came to Rs. 2,47,361-14-0 for the following items: 6. (Omitted) 7. Sri S.N. Misra Appellant claimed a much higher figure of compensation and the total amount claimed by him came to Rs. 2,47,361-14-0 for the following items: 6. (Omitted) 7. Before we go into the question of the determination of the fair market value of the acquired property, it will be worth while to make a mention as to what in law is considered to be the fair market value. S. 23 and 24 of the Land Acquisition Act lay down in a condensed form the principles which are to be followed in determining the fair market value of the property which is the subject matter of acquisition. The property in this case had been acquired under the provisions of the Defence of India Act and so the Arbitrator had to determine the compensation of the property u/s ub Cl. (i) of Cl. (e) of sub-S (1) of S. 19 of the Act. Sub-clause (i) of Cl. (e) aforesaid makes the provisions of Sub-section (1) of S. 23 of the Land Acquisition Act applicable so far as the same can be made applicable Consequently, the criterion for the determination of the fair market value of the property is the same as u/s 23(1) of the Land Acquisition Act. 8. The fair market value is the price which a willing vendor might reasonably expect to obtain from a willing purchaser. The increased value, if any, of the property which may result as a consequence of acquisition on execution of the scheme or the sentimental value placed upon the property by the vendor are factors which cannot be taken into consideration in assessing the fair market price of the property acquired. 9. A Division Bench of the Punjab High Court in the case of Surjan Singh Vs. The East Punjab Government, AIR 1957 P&H 265 observed at page 271 as follows: It is well settled that u/s 23(1) of the Land Acquisition Act the market value is to be determined by considering what price a willing owner would on the date of acquisition be able to obtain from a willing purchaser. 10. Their Lordships of the Supreme Court have also held, in the case of Haji Mohammad Ekramul Haq Vs. 10. Their Lordships of the Supreme Court have also held, in the case of Haji Mohammad Ekramul Haq Vs. The State of West Bengal, AIR 1959 SC 488 that the principles on which compensation is to be ascertained under the provisions of S. 19 of the Defence of India Act are the same as those given in S. 23(1) of the Land Acquisition Act 1894 and that one of the principles of ascertaining compensation is to evaluate the potentialities of the land or the premises, as the case may be, which vary with circumstances. Their Lordships, while dealing with the question of potentialities, further observed that the value of potentialities is to be ascertained by the arbitrator as best as he can from the materials before him. Market value of land depends on various circumstances. For example, the market value of land in urban areas depends on whether it is covered with buildings or is close to inhabited areas with potentiality for use as a building site or is used for agriculture or horticulture or such other purpose. It may be stated that the situation, nature and potentialities of land have to be taken into consideration for assessment of fair market price. In this case, since the land in dispute is already built upon we have only to assess the market value as for land covered by building and have nothing to do with the potentialities. In the case of land covered by buildings the structures on the land are subject to decay for various reasons including natural wear and tear. This will be quite unlike land (without buildings) which remains uncharged and unaffected by efflux of time. Each building has its own life which may even be shortened by neglect or by force majeure. Gradual decay and passing of time would thus eat up the very capital invested in land covered with buildings and a time may come when the building may cease to have any economic existence and the capital invested may cease to be of any account. The value of such property will, therefore, depend upon the age of the constructions, their condition at the time of acquisition and their future expected life. The value of such property will, therefore, depend upon the age of the constructions, their condition at the time of acquisition and their future expected life. The situation of the land acquired affects its market-value, but this point would have a greater importance in cases of land without building than in cases of land covered with buildings, because if the acquired house or shop is situated in a busy or important the city, it will have a higher rental value locality of and consequently a higher price. To us it seems that the situation of the building acquired would be reflected in its rental value which in a better situated house will fetch more rent than a similar type of house in an unimportant locality, and consequently the question of situation is not of much importance in determining the market value of land covered with buildings. 11. So far as the potential value of the land goes, it has been accepted by various authorities in India as already observed by us, that in determining the market value for purposes of assessment of compensation under the Land Acquisition Act the potential value or the special adaptability of the land should be taken into consideration at the time of determination of the market value. According to the principle enunciated in the Privy Council case of AIR 1925 91 (Privy Council) , it is the value to the seller of the property in its actual condition at the time of expropriation with all its existing advantages and with all its possibilities excluding an advantage due to the carrying out of the scheme for the purpose for which the property is acquired which has to be taken into consideration for purposes of potential value. 12. The doctrine of potential value has to be accepted with certain limitations because there is always a certain amount of conjecture on the part of the owner of the property acquired about future potentialities, and so it has to be guarded against that the owner of the property does not put up a claim founded upon imaginative schemes of utilisation which are more speculative in character than real. Sometimes such imaginative schemes also relate to too remote a possibility of adaptability or utilisation of the property because of the alleged potential value. We have to see therefore whether the shops acquired had any potential value. 13. Sometimes such imaginative schemes also relate to too remote a possibility of adaptability or utilisation of the property because of the alleged potential value. We have to see therefore whether the shops acquired had any potential value. 13. In this case the constructions on the land acquired were very old and, according to the arbitrator who inspected the locality, the constructions must have been about 50 to 70 years old or may be more. This is what he judged from the walls standing on the land in dispute at the time of inspection, though the shops had actually been demolished. A mere look at the photograph, Ex. A 1, will also give an idea of the nature and condition of the constructions, and as observed by us earlier there was no roof over the shops but only a sloping shed. The land itself is a narrow strip with a width of 21/4 ft. at the southern end and 11 ft. at the north. Such land or such constructions were rightly held by the arbitrator not to have any potential value. The Appellants tried to prove by evidence that the shops could be rebuilt and even a second storey could be raised, but all this would have required a good deal of money. To us it seems that such a speculative development of the building at heavy cost cannot be treated to constitute any potential value in the property. Moreover, further evidence was required on behalf of the Appellants to prove what actual profits they would have derived after building the second storey in relation to the cost incurred. This has not been done. The alleged potential value urged on behalf the Appellant appears to be in the nature of speculation and, in any case, it is too remote, and so we hole that the arbitrator was right in not awarding any extra compensation on account of any potential value of the property. 14. In view of what has been stated above, we accept the finding of the arbitrator that the only proper method for determination of the market value of the property is the capitalisation of the net annual profits. We also uphold the finding of the arbitrator that the fair market value of the property acquired should not exceed twenty times the annual net profit. We also uphold the finding of the arbitrator that the fair market value of the property acquired should not exceed twenty times the annual net profit. The Appellants' Learned Counsel contended, relying upon the exemplars which we have already considered, that the multiple to be applied to the gross rental should be raised to at least fifty times, but we do not find ourselves in agreement with the Appellants' counsel. We have already held that all exemplars from 1944 to 1946 cannot be treated as exemplars because they relate to subsequent years in which the value of the property had gone sufficiently up. So far as the other exemplars go, the prices appear to be inflated for the reasons already given and consequently none of the exemplars can be taken to afford any criterion for fixing the multiple or the capitalised value. 15. The Learned Counsel for the Appellants also pointed out that the Land Acquisition Officer, when required by the then Collector, made a recommendation for determining the market value of the property at Rs. 40,640. The District Magistrate disagreed. He fixed the market value of the property at twenty times the gross rental which according to him was Rs. 1760. After his transfer the other District Magistrate determined the value at Rs. 20,320. The recommendation of the Land Acquisition Officer originally made to the Collector cannot be relied upon in any case the District Magistrate valued the property at twenty times the annual rental value. But he committed a mistake in taking the gross annual rental value for determining the multiple instead of the net annual rental. Another point which has been put forth by the Appellants counsel in F.A. No. 337 of 1946 is that the Executive Officer, Banaras Municipal Board, by means of a letter dated 12/13-5-1930 determined the compensation of five shops at Rs. 7,200. But this letter, again, can not be taken to be any criterion and in no case can it be taken to be ground for fixing a higher multiple or a higher price than the fair market value. Having regard to the condition of the structures standing on the land, that is the construction of the shops in dispute, their age as well as the fact that all the twenty shops had such a small gross rental value as of Rs. Having regard to the condition of the structures standing on the land, that is the construction of the shops in dispute, their age as well as the fact that all the twenty shops had such a small gross rental value as of Rs. 1767 per year, the fair marker price of the acquired property could not exceed twenty times the net annual rental of the property. The Arbitrator rightly determined the market value of the property of the Appellants in F.A. No. 2 of 1947 at Rs. 23, 673 and the fair market valve of the property of Appellants in F.A. No. 337/46 at Rs. 6017. 16. The Arbitrator has already awarded interest in the sum of Rs. 2959 to the Appellant in F.A. No. 2 of 1947 and a sum of Rs. 751 to the Appellants in F.A. No. 337 of 1946 from the date of requisition to the date of acquisition. Interest was awarded at 5 per cent perannum having regard to the rent which the acquired shops were yielding when in existence. The appellants claimed the rent during this period, but it seems that the shops having been demolished sometime in March 1943 the Arbitrator would not have been justified in awarding rent of the property which was not existing. He rightly awarded interest at 5 per cent per annum, which is almost the same as would have been the rent of the shops if they had existed. Nothing more can be added to it. 17. The Appellants Learned Counsel has claimed 15 per cent for compulsory acquisition, but as the acquisition has been done u/s 19 of the Defence of India Act compensation for the property acquired could only be given under the provisions of sub clause (i) of clause (e). That clause specifically lays down that in making the award the Arbitrator shall have regard to the provisions of Sub-section (1) of S. 23 of the Land Acquisition Act. Solatium for compulsory acquisition can only be awarded u/s ub-S. (2) of S. 23 of the Land Acquisition Act, but the provisions of that Sub-section have not been made applicable in the matter of determination of compensation when property is acquired u/s 19 of the Defence of India Act. As held in the case of District Collector of Krishna Vs. Solatium for compulsory acquisition can only be awarded u/s ub-S. (2) of S. 23 of the Land Acquisition Act, but the provisions of that Sub-section have not been made applicable in the matter of determination of compensation when property is acquired u/s 19 of the Defence of India Act. As held in the case of District Collector of Krishna Vs. Pulavarthi Viswanadam and Others, AIR 1953 Mad 867 , the specific mention of Sub-section (1) impliedly excludes the application of sub-S (2). We do not agree with the Learned Counsel that because the provisions of Sub-section (2) of S. 23 have not been abrogated by S. 19 of the Defence of India Act, 15 per cent compensation for compulsory acquisition is awardable. When under the Defence of India Act Sub-section (1) of S. 23 has been made specifically applicable while Sub-section (2) has not been made applicable, it can only mean that the provisions of Sub-section (2) of S. 23 have been excluded. It was thus not open to the Arbitrator, nor is it open to us, to award solatium of 15 per cent for compulsory acquisition. 18. The Appellants' Learned Counsel also claimed interest on the difference between the price offered by the Collector and the price determined by the Arbitrator. There is no provision in the Defence of India Act like that in S. 28 of the Land Acquisition Act, but it seems to us that interest can still be awarded in equity on the difference of the full value of the property and the value offered by the Collector. In a similar case the Madras High Court held that when land is acquired under the Defence of India Act, the moment the property is taken away from a party, he is entitled to get its value as 'quid pro quo.' Where full value has not been offered by the Collector and on the difference between what was offered by the Collector and what is now fixed by the Arbitrator, the owner of the land is entitled to get interest. This appears to be a sound principle because when a property is acquired the owner must have its full value and when less price is offered the owner should be compensated by awarding interest The Collector in this case had offered Rs. This appears to be a sound principle because when a property is acquired the owner must have its full value and when less price is offered the owner should be compensated by awarding interest The Collector in this case had offered Rs. 20,320, though according to the Arbitrator and also according to the total value of the property of the Appellants in both the appeals will come to Rs. 29,690. The Appellants will thus get interest at 41/2 per annum on the difference between the two. The office will calculate the interest payable to each Appellant in the two cases. 19. The Arbitrator while allowing costs observed as follows: Under Rule 16(2) of the UP Defence of India (Compensation and Arbitration) Rules, 1943, the amount of compensation having been increased, the costs could be made payable by the Crown but I am of opinion that the claims of the two objectors were so extravagant that instead of obtaining costs they should pay 3/4 of Crown's costs. Out of the costs awarded to the Crown, I fix Rs. 920 for Government Pleader's fee. The objectors Nos. 1 and 2 will pay these costs in proportion of 4:4 respectively. 20. We do dot agree with the above observation of the arbitrator. It is true that the Appellants claimed an exorbitant amount and inflated their claims yet, it being a case of acquisition of property under the Defence of India Act and the price offered being less the costs should be borne by the parties throughout We order accordingly. 21. Both the appeals are allowed in part. We maintain the order of the arbitrator relating to the compensation payable to the Appellants but we set aside his order relating to costs and direct that the parties shall bear their own costs throughout. We further direct that the Appellants in both the appeals shall get interest at 41/2 per cent per annum on the difference between the compensation offered by the Collector and that awarded by the arbitrator for the period from the date, of requisition of the date of the award.