Judgment :- 1. These appeals are from the judgment and decrees in L.A.O.Ps. Nos. 44, 45, 46, 47, 50, 52 and 69 of 1955 of the Subordinate Judge's court, Kozhikode, respectively. The learned judge who disposed of the original petitions by one judgment, enhanced the compensation. The State has therefore preferred these appeals. 2. The plots acquired in these cases are the sites of shop buildings given on rent by the respective owners. The acquisition was for the purpose of widening the trunk road from Calicut to Madras. The Notification under S.4 was made on 8-12-1954 and the declaration under S.6, on 15-12-1954. It is not disputed that the sites acquired were in an important part of the municipal town of Kozhikode. 3. The mode of valuation adopted by the Land Acquisition Officer was to assess the value of the land and the materials used for the buildings thereon. The learned Subordinate Judge held that this was not the proper method and he awarded compensation on the basis of the capitalised rental value of the buildings, the same multiple, namely, 35 being adopted in all the cases. Though the ground taken in the memorandum of appeal in each case is that the value of the land and the materials of the buildings alone should have been awarded, the learned Government Pleader who appeared for the State fairly conceded that the proper method was to capitalise the net income from rent; but according to him, the multiple adopted by the learned judge was too high and instead of 35 years, 15 years' purchase should have been awarded as compensation. The only point for decision therefore is the multiple to be used in arriving at the sum awardable as compensation. 4. Before considering the evidence it may be observed that possession of the land and buildings was taken under the emergency powers vested in the Government and that the buildings had been demolished at the time the reference was made. The buildings were valued by an engineer before the same Were demolished but the State did not care to examine the engineer whose evidence would have been useful regarding the age and condition of the several buildings and other relevant factors. Instead of examining him, a draftsman who had nothing to do with this was examined. The buildings were valued by an engineer before the same Were demolished but the State did not care to examine the engineer whose evidence would have been useful regarding the age and condition of the several buildings and other relevant factors. Instead of examining him, a draftsman who had nothing to do with this was examined. The Land Acquisition Officer who was examined as the first witness for the State in L.A.O.P. No. 44 of 1955 had not taken any part during the initial stages so that he too could not give useful evidence. 5. As pointed out by this court in State of Madras v. Aissabi (1957 KLT. 1076) and State of Kerala v. Neelakantan Vydiar (1960-II-KLR. 579) there is a certain amount of arbitrariness in fixing the number of years' purchase to be adopted for the purpose of capitalisation of rent and though buildings may not exactly be in a position of gilt-edged security as pointed out in the latter decision, the return yielded by gilt-edged securities has been taken as a relevant factor in deciding the value of the property. The age of the building is also a material factor. In taking the annual rental value of the building, the rent obtained by the owner on the date of the notification is often taken as the basis for capitalisation without taking into account the potentiality of the land acquired. In supporting the decree under appeal, Mr. Surianarayana Iyer, learned counsel for the respondents in A.S. Nos. 602 and 607, urged that in taking the rental value; the potentiality, of the land should not be overlooked. The argument was that the buildings on the land acquired were given on rent years ago and that the rent then fixed could not be taken as a correct index of the potential value of the land, as rent was controlled, first by executive orders and later by ; legislative enactments. Reliance was placed by him on the decision of the Privy Council in Gajapatiraju v. Revenue Divl. Officer, (AIR. 1939 P.C. 99). Lord Romer observed: "It is perhaps desirable in this connexion to say something about this expression "the market .price." There is not in general any market for land in the sense in which one speaks of a market for shares or a market for sugar or any like commodity. Officer, (AIR. 1939 P.C. 99). Lord Romer observed: "It is perhaps desirable in this connexion to say something about this expression "the market .price." There is not in general any market for land in the sense in which one speaks of a market for shares or a market for sugar or any like commodity. The value of any such article at any particular time can readily be ascertained by the prices being obtained for similar articles in the market. In the case of land, its value in general can also be measured by a consideration of the prices that have been obtained in the past for land of similar quality and in similar positions, and this is what must be meant in general by "the market value" in S.23. But sometimes it happens that the land to be valued possesses some unusual, and it may be, unique features as regards its position or its potentialities. In such a case the arbitrator in determining its value will have no market value to guide him, and he will have to ascertain as best he may from the materials before him, what a willing vendor might reasonably, expect to obtain from a willing purchaser, for the land in that particular position and with those particular potentialities. For it has been established by numerous authorities that the land is not to be valued merely by reference to the use to which it is being put at the time at which its value has to be determined (that time under the Indian Act being the date of the notification under S.4 (1), but also by reference to the uses to which it is reasonably capable of being put in the future." This principle was followed by the Calcutta High Court in Mohd. Ekaramal Haque v. Bengal Province AIR. 1950 Cal. 83). It was held: "Therefore, in deciding upon fair rent, for the purpose of S.23, Land Acquisition Act, it must be a notional fair rent of a hypothetical tenant, and the assessment of such notional fair rent must be based upon a consideration which does not take into account restrictions temporarily imposed by any restrictive executive order or legislation like Rent Control Order, etc. The assessment in practice should be as if it was of a house of like nature let out for the first time to a tenant who is hot compelled to take it up and by a landlord who is not compelled to let it out. The practical method will be to assess rent as if it was a new house for the first time let out on that date." There was an appeal to the Supreme Court from the final decision in the above cage, and it is reported in AIR. 1959 SC. at page 488. It was held: "The principles on which compensation is to be ascertained under the provisions of S.19, Defence of India Act, are the same as those given in S.23(1), Land Acquisition Act, -1894, and one of the principles of ascertaining compensation is to evaluate the potentialities of the land of the premises as the case may be which differ under different circumstances." This principle is also to be kept in view in awarding compensation. 6. It is seen from reported decisions of the Madras High Court that the rental value capitalised for 331/3 years has been awarded for such sites in towns. Thus, in Land Acquisition Officer v. Subba Rao (AIR. 1941 Mad. 684) 331/3 years' purchase was taken as proper compensation in respect of a plot of land in the municipal town of Kozhikode. The same multiple was adopted in Radhakrishna v. Province of Madras (AIR. 1949 Mad. 171) which was in respect of land in the municipal town of Kumbakonam. In State of Madras v. Aissabi (1957 KLT.1076) this court also adopted the same rule regarding the acquisition of a plot of land in Kozhikode. It was not disputed that at the time of the acquisition which has given rise to these appeals, the return from gilt-edged securities was about 31/2 per cent. It was urged on behalf of the State that most of the buildings were erected some years ago and that there was no justification for adopting the rule of 331/3 years' purchase. This, no doubt, is a factor to be taken into consideration, but at the same time, the potential value of the land, which was not taken into account by the court below, cannot be ignored. This, no doubt, is a factor to be taken into consideration, but at the same time, the potential value of the land, which was not taken into account by the court below, cannot be ignored. The Land Acquisition Officer who was examined in the court below admitted that but for the Rent Control Order, all these buildings would have yielded a much higher rent, in some cases even double the present rent. Thus in A.S. No. 602 and No. 607, the claimant deposed that but for the Rent Control Order he could get twice the present rent. He was not cross-examined oh the point. The claimant in A.S. No. 604 said that the monthly rent at the time of the acquisition was Rs. 17-50 but that the building could have been given on double this rent but for the Rent Control measures. The Land Acquisition Officer admitted that a higher rent than what the landlord was getting could be obtained. The same is the case regarding A.S. No. 606 also. Except in one case, with which we shall deal separately, it could not be said that the buildings were very old. The potential value of the land is more than sufficient to compensate this factor. In calculating the net annual rent, the rent for three months should be deducted for taxes and maintenance and the balance taken for the purpose of capitalisation. 7. A.S. No. 601 must be viewed somewhat differently from the other cases. The first claimant in this case was examined as Cw.1. The land acquired belonged to his tarwad and he became the karnavan three years before he gave evidence. He was 74 years old at that time, and he admitted that; the present building was in existence ever since he could remember and that neither he nor the previous karnavan had made any repairs to the building. The learned judge did not consider this aspect when he fixed the compensation. We feel that some reduction is necessary in this case and would therefore reduce it to 25 years' purchase. 8. In A.S. Nos. 602 to 607 of 1958 we consider 331/3 years' purchase as proper compensation and reduce the amounts awarded accordingly. 9. In the result all the appeals are partly allowed. The compensation awardable in A.S. No. 601 is fixed at 25 years' purchase, taking the rent for nine months as the net annual rent. 8. In A.S. Nos. 602 to 607 of 1958 we consider 331/3 years' purchase as proper compensation and reduce the amounts awarded accordingly. 9. In the result all the appeals are partly allowed. The compensation awardable in A.S. No. 601 is fixed at 25 years' purchase, taking the rent for nine months as the net annual rent. In A.S. Nos. 602, 603, 604, 605, 606 and 607 the compensation is fixed at 331/3 years' purchase. The appeals are dismissed in other respects. Final orders will be passed by the court below in each case on this basis, taking into account the amounts awarded by the Land Acquisition Officer. The claimants will get the statutory solatium of 15% on the respective sums awarded and interest at 4 per cent per annum from the dates on which the State took possession. Proportionate costs allowed in all the appeals. 10. Send down the records as early as practicable. Partly allowed.