ORDER Sapre, J. – 1. This is an appeal filed by M.P. Housing Board, Ujjain, under section 54 of the Land Acquisition Act (for short called "the Act") against an award, dated 22.1.1994, passed by learned IV Additional District Judge, Ujjain, in Reference Case No. 23 of 1990. Facts relevant for the disposal of this appeal need mentioned in detail so as to appreciate the controversy both on facts and law in its proper perspective. 2. In exercise of powers conferred by section 4 of the Act, the State of M.P. issued notification on 25/27.3.1988 for acquisition of large chunk of land measuring 21.533 hectares, situated in village Makodia Aam in district Ujjain. This was followed by declaration issued under section 6 of the Act, published on 22.4.1988. The acquisition was for housing scheme made by Housing Board (appellant herein) under the Adhiniyam. The acquired land also included the land belonging to respondent society, measuring around 2.854 hectares bearing Survey No. 1493, 1494, 1495 and 1496. Then followed the proceedings for determination of compensation payable to several landowners including that of the respondents under section 11 of the Act before LAO. By award dated 6.4.1990, the LAO awarded the compensation to all landowners including the respondents at the rate of Rs. 2,48,873/- per hectare. In other words, according to LAO the market rate of land in question on the date of acquisition was Rs. 2,48,873/- per hectare. The landowner-respondents were dissatisfied with the determination made by LAO and hence they sought reference under section 18 of the Act to civil Court. It was acceded to by the Collector and accordingly, the reference out of which this appeal arises was made to civil Court. By award impugned herein, the reference Court/civil Court allowed the reference and awarded compensation to the respondent at the rate of Rs.4.50 per sq. ft. In other words, while enhancing the rate, the reference Court determined the same at Rs.4.50 per sq. ft as against what the LAO had awarded at the rate of per hectare. As a result of awarding the compensation at per sq.ft. rate by the reference Court, the compensation became just double in terms of hectare as against what was awarded by LAO. In other words, if the LAO awarded compensation at the rate of s.2,48,873/- per hectare, the reference Court, on calculation at sq.ft. As a result of awarding the compensation at per sq.ft. rate by the reference Court, the compensation became just double in terms of hectare as against what was awarded by LAO. In other words, if the LAO awarded compensation at the rate of s.2,48,873/- per hectare, the reference Court, on calculation at sq.ft. rate, enhanced the same and awarded at the rate of Rs4,84,200/- per hectare, i.e., equivalent to Rs.4.50 per sq.ft. It is against this award enhancing the compensation, the M.P, Housing Board, for whose benefit the land was acquired and who has to pay the compensation from its corpus, has felt aggrieved and filed this appeal. 3. Heard Smt. Meena Chafekar, learned counsel for the appellant and Shri M.K. Jain, learned counsel for the respondent No.1. 4. Learned counsel for the appellant, i.e., M.P. Housing Board, while assailing the very basis of the determination made by the reference Court, contended that it is not only faulty but is against the law laid down by Supreme Court in the case reported in 1997(1) JLJ 117 = (1997)2 SCC 487 [State of M.P. v. Harishankar Gael and others]. According to learned counsel when admitedly the acquired land was an agricultural land duly recorded as agricultural land in revenue records and whose compensation was determined by LAO in hectare, the reference Court committed manifest error of law in determining the rate in sq. ft. It was contended that such conversion is already held illegal by the Supreme Court in the case of Harishankar (supra). It was contended that reference Court was, therefore, under legal obligation to have determined the market value of land on the basis of per hectare alike LAO and should have seen as to whether any case for enhancement in per hectare is made out on evidence adduced? Learned counsel contended that in the absence of any evidence being adduced by the claimant landowner to prove the market rate of the land, no case whatsoever was made out for any enhancement, what to say enhancement in terms of sq. ft. Learned counsel maintained that the rate if calculated in sq .ft. as against what was awarded by LAO, is seen in its right perspective then it is wholly arbitrary and illegal being against the provisions of section 23 of the Act and the principle laid down by Supreme Court in several cases including Harishankar Goel 's case. ft. Learned counsel maintained that the rate if calculated in sq .ft. as against what was awarded by LAO, is seen in its right perspective then it is wholly arbitrary and illegal being against the provisions of section 23 of the Act and the principle laid down by Supreme Court in several cases including Harishankar Goel 's case. In reply, learned counsel for respondent, while supporting the impugned award contended that looking to the nature of land, its situation, location, potentiality and rate which willing purchaser is likely to offer and the evidence led in the form of sale-deeds, the rate determined by the reference Court is just, reasonable and proper. Learned counsel lastly contended that having regard to totality of the circumstances brought on record by means of oral and documentary evidence, the appeal deserves to be dismissed. 5. Having heard learned counsel for the parties and having perused record of the case, we are of the considered view that appeal deserves to be partly allowed. 6. Law on the point as to how the compensation in such cases should be determined is fairly well settled by several decisions of Supreme Court cited at the bar. What ultimately matters is their application to the facts of each case and appreciation of evidence adduced by the parties. 7. In somewhat similar circumstances, the issue came up for consideration before the Supreme Court in the case of Harishankar Goel (supra). It is in this case, their Lordships held that conversion of rate of hectare in sq. ft. for determining the compensation payable to landowner is not legal. It is in the words of Supreme Court "wrong principle" and should not be applied unless facts so demand. This is what their Lordships held in para 3. of Goel's case (supra). "Para 3. The question, therefore, is what would be the reasonable market value the lands are capable to fetch as on the date of the notification had it been sold in the open market to a willing purchaser? It is seen that when 33 and odd bighas of land was sought to be 'sold in the open market, no willing pm dent purchaser would with any credulity agree to purchase it on sq. ft. basis. It is seen that when 33 and odd bighas of land was sought to be 'sold in the open market, no willing pm dent purchaser would with any credulity agree to purchase it on sq. ft. basis. It is well-settled law that the Judge determining compensation in a compulsory acquisition should eschew feats of imagination; sit in the armchair of a willing purchaser and put a question to himself whether as a willing prudent purchaser, he would offer the same price sought to be awarded for the acquired land. It would, therefore, be clear that the learned Judges did not apply correct legal tests to determine the compensation but determined the compensation on the basis of sq. ft. which is illegal per se. We, therefore, hold that the learned Judges had applied the wrong principle of law in determining compensation. " 8. Again in somewhat similar facts the issue came up for consideration before the Supreme Court in the case reported in (2003)1 SCC 354 [Kasturi v. State of Haryana]. It is in this case their Lordships held that there lies a distinction between a developed area and an area having a potential value though yet to be developed. Their Lordships ruled that in respect of agricultural land or undeveloped land which has a potential value for housing or commercial purpose, normally 1/3rd amount of compensation has got to be deducted out of the amount of compensation payable on the acquired land subject to certain variations depending on its nature, location, extent of expenditure involved for development and the area required for roads and other civil amenities to develop the land so as to make the plots available for residential or commercial purpose. 9. When we examine the evidence adduced by the parties in this reference, it is noticed that respondent did not lead any evidence to show how much expenditure they have incurred in developing the land in question, i.e., their land (2.854 hectares). In order to show that the land in question was actually a developed land on the date of acquisition, it must be proved with adequate evidence that all necessary development activities as are taken note of by Supreme Court in the case of Kasturi (supra), must exist as a fact on the land prior to date of acquisition. In order to show that the land in question was actually a developed land on the date of acquisition, it must be proved with adequate evidence that all necessary development activities as are taken note of by Supreme Court in the case of Kasturi (supra), must exist as a fact on the land prior to date of acquisition. It is only then, the land can be regarded as a developed land else it will be regarded as an agriculture land or undeveloped land but having potential value for housing. We are, therefore, of the opinion that the land in question was not a developed land, much less fully developed land for housing on the date of acquisition but it continued to be an undeveloped land having potential value for housing. 10. In our considered view, therefore, the reference Court/civil Court committed an error in applying the rate of sq. ft. for determining the compensation for the land in question. It was against the law laid down in the case of Harishankar Goel. In the absence of any evidence showing that the entire land is a diverted land thereby changing its original purpose and that too making a fully developed one and could be actually sold in sq. ft. before the date of acquisition due to its change of use, there was no scope for the reference Court to have applied the sq. ft. rate to the land for determining the compensation. 11. We do not agree to the submission urged by learned counsel for the respondent landowner when he contended that since that land in question was a developed and diverted land, the compensation could be awarded in sq. ft. Firstly, as held supra, it was not a developed land. Secondly, no order for diversion was filed by landowner to show that revenue authorities allowed the diversion as per procedure prescribed under the Code and that respondent further deposited diversion charges as per the order of diversion. In our opinion, mere obtaining of licence for colonization from the office of Collector does not make the land a diverted one. It only enables a person to go for diversion. 12. In our opinion, mere obtaining of licence for colonization from the office of Collector does not make the land a diverted one. It only enables a person to go for diversion. 12. We also do not agree to the submission urged by learned counsel for the respondent when he contended that sale-deeds (Exhibits P-20 to P-24 and Exhibits P-26 to P-32) filed by the respondents should be made basis for determining the rate of land in question. In the first place, these sale-deeds (Exhibit P-20 to P-24) cannot be regarded as voluntary and real sale-deeds for determining the market rate of land. Secondly, as is clear, these sale-deeds are executed by the respondents in favour of their own members. Thirdly and with this background, these cannot be called sale-deeds between willing vendor and willing vendee in open market but they are in reality in the nature of allotment of plots by a society to their own members with no element of sale as such. And lastly, rates (Rs.5/- per sq. ft.) mentioned by the respondents in these sale deeds, or we may call allotment deeds, is their own rate which they have invented for the benefit of their members. It is for all these reasons, these deeds (Exhibits P-20 to P-24) are of no significance and hence, could not have been made basis for determining the real market value of the land, nor could they be regarded at par with sale-deeds. Similarly, so far as sale-deeds Exhibits P-26 to P-31 are concerned, they too cannot be made basis for deciding the real market value, Firstly, all these sale deeds are of very small plots, i.e., for the area measuring 10 RA (1000 sq. ft.), 200 RA (20,000 sq.ft.), 0.08 RA etc., whereas the land in question is a big chunk, i.e., total acquired land is 21.533 hectares whereas land belonging to respondent is 2.854 hectares. It is for these reasons, it is not legally proper to solely rely upon these sale deeds for determining the rate of land and that too in sq.ft. 13. It is in the light of these undisputed facts or, we may say overwhelming evidence brought on record land keeping in view the law laid down by Supreme Court in the case of Gael (supra), we have no hesitation in holding that reference Court (civil Court) was wholly wrong in determining the compensation on sq. ft. 13. It is in the light of these undisputed facts or, we may say overwhelming evidence brought on record land keeping in view the law laid down by Supreme Court in the case of Gael (supra), we have no hesitation in holding that reference Court (civil Court) was wholly wrong in determining the compensation on sq. ft. basis. It was against the facts, evidence and law applicable to the case. In our view, it was obligatory on the part of Reference Court to have determined the compensation on hectare basis as was done by the LAO rather than to convert the same in sq. ft. and then enhancing it to almost 2 times of what was awarded by LAO. We cannot, therefore, subscribe ourselves to such approach of reference Court and hence, are constrained to set it aside. 14. As rightly urged by learned counsel for the appellant, the best evidence that was available and which should have been made basis for determining the market rate of the land in question was the sale-deeds (Exhibits P-3 to P-16) by which this very land was purchased by this very respondent just one year before the date of acquisition, i.e., between 19.1.1987 to 18.5.1987 (date of acquisition is 27.3.1988). Indeed, this is what is also ruled by Supreme Court in the case of Harishankar Goel (supra). It was much more so when no other material piece of evidence was available on record for determining the real market rate except these sale-deeds. 15. It is clear from these sale-deeds (Exhibits P-3 to P-16) that respondent society had purchased this very land at the rate of Rs.2,25,000/- per hectare on 19.1.1987. Applying the ratio of Supreme Court decision rendered in the case of (2004)2 SCC 283 [Krishi Upaj Mandi Samiti v. Bipin Kumar], wherein it is held that value of land appreciates every year to the extent of 15% and hence it can be so taken into consideration while determining the market rate alongwith other relevant factors available on record, a reasonable increase in the rate on per hectare basis could have been given to the respondent. 16. 16. Taking into consideration all the aforesaid factors, namely, location of land, its potential use, the purpose for which it was acquired, i.e., housing, appreciation of land at the rate of 15% every year, the nature of land, and the value of plots sold, we have formed an opinion, rather we have come to a conclusion, that it is just and proper to award compensation at a flat rate of "Rs.3 lacs per hectare" to every landowner. In our opinion, the compensation determined at a flat rate to all the landowners is considered just and proper because firstly, we cannot determine different rates for different landowners though others have not come. Secondly, it is also not legally permissible. Thirdly, when the entire land enbloc is acquired under one notification for one purpose, then it is always considered legal, just and reasonable to determine one rate rather than different rates. Fourthly, when different kinds of lands are acquired under one notification and when even reference Court determines one rate for entire land irrespective of their use and potential then in these circumstances, we do not consider it proper to differentiate in nature of land and rates applicable solely upon its use and other factors. Fifthly, it is difficult to determine the exact amount of market value of the land with mathematical calculation and hence, we have made our sincere endeavour after evaluating the totality of whole factual scenario brought on record by way of evidence in the form of sale-deeds and oral evidence, for arriving at a just and reasonable figure of"Rs.3 lacs per hectare" to landowners irrespective of the nature of land and its use prior to acquisition. In the facts appearing on record, we feel that the value that we have determined apart from it being reasonable and just, it is in accord with law laid down by Supreme Court in several cases cited at the bar. We have taken Rs.2,25,000/- to be the basis for determining the rate of land on per hectare basis being the rate by which the respondent had purchased this very land and have added 15% rise by way of appreciation and for remaining balance after taking into consideration other factors which are usually taken into consideration as are mentioned above. 17. We have taken Rs.2,25,000/- to be the basis for determining the rate of land on per hectare basis being the rate by which the respondent had purchased this very land and have added 15% rise by way of appreciation and for remaining balance after taking into consideration other factors which are usually taken into consideration as are mentioned above. 17. The rate which we have arrived at is not only based on value of land which is determined by LAO but it is equally based on potential of the land and other relevant factors mentioned supra which we have taken into account because of non-availability of actual and material sale deeds. 18. In our view, the rate that we have determined works out to almost more or less same, if we deduct 33% from what has been determined by the Reference Court in terms of hectare. In other words, the Reference Court in the first instance committed an error in applying the rate in sq. ft. and in the second instance further failed to deduct 33% or 1/3rd from the value so determined towards development of the area in question as held by Supreme Court in cases relied on supra. If we deduct 33% from Rs.4,84,200/- per hectare (which is equivalent to Rs.4.50 per sq. ft. rate determined by reference Court) then it comes to more or less same amount which we have determined. 19. In any case, therefore, neither on principle nor in calculation, the impugned award of Reference Court is sustainable and hence, liable to be set aside by reducing to amount to the extent this Court has determined supra. 20. Accordingly and in view of foregoing discussion, the appeal succeeds and is partly allowed. Impugned award dated 22.1.1994 passed in Reference Case No. 23 of 1990, by learned IV Additional District Judge, Ujjain, which is subject matter of this appeal, is modified in favour of appellant as indicated above. In other words, the respondents (landowners) and whose land was acquired in these proceedings, are entitled to claim compensation of their land at the rate of "Rs.3 lacs per hectare". In addition, they are also entitled to claim other statutory compensation payable under the Act which is now to be worked out on the basis of rate determined by this Court alongwith interest at the rate awarded by reference Court. Counsel fees Rs.l,000/-, if certified.