Judgment Both Second Appeals arise out of the Judgments in L.A.A.Nos.1 and 2 of 2001 dated 10.06.2004 enhancing the compensation of Rs.75,000/- per acre to Rs.2,18,000/-per acre [Rs.5/- per sq.ft.] of the lands acquired for grant of house site to homeless Adi Dravidars of Kannigapuram village, hamlet of Ambur Town. 2. Though the learned Subordinate Judge, Tirupathur dealt with both LAA by separate Judgments, since common points are involved, both these Second Appeals were heard together and shall stand disposed by this common Judgment. 3. T.S.No.2/1 in Ambur Municipality, Vaniyampadi Taluk, Vellore District was acquired for the purpose of providing house sites to homeless Adi Dravidars of Kannigapuram village under Tamil Nadu Acquisition of Land for Harijan Welfare Schemes Act, 1978 [Act 31/78]. 4. Data land - T.S.No.12/3 from Serial No.6 in Ex.B3 was taken and Special Tahsildar fixed the market value at Rs.75,000/-per acre i.e. Rs.1.72 per sq.ft. Being aggrieved by that Award, Respondents filed L.A.A.Nos.1 and 2/2001 respectively before Sub-Court, Tirupathur. Finding that Data land covered under Ex.B2 sale deed [15. 1998] was situated 1 km. away from the acquired lands, taking into consideration of the documents filed by Claimants, Court below had taken average sale value from those sale deeds and arrived at Rs.10/- per sq.ft. towards market value of the land. Giving 50% deduction towards development charges, Court below awarded Rs.5/- per sq.ft. 5. Details of the amount awarded and enhancement are as under:- Table 6. Being aggrieved by the enhancement of compensation, Government has filed these Second Appeals. At the time of admission of Second Appeals, the following common substantial questions of law were formulated for consideration:- 1) Whether the Court below erred in not appreciating the fact that the market value for the land acquired had been fixed taking into consideration date of sale deed under which the land similar in nature, soil, tharam and classification to the land acquired had been conveyed? 2) Whether the Court below erred in awarding interest at different rates of 9%, 12% and 15% for different periods of time and the statutory provisions of Act 31/78 only provides for uniform rate of interest at 6% per annum? 3) Whether the Court below had erred in placing reliance on Ex.A1 where under a small extent of land classified as house site was conveyed whereas the land acquired is classified as agricultural land and measuring an extent of 69. 3) Whether the Court below had erred in placing reliance on Ex.A1 where under a small extent of land classified as house site was conveyed whereas the land acquired is classified as agricultural land and measuring an extent of 69. 0 hectare? 4) Whether the Court below had erred in not making necessary deduction towards development charges especially in view of law laid down by the Apex Court in its Judgment reported in 2003 (12) SCC 334 where under the Apex Court prescribed the percentage of deduction at 53%? 5) Whether the Court below had erred in not appreciating the provision of section 8 of the Act 31/78 which clearly stipulates that nature and classification of land under acquisition as on date of 4(1) notification is the criterion for fixation of market value and not the probable usage of the said land? 7. Ms. Bhavani Subbarayan, learned Special Government Pleader (CS) contended that Court below erred in fixing the market value of the land at Rs.5/- per sq.ft. and erred in not making necessary deduction. Learned Special Government Pleader would further contend that Court below erred in granting solatium on par with Central Act at 30%. It was further argued that as per Sec.12 of Tamil Nadu Acquisition of Land for Harijan Welfare Schemes Act 1978, only 6% interest could be awarded and while so, Court below erred in awarding interest at the rate of 9% and 15% for various periods respectively. 8. Mr.Karthikeyan, learned counsel for the Respondents submitted that the acquired lands in Govindapuram is within the limits of Ambur Municipality and situated near National Highways and Railway line and Court below rightly fixed Rs.10/- per sq.ft. It was further submitted that deduction of 50% ordered by the Court below is very much on the higher side and therefore market value enhanced at Rs.5/- per sq.ft. warrants no interference. .9. T.S.No.2/1 in Govindapuram village within the limits of Ambur Municipality is very near to National Highways from Chennai – Calicut. National Highways from Chennai – Calicut is also changed into four lanes. Acquired lands is also very near to the Ambur .Railway Station and Railway Line proceeding from Chennai – Coimbatore, Bangalore etc. and the acquired lands are well developed area. 10. Ex.B2 is the sale deed [15. National Highways from Chennai – Calicut is also changed into four lanes. Acquired lands is also very near to the Ambur .Railway Station and Railway Line proceeding from Chennai – Coimbatore, Bangalore etc. and the acquired lands are well developed area. 10. Ex.B2 is the sale deed [15. 1998] for the Data land in T.S.No.12/3 in Ward-B, Block-3 under which one acre was sold by Gunasekaran to one Gudiannan for Rs.75,000/-. In his evidence 1st Claimant [CW1] has stated that Data land in T.S.No.12/3 is at a distance of about 1 ½ km. from the acquired lands. He has also deposed that there are no tanneries or developments around the said Data land T.S.No.12/3 and compensation of Rs.75,000/- per acre is very low. 11. When the Claimants contend that compensation awarded is low, Claimants have to prove and demostrate that compensation awarded by the Special Tahsildar is not adequate and the same does not reflect the true market value of the land on the date of notification under Sec.4 of the Act. This could be done by the Claimants by adducing evidence to the effect that on the relevant date, market value of the land in question was such at which the buyer and seller were willing to sell or purchase the land. .12. Referring to capitalization method for determining the value of the land, in (1986) 2 SCC 516 [State of Maharashtra v. Basantibai], the Supreme Court held as under:- ."..... In order to appreciate this ground of objection, it is necessary to examine whether the classification of the land under the Act into the land in municipal area and the land in rural area for purposes of determining the amount payable on acquisition is bad. It is not denied that the land in municipal area commands various advantages which are not available in the case of land in rural areas." 13. In 2009 AIR SCW 5560 [Satish and others v. State of U.P. and others], the Supreme Court held as under:- "Situation of the land and particularly the area in which it is situated is indisputably a relevant factor. In 2009 AIR SCW 5560 [Satish and others v. State of U.P. and others], the Supreme Court held as under:- "Situation of the land and particularly the area in which it is situated is indisputably a relevant factor. We, however, do not mean to suggest that only because the land is situated within the jurisdiction of a Gram Panchayat by itself would go to show that the value of the lands sought to be acquired cannot under any circumstance be compared with the land situate within the jurisdiction of municipality. There may be a case where the lands situated on one side of the road was within the Gaon Sabha and the other side within the municipality. It is also not a case where the area is known as one and the same area although divided by a road and are under different jurisdictions." 14. It is furthermore beyond any doubt or dispute that building potentiality of the land acquired would also be a relevant consideration. However, the purpose for which the land is sought to be acquired would also assume some significance. 15. Determination of the market value of the land depends upon facts and circumstances of each case, amongst them would be the price of the land, amount of consideration mentioned in a deed of sale executed in respect of similarly situated land near about the date of issuance of notification under Sec.4(1) of the Act. The area of the land, nature thereof advantages and disadvantage occurring therein amongst others would be relevant factors for determining the actual market value of the property. 17. It is on the above mentioned factual back drop and legal principles governing for grant of compensation, the market value of acquired lands are required to be determined. As discussed earlier, acquired lands are situated within the limits of Ambur Municipality. 16. Claimants have produced five sale deeds viz., Exs.A1 to A5 as under:- Ex.A1- Document No.761/1996 dated 13. 1996 T.S.No.14/1, 14/3 – Block-8, Ward-A – Extent 80 cents Sale Value Rs.1,29,000/- (Rs.3.70 per sq.ft.] Ex.A2– Document no.1564/1996 dated 08.07.1996 T.S.No.3/A – Block-7, Ward-A–Extent 4698 sq.ft. (House-site) Sale Value Rs.72,000/- per sq.ft. (Rs.15.32 per sq.ft.) Ex.A3 – Document No.1298/1999 dated 31.01.1999 T.S.No.2/4 – Block-6, Ward-A–Extent 3000 sq.ft. (Vacant site) Ex.A4 – Document No.2358/1999 dated 210. 1999 T.S.No.9–Block-5,Ward-B,Plot No.108,Kaja Nagar–Extent 780 sq.ft. (House-site) Sale Value Rs.72,000/- per sq.ft. (Rs.15.32 per sq.ft.) Ex.A3 – Document No.1298/1999 dated 31.01.1999 T.S.No.2/4 – Block-6, Ward-A–Extent 3000 sq.ft. (Vacant site) Ex.A4 – Document No.2358/1999 dated 210. 1999 T.S.No.9–Block-5,Ward-B,Plot No.108,Kaja Nagar–Extent 780 sq.ft. Sale Value Rs.9000/- (Rs.12/- per sq.ft.) Ex.A5 – Document No.1192/1997 dated 28.04.1997 T.S.No.9-Block-5, Ward-B, Plot No.14, Kaja Nagar–Extent 850 sq.ft. Sale Value Rs.7500/- (Rs.10/- per sq.ft.) From the above sale deeds [Exs.A1 to A5], learned Subordinate Judge had considered the average sale value and arrived at Rs.10/- per sq.ft. towards market value of the acquired lands. However, Court below deducted 50% towards development charges and awarded Rs.5/- per sq.ft. for the lands so acquired. 18. In his evidence, 1st Claimant has stated that Ambur is called "City of Leather". He has also deposed that acquired lands are in the midst of developed area. RW1-Special Tahsildar has also admitted that the acquired lands are situated in between Ambur Railway Station and Pachaikuppam village. Acquired lands are stated to be situated nearby National Highways from Chennai – Calicut. It is well established that the lands situated near National Highways have potentiality for development and would fetch more value. Admittedly, in Govindapuram from where lands were acquired, there are also other houses. When there are other houses and Plots were sold as house sites, Land Acquisition Officer should have taken market value of any document of nearby area. Land Acquisition Officer was not justified in taking the Data land in T.S.No.12/3 which is stated to be about 1 ½ km away from the acquired lands and fixing the market value per acre. 19. In regard to geographical location of acquired lands – situated in between Ambur Railway Station and Pachaikuppam and the railway track and National Highways are very nearby to the lands, the acquired lands will fetch reasonably a higher price than the land lying interior or in an undeveloped area. Having regard to the potentiality of the acquired lands, Court below rightly taken average sale value of Exs.A1 to A5 and fixed the market value per square feet and at Rs.10/- per sq.ft. .20. Stating that acquired lands are only agricultural lands, Court below has ordered deduction of 50% for development charges. Having regard to the potentiality of the acquired lands, Court below rightly taken average sale value of Exs.A1 to A5 and fixed the market value per square feet and at Rs.10/- per sq.ft. .20. Stating that acquired lands are only agricultural lands, Court below has ordered deduction of 50% for development charges. It is well settled that in respect of agricultural land or an undeveloped land which has potential value for housing or commercial purposes, normally 1/3rd of compensation has to be deducted out of the 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 civic amenities to develop the land so as to make the Plots for residential or commercial purposes. Normally 1/3rd deduction would be sufficient. Deduction for development charges ought to be adequately provided for, but it varies from place to place, area to area and amount of developments which are required to be carried out and thus there cannot be any fixed amount of deduction towards development charges. Having regard to the fact that acquired lands are already in the developed area, deduction ordered by the Court below at 50% is very much on the higher side. However, since Claimants have not filed any Cross-Objection, correctness of deduction need not be gone into. 21. Referring to Judgment of Division Bench of this Court in 2004-2-L.W. 673 [The Special Tahsildar, Adi Dravidar Welfare, Sivagangai v. Muthu Konar], Court below awarded 12% additional amount on the market value from 21.09.2000 [date of publication] till 212. 2000 [date of award] and Court below also ordered 30% solatium on the market value as well as additional amount of 12%. In the said case before the Division Bench, to provide house sites to Adi Dravidars acquisition was made under Central enactment which contemplates 30% solatium and additional amount of 12%. In the instant case, acquisition was made under Tamil Nadu Acquisition of Land for Harijan Welfare Schemes Act, 1978 and therefore, Court below was not right in applying the ratio of the above decision and awarding of additional amount of 12% is liable to be set aside. .22. In the instant case, acquisition was made under Tamil Nadu Acquisition of Land for Harijan Welfare Schemes Act, 1978 and therefore, Court below was not right in applying the ratio of the above decision and awarding of additional amount of 12% is liable to be set aside. .22. Sub-section (1) of Section 7 of the Act states that the amount payable in respect of the land that is acquired under the said Act shall be its market value on the date of publication of the notice under section 4(1). Sub-section (2) of section 7 states that in addition to the market value of the land, the prescribed authority shall, in every case, award a sum of 15% on such market value as solatium in consideration of the compulsory nature of the acquisition. Upon determination of the market value of the land after inquiry, under sub-sec.(2) of Sec.7 of the Act Court could order only 15% as solatium. Award of 30% solatium is not in accordance with Sec.7 of the Act. Award of .30% solatium is reduced to 15% on the market value fixed. 23. Court below has also awarded interest at the rate of 9% per annum for one year from the date of award i.e. 212. 2000 to 212. 2001 and thereafter at 15% per annum till realisation. As per Sec.12 of the Act, interest awarded could only be at 6% per annum from the date of taking possession till the amount is paid or deposited. The interest at 9% and 15% ordered respectively by the Court is reduced to 6% per annum from the date of taking possession till the date of payment or deposit. 24. Having regard to the potentiality of the acquired lands and acquired lands were situated in the midst of Ambur Municipality and very near to National Highways, Railway Station, Court below rightly enhanced compensation and awarded Rs.5/- per sq.ft. for the acquired lands, enhancement of compensation does not suffer from any serious infirmity warranting interference. Since awarding of solatium at 30% and also awarding of interest at 9% and 15% per annum respectively are not in accordance with the Act, rate of solatium and rate of interest awarded by the Court below are reduced as aforesaid. 25. for the acquired lands, enhancement of compensation does not suffer from any serious infirmity warranting interference. Since awarding of solatium at 30% and also awarding of interest at 9% and 15% per annum respectively are not in accordance with the Act, rate of solatium and rate of interest awarded by the Court below are reduced as aforesaid. 25. As per the interim order dated 19.02.2007, Appellant was directed to deposit 50% of the enhanced compensation and Respondents were permitted to withdraw 50% of the deposited amount i.e. 25% and the balance amount 25% was ordered to be invested in a Nationalised Bank. Learned counsel for the Claimants submitted that Claimants have withdrawn half of the amount as directed by the Court. 26. In the result, enhancement of compensation by the learned Subordinate Judge, Tirupathur in LAA.Nos.1 and 2 of 2001 dated 11.06.2004 is confirmed. Additional amount of 12% awarded from 29. 2000 to 212. 2000 is set aside. Solatium awarded at 30% is reduced to 15% and the interest awarded at 9% and 15% respectively is also reduced to 6% per annum and these Second Appeals are partly allowed to that extent. Interest at the rate of 6% per annum is payable from 212. 2000. No costs. Consequently, connected M.Ps. are closed. Claimants-Respondents are entitled to withdraw the entire amount deposited to the credit of LAA.Nos.1 and 2 of 2001 respectively on the file of Subordinate Judge, Tirupathur immediately on receipt of copy of this Common Judgment. Balance amount payable along with accrued interest has to be deposited by the Special Tahsildar (ADW), Tirupathur to the credit of LAA Nos.1 and 2 of 2001 within a period of twelve weeks from the date of receipt of copy of this Judgment. On such deposit, the Claimants are permitted to withdraw the entire amount.