JUDGMENT : B.N. Mahapatra, J. - This is an appeal u/s 54 of the Land Acquisition Act 1894 (for short 'the Act') against the order dated 18.0and.2008 passed in Land Acquisition Misc. Case No. 293/2006 wherein the learned Civil Judge (Senior Division), Bhadrak (for short 'Referral Court') determined the market value of the acquired Gharabari land belonging to Respondent No. 1- Soumya Ranjan Mohanty ' of Rs. 30 lakhs per acre and directed the Special Land Acquisition Officer, Dhamara Port Project, Bhadrak to reassess the compensation payable for the above land accordingly and pay the compensation amount to Respondent No. 1 along with other statutory benefits and the compensation awarded towards trees, hutment and pond after deducting the amount already paid to and received by him. 2. Bereft of unnecessary details, the facts and circumstances giving rise to the present appeal are that on 21.06.2005, the Notification u/s 4(1) of the Act was issued for acquisition of Ac.21.03 decimals of land which includes Ac.3.and2 decimals of land of Kissam Gharabari appertaining to Plot No. 126 under Khata No. 190/38 of Mouza Tisalpur belonging to Respondent No. 1 for construction of Railway corridor from Bhadrak to Dhamara in connection with expansion of Dhamara Port Project. Respondent No. 3-Land Acquisition Collector, Bhadrak determined the market value of the said land at the rate of Rs. 6 lakhs per acre. The amount of compensation was determined at. Rs. 33,88,595.and6 towards value of the land, house, pond, trees and other statutory benefits. Accordingly, the Appellant-Company deposited the said amount with Respondent No. 3 through IDCompany Being dissatisfied with the quantum of compensation awarded by Respondent No. 3, Respondent No. 1 submitted an application on 20.09.2006 u/s 18 of the Act. Respondent No. 2-Special Land Acquisition Officer submitted a memorandum along with the petition filed by Respondent No. 1 u/s 18 of the Act before the Referral Court, which was registered as L.A. Misc. Case No. 293/2006 in the said Court. On 21.04.200and, the Appellant-Company filed a petition under Order 1 Rule 10 of the CPC to allow it to be impleaded as a party to the aforesaid L.A. Misc. Case No. 293/2006. The Referral Court vide its order dated 18.0and.2008 allowed the Appellant-Company to be impleaded as Opp. Party No. 3 in the said case. On 21.04.200and, the Appellant-Company filed a petition under Order 1 Rule 10 of the CPC to allow it to be impleaded as a party to the aforesaid L.A. Misc. Case No. 293/2006. The Referral Court vide its order dated 18.0and.2008 allowed the Appellant-Company to be impleaded as Opp. Party No. 3 in the said case. After hearing the parties, the Referral Court passed the impugned order enhancing the market value of the acquired land to Rs. 30 lakhs per acre and awarded compensation for Ac.0.84 decimals of severed plot. Hence, the present appeal. 3. Even though several grounds are taken, Mr. A.K. Parija, learned Senior Advocate appearing for the Appellant-Company confined his argument on two grounds. The first limb of his argument is that the Referral Court has not assigned any justifiable reason for determining the actual market value of the acquired land at Rs. 30 lakhs per acre, which is contrary to the mandates of Sections 23 & 24 of the Act. The amount of compensation determined in respect of the land in question has serious implications on cost of the project unless the same is confined to specific category, i.e., Gharabari of the specific village, namely, Tisalpur. Therefore, it should be clarified that the price arrived at for the- acquired land shall apply only to land of the same category of the same village. It was vehemently argued that the Referral Court has relied on the value of small piece of land to determine the market value of large track of land acquired. The value of small piece of land cannot be the basis to determine the market value of large track of land. Relying on the decision of the apex Court in ONGC Ltd. v. Sendhabhai Vastram Patel and Ors. (2005) 6 SCC 454 , he argued that when a large extent of land is acquired, the sale of small pieces of land though genuine cannot be relied upon as the basis to determine the compensation. Sufficient deduction should be made to arrive at fair market value of large track of land. The second limb of argument is that the Referral Court has committed error in granting compensation in respect of the severed plot measuring an area of Ac.0.84 decimals. 4. Sufficient deduction should be made to arrive at fair market value of large track of land. The second limb of argument is that the Referral Court has committed error in granting compensation in respect of the severed plot measuring an area of Ac.0.84 decimals. 4. Learned Counsel appearing for Respondents 2 and 3 supporting the stand taken by the Appellant submitted that the Referral Court has not assigned sufficient reason to differ with the market value determined by the Land Acquisition Collector. Therefore, Respondent No. 1 - is not entitled to any more compensation than that has been determined by opp. Party No. 3. 5. Mr. R.K. Mohanty, learned Counsel appearing on behalf of Respondent No. 1 seriously contended that the Land Acquisition Collector without any basis valued the land at Rs. 6 lakhs per acre. Determination of market value of the acquired land at the rate of Rs. 30 lakhs per acre on the date of issuance of the Section-4(1) Notification by the Referral Court though based on cogent materials, the same was at a lower side. Even though the Referral Court considered two sale deeds executed in the years 2000 & 2001 at the rate of Rs. 30 lakhs per acre on the same acquired plot, it lost sight of enhancement of the value for the period of four and a half years as the Notification u/s 4(1) of the Act was issued on 21.06.2005. In support of his contention he relied upon the decision of the apex Court in General Manager, Oil and Natural Gas Corporation Ltd. v. Rameshbhai Jivanbhai Patel and Anr., decided on 31.0and.2008, Hindustan Oil,Mills Ltd. v. Special Deputy Collector (Land Acquisition), decided on 20.10.1989 and Lila Ghosh v. State of West Bengal, decided on 18.11.2003. The claimant has entered into an agreement on 1and.05.2005 with Bharati Airtel, a renowned company to lease out 4306 sqft. of land for an amount of Rs. 3,000 per month with an escalation clause of 10% after every three years. The annual rent comes to Rs. 36,000 and 10 years yield comes to Rs. 36 lakhs. Taking into consideration the 10% enhancement every three years, the average valuation of Rs. 42 lakhs appears to be reasonable. Referring to the order dated 28.10.2006 of the SubCollector-cum-Stamp Collector, Bhadrak in Stamp Case Nos. 323/205 and 44/206 (Annexure-6), Mr. The annual rent comes to Rs. 36,000 and 10 years yield comes to Rs. 36 lakhs. Taking into consideration the 10% enhancement every three years, the average valuation of Rs. 42 lakhs appears to be reasonable. Referring to the order dated 28.10.2006 of the SubCollector-cum-Stamp Collector, Bhadrak in Stamp Case Nos. 323/205 and 44/206 (Annexure-6), Mr. Mohanty submitted that the Sub Collector-cum-Stamp Collector basing upon the report of the Tahasildar, Bhadrak (Ext.6. A), held that the valuation of the land in Mouza: Tisalpur is more than Rs. 40 lakhs per acre. This order has been passed in relation to a sale of land in Mouza: Tisalpur situated near National, Highway under sale deed No. 438 dated 16.11.2005 which is nearer to the date of acquisition of the land in question. It was further contended that there is no straitjacket formula allowing deduction for development charges etc. when a big plot is sold in small pieces providing internal road etc. The variation differs from 0% to 65% depending upon the circumstances of the case. The acquired land is in prime location. Huge expenditure has been incurred for development of the said land and therefore no deduction should be allowed on development head. In support of his contention, he relied on the decision of the apex Court in Bhagwathula Samanna and others Vs. Special Tahsildar and Land Acquisition Officer, Visakhapatnam Municipality, and Hans Raj Sharma v. Collector Land Acquisition Tehsil and District Doda (Civil Appeal No. 2504 of 1999), decided on 10.12.2004. It is further argued that acquisition in question has severed strip of plot measuring an area of Ac.0.84 decimals from the balance plot to the west of the acquired land. The severed plot is cut off from National Highway. It -loses all its potentialities and the primness for construction of house building. Referring to Section 23(iii) of the Act, it was argued that compensation should be paid in respect of severed portion of the land. To support his contention, he relied on the decision of this Court in Land Acquisition Collector Vs. Madanlal Agrawal, . According to Mr. Mohanty, the amount of compensation awarded towards value of trees, pond, and hutment is inadequate. The claimant is also entitled to other statutory benefits. 6. To support his contention, he relied on the decision of this Court in Land Acquisition Collector Vs. Madanlal Agrawal, . According to Mr. Mohanty, the amount of compensation awarded towards value of trees, pond, and hutment is inadequate. The claimant is also entitled to other statutory benefits. 6. From the rival contentions, the questions which fall for consideration by this Court are (i) What should be the proper valuation of the acquired land on the date of issue of Notification u/s 4(1) of the Act? (ii) Whether Respondent No. 1, the owner of the acquired land, is entitled to any compensation for the severed land? and. So far as the first question is concerned, it is necessary to refer to the relevant provision of Section 23 of the Land Acquisition Act, 1894, which is reproduced below. 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 u/s 4, Sub-section (1). The apex Court in ONGC Ltd. v. Sendhabahai Vastram Patel and Ors. (2005) 6 SCC 454 , held as follows: Market value is ordinarily the price the property may fetch in the open market if sold by a willing seller unaffected by the special needs of a particular purchase. Where definite material is not forthcoming either in the shape of sales of similar lands in the neighbourhhood at or about the date of notification u/s 4(1) or otherwise, other sale instances as well as other evidences have to be considered. xxxxxx Admittedly, in the present case, neither of the parties could be able to prove any material before the Referral Court in support of sale of similar land in the neighbourhood on or about the date of Notification dated 21.06.2005 issued u/s 4(1). However, Respondent No. 1 produced two sale deeds dated 02.01.2001 (Ext. 1) and 19.12.2000 (Ext.2) which were on executed by him; before the Referral Court. As per the said registered sale deeds, the lands from the said acquired plot were sold at the rate of Rs. 30 lakhs per acre four years - prior to the date of notification u/s 4( 1). The contents of the sale deeds were proved by the vendor. As per the said registered sale deeds, the lands from the said acquired plot were sold at the rate of Rs. 30 lakhs per acre four years - prior to the date of notification u/s 4( 1). The contents of the sale deeds were proved by the vendor. These' two sale deeds have never been challenged nor any contradictory evidence has been adduced by the opposite parties before the Referral Court. The Referral Court has adopted this value for determining the market value as on the date of Notification issued u/s 4(1) without making any enhancement for four years on account of escalation. The apex Court in Om Prakash (D) by Lrs. and Ors. v. Union of India (UOI) &'Anr., decided on 05.08.2004 has not interfered with 12% annual escalation to determine the market value of the land as on the date of acquisition. In Special Land Acquisition Officer BTDA Bagalkot v. Mohd. Hanif Sahib Bawa Sahib 2002 Indlaw SC 184, the apex Court upheld the increase of 10% per annum with reference to the sale deed of an earlier year. The ratio of decision of this case has been followed subsequently by the apex Court in K. Sharadarani Srinivas v. Special Land Acquisition Officer and Anr. 2009 Indl SC 895 . In Hindustan Oil Mills Ltd. and Anr. v. Special Deputy Collector (Land Acquisition), decided on 20.10.1989, the apex Court held that value of land doubles in 5 years. In Lilaghosh v. State of West Bengal, decided on 18.11.2003, the Apex Court held that the land having road frontage should have higher market value and 20% escalation to the market value is reasonable. Admittedly, the Referral Court has not considered the aspect 'of appreciation of the value of the acquired land as on the date of issuance of Notification u/s 4(1) of the Act with reference to sale deeds of earlier years (Ext. 1 and Ext 2). 8. The other important point raised by Mr. Parija is 'that suitable deduction should have been made while determining the market value of a large plot on the basis of the market value of small plot. 1 and Ext 2). 8. The other important point raised by Mr. Parija is 'that suitable deduction should have been made while determining the market value of a large plot on the basis of the market value of small plot. In ONGC Ltd. (supra), the apex Court held that a small plot may be within the reach of many, a large block of land have to be developed; preparing a layout plan, carving out roads, leaving open spaces, plotting out small plot and waiting for purchasers are the hazards of an entrepreneur. Such development charges may range between 20% and 50% of the total price. In K. Vasundara Devi Vs. Revenue Divisional Officer (LAO) the apex Court held that when genuine and reliable sale deeds of small extent of land are considered to determine market value, the same should not form sole basis to determine market value of large track of land. Sufficient deduction should be made to arrive at just and fair market value of large track of land. In Bhagwathula Samanna (Supra), the apex Court held that, no deduction is necessary where the land has got potentiality. The apex Court in Raj Sharma (supra) held that when no other sale instance is available, reliance placed on sale of small area by the High Court is proper. 9. There is no standard formula to arrive at the market value in case of a large plot being acquired, where the only evidence is a small plot. The decision of the apex Court on this issue in above cases shows that deduction ranges from 0% to 50% depending upon the facts and circumstances of the case. 10. In M.V.K. Gundarao Vs. Revenue Divisional Officer, (L.A.O.), Narasaraopet, the apex Court held 'that it is well settled law that the burden lies on the claimant to prove the prevailing market value as on the date of Section 4(1) Notification and it is the duty of the Court to assess the prevailing market value applying pragmatic tests. The Court has to consider the evidence in its, proper perspective whether a willing vendee would prepare to purchase at the rate offered by the willing vendor in an open market when the lands are put to' sale. The Court has to consider the evidence in its, proper perspective whether a willing vendee would prepare to purchase at the rate offered by the willing vendor in an open market when the lands are put to' sale. It is the duty of the Court to sit on the armchair of a prudent purchaser acting under normal market conditions and to decide the prevailing price as on the date of the notification. 11. In the present case, the Referral Court has rightly relied on the registered sale deeds dated 01.02.2001 (Ext. 1) and 19.12.2000 (Ext.2) for the purpose of determining the market value of the acquired land on the date of issuance of Notification u/s 4(1) of the Act as no sale instance in the neighbourhood at or about the date of publication of the Notification u/s 4(1) of the Act was proved before the Referral Court. The Referral Court while determining, the market value of the land on the date of issuance of Section 4(1) Notification, on the basis of earlier registered sale deeds executed four years back and proved before it has not made any enhancement on account of escalation, which should have been done. If 10% escalation on the amount of Rs. 30 lakhs per year is applied for a period of four years, it would come to Rs. 42 lakhs. The acquired land is in developed area having some locational advantages and has been acquired for construction of railway corridor. However, in the facts and circumstances of the case, it would be just and proper to allow deduction to the extent of 35% of Rs. 42 lakhs towards development charges. When deduction to the extent of 35% of Rs. 42 lakhs is allowed, the resultant figure comes to Rs. 2and.30 lakhs. Therefore, taking into consideration the point of escalation and allowing deduction towards the development charges in case of acquisition of a large plot, this Court feels that, in the present case, the just and fair market value of the acquired land on the date of issuance of the notification u/s 4(1) of the Act would be Rs. 2and lakhs per acre. 12. 2and lakhs per acre. 12. To deal with the second question, it is necessary to refer to Section 23(iii) of the Land Acquisition Act, 1894, which reads as under: Section 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. Thirdly, the damage (if any) sustained by the.person interested, at the time of the Collector's taking possession of the land, by reason of severing such land from his other land; The above provision makes it clear that claimants are entitled to compensation of severed portion of the land, which becomes waste land after acquisition. In the present case, according to the Appellant, the compulsory acquisition in question has severed strip of plot measuring an area Ac.0.84 decimals to the west of the acquired land. This severed plot, according to opp. Party No. 1, is at the one end having the width less than five feet, the other end is also very narrow. Railway line constructed on the plot in question is more than 15 feet in height. There remains no way through which the claimant can reach the place easily. The land being cut off from the National Highway loses all its potentialities and feasibility for house building. Before the Referral Court a sketch map of the severed plot has been filed, which has been marked as Annexure-4A. The Referral Court held that opp. Parties have not adduced any rebuttal evidence either oral or documentary to the above averments of the Respondent No. 1. However, Mr. Parija, learned Senior Advocate for the Appellant submitted that out of the said Ac.0.84 decimals of land on,25.09.200and, land measuring an area Ac.0.38 decimals was acquired by the Government of Orissa for Dhamara Port Ltd. and the Respondent No. 1 has already received compensation over the same. An agreement for sale has already been executed between the Appellant and Respondent No. 1 for an area of Ac.0.13 decimals of land out of the severed land. Hence, the Respondent No. 1 is entitled to get compensation for the balance land measuring an area Ac.0.33 decimal at the rate of m Rs. 2and lakhs per acre. 13. In view of the above, the fair market value of the land in question on the date of issuance of Notification u/s 4( 1) is determined at Rs. Hence, the Respondent No. 1 is entitled to get compensation for the balance land measuring an area Ac.0.33 decimal at the rate of m Rs. 2and lakhs per acre. 13. In view of the above, the fair market value of the land in question on the date of issuance of Notification u/s 4( 1) is determined at Rs. 2and lakhs per acre. However, the determination of market value is confined to Gharabari (homestead land) in village Tisalpur only. 14. The appeal is allowed in part. L. Mohapatra, J. 15. I agree. Final Result : Allowed