Judgment :- Being aggrieved by judgment in C.M.A.No.6 of 2004 dated 20.12.2005 enhancing the compensation from 3,13,158 to 12,22,152 and awarding 15% solatium and interest at the rate of 9%, 12% and 15%, Government filed this Second Appeal. 2. An extent of 2.92 acres of land comprised in S.No.294/3 in Thathavalli Village, Tirupattur Taluk, Vellore District was acquired for the purpose of providing house sites to Adi Dravidars in Thathavali. In pursuance of the same, 4(1) Notification under the provisions of the Act was issued in 211. 1996. The Land Acquisition Officer had taken data sale deed -Document No.1284 dated 22.04.1996 relating to Survey No.240/2E, 240/2C total 0.76 acres. Based on the sale deed, award was passed in Award No.3/96-97 dated 23. 97 fixing the market value for the land acquired at the rate of Rs.69,935/- per acre. The Land Acquisition Officer awarded compensation of Rs.3,13,158/-as under:- i) The true area of the land : 18. 0 Hectare ii) a. Market value of the land : Rs.2,72,311.00 b. Solatium 16%: Rs. 40,847.00 Rs.3,13,158.00 3. Being dissatisfied by the fixation of market value by the competent authority, respondent filed C.M.A.No.6 of 2004 before Sub-Court, Tirupattur. Court had taken Ex.A2 (dt.14. 96) and Ex.A3 (dt.25. 96) as comparable sale and fixed the market value at Rs.13.15 / Sq.ft. After deducting 1/3rd i.e., 33.33% i.e., Rs.4.38 for development charges, court fixed market value at Rs.8.50 per sq.ft. Court has enhanced compensation as under: Enhanced compensation for 2.92 acre (181,27,312 sq.ft) at the rate of Rs.8.50 per sq.ft ......................Rs.10,82,152.00 Well..................................................Rs. 1,00,000.00 Motor Room.......................................Rs. 40,000.00 Rs.12,22,152.00 15% Solatium .......................Rs. 1,83,322.80 Rs.14,05,474.80 LESS compensation already paid........................... Rs. 3,13,158.00 Rs.10,92,316.80 4. Being aggrieved by the enhancement of compensation, Government preferred this Second Appeal. Arguments were advanced on the following substantial questions of law: i. Whether the Court below erred in awarding that the market value fixed by the Competent Authority is not correct especially when the said market value was fixed based upon the data sale deed under which the land similar in nature and classification and close in proximity to the land acquired was conveyed. ii. Whether the Court below erred in fixing the market value on a square feet basis when the land acquired is a huge extent of 2.96 acres? iii. ii. Whether the Court below erred in fixing the market value on a square feet basis when the land acquired is a huge extent of 2.96 acres? iii. Whether the award of interest at the rate of 9%, 12% and 15% for various periods is in order when statutory provisions of the Act provide for uniform rate of 6% p.a. .5. The learned Special Government Pleader Ms.Bhavani Subbrayan submitted that Court erred in taking Exs.A2 & A3 for arriving at market value. The learned Government Pleader submitted that Court below erred in awarding market value on Square feet basis when land acquired was huge extent of 2.92 acres. It was further argued that the Acquisition Officer has rightly taken the data sale deed (Ex.R2) and while so, Court below erred in enhancing the compensation based upon Exs.A2 and A3. The learned Special Government Pleader also contended that purpose for which land was acquired cannot be taken into account for ascertaining the market value. It was further argued that when Section 12 of the Tamil Nadu Acquisition of land for Harijan Welfare Scheme Act (Act) provides for 6% uniform rate of interest, award of interest at 9%, 12% and 15% is in violation of provisions of the Act. 6. Thelearned counsel for respondent Mr.R.Subramani submitted that adjacent to the property acquired, there are housing colonies and therefore, Court below rightly fixed the marked value on the basis of Exs.A2 and A3. Placing reliance upon (2003) 1 SCC 354 [Kasturi and others Vs. State of Haryana], it was further contended that it cannot be taken as an absolute proposition that small extent cannot be taken as the guideline for fixing the market value. In so far as deduction to be made, the learned counsel submitted that Court below rightly ordered 1/3rd deduction for developmental charges and that the enhanced compensation is a reasonable one and the same cannot be interfered with. 7. Survey No.294/3-18. 0 H – 2.92 acres in Thathavalli Village was acquired along with well and electric pump-set for providing house sites to Adi Dravidars of Thathavalli Village. For fixing market value of the acquired lands, Land Acquisition Tahsildar has collected 36 sale deeds as indicated in Ex.R1. Serial No.11 sale deed, Document No.1284/96 dated 24. 96 was taken as data sale deed. Under Ex.R2 data sale deed, 0.76 ½ acres of land in S.Nos. For fixing market value of the acquired lands, Land Acquisition Tahsildar has collected 36 sale deeds as indicated in Ex.R1. Serial No.11 sale deed, Document No.1284/96 dated 24. 96 was taken as data sale deed. Under Ex.R2 data sale deed, 0.76 ½ acres of land in S.Nos. 240/2B and 240/2C along with well and pump set there on was sold for Rs.62,500/-. Based on Ex.R2, Land Acquisition Officer fixed the market value at Rs.69,935/- per acre and fixed the compensation including 15% solatium at Rs.3,13,158/-. 8. When claimants contend that compensation awarded is low, claimants have to prove and demonstrate 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. 9. 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. The purpose for which the land is sought to be acquired would also assume significance. It is on the above mentioned factual back drop and legal principles governing, grant of compensation, the market value of acquired lands are required to be determined. .10. Acquired lands are stated to be fit for layout and formation of housing colony. In his evidence claimant has stated that the acquired land is on the northern side of Jalagamparai Road and bus transport facility is available. On the eastern side of acquired land is Pitchanur Village. On the western side is Samuthiram Village, where there are about 1000 houses with Banks, Schools, Post Office and all other facilities . Admittedly Jalagamparai is also about 2 kms from acquired lands. During cross examination, RW1 has admitted that Pitchanur – Jalagamparai villages are nearby to the acquired lands. On the eastern side of acquired land is Pitchanur Village. On the western side is Samuthiram Village, where there are about 1000 houses with Banks, Schools, Post Office and all other facilities . Admittedly Jalagamparai is also about 2 kms from acquired lands. During cross examination, RW1 has admitted that Pitchanur – Jalagamparai villages are nearby to the acquired lands. The finding of the Court in awarding compensation under the Act is to ascertain the market value of the land and date of notification under Section 4(1), method of valuation, the price paid within a reasonable period in a bonafide transaction of the purchase of the land acquired or the lands adjacent to the land acquired possessing similar advantages. In this case, sale deeds in respect of the S.Nos.240/2B, 240/2C nearby to the land acquired and possessing similar advantages have been taken into consideration for arriving at the market value. 11. There is also overwhelming evidence that the acquired lands has high potentiality. Ex.A2 (dt.14. 1996) is the sale deed by one Bose Sahib to Joseph, in which 966 sq.ft in S.No.350/1 (Old S.No.26) was sold for Rs.14,000/-. Under Ex.A3 sale deed (dt.25. 1996), 1548 Sq.ft of land in S.No.157/1(New S.No.360/2) was sold for Rs.23,000/-. Observing that the acquired land has high potentiality, the learned Subordinate Judge based on Ex.A2 and A3 fixed the value at Rs.13.15 per sq.ft. After deducting 1/3rd i.e., Rs. 4.38 per sq.ft, the learned Subordinate Judge fixed the market value at Rs.8.50/- per sq.ft. 12. From Ex.R3 plan, it is seen that S.No.157/1 is very far away from the acquired lands. Even though the lands covered under Ex.A2 and A3 are little far away from the acquired land, admittedly nearby acquired land, the area is developed and fit for house site. As pointed out earlier, for calculating the market value, the Court is to take into account the potentiality of the land and future prospects for development. In his evidence RW1-Land Acquisition Tahsildar has admitted that nearby acquired lands there are residential colony with road facilities. Sale deeds in respect of survey numbers adjacent to the land acquired possesses similar advantages. When acquired land is near the developed area, Land Acquisition Officer was not right in fixing the market value per acre. In his evidence RW1-Land Acquisition Tahsildar has admitted that nearby acquired lands there are residential colony with road facilities. Sale deeds in respect of survey numbers adjacent to the land acquired possesses similar advantages. When acquired land is near the developed area, Land Acquisition Officer was not right in fixing the market value per acre. Determination of market value is not only of the land value but also the other components like potentiality for development and being developed as house plots. As held in (2003) 12 SCC 334 [Land Acquisition Officer, Kammarapally Village, A.P Vs.Nookala Rajamallu and Others], the principles of fixation of market value with reference to comparable sale are made: i. When sale is within a reasonable time of the date of notification under Section 4(1); ii. It should be a bona fide transaction; iii. It should be of the land acquired or of the land adjacent to the land acquired; and iv. it should possess similar advantages. The above factors are present in Exs.A2 and A3 sale deeds and therefore Court below was right in taking Exs.A2 and A3 as comparable sale. Fixing of market value at Rs.8.50 per sq.ft cannot be said to be on the higher side. It cannot be contended that the Court below erred in fixing the market value per square feet and the substantial questions of law 1 and 2 are answered against the appellant. 13. The learned Special Govt. Pleader Ms.Bhavani Subbrayan contended that the learned Subordinate Judge erred in taking Exs.A2 and A3 sale deeds which relates to smaller extent and arriving at market value just by giving normal 1/3rd deduction. The learned Special Government Pleader would further contend that since the acquired lands are far away from the developed area, for forming roads and to provide other facilities, learned Subordinate Judge ought to have made 50% deduction and 33% deduction made is very low. 14. Of course, when large tracts are acquired, the transaction in respect of small extent of properties do not offer a proper guideline. 14. Of course, when large tracts are acquired, the transaction in respect of small extent of properties do not offer a proper guideline. It is fairly well settled that in respect of agricultural land or undeveloped land which has potential value for housing or commercial purposes, normally 1/3rd amount of compensation has to be deducted out of the amount of compensation payable on the acquired lands subject to certain variations depending on its nature, location, extent of expenditure involved for development and the area required for forming roads and other civic amenities to develop the land so as to make plots for residential purposes. 15. Referring to various citations in (2003) 1 SCC 354 , Supreme Court held as follows: "8. This Court in Administrator General of W.B. V. Collector, Varanasi [(1998) 2 SCC 150] referring to earlier decisions has held that prices fetched for small plots cannot form the basis for valuation of large tracts of land as the two are not comparable properties. Para 12 of the said judgment reads: "12. It is trite proposition that prices feaatched for small plots cannot form safe bases for valuation of large tracts of land as the two are not comparable properties. [See Collector of Lakhimpur V.Bhuban Chandra Dutta [ (1972) 4 SCC 236 ]; Mizra Nausherwan Khan V. Collector (Land Acquisition), Hyderabad [ (1975) 1 SCC 238 : (1975) 2 SCR 184 ]; Padma Uppal V.State of Punjab [ (1977) 1 SCC 330 : (1977) 1 SCR 329 ]; Kausalya Devi Bogra V. Land Acquisition Officer; Aurangabad [ (1984) 2 SCC 324 : (1984) 2 SCR 900 ] ]. The principle that evidence of market value of sales of small, developed plots is not a safe guide in valuing large extents of land has to be understood in its proper prospective. The principle requires that prices fetched for small developed plots cannot directly be adopted in valuing large extents. The principle that evidence of market value of sales of small, developed plots is not a safe guide in valuing large extents of land has to be understood in its proper prospective. The principle requires that prices fetched for small developed plots cannot directly be adopted in valuing large extents. However, if it is shown that the large extent to be valued does not admit of and is ripe for use for building purposes; that building lots that could be laid out on the land would be good selling propositions and that valuation on the basis of the method of hypothetical layout could with justification be adopted, then in valuing such small, laid-out sites the valuation indicated by sale of comparable small sites in the area at or about the time of the notification would be relevant. In such a case, necessary deductions for the extent of land required for the formation of roads and other civic amenities; expenses of development of the sites by laying out roads, drains, sewers, water and electricity lines, and the interest on the outlays for the period of deferment of the realization of the price; the profits on the venture etc. are to be made...." 9. In Gulzara Singh V. State of Punjab [( 1993 4 SCC 245 ] referring to the case of Administrator of W.B [ (1988) 2 SCC 150 ] and other cases, this Court upheld the deduction of 1/3rd of the undeveloped land towards developmental charges. In that case, 90 acres of undeveloped land was acquired which required development by laying roads, parks, drainage, lighting and other civic amenities. It may also be noted that in the said judgment, this Court distinguished the case of Bhagwathula Samanna (1991) 4 SCC 506 on which the appellants strongly relied. 10. Yet again in K.Vasundara Devi V.Revenue Divisional Officer (LAO)9 (1995) 5 SCC 426 this Court reiterated that when genuine and reliable sale deeds of small extents were considered to determine market value, the same will not form the sole basis to determine market value of large tracts of land. Sufficient deduction should be made to arrive at a just and fair market value of large tracts of land. Again, in this case also Bhagwathula Samanna (1991) 4 SCC 506 was distinguished while upholding the deduction as to developmental charges. 11. Sufficient deduction should be made to arrive at a just and fair market value of large tracts of land. Again, in this case also Bhagwathula Samanna (1991) 4 SCC 506 was distinguished while upholding the deduction as to developmental charges. 11. This Court again in Special Land Acquisition Officer v. V.T.Velu (1996) 2 SCC 538 in a similar situation as in the case on hand has held that at least 1/3rd of the land acquired is to be set apart for road purpose, developmental purpose and other civic amenities. It is also observed: "The mere fact that there is a connecting road to the lands by itself is not a correct principle of law in refusing to deduct towards developmental charges" (emphasis supplied) 12. In U.P. Jal Nigam v.Kalra Properties (P) Ltd. (1996) 3 SCC 124 this Court has stated thus: "Therefore, it should be determined only on the basis of yardage. If the principle of determination of compensation on yardage basis is adopted, it is equally settled law that at least 1/3rd of the land required should be deducted towards developmental purposes, namely providing roads, electricity, drainage facilities and other betterment developments." 16. Exs.A2 & A3 related to small extent of 1548 sq.ft and 966 sq.ft respectively. While taking Exs.A2 & A3 as comparable sale, the learned Subordinate Judge has made 1/3rd deduction i.e., Rs.4.38/sq.ft and fixed the market value at Rs.8.50/sq.ft. When smaller extent was taken as comparable sale, Court below has rightly given 1/3rd deduction and enhancement of compensation by the Court does not warrant interference. In so far as interest, Court has awarded interest at the rate of 9% from 25.03.1997 to 24.03.1998, 12% from 25.03.1998 to 24.03.1999, 15% from 25.03.2009 and future interest at the rate of 15% till the date of payment. Section 12 of the Act contemplates flat rate of interest at 6% p.a from the date of taking of compensation. The award of different rate of interest 9%, 12% and 15% is not in accordance with Sec.6 of Act 31/1978. So far as award of interest at different rates, the order of the lower Court is to be modified. 17. As per the order in M.P.No.1 of 2007 dated 010. The award of different rate of interest 9%, 12% and 15% is not in accordance with Sec.6 of Act 31/1978. So far as award of interest at different rates, the order of the lower Court is to be modified. 17. As per the order in M.P.No.1 of 2007 dated 010. 2007, interim stay was granted on condition that the petitioner depositing a sum of Rs.10,92,316.80 with interest at 6% from 25.03.1997 to the credit of L.A.C.M.A.No.6 of 2004 on the file of Sub Court, Tirupattur. 18. In the result, the judgment and decree made in C.M.A.No.6/2004 dated 20.12.2005 on the file of Sub Court, Tirupattur enhancing the compensation and solatium are confirmed. Award of different rates of interest viz., 9%, 12% and 15% is reduced to 6% per annum from 23. 1997 till the date of deposit of the amount and the Second Appeal is partly allowed to that extent. Claimants/respondents are entitled to withdraw the entire amount deposited to the credit of C.M.A.No.6/2004 dated 20.12.2005 on the file of Sub Court, Tirupattur immediately on receipt of copy of this judgment. Balance amount, if any payable has to be deposited by the Special Tahsildar (Land Acquisition), Harijan Welfare, Tirupattur within a period of twelve weeks from the date of receipt of copy of this judgment. On such deposit of balance amount also, the claimants are entitled to withdraw the entire balance amount so deposited. Consequently, M.P.No.1 of 2007 is closed.