Judgment :- R.BANUMATHI,J 1. Feeling aggrieved by the enhancement of compensation from Rs.849.34 per cent to Rs.16,000/- in L.A.O.P.No.313 of 1993 by the I Additional Sub-Court, Coimbatore, Government-Special Tahsildar (Adi Dravidar Welfare) has preferred this appeal. 2. The land in S.F.Nos.1106/1, 1107/1, 1108/1 and 1110/2 measuring an extent of 1.39.0 Hectares (or) 3.45 acres of Ramanathapuram village, Coimbatore District was acquired for giving house site pattas to the Scheduled Caste people. Notification under Sec.4(1) of Land Acquisition Act was published on 10.10.1990. Sec.5-A enquiry was conducted on 28.12.1990. Sec.6 declaration was published on 04.10.1991. Land Acquisition Officer [LAO] has taken 251 sale deeds from 01.02.1988 to 10.04.1989. Upon analysis of sale deeds, LAO has taken Town S.No.1107/3 as data land opining that the said land is the same tharam and quality of the acquired lands. Under sale deed dated 30.05.1988, an extent of 30 cents in S.F.No.463/2 of Ramanathapuram village was sold for Rs.26,264/- and per acre is calculated at Rs.84,934/- [per sq. ft. - Rs.1.95 paise]. Based on which, LAO has fixed the market value of the acquired lands and awarded compensation of Rs.2,93,022.30 with 30% solatium totalling into Rs.3,80,929/-and passed the award on 23.03.1992. 3. On objection raised by the land owner, reference under Sec.18 of the Act was made. Before the Reference Court, 1st Claimant-Balasubramaniam was examined as CW1 and one Govindaraj, who was working as Manager in A.L.G. Matriculation school was examined as CW2 and Manager of Mahendra Industries was examined as CW3. Exs.C1 to C8 were marked on the side of Claimants. On side of Referring Officer, one Prakasam, who was then working as Special Tahsildar, Adi Dravidar Welfare Scheme was examined as RW1. On the side of Referring Officer, Exs.R1 to R4 were marked. 4. Based upon Ex.C3 sale deed [15.09.1989], Reference Court fixed the value at Rs.20,000/- per cent. Giving 1/5th deduction for development charges, Reference Court has fixed the market value at Rs.16,000/- per cent.Reference Court also ordered 30% solatium and interest at 12% from the date of Sec.4(1) notification i.e. 10.10.1990 till the date of deposit. 5. Mr.Ravi, learned Special Government Pleader appearing for the Appellant submitted that LAO has taken the relevant sale deed which is prior to Sec.4(1) notification and has rightly fixed the market value as Rs.849.34 and while so, Court below erred in relying upon the sale deed Ex.C3 [15.09.1989] without any basis. 5. Mr.Ravi, learned Special Government Pleader appearing for the Appellant submitted that LAO has taken the relevant sale deed which is prior to Sec.4(1) notification and has rightly fixed the market value as Rs.849.34 and while so, Court below erred in relying upon the sale deed Ex.C3 [15.09.1989] without any basis. Placing reliance upon (2009) 5 MLJ 2 [Special Tahsildar, Neighbourhood Scheme, Erode, Erode District v. Jaganathan Gounder and another], it was contended that the trend of various Judgments of the Supreme Court indicates deduction on account of development charges in the range of 33% and while so, Reference Court erred in giving only 1/5th deduction. 6. We have heard Mr.K.Kanniah Naidu, learned counsel appearing for the Respondents/Claimants. Learned counsel for the Respondents submitted that the acquired lands are in the midst of developed area and the acquired lands are surrounded by hospitals, mills and schools and submitted that the enhancement is very less warranting no interference. 7. According to Appellant, the data land in Town S.No.1107/3 is of the same tharam and quality of the acquired lands. LAO has further stated that the acquired lands are about 6 or 7 feet depth and it would not fetch higher value and rightly taken the data land in S.No.1107/3 which is on the eastern side as of same tharam and quality. 8. Principles for determination of market value:- For determining the amount of compensation payable in respect of the lands acquired by the State, market value therefor is to be ascertained. The expression market value has been the subject matter of consideration by the Supreme Court in several cases. Market value is the price that the willing purchaser would pay to the willing seller for the property having due regard to its existing condition with all its existing advantages and its potential possibilities. In considering the market value the guiding factor would be the conduct of hypothetical willing vendor who would offer the land and a purchaser in normal human conduct would be willing to buy as a prudent man in normal market conditions. For ascertaining the market value of the land, the area of the land, nature thereof and advantages and disadvantages occurring therein amongst others would be relevant factor for determining the actual market value of the property. That apart, potentiality of the acquired land should also be taken into consideration. 9. For ascertaining the market value of the land, the area of the land, nature thereof and advantages and disadvantages occurring therein amongst others would be relevant factor for determining the actual market value of the property. That apart, potentiality of the acquired land should also be taken into consideration. 9. In a catena of decisions, the Supreme Court has laid down the governing principles for determination of market value and the amount of compensation. The positive as well as negative factors and potentiality of the land to be taken into consideration for arriving at the correct market value. In (2005) 4 SCC 789 [Viluben Jhalejar Contractor v. State of Gujarat], the Supreme Court held as under:- "18. One of the principles for determination of the amount of compensation for acquisition of land would be the willingness of an informed buyer to offer the price therefor. It is beyond any cavil that the price of the land which a willing and informed buyer would offer would be different in the cases where the owner is in possession and enjoyment of the property and in the cases where he is not. 19. Market value is ordinarilythe 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 neighbourhood at or about the date of notification under Section 4(1) or otherwise, other sale instances as well as other evidences have to be considered. 20. The amount of compensation cannot be ascertained with mathematical accuracy. A comparable instance has to be identified having regard to the proximity from time angle as well as proximity from situation angle. For determining the market value of the land under acquisition, suitable adjustment has to be made having regard to various positive and negative factors vis-a-vis the land under acquisition by placing the two in juxtaposition. A comparable instance has to be identified having regard to the proximity from time angle as well as proximity from situation angle. For determining the market value of the land under acquisition, suitable adjustment has to be made having regard to various positive and negative factors vis-a-vis the land under acquisition by placing the two in juxtaposition. The positive and negative factors are as under:- Positive factors Negative factors (i) smallness of size (i) largeness of area (ii) proximity to a road distance (ii) situation in the interior at a from the road (iii) frontage on a road (iii) narrow strip of land with very small frontage compared to depth (iv) nearness to developed area (iv) lower level requiring the depressed portion to be filled up v) regular shape (v) remoteness from developed locality (vi) level vis-a-vis land under (vi) some special disadvantageous acquisition factors which would deter a purchaser (vii) special value for an owner of an adjoining property to whom it may have some very special advantage 21. Whereas a smaller plot may be within the reach of many, a large block of land will have to be developed preparing a layout plan, carving out roads, leaving open spaces, plotting out smaller plots,waiting for purchasers and the hazards of an entrepreneur. Such development charges may range between 20% and 50% of the total price. 10. First Claimant was examined as CW1. In his evidence, CW1 has stated that the acquired land is situated in between two main roads – Avinashi and Trichy road. CW1 has further stated that on the eastern side there is Meena Estate and on the western side Amman kulam colony and on the northern side TVF Foundry and hospital and on the southern side Souripalayam - Puliyakulam road. CW1 has further stated that within the distance of 200 meters from the acquired lands, there are number of Mills, School and Hospitals are situated. CW1 has stated that A.L.G. Matriculation school has already asked the acquired lands for sale at the rate of Rs.70,000/- per cent. He has further stated that one Mahendra Industries also asked the acquired lands for sale at the rate of Rs.70,000/- per cent. CW1 has reiterated that the guideline value for the acquired lands itself was Rs.60,000/- per cent. 11. The Manager of A.L.G. Matriculation school was examined as CW2. He has further stated that one Mahendra Industries also asked the acquired lands for sale at the rate of Rs.70,000/- per cent. CW1 has reiterated that the guideline value for the acquired lands itself was Rs.60,000/- per cent. 11. The Manager of A.L.G. Matriculation school was examined as CW2. In his evidence, CW2 has stated that in 1988 to 1990, they were searching lands for playground of their school and negotiated for purchase of the acquired lands at the rate of Rs.60,000/- per cent; but whereas the land owners have insisted the price at Rs.75,000/- to Rs.80,000/-per cent. CW3-Manager of Mahendra Industries was also examined on the side of Claimants. In his evidence, CW3 has stated that the acquired lands is at about 2 furlongs from their factory. CW3 has stated that the acquired lands being adjacent to National Highways i.e. in between Avinashi road and Trichy road, they have found the acquired lands suitable for expansion of their factory and negotiated the price at the rate of Rs.50,000/- to Rs.55,000/- per cent. But the land owners insisted at the rate of Rs.75,000/- per cent. In this regard, CW3 has also produced Ex.C5 copy of the letter sent by them to the Claimants asking to sell the property at the rate of Rs.60,000/- per cent. Considering the evidence of CWs.2 and 3, Reference Court found that there was no agreement for purchase of the lands and therefore, the value of the acquired lands stated by CWs.2 and 3 cannot be taken as it is. 12. From the oral evidence of CWs.1 to 3, it is made clear that the acquired lands are situated in between Avinashi road and Trichy road and the same is surrounded by Mills, Hospitals and Educational Institutions. The acquired lands being situated within the Corporation limits and developed area, LAO was not justified in fixing the value at Rs.849.34 per cent. 13. To show that the acquired lands would fetch more than Rs.50,000/- per cent, Claimants have produced four documents as under:- Exhibits No. S.No. and Extent Sale Value Rs. Per cent/sq.ft. value Rs. Ex.C3 dt. 15.09.1989 S.No.1105/2 638 sq.ft. [1½ cent] Rs.30,000/- Market value Rs.44,660/-Rs.20,000/- per cent Ex.C4 dt.07.6.1990 S.No.1105/3C 326 sq.ft. with terraced house. Rs.58,700/- Rs.80/- per sq.ft. Ex.C6 dt.22.03.1989 S.F.No.1105/1A 2662 sq.ft. 5¼ cent with Hut Rs.1,93,000/-Rs.70/- per sq.ft. Ex.C7 dt.15.09.1989 S.F.No.1105/1B1A 2125 sq.ft. 4½ cent with Mangalore tiled house. Rs.1,92,000/-Rs.70/- per sq.ft. Per cent/sq.ft. value Rs. Ex.C3 dt. 15.09.1989 S.No.1105/2 638 sq.ft. [1½ cent] Rs.30,000/- Market value Rs.44,660/-Rs.20,000/- per cent Ex.C4 dt.07.6.1990 S.No.1105/3C 326 sq.ft. with terraced house. Rs.58,700/- Rs.80/- per sq.ft. Ex.C6 dt.22.03.1989 S.F.No.1105/1A 2662 sq.ft. 5¼ cent with Hut Rs.1,93,000/-Rs.70/- per sq.ft. Ex.C7 dt.15.09.1989 S.F.No.1105/1B1A 2125 sq.ft. 4½ cent with Mangalore tiled house. Rs.1,92,000/-Rs.70/- per sq.ft. 14. Since under Exs.C4, C6 and C7, plot was sold along with house/hut therein, Reference Court has not taken into consideration Exs.C4, C6 and C7. Under Ex.C3 sale deed [15.09.1989], 1½ cent was sold for Rs.30,000/- and per cent is calculated at Rs.20,000/-. Even in Ex.C3 sale deed, the market value is stated as Rs.44,660/-. In our considered view, Ex.C3-sale deed being proximate from time angle and proximity from situation angle was rightly taken as comparable instance. The value taken by the Reference Court at Rs.20,000/- per cent cannot be said to be exorbitant or on the higher side. 15. Deduction towards Development charges:- While fixing the market value, it is permissible for the LAO to give necessary deduction towards development charges. In such cases, the LAO must record reasons about the disadvantage of the land acquired and the purpose for which the land was sought to be acquired as well as the percentage of land necessary for providing developments like provision of roads, electricity, water and sewerage and other facilities. The extent of deduction cannot be put in a straitjacket formula and it varies from case to case. The Supreme Court had time and again indicated the factors to be considered by the LAO for making deduction towards development charges as well as percentage of deduction. Such deduction is also not automatic unless there is a factual finding that deduction was absolutely necessary in the facts of the case by taking into consideration the ground situation. In case the property has already been developed, there would be no requirement of deduction towards development. 16. In 2008 (13) SCALE 202 [Naganath (dead) by LRs. v. Assistant Commissioner and Land Acquisition Officer and another], the Supreme Court observed that the trend of the various Judgments of the Supreme Court indicates deduction on account of development charges in the range of 1/6th to 33%. 17. 16. In 2008 (13) SCALE 202 [Naganath (dead) by LRs. v. Assistant Commissioner and Land Acquisition Officer and another], the Supreme Court observed that the trend of the various Judgments of the Supreme Court indicates deduction on account of development charges in the range of 1/6th to 33%. 17. The Supreme Court in Atma Singh v. State of Haryana [(2008) 3 MLJ 806 (SC)] referred to an earlier decision relating to deduction towards development charges, in Bhagwathula Samanna v. Special Tahsildar & Land Acquisition Officer, AIR 1991 SC 2298 : (1991) 4 SCC 506 : (1992) 1 MLJ 9 , wherein it was held as follows:- "9. ..... In fixing the market value of a large property on the basis of a sale transaction for smaller property, generally a deduction is given taking into consideration the expenses required for development of the larger tract to make smaller plots within that area in order to compare with the small plots dealt with under the sale transaction. However, in applying this principle of deduction it is necessary to consider all relevant facts. It is not the extent of the area covered under the acquisition which is the only relevant factor. If smaller area within the large tract is already developed and situated in an advantageous position suitable for building purposes and have all amenities such as roads, drainage, electricity, communications, etc. then the principle of deduction simply for the reason that it is part of the large tract acquired, may not be justified." 18. Placing reliance upon (2009) 5 MLJ 2 [Special Tahsildar, Neighbourhood Scheme, Erode, Erode District v. Jaganathan Gounder and another], learned Special Government Pleader submitted that 40% deduction should be made towards development cost and 20% on account of small size of plot taken as basis to arrive at the market value. It was further submitted that having regard to the nature of small size of plot, Reference Court was not right in making 20% deduction and the deduction ought to have been more. 19. It is true that deduction for development charges ought to be adequately provided for, but it varies from place to place, area to area and amount of development which are required to be carried out and thus there cannot be any fixed amount of deduction towards development charges. 20. 19. It is true that deduction for development charges ought to be adequately provided for, but it varies from place to place, area to area and amount of development which are required to be carried out and thus there cannot be any fixed amount of deduction towards development charges. 20. We find that the acquired lands are in the midst of developed area and very near to the city and the acquired lands have potential for development. As we have pointed out earlier, from the evidence of CWs.1 to 3, it is proved that the acquired lands are in the midst of developed area. Total land acquired was 3.45 acres. We are therefore of the view that it would be appropriate if 20% deducted for the development charges. 21. Directing deduction of 20% from the market value of the land, in (2004) 10 SCC 745 (Kiran Tandon v. Allahabad Development Authority and another), the Supreme Court held as under:- "16. ...... The evidence on record indicates that the acquired land is situate in a developed area and approach road to the land and also power lines are available. However, in construction of multi-storeyed residential flats a considerable portion of the land has to be left out for internal roads, sewer line, open space, etc. In such circumstances the High Court was justified in directing deduction of 20 per cent from the market value of the land". When the acquired lands are in the midst of developed area, there need not be higher deduction. The lands were acquired for giving house site plots to the Scheduled Caste people. Ofcourse, the amenities such as road, common drainage facilities, water and sewerage, electricity and other basic amenities have to be provided. Since the acquired lands are situated within the city limits, to provide the above facilities and amenities, in our considered view, 1/5th deduction made by the Reference Court is reasonable warranting no interference. 22. In the result, enhancement of compensation made by the I Additional Subordinate Judge, Coimbatore in L.A.O.P.No.313 of 1993 is confirmed. Solatium awarded at the rate of 30% and the interest at 12% p.a. awarded is also confirmed and the appeal is dismissed. 22. In the result, enhancement of compensation made by the I Additional Subordinate Judge, Coimbatore in L.A.O.P.No.313 of 1993 is confirmed. Solatium awarded at the rate of 30% and the interest at 12% p.a. awarded is also confirmed and the appeal is dismissed. It was stated that as per the interim order dated 28.07.2006, Appellant was directed to deposit 25% of the enhanced compensation and Respondents were permitted to withdraw 50% of the deposited amount and 50% was ordered to be invested in a Nationalised Bank. Learned counsel for the Claimants submitted that Claimants have withdrawn 50% of the deposited amount as directed by the Court. Claimants are permitted to withdraw remaining 50% deposited amount along with accrued interest lying in a Nationalised Bank immediately after the receipt of copy of this Judgment. Appellant is directed to deposit the balance compensation amount i.e. 50% along with accrued interest within a period of eight weeks from the date of receipt of copy of this Court. On such deposit, the Claimants are entitled to withdraw the entire compensation amount. Consequently, connected M.Ps. are closed. In the circumstances of the case, there is no order as to costs in this Appeal.