JUDGMENT By the Court.—Heard Sri H.P. Srivasava, learned Additional Chief Standing Counsel appearing on behalf of the appellant and Sri Anupam Mehrotra, learned Counsel for the respondent Nos. 1/1, 1/2 and 1/3. 2. Through the instant First Appeal under Section 54 of the Land Acquisition Act, appellant-State of U.P. challenged the judgment and decree dated 31.5.1989 passed by the Additional District Judge-III, Raebareli in Land Acquisition Case No. 23 of 1986 : Raja Mohan Singh v. State of U.P. and others, whereby compensation awarded by the Special Land Acquisition Officer (Housing), Collectarate, Kanpur on a reference under Section 18 of the Land Acquisition Act, 1894 at the rate of 1.65 per square feet was enhanced to the tune of Rs. 2.25 per square feet alongwith solatium and interest. 3. Shorn off unnecessary details the facts of the case are as under : The appellant herein is the State of U.P. through Collector Raebareli. Respondent No. 2-U.P. Avas Evam Vikas Parishad [hereinafter referred to as the ‘Parishad’] was established and constituted under the provisions of the U.P. Avas Evam Vikas Parishad Adhiniyam, 1965 [hereinafter referred to as the ‘Adhiniyam, 1965]. Under the Adhiniyam, 1965, the Parishad is entrusted with certain functions and duties for preparing and executing Housing Schemes. For the aforesaid purpose in mind, a Notification dated 8.4.1972 under Section 28 of the Adhiniyam was issued, which is equivalent to Section 4 of the Land Acquisition Act, 1894 [hereinafter referred to as the “Act”]. By the aforesaid notification, a large tract of land was sought to be acquired in two parts i.e. on 30.7.1973, 29 bigha, 13 biswa and 10 biswansi, whereas on 31.1.1977, remaining 6 biswa, 10 biswansi belonging to respondent No. 1-Raja Mohan Singh, pursuant to a Housing Scheme, known as ‘Rae Bareli Land Development and Housing Scheme No. 2 ‘ [hereinafter referred to as the “Scheme”] for construction of houses for the public. 4. The Special Land Acquisition Officer of the Parishad gave award on 19.3.1985, whereby compensation was determined at the rate of Rs. 1.65 per square feet according to the prevailing market rates. As the solatium and interest were not fixed by the award dated 19.3.1985 and as such, the said award dated 19.3.1985 was modified vide award dated 18.9.1986, whereby 30% as solatium and 12% additional compensation were awarded to the respondent No. 1. 5. 1.65 per square feet according to the prevailing market rates. As the solatium and interest were not fixed by the award dated 19.3.1985 and as such, the said award dated 19.3.1985 was modified vide award dated 18.9.1986, whereby 30% as solatium and 12% additional compensation were awarded to the respondent No. 1. 5. It has been stated that as the respondent No. 1/claimant was not satisfied by the compensation awarded by the Special Land Acquisition Officer and as such, he moved for enhancement of compensation before the Civil Court. The Civil Court enhanced the compensation from Rs. 1.65 per square feet to 2.25 per square feet by the impugned judgment and decree dated 31.5.1989. Hence the instant appeal. 6. It is pertinent to mention here that the instant appeal has been filed in the year 1993 alongwith an application for condonation of delay in filing the appeal, which was allowed and delay in filing the appeal was condoned vide order dated 26.11.1992. During the pendency of the instant appeal, cross objections were filed by the respondent No. 1 in the month of August, 1998 alongwith an application for condonation of delay, which was rejected vide order dated 29.8.2003. During the course of arguments, parties did not dispute the fact that both the above orders i.e. dated 26.11.1992 and 29.8.2003 attained finality as both the orders have never been challenged. 7. It is also pertinent to mention here that vide order dated 18.4.1995, a Co-ordinate Bench of this Court provided as under : “Considering all the facts and circumstances and after hearing the learned Counsel, we provide that the appellant shall deposit a sum of Rs. 5 lakhs being a part of the solatium and a sum of Rs. 20 lakhs being a part of interest as awarded by the 3rd Additional District Judge by its order dated 31.5.1989 within a period of two months as prayed and agreed by the learned Counsel for the appellant as well as the respondent No. 2. The said amount would be deposited in the Court of the Third Additional District Judge, Raibareli and the respondent No. 1 will be entitled to withdraw the same. The said amount would be deposited in the Court of the Third Additional District Judge, Raibareli and the respondent No. 1 will be entitled to withdraw the same. In case the above condition is not complied with, within the time indicated above, the benefit of this interim order would not be available and it will be open to the respondent No. 1 to proceed with the execution of the award. As soon as the amount is deposited the attached office of the respondent No. 2 shall stand released.” The aforesaid ad interim order dated 18.4.1995 was modified by a Co-ordinate Bench of this Court vide order dated 4.12.1995 to the following extent : “We, therefore, modify our earlier order dated 18.4.1995 and hereby, we stay the payment or realisation of amount on account of solatium and interest and to that extent execution proceedings shall remain stayed. However, looking to the facts and circumstances of the case and the fat that according to the respondent No. 1 still a huge amount remains to be paid and the fact that the acquisition took place in 1972 and the possession was taken in the year 1973 and 1977, that is to say, a quite long time back, it will be only appropriate that the matter is finally heard and disposed of on an early date.” 8. Sri H.P. Srivastava, learned Additional Chief Standing Counsel, appearing on behalf of the appellant has contended that though the exemplars, which were relied upon by the Special Land Acquisition Officer were the relevant exemplars but even then, the the Court below erred in law in enhancing the compensation from Rs. 1.65 per sq.ft. to 2.25 sq. ft. His submission is that the amendments in the Land Acquisition Act by the Land Acquisition (Amendment) Act, 1984 does not apply to the acquisition proceedings initiated by the Parishad under the provisions of the Adhiniyam, 1965 and as such, no relief could be granted to the respondent No. 1 on the basis of the amendments made in the Act but the Court below, on relying upon the said amendment in the Act, erred in passing the impugned decree. 9. Elaborating his submission, Sri Srivastava has contended that in the absence of any legal evidence on record, the Court below was not justified in enhancing the rate of compensation. 9. Elaborating his submission, Sri Srivastava has contended that in the absence of any legal evidence on record, the Court below was not justified in enhancing the rate of compensation. Furthermore, the findings recorded by the Court below that the rate of land was gradually increasing in the vicinity is wholly incorrect and is perverse. Thus, the Court below erred in law in interfering with the award of the Special Land Acquisition Officer, who have given cogent reasons and had considered the relevant material on record, while making the award. 10. To strengthen his arguments, Sri Srivastava has relied upon the decisions of the Hon’ble Supreme Court in Tejumal Bhojwani (dead) through Lrs. and another v. State of U.P., (2003) 10 SCC 525 , Kasturi and others v. Sate of Haryana, (2003) 1 SCC 354 and Inder Parshad v. Union of India and others, (1994) 5 SCC 239 . 11. Per contra, Sri Anupam Mehrotra, Counsel for the respondent No. 1/1, 1/2 and 1/3 has contended that the provisions of the Act relating to determination and payment of compensation, as amended by the 1984 Act, have been applied in the facts and circumstances of the instant case insofar as in U.P. Avas Evam Vikas Parishad v. Jainul Islam, 1998 (2) SCC 467 , Hon’ble Supreme Court has held that determination and payment of compensation, viz., Section 23 (1-A) and Section 23 (2) and 28 as amended by the Land Acquisition Act, 1984 would be applicable to the Acquisitions for the purpose of the Adhiniyam under Section 55 of the Adhiniyam. 12. We have heard learned Counsel for the parties and perused the records. The reference Court, after exchange of pleadings, framed following issues for adjudicating the matter : 1- D;k v/;kIr dh xbZ Hkwfe dk tks ewY;kadu fu;r fd;k x;k gS] og de fd;k x;k gS ? 2- D;k v/;kIr dh tkus okyh Hkwfe ds lEcU/k esa ;kph dks vfrfjDr Hkwfe ewY; dksbZ Hkh izkI; ? ;fn gkW rks fdl nj ls vkSj fdruk ? 3- ;kph dks D;k vU; dksbZ Hkh izfrdj fofèkd izfo/kku ds vUrxZr izkI; gS ? 4- ;kph fdl mi'ke gsrq vf/kdkjh gS ?” From the side of the respondent No. 1/claimant, Harsh Bahadur Singh was examined as P.W.1, whereas from the side of State of U.P., Satya Narayan Singh, Amin, was examined as D.W.1. 3- ;kph dks D;k vU; dksbZ Hkh izfrdj fofèkd izfo/kku ds vUrxZr izkI; gS ? 4- ;kph fdl mi'ke gsrq vf/kdkjh gS ?” From the side of the respondent No. 1/claimant, Harsh Bahadur Singh was examined as P.W.1, whereas from the side of State of U.P., Satya Narayan Singh, Amin, was examined as D.W.1. From perusal of the impugned decree, it reflects that D.W.1 Satya Narayan Singh, Amin, in his cross-examination, admitted the facts that Firoz Gandhi Colony was constructed on the acquired land; area of acquired land was 30 bigha; in the acquired land, Rajbhawan of Tiloi Estate was situated; acquired land was situated at Lucknow-Allahabad Highway, where Raibareli-Sultanpur Road was connected; Commercial institution and shops were constructed at the edge of the road; value of tree was between Rs. 15/- to 60/-. This witness has also admitted the fact that for the residential as well as commercial purposes, acquired land was the best land in the city and acquired land was situated in the mid of developing city Raibareli, wherein probability and possibility of development were very good. Accordingly, considering the aforesaid evidence, the reference Court was of the view that compensation of Rs. 3/- per square feet was just and proper and as such, considering the large tract of land and after deducting 25% amount, the reference Court determined that Rs. 2.25 paise per square feet as compensation would suffice the interest of justice. 13. It is settled law that for ascertaining the market value of the land, the potentiality of the acquired land should also be taken into consideration. Potentiality means capacity or possibility for changing or developing into state of actuality. It is well-settled that market value of a property has to be determined having due regard to its existing condition with all its existing advantages and its potential possibility when led out in its most advantageous manner. The question whether a land has potential value or not, is primarily one of fact depending upon its condition, situation, user to which it is put or is reasonably capable of being put and proximity to residential, commercial or industrial areas or institutions. The existing amenities like, water, electricity, possibility of their further extension, whether near about Town is developing or has prospect of development have to be taken into consideration. The existing amenities like, water, electricity, possibility of their further extension, whether near about Town is developing or has prospect of development have to be taken into consideration. See Collector Raigarh v. Hari Singh Thakur, AIR 1979 SC 472 , Raghubans Narain v. State of U.P., AIR 1969 SC 465 and Administrator General, W.B. v. Collector Varanasi, AIR 1988 SC 943 . 14. It is important to note that some factors, which are relevant for determination of the amount of compensation, are the nature and quality of land, whether irrigated or unirrigated, facilities for irrigation, presence of fruit bearing trees, location of the land, closeness to any road or highway, evenness of the land, existence of any building or structure and a host of other factors bearing on the valuation of the land. 15. The law is settled on the point that the exempler of the higher value must be considered. It has been so held in the case of Mehrawal Khewaji Trust (Regd.) Faridkot and others v. State of Punjab and others, AIR 2012 SC 2721 . Hon’ble the Apex Court while considering this aspect has held in paragraph-15 as under : “It is clear that when there are several exemplars with reference to similar lands, it is the general rule that the highest of the exemplars, if it is satisfied, that it is a bona fide transaction has to be considered and accepted. When the land is being compulsorily taken away from a person, he is entitled to the highest value which similar land in the locality is shown to have fetched in a bona fide transaction entered into between a willing purchaser and a willing seller near about the time of the acquisition. In our view, it seems to be only fair that where sale-deeds pertaining to different transactions are relied on behalf of the Government, the transaction representing the highest value should be preferred to the rest unless there are strong circumstances justifying a different course. It is not desirable to take an average of various sale-deeds placed before the authority/Court for fixing fair compensation.” 16. It is true that onus to prove entitlement to receive higher compensation is upon the claimants, which they can discharge while placing and proving on record sale instances and such other evidences as they deem proper. It is not desirable to take an average of various sale-deeds placed before the authority/Court for fixing fair compensation.” 16. It is true that onus to prove entitlement to receive higher compensation is upon the claimants, which they can discharge while placing and proving on record sale instances and such other evidences as they deem proper. At the same time, it is also to be kept in mind by the Courts that in given facts and circumstances of the case and keeping in mind the potentiality and utility of the land acquired, it can award higher compensation to ensure that injustice is not done to the claimants and they are not deprived of their property without grant of fair compensation. 17. It has been held in Kaushalya Devi v. L.A.O. Aurangabad, AIR 1984 SC 892 and Suresh Kumar v. T.I. Trust, AIR 1980 SC 1222, that failing to consider potential value of the acquired land is an error of principle. 18. There is no dispute that the acquired land situates at Lucknow-Allahabad Highway Road. It is an admitted fact that the land in question was acquired for residential as well as commercial purposes. There are commercial institution and shops in the close vicinity. In our view the Court below rightly enhanced the rate of compensation. For the aforesaid reasons, we are of the view that potentiality of the acquired land is wider and as such, there is no illegality and infirmity in impugned decree. The appeal is dismissed. The amount, if any, is laying before this Court, the same shall be released in favour of respondents-claimants, expeditiously. —————