JUDGMENT By the Court.—All these appeals have come up under Section 54 of Land Acquisition Act, 1894 (hereinafter referred as ‘Act, 1894’) read with Section 96 of Code of Civil Procedure, arising from common award dated 19.11.2004 passed by Additional District Judge, Court No. 17, Meerut, in Land Acquisition References Nos. 136/1991, 135/1991, 140/1991, 137/1991 and 114/1993. 2. The Court below has partly answered references in favour of claimant /tenant holders, determining market value for the purpose of compensation of acquired land @ Rs. 84.00 per square yard. Besides, it has also awarded 30% solatium on the amount of compensation and interest @ 12% per annum from the date of notification under Section 4 of Act 1894, till the date of compensation; 9% per annum from the date of Compensation for the period of one year and 15% for subsequent period till compensation is paid. 3. At the instance of Meerut Development Authority, Meerut for the purpose of constructing residential buildings, acquisition of land in Village Kasheru, Bakshar, and Abdullapur was proposed, in furtherance whereto the State Government issued notification under Section 4 (1) of Act, 1894 in the Gazette dated 14.8.1987. Notification under Section 6 (1) of Act, 1894 was published on 4.9.1987. Special Land Acquisition Officer (hereinafter referred as ‘S.L.A.O.’) determined market value @ Rs. 90,000/- per Bigha i.e. Rs. 29.75 per square yard vide award dated 22.2.1990. Residential scheme for which acquisition in question proceeded was called as “Ganga Nagar Yojana”. 4. Aggrieved by award of S.L.A.O. and being dissatisfied with the rate prescribed therein, claimant-tenure holders/land owners submitted application for making reference under Section 18 of Act, 1894 to the District Judge Meerut, pursuant whereto, 26 references collectively have been decided including references in question of appellants, vide impugned award dated 19.11.2004. Claimants sought payment of compensation by determining market value @ Rs. 300.00 per square yard but Reference Court has determined it @ Rs. 84.00 per square yard. 5. Before this Court appellants have prayed for determination of market value @ Rs. 175.00 per square yard. The case of appellants is that the acquired land comes within the limit of Meerut Nagar Nigam, situated in between Meerut Mawana Road, Meerut, Kila Parikshitgarh Road. It has great potential for development in all respects. On the southern side of acquired land, Sikh Line Regiment Centre, Radha Garden Colony and Commissioner’s residential are situated. 175.00 per square yard. The case of appellants is that the acquired land comes within the limit of Meerut Nagar Nigam, situated in between Meerut Mawana Road, Meerut, Kila Parikshitgarh Road. It has great potential for development in all respects. On the southern side of acquired land, Sikh Line Regiment Centre, Radha Garden Colony and Commissioner’s residential are situated. On the northern side are Electra Vidhyapeeth, Green Park Colony and Aman Vihar Colony; on western side is Defence Colony, Post & Telegraph Colony and Nehru Nagar and on eastern side is Mohalla Abdullapur, Town Area. Even the District Court of Meerut is just 2 and 1/2 k.m. from acquired land. Various Exemplars relied by claimants before Court below showed transfer of land at much higher rate i.e. Rs. 157/- to 293/- per square yard. Still a meagre rate of Rs. 84.00 per square yard has been determined by Court below. 6. Per contra, learned counsel appearing for Meerut Development Authority, Meeurt contended that at the time of acquisition, acquired land was being used for agricultural purposes only. Exemplars relied on behalf of defendant respondents show transfer of land by sale in Bigha at much lesser rate which comes to about Rs. 21.00 to 55.00 per square yard, still Reference Court has awarded Rs. 84.00 per square yard which is on much higher side. 7. We have heard learned counsel for the parties and perused the record. 8. The principles which are to be followed while determining market value of land acquired forcibly, under the provisions of Act, 1894, have now been settled by a catena of decisions in the last two decades. It would be appropriate to have a bird eye view of some of recent authorities on the subject. 9. In Chimanlal Hargovinddas v. Special Land Acquisition Officer, (1988) 3 SCC 751 , the Court has said that a Reference is like a suit which is to be treated as an original proceeding. The claimants are in the position of a plaintiff who has to show that the price offered for his land in the award is inadequate. However, for the said purpose the Court would not consider the material, relied upon by Land Acquisition Officer in award, unless the same material is produced and proved before the Court. The Reference Court does not sit in appeal over the award of Land Acquisition Officer. However, for the said purpose the Court would not consider the material, relied upon by Land Acquisition Officer in award, unless the same material is produced and proved before the Court. The Reference Court does not sit in appeal over the award of Land Acquisition Officer. The material used by Land Acquisition Officer is not open to be used by the Court suo motu unless such material is produced by the parties and proved independently before the Reference Court. Determination of market value has to be made as per market rate prevailing on the date of publication of notification under Section 4 of Act, 1894. The basic principle which has to be followed by Reference Court for determining market value of land, as if, the valuer i.e. the Court is a hypothetical purchaser, willing to purchase land from the open market and is prepared to pay a reasonable price, as on the crucial day, i.e., date of publication of notification under Section 4 of the Act, 1894. The willingness of vendor to sell land on reasonable price shall be presumed. The Court, therefore, would co-relate market value reflated in the most comparable instance which provides the index of market value. Only genuine instances would be taken into account. Sometimes even post-notification instances may be taken into account if they are very proximate, genuine and acquisition itself has not motivated the purchaser to pay a higher price on account of the resultant improvement in development prospects. Proximity from time angle and from situation angle would be relevant considerations to find out most comparable instances out of the genuine instances. From identified instances which would provide index of market value, price reflected therein may be taken as norm and thereafter to arrive at the true market value of land under acquisition, suitable adjustment by plus and minus factors has to be made. In other words a balance sheet of plus and minus factors may be drawn and the relevant factors may be valuated in terms of price variation, as a prudent purchaser would do. The market value of land under acquisition has to be deduced by loading the price reflected in the instances taken for plus factors and unloading for minus factors. 10. The market value of land under acquisition has to be deduced by loading the price reflected in the instances taken for plus factors and unloading for minus factors. 10. Some of the illustrative examples of plus and minus factors given by the Court in Chimanlal Hargovinddas (supra) are as under: Plus factors Minus factors 1 Smallness of size Largeness of area 2 Proximity to a road. Situation in the interior at a distance from the road. 3 Frontage on a road. Narrow strip of land with very small frontage compared to depth. 4 Nearness to developed area. Lower level requiring the depressed portion to be filled up. 5 Regular shape. Remoteness from developed locality. 6 Level vis-a-vis land under acquisition. Some special disadvantageous factor which would deter a purchaser. 7 Special value for an owner of an adjoining property to whom it may have some very special advantage. 11. The size of the land, therefore, would constitute an important factor to determine market value. It cannot be doubted that small size plot may attract a large number of persons being within their reach which will not be possible in respect of large block of land wherein incumbent will have to incur extra liability in preparing a lay out and carving out roads, leaving open space, plotting out smaller plots, waiting for purchasers etc. The Court said that in such matters, the factors can be discounted by making deduction by way of an allowance at an appropriate rate ranging between 20% to 50%, to account for land, required to be set apart for carving out road etc. and for plotting out small plots. 12. The concept of smaller and larger plots should be looked into not only from the angle as to what area has been acquired, but also the number of land holders and size of their plots. When we talk of concept of a prudent seller and prudent buyer, we cannot ignore the fact that in the category of prudent seller the individual land holder will come. It is the area of his holding which will be relevant for him and not that of actual total and collective large area which is sought to be acquired. 13. When we talk of concept of a prudent seller and prudent buyer, we cannot ignore the fact that in the category of prudent seller the individual land holder will come. It is the area of his holding which will be relevant for him and not that of actual total and collective large area which is sought to be acquired. 13. In V.M. Salgoacar & brother Ltd. v. Union of India, (1995) 2 SCC 302 , the land acquired by notification dated 6.7.1970 in village Chicalim near Goa Airport belonged to a single owner. The Court observed, when land is sold out in smaller plots, there may be a rising trend in the market, of fetching higher price in comparison to the plot which are much higher in size. Having said so the Court further said “ though the small plots ipso facto may not form the basis per se to determine the compensation, they would provide foundation for determining the market value. On its basis, giving proper deduction, the market value ought to be determined”. 14. Again in Shakuntalabai (Smt.) and others v. State of Maharashtra, 1996 (2) SCC 152 , 20 acres of land in Akola town was sought to be acquired by notification published on 11.8.1965 under Section 4(1) of Act, 1894 which was also owned by a single person. It is in this context the Court said “the reference Court committed manifest error in determining compensation on the basis of sq. ft. when land of an extent of 20 acres is offered for sale in an open market, no willing and prudent purchaser would come forward to purchase that vast extent of land on sq. ft. basis. Therefore, the Reference Court has to consider valuation sitting on the armchair of a willing prudent hypothetical vendee and to put a question to itself whether in given circumstances, he would agree to purchase the land on sq. ft. basis. No feat of imagination is necessary to reach the conclusion. The answer is obviously no”. 15. ft. basis. Therefore, the Reference Court has to consider valuation sitting on the armchair of a willing prudent hypothetical vendee and to put a question to itself whether in given circumstances, he would agree to purchase the land on sq. ft. basis. No feat of imagination is necessary to reach the conclusion. The answer is obviously no”. 15. We need not go into a catena of other decisions rendered in the last several decades since we are benefited of a recent Division Bench decision of this Court in First Appeal No. 454/2003 and other connected matters, Meerut Development Authority through Its Secretary v. Basheshwar Dayal (since deceased) Through His L.Rs and another, decided on 1.8.2013 wherein the legal principles settled by Apex Court in various judgments, relevant for determination of market value have been crystallized as under: (i) Function of the Court in awarding compensation under the Act is to ascertain the market value of the land on the date of the notification under Section 4(1), (ii) The method for determination of market value may be : (a) Opinion of experts, (b) the price paid within a reasonable time in bona fide transactions of purchase of the lands acquired or the lands adjacent to the lands acquired and possessing similar advantages, (c) a number of years purchase of the actual or immediately prospective profits of the land acquired. (Ref. (1994) 4 SCC 595 para 5 Jawajee Nagnatham v. Revenue Divisional Officer and others) (iii) While fixing the market value of the acquired land, comparable sales method of valuation is preferred than other methods of valuation of land such as capitalisation of net income method or expert opinion method. Comparable sales method of valuation is preferred because it furnishes the evidence for determination of the market value of the acquired land at which a willing purchaser would pay for the acquired land if it had been sold in the open market at the time of issue of notification under Section 4 of the Act. Comparable sales method of valuation is preferred because it furnishes the evidence for determination of the market value of the acquired land at which a willing purchaser would pay for the acquired land if it had been sold in the open market at the time of issue of notification under Section 4 of the Act. However, comparable sales method of valuation of land for fixing the market value of the acquired land is not always conclusive but subject to the following factors : (a) Sale must be a genuine transaction, (b) the sale-deed must have been executed at the time proximate to the date of issue of notification under Section 4 of the Act, (c) the land covered by the sale must be in the vicinity of the acquired land, (d) the land covered by the sales must be similar to the acquired land (e) the size of plot of the land covered by the sales be comparable to the land acquired. (f) if there is dissimilarity in regard to locality, shape, site or nature of land between land covered by sales and land acquired, it is open to the Court to proportionately reduce the compensation for acquired land. (iv) 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 which are as under : Positive factors Negative factors (i) Smallness of size (i) Largeness of area (ii) Proximity to a road. (ii) Situation in the interior at a distance 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) Lower level requiring the depressed portion to be filled up. (vi) Level vis-a-vis land under acquisition. (vi) Some special disadvantageous factor which would deter a purchaser. (vii) Special value for an owner of an adjoining property to whom it may have some very special advantage. (v) For ascertaining the market value of the land, the potentiality of the acquired land should also be taken into consideration. (vi) Level vis-a-vis land under acquisition. (vi) Some special disadvantageous factor which would deter a purchaser. (vii) Special value for an owner of an adjoining property to whom it may have some very special advantage. (v) 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. (vi) Deduction not to be done when land holders have been deprived of their holding 15 to 20 years back and have not been paid any amount. (vii) In fixing market value of the acquired land, which is undeveloped or under-developed, the Courts have generally approved deduction of 1/3rd of the market value towards development cost except when no development is required to be made for implementation of the public purpose for which land is acquired. (Ref. (2011) 8 SCC page 9, Valliyammal and another v. Special Tahsildar Land Acquisition and another, paras 13, 14, 15, 16, 17, 18 and 19. (viii) 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 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. (Ref. (2012) 5 SCC 432 , Mehrawal Khewaji Trust (Registered), Faridkot and others v. State of Punjab and others. (ix) In view of Section 51A of the Act certified copy of sale-deed is admissible in evidence, even the vendor or vendee thereof is not required to examine themselves for proving the contents thereof. This, however, would not mean that contents of the transaction as evidenced by the registered sale-deed would automatically be accepted. The legislature advisedly has used the word ‘may’. A discretion, therefore, has been conferred upon a Court to be exercised judicially, i.e., upon taking into consideration the relevant factors. Only because a document is admissible in evidence, the same by itself would not mean that the contents thereof stand proved. The legislature advisedly has used the word ‘may’. A discretion, therefore, has been conferred upon a Court to be exercised judicially, i.e., upon taking into consideration the relevant factors. Only because a document is admissible in evidence, the same by itself would not mean that the contents thereof stand proved. Having regard to the other materials brought on record, the Court may not accept the evidence contained in a deed of sale. (Ref. (2004) 8 SCC 270 para 28 and 38, Cement Corpn. Of India Ltd. v. Purya and others). (x) While fixing the market value of the acquired land, the Land Acquisition Collector is required to keep in mind the following factors : (a) Existing geographical situation of the land. (b) Existing use of the land. (c) Already available advantages, like proximity to National or State Highway or road and/or developed area, (d) Market value of other land situated in the same locality/village/area or adjacent or very near the acquired land. (xi) Section 23(1) of the Act lays down what the Court has to take into consideration while Section 24 lays down what the Court shall not take into consideration and have to be neglected. The main object of the enquiry before the Court is to determine the market value of the land acquired. The market value is the price that a willing purchaser would pay to a willing seller for the property having due regard to its existing condition with all its existing advantages and its potential possibilities when led out in most advantageous manner excluding any advantage due to carrying out of the scheme for which the property is compulsorily acquired. The determination of market value is the prediction of an economic event viz. a price outcome of hypothetical sale expressed in terms of probabilities. 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. (xii) 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. The existing amenities like water, electricity, possibility of their further extension, whether near about town is developing. (xiii) In fixing market value of the acquired land, which is undeveloped or under-developed, the Courts have generally approved deduction of 1/3rd of the market value towards development cost except when no development is required to be made for implementation of the public purpose for which land is acquired. Deduction of “development cost” is the concept used to derive the “wholesale price” of a large undeveloped land with reference to the “retail price” of a small developed plot. The difference between the value of a small developed plot and the value of a large undeveloped land is the “development cost”. (Ref. (2012) 7 SCC 595 paras 16, 17, 18, 21 and 22, Sabhia Mohammed Yusuf Abdul Hamid Mulla (dead) and others). 16. In the light of above general guidelines and also considering the fact that claimants have to be considered as plaintiffs before Reference Court, therefore, onus initially lay upon them to prove what is the appropriate market rate, we proceed to consider first whether in the present case such onus has been discharged by plaintiffs or not. 17. In the present case, we find that though several documentary and oral evidence have been adduced by the parties but Court below has not examined the same on the ground that there were 141 references before it, out of which 90 stood settled pursuant to an agreement between the parties and under the said agreement compensation was paid @ of Rs. 84.00 per square yard. Since those references have been decided on the basis of compromise rate, settled between the parties therein, the same would be binding and applicable to claimant/tenant holders in the remaining matters also and that is how references of appellants have been adjudicated following the compromise awards of aforesaid 90 references of others. 18. Counsel for appellants, in our view, has rightly contended that settlement award in other matters cannot be held binding on appellants who never agreed to the rate determined therein and that is why they have chosen to contest the matters. Court below has completely erred in law by forcing the said settlement upon the appellants also for deciding references by impugned award. 19. Court below has completely erred in law by forcing the said settlement upon the appellants also for deciding references by impugned award. 19. Learned counsel appearing for defendant respondents, when questioned, could not dispute that award decided on compromise between some other parties cannot bind the claimants who were not parties and were not agreeable to those terms of compromise. Their matters ought to have been decided on merits of their own cases. 20. In the present case, impugned award itself shows that documentary and oral evidence have been relied by the parties but there is no discussion whatsoever of such evidence. Since award has been made by Court below, straight-way following compromise award of other 90 references. We find it difficult to subscribe to the view that the same would be binding upon appellant claimants also. Therefore, the i Impugned award, in our view, cannot sustain. The matters require to be remanded to Court below to decide these references on merits afresh, looking into the evidence on record available before Reference Court by a fresh order. 21. In the result, the appeals preferred by claimant-tenants holders are allowed with cost. The impugned award in so far as it relates to references of appellant-claimants is hereby set-aside. The matter is remanded to Reference Court for deciding Land Acquisition References Nos. 136/1991, 135/1991, 140/1991, 137/1991 and 114/1993, afresh, in the light of observations made hereinabove and in in accordance with law. ———————