JUDGMENT AND ORDER : R.R. Prasad, J. Heard Mr. Y. Ashang, learned G.A. appearing for the State as well as Mr. N. Mahendra, learned counsel appearing for the respondents. 2. This appeal is directed against the Judgment & Order dated 30.04.2014 passed by District Judge, Manipur East in O.S. (LA) No.3 of 2011/16 of 2013 whereby and wherein the compensation for the land acquired was ordered to be fixed at the rate of Rs. 91.83/- per sq. ft. though it had been fixed by the Land Acquisition Officer, Imphal West at the rate of Rs. 18.37/- per sq. ft. 3. A notification under Section 4 of the Land Acquisition Act, 1894 was issued on 16.08.2008 for acquisition of certain lands belonging to the claimants. Subsequently, a notification was issued on 28.01.2009 under Section 6 of the Land Acquisition Act declaring therein that lands sought to be acquired are required for expansion of Imphal Tulihal Airport at Imphal West. Subsequently Government of Manipur directed the Collector of land Acquisition for its acquisition. Thereupon, after observing necessary paraphernalia award was passed by the Collector, Land Acquisition, Imphal West whereby the amount were fixed for compensation for the buildings, ponds, trees etc. Beside that, amount was fixed for compensation for the land at the rate of Rs. 18.37/- per sq. ft. taking the said land to be the agricultural land. Being aggrieved with the rate on which quantum of compensation was fixed the claimants submitted an application under Section 18 of the Land Acquisition Act, which was referred to the Court of District Judge, Manipur East. The claimants adduced evidences to the effect that the lands which was taken to be agricultural land are in fact homestead land over which houses of each of the claimants exists and that in and around the land in question people do have their houses. The claimants claimed for compensation at the rate of Rs. 120/- per sq. ft. on account of the reason that land contiguous to the land in question had been sold @ of Rs. 120/- per sq. ft. The court did not accept the claim of compensation at the rate of Rs. 120/- per sq. ft. rather passed the order for awarding compensation at the rate fixed by the Government for homestead land, i.e. at the rate of Rs. 91.83/- per sq.ft. Being aggrieved with that order, this appeal has been preferred. 4. 120/- per sq. ft. The court did not accept the claim of compensation at the rate of Rs. 120/- per sq. ft. rather passed the order for awarding compensation at the rate fixed by the Government for homestead land, i.e. at the rate of Rs. 91.83/- per sq.ft. Being aggrieved with that order, this appeal has been preferred. 4. Mr. Y. Ashang, learned G.A. submits that the lands in question have been recorded in the Revenue record as agricultural land still the learned District Judge treating the said land as homestead land and ordered to fix compensation at the rate of Rs. 91.83/- per sq. ft. and thereby the court committed illegality. The other submission which was advanced on behalf of the State is that admittedly in the Revenue record the lands in question had been recorded as agricultural land, which according to the claimants was converted into homestead land but that was in contravention of the provision as contained in Section 20 of Manipur Land Revenue and Land Reforms Act, 1960 as conversion of the land was never there with prior approval of the Government and therefore, even if the land would have been homestead land, the claimants are never entitled to get compensation for the homestead land and therefore, the court committed illegality in granting compensation at the rate which has been fixed for homestead land and hence, that order passed by the District Judge is fit to be set aside. 5. As against this, Mr. N. Mahendra, learned counsel appearing for the respondents submits that it is true that the lands in question had been recorded in the Revenue record as agricultural land but over passage of time lands in question as well as the land surrounding those lands were converted into homestead land and in fact Land Acquisition Officer did find buildings over the land of each of the claimants and thereby the compensation was awarded for building. In spite of compensation being fixed for building the land was treated to be agricultural land which was beyond any compensation and hence application was submitted by the claimants under Section 18 of the Land Acquisition Act for reference of the case to the court of District Judge who having appreciated the case of the claimants rightly passed the order for fixation of compensation of the homestead land at the rate of Rs. 91.83 per sq.ft. 91.83 per sq.ft. Learned counsel for the respondents further submits that even if the land recorded as agricultural land is converted into homestead land or that the agricultural land it does have potentiality to be converted into homestead land the compensation needs to be given of the land taking the land as homestead land. In support of his submission, learned counsel has relied upon the decisions rendered in the case of P. Ram Reddy & Ors. -vs- Land Acquisition Officer, Hyderabad Urban Development Authority, Hyderabad & Ors., (1995) 2 SCC 305 and also in the case of Special Land Acquisition Officer & Anr. -vs- M.K. Rafiq Saheb, (2011) 7 SCC 714 . Thus, it was submitted that there has been no illegality or irregularity in the order passed by the District Judge and as such it needs no interference. 6. Having heard learned counsel appearing for the parties, it does appear that it has never been in dispute that the land acquired is homestead land though the said land was recorded in the Revenue record as agricultural land even the land Acquisition Officer has accepted, this fact and thereby he has given compensation for the building. In spite of that land in question was treated to be agricultural land and thereby compensation was passed at the rate of Rs. 18.37/- per sq.ft. fixed by the Government. In that event the claimants being dissatisfied filed an application u/s 18 of the Act for referring it before the District Judge who passed an order for fixation of compensation at the rate of Rs. 91.83/- per sq.ft. fixed by the government but the question which does arise is as to whether the respondents would be entitled to have compensation at the rate fixed for homestead land as the agriculture land has been converted into homestead land without having permission of the Government which is in contravention of Section 20 of Manipur Land Revenue and Land Reforms Act, 1960 which reads as follows: “20. Diversion of land-(1) If any person holding for any purpose wishes to divert such land or any part thereof to any other purpose, except agriculture, he shall apply for permission to the competent authority which may, with the prior approval of the Government and subject to the provisions of this Section and to the rules made under this Act, refuse permission or grant it on such conditions, if any, as may be directed by the Government. (2) Permission to divert may be refused only on the ground that the diversion is likely to cause a public nuisance or that it is not in the interest of the general public or that the holder is unable or unwilling to comply with the conditions that may be imposed under sub-section (3). (3) Conditions may be imposed on diversion for the following objects and no others, namely, in order to secure the public health, safety and convenience, and in the case of land which is to be used as building sites in order to secure, in addition, that the dimensions, arrangement and accessibility of the sites are adequate for the health and convenience of occupies or are suitable to the locality/ (4) If any land has been diverted without permission by the holder or by any other person with or without the consent of the holder, the competent authority, or receiving information thereof, may impose on the person responsible for the diversion a penalty not exceeding one thousand rupees, and may proceed in accordance with the provisions of sub-section (1) as if an application for permission to divert had been made. (5) If any land has been diverted in contravention of an order passed or of a condition imposed under any of the foregoing sub-section, the competent authority may serve a notice on the person responsible for such contravention, directing him, within a reasonable period to be stated in the notice, to use the land for its original purpose or to observe the condition; and such notice may require such person to remove any structure, to fill up any excavation, or to take such other steps as may be required in order that the land may be used for its original purpose, or that the condition may be satisfied. The competent authority may also impose on such person a penalty not exceeding one thousand rupees for such contravention, and a further penalty not exceeding four rupees for each day during which such contravention continues. Explanation: “Diversion” in this section means using land assessed to one purpose for any other purpose, but using land for the purpose of agriculture where it is assessed with reference to any other purpose shall not be deemed to be diversion.” On perusal of the aforesaid provision, it does appear that if any person holding agricultural land intends to convert it for any other purpose than the agricultural purpose he needs to have permission of the competent authority. Admittedly, the claimants have never resorted to that provision, but on account of non resorting to that provision the claimants would not be disentitled to have compensation as it has never been stipulated under the said Act that on account of conversion of the agricultural land without there have being permission of the competent authority the petitioner would be ceasing of his ownership. Rather stipulation is there in Sub-section 4 of Section 20 to the effect that on account of conversion the land owner is liable to pay penalty but the State Government in spite of knowing that the land has been converted into homestead land, never resorted to that provision and thereby it would not be open for the State to take plea that the claimants are not entitled to have compensation of the land converted to be the homestead land. 7. It be further recorded that even the Land Acquisition Officer has treated the land to be the homestead land as compensation has been awarded for the building existing over those lands which would be evident from the chart part of the award given below: Sl. Name of the affected pattadar Village No. Patta No. Dag No. Area in acre Classification Land Compensation Amount Compensation for standing property Remarks 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 1. Chabungbam Menjor Singh, s/o Ch. Mera Singh of Kodompokpi (Sl.No.44 of the Notification) 5- Kodomp-okpi 737 1055 0.48 Anganphou Rs.3,84,094/- Rs.16,51,577/- for Building Rs.18,500/- for Standing Crops & Rs.96,366/- for Standing trees Excepting land compensation he has taken the compensation for the Standing property. 2. 2. 3. 4. 5. 6. 7. 8. 9. 10. 1. Chabungbam Menjor Singh, s/o Ch. Mera Singh of Kodompokpi (Sl.No.44 of the Notification) 5- Kodomp-okpi 737 1055 0.48 Anganphou Rs.3,84,094/- Rs.16,51,577/- for Building Rs.18,500/- for Standing Crops & Rs.96,366/- for Standing trees Excepting land compensation he has taken the compensation for the Standing property. 2. Chabungbam Sanayaima, s/o Ch.Borkumar Singh of Kodompokpi (Sl.No.124 of the Notification) 3- Meitram 255 546 0.57 (P) Anganphou Rs.4,56,283/- Rs.1,52,907/- for Buildings Rs.3,750/- For standing Crops Rs.52,500/- for fish farms & Rs.13,017/- for Standing Trees. -do- 3. Sic 5 Kodom-pokpi 204 354 0.60 (P) Phourel Rs.4,80,118/- Rs.3,24,701/- for Buildings Rs.18,250/- for Standing Crops Rs.80,000/- for Fish Farms & Rs.53,632/- for Standing Trees -do- 4. Chabungbam Amu Singh, s/o Ch.Juge Singh of Kodompokpi (Sl.No.81 of the Notification) 3- Meitram 124 694 1.60 Phourel Rs.12,80,315/- Rs.10,20,106/- for Buildings Rs.1,79,910/- for Fish Farms & Rs.33,026 for Standing Trees -do- 5. Chabungbam Rajnikanta Singh, s/o Ch.Biramangol Singh of Kodompokpi (Sl.No.46 of the notification) 3- Meitram 108/417 649 0.64 Phourel Rs.5,12,126/- Rs.3,35,256/- for Buildings Rs.45,000/- for Fish Farms He has taken all the compensation money. 6. Sorokhaibam Gourakishor Singh, s/o S.Bira Singh of Kodompokpi Mayai Leikai (Sl.No.125 of the notification) 3-Meitram 255/481 546/751 0.45 Anganphou Rs.3,60,089/- Rs.51,171/- for Buildings Rs.5,100/- for Standing Crops Rs.39,000/- for Fish Farms & Rs.47,627/- for Standing Trees He has taken all the compensation money. 8. Thus, it is evident that the character of the land was that of homestead land, but even in a case of agricultural land having potential to be converted into homestead land, the land holders are entitled to get compensation at the rate fixed for homestead land, which proposition has been laid down by the Hon’ble Supreme Court in the case P. Ram Reddy & Ors. -vs- Land Acquisition Officer, Hyderabad Urban Development Authority, Hyderabad & Ors., (1995) 2 SCC 305 wherein it has been observed as follows: “(8) Building potentiality of acquired land. Market value of land acquired under the LA Act is the component of the amount of compensation awardable for such land under Section 23(1) of the LA Act. The market value of such land must relate to the last of the dates of publication of notification or giving or public notice of substance of such notification according to Section 4(1) of the LA Act. The market value of such land must relate to the last of the dates of publication of notification or giving or public notice of substance of such notification according to Section 4(1) of the LA Act. Such market value of the acquired land cannot only be its value with reference to the actual use to which it was put on the relevant date envisaged under Section 4(1) of the LA Act, but ought to be its value with reference to the better use to which it is reasonably capable of being put in the immediate or near future. Possibility of the acquired land put to certain use on the date envisaged under Section 4(1) of the LA Act, of becoming available for better use in the immediate or near future, is regarded as its potentiality. It is for this reason that the market value of the acquired land when has to be determined with reference to the date envisaged under Section 4(1) of the land Act, the same has to be done not merely with reference to the use to which it was put on such date, but also on the possibility of it becoming available in the immediate or near future for better use, i.e. on its potentiality. When the acquired land has the potentiality of being used for building purposes in the immediate or near future it is such potentiality which is regarded as building potentiality of the acquired land. Therefore, if the acquired land has the building potentiality, its value, like the value of any other potentiality of the land should necessarily be taken into account for determining the market value of such land. Therefore, when a land with building potentiality is acquired, the price which its willing seller could reasonably expect to obtain from its willing purchaser with reference to the date envisaged under Section 4(1) of the LA Act, ought to necessarily include that portion of the price of the land attributable to its building potentiality. Such price of the acquired land then becomes its market value envisaged under Section 23(1) of the LA Act. Such price of the acquired land then becomes its market value envisaged under Section 23(1) of the LA Act. If that be the market value of the acquired land with building potentiality, which acquired land could be regarded to have a building potentiality and how the market value of such acquired land with such building potentiality requires to be measured or determined are matters which remains for our consideration now.” Aforesaid proposition has been reiterated by the Hon’ble Supreme Court in the case of Special Land Acquisition Officer & Anr. -vs- M.K. Rafiq Saheb, (2011) 7 SCC 714 . 9. According to Mr. Y. Ashang, learned G.A. appearing for the State the said decisions are not applicable in case of respondents as here in the instant case there has been statutory prohibition of conversion of the agriculture land to homestead land. This aspect of the matter has already been dealt with whereby we have found that no such prohibition is there rather one would be liable to pay penalty for converting the agricultural land to homestead land without having permission from competent authority under the Act. Hence, we do not find any substance in the submission advanced on behalf of the State. Thus in the facts and circumstances stated above, we do not find any legality with the impugned Judgment & Order. Accordingly, this appeal being devoid of any merit, is dismissed. L.C.R may be remitted back.