JUDGMENT : This appeal is by the State under Section 54 (1) of the Land Acquisition Act, 1894 impugning the judgment and award dated 18.10.2014 in LAC.No.41/2011 on the file of the Senior Civil Judge and JMFC, Sindagi (for short, "the Reference Court"). The Reference Court has enhanced the assessment of the market value of the land to Rs.6,77,000/-per acre from Rs.26,580/-per acre as awarded by the Land Acquisition Officer holding that respondents (hereafter referred to as ‘the Claimants’) would be entitled for all statutory benefits accordingly with an addition at 5% of the total compensation as damages for severance. 2. The claimants’ land measuring 03 acres 06 guntas in Sy.No.808/2 of Devar-Hippargi Tq: Sindagi Dist: Vijayapura (hereafter referred to as ‘the subject property’) is notified for acquisition for the purpose of construction of Electricity 110 K.V. station at Devar-Hipparagi, Tq: Sindagi Dist: Vijayapura. The notification under Section 4 (1) of the Land Acquisition Act is dated 12.04.2007. The Land Acquisition Officer has determined the market value of the subject property at the rate of Rs.26,580/-per acre applying the sale statistics method describing the land as Maradi land (dry land). The Land Acquisition Officer has secured the details of the sale deeds executed for the different survey numbers in Devar-Hipparagi, Tq: Sindagi Dist: Vijayapura between 2004 and 2007 from the Sub Registrar’s Office and has taken the average value of the transactions for the dry land in the village during this period as the market value. 3. The claimants, being aggrieved by this determination of the market value, have submitted an application for reference, which is registered with the Reference Court in LAC.No.41/2011. The claimants have examined one of themselves as PW.1 and marked different documents such as exhibits which include the Service Certificate dated 16.12.2013 issued by Hubli Electricity Supply Company Limited (Ex.P.4), RTC for the subject land for year 2007-08 (Ex.P.5), a certified copy of the sale deed dated 12.08.2011 for the land Sy.No.704/A measuring 06 acres 20 guntas of Devar-Hipparagi village Tq: Sindagi Dist: Vijayapura (Ex.P.6), RTC for the year 2013-2014 (Ex.P.7) and a certified copy of the judgment of this Court in MFA.Nos.31998/2011 and connected matters dated 08.02.2013 (Ex.P.8). 4. The Land Acquisition Officer has cross-examined PW.1, but has not otherwise led any evidence. 4. The Land Acquisition Officer has cross-examined PW.1, but has not otherwise led any evidence. The Reference Court referring to the different methods in law for determination of the market value viz., (a) expert’s opinion on market value, (b) sale statistics method and (c) capitalization method, has opined that there is no evidence for determination of the market value of the subject property based on an expert’s opinion and therefore the market value must be determined according based on the sale statistics. The Reference Court opining that the subject property is irrigated land has relied upon the terms of the exemplar sale deed as per Ex.P.6, a certified copy of the sale deed dated 12.08.2011, for determination of the market value to a sum of Rs.6,77,000/-per acre. 5. This sale deed, which is executed in the year 2011, is for a total extent of 06 acres 20 guntas with 02 guntas of pot kharab in Sy.No.704/A of Devar-Hipparagi village Tq: Sindagi Dist: Vijayapura for a total value of Rs.50,00,000/-, or at the rate of Rs.7,69,230/-per acre (Rs.50,00,000.00/6.50 acres = Rs.7,69,230/-per acre). This value is taken as the proximate value of the subject property, and to arrive at the market value as of the date of the preliminary notification, the Reference Court has provided de-escalation at the rate of 3% per annum as this sale deed is dated four years from the date of preliminary notification. Thus, the Reference Court has arrived at the rate of Rs.6,77,000/-per acre after deducting 12% (Rs.7,69,230/-minus 12% of Rs.7,69,230/-is Rs.6,76,922/-which is rounded off to Rs.6,77,000/-). In addition, the Reference Court, relying upon this Court’s judgment dated 08.02.2013 in MFA.Nos.31998/2011 and connected matters, has granted an additional sum of 5% of the total compensation as damages for severance. 6. The learned Additional Government Advocate submits that the Land Acquisition Officer has rightly determined the market value of the subject property as a dry land and not an irrigated land. The Reference Court could not have relied upon Ex.P.4, a certificate issued by Hubli Electricity Supply Company Limited to hold that the subject property has irrigation facilities, or drawn comparison with the sale deed dated 12.08.2011. Even otherwise, the sale deed dated 12.08.2011 which is for the land that has road on three sides unlike the subject property which abuts a road only on one side, could not have been relied upon as an exemplar sale deed. Even otherwise, the sale deed dated 12.08.2011 which is for the land that has road on three sides unlike the subject property which abuts a road only on one side, could not have been relied upon as an exemplar sale deed. The Reference Court has not only relied upon the sale deed dated 12.08.2011 but has also failed to consider the significant difference between these lands. 7. As regards the additional compensation awarded towards damages for severance, the learned Additional Government Advocate submits that there is no evidence on record to indicate that only a part of the claimants’ land is acquired and this acquisition has disrupted the use of the remaining part of land. The Reference Court could not have therefore relied upon the decision of this Court in MFA.Nos.31998/2011 and connected matters for granting the addition of compensation at the rate of 5% as damages for severance. 8. The questions that arise for consideration are that:- a) Whether the Reference Court has erred in relying upon Ex.P.6 sale deed dated 12.08.2011 executed for land in Sy.No.704/A of Devar-Hipparagi Tq: Sindagi Dist: Vijayapur for determination of market value of the subject land, and if it has not erred in relying this sale deed, has it erred in providing the de-escalation at the rate of 3% p.a. and b) Whether the Reference Court is justified in granting additional compensation at the rate of 5% of the total compensation towards damages for severance. 9. The Land Acquisition Officer has determined the market value of the subject property on the premise that it is a dry land relying upon the average sale value as mentioned in certain sale deeds as per communication by the concerned Sub-Registrar. The sale values relate to the years between 2004 and 2007, and the date of the first notification in the present case is 12.04.2007. However, the details other than the sale values or the nature of the lands (i.e., whether dry lands or wet lands) are not placed on record as evidence; the details such as their location and user would be material factors. The nature of the subject property will be a material factor. The Claimants rely on the Certificate dated 16.12.2013 issued by Hubli Electricity Supply Company Limited (Ex.P.4) to substantiate their case that their land had the facility to grow two crops in a year. The nature of the subject property will be a material factor. The Claimants rely on the Certificate dated 16.12.2013 issued by Hubli Electricity Supply Company Limited (Ex.P.4) to substantiate their case that their land had the facility to grow two crops in a year. This Certificate reads that the subject property is serviced with electricity connection in the year 1999. The Claimants’ witness, Sri. Allabax -the claimant No.2 – is categorical in his evidence that they were growing two crops in a year: the first crop being groundnut, sunflower, toordal and etc., and the second crop being onion, groundnut and etc. He also states that subject property is at a distance of 01 km from the village and it abuts a National Highway. 10. The evidence on record establish that the subject property is an irrigated land, and that this land abuts a national Highway. But there is nothing on record to indicate that this evidence is either incredulous or unworthy of acceptance. The only other material evidence on record is a certified copy of the Sale Deed dated 12.08.2011 for the land in Sy.No.704/A of Devar-Hipparagi Tq: Sindagi Dist: Vijayapur. 11. The claimants rely upon Ex.P.6, the sale deed dated 12.08.2011, to contend that within three years from the date of notification, this sale deed is executed for a land in the immediate vicinity of the subject dry land without irrigation, which is sold at the rate of Rs.7,69,230/-. The Hon’ble Supreme Court in G.M., Oil & Natural Gas Vs. Rameshbhai Jivanbhai Patel & Anr, (2008) 14 Supreme Court Cases 745, as regards the reliance on the sale transactions after the date of the notification has observed as follows: “Much more unsafe is the recent trend to determine the market value of acquired lands with reference to future sale transactions or acquisitions. To illustrate, if the market value of a land acquired in 1992 has to be determined and if there are no sale transactions/acquisitions of 1991 or 1992 (prior to the date of preliminary notification), the statistics relating to sales/acquisitions in future, say of the years 1994-95 or 1995-96 are taken as the base price and the market value in 1992 is worked back by making deductions at the rate of 10% to 15% per annum. How far is this safe? How far is this safe? One of the fundamental principles of valuation is that the transactions subsequent to the acquisition should be ignored for determining the market value of acquired lands, as the very acquisition and the consequential development would accelerate the overall development of the surrounding areas resulting in a sudden or steep spurt in the prices. Let us illustrate. Let us assume there was no development activity in a particular area. The appreciation in market price in such area would be slow and minimal. But if some lands in that area are acquired for a residential/ commercial/ industrial layout, there will be all round development and improvement in the infrastructure/ amenities/facilities in the next one or two years, as a result of which the surrounding lands will become more valuable. Even if there is no actual improvement in infrastructure, the potential and possibility of improvement on account of the proposed residential/commercial/ industrial layout will result in a higher rate of escalation in prices. As a result, if the annual increase in market value was around 10% per annum before the acquisition, the annual increase of market value of lands in the areas neighbouring the acquired land, will become much more, say 20% to 30%, or even more on account of the development/proposed development. Therefore, if the percentage to be added with reference to previous acquisitions/sale transactions is 10% per annum, the percentage to be deducted to arrive at a market value with reference to future acquisitions/sale transactions should not be 10% per annum, but much more. The percentage of standard increase becomes unreliable. Courts should therefore avoid determination of market value with reference to subsequent/future transactions. Even if it becomes inevitable, there should be greater caution in applying the prices fetched for transactions in future”. The claimants' reliance on this Sale Deed dated 12.08.2011, which is four years subsequent to the date of the notification, for a dry land in the same village, should be considered with greater circumspection but bearing in mind that the Claimants would be entitled to receive compensation based on the true market value of the subject property. 12. There are differences and similarities between the exemplar land (subject matter of the sale deed dated 12.08.2011) and the subject property. The sale deed dated 12.08.2011 is for a land which is in the same village as the subject property and in its immediate vicinity. 12. There are differences and similarities between the exemplar land (subject matter of the sale deed dated 12.08.2011) and the subject property. The sale deed dated 12.08.2011 is for a land which is in the same village as the subject property and in its immediate vicinity. As pointed out by the learned Additional Government Advocate, the land, which is the subject matter of the sale deed dated 12.08.2011, is bound on 03 sides by road while the subject property is bound by road only on one side. But the undisputed evidence is that the subject property abuts a National Highway. The land for which the sale deed dated 12.08.2011 is executed is a dry land without any irrigation facility, and the subject property, as established by the evidence on record, had irrigation facilities with electricity connection. 13. The value of Rs.7,69,230/-per acre (price as per the sale deed dated 12.08.2011) could be taken as the exemplar value subject to appropriate deduction because of the aforesaid circumstances. However, the question is whether the Reference Court, given that the sale deed dated 12.08.2011 is four years after the notification and the dissimilarities between these lands, has been cautious in allowing deductions for determining a reasonable market value. The Reference Court has observed that the transaction under the sale deed dated 12.08.2011 may not be genuine, but has provided de-escalation only at the rate of 3% per annum. 14. There has to be appropriate deduction towards de-escalation because of the difference in time between the date of acquisition of the subject property and the date of the exemplar sale deed. There could be escalation in the land price as a consequence of the acquisition for construction of the power station, and otherwise because the subject property abuts a National Highway. The deduction towards de-escalation for a period of four years even at the rate of 10% per annum, will be at 40% of the value as mentioned in the sale deed. There has to be further moderation because of the differences between these lands, and another deduction of 5% towards the dissimilarity in terms of the access would be appropriate. The first question is answered holding that the deduction at 12% (at the rate of 3% per annum) is not appropriate and the proper deduction would be 45% of the value as mentioned in the sale deed dated 12.08.2011. The first question is answered holding that the deduction at 12% (at the rate of 3% per annum) is not appropriate and the proper deduction would be 45% of the value as mentioned in the sale deed dated 12.08.2011. In which event the market value for the subject property will be as follows: Rs.7,69,230/--[45% of Rs.7,69,230/-] = Rs.4,23,076.50 which is rounded off to Rs.4,23,000/-per acre. 15. This Court in MFA.Nos.31198/2011 and connected matters, in the light of the evidence on record in that case as regards the partial acquisition of the property and formation of canal in the acquired lands resulting in severance in the use of the lands, has granted compensation as damages for severance. The Reference Court has followed this decision without examining whether there is any material to establish similar losses to the claimants. There is no evidence whatsoever to establish that a part of the claimants’ land is acquired. Therefore, an addition of 5% as damages for severance is improper and cannot be sustained. The second question is answered accordingly. For the foregoing reasons, the following:- ORDER : The Appeal is allowed in part, and the impugned judgment dated 18.10.2014 is modified by reducing the market value of the subject property from Rs.6,77,000/-to Rs.4,23,000/-per acre and setting aside the additional award of 5% of the total compensation as damages for severance. Otherwise, the impugned award remains confirmed.