ORDER : Ninala Jayasurya, J. The appellants / claimants aggrieved by a Common Order dated 08.08.2007 in O.P.Nos.111, 112, 114, 115, 117, 118, 119, 120, 121, 123, 124, 125, 127 and 128 of 2003 on the file of the Court of Principal Senior Civil Judge, Nandyal (hereinafter referred to as ‘the Reference Court’), preferred the present batch of appeals with regard to fixation of market value in respect of three categories of lands acquired from them, the details of which are as follows: Category No.1: Sl.No. Extent Survey No. O.P.No. LAAS No. 1 Ac.0.86 cents 1893/1A 112 of 2003 605 of 2011 Category No.2 Sl.No. Extent Survey No. O.P.No. LAAS No. 1. Ac.0.50 cents 1888 118 of 2003 597 of 2011 2. Ac.10.84 cents 1866, 1867, 1868, 1869, 1875, 1896/2 125 of 2003 598 of 2011 3. Ac.0.50 cents 1887/B 1888 124 of 2003 655 of 2011 4. Ac.0.50 cents 1888 123 of 2003 585 of 2011 5. Ac.2.16 cents 1889 119 of 2003 656 of 2011 Category No.3 Sl. No. Extent Survey No. O.P.No. LAAS No. 1. Ac.0.06 ½ cents 1878 111 of 2003 596 of 2011 2. Ac.0.05 ½ cents 1884 121 of 2003 604 of 2011 3. Ac.0.05 ½ cents 1883/A 127 of 2003 606 of 2011 4. Ac.1.74 ½ cents 1878 128 of 2003 615 of 2011 5 Ac.1.96 ½ cents 1884 114 of 2003 641 of 2011 6 Ac.2.01 cents 1883/A 115 of 2003 642 of 2011 Brief facts of the case: 2. For the purpose of construction of a spill way and formation of surplus course, a Draft Notification under Section 4 (1) of the Land Acquisition Act (hereinafter referred to as ‘the Act’) was published on 18.03.1994 for acquisition of land of an extent of Ac.25.66 cents in various survey numbers belonging to the appellants / claimants and others situated in Owk village of Banaganapalle Mandal, Kurnool District. The Draft Declaration under Section 6 of the Act was published simultaneously. After issuing notices as per the provisions of the Act, the Land Acquisition Officer conducted enquiry and passed Award No.26/1993-94 dated 31.03.1994. The Land Acquisition Officer classified the land under acquisition into three categories i.e., (i) Dry lands without irrigation potentiality; (ii) Dry lands with irrigation potentiality with the water of wells; and (iii) Dry lands having house site potentiality with approved lay out plans and situated near the industrial area. 3. The Land Acquisition Officer classified the land under acquisition into three categories i.e., (i) Dry lands without irrigation potentiality; (ii) Dry lands with irrigation potentiality with the water of wells; and (iii) Dry lands having house site potentiality with approved lay out plans and situated near the industrial area. 3. The Land Acquisition Officer while fixing the market value of the land, considered as many as 163 sale transactions occurred in the village, three years prior to the issuance of Section 4 (1) Notification. Basing on the sale transaction at S.No.58 of the sale statistics, the Land Acquisition Officer fixed the market value of the Category No.2 @ Rs.59,000/- per acre. Insofar as Category Nos.1 and 3 lands are concerned, he fixed the market value @Rs.30,000/- and Rs.5,00,000/- per acre respectively. 4. Having dissatisfied with the compensation awarded by the Land Acquisition Officer, the appellants / claimants received the same under protest and sought reference under Section 18 of the Act seeking compensation @ Rs.10,00,000/- per acre. 5. Before the Reference Court, on behalf of the Referring Officer, P.Ws.1 and 2 were examined and Ex.A1-Copy of the Award No.26/1993-94 dated 31.03.1994 was marked. However, the evidence of P.W.1 was eschewed. On behalf of the claimants, R.Ws.1 to 4 were examined and Exs.B1 to B7 were marked. 6. The Reference Court formulated a point as to whether the Award passed by the Land Acquisition Officer is just and proper, if not, what should be the proper estimate of the market value of the land under acquisition, for which the claimants are entitled? 7. Answering the said point, the learned Reference Court examined the oral and documentary evidence and enhanced the market value of Category-1 Dry lands without irrigation potentiality from Rs.30,000/- to Rs.45,000/- per acre, Category-2 Dry lands with irrigation potentiality with the water of wells from Rs.59,000/- to Rs.88,000/- and Category No.3-Dry lands having house site potentiality with approved lay out plans and situated near the industrial area from Rs.5,00,000/- to Rs.7,00,000/- per acre. The Reference Court awarded all the benefits in terms of the statute. 8. Heard Mr.K.Rathanga Pani Reddy, learned counsel for the appellants. Also heard Smt.A.Jayanthi, learned Government Pleader appearing for the respondents. 9. The Reference Court awarded all the benefits in terms of the statute. 8. Heard Mr.K.Rathanga Pani Reddy, learned counsel for the appellants. Also heard Smt.A.Jayanthi, learned Government Pleader appearing for the respondents. 9. Assailing the Order of the Reference Court, Mr.K.Rathanga Pani Reddy, the learned counsel for the appellants contended inter alia that the learned Reference Court had not fixed the compensation in respect of the acquired lands adequately though evidence in support of the enhancement was adduced by the appellants / claimants, that the belting system / method adopted by the Reference Court is not tenable, as the subject matter acquisition is one stretch of land for the purpose of construction of a spill way. 10. He contended that Category Nos.1 & 2 lands are abutting the Category No.3 lands and surrounded by industrial area with roads on both sides. Category No.2 lands are situated besides the Category No.3 lands in the approved lay out and have similar potentiality as house sites. Further that, 30% deduction in respect of the Category No.3 lands, which are situated in approved lay out is not tenable. Referring to Exs.B1 to B4 i.e., Rough Sketch and Approved Lay Out Plans, the learned counsel for the appellants submits that the potentiality of the land is required to be considered, in as much as all the lands under acquisition are contiguous and the learned Reference Court ought to have applied the same analogy to the Category No.2 lands and fixed the compensation as was done in respect of the Category No.3 lands based on Exs.B5 to B7. 11. Drawing the attention of the Court to the oral evidence, the learned counsel also contended that nothing was elicited in the cross examination of the claimants’ witnesses that the potentiality of Category Nos.1 & 2 lands is not similar to the Category No.3 lands and in such circumstances, the learned Reference Court went wrong in not fixing the market rate of Category Nos.1 and 2 lands on par with the Category No.3 lands. Making the said submissions and placing reliance on the decisions of the Hon’ble Supreme Court in Smt. Lila Ghosh (Dead) through L.R. vs. State of West Bengal , [ AIR 2004 SC 288 ] Calcutta Metropolitan Development Authority vs. M/s.Dominion Lard & Industries Ltd., , [ AIR 1995 SCW 2470 ] , Ebrahim Akbaralli & Others vs. District Deputy Collector, Pandharpur Division, District Sholapur , [ 1969 (3) SCC 735 ] and L.A.O., Chittoor v. L.Kamalamma , [ AIR 1998 SC 781 ] , the learned counsel seeks to allow the appeals by enhancing the market value of the subject matter lands as sought for. 12. Refuting the submissions made on behalf of the appellants, the learned Government Pleader sought to sustain the order under challenge. She submits that Category No.3 lands which are situated in the approved lay out are house sites which are far away from the Category Nos.1 and 2 lands and the same cannot be equated, or treated as house sites on par with the Category No.3 lands. She contends that the house sites in the approved lay out cannot be compared with dry lands with or without irrigation facility and the Land Acquisition Officer, after due consideration of the relevant aspects, have rightly classified the lands into three categories. While pointing out that the testimony of P.W.2 remained unshaken as the claimants have not chosen to cross examine him, the learned Government Pleader submits that the appellants / claimants have failed to prove their case and Ex.B1-Rough Sketch cannot be a basis to come to a conclusion that Category Nos.1 and 2 lands are having similar potentiality of house sites as that of Category No.3 lands. She submits that the learned Reference Court by considering the relevant aspects had rightly fixed the market value and the same therefore, warrants no interference by this Court. Contending that the categorization of lands in respect of the lands under acquisition in the present case is valid, that the contention about belting method adopted is misconceived, the learned counsel prays for dismissal of the appeals. In support of her contentions with regard to categorization, the learned counsel placed reliance on the decision of the Hon’ble Supreme Court in Executive Director v. Sarat Chandra Bisoi & Another, 2000 (6) SCC 326 . 13. In support of her contentions with regard to categorization, the learned counsel placed reliance on the decision of the Hon’ble Supreme Court in Executive Director v. Sarat Chandra Bisoi & Another, 2000 (6) SCC 326 . 13. In a short reply, the learned counsel for the appellants submits that there was nothing to cross examine P.W.2, more particularly as no evidence was lead by the Referring Officer that the Category Nos.1 and 2 lands are not having potentiality as house sites. In any event, he submits that as the acquisition of the entire stretch of land is for one purpose, belting system cannot be adopted as laid down by the Hon’ble Supreme Court and as such, the appellants cannot be deprived of the market value in line with Category No.3 lands. 14. Mr.K.Upendra, learned counsel appearing on behalf of some of the appellants adopted the arguments advanced by Mr.K.Rathanga Pani Reddy. 15. On an appreciation of the rival contentions, the point that arises for consideration by this Court is : Whether the fixation of the market value by the Reference Court in respect of the lands under acquisition classified into three categories is just, valid or market value is to be fixed by treating that all the three categories of lands are having similar potentiality and the belting system / method is not applicable? 16. In order to adjudicate the point under consideration, it is appropriate to appreciate the oral and documentary evidence available on record. On behalf of the Referring Officer, the Special Deputy Collector (L.A.O.), Telugu Ganga Project, Nandyal, who was holding full additional charge of Special Deputy Collector (L.A.O.), SRBC, Nandyal was examined as P.W.2. Basing on the record, he deposed about the fixation of market value @ Rs.5,00,000/- per acre in respect of Category No.3 lands and that the documents filed by R.W.1 (claimant in O.P.No.111 of 2003) were no way helpful and the said lands are not comparable lands with the lands under acquisition with reference to the potentiality and fertility, since the same are situated far away from the lands under acquisition. He was not cross examined by the claimants. Be that as it may. 17. On behalf of the appellants / claimants, the claimant in L.A.O.P.No.111 of 2003 was examined as R.W.1. He was not cross examined by the claimants. Be that as it may. 17. On behalf of the appellants / claimants, the claimant in L.A.O.P.No.111 of 2003 was examined as R.W.1. He inter alia deposed that the lands in Category Nos.1 & 2 and the lands in Category No.3 are useful for house sites and having house sites potentiality, that Category Nos.1 and 2 lands also commands the same market value as that of the lands under Category No.3, that all the three categories of lands are situated in the area adjacent to the industrial area and are useful for commercial purposes and that the entire area is already developed and many industries are located as shown in the Rough Sketch marked as Ex.B1. He also deposed that the lands under the Category Nos.1 to 3 are comparable with market value of the lands covered by Exs.B5 to B7 i.e., Registered Sale Deeds of the plots situated in the approved lay out plans marked as Exs.B2 to B4 (All dated 28.08.2004) and that all the three categories of lands are similar in nature, potentiality and are useful for either house sites or for establishing industries. However, except placing reliance on Ex.B1-Rough Sketch, no evidence was adduced with regard to distance between the Category Nos.2 and 3 lands, let alone by examining an independent witness. The other witnesses R.Ws.2 to 4 deposed on similar lines of R.W.1. Be that as it may. Nothing was elicited in the cross examination to drive home the point that the Category Nos.1 and 2 lands are having potentiality as house sites by virtue of their location viz., adjacent to Category No.3 lands. However, it is for the appellants / claimants to substantiate their claim for enhancement by placing cogent material. As noted earlier, except Ex.B1-Rough Sketch, no documentary evidence was adduced to support the contention that the Category Nos.1 and 2 lands have similar potentiality as that of the Category No.3 lands which are situated in approved lay out. 18. However, it is for the appellants / claimants to substantiate their claim for enhancement by placing cogent material. As noted earlier, except Ex.B1-Rough Sketch, no documentary evidence was adduced to support the contention that the Category Nos.1 and 2 lands have similar potentiality as that of the Category No.3 lands which are situated in approved lay out. 18. Placing reliance on the judgments of the Hon’ble Supreme Court referred to hereunder, the learned counsel for the appellants contended that as the lands in question are in one stretch and acquired for specific purpose i.e., construction of spill way and formation of surplus course for Owk Valley complex, market value should have been awarded by treating all the lands as one category and belting system / method adopted by the Reference Court is not tenable. 19. In Smt.Lila Ghosh (dead) through L.R. v. State of West Bengal , [ AIR 2004 SC 288 ] , the Hon’ble Supreme Court was dealing with a case pertaining to the acquisition of land for the purpose of a film studio. The Hon’ble Supreme Court stating inter alia that the land was not acquired for development into small plots where the value of plots near the road would have a higher value whilst those farther away may have a lesser value held that where a compact block is acquired, the belting method would not be the correct method. 20. Calcutta Metropolitan Development Authority v. M/s.Dominion Lard & Industries Ltd., , [1995 AIR SCW 2470] is a case where the Hon’ble Supreme Court, set aside the order of the Calcutta High Court in determining the market value of the acquired land by adopting the method of belting, placing reliance on prices fetched in sale transaction pertaining to a small plot of land said to have been situated in the vicinity of the acquired land, ignoring the undisputed price of the very acquired land fixed under the transaction of an agreement to sell. 21. In Land Acquisition Officer, Revenue Divisional Officer, Chittoor v. Smt.L.Kamalamma (dead) by Lrs., and Others , [ AIR 1998 SC 781 ] , the order of the erstwhile High Court of Andhra Pradesh was carried in an appeal, wherein the High Court keeping in mind the future potentiality of the land under acquisition in comparison to sales of similar lands, accepted the rate fixed by the Reference Court. However, by reducing by 25% thereof inasmuch as 1/4 th of the land will have to be reserved for drains, sewers, roads and such other amenities to be provided in the lay out that may be formed subsequently. While allowing the appeals partly, the Hon’ble Supreme Court inter alia opined that “when a land is acquired which has the potentiality of being developed into a urban land, merely because of some portion of it abuts the main road, high rate of compensation should be paid while in respect of the lands on the interior side should be at lower rate may not stand to reason because when sites are formed those abutting the main road may have its advantages as well as disadvantages. Many a discerning customer may prefer to stay in the interior and far away from the main road and may be willing to pay reasonable higher price for that site.” 22. Ebrahim Akbaralli & Others v. District Deputy Collector, Pandharpur Division, District Sholapur , [ (1969) 3 SCC 735 ] is a case wherein an extent of Ac.8.20 Gunthas and 24 square yards belonging to appellants was acquired, out of which one acre was converted to non-agricultural land in 1949. Before the Land Acquisition Officer, the claimants contended that the one acre of non-agricultural land was divided into plots and they are entitled for compensation @ Rs.5,000/- per plot and in respect of the rest of the lands, they should be paid @ Rs.2,000/- per each plot. However, the Land Acquisition Officer awarded Rs.2,000/- per acre for agricultural lands and Rs.8,000/- per acre for non-agricultural lands. On reference, the District Court confirmed the valuation fixed in respect of the agricultural lands, but so far as the non-agricultural lands are concerned, increased the same by Rs.5,000/-. Aggrieved by the said orders, the claimant carried the matter by way of an appeal to the Bombay High Court, the respondent filed X-Objections. The High Court dismissed the appeal filed by the claimants and allowed the X- Objections holding that valuation of one acre of non-agricultural land to Rs.5,000/- by the District Court was not justified. Before the Apex Court, the appellants / claimants contended that the entire land should have been valued on the basis that it was a non-agricultural land. The High Court dismissed the appeal filed by the claimants and allowed the X- Objections holding that valuation of one acre of non-agricultural land to Rs.5,000/- by the District Court was not justified. Before the Apex Court, the appellants / claimants contended that the entire land should have been valued on the basis that it was a non-agricultural land. The Hon’ble Court observing that adaptability of the agricultural land as site for buildings, is an essential element to be taken into account for determining the market value and referring to Vyricherla Narayana Gajapatiraju v. Revenue Divisional Officer, Vizagapatam , [AIR 1939 Privy Council 98] , wherein it was held that land is not to be valued merely by reference to the use at the time at which its value has to be determined but also by reference to the uses to which it is reasonably capable of being put in the future and that it is the possibilities of the land and not its realized possibilities that must be taken into consideration, allowed the appeal in part, opining that the land acquired should be valued on the basis of its adaptability for building purposes. 23. However, as seen from the material on record, it would appear that the lands under acquisition are not situated in a single block and it is in bits and pieces. The lands in Survey Nos.1866, 1867, 1868 and 1869 forming part of Category No.2 lands are on one side bifurcated by a road and thus not adjacent to Category No.3 lands. Some of the Category No.2 lands in the other Survey Nos.1875, 1876, 1888, 1889 and 1896/2 are scattered. Further, Category No.1 lands are situated far away from Category No.3 lands. It may be noted here that no evidence was adduced by the appellants / claimants as to the distance between Category No.2 lands to Category No.3 lands, Category No.1 to Category No.3 lands as also distance between Category Nos.1 and 2 lands. The Land Acquisition Officer had classified the lands with reference to their nature and taking into account, the relevant sale transactions in respect of the three categories of lands, fixed the market value separately. 24. Under such circumstances, this Court see no reason to hold that the belting system / method adopted by the Reference Court, in the facts and circumstances of the case is not correct. Be that as it may. 24. Under such circumstances, this Court see no reason to hold that the belting system / method adopted by the Reference Court, in the facts and circumstances of the case is not correct. Be that as it may. 25. Insofar as the Category No.3 lands are concerned, the Land Acquisition Officer fixed the market value of the lands having house site potentiality with approved lay out @ Rs.5,00,000/- per acre by taking into account the existence of several slab factories and the labour colonies situated around the same. Exs.B5 to B7 are sale transactions in respect of small extents of Ac.0.5 ½ cents of house sites situated in Survey Nos.1883/A and 1884 in an approved layout which works out to Rs.10,09,090/- per acre. Though the Reference Court expressed a doubt about the genuineness of the transactions vide Exs.B5 to B7 on the premise that they were brought into existence on 08.12.1993 and 09.12.1993 i.e., within two days by the claimants themselves by entering into the sale transactions, as there are no other sales, thought it expedient to take them into account opining that 30% of deduction from out of the value shown under Exs.B5 to B7 would be reasonable. Thus, it has fixed the market value of Category No.3 lands by enhancing it from Rs.5,00,000/- to Rs.7,00,000/- per acre. 26. The learned counsel for the appellants / claimants had argued that the said deduction as made by the Reference Court is not tenable, but this Court is not inclined to accept the same. As seen from the sale transactions referred to in the Award (Ex.A1), it would appear that an extent of Ac.0.06 ½ cents situated in Survey No.1878 forming part of the approved lay out was sold on 07.12.1993 for Rs.46,000/- which works to Rs.7,07,692/- per acre and within three days thereafter, an extent of Ac.0.05 ½ cents and 0.05 ½ cents in the adjacent Survey No.1883/A was sold at Rs.55,500/- vide transactions dated 10.12.1993 which works out to Rs.10,09,090/- per acre. This increase in the rate, more particularly when the lay out was not even approved by the date of the sale transactions raises a doubt as though the same are brought into existence for claiming more compensation. Therefore, this Court see no reason to take a different view and the enhancement of compensation from Rs.5,00,000/- to Rs.7,00,000/- by the Reference Court is confirmed. 27. Therefore, this Court see no reason to take a different view and the enhancement of compensation from Rs.5,00,000/- to Rs.7,00,000/- by the Reference Court is confirmed. 27. Insofar as Category No.2 lands are concerned, the learned Reference Court observing that the Land Acquisition Officer had acquired similar land and fixed Rs.58,000/- per acre as market value thought it reasonable to enhance the market value of the said category of lands under acquisition from Rs.59,000/- to Rs.88,000/-. It is also felt reasonable to enhance the market value of Category No.1 lands from Rs.30,000/- to Rs.45,000/- per acre. However, the said enhancement in respect of these two categories of lands is random and not based on any material on record. The respondents / claimants have also not filed any contemporaneous sale transactions to support their claim seeking enhancement, except Exs.B5 to B7, the evidentiary value of which was already discussed supra. Therefore, the above said fixation is not tenable. Be that as it may. 28. While categorizing the lands under acquisition, the Land Acquisition Officer opined that they are dry lands with red and mixed soil with and without irrigation potentiality and also having house site potentiality with lay out approved by the Regional Deputy Director of Town Planning, Ananthapur. P.W.2 who deposed on the basis of records did not state anything about the nature of the lands. In the evidence adduced by the appellants / claimants, they asserted that the lands under Category Nos.1 to 3 are similar in nature, potentiality and are useful for either house sites or establishing industries. They denied the suggestion that the lands are not nearer to the village and not fit for house sites. Though no evidence was adduced with regard to distance between the Category No.3 lands and the other two categories of land, nothing could be elicited in the cross examination of the claimant’s witnesses that the Category Nos.1 and 2 lands are not having potentiality as house sites. Therefore, the claim of the appellants for enhancement of market rate in respect of the said lands, merits consideration. However, only the lands in Category No.3 are house sites and as per the Land Acquisition Officer’s Award, the layout plans were approved and there are number of factories and labour colonies around the sites and market rate fixed in respect of the said category is confirmed in the preceding paras. However, only the lands in Category No.3 are house sites and as per the Land Acquisition Officer’s Award, the layout plans were approved and there are number of factories and labour colonies around the sites and market rate fixed in respect of the said category is confirmed in the preceding paras. As the Category No.3 lands stands on a different footing with its’ own advantages, the categorization of the other acquired lands into Category Nos.1 and 2 cannot be found fault with. 29. Going by the categorization made by the Land Acquisition Officer with reference to the nature of the lands, this Court deems it appropriate to determine the market value of the Category Nos.1 and 2 lands taking their potentiality as house sites, however by applying cuts in the light of the settled legal position. In Chimanlal Hargovind Das v. Land Acquisition Officer , [ 1988 (3) SCC 751 ] , the Hon’ble Supreme Court held that while valuing a large block of land, appropriate deduction must be made for setting aside areas for roads, open spaces and dividing the land into smaller plots suitable for construction of buildings. As opined by the Hon’ble Apex Court in Balwan Singh v. State of Haryana , [2022 SCC Online SC 637] , such deductions for the purpose of making a small area of land comparable to larger tracts may range from a minimum of 20% to a maximum of 75%. The said position is reiterated by the Hon’ble Supreme Court in the case of Horrmal (deceased) through his LRs and Others v. State of Haryana & Others. 30. In the light of the above referred decisions, since the market value of the land in respect of Category No.3 is fixed @ Rs.7,00,000/- per acre, taking the same as a yard stick, and potentiality of the Category Nos.2 and 3 lands as house sites, the market value is fixed at Rs.3,50,000/- per acre after deducting 50% towards development charges etc. The Category No.1 lands are far away from the other two categories of lands as could be gathered from Ex.B1-Plan. Therefore, the market value of the Category No.1 lands is fixed @ Rs.2,80,000/- per acre after deducting 60% towards development charges. Point is answered accordingly. 31. In the result, the appeals are allowed in part. The Category No.1 lands are far away from the other two categories of lands as could be gathered from Ex.B1-Plan. Therefore, the market value of the Category No.1 lands is fixed @ Rs.2,80,000/- per acre after deducting 60% towards development charges. Point is answered accordingly. 31. In the result, the appeals are allowed in part. The market value of the Category No.1 lands is fixed at the rate of Rs.2,80,000/- per acre and Category No.2 lands at the rate of Rs.3,50,000/- per acre as against Rs.45,000/- and Rs.88,000/- respectively fixed by the Reference Court. The appellants / claimants are entitled to all the statutory benefits including interest on the enhanced compensation. Rest of the order of the Reference Court stands confirmed. No costs. Consequently, the Miscellaneous Applications pending, if any, shall also stand dismissed.