JUDGMENT: Tirumala Devi Eada, J. This appeal, under Section 54 of the LAND ACQUISITION ACT , 1894, (for short ‘the Act’) is preferred by the appellants – claimants, aggrieved by the order and decree dated 02.05.2003 passed in O.P.No.71 of 1999 by the learned Additional District Judge at Mahabubnagar (hereinafter referred to as ‘the Reference Court’). 2. For convenience and clarity, the parties herein are referred to as they were arrayed before the reference Court. 3. The facts of the case in brief are that the land to an extent of Ac.02-28 guntas was acquired by the Government for formation of Metro gauge to Broad gauge railway line at Balanagar. Draft notification under Section 4(1) of the Act was published on 12.01.1996, while the possession was taken on 21.03.1994. After due enquiry, the Land Acquisition Officer has fixed the market value @ Rs.30,000/- per acre. Aggrieved by the said award, the claimants have made an application under Section 18 of the Act, which was referred to the Additional District Judge at Mahabubnagar. 4. The case of the claimants is that the acquired land is very near to the National Highway and that just behind the acquired land there are commercial complexes, hotels and shops, also a railway station and an MRO Office and that the acquired land is of commercial value. 5. The reference Court has framed the following points for consideration: “1. What is the market value of the acquired land by the date of acquisition? 2. Whether the claimant is entitled to enhanced compensation?” 6. Before the reference Court, the claimants got examined PWs 1 to 3 and got marked Exs.A1 to A6. On behalf of the respondent, RW1 was examined and Ex.B1 was marked. 7. Based on the evidence on record, the reference Court has enhanced the compensation to Rs.50,000/- but made a deduction of Rs.15,000/- and thus, arrived at a market value of Rs.35,000/- per acre, apart from statutory benefits. Aggrieved by the said award, the claimants have preferred the present appeal. 8. Heard the submissions of Sri A.Kranthikumar Reddy, learned counsel for the appellants and learned Government Pleader for the respondent. 9. Learned counsel for the appellants has submitted that the reference Court has erroneously arrived at the principle of making deductions for development in an acquisition made for the purpose of broad gauge railway line. 8. Heard the submissions of Sri A.Kranthikumar Reddy, learned counsel for the appellants and learned Government Pleader for the respondent. 9. Learned counsel for the appellants has submitted that the reference Court has erroneously arrived at the principle of making deductions for development in an acquisition made for the purpose of broad gauge railway line. He further argued that the said deductions would be made when it is acquired for the purpose of house sites but not for the purpose of railway line. He further argued that the reference Court failed to consider the evidence of PWs 1 to 3 and also the documents filed under Exs.A1 to A6. He further argued that PW2 is the purchaser of the land under Ex.A1 and his evidence was also not considered by the reference Court and also that the reference Court failed to consider the judgment of the Senior Civil Judge, Mahabubnagar in OP No.249 of 1984, wherein the reference Court has awarded Rs.70/- per square yard and the Hon’ble High Court reduced to Rs.45/- per square yard, when the land was acquired for the purpose of house sites, therefore, they claimed to enhance the compensation to Rs.50/- per square yard. 10. The learned Government Pleader has submitted that the reference Court has considered all the evidence on record and has arrived at just compensation and has therefore, prayed to uphold the same. 11. Based on the above rival contentions, this Court frames the following points for determination: 1. Whether the claimants are entitled for enhancement of compensation? 2. Whether the order and decree of the reference Court need any interference? 3. to what relief? 12. POINT NO.1: a) The sale deeds relied upon by the claimants are under Exs.A1, A2, A4 and A5. Ex.A1 dated 07.11.1995, wherein the land to an extent of 200 Sq.yards was sold @Rs.300/- per square yard in survey No.233 situated at Balanagar Village and Mandal, Mahabubnagar District. Ex.A2 dated 07.11.1995, wherein the land to an extent of 200 Sq.yards was sold @ Rs.250/- per square yard, however, it pertains to survey No.233. Ex.A4 dated 10.12.1993, wherein the land to an extent of 26.66 Sq.yards was sold @ Rs.110/- per square yard in survey No.234. Exs.A1, A2 and A4 pertains to survey Nos.233 and 234 respectively, while the present acquisition is in survey Nos.171, 172, 203 and 204. Ex.A4 dated 10.12.1993, wherein the land to an extent of 26.66 Sq.yards was sold @ Rs.110/- per square yard in survey No.234. Exs.A1, A2 and A4 pertains to survey Nos.233 and 234 respectively, while the present acquisition is in survey Nos.171, 172, 203 and 204. Ex.A5 cannot be considered because it pertains to 10.02.1989 which is five years prior to acquisition. b) The values under Exs.A1, A2 and A4 are different which are Rs.300/- per square yard, 250/- per square yard and 110/- per square yard, so they vary under different survey numbers and the present acquisition does not pertain to the survey numbers under which the above sale transactions have taken place. c) PW1 denied the suggestion that the lands under Exs.A1 and A2 are situated by the side of National Highway and they are fit for commercial purposes. The land under Ex.A1/the sale deed, is stated to be in the village and on the station road and is about 400 yards away from the acquired land, as per the admission made by PW2. PW3 further admitted that the land under Ex.A2 sale deed is around 300 yards away from the National highway and that his plot is situated between the National highway and the railway station. d) Therefore, based on the evidence on record, the said sale transactions under Exs.A1, A2 and A4 pertain to the lands which are abutting the national highway as revealed from the evidence of PWs 1 to 3, while the acquired land is abutting the railway track. Thus, the said sale deeds can be no way compared to the acquired lands. e) The sales statistics as revealed in the award copy under Ex.B1 refers to the sale transactions held at Balanagar village and Mandal during 1993-95. The Land Acquisition Officer has taken the sale transaction at Sl.No.13 under which Ac.1.28 guntas was sold @ Rs.50,000/- and has reduced the value by Rs.20,000/- per acre as the said land was found to be 1 KM away from the National Highway. The reference Court also has taken into consideration the said sale transaction at Sl.No.13 i.e. @ Rs.50,000/- per acre but has given 1/3 rd deduction and arrived at Rs.35,000/- per acre. f) The record reveals that the purpose of acquisition is for laying the broad gauge railway line. The reference Court also has taken into consideration the said sale transaction at Sl.No.13 i.e. @ Rs.50,000/- per acre but has given 1/3 rd deduction and arrived at Rs.35,000/- per acre. f) The record reveals that the purpose of acquisition is for laying the broad gauge railway line. Thus, from the evidence of the witnesses and a perusal of the documents reveal that the acquired land is abutting the railway track, once it is near the railway track, it cannot be held to have any potential for development into commercial purposes. g) It is settled law that whenever the land is acquired for house sites, then a deduction of 1/3 rd is permissible. In U.M. Ramudu & Ors. v. RDO cum LAO Adoni and others , [2016 SCC OnLine Hyd 131] , it was held by a Bench of this Court that the lands are lying in well- developed municipal area, having facility of access to main road, electricity, water lines, etc. but nonetheless, when vast extents of lands which are acquired and are to be developed into a layout, by providing house sites to the weaker sections, 1/3 rd value has got to be deducted. In view of the law laid down in the above cited decision, it is held that deduction of 1/3 rd is proper, wherein the land is acquired for house sites, but in the present case, the acquisition is made for broad gauge railway line, hence, the deduction is not proper in the eye of law. Therefore, the reference Court was right in enhancing the compensation to Rs.50,000/- per acre, however, it is held that the deduction that is made by the reference Court is not just and proper in view of the legal position and has to be set aside. Point No.1 is answered accordingly. 13. POINT NO.2: In view of the reasoned findings arrived at point No.1, it is held that the order and decree of the reference Court need to be modified with regard to the 1/3 rd deduction made by the reference Court and that the compensation arrived at by the reference Court @ Rs.50,000/- per acre yard is upheld but the finding with regard to the deduction of Rs.15,000/- is set aside, as a result of which, the claimants would be entitled to the compensation of Rs.50,000/- per acre, for the acquired land. 14. 14. POINT NO.3: In the result, the appeal is partly allowed by setting aside the order and decree dated 02.05.2003 passed in O.P.No.71 of 1999 by the learned Additional District Judge at Mahabubnagar, with regard to the deduction @ Rs.15,000/- and accordingly, the claimants are entitled to the compensation of Rs.50,000/- per acre for the acquired land. There shall be no order as to costs. Miscellaneous Petitions pending, if any, shall stand closed.