V. RAMASWAMI, J.
1. This appeal is brought by certificate from the judgment of the Bombay High Court, dated November 13, 1963, in First Appeal No. 80 of 1958, whereby the High Court dismissed the appeal filed by the appellants against the decision of the Civil Judge, Senior Division, Sholapur and allowed the cross-objections filed by the respondent in Appeal No. 80 of 1958.
2. The lands bearing Survey No. 93-A (part) and 94-A (part) measuring in all 8 acres 20 Gunthas and 24 square yards belonging to Akbaralli Abdul-hussein of Pandharpur were notified under Section 4 of the Land Acquisition Act, 1894 (hereinafter called “the Act”) under Government Notification R.D. No. 9111/49, dated May 15, 1951 for acquisition for the use of State Transport Department, Bombay for motor stand garage and depot, etc. for State Transport at Pandharpur. Notification under Section 6 of the Act was published on May 31, 1951. Out of the said lands, one acre was converted to non-agricultural land in 1941. It appears that there was some mistake in the measurements of the lands. A correct notification was published on August 27, 1953. After correcting the original notifications the Collector gave notice to the claimant to appear on May 19, 1954 and claim compensation for the entire land acquired which was Rs 2,05,000. The contention of the claimant before the Land Acquisition Officer was that one acre of non-agricultural land was divided into 17 plots and hence he should get compensation at the rate of Rs 5000 per plot in respect of that land and that as regards the rest of the lands, he should be paid on the basis of 60 plots and that he should get Rs 2000 for each plot. By his award, dated June 2, 1955 the Land Acquisition Officer awarded Rs 2000 per acre for agricultural land. The compensation in respect of agricultural land came to Rs 15,009-14-6 and in respect of non-agricultural land the Land Acquisition Officer assessed the compensation at Rs 8000 per acre. The total amount of compensation including solatium was Rs 28,166-10-9. Being aggrieved by the award the claimant made an application for reference under Section 18 of the Act to the District Court. By his judgment, dated September 12, 1957 the Civil Judge, Senior Division, Sholapur, confirmed the valuation of the agricultural land made by the Land Acquisition Officer but so far as the non-agricultural land was concerned he increased the same by Rs 5000 and 15 per cent solatium thereon and thus awarded an additional sum of Rs 6050. Aggrieved by the judgment of the Civil Judge, Senior Division, Sholapur, the appellant filed First Appeal No. 80 of 1958 in the Bombay High Court claiming a sum of Rs 1,70,733-5-3 as further compensation. The respondent filed cross-objections against the additional amount of Rs 6050 awarded by the Civil Judge, Senior Division, Sholapur. By its judgment, dated November 13, 1963 the High Court dismissed the appeal filed by the appellants and allowed the cross-objections filed by the respondent. The High Court held that the increase in the valuation of one acre of non-agricultural land to Rs 5000 by the Civil Judge was not justified.
3. To appreciate the contentions of the parties it is necessary to set out the exact position of the lands acquired which is given in the plan Ext. 43. The plot acquired was a triangular piece including non-agricultural portion which is rectangularly cut out of the whole land. On the southern side of the land leaving a small margin of open space about 25 feet wide, there are some constructions on a portion of land which at one time belonged to the appellant. Beyond these constructions is the Pandharpur Station Road. To the west is the railway line, which cuts Survey Nos. 93 and 94 leaving portions on the other side of the railway line to the west. It is only the triangular portion on the east of the railway line that is acquired. To the west the land belongs to the Municipal Corporation and on a portion stands what is known as Karad Dharamshala, which abuts near the southern end of the eastern boundary. To the north of this Dharamshala are blocks which are known as “Simcox Blocks” built by the Municipal Corporation. To the west of it lie certain constructions built by the Municipality for residence of Vadaras (wandering community) and further east is the Gauthan land. To the north of the acquired land is some construction with roof of corrugated iron sheets. At the southern side beyond the Station Road there is a rectangular area of land of the Padmavati Temple, in one corner of which there is a Durga and on one side there is a temple.
4. On behalf of the appellants it was contended that the entire land should have been valued on the basis that it was non-agricultural land and that there was no justification for treating 7 acres, 20 Gunthas and 24 sq. yds. as agricultural land and awarding compensation on that basis. In our opinion the contention put forward on behalf of the appellants is well founded and must be accepted as correct. It is true that the major portion of the land bears the technical nomenclature non-agricultural land but it possesses all the requisite potentialities for being converted into building sites. The important features to be noticed in the present case are that the disputed land is situated within zone No. 1 of Pandharpur Municipality and part of the land has already been converted to non-agricultural land. There are some buildings already constructed adjacent to the disputed land which also formerly belonged to the original claimant. To the west of the acquired land is the railway line and to the east the Karad Dharamshala and Simcox Blocks. In the south there is a fencing and beyond that fencing are some bungalows of private owners. The fifth building is a veterinary hospital (see the Inspection Note of the Court, dated March 26, 1957). It is well established that adaptability of the agricultural land as site for buildings is an essential element to be taken into account for determining the market-value. In Gajanatiraju v. Revenue Divisional Officer1 it was observed by the Privy Council 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. It is the possibilities of the land and not its realised possibilities that must be taken into consideration. At p. 102 of the report Lord Romer states:
“In the case of land, its value in general, can also be measured by a consideration of the prices that have been obtained in the past for land. of similar quality and in similar positions, and this is what must be meant in general by ‘the market-value’ in Section 23. But sometimes it happens that the land to be valued possesses some unusual, and it may be, unique features as regards its position or its potentialities. In such a case the arbitrator in determining its value will have no market-value to guide him, and he will have to ascertain as best he may from the materials before him, what a willing vendor might reasonably expect to obtain from a willing purchaser, for the land in that particular position and with those particular potentialities. For it has been established by numerous authorities that the land is not to be valued merely by reference to the use to which it is being put at the time at which its value has to be determined [that time under the Indian Act being the date of the notification under Section 4(1)], but also by reference to the uses to which it is reasonably capable of being put in the future. No authority indeed is required for this proposition. It is a self-evident one. No one can suppose in the case of land which is certain, or even likely, to be used in the immediate or reasonably near future for building purposes but which at the valuation date is waste land or is being used for agricultural purposes, that the owner, however willing a vendor, will be content to sell the land for its value as waste or agricultural land as the case may be. It is plain that in ascertaining its value, the possibility of its being used for building purposes would have to be taken into account. It is equally plain however that the land must not be valued as though it had already been built upon, a proposition that is embodied in Section 24(5) of the Act and is sometimes expressed by saying that it is the possibilities of the land and not its realised possibilities that must be taken into consideration.
But how is the increase accruing to the value of the land by reason of its potentialities or possibilities to be measured? In the case instanced above of land possessing the possibility of being used for building purposes, the arbitrator (which expression in this judgment includes any person who has to determine the value) would probably have before him evidence of the prices paid, in the neighbourhood, for land immediately required for such purposes. He would then have to deduct from the value so ascertained such a sum as he would think proper by reason of the degree of possibility that the land might never be so required or might not be so required for a considerable time. In the case however of land possessing potentialities of such an unusual nature that the arbitrator has not similar cases to guide him, the value of the land must be ascertained in some other way. In such a case moreover there will in all probability be only a very limited number of persons capable of turning the potentialities of the land to account.”
Applying the principle to the present case, we are of opinion that the entire land acquired should be valued on the basis of its adaptability for building purposes. As regards the measure of valuation it is necessary to take into account the prices that have been obtained for lands similarly situated in the same neighbourhood at the relevant period. It is apparent from the map Ext. 69 that Plot No. 96 is close to Plot Nos. 93 and 94 which are the lands in dispute. According to sales-statistics Ext. 101, Items 5 and 6 are comparable transactions. These transactions give an indication of the real value of the disputed lands. Item 5 is the sale deed, dated April 22, 1948 of survey Plot No. 96/1-A/14, area 3½ Gunthas of land for Rs 1400. Item 6 is a sale deed, dated June 16, 1950 of survey Plot No. 96/3-A, area 3½ Gunthas for Rs 1000. On the basis of these transactions the market price of the acquired land may be reasonably fixed at Rs 8000 per acre in addition to a solatium of 15 per cent. It was contended for the appellant that the acquired area could be divided into 50 plots of 3½ Gunthas each and each plot could be sold at an average price of Rs 1000. The total value on this basis would be Rs 50,000. The same result is reached by calculating on the basis of sale deed. Items 5 and 6 of the sales statistics Ext. 101. We are of opinion that the award should be modified and that the market price should be calculated at the rate of Rs 8000 per acre in addition to 15 per cent solatium for the entire area of 8 acres, 20 Gunthas and 24 sq. yds. of the acquired land. We accordingly allow this appeal to this extent with proportionate costs.