Comparable sale evidence and land potentiality governed compensation for industrial acquisition, restoring the enhanced valuation and statutory benefits.

Comparable sale instances and the land's non-agricultural potentiality were treated as relevant for valuing acquired land for industrial development, and the rejection of nearby exemplar sales merely because they involved smaller plots was held to be unjustified. The reference court's market value finding was restored on the evidence of proximity to developed areas, roads and civic amenities, with the enhanced valuation and statutory benefits maintained for the landowners.

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Issues: (i) Whether the High Court erred in reversing the reference court's award by rejecting the sale instances and the finding that the acquired land had non-agricultural potentiality. (ii) What compensation and statutory benefits the landowners were entitled to on the facts of the acquisition.

Issue (i): Whether the High Court erred in reversing the reference court's award by rejecting the sale instances and the finding that the acquired land had non-agricultural potentiality.

Analysis: The acquisition was for an industrial estate and therefore the land had commercial and industrial potential. The reference court had relied on nearby sale deeds, including instances both before and after the notification, to compare similarly situated plots in the same locality. The land acquired lay near developed areas, roads, and civic amenities, and the evidence showed a trend of escalation in land prices. In such circumstances, the comparable sales method and the land's potentiality were relevant factors in fixing market value. The High Court erred in treating the sale instances as inapplicable merely because they related to smaller plots and in disturbing findings supported by evidence.

Conclusion: The High Court's reversal of the reference court was erroneous in fact and in law, and the reference court's finding on market value was restored.

Issue (ii): What compensation and statutory benefits the landowners were entitled to on the facts of the acquisition.

Analysis: Once the reference court's valuation was upheld, the enhanced market value fixed at Rs. 5 per sq. ft. stood restored along with the statutory benefits granted on that valuation. The acquisition being for industrial development, the compensation had to reflect the land's true potential and not the lower agricultural valuation adopted by the Land Acquisition Officer.

Conclusion: The landowners were entitled to the enhanced compensation awarded by the reference court together with the statutory benefits already granted.

Final Conclusion: The appeal succeeded and the compensation fixed by the reference court was reinstated, with directions for payment or deposit of the awarded amount.

Ratio Decidendi: In determining compensation for acquired land, courts must consider comparable sales and the land's existing and potential use, and an award fixing market value on legally relevant evidence cannot be displaced on a merely formal distinction that the exemplars relate to smaller plots.

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