- 1 - NC: 2025:KHC-D:6188-DB MFA No. 103192 of 2014 IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 8TH DAY OF APRIL, 2025 PRESENT THE HON'BLE MR. JUSTICE S G PANDIT AND THE HON'BLE MR. JUSTICE C.M. POONACHA MISCELLANEOUS FIRST APPEAL NO.103192 OF 2014 (LAC) BETWEEN 1. THE STATE OF KARNATAKA REPRESENTED BY ITS SECRETARY, DEPARTMENT OF REVENUE, M.S. BUILDING, BENGALURU. 2. THE LAND ACQUISITION OFFICER, KOPPAL. 3. THE EXECUTIVE ENGINEER, PWD, KOPPAL. ...APPELLANTS (BY SRI. KESHAVREDDY, ADDITIONAL ADVOCATE GENERAL FOR SRI. M.M. KHANNUR, ADDITIONAL GOVERNMENT ADVOCATE.) AND SRI KRISHNACHARI S/O. JAYA TEERTHACHARI, AGE: MAJOR, OCC: AGRIL., R/O. KUSHTAGI, TQ: KUSHTAGI, DIST: KOPPAL. …RESPONDENT (BY SRI. S.A. NINGOJI, ADVOCATE.) THIS MISCELLANEOUS FIRST APPEAL IS FILED UNDER SECTION 54(1) OF LAND ACQUISITION ACT, 1894, PRAYING TO SET ASIDE THE JUDGMENT AND AWARD DATED 20.04.2013 PASSED BY THE SENIOR CIVIL JUDGE, KUSHTAGI, IN LAC NO.514/2011 BY ALLOWING THIS APPEAL IN THE INTEREST OF JUSTICE. Digitally signed by MALLIKARJUN RUDRAYYA KALMATH Location: HIGH COURT OF KARNATAKA - 2 - NC: 2025:KHC-D:6188-DB MFA No. 103192 of 2014 THIS MISCELLANEOUS FIRST APPEAL HAVING BEEN HEARD AND RESERVED ON 25.03.2025 AND COMING ON FOR PRONOUNCEMENT OF JUDGMENT THIS DAY, C.M. POONACHA, J., DELIVERED THE FOLLOWING: CORAM: THE HON'BLE MR. JUSTICE S G PANDIT AND THE HON'BLE MR. JUSTICE C.M. POONACHA CAV JUDGMENT (PER: THE HON'BLE MR. JUSTICE C.M. POONACHA) 1. The present appeal is filed by the State under Section 54(1) of the Land Acquisition Act, 18941, challenging the judgment and award dated 20.04.2013, passed in LAC No.514/2011, by the Senior Civil Judge, Kushtagi2, whereunder the Reference Court has partly allowed the reference application and enhanced the compensation awarded by the Land Acquisition Officer3 to Rs.15,00,000/- per acre along with interest at 12% p.a. and solatium of 30% on the enhanced market value from the date of notification issued under Section 4(1) of the Act, along with interest. 1 Hereinafter referred to as ‘the Act’. 2 Hereinafter referred to as ‘Reference Court’. 3 Hereinafter referred to as ‘LAO’. - 3 - NC: 2025:KHC-D:6188-DB MFA No. 103192 of 2014 2. The relevant facts are that the land of the respondent bearing Sy.No.53/2-1D measuring 03 acres 15 guntas situated at Nerebenchi village in Kushtagi taluka was acquired for the construction of a Circuit House at Kushtagi, vide notification issued under Section 4(1) of the Act dated 31.07.2008. The award was passed on 26.06.2010, whereunder the LAO has awarded compensation of Rs.18,700/- per acre. The respondent preferred LAC No.514/2011 before the Reference Court seeking enhancement of compensation, which was allowed as noticed above. Being aggrieved, the State has preferred the above appeal. 3. Heard the submissions of Sri Keshavreddy, learned Additional Advocate General appearing along with Sri M.M.Khannur, learned Additional Government Advocate for the appellants/State and learned counsel Sri S.A.Ningoji for the respondent. 4. It is the contention of the learned Additional Advocate General that the compensation enhanced by the Reference Court is erroneous and liable to be reduced. It is - 4 - NC: 2025:KHC-D:6188-DB MFA No. 103192 of 2014 further contended that interest ought not to be awarded from the date of notification under Section 4(1) of the Act and that having regard to Section 28 of the Act, interest should be awarded from the date of acquisition. 5. Per contra, learned counsel for respondent justifies the enhancement made by the Reference Court. 6. The submissions of both the learned counsels have been considered and the material on record including the records of the Reference Court have been perused. 7. Endorsement dated 12.04.2012 (Ex.P.2) issued by the Sub-Registrar, Kushtagi, discloses that the Sub- Registrar rate for residential property at Nerebenchi village is Rs.40/- per sq.feet. It is forthcoming from the sketch Ex.P.9 that the acquired land is situated on Kushtagi-Koppal road and various residential layouts are located in the vicinity of the acquired land. It is forthcoming from the order dated 23.07.2001 (Ex.P.3) passed by the Deputy Commissioner, Koppal, that land bearing Sy.No.53/2-1E measuring 01 acre has been converted. Sale Deed dated 18.07.2007 (Ex.P.2) - 5 - NC: 2025:KHC-D:6188-DB MFA No. 103192 of 2014 discloses that a site measuring 30’ x 40’ has been sold for a total consideration of Rs.60,000/-. 8. The acquired land is not yet converted. However the said land has the potential of being put to use for non agricultural purposes. While assessing the compensation for non agricultural purposes, a deduction is required to be made from the market value towards development charges. Having regard to the judgment of the Hon’ble Supreme Court in the case of Atma Singh (Dead) through LRs. and others vs. State of Haryana and another4 as well as the judgment of the Hon’ble Supreme Court in the case of Mala and others vs. State of Punjab and others5, it is just and proper to deduct 15% towards development charges. 9. Accordingly if 01 acre of land is calculated as per the Sub-Registrar rate of Rs.40/- per sq.feet, the value of the said land of 01 acre would be Rs.17,42,400/- (Rs.43,560/- per gunta x 40 guntas). If 15% is deducted 4 (2008) 2 SCC 568. 5 (2023) 9 SCC 315 - 6 - NC: 2025:KHC-D:6188-DB MFA No. 103192 of 2014 towards development charges, the value of the land would be Rs.14,81,040/- (Rs.17,42,400/- less Rs.2,61,360/-). 10. Further, it is noticed that Reference Court has awarded interest @ 12% p.a. on the enhanced market value from the date of notification issued under Section 4(1) of the Act. The same is erroneous and having regard to Section 28 of the Act, interest ought to be awarded from the date of possession. Hence, in the present case, interest is to be awarded from 26.06.2010. 11. Accordingly the following: ORDER i) The appeal is partly allowed. ii) The judgment and award dated 20.04.2012, passed in LAC No.514/2011, by the Senior Civil Judge, Kushtagi, is modified to the extent of holding that compensation awarded by the Land Acquisition Officer is enhanced to Rs.14,81,040/- per acre and the claimant is entitled for interest @ 12% p.a. on the enhanced market value from 26.06.2010. - 7 - NC: 2025:KHC-D:6188-DB MFA No. 103192 of 2014 iii) The judgment and award of the Reference Court in all other respects remain unaltered. Sd/- (S G PANDIT) JUDGE Sd/- (C.M. POONACHA) JUDGE MRK CT: UMD. List No.: 1 Sl No.: 1