Comparable sale deeds prevail over unexhibited revenue reports and statutory fragmentation restrictions in determining market value.

The State of Rajasthan issued a notification under Section 4 of the Land Acquisition Act, 1894 on 13.12.1979 for establishing a Krishi Upaj Mandi.

Possession of the land was taken on 23.05.1981 under urgency clauses.

A draft award was prepared on 28.07.1986 and finalized on 17.02.1987.

The Land Acquisition Officer (LAO) determined compensation at Rs. 10,452/- per bigha based on an unexhibited Tehsildar report, disregarding sale deeds (Exs. 1 to 4) showing a rate of Rs. 26,660/- per bigha on the ground that the sales were void under Section 42 of the Rajasthan Tenancy Act, 1955.

The Reference Court upheld the valuation but granted 30% solatium and interest.

Both the land-owners (seeking enhancement) and the Mandi Samiti (challenging limitation and solatium) appealed.

1. Whether the valuation of the land by the LAO and Reference Court was justified in light of the restrictions under Section 42 of the Rajasthan Tenancy Act, 1955?

2. Whether an unexhibited Tehsildar report can form a legal basis for determining market value over registered sale deeds?

3. Whether the reference applications were barred by limitation under Section 18(2) of the Act of 1894?

4. Whether the 1984 amendment regarding 30% solatium and interest is applicable to these proceedings?

The Court applied Section 18 of the Land Acquisition Act, 1894 regarding the limitation for reference, interpreting "date of award" as the date of actual/constructive knowledge of its essential contents as per Bhagwan Das v. State of UP.

For valuation, it relied on Section 23 of the Act, holding that market value must be determined via comparable sale deeds rather than DLC rates or basic valuation registers, following Jawajee Nagnatham v. Revenue Divisional Officer and Krishi Utpadan Mandi Samiti v. Bipin Kumar.

It further applied the 1984 amendments to Section 23, noting that increased solatium applies to pending proceedings as per Bhag Singh v. Union Territory of Chandigarh.

Regarding the Rajasthan Tenancy Act, 1955, it noted Sections 42 and 42-A, emphasizing that an LAO lacks jurisdiction to declare a third-party sale deed void.

The Court held that the LAO and Reference Court erred in declaring sale deeds void under Section 42 of the Tenancy Act without evidence that the sales resulted in fragmented "fragments" below statutory limits, ignoring the curative provisions of Section 42-A and the fact that such declarations are beyond an LAO's jurisdiction.

Consequently, the sale deeds (Exs. 1-4) were valid indicators of market value.

The Court criticized the reliance on the Tehsildar's report, which was never exhibited nor supported by oral testimony, whereas the land-owners proved the land’s high potentiality (location on Highway and proximity to abadi).

Regarding limitation, the Court found that since no notice under Section 12(2) was served and compensation was paid much later (1988/1992), the reference filed in 1987-88 was within time based on the "date of knowledge" principle.

Since the award was finalized in 1986/87 (post-1984 amendment), the statutory 30% solatium was mandatory.

It held that the market value of the land is enhanced from Rs. 10,453/- to Rs. 26,660/- per bigha.

The Court affirmed the grant of 30% solatium and statutory interest. The respondent is directed to pay the difference in compensation within three months, with interest at 9% p.a. from 28.07.1986 (date of proposed award) on the enhanced amount, and 12% p.a. from the date of judgment until actual payment.