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31. Yet another infirmity in the Judgment of Reference Court is also to be noted. Large block of land will have to be developed for formation of bye-pass road. Even though, Highways is a strip for which common space like roads, drainage and other common space may not be required yet like any other scheme, huge amount will have to be spent for formation of road i.e. place has to be treated and side ways are to be formed and for forming Highways and developing proper infrastructure huge amount will have to be spent. This factor can be balanced only by making a deduction by way of allowance at an appropriate rate ranging approximately between 20% to 50% to account for the land required to be set apart for forming bye-pass road. As pointed out earlier, though the Reference Court has fixed the market value at Rs.100/- per sq. ft. no percentage of deduction for development charges was made. More over, we do not find that any development had taken place in the acquired land as on 4(1) notification. No piece of evidence has been produced by the Claimants showing that the alleged layout has been approved by the competent authority and that the lands were converted as house sites prior to 4(1) notification. In our considered view, the reasons assigned by the Reference Court for not making deduction towards the development charges are not convincing.

60. Deduction towards Development charges:-

Learned Additional Solicitor General and learned Special Government Pleader submitted that Reference Court has failed to give deduction towards development charges. Placing reliance upon (2009) 5 MLJ 2 [Special Tahsildar, Neighbourhood Scheme, Erode, Erode District v. Jaganathan Gounder and another], Mr.Ravindran, learned Additional Solicitor General and Mr.Ravi, learned Special Government Pleader submitted that 40% deduction should be made towards development cost and 20% on account of small size of plot taken as basis to arrive at the market value.

62. The Supreme Court in Atma Singh v. State of Haryana [(2008) 3 MLJ 806 (SC)] referred to an earlier decision relating to deduction towards development charges, in Bhagwathula Samanna v. Special Tahsildar & Land Acquisition Officer, AIR 1991 SC 2298 : (1991) 4 SCC 506 : (1992) 1 MLJ 9, wherein it was held as follows:-

"9. ..... In fixing the market value of a large property on the basis of a sale transaction for smaller property, generally a deduction is given taking into consideration the expenses required for development of the larger tract to make smaller plots within that area in order to compare with the small plots dealt with under the sale transaction. However, in applying this principle of deduction it is necessary to consider all relevant facts. It is not the extent of the area covered under the acquisition which is the only relevant factor. If smaller area within the large tract is already developed and situated in an advantageous position suitable for building purposes and have all amenities such as roads, drainage, electricity, communications, etc. then the principle of deduction simply for the reason that it is part of the large tract acquired, may not be justified."

Courts will have to make suitable deduction for development charges like laying down roads, drain, sewers, water and electricity lines.

There cannot be any fixed amount of deduction towards development charges, but it varies from place to place, area to area and amount of development which are required to be carried out. [See (2008) 3 MLJ 806 (SC) Atma Singh v. State of Haryana; (1991) 4 SCC 506 Bhagwathula Samanna v. Special Tahsildar & Land Acquisition Officer].

Reference Court should ensure that apart from the Land Acquisition Officer, the Requisitioning Body/Requisitioning Department has to be impleaded as party [AIR 1995 SC 1004] and opportunity has to be given to the Beneficiary who has to bear the burden of paying compensation.