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Issues Involved:
1. Proper sum of compensation for compulsory land acquisition. 2. Determination of market value and potentiality of land. 3. Consideration of special adaptability and potential buyers. 4. Application of Section 24(5) of the Land Acquisition Act. Detailed Analysis: 1. Proper Sum of Compensation for Compulsory Land Acquisition: The case revolves around the compensation due to the appellant for the compulsory acquisition of land by the Vizagapatam Harbour Authority. The land in question included a spring that provided a significant water supply, which was diverted by the Harbour Authority for anti-malarial purposes and industrial use. The appellant claimed substantial compensation for the land and its potential uses, including its value as a water supply source. 2. Determination of Market Value and Potentiality of Land: The judgment emphasizes that compensation must reflect the market value of the land at the date of the declaration under Section 6 of the Land Acquisition Act. The market value is determined by what a willing vendor might reasonably expect from a willing purchaser, disregarding any compulsion on either side. The value must consider the land's potential uses, not just its current use. The judgment clarifies that potentialities or future uses of the land should be factored into its valuation, but not as if those potentialities have already been realized. 3. Consideration of Special Adaptability and Potential Buyers: The court discussed the concept of "special adaptability" and whether it should be considered in the valuation. The appellant argued that the land had a unique value due to its potential to supply water to the Harbour Authority and industrial concerns. The court examined whether this potential value should be included in the compensation, especially when the Harbour Authority was the only potential buyer. The judgment referenced several cases, including *Inland Revenue Commissioners v. Clay* and *Glass v. Inland Revenue*, to support the view that even if there is only one potential buyer, the special adaptability should be considered in the valuation. 4. Application of Section 24(5) of the Land Acquisition Act: Section 24(5) of the Act states that any increase in the value of the land due to the use for which it is acquired should not be considered. The judgment interprets this to mean that the land must be valued based on its condition at the time of the acquisition, not on the enhanced value it would have after being used for the intended purpose. The court concluded that the Harbour Authority would have been a willing purchaser of the land with its special adaptability, and this potential value must be included in the compensation, though not inflated by the future use. Conclusion and Final Award: The Subordinate Judge initially awarded the appellant Rs. 1,20,750, considering the potential income from the water supply. However, the High Court reduced this, arguing that the special adaptability had no value apart from the anti-malarial scheme. The Privy Council disagreed, stating that the special adaptability should be considered, even if the Harbour Authority was the only buyer. The final compensation was set at Rs. 40,000, plus an additional 15%, totaling Rs. 46,000. The High Court's decision was modified, and the appellant was awarded costs for the appeal. Separate Judgments: The judgment was delivered collectively without separate opinions from individual judges.
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