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Petitioner: Malik MUHAMMAD ASHRAF and 3 others VS Respondent: NATIONAL HIGHWAY AUTHORITY JUDGMENT
Court Name: Lahore High Court Judge(s): Ijaz-ul-Ahsan, Muhammad Farrukh Irfan Khan Title:Malik MUHAMMAD ASHRAF and 3 others vs NATIONAL HIGHWAY AUTHORITY
JUDGMENT
Reported As: 2011 CLC 1117 Result: Appeal allowed Judgment JUDGMENT ' IJAZ UL AHSAN, J.--- This judgment shall dispose of R.F.As. Nos.296 of 2010, 297 of 2010, No,597 of 2009 and No,598 of 2009 as common questions of law have been raised in these petitions. 2. The brief facts of the case are that certain land was acquired by the respondents for the purposes of construction of Umerabad Bye-Pass, Lahore-Sahiwal Section. In this connection the land owned by the appellants was acquired. A notification under section 4 of the Land Acquisition Act was published on 19-10-1996 and combined notice under section 17(4) read with section 6 of the Land Acquisition Act was published in the Gazette on 27-12-1997. It appears that the acquisition proceedings took some time and were ultimately completed in the year 2002 when the award was announced by the Land Acquisition Collector on 17-7-2002 after a lapse of almost six yeaRs, A perusal of the record indicates that compensation in the sum of Rs,3004.69 per marla was awarded to the appellants with 50% acquisition charges and 8% compound interest in terms of section 28 of the Land Acquisition Act. Being dissatisfied with the quantum of compensation awarded, the appellants filed a reference under section 18 of the Land Acquisition Act. In the said reference enhancement of the quantum of compensation was prayed for. The appellants sought enhancement of the rate of compensation to Rs,1,25,000 per marla. Further, 25% compulsory acquisition charges and compound interest under the law was also claimed 3. The referee court (the Senior Civil Judge, Kasur) issued notice to the respondents, who contested the matter. Out of divergent pleadings of the parties three issues were framed. However, for the purpose of determination of this appeal issue No,1 is material which is reproduced below:---
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"Whether the price of the eland in question was assessed inadequately? If so, what is the proper amount of compensation to be awarded to the petitioners? OPP." ' The referee court subdivided the aforesaid issue for its own convenience in the following parts:--- (a) Is the Award an independent; (b) The period which should have been taken into consideration for assessing the value of the land; (c) Character of the land in question. (d) What should be the price of the land in question. 4. The parties were called upon to produce their evidence. In oral evidence, the petitioners produced Muhammad Yousaf, Clerk of Court, as A.W.1, Khurshid-uz-Zaman, Record Keeper, District Courts, Lahore, as A.W.2, Imran Mazhar, Halqa Patwari, as A.W.3, Haji Muhammad Razzaq as A.W.4, and Muhammad Ishaq, special attorney of the petitioners, as A.W.5. The petitioners also produced application for supply of Copy bearing No,8851 (Exh.A.1), application for supply of Copy bearing No,8852 dated 8.5.2006 (Exh.A.2), application for supply of Copy bearing No,8853 dated 8-5-2006 (Exh.A.3), copy of Mutation No,3309 (Exh.A.4), copy of Mutation No,3311 (Exh.A.5), copy of Mutation No,3261 (Exh.A.6), copy of register haqdaran Zamin for the year 1997-98 (Exh.A.7), copy of Mutation No,3309 (Exh.A.8), copy of Mutation No,3311 (Exh.A.9), copy of Mutation No,3261 (Exh.A.10), copy of special attorney (Exh.A.W.5/1), certified copy of award dated 26-2-1996 (Exh.A.W.5/2), certified copy of Judgment of this Court dated 12-6-2003 (Exh.A.W.5/3), Order of this Court dated 12-6-2003 (Exh.A.W.5/4), certified copy of Order of honourable Supreme Court of Pakistan dated 31-1-2005 (Exh.A.W.5/5), Judgment of honourable Supreme Court reported in PLD 2004 SC 512 (Exh.A.W.5/6), certified copy of Shajra Shera Kot (Exh.A.W.5/7), certified copy of Shajra Mauza Kot Komboh (Exh.A.W.5/8), certified copy of Shajra Mauza Babu Sabu (Exh.A.W.5/9), letter of LAC to the Senior Civil Judge, Lahore, submitted under section 18 of the Land Acquisition Act, 1894 (Mark-A), copy of letter from Syed Muzaffar Ali Shah, Senior Civil Judge, Lahore, to the LAC (Mark-B) and copy of entry register (Mark-C). On behalf of respondents, Mian Rauf Ahmad, L.A.C., N.H.A., Shahpur Interchange, appeared as R.W.1. Copy of award dated 26-2-1996 is Exh.R.W.1/1, copy of notification with regard to price of land assessed by Price Assessment Committee (Exh.R.W.1/2), letter from Collector District Lahore to Commissioner, Lahore Division, Lahore (Exh.R.W.1/3), notification (Exh.R.W.1/4), copy of notification dated 12-6-1994 (Exh.R.W.1/5), notification as to categorization of land dated 30-3-1994 (Exh.R.W.1/3), notification under section 17(4) of the Land Acquisition Act (R.W.1/4) and notification under section 4 of the Land Acquisition Act (R.W.1/5). 5. The learned counsel for the appellants submits that he would focus his arguments on part (b) and (d) above, insofar as these relate to the date which is relevant for the purposes of determination of compensation and the criteria for determination of price/ compensation. 6. The learned counsel has pointed out that during the trial before the referee court the appellants produced oral as well as documentary evidence. A large number of exhibits were placed on record consisting of sale-deeds and copies of the Revenue Records from the period between 1994 to 2002 in order to show not only the price of the land in question prevalent in 1992 but also the price prevalent when the award was announced in 2002 in order to establish the future potentialities of the land. It is pointed out that the National Highway Authority/respondent only produced two witnesses whose evidence according to the learned counsel is not of much consequence. The respondent did not produce any documentary evidence on this point. 7. The learned counsel for the appellants submits that date relevant for the purpose of calculating compensation is the date of award. In this context the learned counsel has placed reliance on Province of Sindh through Collector of District Dadu and others v. Ramzan and others (PLD 2004 SC 512) in which the apex Court observed that for determining the compensation to be awarded, price of the acquired property is only one of the factors and other factors have also to be kept in mind by
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the court which include future potentialities of the acquired property. He further submits that the trend of the superior courts in terms of compensation to the landowner is not to focus on the price but to award compensation to the citizen who is forced against his will to give up his property. He therefore submits that there is a distinction between the price and compensation and compensation should include the price, the future potentialities and adequate recompense for taking away livelihood/property of the landowner against his will. In this regard the learned counsel has placed reliance on Chairman WAPDA and others v. Sarfraz Khan and another (2007 SCMR 1054); Mst. Amtul Haseen and another v. Land Acquisition Collector, Highway Department, Lahore and 3 others (PLD 2009 Lah. 524); Murad Khan through his widow and others v. Land Acquisition Collector, Peshawar and another (1999 SCMR 1647) and Haji Abdul Wahid and others v. WAPDA and others (2005 CLC 1453). 8. The learned counsel further submits that as opposed to the evidence produced by the appellants, the respondents did not produce any evidence on the issue of value/price of the acquired property. He therefore submits that the appellants fully discharged the onus placed on them in terms of issue No, 1 . Referring to the evidence, the learned counsel submits that it was admitted by the respondents that the property which was acquired was being used for commercial purposes. Referring to the evidence of R. W.1, the learned counsel points out that it was admitted not only by R.W.1 but also by R.W.2 that the acquired property was being used for commercial purposes and for this reason certain lands situated near the property of the appellants had been acquired at the rate of Rs,1,45,000/- per marla for the purpose of an overhead bridge. He further points out that, in any event, it is an admitted position that the land in the adjacent areas was valued at Rs,50,000/- to Rs,1,75,000 per marla. He therefore points out that the learned referee court erred in law in awarding compensation at the rate of Rs,50,000 per marla after having found that the value of land at the time of notification under section 4 of the Act was Rs,50,000 per marla while at the time of the award (i.e. Six years later) it was valued much more than that, yet while decreeing the enhancement it confined itself to the value in 1994. He therefore prays that the appellants are entitled to receive enhanced compensation in the sum of at least Rs,1,00,000 per marla. 9. On the other hand, the learned counsel for the respondents has drawn our attention to section 23 of the Land Acquisition Act and the explanation to the said section. The learned counsel points out that certain factors are identified in section 23 which need to be considered at the time of determination of the value of the acquired land. He points out that the concept of future potentialities was subsequently introduced by way of an explanation and can only be taken into account in limited circumstances specified in the said explanation. He adds that if at all future potentialities were to be kept in mind, the same were required to ,be established by production of evidence which in the present case was not done. 10. The learned counsel argues that the mechanism for calculation of value of acquired land is provided in the Punjab Land Acquisition Rules, 1983. He has referred to rule 10(3) of the said rules to maintain that one of the major factors to be kept in mind for determination of the value is the average price of land in the period of twelve months preceding the date. Of notification under section 4 of the Act. The learned counsel argues that such value was kept in mind by the Land Acquisition Collector in arriving at aforesaid figure of Rs,3004.69 per marla. 11. The learned counsel also refers to section 25 of the Land Acquisition Act to submit that it is specifically provided that no compensation will be awarded beyond what has been demanded by the landowneRs, Likewise, compensatiqn less than the amount determined by the Collector cannot be awarded. He has also drawn our attention to the provisions of sections 9 and 10 of the Land Acquisition Act to argue that the notice and proceedings under the Land Acquisition Act provides an opportunity to the landowners not only to object to the proposed price of land but also to
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produce material in order to substantiate their claims for a higher compensation. He submits that the said opportunity was not availed by the appellants and they are estopped from raising the claim at a subsequent stage. The learned counsel for the appellants has, however, pointed out that the appellants had raised objections and claimed the sum of Rs,1,00,000 before the Land Acquisition Collector on receipt of notice and the proceedings taken thereafter. 12. The learned counsel for the respondents submits that on the touchstone of the case of Ramzan and others (supra), cut off date should be the date of announcement of the award, i.e., 17-7-2002. He has, however, drawn our attention to Exhibits A.16 to A.23, which relate to transactions after announcement of the award. According to him, such transactions could neither be considered by the referee court nor can the same be considered in this appeal. Referring to Exhs.A.2 to A.15, the learned counsel submits that all the evidence placed on record relates to transactions involving small pieces of land which, in any event, fetch higher prices. He therefore submits that the said transactions cannot be used as a benchmark for the purposes of determination of the value of land measuring 207 kanals, 15 marlas which is the total land acquired by the respondents. 13. The learned counsel finally argues that only oral evidence was produced by the appellants to allege that the acquired property constituted commercial property. He submits that no documentary evidence was placed on record to establish the said character of the land. He also submits that Exhs.P.24 and P.25, the two judgments of the referee court relating to the same land, which were produced by the respondent indicate that the referee court had fixed compensation in the sum of Rs,30,000 per marla. It may be noted that the said judgments relate to land in the same area, although the learned counsel for the appellants points out that it relates to agricultural land and not the land similar to that of the appellants, which was admittedly in commercial use. Even otherwise, being dissatisfied with the two judgments of the referee court, the landowners are statedly before this Court through appeals. 14. We have heard the learned counsel for the parties and have examined the record with their assistance. 15. The main questions raised by the learned counsel and requiring determination are:--- (a) What period should be taken into consideration for assessing compensation to the appellants; and (b) What is the quantum of compensation to which the appellants are entitled. 16. The notification under section 4 of the Land Acquisition Act was published on 9-10-1996 and the award was announced on 17-7-2002 i.e. 6 years later for no fault on the part of the appellants. The appellants contend that compensation equivalent to the price prevalent at the time of announcement of the award, should be granted to them. Exh.R-4, which is the approval letter of the Board of Revenue, indicates that average sale price for the crucial period was obtained for residential as well as the agricultural land and the same was used as basis for determination of compensation to be paid to the appellants. Although the crucial period is not mentioned in the document, but from Paragraphs-9 & 10 of the award read with section 23 of the Act, it is clear that the average of sale price of the land prevalent in the area, preceding the notification under section 4, was taken into consideration. 17. The question of determination of compensation came up for hearing before the honourable Supreme Court of Pakistan in The Province of Sindh v. Ramzan and others (PLD 2004 SC 512), where it was held as follows:--- "The most important aspect qua the lands compulsorily acquired is that the mandatory returns proposed to be given to the landowners is the compensation and not the market value. Very section 23 provides for various matters to be brought under consideration while determining compensation. Market value is only one of such matters to be considered by Collector or Courts. Compensation is a very wide term indicating that the landowner, for various reasons, is to be
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compensated and not merely paid the price of land, which is just an interaction of supply and demand fixed between a willing buyer and willing seller. ' Section 23 was subsequently amended through West Pakistan Ordinance 49 of 1969 whereby the ambit of matters to be considered was widened and it was in this background that the Courts in the country emphasized the phenomenon of potential value of the land. This term potential value is only one word used for the future uses which the, land can be, put to. In Malik Awan's case (PLD 1988 ,X,52) this feature of potential value and had differentiated the same from the term 'market value'. It was held that market value was normally to be taken as one existing on the date of Notification under section 4(1) of the Land Acquisition Act under the principle of willing buyer and willing seller while the potential value, was explained to be one to which the similar lands could be put to any use in future. Factors for determining compensation of land are not restricted only to the time of the aforesaid Notification but can also relate to period in future and that is why in a large number of cases the 'potential value' has been held to be a relevant factor. ' This Court had also taken notice of the fact that the announcement of award is some times unreasonably delayed after the issuance of Notification under section 4 of the Act. In Malik Aman's case, the period that had elapsed was seven yeaRs, Obviously any escalation in the value of property during such period is a potential value of land which must be taken into consideration. ' Similar view was taken by this Court in Land Acquisition Collector Abbottabad v. Muhammad Iqbal (1992 SCMR 1245) at 1255-K). In the case of Pakistan Burmah Shell (1993 SCMR 1700); it was once again reiterated that consideration of market value at the time of Notification under section 4 of the Land Acquisition Act was merely one of the modes for ascertaining the market value and was not absolute yardstick for assessme nt of compensation. Numerous matters to be considered for determining compensation were elaborately laid down by this Court in Murad Khan's case (1999 SCMR 1647) which was again relied upon in Nisar Khan's case (PLD 2002 SC 25). The crux of the matter is that mere classification or nature of land may be taken as relevant consideration but not as absolute one. An area may be 'banjar' or 'Barani' but its market value may be tremendously high because of its location, neighbourhood, potentiality or other benefits. All these factors, therefore, cannot be ignored. ' Our attention is invited, to a recent judgment of this Court given in the case of Hyderabad Development Authority PLD 2002 SC 84 where the Court has held that the crucial date for determination of market value is the Notification under section 4(1) of the Land Acquisition Act. We do not disagree with it because that verdict pertains to the determination of 'market value' and not to the determination of the compensation. The question of potential value was considered even in that ruling but was not granted because the landowner had not proved the same, being a question of fact." 18. In this regard, reference may also usefully be made to earlier judgments of various courts PLD 1992 FSC 398, 1993 SCMR 1700, 1993 CLC- 179, 1992 CLC 267, PLD 1991 Lah. 337 & PLD 1990 Peshawar 83. In the case of "Chairman WAPDA and others v. Sarfraz Khan" (2007 SCMR 1054), the interpretation and scope of section 23 of the Land Acquisition Act was considered and the court laid down elaborate principles for determination of questions relating to compensation payable to a citizen; whose property has compulsorily been acquired. It would be useful to reproduce the following portions of the aforesaid judgments:--- ' The above principle was also quoted with approval in the case of Haji Muhammad Yaqoob (supra) wherein it was observed that it is well-settled that one year's average sale price of the land in the vicinity preceding the date of notification under section 4 of the Act, is only one of the relevant factors for consideration in determining the market value of the land but it alone cannot be adopted as the basis for assessme nt of market value, if there is other evidence available on record to establish the potential value of the acquired land at a higher rate.
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' In the case, of Province through Collector, Bahawalpur and others v. Col. Abdul Majeed and others 1977 SCMR 1692, the following principles of law were laid down for assessing the future prospects of the land acquired under the Land Acquisition Act, 1894 in terms of section 23: "(i) that an entry in the Revenue Record as to the nature of the land may not be conclusive, for example, land may be shown in Girdawari as Maira, but because of the existence of a well near the land makes it capable for becoming Chahi land. (ii) That while determining the potentials of the land, the use of which the land is capable of being put, ought to be considered. (iii) That the market value of the land is normally to be taken as existing on the date, of publication of the notification under section 4(1) of the Act but for determining the same, the price on which similar land situated in the vicinity was sold during the preceding 12 months and not 6-7 years back may be considered including other factors like potential value etc." ' The above principles were also consistently followed in Abdur Rauf Khan v. Land Acquisition Collector 1991 SCMR 2164, Gunj Khatoon v. Province of Sindh 1987 SCMR 2084, Fazalur Rahman v. Collector PLD 1988 SC 32 and Pakistan Burma Shell Ltd. v. Province of N.-W.F.P. 1993 SCMR 1700. ' Reference may also be made to Murad Khan through his widow and 13 others v. Land Acquisition Collector, Peshawar and another 1999 SCMR 1647, wherein one of us (Muhammad Bashir Jehangiri, J.) had exhaustively laid down the criteria for determination, of fair compensation. Relevant portion of the report reads thus:- "The schedule of average price for four years or for that matter even of one year are not the only criterion for determining the amount of compensation but the other material brought on the file is quite relevant to determine the correct amount of compensation for the acquired land. Section 23 of the Land Acquisition Act, 1894 lays down, by way of criterion, that market value of land on the date of publication of notification under section 4 of the said Act would be the amount of compensation. The expression market value has not been defined in the Act. ' Merely one year average price of the land in the same vicinity or the classification thereof is not exhaustive in itself but there are other considerations enumerated in the law which would also be relevant for determining the market value for fair compensation to be awarded to an owner whose land has been compulsorily acquired. It is wrong to look for the classification alone of the land for the purpose of determination of the fair compensation. ' The following matters are to be taken into consideration in determining the amount of compensation-- (i) the data from which the market value of the land can be estimated as given in Rule 13 of the North-West Frontier Province Circular No,5 issued presumably under section 55 of the Act. (ii) The best method to work out the market value is the practical method of a prudent man laid down in Article 2, Qanun-eShahadat, 1984 to examine and analyze all the material and evidence available on the point and to determine the price which a willing purchaser would pay to willing seller of the acquired land. (iii) Subsection. (1) of section 23 of the Land Acquisition Act provides that in determining the amount of compensation the Court shall take into consideration the market value, loss by reason of severing such land from his other land, acquisition injuriously affecting his other property or his earning in consequence of change of residence or place of business and damage, if any, resulting from diminution of the profits of the land between the time of publication of the declaration under section 6 and the time of the Collector's taking possession of the land. This, however, is not exhaustive of other injuries or loss which may be suffered by an owner on account of compulsory acquisition. (iv) The best method of determination of the market price of the ploLs of land under the acquisition is to rely on instances of sale or it near about the date of notification under section 4(1) of the Land
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Acquisition Act. The next best method is to take into consideration, the instances of sale of the adjacent lands made shortly before and after the notification. When the market value is to be determined on the basis of the instances of sale of land in the neighbouring locality, the potential value of the land need in the neighbouring locality, the potential value of the land need not be separately awarded because such sales cover the potential value. (v) The law provides determination of compensation not with reference to classification or nature of land but its market value at the relevant time. No doubt, for determining the market value, classification or the nature of land may be taken as relevant consideration but that is not the whole truth. An area may be Banjar Qadeem or Barani but its market value may be tremendously high because of its location, neighbourhood, potentiality or other benefits. (vi) while determining the value of the compensation of market value of the land at the time of requisition/acquisition and its potentiality have to be kept in consideration. (vii) consideration should be had to all the potential uses to which the land can be put as well as all the advantages, present or future which the land possesses in the hands of the owneRs, (viii)In determining the quantum of fair compensation the main criterion is the price which a buyer would pay a seller for property if they voluntarily entered into the transaction. (ix) The measure of fair compensation is the…
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