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Petitioner: ISLAMIA UNIVERSITY, BAHAWALPUR through its ViceChancellor VS Respondent: KHADIM JUDGMENT
Court Name: Lahore High Court Judge(s): Mian Allah Nawaz, Khizar Hayat Title:ISLAMIA UNIVERSITY, BAHAWALPUR through its ViceChancellor vs KHADIM
JUDGMENT
Reported As: 1990 MLD 2158 Result: Appeal dismissed Judgment JUDGMENT ' MIAN ALLAH NAWAZ, J.---Regular First Appeals bearing Nos.142, 143, 144, 145, 146, 147, 148, 149, 150, 151, 152, 153, 154, 155, 156, 157, 158, 159, 160, 161, 162 and 163 of 1987 and Regular First Appeals Nos.8, 9, 10, 11, 12, 13, 15, 16 and 17 of 1988 are. Being disposed of by single judgment as all of these appeals arise from the award of reference Court dated 21-9-1987. The first group of these appeals bearing Nos.142, 143, 144, 145, 146, 147, 148, 149, 150, 151, 152, 153, 154, 155, 156, 157, 158, 159, 160, 161, 162 and 163 of 1987 are by Islamia University, Bahawalpur the beneficiary of acquisition proceedings while the appeals bearing Nos.8, 9, 10, 11, 12, 13, 15, 16 and 17 of 1988 are by owners of the land. These appeals arise out of acquisition proceedings under Land Acquisition Act (herein referred as Act) and [arise out] of following circumstances:- (1) The District Collector, Bahawalpur issued notification under section 4 of the Act for compulsory acquisition of agricultural land measuring 2016 Kanals 2 Marlas for the construction/establishment of Islamia University, Bahawalpur in Chak No,8/BC Tehsil and District Bahawalpur. This notification was published in extraordinary Gazette of Government of Punjab dated 24-2-1979. (2) Notification under section 17 of the Act was issued by the Commissioner, Bahawalpur Division, Bahawalpur and was published in the Gazette of Government of Punjab dated 29-3-1980. Islamia University (hereinafter referred as University) obtained the possession of the land acquired on 22- 11-1980. Accordingly in pursuance of these notifications notices were issued to the owners of land under section 9 of the Act, land owners appeared before the Land Acquisition Collector and claimed that the land acquired was situated in prohibited Zone, was extremely valuable, was
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situated near the Bahawalpur Town and had potential of becoming site for residential schemes; and the market value of the land was Rs,35,000 to Rs,40,000 per acre. They also claimed 8% compound interest from the date of taking over possession. 2. After taking into consideration the pleas of both the parties, the Land Acquisition Collector assessed the compensation at the rate of Rs,9,936.21 per acre by means of award dated 31-8-1981. 3. Feeling dissatisfied with this award Khadim Hussain son of Allah Ditta, Mst.Mai Noor Khatoon Mst.Sukhu Mai, Mst.Phapha Mai, Mst. Maraj Mai (hereinafter referred as owner) filed application under section 18 of the Act for sending the reference to the Civil Court for determination of correct compensation on 12-10-1981. Applications were filed separately by land owners. The Collector vide consolidated order referred these applications to the learned Senior Civil Judge for decision of reference. The learned Senior Civil Judge on the pleadings of the parties framed the following issues:- (i) Whether the land, trees, superstructure have not been properly valued for the purpose of compensation to the owners and hence the compensation is liable to be enhanced? OPP (ii) What was the market value of the land, trees and the superstructure at the land, trees and the superstructure at the time of their acquisition? OP. Parties. (iii) How much compensation the petitioners are entitled to get in each case? OPP. (iv) Relief. 4. The learned reference Court vide order dated 21-9-1987 accepted the references, enhanced the award from Rs,9,936.21 per acre to Rs,20,000 per acre with 15% compensation of compulsory charges for land along with 8% compound interest from the date of possession of the land. Hence these two groups of appeals by the University and owners of the land. 5. Learned counsel for the appellant (Islamia University, Bahawalpur) raised the following points:-- (1) It was contended that in accordance with the rule laid down in Pir Khan's case PLD 1987 SC 485, the private owners as well as University had no right to file appeal against the award of reference Court. On the basis of this rule it was suggested with emphasis that appeals filed by the owners of the land were not maintainable. (2) It was next contended that the owners of the land herein appellant did not file objection under section 9 of the Act. According to him the owners on account of this omission were precluded to challenge the award rendered by the Land Acquisition Collector before the reference Court under section 25 of the Act. Strength was sought from Arura and others v. Wadhawa and others AIR 1929 Lah.10. Therefore, the award given by reference Court was without any legal efficacy. On the basis of this argument it was stressed that the learned reference Court had entertained invalid reference and the reference Court had rendered the award without any lawful authority. (3) In the third instance, it was urged that the reference Court had granted interest under section 28 of the Act. According to him that Article 2-A has been made substantive part of the constitution and so the Courts were bound to follow the mandates of divinity contained in the Holy Qur'an and Sunnah. It was further submitted that the interest was unIslamic doctrine and had to be eliminated. On the basis of this argument it was represented that the reference Court had no authority to grant award of interest under section 28 of the Act. The reliance was placed on Messrs Bank of Oman Ltd. v. Messrs East Trading Co. Ltd. And others PLD 1987 Kar.404; Habib Bank Ltd. v. Muhammad Hussain and others PLD 1987 Kar.612; Shahbazud Din Chaudhry and 27 others v. Messrs Services Industries Textiles Limited PLD 1988 Lah.1; Sardar Ali and others v. Muhammad Ali and others PLD 1988 SC 287 and Tyeb v. Messrs Alpha Insurance Co. Ltd. And another PLD 1990 CLC 428. (4) In the fourth instance, it was contended that the award of interest under section 28 was in the exercise of discretionary authority of the reference Court, before awarding interest the reference Court had the power to examine the various circumstances and facts of the case and was not
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under any compulsion to grant it. On the basis of this argument it was contended that the reference Court must have been dictated by Rules of Muslim Common Law and must have sought guidance ,from the provisions relating to interest in the Holy Qur'an and Sunnah. The learned reference Court had not done so and therefore, the award of interest by the reference Court is thoroughly illegal and cannot be sustained. The reliance was placed on Mian Aziz A.Shcikh. v. The Commissioner of Income-tax Investigation Lahore PLD 1989 SC 613. (5) In the fifth place assault was made on the compensation determined by the reference Court. It was contended that the owners have not established by adequate evidence that the market value of land was Rs,20,000 per acre. According to him the transaction of sale embodied in Ex.P.5, Ex.P.6, Ex.P.7, Ex.P.9 and Ex.P.10 related to urban areas and were irrelevant for the purpose of consideration of compensation of land in dispute which was rural agricultural land. The transaction of sale incorporated in sale-deeds bearing Ex.P.18, Ex.P.17, Ex.P.11, Ex.P.12 also related to sale of land in residential purpose. These transactions were not of help for the purpose of computation of market value. Ex.13, and Ex.p.14, related to sale in Mauza Ghangiwala for Industrial purposes. The land sold in these documents was neither in the vicinity of land in dispute nor tht sale was made for agricultural purpose. So no reliance can be placed on these documents for the purpose of deducting market value of land in dispute. As far as the land in Chak No,9/BC is concerned thcre was sufficient evidence that it was within municipal limits, accordingly the only relevant documents arc Exs.P.3, P.4 and P.2. The learned reference Court has committed errors of law by assessing the compensation of Rs,2,000 without any factual basis. On the basis of this argument it was suggested that this award rendered by the Land Acquisition Collector was correct and just. 6. On the other hand, learned counsel . For appellant-owners raised the following points:-- (1) It was contended that the ratio laid down in Pir Khan's case was applicable to appeals filed by the University. Elaborating the contentions, it was contended that the award made by the Land Acquisition Collector becomes final, as far as local authority and University was concerned under section 50(2) of Act neither the Islamia University nor the Land Acquisition Collector has right to file the reference and so the University had no locus-standi to file the appeals. (2) As far as the objection with respect to non-filing of claims under section 9 of the Act was concerned, it was stated that the owners appeared before the Land Acquisition Collector and laid the claim that the market value of the land was between Rs,35,000 and Rs,40,000 per acre. It was urged that this objection was recorded by the Land Acquisition Collector in his award. ' According to the learned counsel the objection on behalf of the University in this respect was totally unfounded and baseless. ' It was further asserted that neither this objection was taken in written statement nor this objection was taken in memo. Of appeal. So the University was precluded to raise this question in this appeal. 7. It was finally submitted that the provisions of section 9 of the Act were directory in nature and were not of vitiative consequences. Reliance was placed on Lalsaheb Nabin Chandra Bhani Deo and others v. The State of Orissa AIR 1975 Orissa 126, Province of Punjab and others v. Mufti Muhammad Ishaq and others PLD 1984 Lah.261. 8. On the question of interest, learned counsel appearing on behalf of owners of land contended that the award by reference Court rendered on 21-9-1987. The appeals were admitted and this Court suspended the execution/operation of the award subject to condition that the .Government shall furnish adequate security in respect of award. Neither the University nor the Government did comply with this order and deprived the owners from the use of land as well as use of the value of the land. On the basis of this narrative it was contended that the University was precluded by conduct to raise this question in this Court on account of their conduct which was visibly contumacious and mala fide. Continuing this submission on this question it was submitted that the mandate in section 28 was mandatory in nature and not directory.
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9. It was next contended that the award of interest under section 28 and section 34 was not repugnant to injunctions of the Holy Qur'an and Sunnah. The award of interest under sections 28 and 34 was made in lieu of the wrongful deprivation of land to owners, therefore, it fell within the meaning of compensation and not within the meaning of "Riba". The reliance was placed on Behari Lal Bhargava v. Commissioner of Income-tax AIR 1941 Allahabad 135. 10. Elaborating the contention it was further urged that section 28 of the Act was mandatory in nature. It was urged that the award of interest as a matter of fact was decreeing of compensation on account of deprivation to the use of land of owners in lieu of compulsory acquisition proceedings. On the basis of this argument it was suggested that the provisions of sections 28 and 34 of the Act were pre-emptory in nature. 11. Dealing with the question of impact the Article 2-A of the Constitution of Islamic Republic of Pakistan, 1973 it was contended that the term interest embodied in sections 28 and 34 in fact meant the compensation for the use of land of owners acquired compulsorily under the Act. It was neither fixed profit on loan nor it was accretion on a k)an investment. According to him, therefore, it was not within the meaning of "Riba" as enshrined in the Holy Qur'an and Sunnah. 12. It was submitted that the Federal Shariat Court had found the Land Acquisition Act in accord with the injunction of Islam in Mohsan A.RahmaA and another v. Federal Government and another PLD 1982 F SC 233. On the basis of this argument it was contended that the rule laid down in Karachi cases was not correct. The reliance was placed on Karachi Development Authority v. Haji Ghulam Ali etc. 1989 MLD 2238 and Land Acquisition Collector v. Ch.Muhammad Ali PLD 1978 Lah.1372. 13. Coming to the contention, that the Objectives Resolution had been made substantive part of the Constitution and the Court was bound to deny the award of interest under section 28 and section 34 of the Act, it was replied that the Act was found not repugnant to injunctions of Islam. It was contended that the rule laid down in Irshad H.Khan v. Mrs.Parveen Ajaz PLD 1987 Kar.466 and Habib Bank Ltd. v. Muhammad Hussain and others PLD 1987 Kar.612 was not applicable to this case. Secondly these provisions related fiscal matters which were protected under Article 203 of the Constitution. 14. We have heard the arguments of both the parties and examined the record with their assistance. The question emerging for consideration from the submissions of the parties are:-- (1) Whether the appeals filed by the owners and by the University are incompetent? (2) Whether the finding of the reference Court on the question of compensation is correct? (3) Whether the provisions of section 28 and section 34 of the Act are hit by the principle of `Riba' as enshrined in the Holy Qur'an and Sunnah? (4) Whether the provisions of section 28 and section 34 are discretionary and so the Court is not obliged to award, interest in view of commandments in the Holy Qur'an and Sunnah? (5) Whether the owners did not file any objection under section 9 of the Act and so were precluded to challenge the award of Land Acquisition Collector before the reference Court. 15. We herein proceed to determine these questions one by one. We take up first the question No,1. Both the parties have pressed this contention on the basis of rule laid down in Pir Khan's case. It will be instructive to examine the Pir Khan's case. In this case the land was acquired under the Act for the purpose of construction of Pakistan Ordnance Factory, Havclian. The owners of the land submitted objection petition under section 18 read with section 30 of the Act. The learned reference Court after considering the evidence of the parties assessed market value of the land as Rs,3,000 and Rs,2,000 per kanal. The Military Estate Officer, Hazara Circle, Abbottabad and the Central Government of Pakistan through Defence Secretary, filed appeal before the High Court of West Pakistan. The owners thereof respondents took up a preliminary objection that neither the Military Estate Officer nor the Central Government had a locus-standi to file appeal. The Division Bench of the High Court Peshawar rejected the contention and proceeded to accept the appeal to the
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extent of compensation awarded by reference Court by reducing the rate of compensation. The owners of land filed appeal under Article 185 (2)(e) of Constitution of Pakistan. Accepting the contentions of owner-appellant, it was held by Supreme Court PLD 1987 SC 485, that the appeal filed by the Military Estate Officer and the Central Government was incompetent. It will be relevant to notice the rule laid down by the Supreme Court in this case:-- "We agree and would add that the order of the Civil Court on reference made to it by the Land Acquisition Collector is not an independent order but merely a substitutive order, whereby the award of the Land Acquisition Collector is substituted by the order of the Civil Court, which order then becomes the award. Since, by virtue of subsection (2) of section 50 of the Act, the award made by the Land Acquisition Collector is final and cannot be challenged except by a party which has expressly been conferred the right of appeal, hence respondents Nos.] and 2 who did not have any such right expressly conferred on them, did not have any locus standi to file an appeal. As already observed, no such right is to be assumed on any a priori ground and a right of appeal can be exercised only if it has been expressly conferred on a party by statute. ' Furthermore, neither the Central Government nor the Military Estate Officer can be deemed to be parties who have been adversely affected by the order of the Civil Court. If the Central Government or the Militaty Estate Officer could get the land in question more cheaply by private negotiations they can refuse to accept the land at the price determined by the Court. They cannot have it both ways. Having chosen to set in motion the special powers given to the Government to acquire land under the Land Acquisition Act for public purposes they are to be confined to those provisions and cannot claim further rights and higher privileges than those provided for under the provisions of the said Act. Since under the provisions of the Act only a special and limited appeal is provided for against the award of the Court, which in the facts and circumstances of this case would be availed of by the Provincial Government nor the Collector chose to file an appeal, the appeal filed by the Central Government and the Military Estate Officer was indeed an appeal filed. By "strangers", having no locus standi to file it." ' The same principle was reaffirmed in Behram Khan and 54 others v. Military Estate Officer and 2 others 1988 SCMR 1160 in Pakistan Steel Mills Corporation Limited and others v. Deputy Commissioner (East) Karachi and others 1989 SCMR 812. In this case the Pakistan Steel Mills Corporation Limited a company for whose benefit land was acquired under Act filed an appeal against the order of reference Court under section 18 of the Act. The High Court relying upon the rule laid down in Pir Khan's case dismissed the appeal. The Pakistan Steel Mills Corporation instituted a civil petition for leave against the order of the High Court. The Supreme Court re- affirmed rule laid down in Pir Khan's case and dismissed the petition. ' In this sequence is the case of WAPDA v. Muhammad Farid and others 1990 SCMR 98, in which case the WAPDA filed civil appeals against the judgment of High Court. In this case the learned Attorney-General took up the point that in Pir Khan's case certain provisions of the Constitution of Pakistan were over-looked namely Article 152 which inter-alia provides that "the Federation may, if it deems necessary to acquire any land situate in a Province for any purpose connected with a matter with respect to which Parliament has power to make laws require the province to acquire the land on behalf and at the expense of the Federation", Article 149 empowers the Federal Government to give all necessary directions to a Province. Therefore, it was contended that the Federal Government in view of these constitutional provisions was a necessary party in proceedings relating to acquisition made by the Province on its, behalf. The Supreme Court granted leave and held that Pir Khan's case was decided by the three Judges of the Supreme Court. The rule laid down in Pir Khan's case was approved by a Bench comprising of 5 Judges of Supreme Court. It was, therefore, necessary that this case be placed before a larger Bench of 7 Judges.
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16. We have considered the rule propounded in Pir Khan's case. We are clear in our mind that the University for whom the land was acquired is stranger to acquisition proceedings. It has a right of filing cross objection under section 21 of the Act but has no right to file appeal under section 54 of the Act. If it is aggrieved of the award rendered by the reference Court it can straightaway decline to purchase the land acquired. Accordingly we are of considered opinion that in view of the rule laid down in Pir Khan's case, the University had no locus standi to file appeals. Accordingly appeals filed by the University are dismissed. 17. Now it is appropriate to examine the second question as to whether the finding of the reference Court on question of compensation is correct. It is a settled principle of law that Act is founded upon the doctrine of "salus populi suprema lex "that the interests of the public are supreme and that the private interests are subordinate to the interests of the State, therefore, it is a well established canon of interpretation that in construing the provisions of this Act, the benefit is to be given to subject. The law dealing with the circumstances to be considered for determination of compensation is contained in sections 23 and 24 of the Act. A bare reading of section 23 and section 24 of the Act indicates that neither the value of the land nor the market value of the land is defined in it. In sections 23 and 24 the circumstances are provided for the purpose of computing the compensation. The sections 23 and 24 have engaged the attention of the superior judiciary in a number of cases. It was laid down by the Privy Council in Fraser v. City of Fraserville (L.R.(1917) A C 194) that:- "It is the value to the seller of the property in its actual condition at the time of expropriation with all its existing advantage and with all its possibilities, excluding any advantage due to the carrying out of the scheme for the purpose for which the property is compulsorily acquired." 18. The same principle was reaffirmed in R.B. Lala Narsingh Das v. Secretary of State of India (1925 Privy Council 91). This principle was again reaffirmed in Atmaram Bhagwant Ghadgay v. Collector of Nagpur AIR 1929 Privy Council 92, Vyricherla Narayana Ajapatiraju v. Revenue Divisional Officer- VI, Gapatam AIR 1939 Privy Council 98; Malik Abdul Qayyum etc. v. Punjab Province etc. PLD 1979 Lah.853. 19. The same golden principles for the purpose of assessing the compensation/market value of the land were followed with enough emphasis in Secretary of State v. Naresh Char ra Bose AIR 1926 Calcutta 1000, Collector of Chingleput District, Saida v. Kadir Mohideem AIR 1926 Madras 732 and Secretary of State v. Chuni Lal and others AIR 1931 Lahore 207. 20. In Fazalur Rehman and others v. General Manager, S.I.D.B. And another PLD 1986 SC 158, in this case the circumstances of future use of property was also taken into consideration while considering this question, his Lordship MrJustice Aslam Riaz Hussain observed as follows:- "I would, therefore, like to emphasise that while determining the value of the land acquired by the Government and the price which a willing purchaser would give to the willing seller, only the "past sales" would not be taken into account but the value of the land with all its potentialities may also be determined by examining (if necessary as a Court-witness) local property dealers or other persons who are likely to know the price that the property in question is likely to fetch in the open market. In appropriate case there should be no compunction even on relying upon the oral testimony with respect to the market value of the property intended to be acquired, because even while deciding cases involving questions of life and death, the Courts rely on oral testimony alone and do not insist on the production of documentary evidence. The credibility of such witnesses would, however, have to be kept in mind and it would be for the Court in each case to determine testimony. It would be useful and even necessary, to examine such witnesses while determining the market price of the land in question, because of the prevalent tenancy that in order to save money on the purchase of stamp papers and to avoid the imposition of heavy gain tax levied on sale of property, people declare or show a much smaller amount as the price of the land purchased by
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them the price actually paid. The 'previous sales' of the land cannot, therefore, be always taken to be an accurate measure for determining the price of the land intended to be acquired." 21. In R.FA. No,77 of 1973 a Division Bench of this Court after surveying the entire case law laid down the following principles in respect of assessment of a compensation:-- (1) The market value or market price means the price property would fetch in the market. The price will be highest price a willing buyer would pay a willing seller would accept both being fully informed and the property being exposed for a reasonable period of time. (2) The market value may be a different from the price a property can actually be sold at a given time. The market value is that price which might be expected to bring if offered for sale in a fair market. (3) In assessing the compensation the potential value i,e, the benefits, advantages arising from the present use and future use are to be taken into consideration. (4) The inflationary trend and depreciation in currency of the country between the date of acquisition…
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