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Official Citation: 2026 LHC 2643
Court / Jurisdiction: Lahore High Court (Honorable Mr. Justice Muhammad Raza Qureshi)
Parties: SNGPL vs MIRZA KHALID JAVED ETC
Ruling Summary: This decision was rendered by the Lahore High Court (Honorable Mr. Justice Muhammad Raza Qureshi), officially reported as 2026 LHC 2643. In this matter between SNGPL and MIRZA KHALID JAVED ETC, the court adjudicated key questions of statutory construction, procedural regularity, and legal precedent under Pakistani law.
Core Holding: The honorable bench evaluated governing statutory provisions and judicial authorities to establish the rights of the parties, delivering the binding reasoning set out below.
COURT: Lahore High Court (Honorable Mr. Justice Muhammad Raza Qureshi) DECISION DATE: 08-04-2026 CASE DETAILS: Regular First Appeal-Regular First Appeal (Final Decree)-u/s 54. Land Acquisition Act 397-14 ============================================================ Stereo. H C J D A 38 Judgment Sheet
IN THE LAHORE HIGH COURT, MULTAN BENCH, MULTAN
(JUDICIAL DEPARTMENT)
Regular First Appeal No.397 of 2014
Sui Northern Gas Pipelines Ltd. and another
versus
Mirza Khalid Javed and another
JUDGMENT
MUHAMMAD RAZA QURESHI, J . This Regular First Appeal is directed against the Judgment and Decree dated 21.11.2012 passed by the learned Senior Civil Judge/Referee Court, Sahiwal, whereby the Reference Application filed under Section 18 of the Land Acquisition Act, 1894 (the “Act”) by respondent No.1 was accepted and the compensation determined by the Land Acquisition Collector vide Award dated 07.02.2005 at Rs.300,000/ - per acre was substantially enhanced by the learned Referee Court at Rs.1,800,000/- per acre and further allowed 50% compensation on account of potential value, 50% severance charges, and 25% compulsory acquisition charges along with ancillary relief. 2. The facts as emerging from the record, are that land measuring 27-Kanals 02-Marlas situated in Chak No.93/9-L, Tehsil and District Sahiwal was acquired for a public purpose, namely, laying of high -pressure gas pipelines. Out of the said Date of Hearing 08.04.2026 Petitioners by: Rao Muhammad Iqbal, Advocate. Respondent No.1 by: In person. Respondent No.2 by Mr.Kanwar Sajid Ali, Assistant Advocate General. -2- Regular First Appeal No.397 of 2014
land, an area measuring 45 -Marlas owned by respondent No.1, comprising Khasra Nos.8/2, 11/1, 12/1 and 13/1, was acquired. The possession of the land was taken prior to the announcement of the Award. The Land Acquisition Collector, after completing codal formalities, announced the Award on 17.02.2005 and fixed the market val ue of the acquired land at Rs.300,000/- per acre. In addition thereto, 25% compulsory acquisition charges and 10% severance charges were also awarded. 3. Feeling dissatisfied, respondent No.1 filed an application under Section 18 of the Act, seeking reference to the Court on the grounds that the land was si tuated on the main road, in close propinquity to developed areas including factories, residential colonies and public offices, and thus had substantial commercial and residential potential. It was further asserted that the acquisition in the form of a line ar strip for pipeline had bifurcated the land into two portions, severely impairing its utility and value. The learned Referee Court, after framing issues, recording evidence of both sides and hearing arguments, accepted the reference and enhanced the compensation as detailed above. The present appeal has been filed to challenge the said enhancement. 4. Learned counsel for the appellant assailed the impugned order and decree on multiple grounds. It was contended that the learned Referee Court misapplied th e settled principles governing determination of compensation and granted excessive and unjustified enhancement. According to the learned counsel, the Land Acquisition Collector had assessed the market value strictly in accordance with law, relying upon average sale transactions of comparable agricultural land in the locality during the relevant period. It was further argued that the learned Referee Court erred in placing reliance on isolated instances and revenue reports without corroboration -3- Regular First Appeal No.397 of 2014
through reliab le sale deeds of comparable land. The enhancement to Rs.1,8 00,000/- per acre was termed as speculative and not reflective of the actual market conditions prevailing at the time of notification under Section 4 of the Act. Learned counsel also argued that th e grant of 50% additional compensation on account of potential value is contrary to law, as no concrete evidence was produced to establish that similarly situated land had been utilized or sold for commercial or residential purposes prior to acquisition. Likewise, enhancement of severance charges from 10% to 50% was stated to be arbitrary and disproportionate. It was emphasized that the land in question was essentially agricultural, and mere proximity to developed areas could not justify such a precipitous increase in compensation. Learned counsel prayed that the impugned order and decree be set aside and the original Award be restored. 5. Respondent No.1, appearing in person, supported the impugned order and contended that the learned Referee Court has correctly appreciated both oral and documentary evidence. He reiterated that his land was ideally located on the main road and surrounded by developed infrastructure, thereby possessing significant commerci al and residential potential. He further argued that the Land Acquisition Collector failed to differentiate between lands situated in inferior locations and his land, which had a prime frontage and advantageous position. It was also contended that the acqu isition through a 22-feet wide strip across the entire holding divided the land into two portions, rendering the remaining land inconvenient, less productive, and unsuitable for development. According to him, there was an inordinate delay between taking po ssession of the land and announcement of the Award, during which the value of the land increased considerably. He maintained that the learned Referee Court rightly considered the principle of “willing buyer and willing seller” as well as the concept of -4- Regular First Appeal No.397 of 2014
potential value recognized by superior Courts of the country. He prayed for dismissal of the appeal. 6. After hearing the learned counsel for the appellant and respondent No.1 in person and upon meticulous perusal of the record, this Court proceeds to determine the matter. 7. Before embarking upon the appraisal of evidence and rendering findings, it is appropriate to delineate the points which arise for determination in the instant appeal. From the perusal of the record and in view of the rival contentions advanced by the parties, the following points emerge for adjudication by this Court: i. Whether the learned Referee Court was justified in enhancing the market value of the acquired land from Rs.300,000/- per acre, as determined by the Land Acquisition Collector, to Rs.1,8 00,000/- per acre? ii. Whether the grant of 50% compensation on account of potential value and 50% severance charges by the learned Referee Court is legally sustainable? iii. Whether the impugned order and decree dated 21.11.2012 suffer from any illega lity, arbitrariness, or misappreciation of evidence warranting interference by this Court? iv. Whether the evidence produced by respondent No.1 was sufficient and reliable to justify the enhancement of compensation, and whether the appellant failed to rebut the same? v. Whether the principles governing determination of compensation under Section 23 of the Land Acquisition Act, 1894 have been correctly applied by the learned Referee Court? 8. In matters pertaining to the enhancement of compensation for compulsor ily acquired land, it is by now a firmly entrenched proposition, consistently enunciated by the Supreme Court, that the determination of compensation must be anchored in the principles of equity, fairness, and realism, reflecting the true market value of t he property at the relevant point of time, i.e., the date of publication of the notification under the Act. It has been authoritatively held that the Award rendered by the Land Acquisition Collector partakes the -5- Regular First Appeal No.397 of 2014
character of a mere administrative offer and does not possess finality, particularly where it is demonstrated to have been suffered from arbitrariness, misapprehension of material evidence, or result of reliance upon extraneous considerations. The Courts, while exercising jurisdiction under Section 18 of the Act, are thus obligated to undertake an independent and judicious evaluation of the evidence brought on record . In this regard, guidance may aptly be sought from the judgment of the Hon’ble Supreme Court in Malik Tariq Mehmood and others v. Provi nce of Punjab and others (2023 SCMR 102) , wherein, while enunciating the parameters for determining compensation, it was observed as under:
“Before we enter upon considering the evidence adduced on the said issue, we deem it appropriate to state some of the principles on which compensation is required to be determined. Under section 23(1) of the Act, compensation is to be determined on the bas is of the market value of the land at the date of publication of the notification under section 4 of the Act. The Court assessing compensation is required to take into consideration not only the present purpose or the present use to which the land is appli ed but also any other more beneficial purpose to which it might reasonably be put by the owner. Indubitably, it is true that regard can be had only to the existing conditions and what is likely to happen in reasonably near future and compensation cannot be fixed on the basis of what might happen in the dim and distant future. Where there is a reasonable possibility of the land being put to a more profitable use within a reasonable period the same cannot be ignored in assessing its value. Compensation has al ways to be determined by reference to the price which a will ing vendor may reasonably accept to obtain from a willing purchaser. When the land possesses some unusual, special or unique features as to its location or potentialities, due weight must be attached to all these elements. After considering all the circumstances, the Court has to arrive at a fair estimate with reference to the surrounding circumstances and evidence in the case and to award a fair -6- Regular First Appeal No.397 of 2014
compensation on that basis. The Court further ought to be liberal in the sense that it should not be too meticulous or pedantic in dealing with the evidence. It is also true that an entry in the revenue record as to the nature of the land may not be conclusive. If the land acquired is found to be useful bot h for agricultural or non -agricultural purposes, merely on the ground that it was used as agricultural land by the owner till the time of its acquisition, its potentiality as non - agricultural land cannot be ignored.” [emphasis added]
The aforesaid principles have been consistently explored in a catena of judgments, inter alia, Land Acquisition Collector, GSC, NTDC, (WAPDA), Lahore and another vs. Mst. Surraya Mehmood Jan (2015 SCMR28 ), Air Weapon Complex through DG vs. Muhammad Aslam and others (2018 SCMR 779), Askari Cement Limited through Chief Executive vs. Land Acquisition Collector (Industries) Punjab and others (2013 SCMRE 1644), Province of Punjab through Collector, Attock vs. Engineer Jamil Ahmad Malik and others (2000 SCMR 870) and Province of Sindh through Collector of District Dadu and others vs. Ramzan and others (PLD 2004 SC 512). 9. The record unequivocally manifests that both the parties availed full opportunity to adduce oral as well as documentary evidence before the l earned Referee Court. The respondent No.1 appeared as AW -2 and, through a consistent and confidence-inspiring deposition, reiterated the a verments contained in his claim/Application . He deposed that the acquired land was situated on the main road, possesse d prime commercial and residential potential, and had been bifurcated due to acquisition in a linear strip, thereby substantially impairing its utility and value. He also highlighted the inordinate delay between taking of possession and announcement of the Award. Notably, his testimony remained -7- Regular First Appeal No.397 of 2014
unshaken, as no cross -examination was conducted upon him, thereby lending further credence to his version. In order to substantiate his claim, respondent No.1 produced Muhammad Adnan Bilal, Junior Clerk from the office of the District Officer (Revenue), as AW -1, who duly proved the relevant official record. 10. In support of his claim, the respondent No.1 placed reliance upon documentary evidence, including Exh.A1 and Exh.A3 (reports of the Revenue Authorities), which reflect that although the average agricultural value of land in the Chak during the relevant period was comparatively modest, the acquired la nd, by virtue of its advantageous location adjoining the factory area and its frontage on the main road, was assessed to possess a significantly higher market value, quantified at Rs.1,800,000/ - per acre. Exh.A2 and Exh.P7 delineate the acquisition proceed ings, while Exh.A4 (Award dated 07.02.2005) discloses the basis adopted by the Land Acquisition Collector. Furthermore, Exh.P4 (Record of Rights) and Exh.P5 ( Aks Shajra ) substantiate the precise location, khasra particulars, and road frontage of the land i n question. The respondent No.1also produced Exh.P6 along with sale deeds Exh.P8, Exh.P9, and Exh.P10 to demonstrate prevailing market trends and to establish the inherent potentiality of the acquired land. 11. Conversely, the appellant examined Ahmad Din , Senior Clerk, as DW-1, who produced documents Exh.D1 to Exh.D9 relating to the acquisition proceedings, including the notification under Section 4 and its publication in the official gazette. However, a careful scrutiny of his testimony reveals that, rather than fortifying the appellant’s case, it substantially eroded the very foundation thereof. During the course of cross-examination, the said witness made material and unequivocal admissions which strike at the root of the -8- Regular First Appeal No.397 of 2014
Collector’s assessment. He conc eded that, at the time of determining the price of the acquired land, the landowners were not even summoned, thereby casting serious doubt on the transparency and fairness of the process undertaken. More significantly, he admitted that the Patwari concerne d had recorded the market value of the acqui red land at Rs.1,800,000/- per acre. He further acknowledged, without circumvention, that in cer tain locations within the same Revenue estate, the prevailing market value ranged between Rs.1,800,000/- and Rs.3,200,000/- per acre. 12. These candid admissions, emanating from the appellant’s own witness, not only render the Collector’s award manifestly untenable but also furnish strong and independent corroboration to the claim set up by respondent No.1. The testimony, thus, stands as a telling indictment of the methodology adopted by the Collector and significantly reinforces the conclusion drawn by the learned Referee Court. Apart therefrom, the appellant failed to produce any independent, cogent, or persuasive evi dence in the nature of comparable sale transactions or expert evaluation to effectively rebut the case of the respondent No.1. Consequently, the evidence brought on record by respondent No.1 remained largely unchallenged and inspires confidence. 13. It is equally well settled that the concept of “market value” is not to be construed in a narrow or pedantic sense, confined merely to the existing use of the land, but must encompass its potentiality, advantageous location, and capacity for future development in a progressively expand ing urban milieu. The superior C ourts have repeatedly cautioned against the mechanical classification of land on the basis of its recorded status in revenue entries, emphasizing instead the doctrine of “highest and best use,” where by land capable of being utilized for residential, commercial, or industrial -9- Regular First Appeal No.397 of 2014
purposes cannot be relegated to a lesser valuation merely because it is presently under agricultural use. In this regard, factors such as proximity to developed localities, access to road networks and civic amenities, and inclusion within or near municipal limits assume pivotal significance. Furthermore, where a large, contiguous tract of land is acquired for a unified public purpose, the law leans in favour of uniform valuation, e schewing artificial or illusory distinctions predicated upon minor variations in classification or topography, which would otherwise result in discriminatory and inequitable treatment of similarly placed landowners. 14. The law governing determination of compensation is encapsulated in Section 23 of the Act. The Hon’ble Supreme Court in judgment reported as Province of Sindh v. Ramzan (PLD 2004 SC 512) has authoritatively held that compensation must be just, fair and ade quate, reflecting not only the existing use of land but also its future potential and all attendant losses. In continuation thereof, reference may also be made to the judgment Province of Punjab through Land Acquisition Collector and another vs. Begum Aziz a (2014 SCMR 75), wherein it was held that, while determining compensation, the Collector is required to take into consideration the relevant factors and settled principles governing such assessment. The Court observed:-
“While assessing the compensation , the Collector has not only to consider the market value of the land in question but its potential value. The market value is normally taken up as one existing on the date of notification under section 4(1) of the Act under the principle of willing buyer and willing seller while the potential value was the value to which similar lands could be put to any use in future. Thus in determining the quantum of compensation the exercise may not be restricted to the time of the aforesaid notification but its future value may be taken into account. This principle was also -10- Regular First Appeal No.397 of 2014
enshrined in judgment reported as Abdur Rauf Khan vs. Land Acquisition Collector/D.C. (1991 SCMR 2164).
[emphasis added]
15. Additionally, the jurisprudence developed by the superior Courts underscores that any deductions on account of development charges or other ancillary considerations must be applied with circumspection and supported by tangible evidence, and cannot be imposed as a matter of routine, particularly in cases where the acquired land already possesses the attributes of a developed o r semi-developed property. The Constitutional safeg uard embodied in Article 24 of the Constitution of the Islamic Republic of Pakistan , 1973 further elevates the right to receive adequate compensation to a fundamental plane, mandating that deprivation of property must be accompanied by recompense that is n ot illusory, speculative, or disproportionately low, but rather commensurate with the real and intrinsic worth of the property. Consequently, where it is es tablished that the Collector’s Award is vitiated by non-consideration of relevant evidence, erroneous application of legal principles, or failure to account for the inherent potential and locational adv antages of the land, the Referee Court, and subsequently the Appellate Court, are not only empowered but duty -bound to rectify such injustice by suitably enhancing the compensation, so as to uphold the ends of justice and the C onstitutional guarantee of fair recompense. 16. In the present case, the evidence on record unmistakably establishes that the land of respondent No.1 was situated on the main road an d in close proximity to developed areas. The Land Acquisition Collector, however, fell into patent error by applying a uniform rate to the entire Chak without distinguishing between lands of varying quality and advantageous location. -11- Regular First Appeal No.397 of 2014
17. The learned Refer ee Court has rightly relied upon the evidence demonstrating the superior location and inherent potential of the land and has determined the market value accordingly. The enh ancement to Rs.1,800,000/ - per acre, in the circumstances of the case, cannot be te rmed excessive or arbitrary reflects a just and equitable assessment consistent with the material available on record. 18. With regard to potential value, it has been consistently held by the Hon’ble Supreme Court that where land is capable of being put to more profitable use in future, such factor must necessarily be taken into account. The proximity of the land to developed areas and its frontage on the road are relevant considerations supporting such assessment. The grant of 50% compensation on this account is thus fully justified. A similar principle has recently been reaffirmed in Federal Government of Pakistan through Mi nstry of Defence Rawalpindi and others vs. Mst. Zakia Begum and others (PLD 2023 Supreme Court 277) and B.P. Pakistan Exploration and Production, Inc. vs. Ashique Hussain Halepoto and others (2024 SCMR 833). In the latter dicta laid down by the august Sup reme Court, it was held as under: “Even otherwise, it is by now settled that the compensation for the property being acquired must not only be based on its market value but also the potential value thereof. In the peculiar circumstances of the present case , we find that compensation adjudged appears to have been reasonably determined. Thus, the objection on the part of the appellant - company regarding the compensation awarded to the private -respondents/ landowners does not hold any legal ground.” 19. Likewise, the enhancement of severance charges to 50% is warranted in view of the peculiar nature of acquisition, whereby the land has been divided into two portions due to installation of high -pressure pipelines, thereby significantly -12- Regular First Appeal No.397 of 2014
impairing its utility and value. The award of 25% compulsory acquisition charges is in consonance with statutory provisions and calls for no interference. 20. It is also a settled canon of appellate jurisprudence that findings of fact s recorded by the Referee Court, which is the primary forum for appreciation of evidence, are not to be lightly interfered with unless shown to be perverse, arbitrary, or suffering from misreading or non -reading of evidence. No such infirmity has been demonstrated in the impugned order. 21. For the foregoing reasons, this Court is of the considered view that the impugned Judgment and Decree dated 21.11.2012 passed by the learned Referee Court is based on correct appreciation of law and evidence and do not suffer from any illegality or infirmity . Consequently, this Appeal is dismissed with no order as to costs.
(MUHAMMAD RAZA QURESHI) JUDGE
Approved for reporting.
JUDGE
*Syed Zameer*