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Petitioner: Mst. SARDAR BEGUM AND 142 OTHERS VS Respondent: THE CAPITAL DEVELOPMENT JUDGMENT
Court Name: Lahore High Court Judge(s): Karam Elahi Chauhan Title:Mst. SARDAR BEGUM AND 142 OTHERS vs THE CAPITAL DEVELOPMENT
JUDGMENT
Reported As: PLD 1977 Lahore 1200 Result: Petitions allowed Judgment JUDGMENT ' A directive bearing No, 112 dated 21-11-1968 acquiring the land in dispute situated in village Landa Mastal tehsil and district Rawalpindi, was issued by the Deputy Commissioner, Capital Development Authority, under section 25 of the Capital Development Authority Ordinance XXIII of 1960, (hereinafter called the Ordinance). The Deputy Commissioner on 26-12-1968 gave an award fixing the following rates of compensation to be given to the land owners concerned :- {{TABLE}} #TBS Rs, 1170 Rs, 510 Rs, 350 Rs, 265 Rs, 130 Rs, 70 #TBE #TBS Rate of compensation awarded by the Com- m issior er. #TBE 1. 2. 3. S. No, Nature of land. Rate of compensation awarded by the D. C. Chahi Rs, 619 Leparah Rs, 270 Mairah Rs, 191 Rakkar Rs, 79 Banjar Qadeem Rs, 40 Ghair Mumkin Rs, 20 {{TABLE}}
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' The petitioners filed 77 appeals which were accepted by the learned Commissioner by means of a common order, dated 18-3-1972, whereby he enhanced the compensation at the rate mentioned in last column of the above table. The Commissioner further directed (like the Deputy Commissioner) that "to the total value of tthe land 25% will be added as provided by the Government to meet the difference of rates of 1954-58 and today and that additional 15% will also be added on de total value of the land as compulsory acquisition. The retitioners have come up in writ petition against the aforesaid proceedirgs and orders to this Court. While passing the above order, the learned Commissioner held that he was fixing the aforesaid rates on the basis of an award already announced ou 3-5.1963 in connection with the land acquired in the same village i,e, Landa Mastal though the date of the acquisition directive in the precedent case followed by him was not Indicated. Re Relevant provisions of Ordinance XXIII of 1960 2. Before proceeding further it is necessary to examine as to what is the criteria and the law for awarding compensation to the land owners whose lands are acquired by the Capital Development Authority under the above-mentioned Ordinance (as amended). For this purpose reference may be made to section 28 of the Ordinance which is headed as "Enquiry and award by Deputy Commissioner" and states that "on the day so fixed, or on any other day to which the enquiry has been adjourned, the Deputy Commissioner shall proceed to enquire Into the objections, if any, which any person interested has stated pursuant to the notice given under section 27 and into the market value of the land and into the respective interests of the persons claiming the compensation, and shall make an award of (i) the true area of the land ; (ii) the compensation which in his opinion would be allowed for the land ; and (iii) the apportionment of such compensation among all the persons known or believed to be interested in the land of whom, or of whose claims, he has information, whether or not they have appeared before him". Section 29 is headed as "Compensation" and states that "where any land is acquired under this Ordinance there shall be paid compensation, the amount of which shall be determined by the Deputy Commissioner, who shall be guided by the provisions of sections 30 and 31". Section 30 deals with "matters to be considered in determining compensation" and states that "(1) in determining the amount of compensation to be awarded for land acquired under this Ordinance the Deputy Commissioner shall take into consideration, first, the market value of the land ; secondly, the damage, sustained by the person interested, by reason of dispossession of any standing crops or trees which may be on the land ; thirdly, the damage, if any, sustained by the person interested at the time of taking possession of the land by reason of severing such land from his other land ; fourthly, the damage, if any, sustained by the person interested at the time of taking possession of the land by reason of the acquisition injuriously affecting his other property, movable or immovable, in any other manner, or his earnings; and fifthly, if, in consequence of the acquisition of the land the person inferested is compelled to change his residence or place of business, the reasonable expenses, if any, incidental to such change. (2) In addition to the value of the land determined as aforesaid, the Deputy Commissioner shall in every case award a sum of fifteen per centum on such value in consideration of the compulsory nature of the acquisition". Section 31 deals with "Factors to be ignored in determining compensation" and states that "in determining compensation as aforesaid, the Deputy Commissioner shall not take into consideration first, the degree of urgency which has led to the acquisition ; secondly, any disinclination of the person interested to part with the land acquired, thirdly, any damage sustained by him which, if caused by a private person would not render such person liable to a suit ; fourthly, any increase likely to accrue to the value of the land acquired from the use to which such land will be put on acquisition ; and fifthly, any increase likely to accrue to the value of the other land of the person interested from the use to which the land acquired will be put". The word "market value" is defined in section 2(k) of
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the Ordinance and states that "in this Ordinance, unless there is anything repugnant in the subject or contest, market value means (i) in relation to land acquired before the first day of January 1968 the average market value thereof prevailing during the period commencing the first day of January 1954, and ending on the 31st day of December 1958 ; and (II) in relation to land acquired on or after the first day of January 1968, the aggregate of the average market value as aforesaid determined with reference to its classification recorded in the Register of Haqdaran Zemin as in force on that day and 25 % of such value". The word "thereof" in clause (i) and the whole of clause (ii) of section 2(k) were added by means of the Capital Development Authority (Amendment) Ordinance VII of 1968 published in the Gazette of Pakistan (Extraordinary) dated 25-10-1968, page 944, section 32 deals with "vesting of land in the Authority" and states that "immediately on the making of the award under section 28, the land shall vest in the Authority free from all encumbrances and thereupon the Deputy Commissioner may, after giving reasonable notice to the occupier, enter upon and take possession of the same". Re : Technical definition of "market value" as contained in sections 2(k) (i) and 2(k)(ii) 3. To open his arguments Raja Said Akbar Khan, learned counsel for the petitioners, referred to Muhammad Yusuf and others v. Capital Development Authority, Islamabad and others (1). That was a case in which the land was acquired by the Capital Development Authority on 10-4-1964. A question arose as to while determining the "market value" of that land any improvement made by the land owners in the nature and condition of land on or by the acquisition day, was to be taken note of in view of the technical definition of the word "market-value" in its original form in section 2(k) of the Ordinance ; or was the compensation amount to be fixed barely with reference to the average market value during the period 1954-1958 without taking note of the improvements or improved conditions of land on the expropriation day. That was a case where the land earlier was not so, but by or on the expropriation day it had become a nehri land and the question cropped up in the context as to whether newt condition/classification of land could be taken note of or rot. The Supreme Court held that the improved conditons and improvements made in the land by or on the acquisition day were not excluded from consideration and could be taken due note of. The actual passage in the judgment of the Supreme Court in this respect is contained at page 757 and reads as follows : "By the introduction of section 2(k) in defining the term "market value" the Legislature has simply pegged up the average prices generally prevailing during 1954 to 1958 in respect of the different kinds of lands in general in the locality. There is nothing in the definition, either express or by necessary intendment, to warrant the conclusion that this embargo against the award on account of any rise in level of prices, was operative in any other direction as well and precluded the landowners from claiming compensation for the bona fide improvements effected in the quality of their acquired lands made during this period". This passage shows that the original definition of "market value" in section 2(k) which is now almost similar to new section 2(k) (0 though left a scope for taking note of improvements and improved conditions of land on the acquisition day, but at the same time contained an embargo and that was "against any rise in level of prices". However, learned counsel for the petitioners submitted that just as the original section 2(k) and as a matter of fact new section 2(k) (i) which dealt with average market value of the land do not on the authority of the aforesaid Supreme Court judgment exclude taking note of the improvements or improved conditions of land while determining overall compensation amount with respect to lands acquired prior to 1.1-1968, the same is the intention of clause (1i) of section 2(k) and it makes no change in that regard at all. He submitted that it could not be the intention of the Legislature to give benefit of the improvements and improved conditions of land to persons whose lands were acquired prior to 1-1-1968 but to deny the same to those whose lands were acquired on or after that date especially when there was no bar in any law for the time being in force to effect
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improvements in or in the conditions of land in general. He further submitted that the phrase "the aggregate of the market value as aforesaid. . . ." in clause (Ii) has reference to clause (I) of' section 2(k) where scope of taking note of improvements as held by the Supreme Court duly exists. He particularly laid emphasis on the words "as aforesaid" and submitted that average market (1) PLD 1976 SC 752 ' value "as aforesaid" does not warrant leaving out the improvements and improved conditions of land and rather points to follow the same approach as in the referred-to clause, Taking the argument further he submitted that the later portion of clause (ii) of section 2(k) when it directs determination of the "average market value" as aforesaid with reference to its classification recorded in the Register of Haqdaran Zamin as in force on; that day, it simply means that instead of keeping the matter uncertain take note of and stick to the classification of land on the acquisition day. The words "that day", according to him, mean the acquisition day whether it is 1-1- 1968 or any day thereafter which in any case will also be an ascertained or ascertainable day. This interpretation he submitted will lead to giving fair compensation to landowners with reference to improvements and improved conditions of their land on the expropriation day and at the same time will avoid any discrimination in the matter of compensation on any other artificial basis. He amplified that if this construction is not accepted the results would be startling which he tried to demonstrate by saying that take, for example, teat a tract of land is acquired today in year 1977, its classification will be of 1-1-1968 and its price wilt be that of period 1954-1958 and that the same would have been the position had the land been acquired on 1-1-1968. This construction, he submitted, cannot be upheld from whatever angle the case, according to him, may he processed because it is not based on uniformity of any principle or any -plausible rationale and Lives no importance to the date of acquisition while determining 'market value'. Mr. S. M. Chaudhry, learned Advocate went so far as to argue that the concept of pegging the price and the classification will go against the fundamental right as contained in Article 24 of the Constitution which deals with "protection of property rights" and inter alia lays down in clause (2) that "no property shall be compulsorily acquired or taken possession of save for a public purpose, and save by the authority of law which provides for compensation therefor and either fixes the amount of compensation or specifies the principles can and the manner in which compensation is to be determined and given". He submitted that the Ordinance neither fixes the amount of compensation nor specifies the principles and the manner in which the compensation is to be determined and given. According to the learned counsel pegging of price and pegging of classification does not mean specifying principles or the mannerism of determination of compensation, because, in the process of specification of principles and the mannerism of determination of compensation no pegging or ceiling of the price or classification can be done and the scope of the matter is left open and not closed. The arguments of the learned counsel deserved some probe and I might have examined them in detail, but I think that the observations of the Supreme Court in the precedent case as occurring at page 758 of the report do not leave any scope for me to express any independent views, inasmuch as, according to Article 189 of the Constitution "any decision of the Supreme Court shall, to the extent that it decides a question of law or is based upon or enunciates a principle of law, be binding on all other Courts in Pakistan". The actual relevant passage in the judgment of the Supreme Court is to the following effect: . "So that for the first time under this amendment in relation to land acquired on or after the first day of January 1968, a further clause was inserted in the definition and this had the effect of pegging the classification of the land as recorded in the Register of Haqdaran Zemin as in force on that day, as the criterion for the assessment or the compensation of the acquired land. But before it, as already discussed above, there was no such pegging of the classification of the lands. There
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was no restriction imposed by the Statute in that direction and the compensation for the acquired land had to be assessed on the basis of its subsisting classification on the date of the acquisition." If this passage is read along with the passage earlier reproduced it will show that earlier there was pegging against the "rise in level of prices" but by the introduction of section 2(k) (ii) as interpreted by the Supreme Court there was pegging on the classification of land as well. If the classification of land stands pegged then it is no longer open to introduce the concept of improvements and improved conditions so as to change the classification through the aforesaid or any other similar device. Learned counsel for the petitioners submitted that the case before the Supreme Court was of acquisition which had taken place prior to 1-1-1968, namely, on 10-4-1964 whereas the present is a case of post 1-14968 acquisition, and as such, the observations of the Supreme Court holding pegging of classification under section 2(k) (ii) are obiter and should not be considered as declaratory of law or of a binding nature. I am afraid, the plea cannot be accepted. It was laid down in M. Ismail & Sons v. Trans-Oceanic Steamship Co. Ltd., and others (1) that even the obiter observations of the Supreme Court are equally binding and cannot be taken exception to. Once the concept of pegging of classification comes in then obviously pegging has to be on 1-1-1968 and not the acquisition day, because, the acquisition day in each case being different cannot be considered as a pegging day. I hold accordingly.. However, I want to make it clear that this discussion is confined to such" improvements etc. Which purport to change classification of the land for technical definition of "market value" and is not to affect individual merits of a particular piece of land while remaining within and without effecting or altering, its relevant classification for compiling "compensation amount" as distinct from technical market value as aforesaid. This aspect of the matter is discussed in some detail in para. 6 infra. Re : Word "aggregate" in the definition of "market value" in section 2(k) 4. The next plea raised by some of the learned counsel for the petitioners in connected cases which were heard along with this case, was that the sentence "the aggregate of the average market value as aforesaid determined with reference to its classification recorded in the Register of Haqdaran Zamin as in force on that day and 25% of such value" refer back to clause (I) of section 2(k) where it is written that market value means in C relation to land acquired before the first day of January 1968, the average market value thereof prevailing during the period commencing the first day of January 1954 and ending on the 31st day of December 1958. So far this approach is correct. However, they further submitted that just as section 2(k) (t) referred to "URDU TEXT" (of period 1-1-1954 to 31-12.1958) similarly the word "aggregate" in section 2(k) (II) suggested that the Deputy Commissioner should go on determining "URDU TEXT" of each next five years period after 1958 I e. Period, for example, 1-1-1959 31-12-1963 and then 1-1-1964 to 31-12-1968 and so on, and then take the aggregate average value of each of such quinquennial period. The plea, to speak with respect, though very ingenious cannot be endorsed, because, the word (I) PLD 1966 Dacca 296 "aggregate" has reference to aggregate (or to put it differently) the sum total of average price during 1954.1958 period plus 25% over and above that. Re: Word "thereof" in section 2(k) (i) 5. At this place something may be said about the word "thereof" as added in section 2(k) (i) which did not exist earlier in the original bare section 2(k). While referring to the "market value" as contemplated in original section 2(k), the Supreme Court in the case above referred to at pages 756-757 observed that "in his endeavour in assessing the compensation, the Deputy Commissioner is required to ascertain the average market value prevailing during the period from 1-1-1954 to 31- 12-1958. The above definition of the term "market value" does not even specifically advert as much to the land under acquisition and in awarding the compensation the enquiry is made into the average market value generally prevailing for the lands in the locality during this period". It was
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probably to cover the aforesaid technical aspect that the word "thereof" was added in section 2(k) (1) while recasting section 2(k) for the purpose of simply clarifying that the transactions, if any, of the particular tract of land under acquisition were also to be taken due note of along with sales of other similar lands in the neighbourhood, vicinity or locality as the case may be. In fact the process already involved this exercise though, as the Supreme Court pointed out, there was no specific mention of it in so many words. In other words, as already indicated, the word "thereof" was merely of a clarificatory nature, inasmuch as, it neither adds any such new factor which was not already there - nor it excludes any such factor which was already there and was covered within the scope of the definition of? The term "market value". To put it differently even though it highlighted consideration of the relevant transactions of the very land under acquisition, at the same time it did not eliminate the transactions of similar lands in the neighbourhood, vicinity or locality, as the case may be, during the relevant period. This is particularly so, because, possibility cannot be ruled out that every tract of land acquired or the land of every lando alter may not have any requisite direct sale-purchase quinquennial history during 1954-1958 period, with the result that, from that point of view, if sales in the neighbourhood, vicinity or locality, as the case may be, are not taken note of then the land under acquisition would have to be held to possess no "market value" within the strict letter of the definition of that term as contained in the enactment under examination and obviously will defeat the very aim and object of laying down the "market value" as the base factor forwarding compensation. In fact the "market value" compiled in the overall manner heretofore mentioned will legally still be the average market value "thereof" i,e, of the land under acquisition, though the process involves taking into account the relevant transactions of the land acquired and of the similar land in the neighbourhood, vicinity or locality, as the case may be. Re : 'Compensation amount" as distinct from technical definition of "market value" and the relevancy of potential value of land and its other merits and demerits on acquisition day. 6. The next point argued by the learned counsel for the petitioners was that there was a difference between what is called technical definition of the word "market-value" as contained in section 2(k) (1) and 2(k) (ii) of the Ordinance on the one hand and "the compensation amount" to be paid to the land owners on the other hand. Compensation amount, he submitted, was total and overall amount whereas market value was simply one of the items to be taken note of in fixing or compiling the compensation amount. The market values in other words was just a base and starts and rot the end of the process of compiling the compensation value. The argument seems to be correct. The wordings of sections 28, 30 and 31 of the Ordinance fully bear it out but if support is needed reference may again be made to the Supreme Court precedent where at page 757 it is written that "after having ascertained the average market value, the Deputy Commissioner is then required to exercise his judicial mind and form his own judgment in awarding compensation for the acquired land in question before him. Section 28 does not lay down that having ascertained the average market value and collected the data as the basis, the Deputy Commissioner is left with no discretion. Indeed his real difficulty lies in the task in forming his opinion, in assessing the compensation for the acquired land in question with tine regard to its relative merits and demerits and the data of the average price complied by him". Proceeding further learned counsel for the petitioners then referred to clause "fourthly" of section 31 of the Ordinance which says that while determining the compensation amount the Deputy Commissioner shall not take into consideration "any increase likely to accrue to the value of the land acquired from the use to which such land will be put on acquisition". He submitted that no doubt post acquisition use due to or on account of acquisition is not to be taken tote of but this does not mean that potential value of the land even on the acquisition day is also to be ignored and this potential value, according to him, despite pegging of classification of land on 1-1-196e can safely be attended to because pegging is only for compiling average marke value of 1954.1958 period so as to be simply kept in view and is not
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directed towards other directions or for other purposes. In my opinion, the plea raised is quite sound. Here attention is invited to section 23 of the Land Acquisition Act (I of 1894) where it is written that while determining the amount of compensation the Court shall take into consideration first the market value of the land at the date of the publication of the notification under section 4, subsection (1). There is then a further provision in clause fifthly of section 24 of that Act which says that the Court shall not take into consideration any increase to the value of the land acquired likely to accrue from the use to which it will be put when acquired. Interpreting that clause the Privy Council in V. Narayana v. Revenue Divisional Officer, Vizagapatam (1) held it means no more than this that in valuing the land acquired, on the date of the notification under section 4(1) of the Act it must be valued as it then stood and not as it would stand when the land had been acquired and used for the purpose for which it was acquired. However, it may be mentioned that generally speaking there are two types of buyers, namely, (1) those who are described as "potentiality buyers" as opposed to (2) "poramboke buyers" or ordinary buyers who would not pay on the prospect of exploiting the potentiality. Where there are other purchasers in the market who would pay for the value of the potentiality the case is simple but…
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