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Petitioner: Malik MUHAMMAD IJAZ VS Respondent: PAKISTAN through Secretary Defense Islamabad JUDGMENT
Court Name: Lahore High Court Judge(s): Shams Mehmood Mirza, Khalid Mehmood Malik Title:Malik MUHAMMAD IJAZ vs PAKISTAN through Secretary Defense Islamabad
JUDGMENT
Reported As: 2018 CLC 1445 Result: Case remanded Judgment JUDGMENT SHAMS MEHMOOD MIRZA, J.--- This appeal is filed under section 54 of the Land Acquisition Act, 1894 (the Act) challenges judgment and decree dated 27.06.2015 passed by the trial court whereby the reference filed by the appellant for enhancement of compensation was dismissed. 2. Facts of the case in brief are that the Collector through Notification dated 21.10.1990 issued under section 4 of the Act acquired land measuring 169 Kanals 10 Marlas for the purpose of extension of technical area, PAC Kamra Cantonment, which included land measuring 22 Kanal 4 Marla owned by the appellant. After completing the process requirements, award dated 22.01.1994 was announced granting compensation to the appellant as per the following classification of land: (i) Rs,18664/- per Kanal for Chahi (ii) Rs,6730.77 per Kanal for Maira/Rakkar (iii) Rs,1862.69 per Kanal for Ghair Mumkin Feeling dissatisfied by the amount of compensation, the appellant along with other persons filed reference application before the trial court under section 18 of the Act claiming enhancement in the amount of compensation in the following manner: a. Chahi Rs,80,000/- per Kanal b. Maira/Rakkar Rs,60,000/- per Kanal c. Ghair Mumkin Rs,13,000 per Kanal 3. In the first round of litigation, the referee court through its consolidated judgment and decree dated 21.10.1997 after evaluating the evidence of the parties found in favour of the appellant and other petitioners by declaring them entitled to receive, inter alia, Rs,33,000/- for Maira/Rakkar land.
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The respondents filed appeals against the judgment and decree which were accepted and the matter was remanded to the referee court for decision afresh. In the second round of litigation, the referee court dismissed all the reference applications though consolidated judgment and decree dated 21.12.2002 by holding that the petitioners did not adduce any evidence including one year average sale price of the land in question. This judgment and decree was once again challenged by the appellant by filing an appeal before this Court (RFA No,50 of 2004) which was allowed on 20.05.2015 and the matter was remanded by this Court on the ground that the referee court did not discuss the evidence of the parties, oral or documentary. 4. The following issues were framed by the trial court: ISSUES: 1. Whether the suit is time barred? 2. Whether the plaintiff is estopped by his words and conduct to file the present petition? 3. Whether the petition is bad for non-joinder of necessary parties? 4. Whether the compensation of the suit property as assessed by the Land Acquisition Collector is wrong, illegal, incorrect, if so what is the correct compensation? 5. Relief. The trial court after evaluating the evidence of the parties once again dismissed the reference application, hence this appeal. 5. Learned counsel for the appellant frankly conceded that the evidence was led by the appellant only in respect of Maira Rakkar land in the shape of three mutations (Exh.P-21, No,22 and Exh.P-25) which show land of identical nature in the village Sulman Makhan was sold for Rs,30,000/-, Rs,35,000/- and Rs,28,000/- per Kanal in the months of June and July 1990. He also referred to an award in respect of land acquired in village was stated in the.award that village Suleman Makhan and village Shamsabad were at the similar tract. It was thus argued that this vital piece of evidence was once again ignored by the trial court while dismissing the reference application filed by the appellant. 6. Learned counsel appearing on behalf of respondents, on the other hand, supported the judgment and decree passed by the trial court. 7. Arguments heard and record perused. 8. The most relevant issue is issue No,4 on which the impugned findings were rendered by trial court. 9. The relevant portion of the judgment dealing with the exhibits in question reads as under: The appellant did not produce AKS Shajra pertaining to the acquired khasras and pertaining to khasras mentioned in the above mentioned mutations in order to prove that whether acquired khasras and khasras mentioned in above mentioned mutations were situated near to each other or adjacent with each other. Naturally in a Mouza different properties situate at difference places. Some properties have less value and some properties situate near town, market, commercial area have higher value, so it was the responsibility and duty of the appellant to prove that acquired property was situated near the places where properties of the relied mutations were situated. So mere production of said mutations does ,not prove that property of the appellant was not properly compensated by the L.A.C. 10. In our opinion, the trial court completely misdirected itself in arriving at the aforementioned conclusion by excluding from its consideration the evidence led by the appellant. It is established law that onus to prove the issue shifts once prima facie evidence is led by the plaintiff. In this case, the appellant tendered in evidence Exh.P-21, No,22 and Exh.P-25 which were mutations of the comparable land in the same village. The respondents, on the other hand, did not produce in evidence the Halqa Patwari and also did not establish the basis on which average price of land was determined by the Land Acquisition Collector. This aspect of the matter shall be dealt with in
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the later part of this judgment as also the question of framing of issue with regard to the determining the fair market value of the acquired land. 11. The trial court only looked at the evidence led by the appellant and decided issue No,4 without adverting to the fact that the appellant had led prima facie evidence in support of the averments made in the reference application which was enough to shift the onus on the respondents. It was not appreciated by the trial court that the respondents did not lead any evidence to prove those circumstances, if any, which would disentitle the plaintiff to the relief he was claiming. 12. It is often observed that the trial court approaches the issue of compensation raised in a reference application filed under section 18 of the Act as if the applicant whose land had been acquired is the one who is charged with the duty to prove the enhancement in the quantum of compensation. What is often overlooked by the trial court in dealing with such matters is that award of fair market value is the fundamental right of a party whose land has been acquired. Article 24 of the Constitution of the Islamic Republic of Pakistan, 1973 (the Constitution) guarantees property rights to the citizens and, inter alia, stipulates that no property shall be compulsorily acquired save by the authority of law which provides for compensation. The relevant portions of the said Article read as under: 24. Protection of property rights.-- (1) No person shall be compulsorily deprived of his property save in accordance with law. (2) 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 on and the manner in which com, ensation is to be determined and given. (emphasis supplied) The reading of the afore-mentioned provision makes it clear that the law under which compensation is to be paid must (a) fix the amount of compensation; or (b) specify the principles or the manner in which compensation is to be determined and given. 13. Compensation is at the heart of compulsory acquisition for making up the loss to the owner of the land and market value of the acquired asset is the yardstick for calculation of such compensation. Since the acquisition takes place without the willing consent of the owner, its exercise has always generated controversy. This is so because loss of homes and land, community cohesion, livelihood patterns, means of livelihood are the most likely victims when people, individually and collectively, are displaced from their communities, economic, social and cultural settings. Financial compensation in relation to the loss of land only rarely compensates the affected parties as the money paid cannot fully replace what is lost. It is often felt that the value for compensation should include more than the value of the land and improvements. In most countries, therefore, laws are enacted which strive to achieve this aim through a variety of tools. 14. The Act deals with the acquisition of land and gives broad principles for grant of compensation. The assessm ent of compensation for the acquisition of land is controlled by section 23 of the Act. This provision, therefore, must be the starting point in any consideration of the issue dividing the parties. It, however, does not specify any principle for the grant of compensation by the acquiring agency rather section 23 of the Act stipulates the principles for guiding the courts to determine the compensation in case the person whose land is acquired is aggrieved of the compensation determined by the acquiring agency. The said provision reads asunder:- 22. Matters to be considered in determining compensation.-- (1) In determining the amount of compensation to be awarded for land acquired under this Act, 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). Explanation- For the purpose of determining the market-value, the Court shall take into account
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transfer of land similarly situated and in similar use. The potential-value of the land to be acquired if put to a. different use shall only be taken into consideration if it is proved that land similarly situated and previously in similar use has, before the date of the notification under subsection (1) of section 4, been transferred with a view to being put to the use relied upon as affecting the potential value of the land to be acquired: Provided that- (i) if the market-value has been increased in consequence of the land being put to a use which is unlawful or contrary to public policy that use shall be disregarded and the market-value shall be deemed to be the market-value of the land if it were put to ordinary use; and (ii) if the market-value of any building has been increased in consequence of the building being so overcrowded as to be dangerous to the health of the inmates, such overcrowding shall be disregarded and the market-value shall be deemed to be the market-value of the building if occupied by such number of persons only as can be accommodated in it without risk of danger to health from overcrowding]. secondly, the damage sustained by the person interested, by reason of the taking of any standing crops or trees which may be on the land at the time of the Collector's taking possession thereof; thirdly, the damage (if any) sustained by the person interested, at the time of the Collector's 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 the Collector's 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; fifthly, if in consequence of the acquisition of the land by the Collector, the person interested is compelled to change his residence or place of business, the reasonable expenses (if any) incidental to such change; and sixthly, the damage (if any) bona fide resulting from diminution of the profits of the land between the time of the publication of the declaration under section 6 and the time of the Collector's taking possession of the land. (2) In addition to the market-value of the land as above provided, the Court shall award a sum of fifteen per centum on such market-value, in consideration of the compulsory nature of the acquisition, if the acquisition has been made for a public purpose and a sum of twenty-five per centum on such market-value if the acquisition has been made for a Company. Two extremely important points emerge from the text of section 23 of the Act. The first is that the acquiring agency is required to pay compensation to the landowner and that market value of the land is distinct and separate from damage caused by what is often termed as severance or injurious affection and disturbance costs. The latter does not constitute the elements of the value of the land under the Act. The second point is that, unlike compensation for the value of the land acquired, compensation for severance, injurious affection and disturbance is not explicitly required to be assessed with reference to the date of issuance of notification under section 4 of the Act. It is, however, sufficient to observe that compensation for severance, injurious affection and disturbance is awarded in respect of matters which often will arise or be quantified after the acquisition of the land. Be that as it may, section 23 of the Act achieves the aim of putting those affected in the same position as they were before the acquisition by granting them market value of the land and additional compensation for severance, injurious affection and disturbance. 15. A cursory perusal of the scheme of the Act shows that publication of preliminary notification and inviting objections is dealt with by section 4 of the Act. The hearing is granted on the objections, if any, raised under section 5A of the Act whereas the determination that the land is required for public purpose is done by issuing declaration in the notification in terms of section 6 of the Act. Section 11 postulates the enquiry and passing of the award by the Collector and while doing so, it
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requires the Collector to determine (a) the true area of the land (ii) the compensation which in his opinion should be allowed for the land and (iii) the apportionment of the said compensation amongst all the persons known or believed to be interested in the land, of whom, or of whose claim, he has information, whether or not they have respectively appeared before him. Section 12 of the Act states that the award of the Collector shall be final and conclusive evidence as between the Collector and the person interested respect of the amount of compensation. It has, however, been held that the award is merely an offer to tender the compensation to the owner of the property. If the offer is not accepted; section 18 of the Act grants the owner of the land a statutory remedy for seeking determination of the amount of compensation from the Court. Sections 4, 5A, 6, 11, 12, 18 and 23 of the Act have been enacted to discharge the constitutional obligation of the State under Article 23 of the Constitution for providing payment of the compensation for acquisition of land, which according to section 23 of the Act shall not be less than the market value of the land. If the Collector wanted to put forth the defense that the procedure prescribed under sections 4, 5A, 6, 11, 12, 18 and 23 of the Land Acquisition Act has been followed in letter and spirit and that the person whose land has been acquired is not entitled to seek enhancement in the amount of compensation in terms of section 23 of the Act, the burden of proof shall be upon the Collector to justify his stand by necessary pleading and proof. 16. The award of fair market value as compensation for the acquired land is, therefore, as much the duty and responsibility of the acquiring agency as it is the right of the landowner to receive the same. In our experience, the trial court, however, almost always put the onus to receive the fair market value of the land on the landowners who move the court by filing the reference under section 18 of the Act. This, in our opinion, is a wrong practice. The necessary issue which is required to be framed in all reference applications under section 18 of the Act should be as to what is the fair market value of the acquired land and/or the compensation to be awarded to the land owner and the onus to prove the said issue primarily should be on the Collector. 17. Section 18 of the Act provides an opportunity to a person to raise grounds on which the objection to the compensation made in the award is taken and it confers a power upon the referee court to determine the market value of the land which is subject matter of the acquisition. This opportunity to raise objection is not a formality, but it is for effectively exercising the fundamental right guaranteed under Article 24 of the Constitution read with section 18 of the Act for determination by the referee court of the true fair market value of the land under acquisition. 18. The next issue with which the trial courts are often confronted is the determination of the market value of the acquired land. Market value is not defined in the Act and the standard for evaluation thereof is also not provided therein. It has, however, come to represent as the amount that would have been paid for the land if it had been sold, at the date of acquisition by a willing but not anxious seller to a willing but not anxious buyer. In the process of evaluating the market value, any increase or decrease in the value of the land caused by the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired is disregarded. The concept of market value was extensively considered in Spencer v. Commonwealth [1907] HCA 82, (1907) 5 CLR 418. Griffith CJ said: In my judgment the test of value of land is to be determined, not by inquiring what price a man desiring to sell could actually have obtained for it on a given day, i,e,, whether there was in fact on that day a willing buyer, but by inquiring 'What would a man desiring to buy the land have had to pay for it on that day to a vendor willing to sell it for a fair price but not desirous to sell?' It is, no doubt, very difficult to answer such a question, and any answer must be to some extent conjectural. The necessary mental process is to put yourself as far as possible in the position of persons conversant with the subject at the relevant time, and from that point of view to ascertain what, according to the then current opinion of land values, a purchaser would have had to offer for
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the land to induce such a willing vendor to sell it, or, in other words, to inquire at what point a desirous purchaser and a not unwilling vendor would come together. Similarly Isaacs J said: In the first place the ultimate question is, what was the value of the land on 1st January 1905? All circumstances subsequently arising are to be ignored. Whether the land becomes more valuable or less valuable afterwards is immaterial. Its value is fixed by Statute as on that day. Prosperity unexpected, or depression which no man would ever have anticipated, if happening after the date named, must be alike disregarded. The facts existing on 1st January 1905 are the only relevant facts, and the all important fact on that day is the opinion regarding the fair price of the land, which a hypothetical prudent purchaser would entertain, if he desired to purchase it for the most advantageous purpose for which it was adapted. The plaintiff is to be compensated; therefore he is to receive the money equivalent to the loss he has sustained by deprivation of his land, and that loss, apart from special damage not here claimed, cannot exceed what such a prudent purchaser would be prepared to give him. To arrive at the value of the land at that date, we have, as I conceive, to suppose it sold then, not by means of a forced sale, but by voluntary bargaining between the plaintiff and a purchaser, willing to trade, but neither of them so anxious to do so that he would overlook any ordinary business consideration. We must further suppose both to be perfectly acquainted with the land, and cognizant of all circumstances which might affect its value, either advantageously or prejudicially, including its situation, character, quality, proximity to conveniences or inconveniences, its surrounding features, the then present demand for land, and the likelihood, as then appearing to persons best capable of forming an opinion, of a rise or fall for what reason soever in the amount which one would otherwise be willing to fix as the value of the property. 19. In our jurisdiction, two extremely influential judgments rendered by the Supreme Court (Province of Punjab through Land Acquisition Collector and another v. Begum Aziza (2014 SCM R 75) and Land Acquisition Collector, G.S.C, N.T.D.0 (WAPDA), Lahore and another v. Mst. Surraya Mehmood Jan (2015 SCM R 28), after taking into account the entire case law on the subject, have laid down all the essential principles for determining the market value of the acquired land. These principles may be stated as under: a. 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. b. 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 of becoming Chahi land; c. While determining the potentials of the land, the use of which the land is capable of being put, ought to be considered; d. The best method to work out the market value is the practical method of a prudent man laid down in section 3 of the Evidence Act to examine and analyse 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. e. Subsection (1) of section 23 of the 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 the 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. f. When the market value is to be determined on the basis of the instances of sale of land in the
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neighboring locality, the potential value of the land need not be separately awarded because such sales cover the potential value. g. It is obvious that 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 as in the present case but its market value may be tremendously high because of its location, neighborhood, potentiality or other benefits. h. 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. i. In determining the quantum of fair compensation the, main criterion is the price which a buyer would pay to a seller for the property if they voluntarily entered into the transaction. The assumption being that sale is being taken place in open market as if notification of acquisition did not exist. j. 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' should not be taken into account but the value of the land with all its potentialities may also be determined by examining (if necessary as 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 cases there should be no compunction even relying upon the oral testimony with respect to market value of the property intended to be acquired, because even while deciding cases involving question 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 the weight to be attached to their testimony. It would be useful and even necessary, to examine such witnesses while…
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