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Petitioner: DISTRICT COLLECTOR LAND ACQUISITION, DISTRICT SWABI, (Now Deputy Commissioner, Swabi) VS Respondent: QAISAR ALI KHAN Honorable Justice Muhammad Ali Mazhar Shah Faisal Ilyas , Muhammad Hamayun Khan
CITATION: 2026 SCMR 1586 CASE: 2026S927 TITLE: DISTRICT COLLECTOR LAND ACQUISITION, DISTRICT SWABI, (Now Deputy Commissioner, Swabi) VS QAISAR ALI KHAN Honorable Justice Muhammad Ali Mazhar Shah Faisal Ilyas , Muhammad Hamayun Khan COURT: SUPREME-COURT YEAR: 2026 JOURNAL: SCMR ============================================================
305 2026 S C M R 1586 [Supreme Court of Pakistan] Present: Muhammad Ali Mazhar and Musarrat Hilali, JJ DISTRICT COLLECTOR LAND ACQUISITION, DISTRICT SWABI, (Now Deputy Commissioner, Swabi) and others ---Appellants Versus QAISAR ALI KHAN and others ---Respondents Civil Appeals Nos. 203-P to 206-P of 2023 and 196-P to 200-P/2024, 77-P, 151-P to 156-P/2025 (Against the judgments dated 15.05.2023, 18.11.2024, 13.02.2025, 08.08.2025, 24.06.2025, passed by the Peshawar High Court, Peshawar in R.F.As. Nos. 286-P, 287-P, 288-P, 289-P, 378-P, 384-P, 385-P, 386-P, 580-P of 2022 and R.F.As. Nos. 276-P of 2023, 290-P, 399-P, 291-P, 306-P, 311-P and 351-P of 2022). C.M.As. Nos. 735-P to 738-P of 2023 in C.As. Nos. 203-P to 206-P of 2023 C.M.As. Nos. 1371-P to 1375-P of 2024 in C.As. Nos. 196-P to 200-P of 2024 C.M.As. Nos. 582-P of 2025 in C.A. No. 77-P of 2025 (Stay applications). and C.M.A. No. 12662 of 2025 in C.A. No. 200-P of 2024 for deletion of respondent. Civil Appeals Nos. 203-P to 206-P of 2023 and 196-P to 200-P of 2024, 77-P, 151-P to 156-P of 2025, C.M.As. Nos. 735-P to 738-P of 2023 in C.As. Nos. 203-P to 206-P of 2023, C.M.As. Nos. 1371-P to 1375-P of 2024 in C.As. Nos. 196-P to 200-P of 2024, C.M.As. Nos. 582-P of 2025 in C.A. No. 77-P of 2025 and C.M.A. No. 12662 of 2025 in C.A. No. 200-P of 2024, decided on 24th February, 2026. (a) Land Acquisition Act (I of 1894)--- ----Ss.4 & 23---Compulsory acquisition of land by the State---Compensation---Market value and potential value---Surrounding development, accessibility and civic amenities---Determination of fair compensation---High Court, enhancement/upholding of compensation on basis of local commission reports and surrounding circumstances---Interference by Supreme Court---Issue: Whether compensation for compulsorily acquired land had been correctly determined by considering its market value, potential value, surrounding development and delay in acquisition proceedings under Section 23 of the Land Acquisition Act, 1894?---Held: Though the nature of some of the acquired land was described as Shah Nehri , its location and the existence of facilities in the neighbourhood increased its potential value---In one connected matter, the land was situated about 400 feet from the main Jehangira-Swabi Road, 110 karams from the Jamalabad Kala side road and between the extended abadi of two villages---High Court upheld the Referee Court after observing that surrounding land value and the enhancement attributable to basic amenities, schools, colleges and hospitals had not been taken into account---In another matter, the acquired land was connected with Sher Shah Suri Road and Swabi-Jehangira Road and was surrounded by an abadi, Gaju Khan s tomb, a primary school, mosque and rest house---Agreeing with the local commission, the High Court held the landowners entitled to compensation at Rs.5,800,000/- per kanal---In another connected matter, the land had residential development on one side, agricultural properties on another and Khattar Textile Mills nearby---The High Court therefore did not interfere with the compensation awarded by the Referee Court---Likewise, where the acquired land was in close proximity to residential and commercial entities, about 300 feet from the main Swabi-Jehangira Road, with a hospital, bazaar and schools nearby, the High Court found no reason to interfere with the quantum of compensation---The High Court had examined the record and relevant circumstances with proper application of mind and had decided the appeals in accordance with law---Present appeals were dismissed, in circumstances. (b) Land Acquisition Act (I of 1894)--- ----Preamble---Acquisition of land---Public purpose---Public need and individual rights, balance between---Fair and just compensation---Acquisition of land must be for a legitimate social or public interest/public purpose, maintaining a rational equilibrium between public need and individual rights and ensuring just and fair compensation. (c) Constitution of Pakistan--- ----Arts.23, 24, 173 & 253---Property---Constitutional right to acquire, hold and dispose of property---Compulsory acquisition---Safeguards and exceptions---Every citizen has the right to acquire, hold and dispose of property, subject to the Constitution and reasonable restrictions imposed by law in the public interest---No person may be deprived of property save in accordance with law, and property may be compulsorily acquired only for a public purpose and by authority of law providing for compensation or principles and manner for its determination---Such protection is subject to the exceptions contained in Article 24(3), including laws made in pursuance of Article 253---Executive authority of the Federation and a Province extends, subject to an Act of the appropriate Legislature, to the purchase or acquisition of property on behalf of the Federal or Provincial Government, as the case may be. (d) Administration of justice--- ----Compulsory acquisition of land by State---Eminent domain---Fair compensation to landowners---Role of Courts as guardians of constitutional property rights---State power of eminent domain is not absolute and is regulated by the Constitution so as to maintain a balance with the rights guaranteed by Articles 23 and 24---Most judicious function of Courts is to ensure compensation that truly reflects the actual value of the property---Acquisition for public interest does not dispense with the necessity of fair compensation for safeguarding property rights---Appeal---Right of appeal---Nature and function---A right of appeal is a substantive right of an aggrieved person or party to invoke the jurisdiction of a superior court for redressing errors and testing the soundness of a decision---Appellate Court acts as a curative forum to ensure that justice is not compromised by errors in the lower tiers of the judiciary---Appeal is not merely a procedural step but a substantive right and is considered in continuation of the original proceedings. (e) Land Acquisition Act (I of 1894)--- ----Ss.4 & 23---Acquisition proceedings---Delay---Fair compensation---Inflationary trends and potential value---Acquiring agency cannot sleep over acquisition proceedings---Delay in acquisition proceedings and payment of compensation may deprive landowners of fair compensation and delayed possession may create further complications---Period between the initial notification and the final award is an essential factor in determining price---Where acquisition proceedings, including taking possession, are delayed for years, market value reflected by the date of notification may no longer remain just and fair---The Court must account for inflationary trends and potential value so as to address the rise in land prices attributable to prolonged departmental delay. (f) Land Acquisition Act (I of 1894)--- ----S.23---Acquisition proceedings---Fair compensation, determination of---Potential value---Salient features---In determining potential value, the Court may examine proximity to infrastructure such as major intercity roads, bypasses and industrial zones, and availability of civic amenities and transport---Where a large area is acquired for a single project, smaller parcels cannot be undervalued and the potential of the entire area for the project becomes relevant---Court may also examine whether agricultural land is already situated amidst shops, factories or petrol pumps---Under Section 23 of the Land Acquisition Act, 1894, the Court is required to consider more than merely the current price. (g) Land Acquisition Act (I of 1894)--- ----S.23 (as applicable in Khyber Pakhtunkhwa)---Acquisition proceedings---Fair compensation, determination of---Market value---Potential value---Other statutory factors---Under the Khyber Pakhtunkhwa amendment to Section 23(1), market value of the land on the date of taking possession is to be considered---For determining market value, the Court is to take into account transfers of land similarly situated and in similar use and, subject to the statutory conditions, the potential value of the land if put to a different use---Court must also consider damage to standing crops or trees; damage caused by severance; injury to other property or earnings; reasonable expenses caused by change of residence or place of business; and bona fide diminution of profits between publication of the declaration under Section 6 and the Collector s taking possession---In addition to market value, the Court shall award fifteen per centum where acquisition is for a public purpose and twenty-five per centum where acquisition is for a company, in consideration of the compulsory nature of acquisition. (h) Land Acquisition Act (I of 1894)--- ----S.23---Acquisition proceedings---Fair compensation, determination of---Principles deducible from Supreme Court precedents---No rigid mathematical formula governs determination of compensation---Market value is to be assessed cumulatively from the circumstances of each case---Potential value and future utility of the land, sale transactions of similarly situated adjoining or nearby land, locality and surrounding development, classification and existing use, likelihood of development, escalation during prolonged acquisition proceedings, severance or other loss, and the peculiar facts of the case are relevant considerations---Revenue classification cannot by itself be treated as conclusive of value or potential---Landowners affected by exercise of eminent domain are to remain at the centre of consideration when determining fair compensation. Sarhad Development Authority N.W.F.P. and others v. Nawab Ali Khan and others 2020 SCMR 265; Gul Zaman v. Deputy Commissioner/Collector Gwadar and others 2024 SCMR 481; Land Acquisition Collector and others v. Mst. Iqbal Begum and others PLD 2010 SC 719; Province of Punjab through Land Acquisition Collector and another v. Begum Aziz 2014 SCMR 75; Land Acquisition Collector (WAPDA) v. Mst. Surraya Mehmood Jan 2015 SCMR 28; Air Weapon Complex through DG v. Muhammad Aslam and others 2018 SCMR 779; Nawabzada Abdul Qadir Khan and others v. Land Acquisition Collector Mardan and others 2023 SCMR 950; Murad Khan v. Province of Punjab 1999 SCMR 1647 and WAPDA through Chairman v. Alam Sher and others 2023 SCMR 981 rel. For Appellant(s). Shah Faisal Ilyas, Additional Advocate General, Khyber Pakhtunkhwa for Appellant (in all cases). For Respondents. Muhammad Hamayun Khan, Advocate Supreme Court (in C.A. No. 203-P of 2023 and C.A. No. 199-P of 2024). Chaudhary Hafeez Ullah Yaqoob, Advocate Supreme Court (in C.A. No. 206-P of 2023). Khalid Mahmood, Advocate Supreme Court (in C.As. Nos. 151-P to 153-P of 2025, C.A. No. 156-P of 2024). Abid Ali, Advocate Supreme Court (in C.As. Nos. 196-P to 198-P of 2024). Taif Khan, Advocate Supreme Court (in C.A. No. 200-P of 2024). Muhammad Javed Yousafzai, Advocate Supreme Court. Fazal-e-Wahid, Advocate Supreme Court (Via video link from Peshawar) (in C.As. Nos. 1547-P and 155-P of 2025). Date of hearing: 24th February, 2026. JUDGMENT MUHAMMAD ALI MAZHAR, J.--- These direct Civil Appeals have been brought under Section 54 of the Land Acquisition Act, 1894 (Act of 1894) to challenge the judgments dated 15.05.2023, 18.11.2024, 13.02.2025, 08.08.2025, 24.06.2025, rendered by the Peshawar High Court in Regular First Appeal (RFA)
Nos.286-P, 287-P, 288-P, 289-P, 378-P, 384-P, 385-P, 386-P, 580-P/2022 and 276-P/2023 and R.F.As. Nos. 290-P, 399-P, 291-P, 306-P, 311-P and 351-P/2022. 2. According to the chronicles of the case, the appellants required the land for construction of Pehure High Level Canal Extension Project, Indus Anbar Pressure Pipe which they acquired through Awards. The value of land was assessed according to the rate in terms of award after issuing Notification under Section 4 of the Act of 1894. The respondents were not satisfied with the amount fixed in the Awards, hence they filed References before the Referee Court. The Referee Court framed the issues and the parties were directed to produce evidence and the learned Referee Court also appointed a Commission for spot inspection and the determination of the market rate of the acquired land. The learned Referee Court in view of the Commission Report enhanced the compensation and also allowed compulsory acquisition charges as well as severance charges. The judgments were challenged before the Peshawar High Court through different RFA(s) but the appellants remained unsuccessful, hence they approached this Court by means of the aforesaid Civil Appeals. 3. The learned Additional Advocate General, KPK argued that the learned High Court failed to appreciate the crucial fact whether the amount assessed was in accordance with law or not. The learned High Court in one case also enhanced the compensation in violation of Section 23 of the Act of 1894. No lawful justification was recorded for fixing the exorbitant rate which was without any solid and authentic evidence. It was further contended that the impugned judgments are based on misreading and non-reading of evidence. He further averred that awarding compensation of the property of agricultural nature as residential was illegal which had no potential value being agricultural property but the learned High Court also awarded 20% severed charges without any yardstick. The report of the local commission was not based on any authentic, or reliable evidence rather it was based on surmises but all the courts below including the High Court failed to note the violation of Section 23 of the Act of 1894. 4. In response, all learned counsel appearing for the respondents in one voice argued that different pieces of land were acquired for construction of Pehure High Level Canal Extension Project Indus Anbar Pressure Pipe through Awards. The respondents filed their Reference Petitions under Sections 18 and 30 of the Act of 1894. The learned Court settled the issues and on completion of evidence, the Local Commission was also appointed which submitted the report in accordance with law. The High Court focused on the mode and manner adopted by the learned trial court for determining the amount of compensation awarded to the land owners for compulsorily acquiring their property and properly considered the niceties of Section 23 of the Act of 1894 which encapsulate the yardstick for determining the compensation. Due consideration was made for potential value and various other factors were taken into consideration and for correct determination, the quantum of compensation cannot be confined to the time of the notification but its future value may be taken into account. It was further argued that the notification under section 4 of the Act of 1894 was published on 27.04.1981; two corrigendum s were issued on 6.10.1982; notification under section 5 was published on 20.7.1983; the declaration under section 6 was published on 01.02.1984 and the award was announced on 28.03.1985. The entire exercise took four years to complete the acquisition proceedings. Meanwhile, the prices escalated which should have been considered while assessing the potential value of the land. It was further avowed that the Local Commission recorded the statements of the parties, revenue officials, expert property dealers and other persons who have recently purchased property in the same vicinity and has also taken assistance of the local Patwari Halqa. He placed on record the mutations attested in the said vicinity after the publication of notice under section 4 of the Act of 1894. 5. Heard the arguments. The Act of 1894 provides all-encompassing provisions for the acquisition of land considered necessary for public purposes and for companies and for determining the amount of compensation which is found payable on account of such acquisition. According to clause (a) of Section 3 of the Act of 1894 (definition clause), the expression land includes benefits to arise out of land, and things attached to the earth or permanently fastened to anything attached to the earth; the person interested is defined in clause (b) which includes all persons claiming an interest in compensation to be made on account of the acquisition of land under this Act; and a person shall be deemed to be interested in land if he is interested in an easement affecting the land. The expression public purpose includes the provision of village-sites in districts in which the Provincial Government shall have declared by notification in the Official Gazette that it is customary for the Government to make such Provision, but does not include a purpose which is against the tenets of Islam and a housing scheme as defined in clause ee . (The underlined words were inserted by Khyber Pakhtunkhwa Act. No. XIX of 1987 and Khyber Pakhtunkhwa Act. No. IX of 1952). The provision of appeal as accentuated under Section 54 of the Act of 1894 provides that subject to the provisions of the Code of Civil Procedure, 1908 (C.P.C.), applicable to appeals from original decrees, and notwithstanding anything to the contrary in any enactment for the time being in force, an appeal shall only lie in any proceedings under this Act to the High Court from the award, or from any part of the award of the Court and from any decree of the High Court, an appeal shall lie to this Court subject to the provisions of Article 185 of the Constitution of Islamic Republic of Pakistan, 1973. 6. The dispute with regard to determination or assessment of fair market value or potential value is time immemorial. The acquiring agency and the beneficiary of acquisition of land for public purpose as opposed to all of whom (person or persons) the land is acquired can be more aptly classified as traditional and conventional rivals or one can label them as arch-rivals with longstanding competitive history according to the jurisprudence laid down by this Court and foreign jurisdiction under the provisions of land acquisition laws. In the battle over determination and payment of fair compensation, the acquiring agency normally applies the District Collector's rate while the land owners claim actual market value including the potentiality of their piece of land. Though the authority delivering the Award performs its role as neutral arbiter to determine fair amount of compensation with other mandatory components as envisaged under the law but somehow or the other, the dispute is cropped up which is inherently adversarial, whether or not the intended use of land is for public purpose/public good including severance damage etc. Even on level pegging of international norms, wherein also the state has been conferred with powers to acquire land for the public good but with certain riders and not unbridled powers. The acquisition of land must be for legitimate social or public interest/public purpose not only with rational equilibrium between the public need and the individual rights but also in terms of just and fair compensation. 7. The right to property is acknowledged and is perceptible as a fundamental human right universally settling all-embracing benchmarks with baseline for the protection of individuals from being arbitrarily deprived of their properties. According to the mandate of Article 23 of the Constitution of Islamic Republic of Pakistan 1973, (Constitution) every citizen has the right to acquire, hold and dispose of property in any part of Pakistan, subject to the Constitution and any reasonable restrictions imposed by law in the public interest whereas Article 24 accentuates that no person shall be deprived of his property save in accordance with law and 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 therefore and either fixes the amount of compensation or specifies the principles on and the manner in which compensation is to be determined and given. However, as stated in sub-article (3), this Article shall not affect the validity of (a) any law permitting the compulsory acquisition or taking possession of any property for preventing danger to life, property or public health; or (b) any law permitting the taking over of any property which has been acquired by, or come into the possession of, any person by any unfair means, or in any manner, contrary to law; or (c) any law relating to the acquisition, administration or disposal of any property which is or is deemed to be enemy property or evacuee property under any law (not being property which has ceased to be evacuee property under any law); or (d) any law providing for the taking over of the management of any property by the State for a limited period, either in the public interest or in order to secure the proper management of the property, or for the benefit of its owner; or (e) any law providing for the acquisition of any class of property for the purpose of (i) providing education and medical aid to all or any specified class of citizens; or (ii) providing housing and public facilities and services such as roads, water supply, sewerage, gas and electric power to all or any specified class of citizens; or (iii) providing maintenance to those who, on account of unemployment, sickness, infirmity or old age, are unable to maintain themselves; or (f) any existing law or any law made in pursuance of Article 253. According to sub-article (4), the adequacy of any compensation provided for by any such law as is referred to in this Article, or determined in pursuance thereof, shall not be called in question in any court, while in Article 173, it is stated that the executive authority of the Federation and of a Province shall extend, subject to any Act of the appropriate Legislature, to the grant, sale, disposition or mortgage of any property vested in, and to the purchase or acquisition of property on behalf of the Federal Government or, as the case may be, the Provincial Government, and to the making of contracts. 8. According to Article 17 of the Universal Declaration of Human Rights, everyone has the right to own property alone as well as in association with others and no one shall be arbitrarily deprived of his property. Whereas in European Convention on Human Rights (ECHR): Protocol (1), Article (1) is also germane to protection of property wherein every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law. However, it is further provided that the preceding provisions shall not in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties. If we look into Article 21 of the American Convention on Human Rights, it also provides that everyone has the right to the use and enjoyment of his property. The law may subordinate such use and enjoyment to the interest of society. No one shall be deprived of his property except upon payment of just compensation, for reasons of public utility or social interest and in such cases and according to the forms established by law. The usury and any other form of exploitation of man by man shall be prohibited by law. At one fell swoop, ILO Convention No. C169, Indigenous and Tribal Peoples Convention, 1989 also protects the land rights of indigenous and tribal peoples, recognizing their communal connection to traditional territories as a fundamental human right. 9. The role of the Court is to ensure fair compensation in acquisition of property as guardian of constitutional rights. Though the doctrine of eminent domain is the inherent power of the State to compulsorily acquire private property for a public purpose even against the owner's will but this power is not absolute and is strictly regulated by the Constitution to prevent the despotic exercise of state authority while cautiously maintaining balance with the fundamental rights of citizens provided under Articles 23 and 24 of the Constitution. In our view, the most judicious function of the Courts is to ensure a fair amount of compensation that truly reflects the actual value of the property. The most recognizable work of fiction is structured on the metaphor gold for gold not copper for gold which is predominantly put in as judicial principle for guaranteeing just and fair recompense so that the owner must not be left in a sorrier financial…
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