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Petitioner: PROVINCE OF PUNJAB AND OTHERS VS Respondent: Mufti MUHAMMAD ISHAQ AND OTHERS
Court Name: Lahore High Court Judge(s): Fazal-e-Mahmood, Chaudhry Muhammad Sharif Title: PROVINCE OF PUNJAB AND OTHERS vs Mufti MUHAMMAD ISHAQ AND OTHERS Case No.: Regular First Appeals Nos. 9 to 18 of 1967/BWP Date of Judgment:1982-11-06 Reported As: PLD 1984 Lahore 261 Result: Appeal dismissed
JUDGMENT
JUDGMENT ' FAZL-I-MAHMOOD, J.-The instant ten Regular First Appeals, bearing Nos. 9, 10, 11, 12, 13, 14, 15, 16, 17 and 18 of 1967, are directed against the consolidated judgments of the learned District Judge, Bahawalpur dated 30-9-1967 answering references of interested persons tiled under section 18 of the Land Acquisition Act, 1894 (Act I of 104). All these appeals are being decided by this judgment since they arise out of the same acquisition proceedings and the points of law are also common and were ordered to be consolidated by an earlier order of this Court. 2. The facts in brief giving rise to these appeals are that under the Land Acquisition Act, 1894, the Provincial Government acquired for the Town Committee, Ahmadpur East, an area 26 acres 5 Kanals and 17 Marlas situated in the revenue estate of Mauza Wahi Qadir Dina within the urban limits of Ahmadpur East for the purpose of construction of a grand market. A notification for this purpose under section 4 of the Land Acquisition Act was issued on 6-3-1961 with a further notification under section 6 on 14-12-1962. The possession of the vacant land was taken over under section 9 of the Act on 15-3-1963. The Land Acquisition Collector gave his award on 24- 6-1963 when none of the respondents was present and it was directed that they be informed about the same. It may be mentioned here that the Collector before giving his award had asked for the opinion of the Tehsildar about the valuation of the land who opined that the compensation for land be given at the rate of Rs, 4,000 per acre as against the demand of the owners at the rate of Re. 1 per sq. Ft. The Collector instead proceeded to assess the compensation on the basis of Ausat Panjsala (five years' average price of the sales). The Collector finally in his award, dated 24-6-1963 treated the land acquired as agricultural and on that basis assessed the compensation in the following terms :-
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Chahi Nehri Nehri Banjar Jadid Banjar Qadeem Ghair Mumkin Rs, 1,560 per acre 1,000 800 500 300 If 3. The persons interested/land owners, none of whom had accepted the award, instead on various dates between 31-7-1963 and 5-9-1963, filed objection petitions against the Collector's award, dated 24-6-1963, claiming references to the Court under section 18 of the Land Acquisition Act for determination by the Court. It is not disputed that none of the persons interested who are respondents to these appeals, had accepted the compensation offered by the Collector as per his award rendered under section 11 of the Act, prior to filing their objections through written applications under section 18 of the Act. On receipt of these references, which were forwarded by the Collector for adjudication in accordance with law, the learned District Judge, Bahawalpur took up their disposal. It is dtring the post-reference period that some of the respondents received the compensation amount offered by the Collector without protest at the time of accepting payments on various dates between the period 4-6-1964 to 18-5-1967, a fact which stood disclosed through the statement of Muhammad Tufail, Clerk in the office of Revenue Assistant/ Land Acquisition Collector. The payment schedule Exh. D. 16 established these facts. The learned District Judge consolidated all these cases. A common issue to be decided in the cases was framed as follows :- "What was the market value of the land acquired at the time of the acquisition?" ' Thereafter, the parties led documentary and oral evidence. The interested persons/respondents in these appeals examined 37 witnesses while the appellants, the Province of West Pakistan and the Market Committee examined five witnesses in defence. 4. The principal point, according to the learned District Judge, requiring determination was with respect to the market value of the land in question and further whether it was purely agricultural land or Sakni in character. The contest between the parties was that the respondents claimed that the entire land should be valued as Sakni land whereas the appellants (respondents before the learned Ditrict Judge) contended that it should be compensated while considering it to be agricultural piece of land. 5. The learned District Judge on the basis of the material on the record came to the conclusion that in so far as the land in dispute was concerned, it was admittedly situated within the municipal limits of Ahmadpur East. Exh. P. 22 was the sketch map of the entire Mauza Wahid Qadir Dina. A portion of the left corner of this Mauza had been acquired for the grain market. The land in dispute was surrounded on two sides by Pucca roads. On its western side was the main Kotla Musa Khan Ahmadpur East Road and on the north of it was a road which linked the former road with the road leading to railway station. The area beyond two roads was covered with residential houses and other bulidings. 6. After considering the sale-deeds produced at the trial, which were found to pertain to the areas which were either within the disputed land or were very close to it, it was held that the land in dispute had definitely acquired Sakni character. For arriving at this finding, the learned District Judge had taken into consideration the factors that the area was within the municipal limits and was very close to the main roads and was also served by the civic amenities. There was evidence to show that the areas had been purchased for the purpose of construction of houses. The evidence of the purchasers P. W. 9, P. W. 10, P. W. 11, P.W. 18 and P. W. 34 was also considered in that behalf. Support was found for this purpose also from the fact that respondents Ali Muhammad and
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Allah Ditta had built their purely residential houses of the land purchased by them. According to the learned District Judge, in view of the evidence on the record it would have been unjust to calculate the compensation on the basis of its being an agricultural piece of land. The learned District Judge then threadoare examined 23 transactions relied upon by the interested persons in that behalf. It was observed that 14 of them related to the areas which lay within the acquired land while the remaining areas were within a distance of 200 ft. To three acres of the acquired land. According to him, therefore, the price previously paid for various parcels of the acquired land provided the best evidence for ascertaining the market value. He accordingly came to the conclusion that the market value at the time of the publication of the notification under section 4 of the Act was paisas fifty per sq. Ft. And that would have been the price which a willing seller might reasonably have expected to obtain from a willing buyer. 7. The second question, relevant for the purposes of these appeals, mooted before the learned District Judge was as to the effect of non-protest by some of the persons interested at the time of accepting the payments. The Court, on a perusal of Exh. D. 16 which was the payment schedule produced by the present Ippellants, found that all payments were made between the period 4-6- 1964 to 18-5-1967. It was further held that objections were filed much before even the first payment was made. He, therefore, came to the conclusion that filing of these objections was in itself an irrefutable evidence of the protest made by the persons accepting the payment. According to the learned District Judge, after having filed their objections before the Collector and praying for reference to the Court there was no need to make a formal protest at the time of accepting the payments. The objection raised on behalf of the appellants, therefore, was repelled. 8. The learned counsel in support of the appeals argued that the land acquired was rightly treated by the Collector as agricultural land and its market price correctly worked out on the basis of average price for five years and the learned District Judge had no jurisdiction to treat it as Sakni land and to work out the price on that basis. 9. After hearing the learned counsel for the parties and on perusal of the record with their assistance, we find that the objection raised on behalf of the appellants has no merit. We notice that the Collector based his award on the Ausat Panjsala (quinquennial average price) prepared by the Patwari purportedly on the basis of sale transactions between the year 1957 to 17th March, 1961. On careful scrutiny, however, we find that this Ausat Panjsala was worked out by the Patwari after taking into consideration amongst other, two Mutations Nos. 715 and 720. The former mutation was sanctioned on the basis of registered sale-deed dated 11-8-1952, while the latter was sanctioned on 12-9-1958 on the strength of registered sale-deed dated 26-1-1950. The actual sale transactions, therefore, bad taken place in the years 1950 and 1952. These sales which actually took place a decade earlier to acquisition could not thus have validly formed the basis for working out the average price of five years. Out of the rest, Mutations Nos. 724 and 726 were oral sales of 3 Kanals 19 Mathis and 1 Kanal respectively which took place in the years 1957 and 1958. The remaining Mutations Nos. 735, 738 and 733 were, respectively, dated 12-9-1958, 20-10-1959 and 28- 10-1960. While working out the Aural Punjsala the Collector did not advert to the relevant circumstances whether in this large Mauza stretching over 1 miles, the transactions related to adjacent or similar land. The position obtaining in the locality and immediate neighbourhood or the location of the acquired land was also overlooked. We may advantageously refer to the evidence of the appellants' own witness D.W. 3 who clearly stated that it he was unable to say at what distance from the land in dispute, the sales witnessed by these mutations were located. According to this very witness, Mauza Wahi Qadir Dina was a big Mauza. He further adimitted that the area under acquisition was within the municipal limits and there was also an Ice Factory in existence there. The acquired area was surrounded by two roads and was near the railway station which was about two furlongs away. In view of the abovenoted features, we are inclined to hold
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that the five years' average was laconically worked out by the Patwari and mechanically relied upon by the Collector.. This could not have furnished a proper basis for working out the market value of the acquired land even on the consideration of five years' average. The Collector while treating the character of the land as agricultural remained oblivious of the true character and potential of the land by merely relying on a few mutations in a Town Committee without realising whether they could be truly reflective of the position obtaining in and around the area in question. Therefore, in any case, the award given by the Collector would not fulfil the requirements of law and lacked the degree of fairness. 10. Now, we propose to deal with the objection of the appellants as regards the jurisdiction of the learned District Judge to determine the character of the land as Sakni while assessing market value under section 23 of the Land Acquisition Act, 1894, on the date of publication of notification under section 4 of the said Act. We must point out at the very outset that while awarding compensation quinquennial average price though constituting relevant piece of evidence is not by itself conclusive. The rule now firmly settled on a true interpretation of section 23 of the Lan Acquisition Act appears to be that market value should be determined on the criterion of the price what a willing purchaser would have paid for land to a willing seller after taking into consideration all other relevant and attending circumstances. The mere user to which the acquired land was being put may not in all cases reflect the true position. The Privy Council as far back as 1939, when construing the provisions of section 23 of the Land Acquisition Act, had laid down in the case of Vyricherla Narayana Gajapatiraju v. Revenue Divisional Officer, Vizagapatam (1) that there is not in general any market for land in the sense in which one speaks of a market for shares or a market for sugar or any like commodity. In the case of land, its value in general can be measured by a consideration of the prices that have been obtained in the past for similar quality and in similar positions, and this is what must be meant in general by 'the market value' in section 23 of the Land Acquisition Act. It was further observed that sometimes, (15 AIR 1939 P C 98 ' it happens that the land to be valued possesses some unusual, and it may be, unique features, as regards its position or its potentialities. In such a case the arbitrator in determining its value will have no market value to guide him, and he will have to ascertain as best he may from the materials before him, what a willing vendor might reasonably expect to obtain from a willing purchaser, for the land in that particular position and with those particular potentialities. According to the Privy Council, the land is not be valued merely by reference to the use to which it is being put at the time at which its value has to be determined but also by reference to the uses to which it is reasonably capable of being put in the future. It is possibilities of the land and not its realized possibilities that must be taken into consideration. It was thereafter observed that in the case of land possessing the possibility of being used for building purposes, it would be permissible to consider the evidence of the price paid in the neighbourhood for the land immediately required for such purposes. It was then inter alia observed that the value of the potentiality must be ascertained on such materials as are available to the person charged with responsibility of deciding the matter without indulging in feats of the imagination. Where there is only one possible purchaser, the value should be the sum which is estimated on the basis that a willing purchaser will pay and not what a purchaser will pay under compulsion. The criterion of what a willing purchaser would have paid for the land after considering all the relevant factors has been upheld by the Supreme Court of Pakistan to be the correct one for determining compensation under section 23 of the Land Acquisition Act. Reference may be made to the decision of the Supreme Court in the case of Pakistan through the Secretary, Ministry of Defence, Government of Pakistan, Rawalpindi and another v. Malik Muhammad Aslam and S others (1). Next, we may refer to the decision of a Division Bench of this Court In re : Government of West Pakistan v. Subedar
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Muhammad Hussain and 3 others (2) wherein, after exhaustive analysis of the case-law it was ruled that potential value of land had to be taken into account irrespective of the actual use of the land at the date of expropriation and that in the wording of section 23 of the Land Acquisition Act, there is no such. Restriction or limitation. The contrary argument that such potential value of the land is not to be taken into consideration was, therefore, found to be without merit. To the same effect is the judgment of a Division Bench of this Court in the case of Province of Punjab v. Muhammad Fail and others (3). The question of jurisdiction raised by the learned counsel for the appellants, therefore, must be repelled in the light of enunciation of law made in the aforesaid precedent cases. 11. Now, after having examined the legal position we may advert to the facts of the present appeals in order to determine whether the learned District Judge had correctly determined the character of the land in dispute as Sakni keeping in view its potential value and further whether the market value awarded was open to exception. 12. In so far as the first matter is concerned, it need not detain us long for the reason that out of the 23 sale-deeds relied upon by the persons interested (namely, Exhs. P. 5 to P. 16, P. 18 to P. 20 and Exhs. P. 34 to P. 40), 14 related to the area actually acquired whereas the remaining transactions were with respect to land located within a distance of 200 ft. To 3 acres from the acquired land. All these documents showed that these transactions (1) 1978 SCMR5 (2) PLD 1970 Lab. 463 (3) PLD 1968 Lah. 1360 ' had taken place for construction purposes. There was also evidence to show that houses had been built on two plots purchased by the interested persons. The land was located within the municipal limits about few furlongs from the railway station and was surrounded at least on two sides by Pucca road. In the immediate neighbourhood, there were residential houses and other buildings. The area in question was also being served by civic amenities. The documentary evidence also found support from oral evidence of at least five P. Ws. In that behalf which remained unrebutted. Coupled, with this was the evidence of D. W. 3 who admitted that there was also an ice factory in existence, the acquired area was surrounded by two roads and was about two furlongs from the railway station. In our view, all these facts and circumstances go to show that the area had undergone a rapid change in character and its potential value was that of building sites though unconstructed plots were still bearing apparently agricultural look. The learned District Judge appears to us to be right in taking into consideration the potential value of the land and justified in treating it as Sakni. 13. We may in this behalf refer to the decision of this Court in Secretary of State v. Chuni Lal and others (I). In this precedent case, a piece of agricultural land had been acquired which was located toward the extreme end of the civil station and abutted on the road leading from the city to the cantonments. At the time of acquisition it was under cultivation but exactly opposite to it on the other side of the road there was a house and a number of Government and railway offices. There were also on the other side of the road Government buildings and Kothis at a short distance from the site in question. The Division Bench of this Court in these circumstances held that : "This being the situation of this plot, there can be no doubt that it had a special adaptability for being used for building purposes and in my opinin the learned District Judge has rightly treated it as a building site. It is no doubt true that at the time of the acquisition, it had not been built upon and was actually under cultivation. But as observed by Chatterji, J. In Hira Nand v. Secretary of State (1905) 21 P R 1905 =132 P L R 1905. Where Government takes property from private persons under statutory powers, the Courts in computing the amount of compensation to be awarded to the person interested therein should be guided by the principle that the owner is entitled to have the price of his land fixed in reference to
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the probable use which will give him the best return and not merely in accordance with its present use or disposition." The case of the respondents in the present appeals rather stands on a stronger footing. There is unrebutted evidence on the record to show that in the instant case some of the plots out of the land in question had been developed for residential purposes and the sale deeds tendered in evident in respect of various plots of acquired land showed that the sales were for construction purposes. The inference drawn by the learned District Judge was, therefore, based on proper appreciation of the material before hi and suffers no infirmity on the factual or the legal plane. The appellant had failed to bring on record any material evidence which could lend support to any of their contentions in this behalf. (1) AIR. 1931 Lab. 207 14. In the facts of the present cases, we however feel that in so far as the determination of the market value is concerned, the character of the land is rather of an academic nature. The position would fair no better for the appellants even if the character of the land was to be taken as agricultural in the face of the evidence obtaining on the record. The market value in fact has been determined by the learned District Judge after relying upon transactions of sales of land from the year 1956 up to the year 1960, the notification under section 4 having been issued in the year 1961. We find that the transaction witnessed by Exh. P. 36, dated 22-8-1956 showed that the price paid as far back as that date was paisas fifty per sq. Ft. The same is the position obtaining in respect of Exhs. P. 5 to P. 15 which are sales that took place from 18-6-1956 to 18-7-1960. All these transactions related to various plots of land located within the area acquired. Then there is sale witnessed by Exh. P. 16, dated 6-7-1960 relating to land at a short distance which was sold at the rate of paisas sixty-two per sq. Ft. The sale-deed Exh. P. 18, dated 15.6-1959 in respect of adjacent land was at the rate of rupee one per sq. Ft. The sale witnessed by Exh. P. 40, dated 24-6-1960 out of the land in dispute is also for paisas fifty per sq. Ft. There are two exceptions provided by sale-deeds Exhs. P. 20 and P. 34, dated 7-2-1956 relating to the disputed land measuring 13 Marlas each showing the rate of paisas thirty-seven per sq. Ft. The preponderance of evidence, therefore shows that the sale price of parcels of land within the land being acquired as far back as the year 1958 was paisas fifty per sq. Ft. And there is further evidence on the record to G show that in subsequent years, as is the position in the case of Exh. P. 18. It was sold at the rate of rupee one per sq. Ft. In the locality. Even if it were to be the case of the appellants that the price remained rather static the determination of market value at the rate of paisas fifty sq. Ft. Would appear to be reasonable and just. We nave, therefore, no hesitation in concurring with the finding of the learned District Judge determining the fair market value of the acquired land at fifty paisas per sq. Ft. This, thus, closes the chapter in so far as the question of determintion of market value is concerned. 15. This now brings us to the next ground urged at the hearing by the learned counsel for the appellants on the strength of second proviso to subsection (2) of section 31 of the Land Acquisition Act. The learned counsel argued that respondents accepted the amount of compensation awarded by the Collector without protest and subsequently filed applications under section 18 of the Land Acquisition Act for reference to the learned District Judge, Bahawalpur, who assumed the jurisdiction contray to law. It was further submitted that condition precedent to the assumption of jurisdiction by the learned District Judge was that the respondents (persons interested) should not have accepted the award but in the present cases the respondents had done so and thus the Court committed excess of jurisdiction in giving the award. ' We pointed out to the learned counsel for the appellants that the first limb of his argument appeared to be based on a wrotig assumption as to material facts as was borne out from the record. It was uncontrovertible position established on the record that the Collector gave his award
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on 24-6-1963 while the applications under section 18 of the Act claiming references were filed by the persons interested on various dates between 31-7-1963 to 5-9-1963, whereas the compensation awarded by the Collector was received by interested persons between the period 4-6-1964 to 18-5-1967 as was evident from a perusal of Exh. D-16 (the payments schedule). It was subsequent to forwarding of the references to the Court and even after the learned District Judge bad assumed jurisdiction in the matter that some of the persons interested while receiving payment of compensation awarded by the Collector did not formally write "under protest" while the rest did so. 16. The learned counsel for the appellants in the face of this patent position on the record was unable to deny that the respondents had not accepted payments from the Collector before filing applications under section 18 but received the same during toe post reference stage in the course of the proceedings before the Court. The learned counsel finding himself in a predicament then argued that the award of the Court was nevertheless without jurisdiction as the references were incompetent in view of rigours of second proviso to section 31 (2). ' On behalf of the respondents it was urged that since none of the interested persons had either…
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