Full Judgment Text & Judicial Ruling

2024 Y L R 1784 [Lahore (Bahawalpur Bench)] Before Anwaarul Haq Pannun and Abid Hussain Chattha, JJ Rana Abid Hussain and others---Appellants Versus National Highway Authority and others---Respondents R.F.As. Nos. 100 and 113 of 2018, heard on 7th October, 2021. Land Acquisition Act (I of 1894)--- ----Ss. 4, 18 & 54---Land acquisition---Compensation, quantum of---Acquisition of land for a public purpose---Referee Court enhanced the compensation from Rs. 600,000/- per acre to Rs. 1600,000/- per acre---Propriety---Respondents filed appeal against the enhancement---Validity---Irrefutable evidence was available to establish that the property was situated on both sides of towns, which were commercial and residential in character---Even the concerned Khata had a cluster of densely populated area with multiple Government and private ventures including petrol pump, high school and police station---Property was not more than 1 kilometers away from that point---Presence of emerging residential colonies was also established---Evidence on record unequivocally demonstrated that the property though was being used for agricultural purposes yet had assumed all the characteristics and features of commercial or residential property---Potential value of the property was much more than being extracted at the time of acquisition on account of its peculiar location in terms of its presence on the road and its closeness to two cities---Mere fact that the appellants had not converted the property from agricultural to commercial status was an irrelevant consideration to determine the potential value of the property---Appellants were not required to do so and had every right to hold and enjoy the property in the manner they so desired---Fact that most of the sale mutations brought on record consisted of small portions of land manifestly demonstrated that land in the area was a precious and scarce commodity being located close to two cities---Therefore, such sale mutations of small portions of land were not completely out of context and could not be ignored altogether when transactions of bigger holdings were not available---Especially, when the property had the potential of conversion into smaller residential or commercial units as was evident from the fact of emerging residential colonies and existence of a host of commercial ventures in close vicinity of the property---Moreover, it was an admitted fact that the property was a sizable chunk and existed as a compact block before acquisition---Property was divided into parts in consequence of acquisition, thereby, adversely affecting its value and impairing its future potential---Nevertheless, such particular negative impact on the property might have been compensated or off-set to some extent on account of overall price escalation due to the project itself but the damage caused to the property through acquisition was vividly evident---In view of the above, the elements of potential value as well as damage to the property by virtue of acquisition were duly proved---Record showed that market value of the property was much higher than awarded in the Award or by the Referee Court---Sale mutations exhibited by the appellants for the years 2013 to 2014 regarding the same Khata ranged from Rs. 16,667/- to Rs. 400,000/- per Marla---Seven mutations of Rs. 66,667/-;25,000/-; 200,000/-; 16,667/-; 75,000/-; 20,000/-; and 66,667/- more or less depicted the normal range of price in fair arm's length transactions between a willing purchaser and a willing seller in the same Khata before the date of the Notification under S.4 of the Act---Conversely, sale mutations exhibited by the National Highway Authorities regarding the same Khata for the years 2013 to 2014 ranged from Rs. 4,286/- to Rs. 5,000/----However, the National Highway Authority could not produce more than three mutations of the concerned Khata and was constrained to exhibit sale mutations fromother Khatas without proof of their relevance---Documentary evidence of the National Highway Authorities was not of any relevance or help to High Court to arrive at the fair market or potential value of the property---Average sale price per Marla of the sale mutations produced by the appellants as well as sale mutation produced by the National Highway Authorities was arrived at Rs. 60,000/- per marla approximately by discarding the rest of the sale mutations as irrelevant for being located in different Khatas without proof of relevance or pertaining to irrelevant period---However, the said price was required to be proportionately discounted in view of price of sale mutations recorded in small portions of land; most of the sale mutations being apparently with respect to residential or commercial properties; wastage of the property when converted into developed land for future use and considering that the property though being located close to two cities yet was not adjacent thereto and at a distance of at least of 1 K.M from the cities---Balancing the pro and contra evidence of the parties to the lis in the light of factors stipulated in S.23 of the Act and settled principles of compulsory acquisition of land the High Court applied 70% deduction or discounting factor in aggregate to the average sale price determined---Potential value of the property and impact of its division was incorporated in the above formula---Accordingly, the fair market and potential value of the property was settled at Rs. 18,000/- per marla---However, the claim of compensation regarding standing sugarcane crop was dropped for insufficient evidence---Appeal filed by the National Highway Authorities was dismissed, whereas appeal filed by private persons was partially accepted by modifying the fair compensation of the property by enhancing it to Rs. 18,000/- per Marla along with entitlement to additional compensation of 15% per annum of the above fixed compensation and compound interest at 8% per annum from the date of possession of the property till the date of payment of compensation with costs of the appeal---Appeal filed by the land owners was partially allowed. Secretary Communication and Works Department Government of Balochistan and others v. Dad Bakhsh and another 2013 CLC 343; Sardar Muhammad Ashraf (deceased) through LRs. and others v. Government of N.W.F.P. (now KPK) through Collector and others 2011 SCMR 1244; Nisar Ahmad Sabri through L.Rs. and others v. Government of Punjab through Secretary, Labour Department and others 2015 YLR 2095; Land Acquisition Collector, National Highway Authority, Lahore and another v. Javed Malik and others 2009 SCMR 634; Lahore Ring Road Authority and others v. Mian Mumtaz Ahmad and others 2021 CLC 178; Muhammad Yaqoob through Legal Heirs v. Land Acquisition Collector (M-4) National Highway Authority and 4 others PLD 2021 Lahore 364; Manzoor Hussain (deceased) through L.Rs. v. Misri Khan PLD 2020 SC 749; Mian Ahmad Raza and 2 others v. Karim Bakhsh through L.Rs. and others 2007 SCMR 1595; Government of Sindh and 2 others v. Muhammad Usman and 2 others 1984 CLC 3406; Muhammad Akram and another v. Mst. Farida Bibi and others 2007 SCMR 1719; Muhammad Rafique Awan v. The Land Acquisition Collector, National Highway Authority and 4 others 2021 MLD 766; Dilawar Hussain and others v. Province of Sindh and others PLD 2016 SC 514; Liyar Khan v. Land Acquisition Collector/A.C., Swabi 2003 YLR 3287; Khanma Bi and 9 others v. Collector Land Acquisition, Mangla Dam Raising Project, Mirpur and another 2018 MLD 1764; Land Acquisition Collector (M-1) National Highway Authority Islamabad and 4 others v. Zahir Shah and 5 others 2016 YLR 2462; Government of N.W.F.P. and others v. Akbar Shah and others 2010 SCMR 1408; National Highway Authority through Chairman and 2 others v. Bashir Ahmad and 2 others 2018 CLC Note 63; Kolkata Metropolitan Development Authority and another v. Gobinda Chandra Makal and another 2012 SCMR 1201; Civil Aviation Authority through Project Director and others v. Rab Nawaz and others 2013 SCMR 1124; Hyderabad Development Authority through M.D., Civic Centre, Hyderabad v. Abdul Majeed and others PLD 2002 SC 84; Special Land Acquisition Officer v. Maharani Biswal and others 2012 SCMR 1179; Sh. Faqir Muhammad v. Land Acquisition Collector and others 2011 MLD 1308 and Abdul Ahad and 19 others v. Government of Balochistan through Secretary C & W and others 2017 MLD 1276 ref. Anwar-ul-Haq Chaudhary v. District Officer (Revenue), Narowal and 4 others 2017 CLC 66; Zardad Khan and others v. Government of N.W.F.P. and others 1987 SCMR 1387; Province of Punjab through Collector, Attock v. Engr. Jamil Ahmad Malik and others 2000 SCMR 870; Land Acquisition Collector, G.S.C., N.T.D.C. (WAPDA), Lahore and another v. Mst. Surraya Mehmood Jan 2015 SCMR 28; Province of Punjab through Land Acquisition Collector and another v. Begum Aziza 2014 SCMR 75; Fazal Haq College through Vice-Chairman v. Said Rasan and others PLD 2003 SC 480; Province of Sindh through Collector of District Dadu and others v. Ramzan and others PLD 2004 SC 512; Special Land Acquisition Officer and another v. M.K. Rafiq Saheb 2012 SCMR 1140; Air Weapon Complex through DG v. Muhammad Aslam and others 2018 SCMR 779 and Government of Pakistan through Military Estate Officer, Abbottabad and another v. Ghulam Murtaza and others 2016 SCMR 1141 rel. Malik Imtiaz Mehmood Awan for Appellants. Malik Muhammad Tariq Rajwana and Syed Mudassar Hussain Naqvi for the Respondents. Date of hearing: 7th October, 2021. Judgment Abid Hussain Chattha, J.---This consolidated Judgment shall decide R. F. A. No. 100 / 2018 / BWP instituted by the Appellants and cross R. F. A. No. 113/ 2018 / BWP filed by National Highway Authority (the "NHA") under Section 54 of the Land Acquisition Act, 1894 (the "Act") directed against the impugned Judgment and Decree dated 19.04.2018 passed by the Senior Civil Judge, Rahim Yar Khan, whereby, the Reference of the Appellants under Section 18 of the Act was partially accepted and the fair compensation of the acquired land was enhanced from Rs. 3,750/- per Marla (Rs. 600,000/- per Acre) to Rs. 10,000/- per Marla (Rs. 1,600,000/- per Acre) along with additional compensation @ 15% per annum of the above fixed compensation and compound interest @ 8% per annum from the date of the Notification under Section 4 of the Act to the date of payment of compensation. 2. Facts necessary for the decision of the titled Appeals are that the Appellants were owners-in-possession of land measuring 39 Kanals 15 Marlas in Khata No. 196/96, Khatooni Nos. 580 to 581 out of total Khata measuring 584 Kanals 10 Marlas as per Register of Record of Rights for the year 2010-2011 situated at Revenue Estate Shedani Sharif, Tehsil Liaquatpur, District Rahim Yar Khan (the "Property"). The Property was acquired at the instance of the NHA for public purpose in connection with the construction of Karachi-Lahore Motorway, Multan to Sukkur Section. Acquisition proceedings were initiated through issuance of the Notification dated 19.07.2014 under Section 4 of the Act culminating into an award bearing No. AC/LAC/713-721 dated 17.12.2015 (the "Award"). The Appellants assailed the Award by filing the Reference averring therein that they received inadequate compensation under protest. The Property was acquired without notice to the Appellants and the Award was rendered without hearing their objections thereon. The District Price Assessment Committee (the "DPAC") prepared an erroneous report regarding the value of the Property without physical verification and examining sale Mutations of concerned and adjoining Revenue Estates to ascertain its market and potential value. The Property was erroneously categorized as purely agricultural, whereas, in essence it was commercial and residential in nature being situated on both sides of Khan Bela Malkani Road and close proximity to two cities. The location was so perfect that the NHA had selected the Property to establish its toll collection area. Important Government and private installations were present nearby the Property including Government College, Rest House of Irrigation Department, Malkani City Petrol Pump and many residential colonies. The aforesaid features were not taken into account which clearly demonstrate that the Property had suitability and potential for multiple commercial ventures. As such, the Board of Revenue endorsed the recommendations of the DPAC in a mechanical manner without conscious and judicious application of mind. Consequently, the Award was arbitrary, unilateral and confiscatory rendered in complete oblivion to the peculiar location and special features inextricably linked to the Property resulting in extremely low compensation. As such, the market value and potential value was determined without adopting due process of law. Besides, it was also contended that the Appellants had also not been compensated with respect to the standing sugarcane crop on the Property. Accordingly, the Appellants claimed fair and adequate price of the Property to the tune of Rs. 1,000,000/- per Marla coupled with the price of standing crop of sugarcane with compound interest @ 8% and compulsory acquisition charges @ 15% from the date of the Notification till its payment. 3. Conversely, the NHA controverted the Reference on both legal and factual plane. It was asserted that the Reference was liable to be rejected under Order VII, Rule 11 of the Code of Civil Procedure, 1908 (the "C.P.C.") being barred by time. It was contended that the entire proceedings of acquisition culminating into pronouncement of the Award were conducted in accordance with the provisions of the Act. The Appellants were associated with the proceedings from its very inception. Adequate compensation was determined by the DPAC and endorsed by the Board of Revenue, Punjab. The Appellants have received their due compensation without protest and as such, are estopped from their words and conduct to question the quantum of compensation awarded in the Award through the Reference which is liable to be dismissed. 4. The Referee Court out of the divergent pleadings of the parties, framed the following issues: i) Whether the compensation assessed in the impugned Award, the subject matter of this Reference, is inadequate? If so, what is fair compensation of the acquired land for the Petitioners? OPA ii) Whether the instant Reference under Section 18 of the Land Acquisition Act, 1894 is not maintainable in its present form and the same is liable to be dismissed? OPR iii) Whether the instant Reference under Section 18 of the Land Acquisition Act, 1894 is badly time barred? OPR iv) Whether the Petitioners have received the compensation without protest, hence, the instant Reference is liable to be dismissed? OPR v) Whether the Petitioners have no cause of action and locus-standi to file the instant Reference? OPR vi) Relief. 5. In order to establish their case, the Appellants produced two witnesses, AW-1 and AW-2. AW-1 was one of the Appellants who held special power of attorney on behalf of two other Appellants while AW-2 was the concerned Patwari of the Revenue Estate. The respective affidavits of the AW's were produced and exhibited. The Appellants also produced sale Mutations (Exhibits A-3 to A-5, A-7 to A-15 and A-18). The site plan of Revenue Estate, Shedani Sharif was exhibited as Exhibit A-6. The NHA, in rebuttal produced Naib Tehsildar as RW-1 and tendered documents including the Award, Report of the DPAC, the Notifications dated 28.05.2015 and 16.07.2015, sale Mutations (Exhibit R-9 to R-18) and Khasra Girdawari 2011 to 2015 (Exhibit R-19). 6. Learned counsel for the Appellants, inter alia, contended that average sale price of transactions taking place before publication of the Notification is merely one of the modes for ascertaining the market value and not an absolute yardstick to determine the amount of compensation; the potential value and status of land was required to be determined with reference to the possibility of development and improvement factors which were not given due consideration by the Referee Court; the principle, "gold for gold and not copper for gold" was violated; the test as to what the willing purchaser would have paid to the willing seller was not employed; the Property was possessed forcibly without due and adequate compensation in violation of the settled law with respect to compulsory acquisition by the State; the market value in the intervening period from the date of the Notification under Section 4 of the Act i.e. with effect from 19.07.2014 to the pronouncement of the Award dated 17.12.2015 was not taken into account; the devaluation of Pakistani Rupee was altogether ignored; oral evidence was given preference over documentary evidence against the express provisions of the Qanun-e-Shahadat Order, 1984; the NHA failed to justify the amount assessed in the Award by producing Mutations on the basis of which one year average price was calculated by the DPAC; the evidence on the basis of which the Land Acquisition Collector pronounced the Award escaped the notice of the Referee Court; the peculiar location of the Property having potential of conversion into residential and commercial property was not given due weight; the effect of existence of commercial properties within the close vicinity of the Property in terms of its potential value was not appreciated; irreparable loss was caused to the Appellants through the acquisition, whereby, the compact block of the Property had been divided into four parts; the observations of the Referee Court with reference to non-conversion of agriculture land into commercial was misplaced; the Referee Court erred by not awarding even average price of the Mutations tendered in evidence; compensation regarding destruction of standing sugarcane crops on the Property at the time of acquisition was declined despite evidence on record; documentary evidence tendered by the Appellants was sufficient to prove their stance; and accordingly, the Appellants were entitled to modification of the impugned Judgment and Decree by way of enhancement of compensation regarding the Property as prayed for in the Reference. Reliance was placed on cases titled, "Secretary Communication and Works Department Government of Balochistan and others v. Dad Bakhsh and another" (2013 CLC 343); "Sardar Muhammad Ashraf (deceased) through LRs. and others v. Government of N.W.F.P. (now KPK) through Collector and others" (2011 SCMR 1244); "Nisar Ahmad Sabri through L.Rs. and others v. Government of Punjab through Secretary, Labour Department and others" (2015 YLR 2095) and "Land Acquisition Collector, National Highway Authority, Lahore and another v. Javed Malik and others" (2009 SCMR 634). 7. Learned counsel for the NHA submitted that the Reference was barred by time in terms of Section 18(2)(a) of the Act and the Referee Court erred in rejecting the application under Order VII, Rule 11 of the C.P.C. since it was established that the Appellants were served with notice (Exhibit R-1) and they personally appeared in acquisition proceedings with reference to their objections. The Appellants failed to discharge the onus to prove issue No. 1 regarding award of inadequate compensation but the compensation was enhanced to an exorbitant rate without any lawful justification. The Award was rendered after physical inspection of the Property, examination of relevant revenue record and taking into account the nature, location and market value of the Property. The price was assessed by the DPAC and duly endorsed by the Board of Revenue. As such, the Award was passed strictly in accordance with the provisions of the Act. The maximum rate of compensation was awarded to the Appellants. The Trial Court did not appreciate that the Award was announced by the Land Acquisition Collector independently without any influence of the NHA. The project was for the welfare of the public and the Property was required in national interest. The Property was neither residential nor commercial in character which was admitted by the Appellants in their evidence as per the deposition of AW-1. The Referee Court declared its finding to this effect yet enhanced compensation without any cogent reasoning. The assessment of value of the Property in huge chunk i.e. measuring 39 Kanals and 15 Marlas could not be based on comparative price of sale transactions of land in small proportions since it is a universal phenomenon that small residential and commercial plots are much more valuable than that of agricultural land. Hence, enhancement of compensation by considering sale price of Mutations of 1, 2 or 3 Marlas was not relevant to determine the fair value of the Property. In contrast, Exhibit R-9 and R-10 indicate that agricultural land similarly placed was being sold in the year 2008-2009 for Rs. 300,000/- per Acre, approximately. Hence, the Trial Court was only required to consider the value of identical agricultural land regarding the relevant period since Rule 10(iii)(c) of the Punjab Land Acquisition Rules, 1983 binds the Trial Court to consider the prevailing average market price of similar kind and location of land during the period of twelve months preceding the date of publication of the Notification under Section 4 of the Act. Further, Section 28-A of the Act was not applicable in the Province of Punjab and 8% compound interest ought not to have been given from issuance of the Notification under Section 4 of the Act. Accordingly, sufficient documentary evidence tendered by the NHA was not evaluated by the Trial Court in its true perspective and there was no occasion to enhance the compensation of the Property after the Appellants received it without any objection. As such, the impugned Judgment and Decree was passed in an arbitrary manner without application of conscious and judicious mind which is liable to be set aside for misreading and non-reading of evidence on record. Reliance was placed on cases titled, "Lahore Ring Road Authority and others v. Mian Mumtaz Ahmad and others" (2021 CLC 178); "Muhammad Yaqoob through Legal Heirs v. Land Acquisition Collector (M-4) National Highway Authority and 4 others" (PLD 2021 Lahore 364); "Manzoor Hussain (deceased) through L.Rs. v. Misri Khan" (PLD 2020 SC 749); "Mian Ahmad Raza and 2 others v. Karim Bakhsh through L.Rs. and others" (2007 SCMR 1595); "Government of Sindh and 2 others v. Muhammad Usman and 2 others" (1984 CLC 3406); "Muhammad Akram and another v. Mst. Farida Bibi and others" (2007 SCMR 1719); "Muhammad Rafique Awan v. The Land Acquisition Collector, National Highway Authority and 4 others" (2021 MLD 766); "Dilawar Hussain and others v. Province of Sindh and others" (PLD 2016 SC 514); "Liyar Khan v. Land Acquisition Collector/A.C., Swabi" (2003 YLR 3287); "Khanma Bi and 9 others v. Collector Land Acquisition, Mangla Dam Raising Project, Mirpur and another" (2018 MLD 1764); "Land Acquisition Collector (M-1) National Highway Authority Islamabad and 4 others v. Zahir Shah and 5 others" (2016 YLR 2462); "Government of N.W.F.P. and others v. Akbar Shah and others" (2010 SCMR 1408); "National Highway Authority through Chairman and 2 others v. Bashir Ahmad and 2 others" (2018 CLC Note 63); "Kolkata Metropolitan Development Authority and another v. Gobinda Chandra Makal and another" (2012 SCMR 1201 [India]); "Civil Aviation Authority through Project Director and others v. Rab Nawaz and others" (2013 SCMR 1124); "Hyderabad Development Authority through M.D., Civic Centre, Hyderabad v. Abdul Majeed and others" (PLD 2002 SC 84); "Special Land Acquisition Officer v. Maharani Biswal and others" (2012 SCMR 1179 [India]); "Sh. Faqir Muhammad v. Land Acquisition Collector and others" (2011 MLD 1308); and "Abdul Ahad and 19 others v. Government of Balochistan through Secretary C &W and others" (2017 MLD 1276). 8. Arguments heard. Record perused. 9. The primary issue involved in these Appeals is confined to the determination of fair market and potential value of the Property. However, before proceeding further, it is pertinent to address issues Nos. 2 to 5 regarding maintainability of the Reference. Burden of proof regarding the said issues was placed upon the NHA. RW-1 appeared on behalf of the NHA and deposed that the Appellants were given prior notice in acquisition proceedings which was served upon one of the Appellants, hence, the Reference was barred by limitation. In rebuttal, AW-1 categorically stated that the Appellants were not given any notice and written objections were not sought from them. The Trial Court found that the Reference filed on 30.05.2016 was within the prescribed period of limitation of six months reckoned from the date of Award passed on 17.12.2015 in view the law laid down in case titled, "Anwar-ul-Haq Chaudhary v. District Officer (Revenue), Narowal and 4 others" (2017 CLC 66), wherein, it was held that once the Collector had made a Reference…

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