P L D 1970 Supreme Court 514 (PLP)

MUHAMMAD YAQUE ALI, J.‑The subject‑matter of these eighty‑eight civil appeals brought by the Province of East Pakistan with the leave of the Court is the fixation of market value of certain lands, in Mouzas Ghorasa, Chagra and Atia in the District of Dacca, acquired under the East Bengal (Emergency) Requisition of Property Act, 1948, hereinafter referred to as the Act. The lands were in the first instance requisitioned by issuing notices to the owners who are respondents herein under section 3 (1) of the Act on 15th December 1960, and possession was taken on 19th January 1961. Notices were next issued on 19th March 1961, under section 5 (1) of the Act declaring the intention of the Government to acquire the requisitioned lands. In due course, the Collector, Dacca, held an inquiry as provided in subsections (2) to (5) of section 5 and fixed the market value of the lands at Rs. 3,500, per acre, for Nal lands and Rs. 4,000 per acre, for Bhiti lands. In addition 15% compensation was awarded under section 23 of the Land Acquisition Act which is applicable in the matter of assessment of compensation by virtue of clause (e) of section 7 of the Act. Consequent upon it a dispute arose between the Government and the owners. The latter demanded compensation at Rs. 35,000, per acre, according to the prevailing market price, while the Government was willing to pay at the rate fixed by the Collector. A reference was thereupon made on 8th June 1965, to the Subordinate Judge, Dacca, as an Arbitrator for fixation of the compensation payable to owners as provided for in clause (b) of section 7 of the Act. The stand taken by the Government before the arbitrator was that market value was to be assessed in accordance with clause (e) of section 7 as it stood on the date when notices under section 5 (1) were issued. Clause (e) was amended subsequently by Ordinance XL of 1961 and Ordi nance XIII of 1963, but on 19th March 1961, when notices under section 5(1) declaring the intention of the Government to acquire the lands were issued, it provided as under: "the market value of any immovable property for the purposes of this section shall be the market value of the property at the date of the order of its requisition under section 3." If clause (e) as it stood unamended applied, then, the market value fixed by the Collector was not open to just exception, but the owners claimed that the terminal date for fixation of market price was when the dispute was referred to the arbitrator. As seen by then clause (e) had been amended twice before the dispute was referred to arbitrator. In its final form it provided: "7(e), the arbitrator in making his award shall have regard to the provisions of section 35 of the Land Acquisition Act, 1894, so far as the same can be made applicable Provided that‑ (i) the market value of any immovable property for the purposes of this section shall be the average value of the properties of a similar description and with similar advantages in the vicinity, during twenty‑four months preceding the date of the service of notice under subsection (1‑a) of section 5." The Subordinate Judge accepted the latter view and enhanced the compensation to Rs. 7,000, per acre, for Nal lands and Rs. 8,000 per acre, for Bhiti lands. Dissatisfied with the increase in the compensation, the Provincial Government filed eighty‑eight civil revisions under section 115, C. P. C. in the High Court reiterating the stand that the terminal date for assessing market value was 15th December 1960, when notices under section 3 of the Act requisitioning the lands were issued. The revision petitions were heard by two separate Benches of the High Court, one consisting of the learned Chief Justice and Abdulla, J., and the other composed of M. R. Khan and Maksumul Hakim, JJ. Both the Benches discharged the rules and dismissed the revision petitions by separate orders though on somewhat different grounds. The first Bench on reviewing a large number of decided cases mostly from foreign jurisdiction concluded thus; "We would like to add that Courts have always leaned in favour of citizens whose properties have been compulsorily acquired by the State in exercise of statutory powers of eminent domain. Almost everywhere in the free countries of world the power to acquire such property for a public purpose has been recognized on the basis of payment of "just compensation". The basis of "compensation" which etymologically means "a quid pro quo", is universally recognized as the market value of the property on the date of divestment of proprietory rights and their consequent investment in the State. The provisions as to compensation in the East Bengal (Emergency) Requisition of Property Act which was passed soon after the "appointed day", was a marked departure from hitherto accepted cannons. Such a departure might have been a necessary evil at time when it was first introduced, but, the subsequent tendency has been towards a liberalisation of an arbitrary method of assessment of compensation. The Legislature has tried to reduce the incidence of an artificial evaluation of compensation. The latest amend ments seek to award a more liberalised mode of assessment, although it still falls short of the concept of "just compensa tion". In the absence of any express provision to the contrary, the Court would, ordinarily, apply the law which is more favourable to the citizen who is being deprived of his property. But, in our opinion, the Arbitrator has been specifically asked, in the present case, to award compensation in accordance with amended provisions of law which was in force at the time when arbitration proceedings were awaiting the decision of the Arbitrator. The Arbitrator has not been given a choice to follow one of two methods of assessment. He was required to follow the directions of law which are addressed to him. He must follow them." The second Bench resolved the controversy in the following terms: ‑ "From the above discussion, it will appear that a vested right can be claimed only from the date of publication of the Gazette notification under section 5 (7) of the Act. The said notification in this case is dated 30‑3‑1964 and was published in the official Gazette on 9‑4‑1964. As such it is only on this date, i.e. on 9‑4‑1964 that a right accrued in favour of the owners of the lands to receive compensation for such acquisi tion. Consequently, section 7 (e) relating to the determination of market value and assessment of compensation as it stood on 9‑4‑1964, the date of vesting the property is the law which will be applicable in these cases. As section 7(e) as it stood on the said date provided that compensation is to be assessed on the basis of average market value of the land during twenty‑four months preceding the date of service of notice under sub section (1) of section 5, the opposite‑parties are entitled to receive compensation on that basis and not on the basis of the average market value of the land in question on the date of its requisition." Leave to appeal was granted to consider the plea that a right to acquire the lands had accrued to the Government on the issuance of notices under section 3 of the Act and as such market value was to be assessed in accordance with the law as it stood on that date. Before considering the contentions raised on either side it will be helpful to set out the relevant provisions of the Act relating to requisitioning and acquisition of properties and assessment of compensation contained in sections 3 to 7. "

3. If in the opinion of the Provincial Government it is expedient or necessary so to do for the administration and development of East Pakistan or for any other public interest connected therewith such as improvement of towns or ports, construction or betterment of roads, water‑ways or other communications, development of commerce or industries, maintenance of supplies and services essential to the life o f the community and other similar purpose, the Provincial Government may by order in writing requisition any property . . . . `. ." After requisitioning the property the Government may under section 4 (2) "take possession of the property forthwith" and may use or deal with the property in such manner as may appear to it to be expedient. After the property has been requisitioned and possession taken the Provincial Government may acquire it in the manner provided in section 5 which is reproduced below in extenso‑ "5. (1) The Provincial Government may, if it thinks fit, acquire any requisitioned property and if it proposes to so acquire, the Provincial Government shall direct an officer authorised under this Act to cause a public notice to be given at convenient places on or near the property to be acquired stating that the Government intends to acquire the property. (2) Such notice shall state particulars of the property to be acquired, and shall require all persons interested in the property to appear personally or by agent before the officer mentioned in subsection (1) at a time and place therein mentioned (such time not being earlier than fifteen days after the date of publication of the notice) and to state the nature of their respective interests in the property, their objections (if any) to the acquisition of the property and particulars of their claims to compensation for their respective interests. (3) Notice shall also be served to the above effect on the owner of such property and on all such persons known or believed to be interested therein or to be entitled to act for persons so interested as reside or have agents authorised to receive service on their behalf within the revenue district in which the property is situated. (4) In case any person so interested resides elsewhere and has no such agent, the notice shall be sent to him by registered post in a letter addressed to him at his last known residence, address or place of business. (4‑a) Every person required to make or deliver a statement under subsections (2), (3) and (4) shall be deemed to be legally bound to do so within the meaning of sections 175 and 176 of the Pakistan Penal Code. (5) The officer authorised under subsection (1) shall after hearing all objections and after making such further inquiry, if any, as he thinks necessary submit the case for the decision of the Provincial Government together with the record of the proceedings held by him and a report containing his recom mendations on the objections. (6) The Provincial Government after considering the report made under subsection (5) shall make a decision about the acquisition of the requisitioned property and such decision of the Provincial Government shall be final. (7) The Provincial Government shall then publish in the official Gazette a notice to the effect that the Provincial Government has decided to acquire the requisitioned property. On and from the beginning of the day on which the notice is so published the requisitioned property shall vest absolutely in the Government free from all encumbrances and the period of such requisition of such property shall end." The procedure for assessing compensation of the acquired property is laid down in section 7: "

7. Whenever any immovable property is requisitioned or acquired under this Act, there shall be paid compensation the amount of which shall be determined in the manner, and in accordance with the principles, hereinafter set out, that is to say (a) where the amount of compensation can be fixed by agreement, it shall be paid in accordance with such agreement ; (aa) where no such agreement can be reached, the Provincial Government shall assess compensation for the immovable property and the District Magistrate shall give immediate notice of the assessment to the person or persons interested ; (aaa) (i) any person interested who has not accepted the assessment may by written application to the Provincial Government require that the matter may be referred to an arbitrator ; (ii) the application shall state the ground on which objection to the assessment is taken: Provided that every such application shall be made within. six weeks of the service of the notice by the District Magistrate under clause (aa) or within three months from the ‑date of Provincial Government's order of assessment, whichever period shall later expire ; (b) on receipt of such application, the Provincial Government shall appoint as arbitrator a person who holds a judicial office not inferior to that a Subordinate Judge ; (c) the Provincial Government may, in any particular case, nominate a person having expert knowledge as to the nature of the property requisitioned or acquired, to assist the arbitrator, and where such nomination is made, the person to be compensated may also nominate an assessor for the said purpose ; (d) at the commencement of the proceedings before the arbitrator, the Provincial Government and the person to be compensated shall state what in their respective opinion is a fair amount of compensation (e) the arbitrator in making his award shall have regard to the provisions of section 23 and subsection (2) of section 35 of the Land Acquisition Act, 1894, so far as the same can be made applicable Provided that‑ (i) subject to the provisions of clauses (ii) and (iii) of this proviso, the market value of any immovable property for the purposes of this section shall be the market value of the property at the date of the order of its requisition under section

3. This was the law on the 19th March 1961, when notices under section 5(1) declaring the intention of the Government to acquire the respondents' lands were issued. However, by 30‑3‑1964 when notices under section 5(7) were published and the lands vested in the Government section 7(e) had been amended by Ordinance XL of 1961 and Ordinance XIII of 1963 as reproduced in the beginning of this order. No other provision of the Act is relevant to the purposes of this order It will be noticed firstly that 'requisitioning' and `acquisition' of properties under sections 3 and 5 are not necessarily juxtaposed with each other in the sense that the Government is bound to acquire the property requisitioned by it for the administration and development of East Pakistan. That is why section 7 comes into operation both when a property is requisitioned and when a property is acquired. In each case separate compensation is payable to the owner in case of requisitioning for dispossession of the owner from his property and in the case of acquisition for the value of the property of which the owner has been deprived. Secondly a notice under subsection (1) of section 5 is only the first step in the acquisition of a property. The Government may on the report of the authorised officer decided not to acquire the property. No rights or obligations are, therefore, created by the issuance of a notice declaring merely the intention of the Government to acquire any requisition property. The property stands acquired and vested in the Government only when a notice under subsection (7) of section 5 is published in the official Gazette As indicated earlier the procedure for assessing compensation laid down in section 7 comes into operation after the property has been requisitioned or acquired as the case may be. The amount of compensation may be fixed by agreement or in case of disagreement the dispute may at the instance of the owner of the property be referred to an arbitrator nominated by the‑Govern ment. It must, therefore, follow that compensation should be assessed in accordance with the state of law as it prevails when the property stands acquired or when the dispute arises as to the amount of compensation payable to the owner. In the High Court the learned Chief Justice adopted the latter view while Maksumul Hakim, J, considered the date of the publication of the notice‑under subsection (7) of section 5 as the appropriate date. Lengthy arguments supported by a number of decided cases were addressed from the bar. The short question arising for decision however is whether the issue of notice under sub section (1) of section 5 had a pre‑emptive effect on the procedure laid down in section 7 of the Act for fixation of market value so as to exclude from consideration the amending Ordinances of 1961 and 1963 which were promulgated to award higher rate of compensation for prosperities acquired under the Act. Neither in the words used in section 7 nor in principle there is any warrant for the proposition canvassed for by the Government. The established rule of interpretation in the words of Dixon, J., in Kraljevich v. Lake View & Star Ltd. (70 C L R (Australia) 647) on which Mr. Brohi appearing for the Provincial Government relied is against reading a statute in such a way as to change accrued rights the title to which consists in transactions past and closed or in facts are events that have already occurred. In other words liabilities that are fixed or fights that have been obtained by the operation of law upon facts or events for or perhaps it should be said against which the existing law provided are not to be disturbed by a general law governing future rights and liabilities unless the law so intends . . . . ." Another rule of interpretation cited by Cockburn, C. J. in R. v. Isswich Union (2) and cited in this very judgment of the High Court of Australia is that "when a statute is passed altering the law, unless the language is expressly to the contrary it is to be taken as intended to apply to a state of facts coming into existence after the Act" Keeping these two rules of interpretation side by side we find that the mere issuing of notice under subsection (1) of section 5 of the Act does not deprive the owner of any right in the property. All that can be said is that his continued right to own the property is put in jeopardy. He has, however, the right to show cause against proposed acquisition and might succeed in having the notice vacated. As a necessary corrolary no right came to be E vested in the Government by notifying its intention to acquire the requisitioned property. The first rule that any change is existing law does not affect vested rights of the parties did not, therefore; apply to the instant case. On the contrary the rule propounded by Cockburn, C. J., was attracted. Under it the Ordinances of 1961 and 1963 became applicable to the assessment of compensa tion as the state of facts on which the right to recover compensa tion had accrued to the owners came into existence after the promulgation of these Ordinances. It was next argued by Mr. Brohi that as the amended proviso to clause (e) of section 7 of the Act speaks of twenty‑four months preceding the notice under section 5(1)(a) and in the instant cases notices were issued under section 5(1) which was then in force, the new basis for assessing market value could not be made applicable. Dealing with this objection the learned Chief Justice in the High Court observed: "Mr. Hamidul Huq Choudhury has tried to argue that inasmuch as the‑ amended provisions of section 7 of the Act as provided by Ordinance XL of 1961 and Ordinance XIII of 1963 refer to the procedure of assessment of compensation as twenty‑four months' average value from the date of the notification under section 5(la), the said provisions could not be applicable to the case under review, because in the case before us, notice was served under section 5(1) and, not under 5(la). If we are right in saying that the Court of arbitration, namely, the learned Subordinate Judge, is, in duty, bound to refer to the latest law which directs him to adopt a particular procedure of assessment, then the question is : would such a new procedure be frustrated merely because of the altered symbols of the law which provides the starting point? It has been argued on behalf of the petitioner that the starting point for computation of the market value is an important element in computing compensation. With this 'proposition we find ourselves in perfect agreement and we need not mention the authorities which were cited before us in this behalf. The starting point is undoubtedly important. We may add that the starting point is the same under section 5(1) of the old Act as under section 5(la) of the new Act, being the date on which the Provincial Government notifies its intention of acquiring the land. The starting point remains the same and the crux of the provision lies in the liberalised mode of computation, namely, the reduced period for which the average sale value of similar lands has to be considered. Would this liberalised procedure be frustrated merely because the starting point has been, without any material alteration, subjected to a change sign‑board? In any way, this point is settled by the provisions of section 25 of the Bengal General Clauses Act which is illustrated by the decisions which we have cited below. It is also of utmost importance to remember that the main scheme and structure of the Act has remained constant notwith standing amendments which have been brought into existence subsequently. We are, in the present case, concerned with section 7 of Ordinance X III of 1963. The scheme of the Act is to enable compulsory requisitioning (and its subsequent acquisition) for purposes specified therein. It authorised the District Magistrate (Deputy Commissioner) to pass an order of requisition for public purpose. Originally, the Provincial Government could alone pass such order of requisition and/or acquisition. Subsequently, in order to decentralise the subject matter, District Magistrate (now Deputy Commissioner) was authorised to requisition land for public purposes. Acquisition of land, however, was still a matter for the Provincial Govern ment to decide, on the recommendation of the appropriate Deputy Commissioner. The Act requires notices of requisition to be served. Furthermore, the Act also requires notice to be served on the owner if the land is intended to be acquired. Such notice under section 5(l) of the Act was changed into one under section 5(la) of the Act. But the gravamen of the provision has remained the same and is unaltered. The point of time, in respect of section 5(1), as in case section 5(la) is the same, namely, the date when the notice of intention to acquire the land has been given under section 5(1). Notice under section 5(1) and shat under section 5(la) in essence and substance, mean one and the same thing. The alteration is to the effect that the power to acquire is to be exercised on a proposal of the Deputy Commissioner. This is the only alteration in section 5(1) which was replaced by section 5(l a). Section 7, as amended by the current law, specifies a particular point of time, at which the market value has to be calculated, namely, the service of notices under section 5(la). The pith and substance of the amended law consists in the patent fact that it liberalises the procedure of computation by changing the requirement of five years average into one for twenty‑four months. The point at which the market value has to be computed has remained the same. notwithstanding the altered symbols, namely, section 5(1a), which reads as section 5(la) with no change in the starting point." In support of this reasoning reliance was placed on the case of Hari Pada v. Howrah Municipality (A I R 1931 Cal. 481) in which it was held that a notification issued under section 641 of Act III of 1899 which was repealed and substituted by section 228 of the Calcutta Municipal Act III of 1923 remained intact and attached to the main Act as provided in section

25. Similarly in the case of Hari Pada v. Howrah Municipality the learned Judges relying on the provisions of section 25 of the Bengal General Clauses Act held: that a notification issued under section 641 of Act III of 1899 which was repealed by and substituted for section 228 of the Municipal Act III of 1913, remained intact and attached to the new Act as having been made under the new provisions of law which was enactment of the provisions of the repealed Act and under which the notification was issued. The next case noticed by the learned Chief Justice was of Charturbhu Mahesri v. Harlal Agarwalla (A I R 1925 Cal. 335): In this case a notice issued under section 3 of the Provincial Insolvency Act V of 1920 was held to remain in, force under the new Act of 1920 as the section re‑enacted the provisions of the repealed Act. Lastly in License Inspector, Howrah Municipality v. Manager, Tar Mohammad & Co. (I L R 55 Cal. 1206) a Division Bench of the Calcutta High Court held that the provisions of section 25 of the Bengal General Clauses Act applied to a notification which was not inconsistent with the re‑enacted provisions which had been superseded and deemed to have been issued under the re‑enacted provisions and that the notification was attached to the new provisions. We are in agreement with the view expressed by the learned Chief Justice and would add that if the construction which Mr. Brohi placed upon clause (e) of section 7 is accepted, it would create a lacuna in the Act. The view that the market value is to be assessed in accordance with the law as it stood on the date when the dispute was referred to the arbitrator cannot be affected by the consideration that in the instant cases notices were issued‑under section 5(1) and not 5(l a). In fact we have held that the process to assess compensation did not come into motion when these notices were issued. It would, therefore, mean that at the time when market value is to be assessed there being no notices under section 5(1a), clause (e) will cease to apply. It, however, cannot mean that because of the lacuna the arbitrator, is forced to apply a process of law which has since been repealed. It is an established rule that the Courts will adopt that construction which will remove the lacuna and advance the purpose and object of the statute. The notices issued in these cases‑ under section 5(1) were, therefore, to be treated as notices under section 5(1a) for the purposes of application of clause (e) of section

7. Both the contentions raised by Mr. Brohi thus have little force. In the result we concur with the learned Judges in the High Court that market value was to be assessed in accordance with the state of law as it prevailed when the dispute was referred to the arbitrator and not according to the law as it stood when notices under section 5(1) of the Act were issued. All the appeal are, therefore, dismissed with costs. S. Q. Appeals dismissed.