2019 PLP 2491 (YLR)

SYED ARSHAD ALI, J.

This judgment shall dispose of the instant regular first appeal as well as the connected appeals fully described in the appendix to this judgment which are arising out of one and the same judgment dated 31.10.2017 passed by the learned Referee Court.

2. It is evident from record that through letter bearing No. 4528/GB dated 21.06.2010, the District Police Officer Shangla ('The Acquiring Department') had requested to the District Collector/ Deputy Commissioner Shangla at Alpuri for acquisition of land for the construction of a Police Lines, District Shangla at Shalizara Muza Banda Cheena, The acquiring department had also sent to the District Collector a draft Notification under section 4 of the Land Acquisition Act, 1894 ('The Act') which was later on notified. The District Collector accord-ingly issued notices to the interested persons under sections 9(1), 9(3) and 10 of the Act. Pursuant to the said notices, the interested persons filed their objections relating to the cost of the land requesting for its enhancement, However, some of the applications were rejected by the District Collector being time barred.

3. The compensation of the land was worked out by the Tehsil Revenue Agency on the basis of the relevant revenue record which was approved as following:- S. No. Nature/Kind of land Rate per Marla Rate per Kanal Worked out on the of

1. Bari Rs. 30.968/- Rs. 6.19,360/- Ausat Yaksala

2. G. Mumkin Rs. 2,519/- Rs. 50,380/- Ausat Panjsala

3. Banjar Qadeem Rs. 3.937/50 Rs. 78,750/- Valuation Table Finally the proceedings were culminated into announcement of award within the terms of section 11 of the Act on 13.02.2013, whereby total land measuring 108 Kanal 16 Marlas was acquired at the total cost of Rs. 6,49,19,658/-. The price/ compensa-tion for built up property and fruit bearing plants were separately assessed.

4. Aggrieved by the compensation for the land as well as the built up property etc, the appellants had filed their objection petitions under section 18 of the Act by contesting that the respondents have not properly assessed the market value of the acquired land and they were not granted potential value of the land in accordance with the Act. In the reference, they had claimed for enhancement of compensation of land, built up property and fruit bearing trees. The respondents/ government/acquiring department had contested the claim of the appellants in their detailed written reply. The learned Referee Court had fr amed the following issues from divergent pleadings of the parties:-

5. In support of their claim, the objectors appeared before the Court and recorded their statements. Ihsan-ul-Alim Patwari Halqa appeared as PW-1 who has produced revenue record of the property. Ahmad Nawaz Girdawar appeared as PW-2 who produced Gushwara Intiqalat exhibited as Ex. PW 2/1. Gauhar Ali Record Clerk office of C&W Department Alpuri appeared as PW-3 who has produced the cost analysis of the built up property exhibited as Ex. PW 3/1 to Ex. PW 3/3. Fazal Ali Assistant in the office of Deputy Commissioner Shangla appeared as PW-4 who has produced the award comprised of five sheets exhibited as Ex. PW 4/1 to Ex. PW 4/5 and other relevant record. Noor-ul-Bashar ADK appeared as PW-5 who has produced all the mutations which were attested from 2009 to 2013 comprised of 76 sheets and were exhibited as Ex. PW 5/1 to Ex. PW 5/76. Besides, oral evidence was also produced by the objectors.

6. In defence, Karim Khan District Director Agriculture Alpuri appeared as DW-1 who had evaluated the cost for the trees which was produced by him as Ex. DW 1/1. Haroon-ur-Rashid Sub-Engineer C&W Department appeared as DW-2 who had produced the cost evaluation of the built up property exhibited as Ex. DW 2/1. Muhammad Ziaq ADK appeared as DW-3 who had produced the crucial mutations bearing Nos. 617 and 620 exhibited as Ex. DW 3/2 to Ex. PW 3/7 and average sale price for one year as well as for five years. Fazal Ali Office Assistant Deputy Commissioner, Shangla appeared as DW-4 who had produced the relevant record relating to the acquisition of land and award.

7. On the applications of the objectors, the learned Trial Court had appointed a local commission for spot inspection. Accordingly Messrs Jawad Ali Noor and Bahri Karam Advocates were appointed as a local commission who had visited the spot and recommended an amount of Rs. 10 Lac as compensation per Kanal for the acquired land. The learned Referee Court vide judgment and decree dated 30.04.2016 had partially allowed the reference, whereby amount of compensation was enhanced to Rs. 12 Lac per Kanal and for built up property/ construction, the amount of compensation was fixed and determined @ Rs. 300/- per square feet.

8. Aggrieved of the aforesaid judgment and decree of the learned Referee Court, both the parties had challenged the same before this Court through regular first appeals. When the said cases came up for hearing on 30.03.2017 before this Court, the parties had arrived at a consensus to appoint a fresh commission to determine the actual compensation of the acquired land. Accordingly they had agreed on appointment of Messrs Abdul Halim Khan and Parwanat Khan Advocates, learned counsel practicing on civil side as local commission to visit the spot and re-evaluate the potential value of the land and the cost of construction etc. Resultantly, the impugned judgment and decree of the learned Referee Court was set aside and the matter was remitted back to the learned Trial Court for decision afresh after receiving the commission report vide order of this Court dated 30.03.2017.

9. Accordingly both the learned counsel visited the spot and had prepared an exhaustive report, whereby they had recommended an amount of Rs. 15 Lac per Kanal as compensation of the land. They had also stated recommendations for enhancement of built up property. The acquiring department had filed their objection on the said report. Accordingly the learned commissioners had appeared before the learned Trial Court and recorded their statements. Considering the said report and other material evidence, the learned Referee Court through the impugned judgment and decree dated 31.10.2017 while partially accepting the reference has held the objectors/ petitioners entitled to the compensation of the land @ Rs. 1.2 million per Kanal for the acquired land and Rs. 300 per square feet as a cost of construction along with statutory increase. Both, the acquiring department as well as the objectors have challenged the amount so determined by the learned Referee Court through the present appeal as well as the connected appeals.

10. Arguments of the learned Asst: A.G as well as the learned counsel representing the objectors were heard at length and the record was minutely gone through with their able assistance.

11. The crucial issue for determination of this Court is the compensation determined by the learned Trial Court through its findings rendered on issues Nos. 3 to 5.

12. First of all I will refer to the nature and location of the acquired land as evident from record of the case. In this regard, I have thoroughly examined the evidence produced by the plaintiffs, the defendants and the reports of both the local commissions. Interestingly the parties are not at dispute regarding the location, nature and character of the property. In this regard, the evidence produced by the defendants have also admitted in their statements that the acquired land is the only plane chunk of land available in the village Shahizara. The entire evidence also gives a clear impression that the acquired land is situated at a distance of 5 kilometers from the District Headquarter. According to their evidence, it is a green, scenic and a fertile land. It is surrounded by mountains, Basic Health Unit, Masque, School and well connected with the other parts of the District through metalled road. The character of the acquired land although is agricultural but has all the potential of the residential land as it is surrounded by houses, however, since the owners of the land are reluctant to sell this land, therefore so far it has not been converted into a residential area.

13. Although PW-5 has produced number of mutations of the surrounding area, whereby the land was sold and purchased through different prices. However, the three mutations which were considered by the District Collector in determining the average sale price of the land and the property sold through the said mutations have the similar character and nature of the property, the detail of the said mutations which are reflected in Ex PW 1 /7 are as following:-

14. Although the average of the three mutations is the same as provided in the award, however the property sold through mutation bearing No. 616 dated 13.04.2010, the price per Kanal is given as 12 Lac. This sale had taken place a few months before the issuing of Notification under section 4 of the Act. The local commissioners while visiting the spot had stated that the nature and character of this property is one and the same.

15. I am conscious of the fact that this one transaction cannot be a ground to determine the market rate of the entire acquired land comprised of 108 Kanal 16 Marlas. The law on the subject envisages that in lieu of acquisition of land, the land owners be compensated rather to provide them the simple market price of the land. Indeed it is evident from record that in the entire area, this piece is the only plane area, whereas the other land surrounded by the acquired land is comprised of mountains and the residents of the area have constructed their houses in the said mountains. It is also evident from the evidence that some of the land owners had to abandon their place of abode because they had no other land in the area.

16. Thus, to evaluate the compensation granted by the learned Referee Court to the land owners, I have to peep in the same through the prism of standard/parameter settled by the august Supreme Court of Pakistan. The august Supreme Court of Pakistan in its judgment titled "Murad Khan through his widow and 13 others v. Land Acquisition Collector Peshawar and another" reported as 1999 SCMR 1647 while expounding section 23 of the Act has laid that the following matters are to be taken into consideration in determining the amount of compensation for the acquired land:- "(i) The data from which the market value of the land can be estimated is given in Rule 13 of the North-West Frontier Province Circular No.54 issued presumably under section 55 of the Act. (ii) The best method to work out the market value is the practical method of a prudent man laid down in Article 2, Qanun-e-Shahadat, 1984 to examine and analyse all the material and evidence available on the point and to determine the price which a willing purchaser would pay to willing seller of the acquired land. (iii) Subsection (1) of section 23 of the Land Acquisition Act provides that in determining the amount of compensation the Court shall take into consideration the market value, loss by reason of severing such land from his other land, acquisition injuriously affecting his other property or his earning in consequence of change of residence or place of business and damage, if any, resulting from diminution of the profits of the land between the time of the publication of the declaration under section 6 and the time of the Collector's taking possession of the land. This, however, is not exhaustive of other injuries or loss which may be suffered by an owner on account of compulsory acquisition. (iv) The best method of determination of the market price of the plots of land under the acquisition is to rely on instances of sale of it near about the date of notification under section 4(i) of the Land Acquisition Act. The next best method is to take into consideration the instances of sale of the adjacent lands made shortly before and after the notification. When the market value is to be determined on the basis of the instances of sale of land in the neighbouring locality, the potential value of the land need not be separately, awarded because such sales cover the potential value. (v) The law provides determination of compensation not with reference to classification or nature of land but its market value at the relevant lime. No doubt, for determining the market value, classification or the nature of land may be taken as relevant consideration but that is not the whole truth. An area may be Banjar Qadeem or Barani but its market value may be tremendously high because of its location, neighbourhood, potentiality or other benefits. (vi) While determining the value of the compensation the market value of the land at the time of requisition/acquisition and its potentiality have to be kept in consideration. (vii) Consideration should be had to the potential uses to which the land can be put, as well as all the advantages, present or future, which the land possesses in the hands of the owners. (viii) In determining the quantum of fair compensation the main criterion is the price which a buyer would pay to a seller for the property if they voluntarily entered into the transaction. (ix) The measure of fair compensation is the value of the property in open market which a seller voluntarily entering into a transaction of sale can reasonably demand from a purchaser this means that Court has to determine the value of the land in the open market at the relevant time on the assumption that the notification of acquisition did not exist. (x) While determining the value of the land acquired by the Government and the price which a willing purchaser would give to the willing seller, only the "past sales" should not be taken into account but the value of the land with all its potentialities may also be determined by examining (if necessary as Court-witness) local property dealers or other persons who are likely to know the price that the property in question is likely to fetch in the open market. In appropriate cases there should be no compunction even relying upon the oral testimony with respect to market value of the property intended to be acquired, because even while deciding cases involving question of life and death, the Courts rely on oral testimony alone and do not insist on the production of documentary evidence. The credibility of such witnesses would, however, have to be kept in mind and it would be for the Court in each case to determine the weight to be attached to their testimony. It would be useful and even necessary, to examine such witnesses while determining the market prices of the land in question, because of the prevalent tendency that in order to save money on the purchases of stamp papers and to avoid the imposition of heavy gain tax levied on sale of property, people declare or show a much smaller amount as the price of the land purchased by them than the price actually paid. The "previous sales" of the land, cannot, therefore, be always taken to be an accurate measure for the determining the price of land intended to be acquired. (xi) The sale-deed and mutation entries do serve as an aid to the prevailing market value. (xii) In cases of compulsory acquisition effort has to be made to find out what the market value of the acquired land was or could be on the material date. While so venturing the most important factor to be kept in mind would be the complexion and character of the acquired land on the material date. The potentialities it possessed on that date are also to be kept in view in determining a fair compensation to be awarded to the owner who is deprived of his land as a result of compulsory acquisition under the Act. (viii) The value of the land of the adjoining area which was simultaneously acquired and for which different formula of compensation has been adopted, should be taken into consideration. (xiv) The phrase "market value of the land" as used in section 23(l), of the Act means "value to the owner" and, therefore, such value must be the basis for determination of compensation. The standard must be not a subjective standard but an objective one. Ordinarily, the objective standard would be the price that owner willing and not obliged to sell might reasonably expect to obtain from a willing purchaser. The property must be valued not only with reference to its condition at the time of the determination but its potential value must be taken into consideration. The said criteria was re-affirmed by the august Supreme Court of Pakistan in Muhammad Ashraf's case reported as 2011 SCMR 1244.

17. In the case of Province of Punjab through Land Acquisition Collector and another v. Begum Aziza reported as 2014 SCMR 75, distinction was drawn between the market value and potential value of the acquired land as following:- "While assessing compensation, the Collector not only had to consider the market value of land in question but its potential value

Market value was normally taken up as one existing on the date of notification under S. 4(1) of Land Acquisition Act, 1894 under the principle of willing buyer and willing seller, while potential value was the value to which similar lands could be put to any use in the future

While determining the quantum of compensation the exercise might not be restricted to the time of the notification under S. 4(1) of Land Acquisition Act, 1894 but future value of land might be taken into account." In the same judgment, it was further held by the august Supreme Court of Pakistan that:- "(xiv) The phrase "market value of the land" as used in section 23(1), of the Act means "value to the owner" and, therefore, such value must be the basis for determination of compensation. The standard must be no, subjective standard but an objective one. Ordinarily, the objective standard would be the price that owner willing and not obliged to sell might reasonably expect to obtain from a willing purchaser. The property must be valued not only with reference to its condition at the time of the determination but its potential value must be taken into consideration."

18. Not only it has been settled by the august Supreme Court of Pakistan that the crucial date for determination of amount/compensation is the date when the acquiring department takes possession but in this regard, the relevant provision i.e. section 23 was amended through the Land Acquisition (West Pakistan Amendment) Ordinance (49 of 1969) which reads as under:- "Amendment of Section 23.-- (1) In clause first and clause sixth of subsection (1) of Section 23 of the said Act; for the words, figures, brackets and comma "at the date of publication of the notification under section 4, subsection (1)" and the words and figure "the time of the publication of the declaration under section 6" shall be deemed to have been substituted by the words, letters and figures "on 1st September, 1961", as both the places." Subsequently, the said section was further amended through North-West Frontier Province Land Acquisition (Amendment) Ordinance, XVII of 2001 as under:- "N. W.F.P Amendment.- Section 23, in subsection (1), for the words and figures "firstly, the market-value of the land on the date of the publication of the notification under section 4, subsection (1)", the words and comma "firstly, the market-value of the land on the date of taking possession of the land" shall be substituted."

19. Therefore, in the context of the present case, the compensation of the land was determined keeping in view the average one year sale in the area in the year 2010 when Notification under section 4 of the Act was issued, whereas the award was announced on 13.02.2013 and the possession was taken by the respondents after the award. Therefore, the probable increase in the land in the said three years cannot be ignored. Thus, when it is evident from record that a similar land was sold in the year 2010 for a sale consideration of Rs. 12 Lac, then awarding 12 Lac per Kanal for the entire land in the year 2013 keeping in view the proximity, nature and character of the land as stated above is neither inappropriate nor against the principles of determination of compensation as laid down by the august Supreme Court of Pakistan.

20. Thus, I have carefully perused the entire evidence and reached at the conclusion keeping in view the principle laid down by the august Supreme Court of Pakistan that the market rate/ compensation determined by the learned Referee Court is correct and in accordance with law which does not call for interference.

21. Resultantly, this appeal as well as the connected appeals are hereby dismissed. Appendix:-

1. R.F.A. No. 86-M/2017 titled "Muhammad Amin v. Government of Khyber Pakhtunkhwa through Chief Secretary and others".

2. R.F.A. No. 88-M/2017 titled "Aman Khan v. Government of Khyber Pakhtunkhwa through Chief Secretary and others".

3. R.F.A. No. 1-M/2018 titled "Government of Khyber Pakhtunkhwa through Chief Secretary and others v. Mohabat Shah and others".

4. R.F.A. No. 2-M/2018 titled "Government of Khyber Pakhtunkhwa through Chief Secretary and others v. Muhammad Amin".

5. R.F.A. No. 3-M/2018 titled "Government of Khyber Pakhtunkhwa through Chief Secretary and others v. Aman Khan".

6. R.F.A. No. 4-M/2018 titled "Government of Khyber Pakhtunkhwa through Chief Secretary and others v. Roshan Ali".

7. R.F.A. No. 5-M/2018 titled "Government of Khyber Pakhtunkhwa through Chief Secretary and others v. Hazrat Younas". ZC/143/P Appeals dismissed.