1999 PLP 29 (CLC)

Mian Abdul Ghani appellant in Regular First Appeal No.80 of 1967 owner of the land detailed therein initially claimed compensation at the rate of Rs.20,000 per Kanal for his land under acquisition before the Referee Court but in appeal the claim at the rate of Rs.10,000 per Kanal with interest at the rate of 6 % was reduced. Sh. Altaf Hussain and other appellants in Regular First Appeal No.81 of 1967 being owners of the land under acquisition in Dhoke Najjo similarly demanded compensation at the rate of Rs.20,000 before the. Referee Court but in, appeal, they confined the claim to the minimum rate of Rs.10,000 per Kanal. The appellant, in Regular First Appeal No.86 of 1967 also in the beginning made a claim of Rs.20,000 per Kanal as compensation for their land but later at appellate stage reduced the same to Rs.10,000 per Kanal. Syed Mubarik Ali Shah appellant in Regular First Appeal No.89 of 1967 claimed compensation at the different rate for the different land. He having categorised his land as commercial and residential, claimed compensation at the rate of Rs.40,000 for commercial land and Rs.20,000 per Kanal for residential land. He was awarded compensation for all land at the rate of Rs.5,461 per Kanal. The appellant, however, consolidating his claim reduced the same in appeal to the tune of Rs.17,206 per Kanal to avoid payment of court‑fee. Additionally the appellants in the above‑referred appeals also claimed 15 % compulsory charges on the compensation for the acquired land as provided under section 23 of the Land Acquisition Act, 1894 alongwith the interest on the amount of compensation as provided under sections 28 and 34 of the said Act.

7. Learned Senior Civil Judge/Referee Court while disposing of the references confirmed the award with the observation that the market value of the land was not determinable differently to that of the value fixed by the Land Acquisition Collector. The learned Judge further observed that the consideration for determination of value of land for payment of compensation under the provisions of the Town Improvement Act, 1922 being not the same as given under section 23 of the Land Acquisition Act, 1894, the actual market value on the basis of its use at the time of publication of notification under section 36 of the Town Improvement Act, 1922 was to be ascertained and not the potential value in terms of section 23 of the Land Acquisition Act, 1894. The appellants were also not found entitled to the payment of compulsory acquisition charges at the rata of 15 per centum permissible under section 23 of the Land Acquisition Act, 1894 being inapplicable to the land acquired under Town Improvement Act, 1922. In a nutshell, the market value of the land determined by the Collector on the basis of the actual use of the land on the date of publication of notification under section 36 of the Town Improvement Act, 1922 as modification made through the Schedule (clause 10 thereto) to the Land Acquisition Act, 1894 was maintained. Judging the matter with reference to the conflicting view taken regarding the legal status of Town Improvement (Amendment) Act, II of 1953, in context with Government of India Act, 1935 and the explanation added thereto through Land Acquisition (Punjab Amendment) Act, XII of 1954, in M. Salim Ullah and others v. Province of West Pakistan and another PLD 1960 (W.P.) Lah. 450, and the Land Acquisition Collector, Rawalpindi v. Lieut- General Wajid Ali Khan Burki PLD 1960 (W.P.) Lah. 469, the Referee Court formed opinion that the market value of the land for the purpose of Town Improvement Act, 1922 would be according to the actual use to which the land is put at date, with reference to which the market value is to be determined. Placing reliance on Province of West Pakistan and another v. M. Salim Ullah and others PLD 1966 SC 547, the Referee Court further observed that Exception to subsection (1) of section 23 of the Land Acquisition (Punjab Amendment) Act, XII of 1954 having held to be violative of subsection (2) of section 299 of the Government of India Act, 1935, the compulsory acquisition charges under section 21(2) of Land Acquisition Act, 1894 were not admissible to the appellants. Proceeding further, the lower Court after detailed discussion of the documentary evidence consisting upon various mutations/sales of the different lands before and after the acquisition of the land hereinbefore referred in para. 12 of the judgment making departure to the findings given therein regarding the average price to be calculated Rs.7,300 per Kanal, mentioned as Rs.6,620 per Kanal through clerical mistake, confirmed the price of award fixed by the Land Acquisition Collector.

8. The payment of the compensation with 15 per centum compulsory acquisition charges on the market value of the land being claimed alongwith the interest under section 28 of the Land Acquisition Act, 1894 is common demand of all the appellants except Syed Mubarik Ali Shah appellant in Regular First Appeal No.89 of 1967, who having not paid compensation under the award given by the Land Acquisition Collector till now has claimed interest under section 34 of the Land Acquisition Act, 1894.

9. The first contention raised by the learned counsel for the appellants was that the market value of the land to be acquired under Town Improvement Act, 1922 being determinable under the provisions of section 23 of the Land Acquisition Act, 1894, the implication of proviso to subsection (2) to section 23 thereof, which is to the following effect:‑‑ "Provided that this subsection shall not apply to any land acquired under the Town Improvement Act, 1922. " added through Punjab Act, XII of 1 1954, being discriminatory and ultra vires to Article 25 of the Constitution of Islamic Republic of Pakistan, 1973 was ineffective and consequently 15 per centum compulsory charges could not be refused to the appellants. Learned counsel placing reliance on Muhammad Ashraf and others v. Province of West Pakistan 1985 SCMR 707 vehemently contended that modification of the provision of subsection (2) of section 23 of the Land Acquisition Act, 1894 by clause 10(2) of Schedule to Punjab Town Improvement Act, 1922, making the said provision inapplicable to the land acquired under Town Improvement Act, 1922, having declared ultra vires of section 299(2) of Government of India Act, 1935 by the Honourable Supreme Court with the following observation, the learned Referee Judge was bound to follow the same:‑‑ "By clause 10(2) of the Schedule to the local Act, this subsection (2) of section 23 of the Land Acquisition Act was made inapplicable to any land acquired under the local Act. But this modification by the Schedule was struck down by this Court in Province of West Pakistan v. Salim Ullah PLD 1966 SC 547 as being ultra vires of subsection (2) of section 299 of the Government of India Act. The ruling is fully applicable to the instant case also because the first notification, which is relevant for the purpose, had been issued on 8‑4‑1955 when the Government of India Act, 1935, was still in force. The provision of section 23(2) is of mandatory nature and the District Judge was bound to comply with it." In a subsequent case Sh. Manzoor Hussain v. Multan Improvement Trust, Multan and others 1986 SCMR 643, the apex Court having examined clause 10(2) of the Schedule to the Town Improvement Act, 1922, which was held valid on the strength of Punjab Act, II of 1953 in Salim Ullah's use PLD 1966 SC 547, reconsidered the provisions of Land Acquisition Act, 1894 through Amended Act XII of 1954 for the purpose of Town Improvement Act, 1922 in the light of subsection (2) of section 299 of Government of India Act, 1935, which provides as under:‑‑ "299(2). Neither the Federal nor a Provincial Legislature shall have power to make any law authorising the compulsory acquisition for public purposes of any land or any commercial or industrial undertaking, or any interest in or in any company owning, any commercial or industrial undertaking, unless the law provides for the payment of compensation for the property acquired and either fixes the amount of the compensation or specifies the principles on which, and the manner in which, it is to be determined." It was observed that subsection (4) of section 299 of the Government of India Act, 1935 provided that "nothing shall affect the provisions of any law in force at the date on the passing of this Act", protected para. 10(2) of the Schedule to the Act and even if there could be any conflict, it could not be declared ultra vires the power of Legislature. In para. 19 of the judgment, it was held as under:‑‑ "The position with regard to Punjab Act II of 1953 was different. It did not .enjoy the protection of subsection (4) of section 299 of the Government of India Act. It was a law made subsequent to the enforcement of Government of India Act, 1935 and had to conform to the requirements of section 299, which was found lacking. In the case of Muhammad Ashraf it appears that this aspect of the case was not brought to notice. In the circumstances, the provisions of sub‑para. (2) of para. 10 of the Schedule to the Act had the validity and had the effect of competently amending subsection (2) of section 23 of the Land Acquisition Act and as in the present case the acquisition proceedings had been taken under the Act as originally framed the denial of compensation of compulsory acquisition was not violative of any provision and had to be enforced and was rightly enforced by the High Court. "

10. The legal position regarding the non‑application of subsection (2) of section 23 of Land Acquisition Act, 1894 for payment of 15 per centum additional charges on the acquisition of land under Town Improvement Act, 1922, having settled the modification through para.10(2) of the Schedule to the Town Improvement Act, 1922 was declared valid under section 299(2) of Government of India Act, 1935. The result was that benefit of proviso to subsection (2) of section 23 of the Land Acquisition Act, 1894 being not available to the appellants was not granted. Learned counsel without conceding the knowledge of above‑referred judgments on the subject, contended that in view of divergent opinion expressed in the abovesaid judgments, the view taken in the earlier judgment can be followed on the basis of beneficial interpretation. We are afraid, no departure can be made to the law laid down by the Supreme Court on the question of non‑payment of additional charges at the rate of 15 percentum permissible under section 23(2) of Land Acquisition Act, 1894, for the land to be acquired under Town Improvement Act, 1922. In the latter judgment, in an unequivocal terms, it was held with strong observations that section 299(2) of Government of India Act, 1935 was not considered in the earlier case. We, therefore, following the dictum laid down by the Honourable Supreme Court of Pakistan in the above judgment maintained that payment of compulsory charges at the rate of 15 percentum being not permissible under Town Improvement Act, 1922, the claim of the appellants is unfounded, which has been rightly refused by the lower Court in the reference.

11. We proceed with the next contention regarding the prevailing market value of the land under acquisition at the time of notification under section 36 of the Town Improvement Act, 1922 and its potential value. It is contended by the learned counsel that preponderance of evidence available on record would show that the price of the land for residential use was not less than Rs.20,000 per Kanal. Describing the character of land, it is argued that the same being situated within the commercial locality had potential value to be used for commercial purposes and consequently the transactions of sale and purchase of the land adjacent to the land in question possessing similar advantages were the best evidence in proof of the correct market value of the land but the Land Acquisition Collector as well as the learned Senior Civil Judge travelling on the mechanical formula of fixing the price on the basis of average calculated by the subordinate revenue staff, determined the value of land without taking into consideration the actual and potential value of the same at the relevant time.

12. Learned counsel appearing on behalf of Syed Mubarik Ali Shah in Regular First Appeal No.89 of 1967 taking us to the evidence in his case forcefully argued that the land of the appellant being of superior quality and of commercial character could fetch the price of Rs.50,000 per Kanal.

13. The perusal of record and the grounds of appeals unambiguously show that except Syed Mubarik Ali Shah, the remaining appellants inducing the initial claim of compensation demanded not more than Rs.10,000 per Kanal before this Court in appeal. Syed Mubark Ali Shah appellant demanded compensation at minimum rate of Rs.20,000 per Kanal before the Referee Court and Rs.17,200 before this Court in appeal with the explanation that he claimed less value to that of the reference to save the court‑fee. The review of the evidence, will necessarily be helpful in resolving the controversy regarding the character of land and its market value prevalent at the relevant time.

14. Maj. Syed Waris Shah (P.W.6) describing the value of land of Syed Mubarik Ali Shah at the rate of Rs.1,000 per Marla stated that the appellant was offered this .price through him by a third person but the appellant demanded Rs.1,500 per Marla and bargain could not struck. According to him, the land owned by Syed Mubarik Ali Shah was surrounded by houses, a girls school, water works, constructed before the partition and residential scheme of Satellite Town, Rawalpindi developed in 1952. However, the witness has not been able to disclose the name of purchaser, who offered Rs.1,000 per Marlas for the purchase of the land in question. Muhammad Aslam (P.W.7) claimed purchase of four Marlas of land for a consideration of Rs.5,000 in 1958 in the vicinity of the land under acquisition, whereas Akbar Ali (P.W.8) claimed purchase of 17 Marlas of land for a consideration of Rs.8,000 in 1956 at a distance of 1/2 furlong from the land of Syed Mubarik Ali Shah. Khan Bahadur Patwari Halqa (P.W.9) giving detailed description of the locality of the land subject‑matter of acquisition confirmed that the same was situated within the municipal limits and was covered by the constructed area of the surrounding land. He, however, admitted that in the year 1958, the land in question was under cultivation. Ch. Sardar (P.W.5) on the instruction of Syed Mubarik Ali Shah appellant prepared a site plan about 2/3 months before making the statement in the Court. Sh. Badar Rashid (P.W.1), a property dealer deposed that on the instructions of a purchaser, he offered Rs.27,000 per Kanal to one Mst. Sadiqa Begum, who owned land in the same area in 1962. However, neither the said purchaser is known nor Mst. Sadiqa Begum was produced in confirmation of the statement of this witness. Muhammad Sharif (P.W.2), a Settlement Inspector, produced auction list of the evacuee property in the area, showing the price of evacuee land at the rate of Rs.32,000 per Kanal without producing the original record and the auction register pertaining to the auction. Syed Mubarik Ali Shah appellant in his statement as P.W.11 claiming location of his land surrounded by the bungalows, houses, girls school, degree as well as inter colleges, water, works at a 1‑1/2 furlong from Asghar Mall Road, a residential and commercial area, stated that the Settlement Department through restricted auction sold the evacuee land at the rate of Rs.2,000 per Marla, adjacent to the land of the appellant. According to him, the market value of his land in the year 1958 was Rs.30,000 per Kanal. However, he has frankly admitted that the land in question was allotted to him as agricultural units. The analysis of the evidence brought on record by Syed Mubarik Ali Shah appellant in Regular First Appeal No.89 of 1967 and also to be read for the benefit of the remaining appellants having common grievance did not provide any sound and cogent material in support of the market value of the land being claimed by the appellants. The general characteristic of the area on the basis of future expected use of land as residential and by reason of its location at some distance from Asghar Mall Road and the Satellite Town Schemes could not be the relevant consideration for ascertaining the value of the land under modified form of section 23 of the Land Acquisition Act, 1894 as applicable to the Town Improvement Act, 1922, which reads as under:‑‑ "(1) In determining the amount of compensation to be awarded for land acquired under this Act the Court shall take into consideration:‑‑ Firstly, the market value of the land at the date of the first publication of the notification under section 36 of the Town Improvement Act, 1922. (2) In addition to the market value of the land as above provided, the Court shall in every case award a sum of 15 per centum on such market value in consideration of the compulsory nature of the acquisition: Provided that this subsection shall .not apply to any land acquired under the Punjab Town Improvement Act, 1922. (3) For the purposes of clause first of subsection (1) of this section (a) The market value of the land shall be the market value according to the use of which the land was put at the date with reference to which the market value is to be determined under that clause. "

15. In determining the amount of compensation to be awarded, the market value of the land on date of publication of the notification in question is to be taken into consideration. The method of valuation of the land so acquired can be classified under these heads, namely:‑‑ (1) The opinion of experts (2) The price paid within a reasonable time of the material date in bona fide transactions of purchase of lands in the neighbourhood and possessing similar advantages. (3) By capitalizing the net annual income from the land, Market value of the land on the basis of which compensation is payable, is the price which a willing purchaser could pay to a willing seller for the property on the date of notification. In absence of availability of definite material either in the nature of sales of neighbouring land at or about the date of notification or otherwise, the Court would not be erring on the wrong side if it fixes the market value on the basis of average price. In the present case, the Referee Court in para. 12 of the judgment worked out the average price of the land of Block "A" at the rate of Rs.7,300 per Kanal (inadvertently written as Rs.6,600) as compared with the price fixed by Land Acquisition Collector at the rate of Rs.5,461 per Kanal.

16. The oral and documentary evidence brought on record is not helpful in arriving at a different value of land under acquisition as only the sole instances of lands comparable with land under acquisition can afford a guide but no such transaction were brought on record for determining the market value of the land.

17. The best guideline for determining the sale price of the property under acquisition is always the previous sale of the same land or that of the sale of similar land or property in the area and in absence of the evidence of previous sale and purchase of the same land, the element of similarity of the land and its sale and purchase in the adjacent land can be appropriate index of its market value. We have been informed that compensation relating to a parcel of land measuring 10 Marlas out of the land under acquisition was paid at the rate of Rs.10,000 per Kanal through a separate award by the Court in reference under section 18 of the Land Acquisition Act, 1894 and that said award for want of challenge has attained finality. Learned counsel for the parties having conceded this fact readily desired for taking the judicial notice of the same. The appellants have also through a miscellaneous application requested for permission to bring the award in question as additional evidence.

18. The appellants except Syed Mubarik Ali Shah in Regular First Appeal No.89 of 1967 having not claimed the price of the land under acquisition as compensation more than the price fixed in the abovesaid award, which could be best evidence in support of the claim for the compensation irrespective of any other consideration.

19. The general division of land into three blocks without proper classification through taking into consideration the character and the nature of the land of each block and the category to which the same belonged, was not correct for the purpose of determination of the market value of the land. This is not understandable that in what terms the whole land of Rawalpindi Mahal was declared superior to that of the remaining land under acquisition, therefore, ignoring this arbitrary division not representing the true character of the land, the total land under acquisition would be treated of one and the same category and consequently the price of all lands divided into three blocks was to be fixed on the same rate. We, therefore, unhesitantly proceed to decide the issue of compensation on the assumption that there is only one category of land under acquisition.

20. The Land Acquisition Collector on the basis of quinquennial average worked out by the staff dividing the land into three blocks fixed the market value of the land under acquisition in the following manner:‑‑ (1) The land of Rawalpindi Mahal was named as Block "A" and was assessed at the rate of Rs.5,461 per Kanal, whereas the compensation for the land of Dhoke Hayat and Dhoke Noor included in Block "B" and land of Dhoke Najjo with some portion of land of Dhoke Noor comprising Block "C" was determined at the rate of Rs.2,019 and Rs.1,200 per Kanal, respectively. Learned Senior Civil Judge after detailed discussion of documentary evidence in the shape of sales concluded that the same being not relevant did not furnish material help for the determination of market value of the land differently and consequently the market value fixed in the award was confirmed. Learned Senior Civil Judge in an unequivocal term concluded the market value of the land of Block "A" at the rate of Rs.7,300 per Kanal (written as Rs.6,620 through clerical mistake in para.12 of the judgment, but the compensation of land measuring 10 Marlas, part of land under acquisition awarded at the rate of Rs.10,000 per Kanal through separate award would be more relevant for fixing the price of land. Except Syed Mubarik Ali Shah, the claim of the compensation of remaining appellants is confined maximum to the tune of Rs.10,000 per Kanal only. The difference of average price calculated by the Referee Court and the award in question comes to Rs.2,700 per Kanal.

21. Learned counsel appearing on behalf of improvement Trust‑respondents have not been able, to show that the land of abovesaid award was of different nature and quality, which could not be taken at par to that of the land subject matter of present award for the purpose of compensation. Admittedly, the land of the said award being of the same nature and character and part of the same notification by virtue of which the land subject‑matter of the present award and appeals was acquired, there could not be different compensation without proving the better quality and value of the land. We, therefore, taking judicial notice of the said award consider it appropriate to fix the market value of the land of the appellants at the rate of Rs.10,000 per Kanal as claimed by them in appeals to avoid any discrimination in the matter of grant of compensation. The miscellaneous applications bearing Civil Miscellaneous No.476/C of 1989 in Regular First Appeal No.67 of 1967, Civil Miscellaneous No.176/C of 1990 in Regular First Appeal No.80 of 1967, Civil Miscellaneous No.177/C of 1990 in Regular First Appeal No. 81 of 1967, Civil Miscellaneous No. 178/C of 1990 in Regular First Appeal No.86 of 1967 and Civil Miscellaneous No.427/C of 1989 in Regular First Appeal No.89 of 1967 for bringing on the record the award in question as additional evidence having conceded by the learned counsel for the respondents are allowed. Another application bearing Civil Miscellaneous No.953/C of 1979 in Regular First Appeal No.89 of 1967 to bring the letter, dated 21‑8‑1973 on record written by the respondent to Syed Mubarik Ali Shah for non‑availability of funds to make him the payment of compensation being not opposed by the learned counsel for the respondent Trust is also allowed. However, the applications of Syed Mubarik Ali Shah in Regular First Appeal No.89 of 1967 seeking permission to amend the claim of compensation at enhanced rate at this stage, which was not made to save the court‑fee at the time of filing the appeals cannot be allowed. The applications in this behalf are, therefore, dismissed.

22. Learned counsel appearing on behalf of Syed Mubarik Ali Shah appellant in Regular First Appeal No.89 of 1967 contended that the land owned by the appellant being of better quality and of commercial character, the same was required to be valued by reference to the use to which it is reasonably capable of being put in the near future. He argued that without considering the potential value of the land under acquisition, the highest value required to be awarded in principle was determinable and that the price fixed without due regard to the potentialities of the land was not the correct value of the land. He with reference to the evidence on the record argued that the price offered by a willing purchaser being much more to that of fixed by the Collector was the best evidence for fixing the value of the land. He stressed for payment of the compensation claimed by the appellant which was muchless than the actual value of the land at the time of acquisition.

23. We having minutely examined the evidence produced by the appellant and also attended the arguments advanced by the learned counsel in support thereof, do not find any distinguishable features of the case of the appellant. Admittedly, the land was allotted to him as agricultural units and, therefore, the same could not be awarded any other character except the one for which it was being used on the date of issue of notification under section 36 of the Town Improvement Act, 1922. Naturally the value of the land was determined as agricultural without taking into consideration the presumptive potentialities of a developed area. The claim of compensation at higher rate without proving the prevailing rate in the contiguous developed land with comparative merits of proposed and developed area, cannot be granted. Undoubtedly, there is no evidence to show that there was pressure on the land for building activity other than the scheme under proposal. Thereafter, the potentiality of land is to be judged with reference to its use at the time of acquisition and not to a different use in future after acquisition and, consequently, the claim of compensation on the basis of the land after development of the scheme is foreign to the law on the subject.

24. In a nutshell, taking into consideration the conclusion of the Referee Court regarding the price of the land of Block "A" and the price fixed in the award of 10 Marlas of land placed on record and the demand made by the remaining appellants of their land of same character and nature, we are not inclined to accept the adoptability of the land of the appellant of a better quality and value for the purpose of compensation. Consequently, he will be entitled to the same compensation.

25. It is contended by the learned counsel that the division of the land into blocks without its proper classification as per character and nature has caused serious prejudice to the appellants in the matter of determination of value and payment of compensation. The contention raised is not without force. The Collector divided the same into three blocks of three revenue estates without making proper classification of the land. The uniform formula for the determination of value of all kinds of land for the purpose of compensation is unknown to the method of calculation of the compensation under Land Acquisition Act, 1894 and consequently we, treating all the lands of one category and quality, hold that the compensation at the rate of Rs.10,000 per Kanal as given for ten Marlas of land through a separate award would also be admissible to the appellants with no discrimination.

26. Learned counsel for Syed Mubarik Ali Shah appellant placing reliance on the letter, dated 21‑8‑1973 as additional evidence in appeal before this Court contended that despite demand and repeated requests, no compensation was paid or even deposited by the concerned agency for payment to the appellant till date. Learned counsel appearing on behalf of the respondents conceding the non payment of compensation to the appellant for want of funds assures forthwith payment in terms of the decision of this appeal. The perusal of the letter in question shows that payment of compensation was being withheld by the respondents not for any other reason, but due to the non‑availability of funds. According to law, the amount of compensation was, necessarily, to be deposited in proportionate before the award and in toto immediately on award to make I payment to the landowners. This is strange that the land of appellant was E acquired without deposit and payment of compensation. Thus, the appellant is entitled to the payment of compensation on the above rate with interest at the rate of 8 % per annum from the date of award under section 34 of the Land Acquisition Act, 1894.

27. The remaining appellants will be entitled to the interest at the rate of 8 % per annum on the difference of the amount of compensation to be paid to them under section 28 of the Land Acquisition Act, 1894.

28. In the light of foregoing discussion and with the above modification in the quantum of compensation, we dispose of these appeals with no order as to costs. A.A./A‑313/L Order accordingly