P L D 2011 Peshawar 60 (PLP)

YAHYA AFRIDI, J.

By this single judgment, this court intends to dispose of two Regular First Appeals filed by Sultan Shah and Mehrab Shah ("Owners") (R.F.A. No.153 of 2007) and The Government of N.-W.F.P. and others (R.F.A. No.156 of 2007), as they arise out of a single judgment and decree of the learned Civil Court/Referee Judge, Swabi dated 26-2-2007 and also that common questions of law are involved in both the appeals.

2. The brief and essential facts leading to the present appeals are that the Government of Pakistan approved a programme for the construction of Pehur High Level Canal Project ("Project") for which land was to be acquired in Swabi. In this regard, the requisite notification under section 4 ("Notification") of the Land Acquisition Act, 1894 ("Act") was published on 8-4-1996. The Land Acquisition Collector, Swabi ("Collector") vide Award No. 2047-50/ACS/LAC dated 17-6-1998 fixed the compensation for the property being acquired at Rs.8,370 per kanal ("Award"). The Owners, whose 23 kanals and 2 marlas of land was acquired in the said acquisition proceedings ("acquired property"), were aggrieved of the compensation so fixed and thus they contested the same by seeking a reference as envisaged under Section 18 of the Act. It would be pertinent to note that the Owner in September, 1998, though under protest, accepted the compensation so fixed in the Award for the acquired property.

3. Without going into the details of the checkered history of the reference proceedings, suffice it to state that an ex parte decree passed in favour of Owners was set aside. Thereafter, the reference proceeded in active presence of the parties and the Referee court based on the contesting claims of the parties, framed six issues, which were as follows: (1) Whether the petitioners have got a cause of action. (2) Whether the petitioners are estopped to sue. (3) Whether the application is incompetent in its present form. (4) Whether the compensation awarded by the respondents Collector has been properly determined. (5) What is the proper valuation of the suit property. (6) Relief?

4. The parties produced their evidence. In this regard Patwari Halqa' village Baja appeared as P.W.1 and produced the various Revenue Record regarding the acquired property, which included the one year average, five year average, the `Khasra Girdawri', `Jamabandies' and a site plan of the acquired property. Sultan Shah appeared as P.W.2, Umar Said, an officer of DRO Office, Swabi appeared as D.W.1, and Barkatullah an officer of the Project appeared as D. W.2.

5. Finally, the Referee Court enhanced the compensation and fixed it at Rs.10,000 per kanal with 15% compulsory acquisition charges vide judgment and decree dated 26-2-2007. Aggrieved thereof, the Owners and the Government of N.-W.F.P, impugned the same through separate appeals. Hence, the present two appeals.

6. Mr. Abdul Zakir Tareen, Advocate the learned counsel of Owners, rigorously contended that the referee court had determined the compensation of the acquired property much less than the market value of the same and in particular the revenue record and the oral testimony of the independent witness namely the Patwari Halqa', was totally ignored; that the other evidence including the future sales prices of similar land could be taken into account to truly appreciate and determine the "potentiality" of the acquired property, which was not considered by the referee court; and that the compensation be enhanced to Rs.80,000 per kanal and the compulsory acquisition charges compensation be enhanced to 30% and in this regard referred to a `yaksala' relating to `Ghair Mumkin' land wherein the value determined was Rs.58,974.36 per kanal.

7. Mr. Shakirullah Afridi Advocate the learned counsel for the Government of N.-W.F.P., vehemently disputed and aggressively contested the assertions made by the learned counsel for the Owners and contended that the referee court had totally misconstrued the legal purport of the enabling provisions of the Act; that section 23 of the Act, clearly provided that the market value of the property was to be determined based on the value of the property on the date of the Notification and that the enhancement made by the referee court was not in consonance with the evidence relating to the value of the acquired property; and that the acquired property was `Mera' land and `yaksala' being relied upon were of different types of land and should not be considered for the determination of the acquired property.

8. The Valuable arguments of the learned counsel for the parties heard and the available record of the case thoroughly considered.

9. The two most essential issues on which the present appeals hinges are that; (i) whether in determining the compensation of the acquired property only the market value of the same at the time of issuance of Notification has to be considered or future prospects of the said property including future sales prices could also be considered in determination thereof. (ii) whether the "yaksalas' and `panchsalas' were the only guiding consideration for determining the compensation of the acquired property.

10. In regard to the first issue, it would pertinent to note that section 23 of the Act provides as follows:-- "

23. Matters to be considered in determining compensation.--(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 publication of the notification under section 4, subsection (1), secondly, the damage sustained by the person interested, by reason of the taking of any standing crops or trees which may be on the land at the time of the Collector's taking possession thereof; thirdly, the damage (if any) sustained by the person interested, at the time of the Collector's taking possession of the land, by reason severing such land from his other land; fourthly, the damage (if any) sustained by the person interested, at the time of the Collector's taking possession of the land, by reason of the acquisition injuriously affecting his other property, movable or immovable, in any other manner, or his earnings; fifthly, if, in consequence of the acquisition of the land by the Collector, the person interested is compelled to change his residence or place of business, the reasonable expenses (if any) incidental to such change; and sixthly, the damage (if any) bona fide resulting from diminution of the profits of the land between the time of the publication of the of the declaration under section 6 and the time of the Collector's taking possession of the land. (2) In addition to the market-value of the land as above provided, the Court shall in every case award a sum of fifteen per centum on such market-value, in consideration of the compulsory nature of the acquisition." It would be important to note that on 22-8-2001 there has been an amendments introduced in subsection (1) of section 23 of the Act vide N.-W.F.P. Land Acquisition (Amendment) Ordinance, 2001 ("Amendment"). "Firstly, the market-value of the land at the date of the publication of the notification under section 4, sub-section (1)," The above provision of subsection (1) of section 23 of the Act has been substituted through the amendment by the following provision:-- "Firstly, the market-value of the land on the date of taking possession of the land." However, as the present appeals relate to the period prior to the introduction of the amendment, and as the operation of the same has not been expressly provided to be retrospective, the original un-amended provisions of section 23 of the Act would be applicable to the present appeals. In this regard the august Supreme Court of Pakistan has in Province of Sindh v. Ramzan and others (PLD 2004 SC 512) provided us with guiding principles for considering and determining the compensation for acquisition of property under the un-amended provision of section 23 of the Act by holding that; "(8) Section 23 was subsequently amended through West Pakistan Ordinance 49 of 1969 whereby the ambit of matters to be considered was widened and it was in this background that the Courts in the country emphasized the phenomenon of potential value of the land. This term potential value is only a word used for the future uses which the land can be put to. In Malik Aman's case (PLD 1988 SC 32) this court had explained the feature of potential value and had differentiated the same from the term 'market value'. It was held that market value was normally to be taken as one existing on the date of Notification under section 4(1) of the Land Acquisition Act under the principle of willing buyer and willing seller while the potential value was explained to be one to which the similar lands could be put to any use in future (10) Similar view was taken by this court in Land Acquisition Collector Abbottabad v. Muhammad Iqbal (1992 SCMR 1245 at 1255-K). In the case of Pakistan Burmah Shell (1993 SCMR 1700), it was once again reiterated that consideration of market value at the time of Notification under section 4 of the Land Acquisition Act was merely one of the modes for ascertaining the market value and was not absolute yardstick for assessment of compensation. Numerous matters to be considered for determining compensation were elaborately laid down by this Court in Murad Khan's case (1999 SCMR 1647) which was again relied upon in Nisar Ahmad's case (PLD 2002 SC 25). The crux of the matter is that mere classification or nature of land may be taken as relevant consideration but not as absolute one. An area may be `banjar' or `Bar-ani' but its market value may be tremendously high because of its location, neighbourhood, potentiality or other benefits. All these factors, therefore, cannot be ignored. (11) Our attention is invited to a recent judgment of this Court given in the case of Hyderabad Development Authority PLD 2002 SC 84 where the Court has held that the crucial date for determination of market value is the Notification under section 4(1) of the Land Acquisition Act. We do not disagree with it because that verdict pertains to the determination of 'market value' and not to the determination of the compensation. The question of potential value was considered even in that ruling but was not granted because the landowner had not proved the same, being a question of fact." In a more recent case, the august Supreme Court of Pakistan has in Land Acquisition Collector v. Mst. Iqbal Begum (PLD 2010 SC 719) confirmed the aforementioned guiding principles by holding that; "We are not impressed by the contention of the learned Advocate Supreme Court on behalf of the appellants that the determination of compensation should be based merely on the "past sales" for the reason that the potentiality of land cannot be determined without examining its future prospects and, therefore, the compensation cannot be based merely on the basis of "past sales"." In view of the aforementioned clear annunciation of the august Supreme Court of Pakistan, it is now settled that in order to determine the compensation for the acquired property, the determining factor should not only be the "Market" value of sales taking place at the time of Notification but it should also be with reference to the use to which the acquired property was reasonably capable of being put in future. In this regard, future sales could also be taken into consideration, while determining the compensation for the acquired property. Another reason for considering the future sales in determining the compensation for the acquired property is that there are long inordinate delays between the Notification and the actual announcement of Awards. Thus if the future sales are not considered, in cases where the awards are announced after a considerable delay from the date of Notification, the same would surely lead to exploitation of the proprietary rights of the Owners, whose property is being acquired. This aspect was considered by the august Supreme Court of Pakistan in Ministry of Defence v. Syed Wajdi Rizvi (2009 SCMR 105) when it held that: "the notification issued under section 4 in the year 1990 while award delivered on 26-5-1993 after a span of about three years, in which the price of the land increased alarmingly, the fixation of price compensation at 700,000 (seven lac) per kanal by the learned Judges of the High Court cannot be considered to be illegal, so as to require the setting aside of the impugned judgment."

12. Now moving on to 'the next issue. This court has after reviewing the clear dicta of the judgments of the Supreme Court in Rehman Shah v. The Collector Land Acquisition Indus Highway (2005 YLR 1712) set certain guiding principles, which relate to the second issue. The same are that: (a) The amount paid to the land owners in consequence of the proceedings under the Land Acquisition Act, 1894, is not the price of the land acquired, rather it is compensation to the land-owners from whom the property is taken. A willing seller of the property makes up his mind to sell the property after considering his need, the worth of the amount to be paid to him as consideration as well as the uses of the said amount. On the other hand, the land acquired from the landowners is so acquired without the urgent need of the landowners, without their consent, and without any immediate requirement of the land owners for the amount paid in lieu of transfer of that property. The amount of compensation, therefore, should never be less than the sale price of the property in the market, but may be more than that in the circumstances of each case. (b) The compensation is to be paid, keeping in view the date of Notification under section 4 of the Land Acquisition Act, 1894, but the potential value of the property, besides its current market value, is to be kept in view while fixing the amount of compensation. (c) The compensation for agricultural lands which have Commercial or residential potentiality is generally more than the value of the agricultural lands used for only agricultural purposes. The value of such lands, even if Banjar-e-Qadeem or Ghair Mullikin may be more than Shah Nehri or Nal Chahi kinds of land, if such lands are usable for residential or commercial purposes." This court is in agreement with the views expressed herein above, that in determining the compensation for the acquired property, the Collector should not restrict his consideration only to the value of land determined in the Yaksalas' and the Panchsalas' prepared by the Revenue Department. This court finds that' the said values so determined are the guiding factors for determining the "market" value, which should form the bench marks, whereupon the "potential" value of the acquired property has to be determined and developed.

12. In view of the aforementioned discussion on the two essential issues, this court is of the considered view that: (i) in determining the compensation for property being acquired, the "potential" value thereof can and should be considered, which would depend upon the future prospects of the similarly placed property. This can be determined by factors including the sale price or the market value of similarly placed property even E on a future date, subsequent to the Notification but not beyond the announcement of the Award. (ii) the 'yaksalas' and 'punjsalas' can and should not be the only consideration for determining the compensation for the property being acquired under the Act.

13. Now reviewing the evidence produced by the parties on the aforementioned determinations, this court finds that; (I) this court agrees with the submissions of the learned counsel for the Government of N.-W.F.P. that 'yaksala' of 'Ghairmumkin land' relied by the Owners, wherein the Government fixed Rs.58,974.36 per kanal, could not be applied to the acquired property, as the same was 'Mera land' and thus being a different type of land. (II) Admittedly, Notification was published on 8-9-1996, the Award was announced after a delay of three years on 17-6-1998 and it is noted that the 'yaksala' of 'Mera land', being similarly placed area as the acquired property for the year 1997-98, was produced as Exh.RDW.1/6, wherein the "market value" was determined as Rs.18,541.80 per kanal. This 'yaksala' has been' totally ignored by the Referee Judge in determining the compensation for the acquired property. It would thus not be too far to treat the same to be the 'potential value' of the acquired property. Moreover, it would be unfair, if not exploitatery, if the said 'yaksala' is not considered in determining the compensation for the acquired property. (III) The Owners have produced valid and reliable evidence to prove the potential value of the acquired property. In this regard the Patwari Halqa, village Baja, who appeared as P.W. clearly stated that the acquired property was at a distance of 250 feet from the boundary wall of an educational institution. He also stated that there was a road and certain `Khotas' in close proximity to the acquired property. These assertions made by the said witness were never contradicted or confronted by the Acquiring Department during his cross-examination. Hence, the same are to be deemed admitted. Surely, the Site Plan produced by the Patwari Halqa' as Exh.P.W.1/D-6, which was prepared in the presence of the Owners, does not show the educational institute as claimed and admitted by the `Patwari Halqa' during his examination-in-chief. As the said fact was not objected or confronted with or explained during the cross-examination of the said witness, the unrebutted assertions made by the said witness would thus be deemed admitted and prevail. (IV) It would be important to note that even if this court accepts the objection of the acquiring department regarding the educational institution not being in the site plan. The referee court has totally ignored the crucial evidence relating to the potential value of the acquired property, which included the `yaksala' for the year 1997-98 for similarly placed `Mera' land in the locality, J wherein the price was determined at Rs.18,541.82 per kanal the unmatalled road, `khotas' and an educational institute in the close proximity to the acquired property. (V) Thus this court, in view of the clean reliable evidence produced regarding the "potential" value of the acquired property enhance the compensation for the acquired property to Rs.20,000 per kanal the 15% compulsory acquisition charges as already determined by the Referee Court, is maintained.

14. Accordingly, in view of the aforementioned findings, this court holds that the appeal of the Owners being R.F.A. No.153 of 2007 is partially accepted and the compensation for the acquired land is enhanced to Rs.20,000 with the 15% compulsory acquisition charges. While the appeal filed by the Government of N.-W.F.P. being R.F.A. No.156 of 2007 is dismissed. No order as to costs. S.A.K./401/P Order accordingly.