2014 PLP 1353 (CLC)

MIAN FASIH-UL-MULK, J.

The points raised for determination in the instant Regular First Appeal filed by the Government of Khyber Pakhtunkhwa in the Works and Services/ Communication and Works Department, Peshawar and others can be summed up to the effect:

That the respondent and other landowners were not entitled to 8% compound interest, as held by the Referee Court, when under Section 34 of the Land Acquisition Act, 1894 (hereinafter called the Act) the grant of such interest is conditioned with failure of the acquiring department to pay or deposit the compensation amount on or before taking possession of the land; and that under the second Proviso to section 31(2) of the Act, the very Reference Petition of respondent was not competent for having received the compensation amount by the respondent and other landowners without any protest.

2. The District Officer Revenue and Estate/Land Acquisition Collector, Swat vide Award No.2412 dated 20-3-2008 acquired certain lands in Moza Chongi, Zara Khela, Illaqa Shamozai, Tehsil Barikot in various khasra numbers. The rate of compensation as fixed in the award was paid to the affectee landowners including respondent. The respondent then filed a Reference Petition under section 18 of the Act for grant of 8% compound interest under section 34 of the Act on the amount of compensation paid to them. The Reference was accepted to the extent that respondent Fazle Wahid was held entitled to such interest per annum for the period from taking possession till the actual payment of compensation instead of claiming the same by the respondent from the date of issuance of notification under section 4 of the Act till decision of the Reference.

3. The learned D.A.-G. argued that the impugned judgment of the Referee Court is not sustainable on two grounds; firstly, that the amount of compensation of the acquired land was duly deposited by the acquiring department with the Land Acquisition Collector; hence the respondent and others were not entitled to grant of such interest under section 34 of the Act; and secondly, that under the second Proviso to section 31(2) of the Act, no person who has received the amount otherwise than under protest shall be entitled to make any application under section 18 of the Act.

4. We have considered the arguments of learned D.A.-G. and are of the view that the interpretations offered by him to sections 34 and 31(2) of the Act are not correct in the circumstances of instant case.

5. The provisions of Land Acquisition Act, 1894 are self-contained as it is a Code in itself providing for a complete procedure and steps which are required to be taken by the authorities concerned, for acquisition of land and payment of compensation. Part II and Part-III of the Act deal with this aspect. Part-II commences with a mandate that the appropriate authority shall issue a notification in terms of section 4 of the Act, where after objections for acquisition are invited by the Collector and he shall conduct an inquiry in accordance with law. Having disposed of the objections after hearing the concerned parties, the Collector is expected to make an award. The possession of the acquired land has to be taken in accordance with the provision of the Act. Part-III deals with the procedure of making a reference to the Court of specified jurisdiction and the procedure to be adopted thereupon. It also spells out what factors are to be taken into consideration by the Court and what should be ignored while determining the compensation.

6. The legislature in its wisdom has laid down the procedures and guidelines which have to be adopted by the authorities concerned and subsequently by the Court of competent jurisdiction in regard to the acquisition of land and payment of compensation thereof. It is expected of the State to pay compensation expeditiously. Thus, it is obligatory on the part of the Court to follow the legislative intent in exercise of its judicial discretion. The legislative intent is of definite relevancy when the Court is interpreting the law. Keeping in view the scheme of the Act, it will not be appropriate either to apply the rule of strict construction or too liberal construction to its provisions. The Act has a unique purpose to achieve, i.e. fulfilment of the various purposes to serve the public interest at large, for which the land has been acquired under the provisions of this Act by payment of compensation with other statutory benefits. The power of compulsory acquisition has an inbuilt element of duty and responsibility upon the State to pay the compensation which is just, fair and without delay. Thus, it will be appropriate to apply the rule of plain interpretation to the provisions of the Act.

7. Admittedly, the Collector Land Acquisition had not granted 8% compound interest on the amount of compensation despite the fact that respondent and other landowners were dispossessed of their properties prior to payment of compensation, for which the affected landowners were entitled under section 34 of the Act. Admittedly, the lands of respondent etc. were taken into possession under section 17 of the Act, i.e. on emergency basis prior to making of the Award and the compensation amount was not deposited with the Court.

8. Under section 31, on making an award under section 11, the Collector shall tender payment of the compensation awarded by him to the persons interested entitled thereto according to the award, and shall pay it to them unless prevented by the contingencies referred to in section 31 itself. It is on the record that though the respondent had received the compensation amount without protest but he had duly raised objection on non-payment of compensation for the trees and crops standing on his land at the time of taking over its possession by the Collector.

9. Under section 34 of the Act, when the amount of compensation awarded is not paid or deposited on or before taking possession of the land, the Collector shall pay the amount awarded with interest thereon at the rate of eight per centum from the time of so taking possession until it shall have been so paid or deposited. A person interested, who is not satisfied with the amount of compensation awarded by the Collector is entitled to receive the amount under protest and could apply to the Collector requiring him to refer the matter to the Court in terms of section 18 of the Act. The Collector is then to make a statement to the Court and the Court is entitled to fix the compensation subject to section 25 of the Act which provides that the amount of compensation awarded by the Court shall not exceed the amount so claimed, or be less than the amount awarded by the Collector under section 11 of the Act.

10. Under section 25(3) of the Act, when the applicant has omitted for a sufficient reason (to be allowed by the Judge) to make such claim, the amount awarded to him by the Court shall not be less than, and may exceed, the amount awarded by the Collector. In this case, neither the compensation amount was deposited by the Collector with the Court after taking possession of the land of respondent and other landowners nor the respondent in his Reference had asked for enhancement in the rate of compensation as they had simply asked for award of interest @ of 8% per centum per annum under section 34 of the Act.

11. The arguments of learned D.A.-G. are therefore without any force as it was not the Collector with whom the acquiring department had to deposit the compensation amount. Under section 34 of the Act, it is the Collector who has to deposit or pay the amount of compensation with the Referee Court and for this purpose the provision of section 31(2) of the Act would not apply, whether the amount of compensation was received by the interested person under protest or not.

12. For the award of compensation under the Act, it has different stages. The first stage occurs when the award is passed. Obviously, the award takes in all the amounts contemplated by section 23(1) and (2) as well as the interest contemplated by section 34 of the Act. The whole of that amount is paid or deposited by the Collector in terms of section 31 of the Act. At this stage, no shortfall in deposit is contemplated, since the Collector has to pay or deposit the amount awarded by him. On the deposit by the Collector under section 31 of the Act, the first stage comes to an end subject to the right of the claimant to notice of the deposit and withdrawal or acceptance of the amount with or without protest. The second stage occurs on a reference under section 18 of the Act. When the reference Court awards enhanced compensation, it has necessarily to take note of the enhanced amounts payable under section 23(1) and section 23(2) and interest on the enhanced amount as provided in section 28 of the Act and costs in terms of section

27. The Collector has the duty to deposit these amounts pursuant to the deemed decree thus passed. The third stage occurs, when appeals are filed in the High Court from the award, or from any part of the award etc.

13. In view of the above discussion, we are of the view that no valid exception could be taken to the well-reasoned findings of the Referee Judge and the Appeal in hand is thus liable to be dismissed. Accordingly, the appeal is dismissed but with no order as to costs. AG/387/P Appeal dismissed.