P L D 1966 Supreme Court 547 (PLP)

MUHAMMAD YAQUB ALI, J.‑This is a certificated appeal by the Province of West Pakistan from the order of the High Court (W. P.), Lahore Bench, made in exercise of its jurisdiction under Article 170 of the late Constitution of 1956 read with Article 2(4) of the Laws (Continuance in Force) Order I of 1958. The facts are not in dispute. In connection with the setting up of a satellite town in the neighborhood of Lyallpur the appellant acquired 142 kanals and 10 marlas of land belonging to M. Salimullah and others respondents herein. Notification under section 4 of the Land Acquisition Act for this purpose was issued on the 20th January 1953, and the declaration of the proposed acquisition published in the official Gazette on the 10th March 1953. Originally it was agreed that in lieu of cash compensation the respondents will be given alternate land, but later on the appellant changed its stand and decided to award cash compensation. Notices under section 9 of the Land Acquisition Act inviting claims for compensation were accordingly issued by the Land Acquisition Collector on the 10th July 19.)

3. The respondents disputed the authority of the appellant to resile by unilateral act from the above agreement and at the same time claimed compensation for the land at Rs. 80,00) per acre. It was averred that the land acquired was situated on the main Lyallpur‑Satiana metalled road, was only two miles away from the centre of the Lyallpur town and fell within the new proposed boundary of Lyallpur municipality. In addition 15 percent on the market value was claimed in consideration of compulsory acquisition as provided in subsection (2) of section 23 of the Land Acquisition Act. While the acquisition proceedings were initiated under the Land Acquisition Act the Land Acquisition Collector at the time of delivering the award invoked the application of subsection (3) of section 66 of the Punjab Town Improvement Act, 1922, added by the Punjab Town Improvement (Amendment) Act (I1 of 1953) and according to the use to which the land was put at the time of issuance of the notification under section 4 assessed its value at Rs. 1,627‑6‑0 per acre and disallowed the claim for 15 percent on market value. Aggrieved by it the respondents moved the High Court of West Pakistan, Lahore Bench, in exercise of its constitutional jurisdiction and asked for quashing the acquisition proceedings among others on the ground that the Punjab Town Improvement (Amendment) Act (II of 1953) being confiscatory in nature was ultra vires of subsection (2) of section 299 of the Government of India Act, 1935, which was to the effect that neither the Federal nor the Provincial Legislature shall have power to make any law authorising the compulsory acquisition for public purposes of any land unless the law provides for the payment of compensation for the property acquired and either fixes the amount of the compensation or specifies the particulars and the manner in which it is to be determined. Subsection (3) of section 66 as added by the Punjab Town Improvement (Amendment) Act (II of 1953) provides that "whenever the Provincial Govern ment acquires land for the purpose of setting up of a satellite town, whether within or beyond the local limits of a municipal committee, or the local authority or trust, or for any other purpose which in the opinion of the Provincial Government is connected with the setting up of the satellite town concerned, the provisions of subsections (1) and (2) shall, as far as possible, apply to such acquisition". Under subsections (1) and (2) of section 66 whenever a municipal committee or other local authority acquires land for the purpose of laying out new public streets or constructing new buildings on such public streets or reclaiming unhealthy or insanitary localities, the Land Acquisition Act shall be deemed to have been modified to the extent indicated in the Schedule to the Punjab Town Improvement Act. Clause 10 of the Schedule makes various amendments to section 23 of the Land Acquisition Act. The relevant clauses being (1) clause 10(2) providing that subsection (2) shall not apply to any land acquired under the Punjab Town Improvement Act viz., that 15 percent on market value will not be allowed and (2) clause 10(3) providing that for the purposes of first clause of subsection (1), the market value of the land shall be the market value according to the use to which the land was put at the date with reference to which the market value is to be determined under the clause. Section 66 of the Punjab Town Improvement Act as it existed before the coming into force of the Government of India Act, 1935, was accommodated by subsection (4) of section 299 as an existing law, but as mentioned above, the respondents objected to its extension to acquisition of land for setting up satellite towns on the ground that it was a confiscatory measure and ultra vires of subsection (2) of section 299 of the Government of India Act. The learned Judges of the High Court relying on the decision of their own Court in the case of Malik Khizar Hayat Khan Tiwana v. Punjab Province (P L D 1955 Lah. 88), that compensation means ren dering of equivalent in money and the decision of this Court in Jibendra Kishore v. The Province of East Pakistan (P L D 1957 S C (Pak.) 9); in which an extract from Nichol's "Eminent Domain" was quoted with approval to the effect that "compensation as used in the Constitution as a limitation upon the power of eminent domain, implies a full and complete equivalent (usually monetary) for the loss sustained by the owner whose land has been taken or damaged"; held the Punjab Town Improvement (Amendment) Act (II of 1953) ultra vires of subsection (2) of section 299 of the Government of India Act in so far as it made the provisions of clause 10 of the Schedule applicable to acquisition of land for purposes of setting up satellite towns. It was said that "introducing a new definition of market value, has the effect of reducing it invariably by superseding the advantage of situation, so that, in a case like the present one, the owners are `compensated' with the payment of about one‑tenth of the real market value". Reliance was placed on the case in which in 1955 the Land Acquisition Collector had acquired land for the National Silk and Rayon Mills, Lyallpur, which was situated at a greater distance from the centre of the town at Rs. 16,245 per acre while the market value of the respondents' land was fixed at Rs. 1,627‑6‑0, per acre. After arguments had been closed and the learned Judges were at the point of pronouncing order in the case the learned counsel for the Provincial Government sought permission to appeal to the provisions of subsection (4‑A) of section 299 of the Government of India Act, 1935, added by Government of India (Second Amendment) Act, 1951. The subsection provides that nothing in subsection (2) shall be construed to invalidate any law having reference either to the administration or acquisition of any property which is or is deemed to be evacuee property under any law for the time being in force or to the remedying of the dislocation in the social and economic life of Pakistan, because of the mass movement of population from and into Pakistan. In substance it was urged that the setting up of satellite towns was intended to remedy housing shortage caused by the influx of refugees from India. Reliance for this purpose was placed on the preamble of the Punjab Town Improvement (Amendment) Act (II of 1953) viz., "whereas it is expedient further to amend the Punjab Town Improvement Act, 1922, in the manner hereinafter appearing with a view to make provision for 'the improvement and extension of towns in the Punjab by setting up satellite towns to relieve congestion in the existing towns caused by the influx of refugees". The learned Judges of the High Court construed sub section (4‑A) of section 299 as protecting laws enacted only to administer properties abandoned by evacuees and to rehabilitate refugees by settling them on the properties of evacuees. The Punjab Town Improvement (Amendment) Act (II of 1953) was therefore not considered to be accommodated by subsection (4‑A). It was observed that it could not have been within the contemplation of the legislature; "to repair dislocation by dislocating the local population" and "to unsettle legitimate interests‑except in the ordinary course . . . . ." In the result a writ of certiorari was issued quashing the proceedings before the Land Acquisition Collector and directing that compensation should be assessed under the general provisions of the Land Acquisition Act. In disputing the correctness of the order of the High Court Mr. S. M. Bashir, the learned Assistant Advocate‑General, firstly urged that apart from the provisions of clause 10 of the Schedule to the Punjab Town Improvement Act, 1922, the award of the Collector was validly made in accordance with the Explanation added to subsection (1) of section 23 of the Land Acquisition Act by the Land Acquisition (Punjab Amendment) Act (XII of 1954). The Explanation is to the effect that for the purpose of determining the market value "the Court shall take into account transfers of land similarly situated and in similar use. The potential value of the land to be acquired if put to a different use shall only be taken into consideration if it is proved that land similarly situated and previously in similar use has, before the date of the notification under section 4(1), been transferred with a view to being put to the use relied upon as affecting the potential value of the land to be acquired". The contention has been raised for the first time in this Court as there is no mention of it either in the judgment of the High Court or in the written statement filed by the appellants to the writ petition. Otherwise too the contention has little merit. The Land Acquisition (Punjab Amendment) Act (XII of 1954) came into force on the! 17th April 1954. The acquisition proceedings in the instant case were initiated with the publication of the notification under section 4 of the Land Acquisition Act on the 20th January 1953, which is the material date for determining the market value of the land. The declaration under section 6 was published in the official Gazette on the 10th March 1953, and claims for compensation under section 9 were invited on the 10th July 1953. Act XII of 1954 which came into force on the 17th April 1954, does not even purport to operate retrospectively. The Explanation relied upon by Mr. S. M. Bashir therefore did not apply in the case. Further the reasons for which the Punjab Town Improvement (Amendment) Act (II of 1953) was held to be violative of subsection (2) of section 299 of the Government of India Act would equally apply to the Land Acquisition (Punjab Amendment) Act (XII of 1954). Moreover as the `Explanation' was not invoked in the acquisition proceedings an inquiry as contemplated in its concluding part was not held. And finally the provisions of subsection (3) of section 66 added by the Punjab Town Improvement (Amendment) Act (II of 1953) being ultra vires of subsection (2) of section 295 of the Government of India Act, the provisions of the Punjab Town Improvement Act did not apply in the case. Subsection (3) of section 1 of the Act reads: 1. .. (3) This section and section 66 shall come into force at once. The Provincial Government may by notification propose to apply the rest of the Act to the whole or any part of any municipality and to any locality adjacent thereto, on such date as may be specified in such notification, and the Act shall come into operation after the lapse of three months unless within that period the municipal committee concerned at meeting convened for the `purpose of considering the application of the Act resolve by a majority of two‑thirds that the Act should not be so applied." The Provincial Government on 3rd February 1944, issued Notification No.62‑C‑44/8987 applying the provisions of the Punjab Town Improvement Act to the Municipality of Lyallpur. Mr. Bashir desired us to construe subsection (3) to the effect that whenever the provisions of the Act are applied to any municipality all adjacent localities are ipso facto included in it. The construction is not only constrained, but leads to anomalous results as it will not be known to which adjacent locality the Act, applies and what are the boundaries of that locality. It thus becomes clear that the Punjab Town Improvement Act did not apply to the acquisition of the respondents' land which was situated outside the Municipality of Lyallpur. It was next urged by the learned Assistant Advocate‑General, that as satellite towns were to be set up to relieve congestion in the existing towns caused by the influx of refugees subsection (4‑A) of section 299 of the Government of India Act gave it protection. No elaborate argument was put in support of the contention, but keeping in view the principle that Courts will lean in favour of constitutionality of laws we have examined the relevant provision of the Government of India Act, the preamble of the Punjab Town Improvement Act and the effect of the modifications in clause 10 of the Schedule reproduced above and come to the conclusion that the protection provided in subsection (4‑A) of section 299 was confined to evacuee laws like the Pakistan (Administration of Evacuee Property) Act, the Rehabilitation Act, the Displaced Persons (Compensation and Rehabilitation) Act, the Displaced Persons (Land Settlement) Act and a number of other similar enactments dealing with evacuee properties. The first part of clause (b) of subsection (4‑A) speaks of "evacuee property" and the second part of "remedying of the dislocation in the social and economic life of Pakistan by the mass movement of population from and into Pakistan". Two kinds of dislocations: were in contemplation, one caused by the migration of non-Muslims who at the time of Independence held a monopoly in trade, business and commerce in territories now constituting Pakistan. Their migration had caused a vacuum. The second dislocation was by influx of refugees into Pakistan. They required shelter and means of sustenance. The remedying measures in both respects were provided by evacuee laws. The Pakistan Rehabilitation Ordinance, 1948, as mentioned by the learned Judges of the High Court opened with an intention "to make' provisions for the restoration and maintenance of the social and economic life of Pakistan and the orderly settlement of persons who had taken refuge therein". In the Pakistan Rehabilitation Act (XII of 1956) the same preamble was repeated and in Ordinance XVII of 1956 which succeeded the Act the words: "circumstances arising out of the mass movement of population from and into Pakistan" were added in the preamble. Similarly the preamble of the Displaced Persons (Compensation and Rehabilitation) Act reads: "whereas it is expedient to provide for the payment of compensation to certain displaced persons for the losses suffered by them on account of expropriation by the: Government of India of their rights in property in India or in any area occupied by India, and the rehabilitation of others and for matters incidental thereto or connected therewith". An examination of the provisions of these laws as well as other evacuee laws enacted from 1947 onward shows that they all aim at remedying dislocation in the social and economic life of Pakistan by utilization of evacuee properties. The learned Judges of the High Court were therefore right in concluding that "as clause (b) of subsection (4‑A) opened with particular reference to the evacuee property the general words which follow in relation to the remedying of the dislocation etc., could not reffer to property which is superior in title to evacuee property". They relied for this purpose on the rule of ejusdem generis that where there are general words following particular and specific words the general words must be confined to things of the same kind as those specified. There is another aspect too. Firstly in the preamble of the Punjab Town Improvement (Amendment) Act (II of 1953), the words "to relieve congestion in the towns caused by the influx of refugees" is a factual statement that satellite towns are to set up to relieve congestion without purporting to invoke the application of clause (b) of subsection (4‑A) of the Government of India Act. Secondly the governing words in the preamble are: "to make provision for the improvement and extension of the towns in the Punjab" and not to "remedying of the dislocation in the social and economic life of Pakistan caused by the mass movement of population from and into Pakistan". We are thus in agreement with the High Court that the Punjab Town Improvement (Amendment) Act (II of 1953) to the extent it applied clause 10 of the Schedule to the main Act to acquisition of land for setting up of satellite towns was ultra vires of sub section (2) of section 299 of the Government of India Act. Compensation for the land acquired in the case must therefore be assessed in accordance with the provisions of the Land Acquisition Act. A further question arose at the hearing whether 15 percent on market value in consideration of compulsory acquisition provided for in subsection (2) of section 23 of the Land Acquisition Act was part of `compensation' or was a `statutory payment'. If it be a part of compensation then the law which purports to take it away is for the aforesaid reason invalid, but if payment of 15 percent on market value is a `statutory payment' and not a part of the `compensation' then it could be said that the limitation placed on the powers of "Eminent Domain" to pay a full and complete equivalent was not applicable to subsection (2) of section 23 of the Land Acquisition Act. The learned counsel for the respondents in order to make out that 15 percent on market value was part of the price of the land relied upon Horn v. Sunderland Corporation ((1941)1 AER480) in which Scott, L. J., quoting from the decision of the House of Lords in Inland Revenue Commissioners v. Glasgow and South Western Railway Company (12AC315) said: "The case finally establishes two principles. The first is that compensation for disturbance is just an element in the price of the land and the second upon which Lord Watson based his opinion is that by `compensation' is meant an equivalent for that which the railway company take and acquire and which the proprietor gives up to them". The learned counsel construed 'disturbance' as `compulsory acquisition' and maintained that 15 percent on market value was apart from the price of the land. 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 of standing crops or trees, loss by reason of severing such land from his other land, acquisition injuriously affecting his other property or his earnings 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 of 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. An important constitutent of owner ship is the right to deal with the property in such manner as the owner may consider it to be in his interest. The owner may, for example, like to retain the property and sell it when the market value has increased. In parting with the property he is, therefore, being deprived of a right and to compensate it, the Legislature has provided a uniform rate of payment at 15 percent on market value. The proviso to subsection (2) of section 23 of the Land Acquisition Act was, therefore, a confiscatory measure and to that extent the Punjab Town Improvement (Amendment) Act (II of 1953) was equally ultra vires of subsection (2) of section 299 of the Government of India Act. For the aforesaid reasons no exception can be taken to the order of the High Court that compensation in the present case should be assessed in accordance with the general provisions of the I and Acquisition Act and not under the Punjab Town Improvement (Amendment) Act (II of 1953). The appeal thus fails and is dismissed with costs. A. H. Appeal dismissed.