' M. JAVED BUTTAR, J.---Regular First Appeal No,604 of 1996 and Regular First Appeal No, 282 of 1997 having common questions of law and fact, assailing the judgment, dated 25-4-1996, passed by the Senior Civil Judge, Gujranwala/Referee Court, in a reference under section 18(3) of the Land Acquisition Act, 1894, are being disposed of through this common judgment.
2. Land measuring 12 Kanals, 11 Marlas situated in village Qiampur, Tehsil and District Gujranwala, described in the reference, owned by the appellants, Muhammad Saleem and others of Regular First Appeal No, 604 of 1996 (hereinafter referred as -appellants"), was acquired by the Government of the Punjab for the benefit of National Highway Authority, for the extension of Gujranwala- Rawalpindi bypass by way of construction of additional carriage way. Notification under section 4 of the Land Acquisition Act, 1894 was issued on 19-5-1987 and was published in the Punjab Gazette on 11-6-1987. Provisional award was announced by the Land Acquisition Collector on 1-11-1987 by which compensation for guava trees belonging to the appellants, was assessed at Rs,523,972 and Kinno trees at Rs,352,000. It was ordered that 75% of the assessed amount for the above said fruit trees be paid to appellants. The provisional award regarding trees has not been assailed. The District Collector assessed the compensation for the subject land at the rate of Rs,3708 per Marla but the Board of Revenue worked out the price of the suit land at the rate of Rs,1,646.20 per Marla.
The final award was announced by the Land Acquisition Collector on 16-1-1991 and the compensation for the suit-land was awarded at the rate of Rs,1,646.20 per Marla alongwith 15% compulsory acquisition charges. The appellants, being aggrieved of the determination of the price as worked out by the Land Acquisition Collector, filed a reference under section 18 of the Land Acquisition Act, 1894, which was forwarded to the Senior Civil Judge, Gujranwala. The case of the landowners was that the amount of compensation assessed by the Land Acquisition Collector was grossly inadequate and was an apology to its market value prevalent at the time of its acquisition, as the suit land was situated adjacent to Gujranwala Bypass, it was residential and commercial in character, having immense value. The landowners prayed for fixation of fair compensation. The respondents (appellants in the connected Regular First Appeal No,282 of 1997) resisted the reference by maintaining that amount of compensation of the suit-land was properly and adequately assessed and was congruent with the market price at the time of its acquisition. The learned trial Court framed the following issues on 4-12-1991:
(1) Whether the application is not maintainable under sections 18 and 19 of the Land Acquisition Act, 1894? OPR
(2) Whether the instant application is filed in violation of the statutory provisions of Land Acquisition Act as such the same is not maintainable? OPR
(3) Whether the instant reference is barred by time? OPR
(4) Whether the petition is liable to be dismissed for non-joinder of necessary parties? OPR
(5) Whether the petition is frivolous, vexatious, vague and as such cannot proceed? OPR
(6) Whether the compensation of the disputed land has been inadequately assessed, if so, what is the correct compensation and to what effect? OPA
(7) Relief.
' The learned trial Court, vide its order, dated 2-2-1993, framed the following additional issue No, 4- A: ' Issue No,4-A ' When the possession of acquired land was taken over by the National Highway Authority? OPP
3. The appellants led their respective evidence. Respondents (appellants in the connected Regular First Appeal No,282 of 1997) were given more than a dozen opportunities to produce evidence but they failed and assented themselves from the proceedings of the case. Orders of ex parte proceedings against them were thus passed on 30-1-1996. Their application for setting aside the ex parte proceedings was dismissed on 12-3-1996. The respondents did not assail the orders of ex parte proceedings against them any further.
4. The appellants produced A.W.1 Muhammad Nazir, D.R.A. D.C. Office, Gujranwala, A.W.2, Muhammad Javed, property dealer, wrongly recorded as R.W.1, A.W.3, Muhammad Arshad, Patwari Halka, wrongly recorded as R.W.2 and the appellant, Muhammad Saleem, himself appeared as A.W.4., wrongly recorded as A.W.3.
5. A.W.I., Muhammad Nazir D.R.A. D.C. Office, Gujranwala, did not bring the relevant file.
6. A.W.2., Muhammad Javed, property dealer, stated that in 1986-87 there were petrol pumps, residential settlements and industrial units in existence, around the land in dispute and in the centre only the appellants' area was lying vacant as they would not sell it and the land in dispute adjoined the eastern side of Municipal Committee and the western side of the bypass and in those days (1986-87) the market rate at the place was Rs,25,000 per Marla and at some distance it was Rs,12,500 per Marla.
7. A.W.3., Muhammad Arshad, Patwari produced average sale price of one year (`Aust Yaksala') from 11-6-1986 to 11-6-1987 as Exh.A-1 according to which the average price was Rs,2,635.51 per Marla.
8. A.W.4., Muhammad Saleem, one of the appellants, supported his case. He stated that at the time of the issuance of the notification under section 4 of the Land Acquisition Act, 1894. The rate of the land adjacent to the road near the square (Chowk) was Rs,25,000 to Rs,30,000 per Marla in the year 1982-83 he had sold the land at the rate of Rs,15,000/16,000/17,000 per Marla, which was at a distance of 6/7 acres from the land in dispute towards the west and that by the time the final award was announced, the prices of the land had doubled.
9. The appellants produced the following documentary evidence: Exh.A-1, average sale price (Aust Yaksala) for the period from 11-6-1986 to 11-6-1987 as Rs,2,635.51 per Marla.
' Exh.A-1, letter, dated 7-9-1987 issued by the Deputy Commissioner, Gujranwala to Commissioner, Gujranwala Division, Gujranwala.
' Exh. A-2, provisional award, dated 1-11-1987.
' Exh.A-3, copy of Mutation No,232, dated 29-11-1982 in regard to the sale of land measuring 1 Kanal, 16-1/4 Marlas in Khata No,55, for a consideration of Rs,1,40,000 i.e, at the rate of Rs,3,783 per Marla, ' Exh.A-4, copy of Mutation No,251, dated 26-3-1983 in regard to the sale of land measuring 8-1/4 Marlas in Khata No,21/58, for a consideration of Rs,50,000 i.e, at the rate of Rs,6,061 per Mrala.
' Exh. A-5, copy of Mutation No,269, dated 10-6-1983 in regard to the sale of land measuring 8-1/4 Marlas in Khata No,2158, for a consideration of Rs,45,000 i.e, at the rate of Rs,5,454 per Marla, ' Exh. A-6, copy of Mutation No,270, dated 7-3-1983 in regard to the sale of land measuring 4-1/2 Marlas in Khata No,66/137, for a consideration of Rs,22,000 i.e,, at the rate of Rs,4,889 per Marla, ' Exh.A-7, copy of Mutation dated 24-11-1983 in regard to the sale of land measuring 9-1/2 Marlas in Khata No,50/112, for a consideration of Rs,41,000 i.e, at the rate of Rs,4,316 per Marla, ' Exh.A-8, copy of Mutation dated 20-12-1983 in regard to the sale of land measuring 16-1/2 Marlas in Khata No,65/136 for a consideration of Rs,1,50,000 i.e, at the rate of Rs,9,091 per Marla, Exh.A-9, copy of Mutation No,311, dated 8-8-1985 in regard to the sale of land measuring 1 Kanal in Khata No, 23/60, for a consideration of Rs,85,000 i.e, at the rate of Rs,4,250 per Marla, ' Exh.A-10, copy of Mutation No,317, dated 10-10-1985 in regard to the sale of land measuring 4-1/2 Marlas in Khata No,67/138, for a consideration of Rs,18,000 i.e, at the rate of Rs,4,000 per Maria, ' Exh.A-11, copy of Mutation dated 28-6-1987 in regard to the sale of land measuring 4-1/2 Marlas in Khata No,66/137, for a consideration of Rs,18,000 i.e, at the rate of Rs,4,000 per Marla, ' Exh.A-12, copy of Mutation dated 28-6-1987 in regard to the sale of land measuring 2-1/4 Marlas in Khata No,66/137, for a consideration of Rs,10,000 i.e, at the rate of Rs,4,444 per Marla.
' Exh.A-13, copy of Mutation No,354, dated 3-8-1986 in regard to the sale of land measuring 13 Marlas in Khata No,67/138, for a consideration of Rs,1,00,000 i.e, at the rate of Rs,7,692 per Marla, ' Exh.A-14, copy of Mutation No,363, dated 28-6-1987 in regard to the sale of land measuring 1 Kanal, 6-1/2 Marlas in Khata No,21/58, for a consideration of Rs,1,00,000 i.e, at the rate of Rs,3,773.58 per Marla.
' Exh.A-15, copy of Mutation No,366, dated 28-6-1987 in regard to the sale of land measuring 4-1/2 Marlas in Khata No,73/149, for a consideration of Rs,20,000 i.e, at the rate of Rs,4,444 per Marla.
' Exh.A-16, copy of Mutation No,370, dated 18-6-1987 in regard to the sale of land measuring 1 Marla in Khata No,76/102, for a consideration of Rs,4,000.
' Exh.A-17, copy of Mutation No,223, dated 13-7-1982 in regard to the sale of land measuring 1 Marla in Khata No,55/144, for a consideration of Rs,15,000.
' Exh.A-18, copy of Mutation dated 24-11-1983 in regard to the sale of land measuring 1 Marla in Khata No,73, for a consideration of Rs,17,000.
' Exh.A-19, copy of Mutation dated 24-11-1983 in regard to the sale of land measuring 1 Marla in Khata No,73, for a consideration of Rs,16,000.
' Exh.A-20, copy of Mutation No,378, dated 13-9-1987 in regard to the sale of land measuring 6 Marlas in Khata No,81/157 min, for a consideration of Rs,40,000 i.e, at the rate of Rs,6,667 per Marla, ' Exh.A-21, final Award.
10. The learned trial Court after having heard the arguments of the learned counsel for the parties, vide its impugned judgment and decree, dated 25-4-1996, assessed the compensation payable to the plaintiff/ appellants at the rate of Rs,2,635.51 per Marla and also awarded interest at the rate of Rs,8% from the date of announcement of provisional award i.e, 1-11-1987.
11. The appellants' case is that the rate per Marla determined by the learned trial Court is too low.
The case of the respondents, on the other hand, is that the final award was correctly announced by the Land Acquisition Collector and the rate per Marla determined by him represented the market value and for this purpose they have also assailed the impugned judgment through cross-appeal Regular First Appeal No,282 of 1997.
12. We have heard the learned counsel for the parties and have also seen the record with their help.
13. It is submitted by the learned counsel for the appellants that the trial Court acted illegally in determining the market value at the rate of Rs,2,635.51 per Marla on the basis of the `Aust Yaksala' produced by A.W.3., Muhammad Ashraf, Patwari, while the rest of the evidence produced by the appellants, oral as well as documentary, was completely ignored, it has been stated by A.W.2., Muhammad Javed that the land in dispute adjoins the boundary line of Municipal Corporation, Gujranwala, it is on the bypass road and surrounded by residential colonies, factories, petrol pumps and is suitable for the purposes of construction, that the copies of mutations (Exhs.A-3 to A- 20) produced by the appellants have neither been looked into nor referred by the trial Court and these sale mutations show that market value was much greater than the one arbitrarily determined by the learned trial Court; and that `Aust Yaksala' (Exh.A-1) produced by A.W.3 does not represent the true pricture and is in respect of scattered pieces of land, which are not located on the bypass. It has further been argued by the learned counsel for the appellants that at the time of its acquisition, the land in dispute did not retain its rural character and had become an urban immovable property as it was surrounded by roads, buildings, factories and was bordered on the limits of Municipal Corporation, therefore, merely the reliance on the `Aust Yaksala' was illegal. The learned counsel for the appellants has also placed his reliance on Lal and others v. Muhammad Sharif (PLD 1961 (W.P.) Lahore 47), Fazalur Rehman and others v. General Manager, S.I.D.B. And another (PLD 1986 SC 158), Malik Aman and others v. Land Acquisition Collector and others (PLD 1988 SC 32), Land Acquisition Collector, WAPDA SCARP-VI, and others v. Quresh Muhammad and others (1990 M LD 2133), N.-W.F.P through Collector, Abbottabad Land Acquisition and others v. Haji Ali Asghar Khan and others (1985 SCM R 767), Sardar Abdur Rauf Khan and others v. The Land Acquisition Collecotr/Deputy Commissioner, Abbottabad and others (1991 SCM R 2164), Nisar Ahmed Khan and others v. Collector, Land Acquisition, Swabi and others (PLD 2002 SC 25), Haji Muhammad Yaqoob and another v. Collector, Land Acquisition/Additional Deputy Commissioner, Peshawar (1997 SCM R 1670) and Muhammad Saeed and others v. Collector, Land Acquisition and others (2002 SCM R 407).
14. In Lal and others v. Muhammad Sharif (supra), it was held that where the land in dispute was surrounded by roads or buildings, it no longer remained village immovable property and became a suburb of the town. In Fazalur Rehinan and others v. General Manager, S.I.D.B. And another (supra), it was held that one of the important factors which have to be taken into consideration while determining the market value of the land to be acquired is not merely the reference to the use to which it is being put at time of its acquisition but also to the uses to which it is reasonably capable of being put in future, and the market value is the potential value of the property at the time of acquisition which would be paid by a willing buyer to a willing seller. In Malik Aman and others v. Land Acquisition Collector and others (supra), it was held, that the market value of the land is normally to be taken as existing on the date of publication of notification under section 4(1) of the Land Acquisition Act (I of 1894, yet for determining market value Courts often look at the prices on which similar land was sold during preceding twelve months and similarly potential value of the property is also taken into consideration and, therefore, the factors for determination of market value of land are not restricted only to the time of issuance of notification or any period prior to it but can also relate to period in future and it is for this reason that potential value of the land i.e, the use to which it can be put in future is a relevant factor. It was also held that fact that long period had elapsed between issuance of notification and announcement of award coupled with fact that during thal period prices of land in question had risen sharply, was also a factor which ought to and should have been taken into account while determining value of land for the purpose of compensating the owner. In Land Acquisition Collector, WAPDA SCARP-VI, and others v.
Quresh Muhammad etc. (supra), it was held that inflationary trend and depreciation in currency between the date of notification under section 4 of the above said Act and date of award should not be ignored while determining quantum of compensation for the land acquired. In N.-W.F.P.
Through Collector, Abbottabad Land Acquisition and others v. Haji Ali Asghar Khan and others (supra), the notification of acquisition was issued in 1978 and the award was made two years later and, in the meanwhile, there was upward trend in the prices of land and average market value of the sales of land in village during this period was taken into consideration by the Honourable Supreme Court for determining the compensation payable to the landowners. In Sardar Abdur Rauf Khan and others v. The Land Acquisition Collector/Deputy Commissioner, Abbottabad and others (supra), it was held by the Honourable Supreme Court that while determining the potentials of the land, the use of which the land is capable of being put, ought to be considered and that the market value of the land is normally to be taken as existing on the date of publication of notification under section 4(1) of the Land Acquisition Act but for determining the same, the prices on which similar land situated in the vicinity was sold during the preceding 12 months and not 6-7 years may be considered including other factors like potential value etc. In Nisar Ahmed Khan and others v.
Collector. Land Acquisition, Sawabi and others (supra) the principle of willing purchaser and willing seller laid down in Fazalur Rehman and others v. General Manager, S.I.D.B. And another (supra) was followed and affirmed. In Haji Muhammad Yaqoob and another v. Collector, Land Acquisition/Additional Deputy Commissioner, Peshawar (supra) the evidence produced before the Referee Court showed that the acquired land was surrounded by residential area and was in the municipal limits of a big city and cantonment area. It was held that the acquired land, therefore, had all the characteristics of a potential building site and one year's average sale price of the land in vicinity, preceding the date of notification under section 4 of the Land Acquisition Act, 1894 was only one of the relevant factors for consideration in determining the market value of the land but that alone could not be adopted as the basis for assessment of market value if there was other evidence available on record to establish the potential value of acquired land at a higher rate. In Muhammad Saeed and others v. Collector, Land Acquisition and others (supra) it was held that while enhancing the compensation from Rs,15,000 per Kanal to Rs,40,000 per Kanal High Court had correctly taken into consideration the location of acquired land, sale price of adjoining land. Its potentiality and likelihood of development and improvement, the report of the Local Commission, the evidence on record produced by the land owners not having been controverted satisfactorily, general tendency of the vendees to show smaller amount as to price of land purchased by them than the actual price paid by them in order to avoid imposition of heavy gain tax and the stamp duty, so also the inflationary trends and depreciation in currency in between the date of acquisition and the date of award.
15. The learned counsel representing the respondents/appellants in the cross appeal (Regular First Appeal No,282 of 1997) while attacking the impugned judgment and while supporting the award announced by the Land Acquisition Collector, submitted that the learned trial Court did not give any decision on Issue No,4-A and the decision on the same is necessary for the determination of time from which the interest, if at all, payable to the landowners, and as such the impugned judgment and decree suffer from a basic illegality and that mandatory notice under section 20 of the Land Acquisition Act, 1894 was not served on the District Collector. He has also placed his reliance on Province of Punjab through Collector, District Bahawalpur v. Sheikh Hasan Ali and others (NLR 1994 Revenue 146) and Province of Punjab, Lahore and another v. Shah Rasool and 3 others (1992 CLC67). It has further been argued that if this Honourable Court is going to remand the case back to the trial Court, the respondents ought to be granted an opportunity to produce evidence.
Learned counsel for the appellants, at this stage has submitted that the appellants have no objection if the respondents are given another opportunity to produce evidence in case of remand.
16. The impugned judgment, in our view, suffers from basic defect due to non decisioi, on Issue No,4-A. We are also of the view, on the basis of the relevant law discussed above, that the learned trial Court wrongly and illegally ignored the entire oral evidence and the documentary evidence (Exh.A-3 to Exh.A-20) and the mere reliance on Exh.A-1, average sale price of one year (`Aust Yaksala) was illegal.
17. In view of the above discussion, both these appeals are partly allowed. The impugned judgment and decree, dated 25-4-1996, passed by Senior Civil Judge/Referee Court, Gujranwala is set aside and the case is remanded to the learned trial Court for a fresh decision on merits in accordance with law, keeping in view the observations made in this judgment and at remand, the learned trial Court shall grant a fresh opportunity to respondents (the appellants in the connected Regular First Appeal No, 282 of 1997) to produce evidence and while doing so the appellants/landowners shall also be granted an opportunity to produce additional evidence, if they so desire. There is, however, no order as to costs.