SARDAR MUHAMMAD RAZA KHAN, J.---Involving common question of law and fact, identical judgments and identical awards under Land Acquisition Act, the above civil appeals and civil petition for leave to appeal are taken up together.
2. Landed property measuring about 1450 acres situated in Taluka Kotri, District Dadu was acquired for the public purpose of military installations. Notification under section 4 of the Land Acquisition Act, 1894 was issued on 30-5-1981 but the emergent possession was taken under section 17 of the Act on 20-4-1983 whereas the award under section 11 was rendered on 7-3-1985.
3. The Collector Land Acquisition awarded compensation at the rate of Rs,15,000 per acre keeping in view the existing value of the land based on the principle of supply and demand. The landowners through numerous petitions under section 18 of the Land Acquisition Act challenged the amount of compensation claiming enhancement thereof. The learned Additional District Judge, Kotri by his common judgment, dated 7-1-1997 and another judgment, dated 20-2-1997 accepted the references made to the Court and enhanced the compensation from Rs,15,000 per acre to Rs,50,000 per acre or from Rs,1875 per Kanal to Rs,6,250 per Kanal. The Province of Sindh through Collector, District Dadu and Federation of Pakistan through Military Estates Officer, Hyderabad Circle have challenged such enhancement through petitions converted into appeals while one is a petition where leave is yet to be granted.
4. The leave in two cases, on 25-1-1999 was granted by this Court to consider:
(i) Whether the learned Additional District Judge and the learned Judge in chamber have assessed the above amount of compensation at the rate of Rs,50,000 per acre in consonance with law as enunciated by this Court on the subject?
(ii) Whether the grant of 15% additional compensation per annum from the date of notification under section 4 of the Act i,e, with effect from 30-5-1981 by the Courts below is in consonance with the law?"
5. The main grievance of the learned counsel for the appellants was that while making enhancement of compensation, the learned Referee Judge had brought into consideration certain factors that had occurred after the issuance of Notification, dated 30-5-1981 under section 4 of the Act. According to him, the valuation of the property or the transactions having taken place after the date of issuance of Notification under section 4 of the Act could not be brought under consideration and that for such purpose, the demarcating line was the notification aforesaid.
6. Learned counsel for the respondents landowners strongly opposed the arguments saying that the Collector while awarding compensation is bound to keep in view not only the existing value of the land under Acquisition but also to keep in view the potential value of the land as well.
7. The most important aspect qua the lands compulsorily acquired is, that the mandatory returns proposed to be given to the landowner is the compensation and not the market value. Very section 23 provides for various matters to be brought under consideration while determining compensation. Market value is only one of such matters to be considered by the Collector or Courts. Compensation is a very wider term indicating that the landowners, for various reasons, is to be compensated and not merely paid the price of land which is just an interaction of supply and demand fixed between a willing buyer and willing seller.
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 one 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. Factors for determining compensation of land are not restricted only to the time of the aforesaid Notification but can also relate to period in future and that is why in a large number of cases the 'potential value' has been held to be a relevant factor.
9. This Court had also taken notice of the fact that the announcement of award is sometimes unreasonably delayed after the issuance of Notification under section 4 of the Act. In Malik Aman's case, the period that had elapsed was seven years. Obviously any escalation in the value of property during such period is a potential value of land which must be taken into consideration.
10. Similar view was taken by this Court in Land Acquisition Collector Abbottabad v. Muhammad Iqbal (1992 SCM R 1245 at 1255K). In the case of Pakistan Burmah Shell (1993 SCM R 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 assessm ent of compensation. Numeraous matters to be considered for determining compensation were elaborately laid down by this Court in Murad Khan's case (1999 SCM R 1647) which was again relied upon in Nisar Ahmed'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 `Barani' but its market value may be tremendously high because of its location, neighborhood, 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.
12. Whether, in the instant case, the potential value of the land in dispute is proved or not, is a question answered by the Collector himself in the awards which were announced four years after the issuance of Notification under section 4 of the Act. This delay being an exploitation by itself is further aggravated when we observe the very remarks of the Collector in the award, dated 7-3- 1985 as follows:-- "The value of the land as Agricultural land is low but it is an ideally located land for the purpose of installation of Industries, Commercial Centers and residential Colonies without any efforts and on minimum expenses. It is a high surface land and is free from salinatary and water-logging and is essentially a building site. Between 1975 to 1981 a number of Housing Colonies on its East have been sponsored by private parties which are fully developed, having all the facilities such as water, electricity, roads, sewerage and drinking water. The H.D.A. Has developed first phase of one of the highest housing colony on ultramodern style on its Eastern Border, which is known as Gulshan-e- Shahbaz. The H.D.A. Itself sold its plots at Rs,100 to Rs,125 per Sqr. Yard at the relevant time.
"The Sind University, Liaquat Medical College Hospital, T.B. Santiorium, Railway Workshop and Railway Colony are also close to the land on its North-East. The higl.Ly developed Sind Industrial Area of Kotri with number of Mills, Labour Colonies and Thermal Power Station are on its South at a walking distance. The village Khadda having over 500 houses mostly pacca built with water and electricity facilities, near Bolari Railway Station, is attached to this land on its West. Some of the residents of this land have light connection, and get the drinking water from privately owned wells and tube-wells. The present Government has also dug a well for drinking water. The transportation to and from the land to all parts of the country is most convenient and the residents even presently have no transport problems. The value of the land since 1981, has immensely increased but it was not less than Rs,2 per sq. Ft. Of sma ll plots or Rs,50,000 per acre, for big plots at the time of notification under section 4 of the Act. The Government has itself sold the land in the vicinity at about Rs,50,000 per acre."
13. After recording the above facts and despite being cognizant of the potential value of the land in question, the Collector proceeded further to hold:-- "I award compensation of the land on the basis of its market value with reference to its present actual use only at Rs,15,000/00 per acre and I am not inclined to consider its value for the compensation with reference to its future use and its potential value as ideal building site."
14. It is a well-known principle of law that the Collector while considering the question of compensation is the sole authority to do so and should rather act as an Arbitrator rather than being influenced by any other authority or by his own whims. The Collector himself has elaborately given the potential value of the land in question fully aware of the fact that the Sindh Government had sold similar land for Rs,10 per square yard to Secretary Defence. This price also comes to more or less Rs,50,000 per acre. The learned Court enhancing compensation in hand and the learned High Court upholding such enhancement have rightly appreciated the market value as well as the potential value of the land under acquisition. We have no reason to disagree.
15. The next objection raised by the appellants was that of limitation. It may be pointed out at this juncture that so far as the filing of objection petitions under section 18 of the Land Acquisition Act is concerned those are within time. The appellants have failed to prove that the landowners were present or represented before the Collector at the time when the award was made. They have also failed to prove that a notice from the Collector under section 12(2) of the Land Acquisition Act was issued to the landowners. In the absence of proof of both, the limitation to file objection petition under section 18 of the Land Acquisition Act would be six months.
16. A totally unfounded objection is raised to the effect that the Collector had referred the matter to Court almost after the passage of seven years. Section 18 of the Act is concerned with the filing of the objection petitions within a specified time, before the Collector and not before the Court. With how much of delay the Collector subsequently makes a reference to the Court, is altogether irrelevant for the landowner affectees. Once the objections are within time and once the Collector holds them to be within time and makes a reference to the Referee Court, the question of limitation becomes redundant and should not be gone into by the Referee Court.
17. Lastly, it was contended that an additional amount of 15% per annum of the compensation fixed has illegally been granted. We have given our considered thought to the matter and are of the view that the above additional amount being altogether independent of the one described in subsection (2) of section 23 of the Land Acquisition Act could very well be granted under section 28-A of the Land Acquisition Act as promulgated in the Province of Sindh and inserted by Sindh Government Ordinance 23 of 1984. This in our view is quite an healthy enactment provided in law to check the highhandedness of the acquiring department as well as the acquiring agency who sometimes sleep over the matter after once issuing a Notification under section 4 of the Act and avoid making payment even after the announcement of the award. We have already, in case of Saadi Jafri Zainabi (PLD 1992 SC 472) held that section 28-A added by Land Acquisition (Sindh Amendment) Ordinance 1994 is mandatory in nature. In the instant case the Notification under section 4 of the Act was issued in the year 1981, the awards were made somewhere in the year 1985 and the objection petitions of the landowners were referred by the Collector to the Court more than seven years thereafter. Having no regard for the rights of the people and having dealt with them in such a careless and ruthless manner, they were bound to be checked under section 28-A of the Land Acquisition Act. It is exactly for these eventualities and circumstances that the section was enacted.
18. As a sequel to the above discussion, we find no merit in the appeals and the petition in hand.
Both the appeals are dismissed with costs and leave to appeal is refused in Civil Petition No,561-K of 2002, without costs.
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