1. ' MUIIAMMAD HALEEM, J.-This appeal by special leave arises out of the judgment of the former High Court of West Pakistan, Karachi Bench dated 5th of April 1968, upholding the judgment of the District Judge, Karachi,dated 20th of September 1962, rejecting the claim of Col. Abid Hassan for enhancement of the price of the land acquired under the Land Acquisition Act, 1894.
2. ' The facts which have given rise to this appeal are that Colonel Abid Hussain, now represented by his legal representatives,----purchased Survey No, 281 situate nn Deh Tappo Malir, Karachi, measuring 2 acres from an evacuee owner in 1947 which sale was confirmed by the Deputy Custodian of Evacuee Property on 8th of September 1955, for Rs, 14,520. As the government needed this land for a public purpose namely, to lay down a pipeline for the supply' of water to the refugee colony at Malir, Notifications under sections 4 and 6 of the Land Acquisition Act, 1894, were issued for its acquisition. A further notification under section 9 was issued on 1st of September 1954, Colonel Abid Hussain did not participate in the proceedings and'. An ex parse award was made by the Deputy CoMector on 20th of October 1959, awarding Rs, 8,780-4-0 as compensation to him which was less than a rupee per sq. Yd. And 1/8th of the sale price. Colonel Abid Hussain accepted this amount under protest; and as it was inadequate, he filed an application on 30th of November 1959, under section 18 of the Land Acquisition Act, 1894, before the Collector requiring him to refer the matter for the determination of the amount of compensation to the District Judge, Karachi. On such reference being made, the parties led evidence before the District Judge, Colonel Abid Hussain examined Ali Bhai, a Broker, Abdul Wahid and Abdur Rehman while Nisar Ahmad examined on behalf of the respondent. He also produced the sale deed and the order of the Deputy Custodian confirming the sale deed.
3. ' Enhanced compensation was claimed on the ground of its locale as it was situate behind the railway line, near the Grand Hotel which had obviously a potential for being utilised as a building site considering the heavy influx of the refugees and the paucity of the accommodation available although it was an agricultural land. It was next pleaded that the amount awarded was less than the cost of the land and that having regard to the land sold in the vicinity at least Rs, 5 per sq. Yd.
4. Should have been awarded plus the amount of Rs, 4,000 spent for developing the land. The learned District judge held : "All this evidence shows that the applicant, Colonel Abid Hussain, has failed to make out .That the compensation awarded to him under the Award for two acres of land is inadequate or that all the factors which are mentioned under section 23 of the Land Acquisition Act, 1894, were not taken into consideration before this compensation was awarded to him."
5. ' It was further held that the predecessor-in-interest of the appellants had failed to establish the expenditure of Rs, 4,000 in developing the land as he did not file the accounts nor gave the details in regard to it. On appeal the High Court upheld this conclusion.
6. ' Leave to appeal was granted to consider whether the amount of compensation was adequate in the absence of any material on record to justify the assessment of the price of the land at a lower rate than its cost price a t Rs, 1-8-0 per sq, yd.
7. At the time of the acquisition of the land, the Land Contral (Capital of thier Federation) Ordinance, 1948, was in force. There was a restriction on the transfer of land under section 3 of this Ordinance and for this purpose approval of the Central Government was necessary. Under section 4 it was the maket value of the land on the 31st of March 1948, which had to be awarded provided it was lower than its market value on the date of the Notification for acquisition. Therefore, it was also necessary to determine the market value of the land on the 31st of March 1948, apart from its market value on the date of its acquisition. On behalf of the appellant evidence was furnished of the cost price of the land as on 2nd of September 1947, as embodied in the sale deed and the order of the Deputy Custodian confirming it, but the learned District Judge did not advert to it and relied mainly on the evidence of Nisar Ahmad, a Clerk in the office of the Deputy Collector, Karachi, who had testified to the mutations pertaining to the sales of land in the year 1954-55 in the same Deb; and in support of it be had filed copies of Deh Form No, 7 (Exhs. 4/A and 4/B) in which the price of the adjoining lands sold was Rs, 670-7-9, 2381-13-4, 2490-15-7 and 1814-15-8 per acre. He further stated that Mr. A. T.
8. Naqvi, the former Commissioner of Karachi, and Colonel Sikandar Mirza, the former President of Pakistan had sold their land in the adjoiniong Deh Thano at the rate of Rs, 3 per sq. Yd. In the year 1954 which, by an earlier order dated 2nd of April 1952, was converted into Sikni land. He, however, failed to produce any evidence to show the price of the land on 31st of March 1948.
9. ' The learned District Judge did not place reliance on the evidence led on his behalf. In regard to Ali Bhai, it was held that his estimate of the price of Rs, 3-8-0 or Rs, 4 per sq. Yd. In 1954-55 was based on an offer made by Mr. Hashmi in 1961 which could not advance the case of Colonel Abid Hussain, as it could not be regarded as the market value of the land. The evidence of the other two witnesses, namely, Abdul Wahid and Abdur Rehman was also disregarded for the former testified to the market value of the land in the adjoining Deh Thano and the tatter's evidence was of no value as he was his employee.
10. ' The High Court had noted the contention of Colonel Abid Hussain that the land in dispute was purchased in the year 1947 at Rs, 1-8-0 per sq. Yd. But rejected the cost price on the ground that "it is not always the purchase price of a land which would represent the market value at the time of acquisition. At best it would constitute a piece of evidence." However, it failed to occur to the High Court that it was the lower market value of the land which had to be awarded as compensation and, therefore, under section 4 not only the market value of the land on the date of the Notification of acquisition which had to be determined but, also the market value as on 31st of March 1948. The High Court, however, proceeded to examine the market value of 13 acres of land on the basis of the sale transaction between A. T. Naqvi and Abdul Karim which worked out at Rs, 3 per sq. Yd. As total purchase money amounted to Rs, 1,63,494. The High Court, however, deducted Rs, 2 per sq. Yd. From the sale price for the conversion charges and reached the conclusion that thereafter the rate came to Rs, 1 per sq. Yd. Therefore, this was the rate which was held to be the market value of the land and, thereupon, the High Court concluded that "upon this evidence we are satisfied that the order of the learned District Judge was clearly right" as the compensation awarded was also more or less to the same extent.
11. ' Now in deducting Rs, 2 per sq. Yd. From the cost price of the land on account of conversion charges the High Court seems to have overlooked the fact that by doing so the seller had enhanced the potential of the land for it could thereafter he used as a builiding site and we see no logic in deducting this amount from the sale price of Rs, 3 per sq. Yd. particularly when it transpires from the evidence of Nisar Ahmad that the conversion fee was not deposited by the seller and the purchaser had to pay the penalty. In judging the market value of the land the criterion is the "possibility of the land and not its relied possibility that must be considered" as was held by this Court in Nishat Sarhad Textile Mills Ltd. v. Sher Ahmad Khan and others (1), and, therefore, the potential of the land as a building site could not be lost sight of in determining the market value.
12. Considering the fact that there was an embargo on the sale of the land and the absence of the evidence in regard to the sale of the land at Rs, 5 per sq. Yd. it is not possible to accept the market value of the land at Rs, 5 per sq. Yd. However, its cost price in 1947 at Rs, 1-8-0 per sq. Yd. Does show that the predecessor-in-interest of the appellants had in mind its potential as a building site considering its locale; and as for sales in this Deh, there is considerable variance in the cost price and we would, therefore, prefer to accept the price of Rs, 3 per sq. Yd. Paid by Abdul Karim but considering that it was Sikni land when sold we would leave a margin of one rupee per sq. Yd. And fix the market value at Rs, 2 per sq. Yd. At time of its acquisition. As there is no evidence of sales of land in 1948, except for the cost price of the land in 1947, we would take Rs, 2 as its market value in the absence of any evidence as to its lower market value on 31st of March 1948; and award compensation at this rate. Further, as the Deputy Collector had failed to award 15% compulsory acquisition charges on the market value of the land under subsection (2) of section 23 of the Land Acquisition Act, we would award this sum to the appellant in addition to its market value; and as for the interest on the excess sum so awarded, the appellants had failed to claim it at any stage of the proceedings and we would not now entertain it.
13. ' Accordingly, we would allow the appeal with costs throughout and set aside the impugned orders.
(1) PLD 1976 SC 531