' FAISAL ARAB, J.---The present appeal calls in question the judgment of Additional District Judge Badin, whereby the value of agricultural lands of the private respondents acquired for the benefit of appellants was enhanced to Rs,1,20,000 per acre from 95,000 per acre originally fixed by Land Acquisition Officer.
1. The facts of the case are that 5 acres and 1 Ghunta of agricultural lands in Taluka Matli, District Badin belonging to private respondents were acquired in December, 1985 for the appellant, a foreign oil company for the purposes of exploring oil. The said lands are located in Taluka Matli on the road that runs between Matli and Phalkara. The lands are irrigated from a perennial canal and each acre consists of 40 Produce Index Units. Prior to the acquisition of said lands, the lands in question were obtained by the appellant on lease w,e,f, 2-9-1984 at the yearly lease of Rs,13,000 and Rs,18,000 per acre. This lease was to continue uptill 1995. However, soon after taking the lands on lease, the appellant, satisfied with the prospects of striking oil, sought outright acquisition of the lands instead of paying yearly lease to the private respondents.
2. The Land Acquisition Officer determined the compensation at Rs,95,000 per acre. The appellant accepted this rate but the respondent owners sought enhancement before the District Judge, Badin upto Rs,2,60,000 and 3,60,000 per acre i,e, to the extent of 20 times the rate of yearly lease which was being received from the appellant. The Additional District Judge, Badin however enhanced the compensation to Rs,1,20,000 per acre. From Rs,95,000 per acre determined by the Land Acquisition Officer. The private respondents accepted this enhancement but the appellant in the present appeal have questioned this enhancement of Rs,25,000 per acre i,e, from 95,000 per acre to Rs,1,20,000 per acre.
3. While determining compensation at Rs,1,20,000 per acre, the learned Additional Sessions Judge, Badin multiplied the 40 Produce Index Units per acre with Rs,400 per Produce Index Units, thereby reaching at the annual income of Rs,16,000 per acre. Thereafter the learned Additional Session Judge deducted Rs,4,000 towards input costs and 6;000 towards Hari's share and determined the net annual income of Rs,6,000 per acre. After multiplying this net income of Rs,6,000 per acre with 20 years income, he determined the value of the lands at Rs,1,20,000 per acre and decreed the suit to that extent.
4. In the present appeal it is to be seen that on the basis of evidence on record, was the fixation of compensation at Rs,1,20,000 per acre justified?
5. There are several modes of determining compensation of land which include the transactional value of similar lands in the same vicinity as well as ascertaining the yearly rental value of the land and then multiplying this yearly income with 20 times to determine its price. Insofar as the transactional value is concerned the same is the most unreliable mode of determining compensation as it is not unusual that the purchasers in order to avoid stamp duty on the actual transactional value or to conceal the actual sale consideration resort to valuing the lands at the minimum possible price. In this manner an acre of land though may be worth 2 to 3 lacs per acre is shown to be sold for few thousand rupees. One other mode of determining the value of land is by adopting the formula of multiplying the yearly rental of the lands 20 times to reach its value. This mode is the most accurate mode of valuing the land particularly when the lands which are sought to be acquired or any other similar land in the vicinity is already fetching yearly rental income.
6. In the present case it has come in evidence that the lands in question were already obtained by the appellant i,e, the acquiring agency itself, on yearly lease at two different rates i,e, Rs,13,000 per acre per annum and Rs,18,000 per acre per annum. Therefore, adopting the formula of multiplying the yearly rental of lands 20 times of the yearly income in order to arrive at the real value of the land poses no difficulty. This would also obviate the chance of claiming exaggerated yearly rental value as the acquiring agency was itself paying yearly rentals for the lands sought to be acquired.
Now, even if the lowest annual rate of rentals i,e, Rs,13,000 per acre is taken into consideration, the value of land by multiplying it 20 times comes to Rs,2,60,000 per acre. This formula of 'multiplier' of yearly rental income or yearly produce value has been adopted in several cases. This Court, the Madras High Court and the Lahore High Court in the cases reported in AIR 1931 Sind 168, AIR 1949 Mad. 902 and PLD 1960 Lah. 469 at 481 have held that yearly income or yearly rental multiplied by 20 times is the safest method to arrive at the value of the land.
7. In the present case it is an admitted position that the appellant was paying Rs,13,000 to Rs,18,000 per acre annually to the private respondents. These rates were fixed in September, 1984 and lease was to continue till 1995 as deposed by appellant's own witness D.W.2 in his examination-in-chief.
Therefore had the land not been acquired and the appellant continued to pay yearly rentals upto 1995 i,e, for 11 years the land which was on lease for Rs,13,000 would have fetched 1,43,000 and the land which was on lease for Rs,18,000 would have fetched Rs,1,98,000 on account or rental income only over a period of 11 years.
8. These facts also show that more than a year prior to start of the acquisition process, the private respondents were earning annually Rs,13,000 and Rs,18,000 per acre. So this was private respondent's income from the lands when the lands were notified for acquisition in 1985. The method of multiplying annual income of lands 20 times to determine its value would take the value of the land to Rs,260,000 to Rs,360,000 per acre. Even the potential value of the land sought to be acquired is considered to be one of the factors while determining the compensation of land. This has been so held by the Honourable Supreme Court in the case of Gunj Khat000n v. The Province of Sindh reported in 1987 SCMR 2084. In the case of Aman v. Land-Acquisition Controller reported in PLD 1988 SC 32 it was held that factors in determining compensation 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 i,e, the use to which a land can be put in future was held to be a relevant factor. In a relatively recent case of Muhammad Saeed v. Collector, Land Acquisition reported in 2002 SCMR 407 also the Honourable Supreme Court held that future potential of the land was one of the factors to be considered while determining compensation. Therefore even for argument's sake if the actual rental income that was being fetched at the time of acquisition in 1985 is treated to be the potential income which the private respondents were to earn had the lands not been acquired, the value of the land by applying the "Multiplier" formula is determined at Rs,2,60,000 i,e, much more than Rs,1,20,000 which has been determined in the impugned judgment. In the present case however as the private respondents have not questioned the Additional Sessions Judge, Badin's determination at Rs,1,20,000 per acre, which is much less than what could be determined by applying the `Multiplier' formula, the compensation at Rs,1,20,000 per acre cannot be said to be excessive.
9. An objection has been taken by the learned counsel for the appellant that as the private respondents received the compensation determined by the Land Acquisition Officer without any protest and the endorsement on the receipt "with objection" being in different ink has been subsequently inserted in the receipt, the Reference for seeking enhancement of the compensation was not maintainable. Receiving compensation determined by the Land Acquisition Officer and seeking enhancement of compensation under section. 18 of Land Acquisition Act are two different things. The receipt of the amount would not divest a party to seek enhancement in legal proceedings. Furthermore, the receipt is in English whereas the recipient of the cheque is by an illiterate person as is evident from his thumb impression on the receipt. It is not expected that an illiterate person from a rural area would make an endorsement on the receipt that payment is being received "under protest". In any case there exist an endorsement in English which says "with objection". Therefore nothing turns on the fact this endorsement is in different ink. The learned Additional Sessions Judge, Badin has accepted the endorsement "with objection" as having being made at the time of receiving payment, this Court finds no reason to disregard it.
10. After discussing the merits of the determination of compensation, this Court came across several decisions of the Honourable Supreme Court in which it is held that the local authority or the company for whose benefit land is acquired has no right or locus standi to question the determination of compensation by way of reference or appeal.
11. In the case of Pir Khan v. Military Estate Officer, Abbottabad and others, reported in PLD 1987 SC 485, which is held as follows:---
12. "Since under the provisions of the Act only a special and limited appeal is provided for against the award of the Court, which in the facts and circumstances of this case would be availed of by the Provincial Government or. The Collector, no other party, including the appellant herein could avail of the right of appeal. As neither the Provincial Government nor the Collector chose to file an appeal, the appeal filed by the Central Government and the Military Estate Officer was indeed an appeal filed by `stranger', having no locus standi to file it."
12. This view of the Honourable Supreme Court was affirmed by another judgment in the case of Land Acquisition Collector Abbottabad and others v. Muhammad Iqbal and others, reported in 1992 SCMR 1245. Similar views have been taken in the case of Behram Khan and 54 others v. Military Estate Officer and 2 others, reported in 1988 SCMR 1160, Pakistan Steel Mills Corporation Limited and others v. Deputy Commissioner (East), Karachi and others, reported in 1989 SCMR 812, ICA Pakistan Limited v. Salahuddin and others, reported in 1991 SCMR 15 and Iftikhar Hussain Shah and others v.
Pakistan through Secretary, Ministry of Defence, Rawalpindi and others, reported in 1991 SCMR 2193.
Therefore the appellant i,e, Union Texas Pakistan Inc., being the company for whose benefit land was acquired has no locus standi to file the present appeal and hence cannot question the validity of the impugned judgment on any ground. This appeal is therefore dismissed as not maintainable.
13. The Additional Registrar of this Court is directed to seek encashment of Bank Guarantees furnished on behalf of the appellant to cover the decretal amount and thereafter make payment to the private respondents. In case the private respondents consider this amount to be insufficient to cover the entire decretal amount, they shall be free to agitate the matter in execution proceedings.