Tassaduq Hussain Jillani, J.--This judgment shall dispose of Civil Appeal Nos, 2031 & 2032 of 2001 as they arise out of the same consolidated judgment.
2. Land measuring 5 kanals 17 marlas comprising of Khasra No, 791 (village Ojhri Kalan, Tehsil & District Rawalpindi) was acquired in terms of the notification dated 27.4.1981 and as per the award announced by the Land Acquisition Collector dated 28.3.1985 the compensation/rate of the land was determined as Rs, 77,720/- per kanal. Respondent-land owner challenged the said award under Section 18 of the Land Acquisition Act by filing a reference before the Senior Civil Judge, Rawalpindi, who vide the judgment dated 15.1.1992 enhanced the rate/compensation to Rs,200,000/- per kanal with 15% compulsory acquisition charges. This judgment was challenged in appeal both by the appellants and respondent Mst. Aziza Begum (RFA No, 26/ 1992 filed by Aziza Begum and RFA No, 62/1992 filed by appellants). The learned High Court dismissed the appeal filed by the appellants and allowed the appeal of respondent Aziza Begum i,e, RFA No, 26/1992 and thereby enhanced the rate/compensation of the acquired land to Rs,35000/- per marla i,e, Rs, 700,000/- per kanal with 15% compulsory charges.
3. Learned counsel for the Appellant No, 2 Military Estate Officer, Rawalpindi/Mr. Dil Muhammad Alizai, learned Deputy Attorney General submits that the learned High Court has not correctly appreciated the evidence on record and has enhanced the compensation without there being any cogent evidence led to justify enhancement.
4. Learned counsel for the respondent has defended the impugned judgment.
5. We have considered the submissions made and have gone through the evidence led.
6. Admittedly the suit land is located about 25 kararns away from Murree Road and opposite to the office of Survey of Pakistan. PW-1 Sardar Khan, Deputy MEO admitted in cross-examination that there are shops on one side of the said office as well as on its back; that adjacent to the land is the Ojhri Camp; that across the said camp also there are shops and that on the other side of the road are commercial as well as residential properties including a patrol pump. Muhammad Riaz AW-2 an official of the office of Deputy Commissioner, Rawalpindi, admitted that as per the valuation table issued by the office of the Deputy Commissioner, the commercial land is assessed at Rs, 2,25,000/- per marla whereas the residential land is assessed as Rs, 35000/- per marla in the said area. The valuation table was prepared and notified in terms of Section 27-A of the Stamp Act, 1899. This valuation table by itself may not furnish conclusive evidence qua the value of the property but this can be taken note of particularly in absence of any evidence to the contrary regarding the value of the property and other factors reflected in the evidence with regard to the potential value of the property. While assessing the compensation, the Collector has not only to consider the market value of the land in question but its potential value. The market value is normally taken up 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 the value to which similar lands Could be put to any use in future. Thus in determining the quantum of compensation the exercise may not be restricted to the time of the aforesaid notification but its future value may be taken into account. In Abdur Rauf Khan Vs. Land Acquisition Collector/D.C, (1991 SCMR 2164) this Court while dilating upon the question of rate of compensation laid down following principles germane to Section 23 of the Land Acquisition Act which may be kept in view.
Those are as follows:- "(i) That an entry in the Revenue Record as to the nature of the land may not be conclusive, for example, land may be shown in Girdawari as Maira, but because of the existence of a well near the land, makes it capable of becoming Chahi land;
(ii) That while determining the potentials of the land, the use of which the land is capable of being put, ought to be considered;
(iii) That the market value of the land is normally to be taken as existing on the date of publication of the notification under Section 4(1) of the 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."
7. The afore-referred ratio was reiterated with greater depth in Murad Khan Vs. Land Acquisition Collector (1999 SCMR 1647) wherein the Court found that though the expression "market value" appearing in Section 23 of the Land Acquisition Act has not been defined but its import can be appreciated from the precedent case law. The Court deduced from the precedent case law the following principles:--
(i) The data from which the market value of the land can be estimated is given in Rule 13 of the North-West Frontier Province Circular No, 54 issued presumably under section 55 of the Act.
(Premier Sugar Mills Limited v. Hayatullah Khan (PLD 1956 (W.P.) Pesh. 67).
(ii) The best method to work out the market value is the practical method of a prudent man laid down in Section 3 of the Evidence Act to examine and analyse all the material and evidence available on the point and to determine the price which a willing purchaser would pay to willing seller of the acquired land. "The Land Acquisition Collector, Rawalpindi it Lieut. General Wajid Ali Khan Burki (PLD 1960 (W.P.) Lah. 469).
(iii) Subsection (1) of Section 23 of the Act provides that in determining the amount of compensation the Court shall take into consideration the market value, loss by reason of severing such land from his other land, acquisition injuriously affecting his other property or his earning 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 under 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 maybe suffered by an owner on account of compulsory acquisition. (Province of West Pakistan and another u. M. Salim Ullah and others (PLD 1966 SC 547).
(iv) The best method of determination of the market price of the plots of land under the acquisition is to rely on instances of sale of it near about the dale of notification under Section 4(i) of the Act.
The next best method is to take into consideration the instances of sale of the adjacent lands made shortly before and after the notification. When the market value is to be determined on the basis of the instances of sale of land in the neighbouring locality, the potential value of the land need not be separately awarded because such sales cover the potential value. (Jogendra Nath Chatterjee and others v. State of West Bengal (AIR 1971 Calcutta 458).
(v) it is obvious that the law provides determination of compensation not with reference to classification or nature of land but its market value at the relevant time. No doubt, for determining the market value, classification or the nature of land may be taken as relevant consideration but that is not the whole truth. An-area may be Banjar Qadeem or Barani as in the present case but its market value may be tremendously high because of its location, neighbourhood, potentiality or other benefits. (Pakistan and another v Rehm Dad and another (1980 CLC 574.).
(vi) According to the well-settled principle, while determining the value of the compensation the market value of the land at the time of requisition/acquisition and its potentiality have to be kept in consideration. (Pakistan v. Din Muhammad and others (1983 CLC 1281).
(vii) Consideration should be had to all the potential uses to which the land can be put, as well as all the advantages, present or future, which the land possesses in the hands of the owners. (Mst.
Khatu and others v Barrage Mukhtiarkar, Thatta (PLD 1977 Kar. 203).
(viii) In determining the quantum of fair compensation the, main criterion is the price which a buyer would pay to a seller for the property if they voluntarily entered into the transaction. (Din Muhammad, v. General Manager, Communication and others (PLD, 1978 Lah. 1135).
(ix) The measure of fair compensation is the value of the property in open market which a selle'r voluntarily entering into a transaction of sale can reasonably demand from a purchaser this means that we, have to determine the value of the land in the open market at the relevant time on the assumption that the notification of acquisition did not exist. (Province of Punjab v. Sher Muhammad and another (PLD 1983 Lah. 578).
(x) While determining the value of the land acquired by the Government and the price which a willing purchaser would give to the willing seller, only the 'past sales' should not be taken into account but the value of the land with all its potentialities may also be determined by examining (if necessary as Court witness) local property dealers or other persons who are likely to know the price that the property in question is likely to fetch in the open market. In appropriate cases there should be no compunction even relying upon the oral testimony with respect to market value of the property intended to be acquired, because even while deciding cases involving question of life and death, the Courts rely on oral testimony alone and do not insist on the production of documentary evidence. The credibility of such witnesses would, however, have to be kept in mind and it would be for the Court in each case to determine the weight to be attached to their testimony. It would be useful and even necessary, to examine such witnesses while determining the market prices of the land in questions because of the prevalent tendency that in order to save money on the purchases of stamp papers and to avoid the imposition of heavy gain tax levied on sale of property, people declare or show a much smaller amount as the price of the land purchased by them than the price actually paid. The previous sales' of the land, cannot, therefore, be always taken to be an accurate measure for the determining the price of land intended to be acquired. (Fazalur Rehman and others v. General Manager, S.LD.B. and another (PLD 1986 SC 158).
(xi) The sale-deed and mutation entries do serve as an aid to the prevailing market value.
(Government of Pakistan v. Maulvi Ahmed Saeed (1983 CLC 414).
(xii) It is a well-settled law that in cases of compulsory acquisition effort has to be made to find out what the market value of the acquired land was or could be on the material date. While so venturing the most important factor to be kept in mind would be the complexion and character of the acquired land on the material date. The potentialities it possessed on that date are also to be kept in view in determining a fair compensation to be awarded to the owner who is deprived-of his land as a result of compulsory acquisition under the Act. (Central Government of Pakistan v. Sardar Fakhar-e-Alam and another (1985 CLC 2228).
(xiii) The value of the land of the adjoining area which was simultaneously acquired and for which different formula of compensation has been adopted, should be taken into consideration. (Raza Muhammad Abdullah through his Legal Heirs v. Government of Pakistan and others (1986 MLD 252).
(xiv) The phrase "market value of the land" as used in section 23(1), of the Act means "value to the owner" and, therefore, such value must be the basis for determination of compensation. The standard must be 1.o, subjective standard but an objective one. Ordinarily, the objective standard would be the price that owner willing and not obliged to sell might reasonably expect to obtain from a willing purchaser. The property must be valued not only with reference to its condition at the time of the determination but its potential value must be taken into consideration. (Abdul Wahid and others v. The Deputy Commissioner (1986 MLD 381)."
8. The learned Referee Court neither adverted to the afore-mentioned principles nor appreciated the evidence in proper perspective. There is yet another aspect of the matter which may have a bearing on the value of the property. The notification under Section 4 of the Act was published on 27.4.1981; two corrigenda were issued on 6.10.1982; notification under Section 5 was published on 20.7.1983; the declaration under Section 6 was published on 1.2.1984 and the award was announced on 28.3.1985. Thus it took four years for appellants to complete the acquisition proceedings. The prices may have escalated during this period and this escalation has to be kept in view while assessing the potential value of the land. This is in line with the law laid down by this Court in Province of Sindh Vs. Ramzan (PLD 2004 SC, 512), Abdul Majeed etc. Vs. Muhammad Subhan etc. (1999 SCMR 1245 at 1255) and Pakistan Burma Shell Limited Vs. Province of NWFP etc (1993 SCMR 1700).
9. For what has been discussed above, we are of the view that the judgment of the Lahore High Court is in consonance with the spirit of Section 23 of the Land Acquisition Act and is in accord with the principles laid down by this Court. We do not find any merit in these appeals, which are dismissed with no order as to costs.