' MAMOON RASHID SHEIKH, J.--- This is a regular first appeal calling into question the judgment/decree dated 20.01.2010 passed by the learned Referee Court/the Senior Civil Judge, Lahore, whereby the appellants' Reference under Section 18 of the Land Acquisition Act, 1894 (the Act) in respect of the land/property in question has been dismissed.
2. The facts relevant for the present purposes are to the effect that the Forest Department, Government of the Punjab, has set up a Safari/Forest Park in Mauza Jallo, District Lahore. The said park is known as the Jallo Park. An approach road (the Road) leads from the main Canal Bank Road to the Jallo Park. For the purpose of providing a green belt along both sides of the Road the Forest Department decided to acquire private land/property. A preliminary Notification No,LAC/6047 dated 06.04.1985 gazetted on 10.04.1985 was issued by the then Commissioner, Lahore Division Lahore, under Section 4 of the Act. Subsequent thereto, Notification No,LAC/36 dated 12.09.1985 under Section 17(4) of the Act was issued by the Commissioner which was gazetted on 24.09.1985. Initially it was proposed that the green belt would expand to 200 feet on both sides of the Road thus a total area of 169-Kanals 9-Marlas situated in Mauza Manawan and Mauza Jallo was proposed to be acquired in the public interest. However, owners of the land challenged the acquisition proceedings through W.P.No,4352 of 1985. This petition was disposed of through the order dated 21.12.1987 passed by Mr. Justice M.A. Lone (as he then was) on the basis of a compromise having been effected between the Government and the land owners. As a consequence, the Government agreed to confine the acquisition of land to 75 feet instead of 200 feet on either side of the road provided the land owners/writ petitioners withdrew the writ petition and dropped the other litigation against the Government.
3. As a consequence, Corrigendum Nos.LAC/15398 dated 13.08.1991 and LAC/734 dated 13.01.1992 were issued in the above Notifications and were gazetted on 05.09.1991 and 23.01.1992 respectively with the effect that the land to be acquired was reduced to 67-Kanals 8-Marlas. Out of this land 9- Kanals and 6-Marlas are situated in Mauza Manawan whereas 58-Kanals and 2-Marlas are situated in Mauza Jallo, Tehsil Cantt. District Lahore. The land of the appellants is situated in Mauza Jallo. Subsequent to the publishing of the Corrigenda the appellants are stated to have filed objection petitions before the Land Acquisition Collector. The Award was finally announced on 16.12.2002 whereby despite the appellants' claim for a higher price the Land Acquisition Collector fixed the price of the land in question at the rate of Rs,700/- per Marla for the land situated in Mauza Manawan and Rs,350/- for the land situated in Mauza Jallo with 15% compulsory acquisition charges.
4. Feeling aggrieved the appellants filed the Reference in question against the respondents. On the basis of the pleadings of the parties the learned Referee Court framed the following issues:- "1. Whether the reference is not maintainable and is liable to be dismissed with cost? OPR
2. Whether the Award dated 16.12.2002 has been announced in accordance with the law? OPR
3. Whether the disputed land was acquired for establishment of green belt on either side of approach road to Jallo Park, Lahore? OPP"
4. Whether price assessed by the Land Acquisition Collector is not the market value which is now not less than Rs,90,000/- per marla and the LAC has not assessed the correct value of the land?
OPP
5. Whether the Land Acquisition Collector has not assessed value of trees, building over the land?
OPP
6. Whether the petitioners are entitled to the relief as prayed for on the grounds mentioned in the petition? OPP
7. Relief.
5. During the pendency of the Reference although the respondents filed their defences yet they absented themselves, therefore, ex parte proceedings were initiated against them.
6. The appellants led evidence which went un-rebutted. The learned Referee Court, however, on the basis of the evidence led decided all issues against the appellants with the result that through the impugned judgment/decree dated 20.10.2010 the appellants' Reference was dismissed.
7. The learned counsel for the appellants submits that the learned Referee Court has erred whilst passing the impugned judgment/decree inasmuch as it has not considered the evidence brought on the record.. The learned Referee Court failed to appreciate that the Notification under Section 4 of the Act was gazetted on 10.04.1985 and the Award was announced on 16.12.2002 i,e, after a passage of more than seventeen (17) years. The intervening period which by no stretch of the imagination is a reasonable period should have been factored in by the Land Acquisition Collector as also the learned Referee Court whilst deciding the potential value of the land in the appellants' case. Further submits that the learned Referee Court also failed to appreciate that the respondents had not led any evidence in rebuttal whereas the appellants had brought on record cogent and confidence inspiring evidence both oral and documentary in support of their case. The learned Referee Court, however, failed to appreciate the evidence so brought on the record.
8. Contends that the impugned judgment/decree suffers from misreading and non-reading of evidence. Further contends that it is settled law that whilst assessing the compensation to be awarded to an affectee under Section 23 of the Act the market value of the land is to be taken into consideration. Market value does not mean the actual market value but the potential value of the land/property in question. The market value is only one factor which has to be decided by the Land Acquisition Collector and the Courts. The price should be determined inter alia on the principle that what price a willing purchaser would give to a willing seller. Similarly, if there is an inordinate delay in the publication of the Notification under Section 4 of the Act and announcement of the Award, benefit of the delay is to be given to the affectees. The learned Referee Court has, failed to appreciate these settled principles of law. Relies on "Province of Sindh through Collector of District Dadu and others v. Ramzan and others" (PLD 2004 Supreme Court 512), "Government of N.-W.F.P. v.
Mst. Taj Begum" (2003 MLD 1865) and "Muhammad Saeed and others v. Collector, Land Acquisition and others" (2002 SCMR 407).
9. The learned A.A-G. Submits that the land in question has been acquired for establishing of a green belt on both sides of the road. The land cannot be put to any other use, therefore, the Land Acquisition Collector as also the learned Referee Court have come to the just conclusion as to the compensation to be awarded to the appellants. Further submits that the delay in announcement of the Award in fact was caused by the appellants. A writ petition was filed in the year 1985 which was decided through the order dated 21.12.1987 and the area of the land which was to be acquired was reduced on account of a compromise arrived at between the affectees and the Government of the Punjab. The Corrigenda in the Notifications was issued as a result thereof. Thereafter the process of hearing objection petitions was started by the Land Acquisition Collector, however, different affectees kept on approaching' various Courts and obtained stay orders. The litigation in this respect still continues and it was in this scenario the Award was announced on 16.12.2002.
10. Contends that there is no delay on the part of the Land Acquisition Collector. In fact the delay, if any, was caused by the litigation started initially by the appellants and the other affectees.
11. Further submits that the learned Referee Court after assessing the evidence brought on the record by the appellants came to the right conclusion that the market value of the land in question was as determined by the Land Acquisition Collector.
12. Further submits that the land in any case cannot be put to any other use. Under the law no construction can be raised on the berm of the road as both sides of the road are to be kept clear of all encroachments. As such the land does not have a high value, potential or otherwise.
13. Further contends that the appellants cannot claim a higher rate of compensation as the land till today remains in their possession and they have been deriving benefit therefrom. The appellants, therefore, cannot say that they have been denied possession of the land and have not been adequately compensated. The appellants on the other hand are liable to pay mesne profits to the respondents.
14. Further submits that the learned Referee Court erred by proceeding ex parte against the respondents with the result that the respondents have been condemned unheard. Pleads violation of Article 10-A of the Constitution of the Islamic Republic of Pakistan, 1973.
15. We have considered the arguments of the learned counsel and have also gone through the record. We find that the Notification under Section 4 was gazetted on 10.04.1985 and the Award was announced on 16.12.2002. It is a matter of concern as to why such a long time was taken by the Land Acquisition Collector to hear the objection petitions and announce the Award. The explanation given by the learned A.A.-G. Seems to hold force that the acquisition in question was subject matter of litigation before various Courts and is even to-date under litigation. That reason may be persuasive but at the same time a duty was imposed upon the Land Acquisition Collector to proceed in the matter with reasonable dispatch. We have noted the same pattern in a number of cases where after the publication of the initial Notification under Section 4 of the Act the matter keeps on lingering on and the Award is announced after a number, of years whereas the scheme of the Act envisages prompt action where the land is to be acquired for a public purpose that is construction of a road, school, hospital, etc. The Government and the Acquiring Agencies always plead urgency and issue Notifications under Sections 17(4) and 6 of the Act to take over the immediate possession of the land/property on the grounds that the project is of utmost public importance and is to be completed within a stipulated period, however, at the same time adequate and prompt compensation is not awarded to the affectees.
16. We agree with the contention of the learned counsel for the appellants that while assessing the compensation of the land/property in question the Land Acquisition Collector as also the Courts are to bear in mind that under Section 23 of the Act the market value of the land alone is not to be considered. The potential value of the land/property has to be calculated and/or figured out.
Moreover, if there is a considerable delay between the Notification under Section 4 of the Act and the date of announcement of the Award (which delay in the instant case is more than seventeen
(17) years) then the delay is also to be factored in whilst calculating the potential value of the land/property as prices of the land/property may have escalated during the intervening period. It would, therefore, be unjust to the owner of the land if he is not given the benefit of escalation. There are ample precedents on this point. The latest being the judgment reported as "Province of Punjab through Land Acquisition Collector and another v. Begum Aziza" (2014 SCMR 75). For ease of reference the relevant portion thereof is being reproduced hereunder: -
6. Admittedly the suit land is located about 25 karams away from Murree Road and opposite to the office of Survey of Pakistan. P.W.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 petrol pump. Muhammad Riaz A.W.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,35,000 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 v. 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 v. 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 v. 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 may be suffered by an owner on account of compulsory acquisition. (Province 21' West Pakistan and another v. 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 date 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 seller 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.I.D.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 (1.985 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 no, 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)."
' 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 v. Ramzan (PLD 2004 SC 512), Abdul Majeed etc. v. Muhammad Subhan etc. (1999 SCMR 1245 at 1255) and Pakistan Burma Shell Limited v. Province of N-W.F.P. 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."
17. In the instant case we find that the above principles of law especially the principle relating to factoring in the delay between the Notification issued under Section 4 of the Act and announcement of the. Award have neither been considered nor followed by the Land Acquisition Collector as also the learned Referee Court whilst determining the potential value of the land/property in question. There is an admitted delay of more than seventeen (17) years between the Notification under Section 4 of the Act and the announcement of the Award. Prices of land have indeed escalated during the intervening period. The said escalation has not been factored into the potential value of land as determined by the Land Acquisition Collector. We, therefore, find that the Land Acquisition Collector as also the learned Referee Court have erred in law.
18. We further find that whilst discussing Issues Nos.2 and 4 the learned Referee Court has placed reliance on the findings of the Land Acquisition Collector and has completely ignored the evidence brought on the record by the appellants. We, therefore, feel that the learned Referee Court has erred in law.
19. At the same time we note that the contention of the learned A.A.-G. That since the land has admittedly remained in the possession of the appellants, therefore, they appear to have derived benefit therefrom also has some force. This factor has also not been of taken note by the Land Acquisition Collector and/or the learned Referee Court.
20. We also note that the respondents were proceeded against ex parte before the learned Referee Court. We, therefore, in view of the contention of the learned A.A.-G. That the respondents have been denied the opportunity to set up their defence or to lead evidence, are of the view that in the facts and circumstances of the case the respondents deserve the opportunity of hearing.
21. In view of the above, we set aside the impugned order/decree dated 20.01.2010 and remand the matter to the learned Referee Court for decision afresh.
22. The Reference of the appellants shall be deemed to be pending before the learned Referee Court. The respondents shall be given the opportunity to file their defence to the Reference if not already filed. The appellants as well as the respondents shall be given the opportunity to lead evidence. The learned Referee Court shall on the basis of the evidence so led decide the appellants' Reference in the light of the guidelines given by the Hon'ble Supreme Court in the judgment reported as "Province of Punjab through Land Acquisition Collector and another v.
Begum Aziza" (2014 SCMR 75) and the judgments cited at the bar by the learned counsel for the appellants.
23. In view of the order of remand we hold that the costs of the appeal shall be borne by the parties.
24. We further direct that the learned Referee Court shall decide the Reference within four (4) months from the receipt of the copy of the order/record under intimation to this Court.
25. The office is directed to remit the record forthwith.