Shams Mehmood Mirza, J:-This appeal is filed under section 54 of the Land Acquisition Act, 1894 (the Act) challenges judgment and decree dated 27.06.2015 passed by the trial court whereby the reference filed by the appellant for enhancement of compensation was dismissed.
2. Facts of the case in brief are that the Collector through Notification dated 21.10.1990 issued under section 4 of the Act acquired land measuring 169 Kanals 10 Marlas for the purpose of extensio n of technical area, PAC Kamra Cantonment, which included land measuring 22 Kanal 4 Marla owned by the appellant. After completing the process requirements, award dated 22.01.1994 was announced granting compensation to the appellant as per the following classification of land:
(i) Rs.18664/- per Kanal for Chahi
(ii) Rs.6730.77 per Kanal for Maira/Rakkar
(iii) Rs.1862.69 per Kanal for Ghair Mumkin Feeling dissatisfied by the amount of compensation, the appellant along with other persons filed reference application before the trial court under section 18 of the Act claiming enhancement in the amount of compensation in the following manner: a. Chahi Rs.80,000/- per Kanal b. Maira/Rakkar Rs.60,000/- per Kanal c. Ghair Mumkin Rs.13,000 per Kanal
3. In the first round of litigation, the referee court through its consolidated judgmen t and decree dated 21.10.1997 after evaluating the evidence of the parties found in favour of the appellant and other petitioners by declaring them entitled to receive, inter alia, Rs.33,000/- for Maira/Rakkar land. The respondents filed appeals against the judgment and decree which were accepted and the matter was remanded to the referee court for decision afresh.
In the second round of litigation, the referee court dismissed all the reference applications though consolidated judgment and decree dated 21.12.2002 by holding that the petitioners did not adduce any evidence including one year average sale price of the land in question. This judgment and decree was once again challenged by the appellant by filing an appeal before this Court (RFA No.50 of 2004) which was allowed on 20.05.2015 and the matter was remanded by this Court on the ground that the referee court did not discuss the evidence of the parties, oral or documentary .
4. The following issues were framed by the trial court: ISSUES:
1. Whether the suit is time barred?
2. Whether the plaintif f is estopped by his words and conduct to file the present petition?
3. Whether the petition is bad for non- joinder of necessary parties?
4. Whether the compensation of the suit property as assessed by the Land Acquisition Collector is wrong, illegal, incorrect, if so what is the correct compensation?
5. Relief The trial court after evaluating the eviden ce of the parties once again dismissed the reference application, hence this appeal.
5. Learned counsel for the appellant frankly conceded that the evidence was led by the appellant only in respect of Maira Rakkar land in the shape of three mutations (Exh.P-21, No.22 and Exh.P-25) which show land of identical nature in the village Sulman Makhan was sold for Rs.30,000/-, Rs.35,000/- and Rs.28,000/- per Kanal in the months of June and July 1990. He also referred to an award in respect of land acquired in village was stated in the award that village Suleman Makhan and village Shamsabad were at the similar tract. It was thus argued that this vital piece of evidence was once again ignored by the trial court while dismissing the reference application filed by the appellant.
6. Learned counsel appearing on behalf of respondents, on the other hand, supported the judgment and decree passed by the trial court.
7. Arguments heard and record perused.
8. The most relevant issue is issue No.4 on which the impugned findings were rendered by trial court.
9. The relevant portion of the judgment dealing with the exhibits in question reads as under: The appellant did not produce AKS Shajra pertaining to the acquired Khasras and pertaining to khasras mentioned in the above mentioned mutations in order to prove that whether acquired khasras and khasras mentioned in above mentioned mutations were situated near to each other or adjacent with each other . Naturally in a Mouza different properties situate at difference places. Some properties have less value and some properties situate near town, market, commercial area have higher value, so it was the responsibility and duty of the appellant to prove that acquired property was situated near the places where properties of the relied mutations were situated. So mere production of said mutations does not prove that property of the appellant was not properly compensated by the L.A.C.
10. In our opinion, the trial court completely misdirected itself in arriving at the aforementioned conclusion by excluding from its consideration the evide nce led by the appellant. It is established law that onus to prove the issue shifts once prima facie evidence is led by the plaintif f. In this case, the appellant tendered in evidence Exh.P-21, No.22 and Exh.P-25 which were mutations of the comparable land in the same village. The respondents, on the other hand, did not produce in evidence the Halqa Patwari and also did not establish the basis on which average price of land was determined by the Land Acquisition Collector. This aspect of the matter shall be dealt with in the later part of this judgment as also the question of framing of issue with regard to the determining the fair market value of the acquired land.11. The trial court only looked at the evidence led by the appellant and decided issue No.4 without adverting to the fact that the appellant had led prima facie evidence in support of the averments made in the reference application which was enough to shift the onus on the respondents. It was not appreciated by the trial court that the respondents did not lead any evidence to prove those circumstances, if any, which would disentitle the plaintif f to the relief he was claiming.
12. It is often observed that the trial court approaches the issue of compensation raised in a reference application filed under section 18 of the Act as if the applicant whose land had been acquired is the one who is charged with the duty to prove the enhancement in the quantum of compensation. What is often overlooked by the trial court in dealing with such matters is that award of fair market value is the fundamental right of a party whose land has been acquired. Article 24 of the Constitution of the Islamic Republic of Pakistan, 1973 (the Constitution ) guarantees property rights to the citizens and, inter alia, stipulates that no property shall be comp ulsorily acquired save by the authority of law which provides for compensation. The relevant portions of the said Article read as under:
24. Protection of property rights. (1) No person shall be compulsorily deprived of his property save in accordance with law.
(2) No property shall be compulsorily acquired or taken possession of save for a public purpose, and save by the authority of law which provides for compensation therefore and either fixes the amount of compensation or specifies the principles on and the manner in which compensation is to be determined and given. (emphasis supplied)
The reading of the afore-mentioned provision makes it clear that the law under which compensation is to be paid must (a) fix the amount of compensation; or (b) specify the principles or the manner in which compensation is to be determined and given.
13. Compensation is at the heart of compulsory acquisition for making up the loss to the owner of the land and market value of the acquired asset is the yardstick for calculation of such compensation. Since the acquisition takes place without the willing consent of the owner , its exercise has always generated controversy . This is so because loss of homes and land, community cohesion, livelihood patterns, means of livelihood are the most likely victims when people, individually and collectively , are displaced from their communities, economic, social and cultural settings. Financial compensation in relation to the loss of land only rarely compensates the affected parties as the money paid cannot fully replace what is lost. It is often felt that the value for compensation should include more than the value of the land and improvements. In most countries, therefore, laws are enacted which strive to achieve this aim through a variety of tools.
14. The Act deals with the acquisition of land and gives broad principles for grant of compensation. The assessment of compensation for the acquisition of land is controlled by section 23 of the Act. This provision, therefore, must be the starting point in any consideration of the issue dividing the parties. It, however , does not specify any principle for the grant of compensation by the acquiring agency rather section 23 of the Act stipulates the principles for guiding the courts to determine the compensation in case the person whose land is acquired is aggrieved of the compensation determined by the acquiring agency . The said provision reads as under
23. Matters to be considered in determining compensation.- (1) In determining the amount of compensation to be awarded for land acquired under this Act, the Court shall take into consideration- first, the market-value of the land at the date of the publication of the notification under section 4, sub-section (1).
Explanation- For the purpose of determining the market-value, the Court shall take into account transfer of land similarly situated and in similar use. The potential-value of the land to be acquired if put to a different use shall only be taken into consideration if it is proved that land similarly situated and previously in similar use has, before the date of the notification under sub-section (1) of section 4, been transferred with a view to being put to the use relied upon as affecting the potential value of the land to be acquired: Provided that-
(i) if the market-value has been increased in consequence of the land being put to a use which is unlawful or contrary to public policy that use shall be disregarded and the market-value shall be deemed to be the market- value of the land if it were put to ordinary use; and
(ii) if the market-value of any building has been increased in consequence of the building being so overcrowded as to be dangerous to the health of the inmates, such overcrowding shall be disregarded and the market-value shall be deemed to be the market-value of the building if occupied by such number of persons only as can be accommodated in it without risk of danger to health from overcrowding]. secondly , the damage sustained by the person interested, by reason of the taking of any standing crops or trees which may be on the land at the time of the Collector 's taking possession thereof; thirdly , the damage (if any) sustained by the person interested, at the time of the Collector 's taking possession of the land, by reason of severing such land from his other land; fourthly , the damage (if any) sustained by the person interested, at the time of the Collector 's taking possession of the land, by reason of the acquisition injuriously affecting his other property , movable or immovable, in any other manner , or his earnings; fifthly, if, in consequence of the acquisition of the land by the Collector, the person interested is compelled to change his residence or place of business, the reasonable expenses (if any) incidental to such change; and sixthly, the damage (if any) bona fide 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.
(2) In addition to the market-value of the land as above provided, the Court shall award a sum of fifteen per centum on such market-value, in consideration of the compulsory nature of the acquisition, if the acquisition has been made for a public purpose and a sum of twenty-five per centum on such market-v alue if the acquisition has been made for a Company .
Two extremely important points emerge from the text of section 23 of the Act. The first is that the acquiring agency is required to pay compensation to the landowner and that market value of the land is distinct and separate from damage caused by what is often termed as severance or injurious affection and disturbance costs.
The latter does not constitute the elements of the value of the land under the Act. The second point is that, unlike compensation for the value of the land acquired, compensation for severance, injurious affection and disturbance is not explicitly required to be assessed with reference to the date of issuance of notification under section 4 of the Act. It is, however, sufficient to observe that compensation for severance, injurious affection and disturbance is awarded in respect of matters which often will arise or be quantified after the acquisition of the land. Be that as it may, section 23 of the Act achieves the aim of putting those affected in the same position as they were before the acquisition by granting them market value of the land and additional compensation for severance, injurious affection and disturbance.
15. A cursory perusal of the scheme of the Act shows that publication of preliminary notification and inviting objections is dealt with by section 4 of the Act. The hearing is granted on the objections, if any, raised under section 5A of the Act whereas the determination that the land is required for public purpose is done by issuing declaration in the notification in terms of section 6 of the Act. Section 11 postulates the enquiry and passing of the award by the Collector and while doing so, it requires the Collector to determine (a) the true area of the land (ii) the compensation which in his opinion should be allowed for the land and (iii) the apportionment of the said compensation amongst all the persons known or believed to be interested in the land, of whom, or of whose claim, he has information, whether or not they have respectively appeared before him. Section 12 of the Act states that the award of the Collector shall be final and conclusive evidence as between the Collector and the person interested in respect of the amount of compensation. It has, however , been held that the award is merely an offer to tender the compensation to the owner of the property . If the offer is not accepted, section 18 of the Act grants the owner of the land a statutory remedy for seeking determination of the amount of compensation from the Court.
Sections 4, 5A, 6, 11, 12, 18 and 23 of the Act have been enacted to discharge the constitutional obligation of the State under Article 23 of the Constitution for providing payment of the compensation for acquisition of land, which according to section 23 of the Act shall not be less than the market value of the land. If the Collector wanted to put forth the defense that the procedure prescribed under Sections 4, 5A, 6, 11, 12, 18 and 23 of the Land Acquisition Act has been followed in letter and spirit and that the person whose land has been acquired is not entitled to seek enhancement in the amount of compensation in terms of section 23 of the Act, the burden of proof shall be upon the Collector to justify his stand by necessary pleading and proof.
16. The award of fair market value as compensation for the acquired land is, therefore, as much the duty and responsibility of the acquiring agency as it is the right of the landowner to receive the same. In our experience, the trial court, however , almost always put the onus to receive the fair market value of the land on the landowners who move the court by filing the reference under section 18 of the Act. This, in our opinion, is a wrong practice. The necessary issue which is required to be framed in all reference applications under section 18 of the Act should be as to what is the fair market value of the acquired land and/or the compensation to be awarded to the land owner and the onus to prove the said issue primarily should be on the Collector .
17. Section 18 of the Act provides an opportunity to a person to raise grounds on which the objection to the compensation made in the award is taken and it confers a power upon the referee court to determine the market value of the land which is subject matter of the acquisition. This opportunity to raise objection is not a formality , but it is for effectively exercising the fundamental right guaranteed under Article 24 of the Constitution read with section 18 of the Act for determination by the referee court of the true fair market value of the land under acquisition.
18. The next issue with which the trial courts are often confronted is the determination of the market value of the acquired land. Market value is not defined in the Act and the standard for evalua tion thereof is also not provided therein. It has, however , come to represent as the amount that would have been paid for the land if it had been sold at the date of acquisition by a willing but not anxious seller to a willing but not anxious buyer . In the process of evaluating the market value, any increase or decrease in the value of the land caused by the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired is disregarded. The concept of market value was extensively considered in Spencer v Commonwealth [1907] HCA 82, (1907) 5 CLR 418. Grif fith CJ said: In my judgment the test of value of land is to be determined, not by inquiring what price a man desiring to sell could actually have obtained for it on a given day, i.e., whether there was in fact on that day a willing buyer, but by inquiring 'What would a man desiring to buy the land have had to pay for it on that day to a vendor willing to sell it for a fair price but not desirous to sell?' It is, no doubt, very difficult to answer such a question, and any answer must be to some extent conjectural. The necessary mental process is to put yourself as far as possible in the position of persons conversant with the subject at the relevant time, and from that point of view to ascertain what, according to the then current opinion of land values, a purchaser would have had to offer for the land to induce such a willing vendor to sell it, or, in other words, to inquire at what point a desirous purchaser and a not unwilling vendor would come together.
Similarly Isaacs J said: In the first place the ultimate question is, what was the value of the land on 1st January 1905? All circumstances subsequently arising are to be ignored. Whether the land becomes more valuable or less valuable afterwards is immaterial. Its value is fixed by Statute as on that day. Prosperity unexpected, or depression which no man would ever have anticipated, if happening after the date named, must be alike disregarded. The facts existing on 1st January 1905 are the only relevant facts, and the all important fact on that day is the opinion regarding the fair price of the land, which a hypothetical prudent purchaser would entertain, if he desired to purchase it for the most advantageous purpose for which it was adapted. The plaintif f is to be compensated; therefore he is to receive the money equivalent to the loss he has sustained by deprivation of his land, and that loss, apart from special damage not here claimed, cannot exceed what such a prudent purchaser would be prepared to give him. To arrive at the value of the land at that date, we have, as I conceive, to suppose it sold then, not by means of a forced sale, but by voluntary bargaining between the plaintif f and a purchaser , willing to trade, but neither of them so anxious to do so that he would overlook any ordinary business consideration. We must further suppose both to be perfectly acquainted with the land, and cognizant of all circumstances which might affect its value, either advantageously or prejudicially , including its situation, character , quality , proximity to conveniences or inconveniences, its surrounding features, the then present demand for land, and the likelihood, as then appearing to persons best capable of forming an opinion, of a rise or fall for what reason soever in the amount which one would otherwise be willing to fix as the value of the property .
19. In our jurisdiction, two extremely influential judgments rendered by the Supr eme Court (Province of Punjab through Land Acquisition Collector and another vs. Begum Aziza 2014 SCMR 75 and Land Acquisition Collector , G.S.C, N.T.D.C (WAPDA), Lahore and another vs. Mst. Surraya Mehmood Jan 2015 SCMR 28), after taking into account the entire case law on the subject, have laid down all the essential principles for determining the market value of the acquired land. These principles may be stated as under: a. In determining the quantum of compensa tion the exercise may not be restricted to the time of the aforesaid notification but its future value may be taken into account. b. 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; c. While determining the potentials of the land, the use of which the land is capable of being put, ought to be considered; d. 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. e. 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, acquisitio n injuriously affecting his other property or his earning in conse quence 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 suf fered by an owner on account of compulsory acquisition. f. When the market value is to be determined on the basis of the instances of sale of land in the neighboring locality , the potential value of the land need not be separately awarded because such sales cover the potential value. g. 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 relevan t 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 tremendou sly high because of its location, neighborhood, potentiality or other benefits. h. 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. i. 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. The assumption being that sale is being taken place in open market as if notification of acquisition did not exist. j. 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. k. The sale-deed and mutation entries do serve as an aid to the prevailing market value. l. 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. m. 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. n. 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.
20. The potential value of the land is some instances might pose some problems for determination by the courts.
The Hon'ble Supreme Court in judgment reported as Province of Sindh through Collector of District Dadu and others Vs. Ramzan and others PLD 2004 Supreme Court 512 has attempted to explain and distinguish between 'market value' and 'potential value' with specific reference to section 23 of the Act. It was held thus:
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 the 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 Court s 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 .
21. The Act contains express provision for compensation for disturbance, severance and injurious affection and, therefore, these heads of damages should be excluded from the notion of value to the owner (see Boland v Yates Property Corporation Pty Ltd [1999] HCA 64). In Minister of State for the Army v Parbury Henty and Company Pty Ltd (1945) 70 CLR 459, however , the provisions of Lands Acquisition Act 1906-1934 were in issue which contained no express provision for damage caused by disturbance. Justic e Williams in the said judgment stated: The amount of compensation, being a matter of assessment, can, like damages, be calculated in the light of any subsequent facts to the extent to which they throw light upon the items of value which can properly be taken into account in the calculation, having regard to the circumstances existing at the date of acquisition (Australian Apple and Pear Marketing Board v Tonking (105); McCathie v. Federal Commissioner of Taxation (106)). In the present case it would have been reasonable for the companies, as willing sellers of the proprietary interests acquired by the Minister , to have claimed, not only for the value of the proprietary interests so acquired, but also for what can be compendiously called the expenses of removal into premises at least as commodious and congenial, taking a broad view of the matter , as those of which they were dispossessed. ... A prudent purchaser must have expected that he would have to provide a sum to meet these expenses as a part of the purchase money sooner than fail to obtain the premises (Pastoral Finance Association Ltd. V .The Minister (107)). In other words, in the circumstances, the companies as reasonably willing vendors would have been entitled to demand a price which would enable them to reinstate themselves in equally suitable premises. Another method of calculating the compensation which leads in this instance to the same result is to ascertain what sum is required to reinst ate the person dispossessed in equally convenient buildings on an equally convenient site.
The principle set out in the above judgme nt was impliedly affirmed in the judgment rendered in The Commonwealth v Milledge (1953) 90 CLR 157 in which it was stated as under: There remains the item of the plaintiff's claim described as business disturbance. Though it was considered convenient in this case, as it often is, to deal with this topic as a separate matter, it must always be remembered that disturbance is not a separate subject of compensation. Its relevance to the assessment of the amount which will compensate the former owner for the loss of his land lies in the fact that the compensation must include not only the amount which any prudent purchaser would find it worth his while to give for the land, but also any additional amount which a prudent purchaser in the position of the owner, that is to say with a business such as the owner's already established on the land, would find it worth his while to pay sooner than fail to obtain the land.
But a prudent purchaser in the position of the owner would not increase his price on account of the special advantage he would get by not having to move his business, unless the amount he would have been prepared to pay apart from that special advantage was the value of the land considered as a site for that kind of business.
Disturbance, in other words, is relevant only to the assessment of the difference between, on the one hand, the value of the land to a hypothetical purchaser for the kind of use to which the owner was putting it at the date of resumption and, on the other hand, the value of the land to the actual owner himself for the precise use to which he was putting it at that date.
22. In BHP Billiton Mitsui Coal Pty Ltd v Isdale & Ors [2015] QSC 107, it was stated as under The primary question to be determined is the value of the land taken. The parties are agreed that the appropriate methodology to be applied is the before and after method of valuation. Such an approach has the advantage that it takes into account all elements of severance, injurious af fection and enhancement.
23. In Bwllfa and Merthyr Dare Steam Collieries (1891) v Pontypridd Waterworks Company [1903] AC 426, it was held as follows: If the question goes to arbitration, the arbitrator 's duty is to determine the amount of compensation payable. In order to enable him to come to a just and true conclusion it is his duty, I think, to avail himself of all information at hand at the time of making his award which may be laid before him. Why should he listen to conjecture on a matter which has become an accomplished fact? Why should he guess when he can calculate? With the light before him, why should he shut his eyes and grope in the dark?
24. In reference applications, evidence is often recorded by the trial court at a stage when much time has lapsed from the date of issuance of notice under section 4 of the Act or from the date of the award. The trial court can, therefore, reasonably rely on events that have since taken place in order to at least make a determination regarding the severance or injurious affection and disturbance costs incurred by the landowner . Similarl y, nothing stops the referee court from calling as court witness all the persons who are acqu ainted with the market value of the land including the revenue officials and land registrar who are custodians of the record of sales. If need be, the referee court should not shy from appointing a local commission for holding an inquiry into the market value of the land. For this purpose, professional evaluators on the panel of Pakistan Banking Association can be appointed at the expense of the parties.
25. At this juncture, it may also be noted that the Act and the Land Acquisition Rules, 1983 require the Collector to hold an inquiry on the objections filed by the interested persons for determining the compensation to be awarded.
The Collector in holding the inquiry and passing the award is not constrained to adopt any particular procedure or mode of inquiry . Although the detailed rules of this inquiry to be conducted by the Collector and the guidelines for arriving at the amount of compensation have not been framed, it is obvious that it not meant to be a summary inquiry as the Collector is empowered by virtue of section 14 of the Act to summon and enforce the attendance of witnesses, including the parties interested or any of them, and to compel the produ ction of documents by the same means, and, so far as may be, in the same manner , as is provided in the case of a civil court under the Code of Civil Procedure, 1908. It is thus clear that the inquiry envisaged by section 11 requires opportunity of hearing to the affected persons for adducing evidence and that the Collector ought also to make local enquiries by summoning the revenue officials and the land registrar for ascertaining the market value of the land. There is nothing in the Act that shows that the functions of the Collector can be delegated to other persons. The scheme of Act as it stands today shows that the Collector shall cause public notice to be given for inviting objections as well as claims to compensation from all interested persons who shall appear personally or through agent before him at the given date and time for the purposes of holding inquiry under section 11 of the Act for determination of claims and objections. This notice is also required to be served on the Government department, local authority or Company, as the case may be, for whose benefit land is being acquired, who are expected to attend the enquiry proceedings through a duly authorized representative for the purpose of making objections, if any, to the measurement of the land, claims to any interest in the land or the amount of any compensation. It may be noted that the inquiry under section 11 of the Act is with regard to the ascertaining the amount of compensation and not determination of market value of the land alone, which, as mentioned earlier, are two separate facets of payment to be made by the acquiring agency under section 23 of the Act to the interested persons. Although the Act is silent in this regard, Rule 10 of the Land Acquisition Rules, 1983 lays down that the Commissioner while issuing the Notification under section 5 of the Act shall mention therein, apart from others, the fact that the Collector has carefully and prudently calculated the estimated price of the land sought to be acquired keeping in view
(a) the factors laid down in sections 23 and 24 of the Act;
(b) the classification of the land to be acquired and its location; and
(c) the average market price of similar kind of land similarly located, on the basis of the price prevalent during the period of twelve months preceding the date of publication of Notification under section 4 .
Section 11 of the Act read with Rule 10 thus illustrates that the compensation to be awarded by the Collector should be calculated and determined on the same standards and guiding principles as laid down in section 23 of the Act by proper application of mind. It is, however, observed that the Collector innumerably delegates his function of determination of fixing the market value of the land to the Board of Revenue which in turn constitutes a price assessment committee for arriving at the average price of the land in the area where the acquisition is taking place.
The Collector then mechanically fixes the amount of compensation on the basis of such average price regardless of the vastness of the area under acquisition. It is often held that the doctrine of equality in determination and payment of same compensation for all claimants involved in the same notification is not a good principle. Be that as it may, the proceedings undertaken by the Collector under section 11 of the Act have judicially been held to be administrative or quasi judicial in nature although he decides upon the objections of the interested persons regarding the market value of the land and/or compensation. Another distinction that needs to be kept in mind by the referee court is that the reference application initiated under section 18 of the Act is an independent, original proceeding for determination of the compensation afresh on the basis of the material produced and proved before it by the parties. Notwithstanding the determination by the Collector on the market value of the land and compensation to be allowed, the award is merely an offer to the interested person. Section 19 of the Act furthermore stipulates that the Collector in making the reference application shall state for the information of the court in writing, inter alia, grounds on which the compensation was determined. The material taken into account by the Collector for making his determination about the compensation, however, cannot be considered by the referee court till such time it is duly proved before it. In this respect, the referee court does not act as an appellate court charged with the function of affirming or reversing the findings of the Collector which form the basis of the award rather it has to apply its independent mind in arriving at the amount of compensation to be awarded to the complaining party.
26. Coming back to the merits of the case, the appellant tendered in evidence, amongst others, mutations (Exh.P- 21, No.22 and Exh.P-25) which showed that land of identical nature in the village Suleman Makhan was sold for Rs.30,000/-, Rs.35,000/- and Rs.28,000/- per Kanal in the months of June and July 1990. The respondents, on the other hand, only examined Halqa Patwari as DW-1 who simply produced award dated 22.01.1994 as Exh.R-1. The award in question shows that after the issuance of Notification under section 4 of the Act, the Land Acquisition Collector sought report from the revenue field staff of the mutations executed during 22.10.1989 to 21.10.1990. The Land Acquisition Collector keeping in view of the report of the revenue staff and the previous approval of the Board of Revenue proposed the estimated cost of the land under acquisition and sent it to the Commissioner which was in turn submitted to the Board of Revenue for approval. The estimated cost of land was accorded approval by the Board of Revenue through its letter dated 22.08.1991. It was this price which was approved in the award by the Land Acquisition Collector .
27. The respondents did not produce in evidence any document to prove the average price fixed by the revenue staff. Any official of the Board of Revenue associated with the fixation of the average price was also not produced in evidence. Similarly , the Land Acquisition Collector also chose not to enter the witness box. DW-1 accepted the fact that all the affected persons filed the objections on the average price of the land fixed by the Board of Revenue before the Land Acquisition Collector as was indeed mentioned in the award itself. The award stated that the affected persons raised the objection that the average price fixed by the Board of Revenue was less than the market price. The Land Acquisition Collec tor, as per the contents of the award, dealt with the objection by stating as follows The prices of the land were assessed according to the rules/instructions and there is no justification in the objection raised by the land owners, with regard to the assessment of the average price.
Now this finding of the Collector had no basis in law. He did not meet with the objections that the objectors took in writing before him in any meaningful way rather he accepted as ipse dixit the determination made by the Board of Revenue without realizing that the law enjoined upon him to make his independent decision regarding the market value of the land in question. These glaring omissions were not appreciated by the referee court in its judgment while rejecting the claim put forward by the appellant.
28. The mutations relied on by the appe llant were ignored by the referee court. The reason put forward by the referee court in excluding these mutation s does not appeal to reason. As stated earlier , the respondents did not lead any evidence worth its name to demonstrate that the market value of the land in question was validly and lawfully fixed by the Collector or that the land comprising in the mutations relied upon by the appellant was different to and distinct from the appellant' s land that was the subject matter of the acquisition. The referee court in arriving at the conclusion that "......mere production of said mutations does not prove that property of the appellant was not properly compensated by the L.A.C. " entered into the realm of speculation. The findings of the referee court were not warranted by law and facts of the case.
29. After going through the record and the ratio laid down in judgments reported as Province of Punjab through Land Acquisition Collector and another vs. Begum Aziza 2014 SCMR 75 and Land Acquisition Collector , G.S.C, N.T.D.C (WAPDA), Lahore and another vs. Mst. Surraya Mehmood Jan 2015 SCMR 28, we are of the opinion that the referee court did not proceed on correct premise in rejecting the claim of the appellant. It appears that many persons preferred reference applications which were joined together and conso lidated evidence was recorded.
There are a number of documents including mutations and awards that were tendered in evidence by the parties which also include Aks Shjra, which were not discussed by the referee court. Be that as it may, in view of the law laid down by the Hon'ble Supreme Court in the afore-mentioned judgments, the referee court is not denuded of its powers to itself call in evidence the revenue authorities to ascertain the true location of the land comprising in mutations relied on by the appellant, which mutations otherwise pertained to the period recognized as relevant by section 23 of the Act.
30. In view of what has been stated above, we partially allow this appeal by setting aside judgment and decree dated 27.06.2015 to the extent of fixing Rs.6730.77 as the price for per kanal land Maira/Rakkar with the result that the reference application shall be deemed to be pending before the referee court which shall pass a fresh decision thereon only in respect of claim preferred by the appellant to the extent of Maira/Rakkar land. The referee court shall either itself or on the application of the appellant call additional evidence by summoning the concerned revenue official together with official record for determining the location of the mutations relied on by the appellant. The parties are directed to appear before the referee court on 23.04.2018. The referee court is directed to pass a decision within a period of two months from the date of appearance of the parties. To the extent that this judgment sets aside judgment and decree dated 27.06.2015, all the other terms and conditions thereof shall remain intact.