By this common judgment, the two captioned appeals are decided, as both emanate out of the same land acquisition award dated 26.02.2000, whereby several thousand kanals of land were acquired for the Army Welfare Trust for developing a housing scheme, which is now known as the Defence Housing Authority, Islamabad. The notification under Section 4 of the Land Acquisition Act, 1894 (the Act) was issued a year-and-a-half ago on 19.08.1998. The appellants being dissatisfied with the compensation of Rs. 57,000/- per kanal awarded for their tracts of land in Mauza Humak, filed their reference under Section 8 of the Act, which was dismissed vide the impugned judgment dated 01.02.2010 passed by the Senior Civil Judge, Islamabad.
2. I have heard the learned counsels, perused the record with their able assistance, and now proceed to rule on the key points raised during the submissions. I conclude that the impugned judgment passed by the Senior Civil Judge was severely deficient in applying the principles of compensation that are incontrovertibly settled by judicial precedent of formidable weight with a long and consistent chain of reiteration of those principles by the Supreme Court. While the number of precedents is innumerable, the following judgments in my humble view encompass those principles quite comprehensively: Federal Government of Pakistan vs Mst. Zakia BegumPLD 2023 SC 277 Malik Tariq Mahmood, etc. vs. Province of PunjabCivil Appeal No.914-L of 2013, decided 29.11.2022 Sarhad Development Authority vs Nawab Ali Khan and others2020 SCMR 265 Land Acquisition Collector, G.S.C, N.T.D.C.
(WAPDA), Lahore vs Mst. Surraya Mehmood Jan 2015 SCMR 28 Province of Punjab through Land Acquisition Collector vs Begum Aziza2014 SCMR 75 Land Acquisition Collector vs Mst. Iqbal BegumPLD 2010 SC 719 Fazal Haq College vs Said Rasan and others PLD 2003 SC 480 Province of Sindh and others vs Ramzan and othersPLD 2004 SC 512
3. The overriding principle of compensation is laid down by the Supreme Court axiomatically by saying that a landowner is to be compensated and not merely paid the price of land.[1] It entails arriving at a price that would have been fetched between a willing buyer and a willing seller at the time. This is the market price. The potential value of the land is an attribute of the market price. The Collector, or the referee Court, are to place themselves as nearly as possible in the shoes of the willing parties and ascertain all those factors which would have had a bearing on the price at the time the award was announced. That would be the market price. Bur Both the award and the impugned judgment are silent on this score.
4. In determining the compensation, the award confined itself to 15 mutations for the year preceding the date of the notification under Section 4 of the Act for the purposes of ascertaining the market value of land, and did not at all factor in the transactions that took place between the date of the notification and the award, leading to a failure to determine the correct market value between a willing buyer and a willing seller on the date the award was made. In Sarhad Development Authority, the Supreme Court had the following to say on this point:[2] Precedents reflected a consistent trend to also consider for the purposes of determining the "market value" of property to be acquired, its "potential value" or essentially, the future use to which the said property could be put to. In doing so, there was judicial consensus in considering sale transactions of similar nature of immovable property in the adjoining khasras or even mauzas taking place even after the date of publication of the notification under S. 4(1) of the Land Acquisition Act, 1894, for adjudging the "market value", and in doing so to finally fix the amount of compensation to be awarded to the landowners for the property acquired. (emphasis supplied)
5. Exhibits A4, A5, A6 and A7 in the trial of the reference application leading to RFA No. 83 are mutations and registered sales deeds of November and December 1999, which record the transactions in the same Mauza at about Rs. 27,000/- per marla translating into Rs. 540,000/- per kanal. These mutations do not find mention in the award. The reason given by the learned trial Court in excluding Exhibits A4 to A9 from consideration, namely, that the said lands were not the ones acquired by the respondent or that they were not proven adjacent to the land acquired by the respondent, are quite incomprehensible. The learned trial Court overlooked the point that the said properties were in the same Mauza. The mere fact that the lands were not the ones acquired did not detract from the fact that the lands were in the same Mauza. The following headnote from Zakia Begum illustrates the point well: Question as to whether the acquired land could be treated as one large area for purpose of determining compensation--Held, that measuring the land in small parcels, based on ownership and revenue classifications is to the disadvantage of the landowners because it undermines the potential value particularly when the acquisition is of a large area of land for a single project--In such a situation, the landowners must be given the benefit of the potential value of the entire area being acquired and not just small pieces of land, so as to ensure that the landowners are compensated as per the expected reasonable capacity of land use--Where land is acquired for one project, the potential value of the entire area being acquired is relevant as the very purpose of the acquisition suggests that the land has future prospects. (emphasis supplied)
6. There was no determination in the award of any potential value of the land for the purposes of computing its market value, judicially defined to mean the price between a willing buyer and a willing seller[3] and the use to which the said land could be put. The Collector in his award only took into account the revenue classification of the appellants' land, and that too for only one year,
4. but the judgments are unanimous that classification of the land in the revenue record could not be the sole criterion for determining the market value. For such purpose, the use of the land in the vicinity also needs to be examined. The law is quite settled by now that an area may be Banjar or Barani or another kind, which are all categories for collection of land revenue, but its market value may be tremendously high because of its location, neighbourhood, potentiality, or other benefits, and all such factors were to be taken into account for determining the proper compensation.[5] The Supreme Court reiterated[6] these principles in Malik Tariq Mahmood, etc. v. Province of Punjab (Civil Appeal No. 914-L of 2013 following terms: decided 29.11.2022) in the following: The Court assessing compensation is required to take into consideration not only the present purpose or the present use to which the land is applied but also any other more beneficial purpose to which it might reasonably be put by the owner...
Indubitably, it is true that regard can be had only to the existing conditions and what is likely to happen in reasonably near future and compensation cannot be fixed on the basis of what might happen in the dim and distant future Where there is a reasonable possibility of the land being put to a more profitable use within a reasonable period the same cannot be ignored in assessing its value ... When the land possesses some unusual, special or unique features as to its location or potentialities, due weight must be attached to all these elements......The Court further ought to be liberal in the sense that it should not be too meticulous or pedantic in dealing with the evidence. It is also true that an entry in the revenue record as to the nature of the land may not be conclusive. If the land acquired is found to be useful both for agricultural or non-agricultural purposes, merely on the ground that it was used as agricultural land by the owner till the time of its acquisition, its potentiality as non-agricultural land cannot be ignored.
7. Mouza Humak fell in what was known as the Kahuta Industrial Triangle. It was adjacent to Model Town Humak. AW1 in RFA 82 testified that the land in Humak was Rs. 1 million per kanal. He was not cross-examined and his testimony went un-rebutted. The respondent's witness RWI in RFA No. 83 admitted in his cross-examination that Kahuta road was to the West, GT road to the South, and Islamabad Highway to the East of the acquired land, which lends credence to the appellant's case that the land had much higher potential for the purposes of its market value as between a willing buyer and a willing seller than the reference point of mutations recorded as far back as 1998,-99, which constituted the sole criterion for determining the compensation by the Collector, and the award on the face of it did not factor in the location and the potential commercial or developmental use to which the acquired land could be put.
8. Learned counsel for the respondent sought to argue that the appellants had not produced any evidence to show that their lands were adjacent to the three roads mentioned above, or that the acquired land was adjacent to industrial areas. The Court is very surprised at this brazen argument. It is common knowledge for all residents of Rawalpindi and Islamabad that Mouza Humak is in the vicinity of the industrial area of Islamabad and, for a fact as obvious as that, the Court wonders what other evidence had to be produced for the trial Court to take judicial notice of the location of Mouza Humak.
9. But this point hardly carries any weight because, firstly, the lands did in fact fall within the triangle of the key transport arteries aforesaid and at worst, the land falling further away deeper into the industrial triangle might have commanded a somewhat lesser price, but certainly not the rock-bottom price reflected in the few mutations considered by the Collector and, secondly, because the learned trial Court was empowered to appoint a commission to ascertain the precise location of the appellants' lands once they had raised the ground in their reference application.
This was so because a higher duty is cast on a Court determining a compensation reference because the land acquisition is an extreme instance of the exercise of the coercive power of the State where, as in this instance, people living on their lands for generations spanning centuries are dislodged, and they are often from the disadvantaged segments of the society unable to command top legal resources for digging out and marshaling the paper trails of revenue records, and that too from the very revenue department who rarely seems interested in market-based compensation being awarded. The Supreme Court had the following to say on this point in Malik Tariq Mehmood: Under Article 24 of our Constitution, the landowner has a fundamental right to get fair and just compensation for the land acquired and must, therefore, take all possible steps to protect the landowner from denial of that right, and to do so the law does not restrict it to merely rely on the evidence of the parties, but obliges it to exercise its suomotu powers under Order XXVI, Rule 9, CPC and to obtain the Commission's report on the matters relating to the location, type, and use of the land acquired and its market value.
10. The recognition by the Supreme Court of the protection of the fundamental right of protection of property rights by adequate compensation[7] necessitate that a referee Court ought to visualize its role not as a passive bystander in determining a lis between two private parties, but as a guardian of the fundamental rights of the citizens whose lands are acquired by the State by exercising its coercive power. Inadequate compensation is tantamount to adding insult to injury, and therefore the referee Court must not hesitate to exercise powers vested in it under the Code of Civil Procedure to appoint commissions to ascertain such facts as are brought to its knowledge in the reference application.
11. Learned counsel for the respondent DHA objected that there was a variance in the plaint and the evidence in terms of the prices claimed by the appellants, which would have left the referee Court perplexed as to which was the correct amount to be awarded. This argument does not carry any weight because the referee Court is not meant to simply choose one of the figures given by the petitioners and the acquiring authority, but is meant to apply its mind to come to an appropriate level of compensation. The petitioners in their reference application expressly stated[8] that they were entitled to compensation on the basis of current market value which was not less than Rs. 6 lacs per kanal for the agricultural land and not less than Rs. 2 million per kanal for the land which was adjacent to the Model Village Humak.
12. Another objection raised by the learned counsel was that, under Section 23 of the Act, the cut- off date by which the compensation was to be determined was the date of notification under Section 4 of the Act and subsequent mutations were inadmissible per se. This argument could only be made in utter ignorance of the case law generally and the precedents listed in paragraph 2 above holding that the period between the notification and the date of the award is also to be considered in determining fair compensation.
13. Learned counsel's next objection that the reference application referred to a figure of Rs.
75,000/- per kanal at which DHA was carrying out its purchases directly is neither here nor there, because that number does not in and of itself determine what the market value ought to be. By the same token, the reference application also mentions Rs 6 lacs and Rs 20 lacs as the price reference points for the reasons given therein.
14. In summary, the impugned award merely confines itself to a backward looking price determination exercise limited to a few mutations. This method of determining compensation has long been discarded by the judicial system as inadequate, inequitable, expropriatory, and in breach of the fundamental rights.
15. Resultantly, these appeals are allowed. The impugned judgments of the learned trial Court are set aside. The cases are remanded for decision afresh by the referee Court, which it shall do keeping in view the principles referred in the aforesaid judgments, and ensuring that it exercises all powers vested in it under Order XXVI, Rule 9 (and other enabling rules) of the Code of Civil Procedure, read with Article 161 of the Qanun-e-Shahadat Order, 1984. It shall do so proactively, and not as a passive bystander. It bay also consider granting per annum interest given the prolonged duration for which the appellants remained deprived of a just and fair compensation. Given the inordinate delay that has taken plate in the aforesaid reference, the reference applications are to be decided by the COP learned referee Court within six months from today.
1. Province of Sindh and others vs Ramzan and others (PLD 2004 SC 512).
2. Reiterated in Zakia Begum case.
3. Fazal Haq College v. Said Rasan (PLD 2003 SC 480).
[4]Land Acquisition Collector and Others v. Atst. Iqbal Begum and others (PLD 2010 SC 719), holding that one year prices was only one factor in determining the market price.
5. See Province of Sindh v. Ramzan (PLD 2004 SC 512) and Land Acquisition Collector and Others Mst. Iqbal Begum and others (PLD 2010 SC 719).
6. At paragraph 7 of the judgment.
7. Also see: Sarhad Development Authority v. Nawab Ali Khan (2020 SCMR 265).
8. Para J of the reference application.