QAZI JAWAD EHSANULLAH, J. This common judgment will decide this and connected RFA Nos.
205/2021, 245/2021, RFA No. 246/2021 and RFA No. 258/2021 because all these appeals are arising out of the Award No. 229/4/LA dated 18.12.2015 forming subject matter of the present lis.
2. Brief facts of the case relevant for the purposes of deciding present appeals are that the Government of Khyber Pakhtunkhwa through Director General, Sports and Youth Affairs, Peshawar has expressed need of acquiring land for the public purpose of setting up a playground in Mauza Katlang, Tehsil Katlang, District Mardan. For the purposes, it has issued a Notification u/s 4 of the Land Acquisition Act, 1894 (the Act) vide Endorsement No. 1823- 31/L.A.Cell dated 30.10.2014. Since possession of land was required urgently, therefore, as per contents of the Award, a Notification under section 17 of the Act was also issued and thereafter formal Award for acquisition of 40 Kanal of Land in the subject Mauza and Khasra numbers (fully detailed therein) was finally issued on 18.12.2015. In the Award, the Land Acquisition Collector had calculated the amount of compensation to be awarded to the landowner @ Rs. 12,4531- per maria solely based upon one-year average sale price. The quantum of compensation as fixed in the Award was objected to by the landowners including the present appellants and pursuant thereto Reference proceedings under section 18 of the Act had commenced before the learned Referee Court. In their pbjcctions, the appellants- landowners had claimed that land forming subject matter of Award was much valuable and that they should have been compensated with the rate of Rs. 200,000/- per marla instead and in some cases ever more. During the course of trial, the objector-landowners have produced as many as 5 witnesses including Patwari Halqa, concerned clerk from the office of Land Acquisition Collector and 3 other private witnesses. The respondents too have produced one official witness on their turn and after that the evidence of the parties was closed. Record further divulges that vide order dated 12.12.2020, the learned Referee Judge has also appointed a Local Commissioner to visit and inspect the spot and submit its reports on the terms of reference noted in the court order of even date.
Upon submission of the report of Local Commissioner, he was examined as CW-1 and thereafter the case was fixed for final arguments and ultimately impugned judgment and decree was passed, whereby the landowners were held entitled to compensation @ 150,000/- per marla instead along with compulsory acquisition charges @ 15% and interest @ 6% per annum from the date of acquiring of possession till final payment. Aggrieved from that, the present appellant- landowners had questioned the said judgment and decree through the appeal in hand and claimed that the compensation of the acquired land be fixed @ Rs. 300,000/-per marla along with interest etc.
3. The main contention of the counsel for the appellant-landowners in all these appeals is that the acquired land is much valuable and precious one; it is surrounded by a metal road and is 500 meters away from main Katlang Bazar, all civic facilities are available in and around the acquired land and its potentiality, value and future prospect are much higher both for residential and commercial purposes. Learned counsel has also referred to a judgment dated 23.10.2017 of this court rendered in RFA No. 36-P/2017, wherein compensation of land acquired from same moza was enhanced and fixed @ Rs. 180,000/- per marla; further contended that location of the land forming subject matter of the present case and the one of RFA No. 36-P/2017 was just the same, as in both the cases the acquired land was situated near the main Katlang bazar etc. In this respect, the counsel has also referred to the report of Local Commissioner tendered in the evidence as CW-1/l, which report according to him has been upheld and accepted by the learned court below.
4. In response, the learned AAG appearing on behalf of the official respondents submits that the compensation amount as fixed in the Award was perfectly in accordance with law as it was based upon ausat yaksala and was quite reasonable and just. 1-le has placed reliance upon the case- law rendered by the Lahore High Court in the case of 'National Highway Authority vs. Bashiran Bibi & others' reported in 2024 MLD 1590. He prayed for setting aside of the decree passed by the learned Referee Court and with that he prayed that the appeals filed by landowners may be dismissed and those filed by the Government may be allowed and accepted. With that he has also stated that the report of Local Commissioner was inconsequential in material particulars; too vague and general and so, according to him, all these cases may be remanded back to the trial court for decision afresh after appointment of new commission and receipt of its report.
5. Heard and record perused with the invaluable assistance of the counsel for the parties. The law relating to the fixation of compensation and its payment to the landowner in !and acquisition cases has recently been expounded quite in detail by the apex court in the case of 'Federal Govt. of Pakistan throukh Ministry of Defence Rawalpindi and others vs. Mst. Zakia Bekunz and others' reported in PLD 2023 SC 277. In this particular judgment, the apex court has identified various guiding principles for calculating and fixing the compensation amount and has also elucidated the constitutional dimension of right to compensation. For the facility of reference, these principles laid down by the apex court in the case-law ibid are reproduced below; "9. This Court, while interpreting Section 23 of the Act has interpreted potential value to mean and include the following factors:
(i) The land has potentiality if it is in close proximity to a residential area, or the municipal limits of a city. Also to be considered is that the acquisition of such land is proof of its potential for development. (Land Acquisition Collector and others v. Abdul Qayyn in Malik and others 1980 SCMR 63).
(ii) The land is not to be valued merely by reference to the use to which it is being put at the time at which its value has to be determined, but also by reference to the uses to which it is reasonably capable of being put in the future; and market-value is the potential value of the property at the time of acquisition which would be paid by a willing buyer to a willing seller, when both are actuated by business principles prevalent in the locality at that time. (Fazalur Rahman and others v. General Manager, S.I.D.B and another PLD 1986 SC 158).
(iii) Revenue record is not conclusive of the value of the land, rather it is the value of the use which the land is capable of and the use of the land in the vicinity. (Sardar Abdur Rauf Khan and others v. The Land Acquisition Collector/Deputy Commissioner, Abbotabad and others 1991 SCMR 2164 and Land Acquisition Collector, G.S.C., N.T.D.C., (WAPDA), Lahore and another v. Mst.
Surraya Mehmood Jan 2015 SCMR 28).
(iv) The Court is to take into consideration the potentialities of the land, which may even include the price escalation, (sic) the issuance of notification under section 4(1) of the Act. (Land Acquisition Collector, Abbottabad and others v. Muhammad Iqbal and others 1992 SCMR 1245) and Sarhad Development Authority, NWFP (now KPK) through COO/CEO (Officio) and others v.
Nawab All Khan and others 2020 SCMR 265).
(v) For determining the price which a willing purchaser would give to the willing seller relying only on past sales is not enough as the value of the land with all its potentialities may be determined by examining local property dealers or other persons who are likely to know the price that the property can fetch in the open market. Where land is acquired near the Highway, its potentiality and future prospects are to be considered (Maqbool Ahmed Fatehally and others v. The Collector, District Lasbella and others 1992 SCMR 2342).
(vi) The possibility of land being used for a different purpose in future and its potential value on account of its situation near the developed area is important. (Province of Punjab through Collector Bahawalpur, District Bahawalpur and others v. Col. Abdul Majeed and others 1997 SCMR 1692).
(vii) 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 but its market value may be tremendously high because of its location, neighbourhood, potentiality or other benefits. The potential uses to which the land can be put to is relevant. (Murad Khan through his widow and 13 others v. Land Acquisition, Collector, Peshawar and another 1999 SCMR 1647).
(viii) Amenities such as roads, water, gas, electricity are relevant as is availability of schools and colleges in the vicinity of the acquired land. Urbanization of the area shows great potentiality of the area. (Ministry of Defence through Secretary, Government of Pakistan and others v. Syed Wajdi Rizvi 2009 SCMR 105 and WAPDA through S.E. Acquiring Cell CRBC Project WAPDA, D.1. Khan and another v. Syed Ali and others 2010 SCMR 82).
10. The sum total of the aforesaid cases is that land must be valued as per its market value which is the price a willing buyer would give to a willing seller and must also include its potential value.
Potential value means the value of the land based on the probability that if developed, considering its location and proximity to residential, commercial or industrial areas with amenities such as roads, water, gas, electricity, communication network and suitability it has the potential to be developed, which will increase its value. The value of land must include the potentiality of the land because this is the value, which the landowners would benefit from if they were able to maintain their ownership over the land. So far as the determination of potential value, there is no mathematical formula, which is applied uniformly in every case. Each case is seen in the context of its own facts but potential value has to be factored along with the market value. The objective is to ensure that the landowner not only gets the actual value of the land at the time it is acquired but also gets the value based on any future prospects attached with the use of land. Consequently, factors such as entries in the revenue record and land classifications cannot form the basis of the compensation as it does not bring out the potential value of the land and it does not factor in future prospects of the land. Although, the Land Revenue Collector is required to classify the land being acquired with its location, under Rule 10 of the Rules, it is not the sole basis for calculating the estimated price of the land under acquisition. It is important to note that this Court has considered the concept of compensation in the case reported as Land Acquisition Collector and others v. Mst. Iqbal Begum and others (PLD 2010 SC 719) and concluded that if a landowner is deprived of their property they must be adequately compensated so as to give gold for gold and not copper for gold. This is the essence of granting potential value. This Court has also held that compensation cannot be based on past sales of similar land in the same vicinity because potentiality cannot be determined without examining future prospects. Hence, compensation is about the value of the land, being its market value plus its potential value, so as to ensure that the landowner is duly compensated. This is fundamental to the process of Award of compensation.
11. The law of acquisition is confiscatory in nature and easily deprives an individual of their property and all rights attached to it. The Constitution of the Islamic Republic of Pakistan, 1973 (Constitution) gives every citizen the right to acquire, hold and dispose of property in every part of Pakistan under Article 23. Property has been interpreted to mean and include a right of proprietorship and includes every possible right or interest abstract or concrete. It includes the right to own, possess and enjoy the property (Pakcom Limited and others v. Federation of Pakistan and others PLD 2011 SC 44). The right to own property being a fundamental right is inclusive of the right to possession, right of control and the right to derive income from the property. Accordingly, the right to own property under Article 23 of the Constitution means the right to own economically productive property associated with agriculture, commerce, industry and business. Hence, it is a source of livelihood and provides economic security to a person. This goes to the underlying right to dignity of an individual and their home, as prescribed in Article 14 of the Constitution. Article 24 of the Constitution protects the right to own property such that no person can be deprived of his property save in accordance with law under Article 24. The exception to this fundamental right as per Article 24 is compulsory acquisition for public purpose, which means that the State can acquire private property for public purpose under the authority of law, which provides for compensation and either fixes the compensation or provides for a mechanism to fix compensation. The Constitution, therefore, mandates that if there is any acquisition by the State, it will be under a Statute, which provides for due process and compensation. So the Constitution has ensured that if acquisition is necessary it comes at a cost, which is compensation. The right to compensation under the authority of a law has a constitutional underpinning that is the protection given to the right to own property. In the context of acquisition it means that a person who owns property has to be compensated on account of being deprived of their property. When a person is deprived of their right to own property, even if in accordance with law, they are deprived of their right to control, possess and earn from that property. And this deprivation is what must be compensated".
6. Another most important tool and principle to reach to a just conclusion in calculating the compensation amount in land acquisition cases has been authoritatively laid down by the apex court in the case of "Land Acquisition Collector, G.S.C, NTDC, (WAPDA), Lahore and another vs. MA Surrava Mehmood Jan" reported in 2015 SCM R 28, wherein it was held as follows; "9. The principles that can be gleaned from the aforesaid judicial precedents are that the term "market-value" as employed in section 23 of the Act of 1894 implies the price that a willing purchaser could pay to a willing buyer in an open market arms length transaction entered into without nay compulsion. Such determination must be objective rather than subjective. While undertaking this exercise, contemporaneous transaction of the same, adjoining or adjacent as well as the land in the same vicinity or locality; in dissenting precedents, may be taken into account. An Award of compensation of a similar, adjacent, adjoining land or in respect of acquired land in the same vicinity of locality cannot be ignored. The classification of land in the Revenue Record cannot be the sole criteria for determining its value and its potential i.e. the use of which the said land can be put, must also be a factor. In this behalf, the use of the land in its vicinity needs to be examined. A bare reading of the provision in question i.e. section 23 of the Act of 1894 reveals that the landowner is entitled to compensation and not just market-value, hence loss or injury occasioned by its severing from other property of the landowner, by change of residence or place of business and loss of profits are also relevant. The delay in the consummation of acquisition proceedings cannot be lost sight of. While conducting the aforesaid exercise, oral evidence, if found credible and reliable can also be taken into account."
[emphasis supplied]
7. When the record of the case is examined in the light of above principles, one reaches to an irresistible conclusion that the primary submission of the Mr. Arif Mehmood Advocate (appearing for appellants' side) canvassed at the bar, is quite genuine when he states that land in the similar muaza was acquired through another Award dated 30.12.2011 and in that case this court has enhanced the compensation to Rs. 180,000/- per marla while deciding RFA No. 36-P/2017 on 23.10.2017. To further examine the identical nature of the land forming subject matter of the present Award and one acquired through the aforesaid Award pertaining to RFA No. 36 ibid, it is quite clear from the record that in both these cases the land was acquired from the same Moza. Perusal of the earlier judgment rendered in RFA No. 36 and the Commission Report EX.CW 1/1 clearly reveals that the two acquired properties were situated in a vicinity proximate to the village abadi and adjacent to the main Katalang Bazar. As regards the land acquired in the present case, the statement of CW-1 as well as his report Ex.CW-1/1 were aptly made mentioned of by the learned Referee Judge in his judgement and was correctly taken note of that the acquired land was Shah Nehri situated on Pathodak road and at a distance of 100 meters away from Abadi of the village, while towards the eastern side the distance between the main bazar and the acquired land was around 500 meters; on the northern side the land was bounded by agriculture land where all civic facilities like electricity, telephone, drinking water etc. were fully available. Primary and Middle schools and D- Type hospital was also in close proximity of acquired land. Therefore, the potentiality of the land in question and its utilization in future both for commercial and residential purposes could not be ruled out.
8. Therefore, the prayer of the appellants' counsel to enhance the compensation from Rs. 150,000/- to Rs. 180,000/- made at the bar is quite reasonable and legitimate one. For this particular enhancement, the appellants are also entitled because the land has been acquired way back in the year 2015 and they were deprived of the possession of the acquired land even prior to the Award but the acquisition proceedings have not been finalized and consummated as yet.
Consummation of acquisition proceedings do not mean that they should be deemed to be concluded and finalized upon announcement of the Award and dispossession of the landowners, but as per the scheme of the Act the process should be considered to have been completed when the compensation is fully paid to the landowners.
9. Resultantly, the appeals filed by the landowners are allowed and accepted and the compensation amount awarded by the learned Referee Judge @ Rs. 150.000/- per marla is enhanced and raised to Rs. 180,000/- per marla and the remaining relief of granting interest @ 6% from the date of possession till payment of compensation and Award of compulsory acquisition charges @ 15% are maintained as of right guaranteed to the landowners by the Act of 1894.
10. Needless to add that grand of interest @ 6 % from the date of taking over the possession of the acquired property is statutory right of the land owner which is recognized by section 34 of the Act[1]. It is in fact penal in nature[2] and is attracted when no amount of compensation is either paid to the land owners or deposited in the court at the time of taking possession from the land owner as envisaged in section 31 of the Act.
11. As regards the appeals filed on behalf of the government, the main contention that has been voiced at the bar by the learned AAG is that the amount of compensation as fixed in the Award dated 18.12.2015 @ Rs. 12,453/- per marla was based upon ausat yaksala and therefore the same may be subscribed to. Said submission of the learned AAG is not tenable in view of law laid down by the apex court in the case of "National Highway Authority v. Rai Ahmad Nawaz Khan and others reported in 2023 SCMR 700 wherein it has been clearly ruled that`basing compensation on a one-year average of the acquired land would defeat the intent of the legislature behind enacting section 23 of the Land Acquisition Act, 1894'. Resultantly, the appeals so filed on behalf of government fail and are accordingly ordered to be dismissed with no order as to cost.
1. Shiekh Muhammad Ilyas Ahrnad & Others v. Pakistan through Secretary Ministry of Defence Islamabad & others' reported in PLD 2016 SCMR 64
2. Mst. Nasrcen Zahra & others v. Multan Development Authority Mardan and others' reported in 2015 SCMR 1440