NASIM HASAN SHAH, J.-- This judgment will dispose of Civil Appeal No K-143 of 1980 and Civil Appeal No.K-144 of 1980, as both are directed against a common judgment passed by the Sind High Court.
2. The appellants, in both the above-mentioned appeals, were the owners of certain land situated in Dehs Sharabi and Phihai, which adjoin each others. These lands, inter alia, were acquired for the establishment of Korangi Township by the then Government of West Pakistan under the Land Acquisition Act, 1894 (hereinafter referred to as the 'Act') through notifications issued under section 4 of the said Act on 2-2-1960 and 5-3-1960. The acquired land measured 87-29 acres comprising 47-1 acres of land under garden and 40-28 acres of agricultural land. Each of these lands was further categorized as restricted and unrestricted tenures. The lands under gardens, moreover, appear to have been full of fruit bearing trees. The owners, therefore, expected reasonable compensation for their lands, gardens and fruit trees.
3. The Collector, however, by his award dated 17-12-1960 awarded compensation to the appellants for the land at the following rates only: -
(a) Unrestricted agricultural lands:Rs.3,500 per acre
(b) Unrestricted garden lands:Rs.5,000 per acre
(c) Restricted agricultural lands:Rs.2,625 per acre
(d) Restricted garden lands:Rs.3,750 per acre
4. Compensation was also allowed by the Collector separately for the trees but at rates very much lesser than those claimed by the owners.
5. The, appellants, therefore felt dissatisfied with the Collector's award and applied to the Deputy Collector and Land Acquisition Officer under Section 18 of the Land Acquisition Act, 1894 to refer their case to the Civil Court for determining the appropriate compensation for their property, which was acquired.
6. The reference (Civil Reference No.5/1969) was disposed of by a learned Single Judge of the Sind High Court (Noorul Arfin, J.). The learned Judge by his judgment dated 27-8-1970 disposed of the reference wherein he modified the rates of the compensation for the lands, as followed: -
(a) Unrestricted agricultural lands:Rs.5,000 per acre
(b) Unrestricted garden landsRs.6,000 per acre
(c) Restricted agricultural lands:Rs.3,750 per acre
(d) Restricted garden lands;Rs.4,875 per acre
7. As regards the trees, the learned Single Judge increased the rate of date trees to Rs.150 per tree as against Rs.65 per date tree allowed by the Collector but maintained the award of Collector for the other trees, observing that the appellants' counsel had not pressed their case as regards the other trees.
8. It may be mentioned that the learned Single Judge in deciding the appellants' reference in this case (Reference No.5 of 1969) followed his previous judgment in Civil Reference Nos.88/64 and 22/66 decided on 8-11-1967. These references related to the lands in Deh Phihai and Deh Dieh which were acquired under notifications dated 17-9-1960 and 11-10-1960.
9. Two appeals were filed against the judgment of the learned Single Judge dated 27-8-1970, namely, L.P.A. No.165 of 1970 (Mst. Ganj Khatoon and others v. Province of Sind and another) and L.P.A, No. 165 of 1970 (Dilawar Hussain and others v. Province of Sind and others). Both these appeals were disposed of by a common judgment passed by a Division Bench of the Sind High Court (comprising I. Mahmud and Z.A. Channa, JJ) dated 26-9-1977. The Letters Patent Bench allowed the appeal to a slight extent and allowed compensation at the following rates to the appellants:-
(a) Unrestricted agricultural landsRs.6,000 per acre
(b) Unrestricted garden landsRs.6,000 per acre (No increase from the rate allowed by learned Single Judge.)
(c) Restricted agricultural landRs.4,500 per acre
(d) Restricted garden landsRs.4,875 per acre (No increase from the rate allowed by the learned Single Judge)
10. As regards the date trees, the rate was increased from Rs.150 per date tree to Rs.200 per date tree. But so far as the other trees are concerned, the learned Division Bench of the High Court, although they examined all the evidence relevant thereto but did not agree with the claim of the appellants in respect thereof and were pleased to maintain the rates fixed by the Collector vide his order dated 17-12-1960.
11. The upshot is that though some slight modification was made by the learned Judges of the Division Bench in the rates of compensation allowed by him, as compared to the compensation allowed by the learned Single Judge, but the learned Judges of the Division Bench have not really differed with the approach of the learned Single Judge with regard to the principle to be followed in assessing the rate of compensation. This was stated by the learned Single Judge himself in the following words:- "In my opinion market price for the purpose of compensation under the Land Acquisition Act, 1894, should be determined according to the rates at which sales were made in the locality in question and these sales should be nearest in point of time to the notification under the Act."
12. This Court granted leave to the appellants, who were still dissatisfied, to consider whether the High Court followed the principles laid down by this Court in Nishat Sarhad Textile Mills Ltd. v. Sher Ahmad Khan and others PLD 1976 SC 531 and reiterated in Allah Bux Khudadad Gabol and others v.
Collector of Karachi Civil Appeal: Nos.K-93 to K-95 of 1972) decided on 30-1-1980, while evaluating the market value of the acquired lands.
13. In the case of Nishat Sarhad Textile Mills Ltd. The observation: made in the case of Vyicherla Narayan Gajayatiraju v. Revenue Divisional Officer AIR 1939 PC 98 and some other cases to the effect that the land is to be valued not merely by reference to the use to which it was put at the date of notification under Section 4 of the Land Acquisition Act but also by reference to uses it was reasonabl3 capable of being put to in future, were noticed.
14. In Civil Appeals Nos.K-93 to K-95 of 1972, namely, Allah Bu} Khudadad Gabol and others v.
Collector of Karachi C.A. No. K-93/7; and Hostan N.E. Dinsha and others v. Collector of Karachi C. As, Nos. K-94 and K-95 of 1972), it was observed by this Court that the High Court should have examined the case from the angle of the "potential value of the land". These observations have now not only been reiterated but further elaborated in a recent decision of the: Court, namely, Fazalur Rahman and others v. General Manager, S.I.D.B. And another PLD 1986 SC 158, wherein it was observed that: - "the land is not to be valued merely by reference to the us to which it is being put at the time at which its value has to be determined, but also by a reference to the uses to which it is reasonably capable of being put in future; and the market value is the potential value of the property at the time of acquisition which would be paid by a willing buyer to willing seller, when both are actuated by business principles prevalent in the locality at that time."
It was also observed:- "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 a 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 ...........
The previous sales' of the land cannot, therefore, be always taken to be an accurate measure for determining the price of the land intended to be acquired."
15. Thus, the approach of the High Court in the instant case that the market value of the land for purposes of compensation under the Land Acquisition Act must be determined according to the rates at which sales were made in the locality in question cannot be upheld, as it ignores the fact that for ascertaining the market value of the land its "potential value" is also a very relevant factor.
16. This brings us to the question as to what are the factors that must be taken into consideration for assessing this "potential value". Some guidance on this question is provided by the following observations of Lord Romer in Gajapatiraju's case (AIR 1939 PC 98):- "There is not in general any market for land in the sense in which one speaks of a market for shares or a market for sugar or any like commodity. The value of any such article at any particular time can readily be ascertained by the prices being obtained for similar articles in the market. In the case of land, its value in general can also be measured by a consideration of the prices that have been obtained in the past for land of similar quality and in similar positions and this is what must be meant in general by the market value, in Section 23. But sometimes it happens that the land to be valued possesses some unusual and it may be, unique features as regards its position or its potentialities. In such a case the arbitrator in determining its value will have no market value to guide him and he will have to ascertain as best as may be from the materials before him. What a willing vendor might reasonably expect to obtain from a willing purchaser, for the land in that particular position and with those: particular potentialities. For it has been established by numerous authorities that 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 that time under the Indian Act being the date of the notification under section a (1) but, also by reference to the uses to which it is reasonably capable of being put in the future. No authority indeed is required for this proposition. It is a self-evident one. No one can suppose in the case of land which is certain, or even likely to be used in the immediate or reasonably near future for building purposes but which at the valuation date is waste land or is being used for agricultural purposes, that the owner, however willing a vendor, will be content to sell the land for its value as waste or agricultural land as the case may be. It is plain that in ascertaining its value, the possibility of its being used for building purposes would have to be taken into account. It is equally plain, however, that the land must not be valued as though it has already been built upon, a proposition that is embodied in section 24 (5) of the Act and is sometimes expressed by saying that it is the possibilities of the land and not its realized possibilities that must be taken into consideration."
17. The unique features as regards the position of the acquired land and its potentialities are even acknowledged in the Award dated 17-12-1960 by the Collector himself while discussing the relative merits of the land presently acquired as compared with that which was previously acquired. He said:- "Since the establishment of the said 5th Refugee Colony (land acquired in January, 1956), the land involved in present case which forms part of the some Dehs from which land for the 5th Refugee Colony was acquired and is contiguous to that Colony, has grown in importance for its building potentiality. From the agricultural point of view, the land previously acquired for the said refugee colony, cannot stand comparison with the present land which contains cultivated land and gardens with fruit tree at certain places; while the land occupied by the 5th Refugee Colony was barren and undeveloped land with no cultivation on it. Thus the land involved in the present case, commands good importance both from building as well as agricultural point of view."
18. In his Award, the Collector also admitted that Dehs Drigh and Drigh Road are adjacent to Dehs Sharabi and Phihai. He also referred to an award of compensation relating to land acquired from Deh Cujra (near to Dehs Sharabi and Phihai) where compensation awarded at rate Rs.3,000% was enhanced by the District Judge, Karachi, to Rs.4000 per acre on the basis' of market value prevalent on 31-3-1948. He also observed in his award dated 7-12-1960 that the lands in Deh Sharabi were superior to the lands in Deh Ibrahim Hyderi.
19. It is also an admitted position that the lands in Dehs Sharabi and Phihai and the other adjoining Dehs of Karachi were acquired in 1960 for the establishment of Korangi Township and that the aforesaid Korangi Township is adjacent to Malir and Drigh Road. The refugee colonies of Malir, Drigh and Korangi dad already been established in 1960. In fact, Korangi Colony had been established partly in Dehs Sharabi and Phihai and the Railway Line had been laid down in Deh Sharabi. These facts were, relevant factors to be taken into consideration while determining the market value of the lands belonging to the appellants as they showed their potentiality for being used as building sites.
20. A witness appearing on behalf of the appellants, namely, Dilawar Hussain had produced extracts of the revenue record--. Ex.9/8 and Ex.9/4, which showed that on 13-6-1957 Manzoor Ahmad Sahi sold the said lands which he had purchased, to P and T Cooperative Society at the rate of Rs.10,890 per acre (Rs.225 per sq. Yard) and on 10-6-1958 Syed Ainul Abedin Bukhari sold Survey No 105 to the Peoples Cooperative Housing Society at the rate of Rs.12,100 per acre (Rs.2.50 per sq. Yard) and it was contended that these sales which were even earlier to the date of the acquisition notifications, represented the market rates of the lands in the locality around the date of the notifications (there being no sales in 1959) and the said rates may be adopted. But the learned Judges of the Letters Patent Bench rejected his submission on the ground that these sales were made to the Co-operative Societies who had not acted prudently in making these purchases and had paid much higher rates than the prevalent rates in the market. In this connection, it was observed that in an earlier case, which was decided very recently by them, it was held that "it would be legitimate to hold that in the year 1957-58 the average market rate was approximately between Re.l to Rs.1.25 per sq. Yard and conceding a steady rise in prices at the rate of paisas 10 per sq. Yard per annum, we fixed the market rate for the relevant year 1960 at the rate of Rs.1.50 per sq.
Yard or approximately Rs.6,000 per acre", and they went on to add:- "In the instant case, the lands are also situate in Deh Phihai and the lands in Deh Sharabi are adjoining the land in Deh Phiha.' We would, therefore, fix the same market rate for the lands in both dehs in the relevant year 1960 i.e at the rate of Rs.6,000 (Rs. Six thousand) per acre for lands held on unrestricted tenure and correspondingly at 25% less rate for lands held on restricted tenure. We would, therefore, vary the impugned judgment accordingly.
21. It is thus evident that the learned Judges in the High Court not only did not consider .The potentialities of the land but even brushed aside the transactions of sale that had taken place at the rate of Rs.2.50 per square yard in the locality during 1957/1958 on their view that "fancy rates" had been paid by the Co-operative Societies in those cases. We cannot agree. In our opinion, the impression of the learned Judges that "fancy prices" had been paid by the Co-operative Societies was not correct. On the other hand if the situation of the land alongwith all its advantages and potentialities were taken into account it could safely be concluded that the market value of the land when the notifications under section 4 of the Act (February/March 1960) were issued was not less than what was paid by the Co-operative Societies and that the rate paid by them was indeed the fair market value of the lands in question. The learned Judges should, accordingly, not have objected to the claim of the appellants for assessing the compensation for their lands at the rate of Rs.2.50 per sq. Yard (for lands held on unrestricted tenure) and the lesser rate of 25% for lands held on restricted tenure.
22. We ourselves would have been inclined to award compensation at the above-mentioned rate but we observe that in response to the notices issued under sections 9 and 10 of the Act the appellants had claimed different rates for land i.e. Rs.2 per sq yard, Rs.2/8 per sq. Yard. Rs.3 per sq yard, Rs.5 per sq. Yard (4,840 sq. Yard make one acre) and Rs.10,000 per acre, and in their memorandum of appeal before the Letters Patent Bench also they submitted that the market value of the land was at least Rs.10,000 per acre. In view of these claims made by the appellants themselves it is difficult to allow compensation to them in excess of Rs.10,000 per acre i.e. At about Rs.2.1 per sq yard. No doubt, it was submitted before us by Mr. Khalid M. Ishaque on behalf of the appellants that notwithstanding these claims the appellants were entitled to compensation at the market rates and that they should not be restricted to the figure of Rs.10,000 per acre. But it is not possible to accept this submission.
23. According to the provisions of section 9 of the Act the claimant is required to submit, inter alia, his claim with regard to the question of compensation payable to him and the claim made in response to the notice issued under section 9 cannot be modified during the course of the proceedings. This rule has recently been reiterated in Muhammad Sharif v. Afsar Textile Mills Ltd.
1985 SCMR 1181 where the dictum of the Lahore High Court in State v. Tikka Jagtar Singh AIR 1936 Lah 733 to the effect "that under section 9 of the Act an objector must give particulars of his claims and if an item is not specified therein he will not be awarded compensation on that score. The basis for decision was also the sanctity of the claim preferred by the objector as binding on him was approved by this Court and it was observed that section 9 requires the claimant /objector to fully present his case before the Collector which will be deemed to be his pleadings and that he shall be confined to them throughout the proceedings. The provisions to Section 25 are also to the same effect.
24. We, therefore, think that taking all the relevant factors into account the rate at which compensation should be allowed to the appellants for their acquired lands should be as follows:-- --
(a) Unrestricted agricultural lands:Rs.10,000 per acre
(b) Unrestricted garden lands:Rs.10,000 per acre
(c) Restricted agricultural land:Rs. 7,500 per acre
(d) Restricted garden lands:Rs. 7,500 per acre (25% less: being lands held on unrestricted tenure)
25. We may now turn to the question of compensation with regard to fruit trees. As pointed out in the Award by the Collector there are various kinds of trees existing in the gardens for which compensation was claimed by the owners. The compensation claimed by them was at the following rates:- Name of treesRate per tree as claimed by the land-owners ChikooRs.2,500 MangoRs.2,000 Guava (Amrood)Rs.1,000 BadamRs.1,000 ShahtutRs. 500 FalsaRs. 300 JamanRs.1, 000 Batu (Kavit)Rs. 500 CoconutRs. 500 Date treeRs. 300 Amli (Jungli)Rs. 500 NimRs. 150 BabluxRs. 50 Bair (Berry)Rs. 100 SitaphalRs. 100 Tahi MewaRs. 250 SingiRs. 50 AarundaRs. 50 GadoodRs. 10 Perver (per running ft)Re.1 Amli (Fig)Rs. 100 BairRs. 100 LayerRs. 25 Gul MourRs. 25 PapitaRs.50 Lucern Rs.7,500 Cata crops(Fodder) Rs. 500 WheatRs. 240 MaizeRs.500
26. Since the rates claimed by the owners seemed to be exorbitant to the Collector, he asked the Director of Agricultural, Karachi, for his comments with regard to the value of the trees. However, in the comments sent by the Director of Agriculture, the rates suggested by him were very much lower than those claimed by the owners, this is apparent from the following tables:- Name of treeRate per tree asRate per tree as claimed by the landsuggested by ownersthe Director of Agriculture Karachi.
ChikooRs.2,500Rs. 300 MangoRs.1,000Rs. 200 Guava(Amrood)Rs.1,000Rs. 70 BadamRs.1,000Rs. 50 ShahtutRs. 500Rs. 50 FalsaRs. 300Rs. 10 JamanRs.1,000Rs. 150 Batu (Kavit)Rs. 500not suggested CoconutRs. 500Rs. 200 Date treeRs. 300Rs. 50 Amli (Jungli)Rs. 200Rs. 50 Banana(Harichhal)Rs. 50Rs. 3 for local Rs. 6 for Harichhal NimRs. 150 BabluxRs. 50 Bair (Berry) ,Rs. 100Rs. 30 SitaphalRs:10Rs.70 Tahi MewaRs. 250 SingiRs. 50 AarundaRs. 50Rs. 10 GadoodRs. 10Rs. 5 MohandiRs. 10Rs. 3 Perver (per running ft)Re. 1 Amli (fig)Rs. 100Rs. 15 BairRs. 100 LayerRs. 25 Gul mourRs. 25 PapitaRs. 50Rs.2,000 per, acre LucernRs.7,500Rs.1,000 per acre Cash crops FodderRs. 500Rs. 150 per acre WheatRs. 240Rs. 70 per acre MaizeRs. 500Rs. 200 per acre
27. The comments of the Director of Agriculture, Karachi, however, were not very helpful in that they were not based on any recognised principle for assessing the value of trees. The formula for evaluating the value of the fruit trees as given in the Land Acquisition Manual is that the not income of the trees per year is to be ascertained and calculated somewhat as follows:- "The number of years during which it will bear fruit minus the expenses during the initial period of nursery during which it bears no fruit. In other words the not income of a tree will be calculated after deducting all expenses of gathering, watching, carriage to the market and payment of land revenue etc., as also the expenses incurred during the nursery period."
28. But it was not possible to make a calculation on the basis of this formula because neither the owners had led any evidence with regard to these points nor was any information available with regard to these points in the remarks furnished by the Director of Agriculture. Hence any assessm ent with regard to the value of the trees on the basis of the above formula was not possible. The Collector, therefore, again asked the Director of Agriculture to give an estimate of the yearly not income of trees in question on the basis of this formula. Unfortunately, his reply to this further reference was again unsatisfactory. In most cases he failed to supply the required information and in those where he did furnish it, his effort was only to support his previous comments, instead of supplying the solicited information. An example of this attitude of the Director of Agriculture was illustrated by the Collector by referring to the case of mango trees. The Collector pointed out that the Director of Agriculture had stated in his comments that the average fruit bearing period of a mango trees is 12 years and its not income Rs. 10 per year implying that the total value of a mango tree was only Rs. 220 (i.e. Rs. 10 multiplied by 22); even though according to the Land Acquisition Manual, mango trees are supposed to bear fruit upto the age of 75 years. The Collector went on to observe that even if it was assumed that the period which a mango plant takes to reach the fruit bearing stage is 10 years the not period during which it would bear fruit should even then be 66 years, whereas the Director of Agriculture had stated this to be only 22 years. The Collector added that it was possible that the mango trees might not bear fruit right upto the age of 75 years but the evidence of the fruit brokers before him had established that the average fruit bearing period of the mango tree in Karachi was at least 40 years. Thus the period of 32 years estimated by the Director of Agriculture was not correct from any point of view. Similar inaccuracies with regard to date-tree were also pointed out constraining the Collector to conclude that the estimates of the period of fruit bearing made by the Director of Agriculture was less than normal with a view to support his previous comments. On this view of the matter the Collector found that as the rates suggested by the Director of Agriculture were low, it would be reasonable to increase them by 25% to 30%.
29. The learned Single Judge while disposing of the reference under Section 18 of the Act (Civil Reference No. 5/1969) dealt with the case of the date-trees only in relation to fruit trees, and enhanced their compensation to Rs.50 instead of Rs.65 per tree suggested by the Director of Agriculture. However, he did not deal with the case of any other fruit tree on the ground that the rates of compensation fixed by the Collector with regard to the other kind of trees had not been challenged before him. The learned Judges of the Division Bench, however, did not agree with the learned Single Judge on this point viz. That the rates of compensation assessed by the Collector regarding the other trees was not challenged before him. They, therefore, proceeded to examine all the relevant evidence available on the record with a view to estimating the value of the other trees.
However, after examining this evidence they also reached the same conclusion, namely, that the compensation fixed by the Collector with regard to them, except for the date-trees, which was enhanced to Rs. 200, should be maintained.
30. We, on our part, consider that apart from the question of compensation regarding date-trees, which has been adequately considered in the High Court, the question of the rates of compensation of other trees requires further consideration. In this connection, we may observe that since the owners had not furnished the necessary information to enable an accurate assessm ent to be made of the value of the trees, the learned Collector was right in asking the Director of Agriculture who was in a better position to supply the requisite date for his assessment with regard to this question. The latter, however, failed to supply the necessary information in the comments submitted by him in the first instance and when pressed again in this behalf supplied information which was rather sketchy and somewhat unsatisfactory. Even the Collector himself was convinced that the estimates with regard to the age of fruit bearing of the trees given by the Director of Agriculture and the yearly income which was normally derived from them was low and required appropriate modification. Accordingly, he increased his estimate by 25% to 30%. But on account of the inaccuracies in the information supplied (some examples whereof are given by the Collector in his award) and the extent of conservatism exhibited by the Director of Agriculture in estimating the period of fruit bearing of the trees and his inclination to reduce the amount of their yearly income, it seems to us that the increase ordered by him, namely, 25% to 30% was not really sufficient and taking everything into account, to arrive at a truer estimation of their value, he should have ordered an increase of 100% in the rates suggested by him. We would order accordingly.
31. In the result we direct an increase in the rates of compensation of all the trees, other than date- trees, by 100% instead of 25% to 30% ordered by the Collector. Accordingly, the compensation to be allowed for the trees shall now be as follows:- Name of treesRate per tree asRate per treeas claimed by theallowedby this land owners. Court.
ChikooRs.2,500Rs.600 MangoRs.2,000Rs.400 Guava(Amrood)Rs.1,000Rs.140 BadamRs.1,000Rs.100 ShahtutRs. 500Rs.100 FalsaRs. 300Rs. 20 JamanRs .1, 000Rs.300 Batu(Kavit)Rs. 500Rs. 75 CoconutRs. 500Rs.400 Date treeRs. 300Rs.200 Amli(Jungli)Rs. 200Rs. 50 Banana (Harichhal) Rs. 50Rs. 6per local Rs. 12for Harichhal NimRs. 150Rs. 40 BabluxRs. 50Rs. 15 Bair(Berry)Rs. 100Rs. 60 SitahalRs. 100Rs.140 Tahi MewaRs. 250Rs. 15 SingiRs. 50Rs. 15 AarundaRs. 50Rs. 20 GadoodRs. 10Rs. 10 MohandiRs. 10Rs. 6 Perver (per running ft.)Re. 1Rs. 10 per running yard Amli (fig)Rs. 100Rs. 30 LayerRs. 25Rs. 7 Gul MourRs. 25Rs.7 PapitaRs. 50Rs.4,000 per acre LucernRs.7,500Rs.2,000 per acre Cash crops(Fodder) Rs. 500Rs.300 per acre WheatRs. 240Rs. 40 per acre MaizeRs. 500Rs. 400 per acre
32. The result is that both the appeals are allowed and compensation shall be awarded to the appellants for lands at the rates mentioned in para. 24 above and for fruit trees at the rates mentioned in para. 31 above. In addition, the appellants will get the usual 15% allowance towards compulsory acquisition plus interest at the rate of 6% per annum from the date when the possession was taken from them for the part of the compensation which has become payable to them as a result of this order.
33. The appeals succeed in the above terms and are allowed with costs.