' MIAN ALLAH NAWAZ, J.--These two Regular Firt Appeals bearing No,77 of 1973 and 83 of 1973 by Nawabzada Muhammad Saeed Khan and by the Province of Punjab respectively under section 54 of the Land Acquisition Act arise out of the acquisition proceedings and award by reference Court, Administrative Civil Judge, Multan, dated the 25th June, 1973.
' The facts in brief are that on the application of Messrs Gultex Ltd. Dated the 15th December, 1961, a notification under section 4 of the Land Acquisition Act No,1 of 1894, hereinafter referred to as "the Act", was issued and published in the Gazette of the Government of West Pakistan, dated the 14th September, 1962. A corrigendum to this Notification was published in the Gazette of the Government of West Pakistan dated the 4th of October, 1962. An agreement under section 42 of the Act was published in Gazette of 12th February, 1962. Messrs Gultex Ltd. Obtained the possession of the acquired land measuring 33 acres 18 marlas situated in village Mari Seetal, belonging to Nawabzada Muhammad Saeed Khan on the 22nd of November, 1962.
3. The acquiring department submitted the proceedings to the Deputy Commissioner, Multan, for making award under section 11 of the Act. The Acquisition Collector under section 9 issued notices to the parties for filing objections. It was on the 29th of June, 1966 when the owner of the land filed his objection and made a claim to the effect that the land acquired was situated in the area which was marked for industrial as well as commercial purposes. The land in dispute was situated within the limits of Municipal Committee Multan and had a frontage between two pakka roads. He laid claim of Rs,1,81,189 per acre on the basis of a market price for land suitable for industrial purposes and Rs, 27,063 per acre as a land being utilized for residential purposes. He estimated the price of land to be Rs, 26,89,385. The learned Acquisition Collector vide order dated the 18th of July, 1966, assessed the market price of the land acquired to be Rs,9,240 per acre holding that the land acquired was urban agricultural land which was suitable for cultivation of vegetables and fruits. He made assessm ent on the basis of sale transaction preceding one year in village Jumma
4. Feeling dissatisfied with this award, the owner of the land submitted a reference to the Collector for the determination of his objection to amount of compensation given in the award. Accordingly the matter was referred under section 18 of the Act to the reference Court i,e, the Administrative Civil Judge, Multan.
5. The reference was contested. The reference Court framed as many as 13 issues arising out of the objections of the parties. The only issues No, 3, 6, 7 and 8 were argued before the reference Court on which the learned Administrative Civil Judge returned the finding, therefore, it will be appropriate to reproduce issues Nos. 2, 3, 6, 7 and 8 only which are as under:--
(3) What was the market value of the land acquired at the time of the publication of the Notification under section 4 of the Land Acquisition Act?
(6) Whether the petitioner is entitled to any compensation besides the market value of the land, if so, to what extent?
(7) Whether the petitioner is entitled to charge the compensation at the rate of 25% for compulsory acquisition in this case?
(8) Whether the petitioner has suffered any loss in the value of his other land on account of the acquisition of the land in this case, if so, to what extent?
6. The learned Administrative Civil Judge vide award dated the 25th of June, 1973 enhanced the award from Rs, 9,240 per acre to Rs, 14,400 per acre along with compulsory acquisition allowance at the rate of 15% and additional compensation holding the property in dispute to be building site.
Hence these two appeals have been filed both by the owner and by the acquiring department against the award.
7. Learned counsel for the parties concentrated their assault on the quantum of compensation on a number of grounds which will be examined later on. No other point except the compensation had been under examination of this Court.
8. The learned counsel for the appellant contended that the learned reference Court had fallen into error of law by ignoring that acquired land was situated within the Municipal limits, that it was included in the master plan as a site for the establishment of industry, that the land was being sold for residential purposes, that Messrs Allah Wasaya Textile Mills, Punjnab Textile Mills and Pak-Asia Paints were situated in the neighbourhood of the disputed land. According to him, therefore, the learned reference Court must have examined award in favour of Allah Wasaya Textile Mills and who have given the award on that very basis. There was no reason whatsoever to ignore the award in favour of Allah Wasaya Textile Mills. It was urged that notification of acquisition of land measuring 21 kanals 17 marlas under section 4 of the Act was issued on the 16th of August, 1962. The land was situated on Multan-Vehari Road in the estate of village Jumma Khalsa. The reference Court by award dated the 19th of June, 1969 Ex. P.23 assessed Rs, 23,000 per acre as to be fair compensation of land in question. It was further urged that the reference Court has not taken into consideration the doctrine of potential value of the land, as so, has fallen into grave error of law in fixing the compensation. Reliance was placed on Malik Aman and others v.
Land Acquisition Collector and others PLD 1988 SC 32.
9. The learned Additional Advocate-General appearing on behalf of the Government completely supported the decision of the reference Court.
10. Learned counsel appearing on behalf of Messrs Gultex impeached the award. It was submitted by him that admittedly the land was being used for agricultural purposes, therefore, the finding of the reference Court that it was a building site was untenable. According to him the Court had to determine the nature of land acquired in accordance with the use at the time of Acquisition Notification under section 4 of the Act and not according to the use it will be put after the acquisition. Neither the purpose of acquisition nor increase in the price of the land after the project is completed by the acquiring company is to be taken into consideration. Reliance was placed on clause (vi) of section 24 of the Act. It was vehemently asserted that the compensation was to be determined within the framework of sections 23 and 24 of the Act.
11. We have heard the arguments and perused the record with care. Before we proceed to determine respective contentions of the parties and examine the applicable law. The acquisition proceedings were initiated under the Land Acquisition Act 1894 for the benefit of Messrs Gultex Ltd.
Who needed the land for installing textile mill for the benefit of the people. It is a settled principle of law that this Act directly interferes with the inviolable right of the people regarding their disposal of property. It is founded upon the doctrine of "salus populi suprema lex" that the interests of the public are supreme and that the private interests are subordinate to the interests of the State, therefore, it is a well established canon of interpretation that in construing the provisions of this Act, the benefit is to be given to the subject. The law dealing with the matters to be considered in determining the compensation is provided in sections 23 and 24 of the Act. Sections 23 and 24 are as follows:--
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, subsection (1), ' 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 in every case award a sum of fifteen percentum on such market-value, in consideration of the compulsory nature of the acquisition.
24. But the Court shall not take into consideration-- ' first, the degree of urgency which has led to the acquisition; ' secondly, any disinclination of the person interested to part with the land acquired; ' thirdly, any damage sustained by him which, if caused by a private person, would not render such person liable to a suit; ' fourthly, any damage which is likely to be caused to the land acquired, after the date of the publication of the declaration under section 6, by or in consequence of the use to which it will be put; ' fifthly, any increase to the value of the land acquired likely to accrue from the use to which it will be put when acquired; ' sixthly, any increase to the value of the other land of the person interested likely to accrue from the use to which the land acquired will be put; or ' seventhly, any outlay or improvements on, or disposal of, the land acquired, commenced, made or effected without the sanction of the collector after the date of the publication of the notification under section 4, subsection (1).
12. A bare reference to section 23 of the Act will show that owner of the land is entitled to receive the market value of the land. Market value of the land is not defined in the Act. This important word has come under consideration before the superior judiciary from a very long time. It will be useful to notice certain authorities for reaching the correct principles. It was laid down by the Privy Council in Fraser v. City of Fraserville L R (1917) AC 194 that:-- "It is the value to the seller of the property in its actual condition at the time of expropriation with all its existing advantages and with all its possibilities, excluding any advantages due to the carrying out of the scheme for the purpose for which the property is compulsorily acquired."
13. The same principle was reaffirmed in R.B.Lala Narsingh Das v. Secretary of State of India 1925 Privy Council 91. This principle was again reaffirmed in Atmaram Bhagwant Ghadgay v. Collector of Nagpur AIR 1929 Privy Council 92 where it was laid down that: "Now, the proper principles applicable to the case were not in controversy before the Board. An owner of lands, in the position of the appellant is entitled, it was agreed, to the value to himself of the property in its actual condition at the time of expropriation with all its then existing advantages and with all its future possibilities, excluding only any advantage due to the carrying out of the scheme for the purposes for which the property was being acquired.
14. In Vyricherla Narayana Gajapatriaju v. Revenue Divisional Officer, Vizagapatam AIR 1939 Privy Council 98, the same question was examined as to how the potential value of the land was to be taken into consideration in the context of clause (vi) of section 24 of the Act. The concept of potential value and increase in the value of the land acquired on account of construction of future project was resolved in the following words:-- "Now if and so long as there are several competitors including the actual taker who may be regarded as possibly in the market for purposes such, as those of the scheme, the possibility of their offering for the land is an element of the value in no respect differing from that afforded by the possibility of offers for it for other purposes, as such, it is admissible as truly market value to the owner and not merest value to the taker. But when the price is reached at which all other competitions must be taken to fail, to what can any further value be attributed? The point has been reached when the owner is offered more than the land is worth to him for his own purposes and all that any one else would offer him except one person, the promoter, who is now, though he was not before, freed from competition. Apart from compulsorily powers, the owner need not sell to that one and that one would need to make higher and get higher offers. In respect of what would he make them? There can ones be one answer in respect of the value to him for his scheme. And he is oily driven to make such offers because of the unwillingness of the owner to sell without obtaining for himself a share in that value. Nothing representing this can be allowed.
' If and so far as this means that the value to be ascertained is the price that would be paid by a.
Willing purchaser to a willing vendor, and not the price that would be paid by a "driven" purchaser to an unwilling vendor, their Lordships agree. But so far as it means that the possibility of the promoter as a willing purchaser being willing to pay more than other competitors, or in cases where he is the only purchaser of the potentiality, more than the value of the land without the potentiality is to be disregarded, their Lordships venture respectfully to differ from the learned Judge. For these reasons, their Lordships have, come to the conclusion that, even where the only possible purchaser of the land's potentiality is the authority that has obtained the compulsory powers, the arbitrator in awarding compensation must ascertain to the best of his ability the price that would be paid by the willing purchaser to a willing vendor of the land with its potentiality in the same way that he would ascertain it in a case where there are several possible purchasers and that he is no more confined to awarding the land's "poramboke" value in the former case than he is in the latter."
15. The same golden principles for the purpose of assessing the compensation/market value of the land were followed with enough emphasis in Secreted of State v. Naresh Chandra Bose AIR 1926 Cal. 1000, Collector of Chingleput District Saida v. Kadir Mohideen Sahib AIR 1926 Mad. 732 and Secreted of State v. Chuni Lal and others AIR 1931 Lah.
207.
16. The same principles were followed by the superior judicial of Pakistan after partition. Reference may. Be- made to Sheikh Manzoor Hussain v. The Multan Improvement Trust, Multan and another PLD 1972 Lah. 225 and Malik Abdul Qayyum etc. v. Punjab Province etc. PLD 1979 Lah.
853.
' It will be appropriate to examine the latter case law in which it was held that even the future use of property acquired be taken into consideration. In Fazalur Rehman and others v. General Manager, S.I.D.B. And another PLD 1986 SC 158, while considering the question of future use, his Lordship Mr. Justice Aslam Riaz Hussain observed as follows:-- "I would, therefore, like to emphasize that 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" would 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. In appropriate case there should be no compunction even on resting upon the oral testimony with respect to the market value of the property intended to be acquired, because even while deciding cases involving questions of life and death, the Courts reds on oral testimony alone and do not insist on the production of documental 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 price of the land in question, because of the prevalent tenancy that in order to save money on the purchase 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 at the price of the land purchased by them than the price actual paid. 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."
17. This enunciation of law was noticed in Sub. Haider Zaman and others v. Government of N.-W.F.P.
And others 1987 SCMR 465. However, no decision on the basis of this principle was rendered in this case.
18. This principle was affirmed in Malik Aman and others v. Land Acquisition Collector and others PLD 1988 SC 32 but the appeal was dismissed on the ground that the parties have not adduced enough evidence and material for taking into consideration for assessing compensation in regard to subsequent inflationary trends after the issuance of acquisition under section 4 of the Act and before passing of the award.
19. From the foregone critical anassis of applicable case-law and sections 23 and 24 of the Act, the following principles emerge in respect of assessment of compensation:--
(1) The market value or market price means the price property would fetch in the market. The price will be highest price a willing buyer would pay and a willing seller would accept both being fuls informed and the property being exposed for a reasonable period of time.
(2) The market value may be different from the price a property can actuals be sold at a given time. The market value is that price which might be expected to bring if offered for sale in a fair market.
(3) In assessing the compensation the potential value i,e, the benefits, advantages arising from the present use and future use are to be taken into consideration.
(4) The inflationary trend and depreciation in currency of the counted between the date of acquisition under section 4 of the Act and the date of award also should not be totals ignored and be taken into consideration.
20. Guided by these golden rules now we proceed to examine the evidence on the record. The evidence produced by both the parties is voluminous in nature. Nawabzada Muhammad Saeed Khan as well as the acquiring department and Messrs Gultex have produced the Patwaris of Mauzas Seetal and of the adjoining mauzas to prove the statement of price calculated from mutation of sales of the preceding years. These witnesses have proved these statements while Aziz Nawaz Khan appeared as attorney on behalf of Nawazada Muhammad Saeed Khan and stated to the effect that the property was situated within the municipal limits, was surrounded on two sides by roads and the surrounding area, was being used for residential as well as industrial purposes.
According to him the price of the land at the time of acquisition was Rs, 10,000 per kanal while Messrs Shah Muhammad proved his assessment given in his objection before the Land Acquisition Collector.
21. We have examined the documentary evidence in depth and are of the view that much of the evidence produced by the parties is neither relevant to the resolution of the controversy nor provides any basis for the fixation of fair compensation. The relevant documentary evidence regarding the price of the land furnished by both the parties is as follows:-- Average price of land sold during the last 12 months from 1961-62 Mauza ExhibitYear AreaTotal priceAverage price per acre Taraf Ravi P2 1961-62 5 acres 52351 30,470.20 Mari Seetal P2 1961-62 6 acres 61300 25,216.67 Taraf Ravi P15Award of Land Acquisition Collector dated 31-5-64121 Kanals &10 marlas61743 43,392.00 Jumma Khalsa Multan-Vehari Road, Multan city)P22Award in respect of the land acquired for the benefit of Allah Wasaya Textile Mills through Notifica--tion dated 16-8-62 on 19-6-196921 kanals 15 marlas62,820 23,000.00 Taraf Ravi D4Statement based on Mutation of sale 7-9-61 to 6-9-6228K 15K245616 61404.00 Jumma Khalsa D6Statement based on Mutation of sale 7-9-61 to 6-9-6216 acre47328.9529,520.56 Mari Seetal R1450K 4M25,705.60
22. After the examination of oral as well as documentary evidence we do not feel the need to examine the other documentary as well as oral evidence as the remaining documents and evidence is not material for the purpose of resolution of objection of parties in respect of fixation of compensation are of considered opinion that fair compensation to owner can be determined by taking mean of price fetched by land for industrial purposes and residential purposes. According to the documents mentioned above Exs.P2, and P3 relate to average price calculated from the sale for the residential purposes in Mauza Taraf Ravi in 1961-62 and Mari Seetal while Ex.P15 relates to award given by the Land Acquisition Collector in respect of compulsory acquisition of land for the benefit of Messrs Pakasia Paints. Ex.P22 pertains to award rendered by reference Court in respect of land acquired for the benefit of Allah Wasaya Textile Mills, through Notification dated 16-8-1962.
Ex.R14 is another relevant document of a significant importance. It was furnished by the respondents. It indicates the price of land sold for residential purposes in Mari Seetal. According to our opinion a mean of Exs. P.2, P.3, P.22 and R.14 will provide a fair and solid basis for determining the compensation of acquired land which is situated in Mari Seetal and has been acquired for industrial purposes. We have not taken into consideration Ex. P15 which was an award of the land acquired by Pakasia Paints. This land was already in possession of the acquiring company being evacuee property, therefore, it is not safe to place reliance upon this award. Similarly, Exs.D4 and D6 are also not on the point.
23. In view of our finding the mean of Exs. P.2, P.3, P.22 and R.14 is an adequate basis. The mean of these documents comes to be Rs, 26,098.12.
24. Having determined the basis of compensation we accept the appeal filed by Nawabzada Muhammad Saeed Khan to the extent of enhancement of compensation. The compensation is accordingly increased from Rs,14,400 to Rs,26,098.12 per acre. The appeal filed by the Province of the Punjab and others is dismissed with costs.
25. In view of our finding the compensation granted to the appellant shall be in the following terms:--
(1) Market value at the rate of Rs. 26098.12 per acre Rs. 86,1237.96
(2) Compulsory acquisition allowance at the rate of 15%Rs. 1,29,626.09
(3) Total Rs. 9,93,800.09
(4) Less already awarded Rs. 3,42,714.38
(5) Additional compensation Rs. 2,05,628.62
26. The appellant shall also be entitled to compound interest at the rate of 8% on the enhanced compensation with effect from 22-10-1962 the date of possession till the deposit of the said amount in the Court by the respondents.