' MUHAMMAD BASHIR JEHANGIRI, J.---This order will dispose of Civil Appeals Nos. 861 and 862 of 1994 filed by the two rival parties against one and the same judgment of the High Court passed in R.F.A.
No,14 of 1986.
2. The appellants-owners of the land with leave of this Court filed C.A. No,861 of 1994 while the Provincial Government of North-West Frontier Province also filed C.A. No,862 of 1994 against the judgment of Peshawar High Court, Peshawar, dated 19-9-1992, whereby order declining to enhance the compensation passed by the learned Senior Civil Judge, Peshawar was upheld in so far as the Shah Nehri classification of land was concerned but enhanced the compensation for 'Ghair Mumkin' classification of land to that of the Shah Nehri classification.
3. The relevant facts, briefly stated, are that land measuring 38-Kanals and 7 Merlas situated at Tehkal Payan, belonging to Murad Khan and other was acquired by the Federal Government through a Notification under section 4 of the Land Acquisition Act (I of 1894) (hereinafter referred to as the Act) dated 11-2-1978 followed by subsequent Corrigendums regarding the deletion of some of the areas vide Notifications; dated 1-10-1979, 15-3-1980 and 23-9-1980. Compensation for the said land was assessed by the Land Acquisition Collector, Peshawar, in his Award No,417-P, dated 21-6-1978 at the following rates:-- "Nehri Awal : Rs,1977.31 per Marla. Ghair Mumkin Rs,994.94 per Marla.
4. The Award was not accepted by the landowners/appellants on the ground that the land was meant for residential purpose as it, was situated in a fully developed area known as 'Khyber Colony' and surrounded by other Bungalows and Quarters and, therefore, its market value was not less than Rs,50,000 per Marla. Consequently, on their written request, the Land Acquisition Collector referred the matter under section 18 of the Act to the civil Court for awarding the adequate compensation amount.
5. The Objection Petition filed by the appellants was contested by respondent No,2 in C.A. No,861 of 1994 (Appellant No,3 in C.A. No,862 of 1994). While conceding the assertion of the appellants that the acquired land in dispute was situated "near Jamrud Road", it was urged that the amount of compensation was awarded by the Land Acquisition Collector 'after due consideration of all the facts and circumstances".
6. For the purpose of this appeal, the following issues are crucial:
(6) Whether the compensation assessed by the Land Acquisition Collector vide his award in question is wrong?
(7) What was the market value of the land acquired at the time of notification under section 4 of the Land Acquisition Act?
7. After perusal of evidence adduced by the parties, the Civil Court, took up issues Nos.6 and 7 together and held as under:- "I am of the view that the objector could not discharge the burden of proving that the price assessed by the Collector is wrong for the reason that the Collector while determining the amount of compensation considered matters which are mentioned in section 23 of the Act. All the witnesses produced have not deposed about the price of the land at the time of notification under section 4. The price prevalent at the time of recording evidence would not be taken into consideration. The land is situated at some distance from the road and there is no evidence that near the suit land any commercial property is situated. The petitioner could not give single instance by way of mutation registered deed or any award at that time through which it has been acquired showing a higher price than assessed by the Collector. All the witnesses examined by the petitioner have admitted that they have neither sold nor purchased the property. The Collector, keeping in view the price paid within one year in transaction of purchase of land, has adopted the method for ascertaining the market value which is the proper way for taking into consideration the price of the land. The Patwari Halqa examined by the petitioners, had clearly stated that the maximum price in the vicinity is about Rs,10,000 per Marla and stated that he did not know about the value of the disputed property during the year 1977-78, however the market value of the lands have raised many fold between 1977 and 1983. In light of such evidence the petitioners have failed to establish the fact that the Collector has not valued the property keeping in view the principles laid down in section 23 of Land Acquisition Act. So, I hold that the market value of the land at the time of notification under section 4 was the same assessed by the Collector and he has properly assessed the land in the award. Both these issues are decided against the petitioners."
8. On the basis of the above reasoning, the learned Senior Civil Judge dismissed the Objection Petition. The owners/appellants filed Regular First Appeal No,14 of 1986 in Peshawar High Court, Peshawar. The learned Chief Justice of Peshawar High Court by his judgment and decree, dated 19-9-1992 disposed of the appeals on merits and after discussing the evidence on record came to the conclusion that the valuation fixed by the trial Court was correct in so far as Shah Nehri classification of land was concerned but the compensation for Banjar Qadeem land was enhanced to that of Shah Nehri land and with this modification, dismissed the appeal.
9. Leave to appeal in both the appeals was granted to consider, inter alia, whether the Courts below had misread / failed to correctly appreciate the material/evidence regarding the average sale price of the land at the relevant time.
10. Mr. Jan Muhammad Khan, learned Advocate-on-Record, in support of Appeal No,861 of 1994 contended that the learned Civil Court also the learned Chief Justice in the High Court while upholding the compensation under the Act erred in relying on schedule of sale price for one year the classification of the land, namely, Shah Nehri and Banjer Qadeem as the two considerations were not at all relevant for the determination of the correct valuation of the land acquired in this case. According to the learned Advocate-on-Record, the two Courts below had completely ignored the potentiality of the land in dispute inasmuch as it was and is still situated within the limits of Municipal Corporation, Peshawar, and in a very populous area, namely, University Road, Peshawar near Tehkal Payan, where the present rate was not less than Rs,50,000 per Marla. In this context reference has been made to the statement of Ashiq Hussian, Halqa Patwari (P.W.5) who, apart from bringing on record the copy of the Registrar Haqdaran Zamin Exh.OW-5/1 of 1977-78, has admitted in his Examination-inChief that the disputed land was situated "in the surrounding of Bungalows"; that it was a valuable property and that according to his estimation the price of one Marla in the vicinity of the disputed land was about Rs,10,000 per Marla. In the cross-examination also he had asserted that the market value of the land had gone up manifold between the years 1978 and 1983. The learned Advocate-onRecord then made reference to Award No,1996-P, dated 20-6-1978 wherein the same Land Acquisition Collector had not adverted to the classification of the land at all and awarded compensation at the flat rate of Rs,2,500 per Marla although this notification was issued earlier than the one giving rise to these appeals.
11. Mr. M. Sardar Khan, learned Advocate-General N.-W.F.P. Assisted by Mr. Abdul Hakeem Khan Kundi learned D.A.-G. Appearing in support of Appeal No,862 of 1994 have taken exception to the impugned order of the learned Chief Justice Ghair Mumkin classification of land with Shah Nehri and awarding the blanket rate for both types of land acquired for the purpose.
12. We are of the considered view, however, that the schedule of average price for four years or for that matter even of one year are not the only criterion for determining the amount of compensation but the "other material" brought on the file is quite relevant to determine the correct amount of compensation for the acquired land.
13. Section 23 of the Act lays down, by way of criterion, that "market value" of land on the date of publication of notification under section 4 (ibid) would be the amount of compensation. The expression "market value" has not been defined in the Act. But there is considerable case-law on the point encompassing the period of about nine decades in which the expression in question has come to assume almost definite meaning. In this judgment we would, however, refer to a number of very important cases in which the expression 'market value' occurring in section 23 (ibid) has been judicially construed by 'various High Courts and even the Supreme Court of Pakistan.
According to these judgments the following matters are to be taken into consideration in determining the amount of compensation:--
(i) The data from which the market value of the land can be estimated is given in Rule 13 of-the North-West Frontier Province Circular No,54 issued presumably under section 55 of the Act.
(Premier Sugar Mills Limited v. Hayatullah Khan (PLD 1956 (W.P.) Pesh. 67).
(ii) 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." The Land Acquisition Collector, Rawalpindi v. Lieut. General Wajid Ali Khan Burki (PLD 1960 (W.P.) Lah. 469).,
(iii) 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, acquisition injuriously affecting his other property or his, earning in consequence 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 tollector's taking possession of the land. This, however, is not exhaustive of other injuries or loss which maybe suffered by an owner on account of compulsory acquisition. (Province of West Pakistan and another v. M. Salim Ullah and others (PLD 1966 SC 547).
(iv) The best method of determination of the market price of the plots of land under the acquisition is to rely on instances of sale of it near about the date of notification under section 4 (i) of the Act.
The next best method is to take into consideration the instances of sale of the adjacent lands made shortly before and after the notification. When the market value is to be determined on the basis of the instances of sale of land in the neighbouring locality, the potential value of the land need not be separately awarded because such sales cover the potential value. (Jogendra Nath Chatterjee and others v. State of West Bengal (AIR 1971 Calcutta 458)., (Underlining provided for.Emphasis).
(v) 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 relevant consideration but that is not the whole truth. An area may be Baniar Qadeem or Barani as in the present case but its market value may be tremendously high because of its location. Neighbourhood, potentiality or other benefits. (Pakistan and another v. Rehm Dad and another (1980 CLC 574.) (Underlining provided for emphasis).
(vi) According to the well-settled principle, while determining the value of the compensation the market value of the land at the time of requisition/acquisition and its potentiality have to be kept in consideration. (Pakistan v. Din Muhammad and others (1983 CLC 1281).
(vii) 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. (Mst.
Khatu and others v. Barrage Mukhtiarkar, Thatta (PLD 1977 Kar. 203).
(viii)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. (Din Muhammad v. General Manager, Communication and others (PLD 1978 Lah. 1135).
(ix) The measure of fair compensation is the value of the property in open market which a seller voluntarily entering into a transaction of sale can reasonably demand from a purchaser this means that we have to determine the value of the land in the open market at the relevant time on the assumption that the notification of acquisition did not exist. (Province of Punjab v. Sher Muhammad and another (PLD 1983 Lah. 578).
(x) 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. (Fazalur Rehman and others v. General Manager, S.I.D.B. And another (PLD 1986 SC 158).
(Underlining provided for emphasis).
(xi) The sale-deed and mutation entries do serve as an aid to the prevailing market value.
(Government of Pakistan v. Maulvi Ahmed Saeed (1983 CLC 414).
(xii) 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'. (Central Government of Pakistan v.
Sardar Fakhar-e-Alam and another (1985 CLC 2228).
(xiii) 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. (Raza Muhammad Abdullah through his Legal Heirs v. Government of Pakistan and others (1986 MLD 252).
(xiv) 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 not a 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.
(Abdul Wahid and others v. The Deputy Commissioner (1986 MLD 381).
14. Undoubtedly in some cases of acquisition of land the Schedules of average prices of mutations and sale-deeds have been considered for the determination of the "market value" an expression occurring in section 23 of the Act. In one case the Collector Acquisition has squarely relied upon the Schedules Exh.O.W.5/1 to award the compensation to the respondents at Rs,40,000 per Kanal. As has been held in the Government of Pakistan v. Maulvi Ahmad Saeed (1983 CLC 414), cited at Serial No,(xi) ante the sale-deeds and mutation entries do serve as aids as to the prevailing market value. Nonetheless, this is not the sole criterion for the determination of the market value.
Consequently, the learned Collector Acquisition, the learned civil Court and the learned Chief Justice of the Peshawar High Court had fallen into error to place reliance solely on the entries of mutations incorporated in the two Schedules Exh.O.W.-5/1.
15. Be that as it may, it is not denied that in the instant case the Government of N.-W.F.P. Had acquired some other land in the same vicinity before the acquisition of the land in dispute which is subject-matter of these appeals wherein blanket rate at Rs,2,500 per Marla had been awarded to the owners. The sole question surviving for determination, is as to whether the learned Civil Court was correct to take into consideration the amount of Award Exh.O.W.5/1. In view of the settled law reproduced above, merely one year average price of the land in the same vicinity or the classification thereof is not exhaustive in itself but there are other considerations enumerated in the aforenoted case law which would also be relevant for determining the market value for fair compensation to be awarded to an owner whose land has been compulsorily acquired.. In the instant case, the, learned Civil Court and the learned Chief Justice in the High Court have not at all adverted to potentiality of the land acquired possessed on the relevant date or a title later which is one of the considerations to be kept in view in determining a fair compensation to be awarded to the owners who are deprived of their land as a result of compulsory acquisition under the Act. It has been established on the record that the disputed land in adjacent to Khyber Colony and the construction of Bungalows was in progress around the land during the period from 1978 to 1981 when corrigendum were issued. It is also at a little distance from the University Road in T'akhel Payan. It would thus be noticed that the disputed land had completely lost the agricultural character and had been even acquired for the purpose of construction of Quarters for Warrant Officers in the P.A.F. We are, therefore, of the considered view that the Collector Land Acquisition and the learned Chief Justice in the High Court has fallen into a grave error to look for the classification alone of the land for the purpose of determination of the fair compensation.
16. The learned Advocate-General N.-W.F.P. And the learned D.A.-G. Have not been able to convince us that the sole consideration for the determination of the fair compensation was the classification of the land or one year's average price worked out by the Patwari. Another consideration evolved in the case of Jogendra Nath Chatterjee and others cited at serial No,iv (ante) would show that the best method is take into consideration the instances of sale of the adjacent lands made "shortly before and after the notification". In the instant' case the sale shortly after the notification has not been placed on the record. Nonetheless the land in dispute is shown to possess the potentiality of becoming the residential plots within a period of months after the notification under section 4 of the Act in this case. We would, therefore, hold that the criterion, namely, potentiality of the land on or near about the date of notification under section 4 of the Act or of passing the Award in this case ought to have been adopted by the trial Judge and the learned Chief Justice in the High Court for determination of the market value of the land in dispute. In this context, we find that Ashiq Hussain Halqa Patwari, (O.W.5) had categorically stated that one Marlas was being sold during those days at Rs,10,000. Even otherwise during the days of the Award the potentialiies of the disputed land and surrounding plots was being settled as plots for construction of Housing Property.
17. In this view of the matter, while dismissing C.A. No,862 of 1994 we would accept C.A. 861 of 1994, set aside the impugned judgment of the learned Chief Justice and award the compensation at Rs,10,000 per Marla to the appellants for the disputed land. The remaining findings of the learned Chief Justice in para.6 of his judgment are upheld. The parties shall, however, bear their own costs.
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