' These two Civil Appeals Nos.95 of 1997 and 13 of 1998 are being disposed of together as common question of facts and law are involved therein. The facts of Civil Appeal No,95 of 1997 are that on certain pieces of land in Taluka Kotri, District Dadu, belonging to various persons arrayed as respondents in the memo. Of appeal were acquired for a public purpose i,e, military installations. A preliminary Notification under section 4 of the Land Acquisition Act, 1894, was issued on 30-5-1981 and subsequent Notifications under sections 6 and 17 of the Act were published on 30-7-1981.
Physical possession was taken over on 20-4-1983. The proceedings for determination of compensation were commenced by the Assistant Commissioner and Land Acquisition Officer, Kotri, and after hearing objections preferred by owners/interested persons an award was made on 7-3-1985 and the Land Acquisition Officer awarded compensation for the value of land at the rate of Rs,15,000 per acre. Apart from the above certain additional amounts were awarded for houses, trees, tube wells, electricity installation etc., but it is not necessary to discuss them as the amounts awarded under these items were neither called in question before the District Court in the Reference under section 18 nor are the same in issue in this appeal. It seems that on 16-6-1985 the respondent on behalf of himself as well as in his capacity as the attorney for the remaining respondents submitted an application before the Collector under section 18 of the Act stating that they would receive the compensation awarded under protest and requesting that the cases may be referred to the Court for determination of the amount of compensation. Accordingly the matters were referred to the Court on different dates and were registered as Suits Nos.7, 14, 15, 16, 17, 18, 19 and 21 of 1986 and 2, 3, 4 and 5 of 1992. By a common judgment, dated 7-1-1997 the learned Additional District Judge, Kotri, enhanced the amount of compensation for the land at the rate of Rs,50,000 per acre together with simple interest at the rate of 6% for the unpaid amount.
2. Civil Appeal No,13 of 1998, also arises from the same award with the only difference that, in this case reference to the Court was made by the Land Acquisition Officer under section 18 of the Act on or about 21-2-1995 i,e, almost 10 years after the making of the award. The references were registered as Land Acquisition Suits Nos.1 to 10 of 1995 and the quantum of compensation in these cases was also enhanced by the learned Additional District Judge, Kotri, to Rs,50,000 vide judgment, dated 11-10-1997.
3. Aggrieved by the aforesaid judgment the Provincial Government and the Federal Government and the Military Estate Officer have preferred these appeals. Since common questions of facts and law were involved in all these appeals alongwith 1st Appeal No,94 of 1995 they were directed to be heard together. These appeals were partly heard by me at the Hyderabad Circuit Bench and since the hearing could not be concluded during the circuit, I directed, with the consent of counsel that the same may be heard at Karachi. Learned counsel for the respondent in 1st Appeal No,94 of 1997, Mr. Ali Ahmad Shaikh, however, was not available when the hearing resumed at Karachi, and therefore, the hearing of that appeal has been adjourned and the matter has been retransferred to the Circuit Bench. In these appeals, however, I have heard Mr. Rafiq Ahmad, learned counsel for the appellants Nos.2 and 3, Mr. Muhammad Saleem Samo, Additional Advocate-General on behalf of the appellant No,1 and Mr. Ghulam Rasool Qureshi, Advocate for respondents at great length and am thankful for their valuable assistance.
4. In support of the appeals Mr. Rafiq Ahmad, Advocate for the appellants Nos.2 and 3 raised two- fold contentions. In the first instance he urged that most of the references before the Court were barred by limitation and as such the Court below ought to have rejected the same without going into the merits of the controversy. On merits he contended that in any event there was no tangible evidence on record to show that the market value of the land in question was equivalent to Rs,50,000 per acre as on the date of Notification under section 4 of the Act and the learned Additional District Judge gravely erred in taking into consideration evidence relating to market value on dates long after the land had been acquired. In support of his first contention learned counsel, in the first place urged that the award having been based on 7-3-1985, the references, particularly those made in 1992 and 1995, were hopelessly barred by limitation. He argued that after the insertion of subsection (3) in section 18 of the Land Acquisition Act, through Ordinance 49 of 1969, reference to a Court could only be made within 6 months of the announcement of the award.
To appreciate the aforesaid contention it may be pertinent to reproduce section 18 of the Act which reads as under:- "18. Reference to Court.-- (1) Any person interested who has not accepted the award may, by written application to the Collector, require that the matter be referred by the Collector for the determination of the Court, whether his objection be to the measurement of the land, the amount of the compensation, the persons to whom it is payable, or the apportionment of the compensation among the persons interested.
(2) The application shall state the grounds on which objection to the award is taken:"
' Provided that every such application shall be made,--
(a) if the person making it was present or represented before the Collector at the time when he made his award, within six weeks from the date of the Collector's award;
(b) in other cases, within six weeks of the receipt of the notice from the Collector under section 12, subsection (2) or within six months from the date of the Collector's award, whichever period shall first expire.
(3) Notwithstanding anything to the contrary contained in section 21, the Provincial Government may, if it has not accepted the award, refer the matter to the Court within a period of six months from the date of announcement of the award; provided that the Court shall not entertain the reference unless in its opinion there is a prima facie case for inquiry into and determination of the objection against the award."
5. A bare reading of the above provisions would show that before the 1969 amendment, no award made by a Collector could be questioned before a Court except through a reference made by the Collector himself. The newly added subsection (3), however, conferred a right upon the Provincial Government to take the matter directly to Court within six months from the award, in case such Government did not accept the award. In the instant case, however, the Government did not object to the award of the Collector and it was only at the instance of the private landowners that reference was made. Therefore, subsection (3) ipso facto does not apply and the objection is entirely misconceived.
6. Alternatively Mr. Rafiq Ahmad contended that under the proviso to subsection (2) a reference could have only been made by the Collector upon an application in writing made by the objector within six weeks from the date of the award or the receipt of notice under section 12(2) as the case may be. He pointed out that the award was made on 7-3-1985 and a direction to issue notice under section 12 (2) was also made on the same date. As such the application should have been made within six weeks from 7-3-1985. When pointed out that the respondents were not personally present on the date of the award as is evident from the observations recorded therein and though a direction to issue notice under section 12(2) has been recorded. There is nothing to indicate that such notice was actually issued, learned counsel contended that even in such event the application was required to be made within six months of the announcement of the award and not later.
7. Mr. Ghulam Rasool Qureshi, learned counsel for respondents submitted in reply that such applications were duly made within the time stipulated by law. In this context he referred to an application dated 16-6-1985 appearing at page 37 in the record of the trail Court proceedings forming the subject-matter of Appeal No,94 of 1995 and a similar application dated 3-7-1985 in the record relating to Appeal No,13 of 1998.
8. Mr Rafiq Ahmad, however, strenuously argued that both these documents were not duly exhibited before the Court and the appellants were not given a chance to question through credibility. As such the trial Court was bound to acknowledge it.
9. Learned counsel appears to be correct in asserting that these applications were not duly exhibited. Nevertheless it seems that the question of limitation was raised before the trial Court, but the same declined to consider the same in view of the authoritative pronouncement of the Honourable Supreme Court in Government of N.-W.F.P. v. Allah Dad and others 1996 SCMR 384 to the effect that the question of limitation has to be decided by the Collector and the Court is only required to confine itself to the contents of the objections. Mr. Ghulam Rasool Qureshi, learned' counsel for the respondent also drew my attention to the earlier judgment of the Honourable Supreme Court in Government of West Pakistan v. Arbab Haji Ahmad All Jan and others PLD 1981 SC 516 a judgment of this Court in Collector of Karachi v. Haji Gola PLD 1965 Kar. 413 and Muhammad Ibrahim and others v. Province of Sindh and another 1991 MLD 90, wherein the same proposition has been enunciated. In view of the above authoritative pronouncements the contention cannot be sustained.
10. With respect to 1st Appeal No,13 of 1998 Mr. Rafiq Ahmad also attempted to argue that there could be no justification for entertaining reference after 10 years of the making of the award. All that can be said is that if the respondents made the application before the Collector within time stipulated by law there could not be blamed for any delay caused in the office of the Collector and the Collector who happens to be the appellant before this Court cannot 'take advantage of his own wrong. Learned counsel relied upon certain observations made in the Division Bench judgment of the Peshawar High Court in the case of Umer Farooq Khan v. N.-W.F.P. 1998 CLC 713, wherein it was observed that the Collector should not have made a reference under section 18(2) on objections filed after 7 years of the award. Nevertheless as rightly pointed out by Mr. Qureshi even in that case the findings of the Court on the basis of the reference were upheld and a copy of the judgment was only referred to the Chief Secretary for taking action against the delinquent officer. It may also be pertinent to observe that in case the making of the reference was not lawful the appellants could, in the absence of an alternate remedy invoked the Constitutional jurisdiction of this under Article 199 of the Constitution, which they chose not to avail. However, in view of the settled legal position established through several precedents, which this Court is bound to follow the question could not be agitated in the limited jurisdiction conferred upon the Courts under the Land Acquisition Act.
11. Coming to the merits of the case, Mr. Rafiq Ahmad argued that under the law the respondents were only entitled to the market value of the land as existing on the date of issuance of the notification under section 4 of the Act and the learned Court below committed a serious error of law in taking into consideration the evidence of increased market value much later. He pointed out that certain records from the office of the Mukhtiarkar Kotri showing the sale price of the land during the period immediately preceding in the vicinity were produced before the Land Acquisition Officer and have been referred to at page 7 of the award. The earliest entry is dated 27-2-1979 and the latest dated 28-1-1981. A cumulative effect of these entries show that about 103 acres of land was sold at a total price of Rs,529,000 and the average sale price is about Rs,5,000 per acre.
According to these entries the highest price declared relates to sale of 22 to 37 acres at the price of Rs,155,000 which amounts to less than Rs,10,000 per acre. As such according to the learned counsel even the award of compensation at the rate of Rs,15,000 per acre on the part of the Land Acquisition Officer was excessive and in any case there was no justification for enhancing the amount to Rs,50,000 per acre. In response to the query whether the appellants had challenged the award, Mr. Rafiq Ahmad drew my attention to certain documents from the record indicating that the appellants had also applied for a reference to the Court contending that the compensation awarded was excessive but the reference was not made on ground that the appellant's applications were held to be barred by limitation. He referred to pages 7 and 8 of the impugned judgment in the 1st. Appeal No,95 of 1997 and pointed out that the learned Additional District Judge has relied upon certain documents produced as Exhs.11, 12 and 13 by one Khadim Hussain, an Assistant in the office of the Land Acquisition Officer, Kotri, who was summoned as a witness by the respondents. These documents, learned counsel pointed out, related to award of compensation and transactions effective long after 30-4-1981 as is evident from the documents themselves and the deposition of the witness, the relevant parts whereof are reproduced as under:- "It is correct to suggest that in Deh Sonwalhar land was acquired for Gas Pipe Line such Award was passed on 24-6-1989. I produce it as Exh.11 Certified True copy of the case he placed on record and original be returned. It is correct to suggest that in Deh Sonwalhar land was also acquired for NLC such Award was passed on 18-2-1986 I produce it as Exh.12 (attested photostate copy of the same be placed on record at costs of plaintiff and original be returned). It is correct to suggest that for bye-pass project land was acquired in Deh Sonwalhar such Award was passed on 20-6-1987. I produce it as Exh.13 (Attested photo-state True copy be kept on record at the cost of plaintiff and original be returned to Department). It is correct to suggest that Martial Law Admn. Zone 'C' and Governor of Sindh sold an area of 9463-25 acres in Deh Sonwalhar which was Government land to Ministry of Defence on 28-6-1983 at the rate of Rs,10 per square yard. It is correct to suggest that in Deh Sonwalhar land was sold-out by the Government of Sindh to Messrs Anwar Zeb Cenient Factory at the rate of Rs,50,000 per acre. It is correct to suggest that in the year 1981 S.D.M., Kotri had granted land to people at the rate of Rs,4 per sq.Ft. For residential purpose. Voluntarily states that it was not Housing Scheme, therefore, no development work was made by Assistant Commissioner Kotri as it was not his responsibility."
12 According to the learned counsel the learned Additional District Judge was pursuaded to enhance the amount of compensation on the basis of evidence showing that compensation at the rate of Rs,50,000 per acre was awarded in 1986 and 1989, whereas under the law he was required to premised is finding on the basis of market value existing on 30-4-1981 and not on any subsequent date. Admittedly the price of land has been increasing eversince the date of acquisition but the Court was required to ignore any evidence relating to subsequent enhancement of price. In support of the above proposition learned counsel placed strong reliance upon a Full Bench decision of the Peshawar High Court in the case of Government of Pakistan v. Sikandar Khan and others PLD 1987 Pesh. 68 and Muhammad Farid Khan and others v. Collector No,5 Terbela Dam Project, WAPDA PLD 1990 Peshawar 97. Wherein it has been held that the relevant date for the purpose of determination of the market price is the date of Notification under section 4 and the price on account of any subsequent improvements cannot be taken into consideration. He further argued that even the rise in prices between the date of Notification and the date of Award could not be taken into consideration as held by the Honourable Supreme Court in the case of Land Acquisition Collector v. Muhammad Iqbal 1992 SCMR 1245. With reference to the sale price offered by the Hyderabad Development Authority, learned counsel additionally contended that the prices offered by Cooperative Society and Development Agencies including the development parties and the same could not be taken into consideration for the purpose of awarding compensation when the land in question admittedly was not part of any Housing Scheme.
13. Mr. Ghulam Rasool Qureshi, learned counsel for the respondents did not dispute the proposition that theoretically compensation was to be determined on the basis of market value with reference to the date of Notification under section 4 of the Land Acquisition Act. Nevertheless, he contended that evidence relating to transactions made thereafter could not he ignored but was in fact required to be taken into consideration in view of several recent authoritative pronouncement of the Honourable Supreme Court to the effect that not merely the exiting but also the potential value of the land is required to be considered for the purpose of determining the quantum of compensation. He relied upon the judgments of the Honourable Supreme Court in the cases of Malik Aaman and others v. Land Acquisition Collector and others PLD 1988 SC 32, Government of Sindh v. Shakir Ali Jafri 1996 SCMR 1361, Abdul Qayoom and others v. Pakistan 1996 SCMR 1820, Province of Punjab v. Abdul Majeed and others 1997 SCMR 1692 as well as the Division Bench judgment of the Lahore High Court in the case of Muhammad Rafiq Khan v. Province of Punjab 1992 CLC 1775 and two judgments of this Court in the cases of Muhammad Ibrahim and others v.
Province of Sindh 1991 MLD 90 and Government of Sindh v. Shakir Ali Jafri 1991 MLD 1258.
14. In Malik Aaman's case the following observations of Aslam Riaz Hussain, J. Speaking for the Bench, clearly support Mr. Qureshi's contention:-- "It is, therefore, evident that the factors for determination of the market value of the land proposed to be acquired are not restricted only to the time of issuance of the notification under section 4 of the Land Acquisition Act or any period prior to it, but can also relate to the period in future (i,e, to period after' the issuance of notification under section 4 of the Act). It is for this reason that the 'potential value' of the land i,e, the use to which it can be put in future, has in a large number of cases been held to be a relevant factor. As such the fact that long period has elapsed between the issuance of notification under section 4 of the Act and the announcement of the award coupled with the fact that during that period the prices of land or the property in question have arisen sharply, is a factor which ought to and should have been taken into account while determining the value of the land in dispute for the purpose of compensating the owner."
15. In the case of Abdul Qayoom 1996 SCMR 1820 the Honourable Supreme Court enhanced the quantum of compensation awarded by the Courts below on the consideration that the High Court had not taken into consideration the fact that while the land was acquired in 1972 the Arbitrator given his award in 1977, the appeal before the High Court was decided in 1992 and during the intervening period the value of the land had increased and the value of the money diminished.
16. In the recent decision in the case of Province of Punjab v. Abdul Majid 1997 SCMR 1692, the Honourable Supreme Court has clearly held that one years average of sale taking place before the notification under section 4 is merely one of the modes for ascertaining market and not an absolute yardstick for assessm ent. It has further been reiterated that in assessing market value of land the present use thereof alone is not relevant and it's potential on account of its situation new developed area/land is an important factor which Court must keep in view in determining its market price. The -above principle which has been authoritatively affirmed by the Honourable Supreme Court was enunciated by the Division Bench of the Lahore High Court in the case of Muhammad Rafiq 1992 CLC 1775, where it was held that though the land in question was used for agricultural purposes and no residential colony was in existence at the site, but a bus stand and a building of the Brigade Headquarter had been set-up and assessment should be made on the basis of the land being "urban agricultural land with suitability for building purpose".
17. In the case of Muhammad Ibrahim 1991 MLD 90 the land acquired was being used for agricultural purposes growing vegetables, but was surrounded by industrial units and residential colony. The Land Acquisition Officer awarded compensation at the rate of Rs,5,000 per acres for cultivated land and Rs,3,000 for uncultivated land. Upon a reference under section 18 the Additional District Judge, Sukkur enhanced the compensation to Rs,10,000 per acre for the entire land. On appeal under section 54, however, late Qaiser Ahmad Hamidi, Y. Considering the proximity of the land with urban area and its potential use set-aside the judgment and awarded per sq. Ft.
Compensation at rate of Rs,2. In the case of Government of Sindh v. Shakir Ali Jafri, the same learned Judge held that the potential value of the land i,e, the value on account of use to which the land could be put to use in future was always relevant consideration and dismissed the appeal preferred by the Government questioning the finding of the 1st. Additional District Judge, Hyderabad on this ground. This judgment was sustained by the Honourable Supreme Court in the case reported in 1996 SCMR 1361.
18. Against the above legal position Mr. Qureshi referred to the following observations of the Land Acquisition Officer himself in the award, dated 7-3-1985, which may be reproduced in extenso:-- "The value of the land as Agricultural land is low but it is an ideally located land for the purpose of installation of Industries, Commercial Centres and residential Colonies without any efforts and on minimum expenses. It is a high surface land and is free from salinatary and water lodging and is essentially a building site. Between 1975 to 1981 a number of housing Colonies on its East have been sponsored by private parties which are fully developed, having all the facilities such as water, electricity, roads, sewerage and drinking water. The H.D.A. Has developed first phase of one of the highest housing colony on ultramodern style on its Eastern Border, which is known as Gulshan- eShahbaz. The H.D.A. Itself sold its plots at Rs,100 to Rs,125 per sq. Yards at the relevant time.
' The Sindh University, Liaquat Medical College Hospital. T.B. Sanitorium, Railway Workshop and Railway-Colony are also close to the land on its North-East. The highly developed Sindh Industrial Area of Kotri with number of Mills, Labour Colonies and Thermal Power Station are on its South at a walking distance. The village Khadda having over 500 houses mostly pacca built with water and electricity facilities, near Bolari Railway Station, is attached to this land on its West. The some of the residents of this land have light connection, and get the drinking water from privately owned wells and tube-wells. The present Government has also dug a well for drunking water. The transportation to and from the land to all parts of the country is most convenient and the residence even presently have no transport problems. The value of the land since 1981, has immensely increased but it was not less than Rs,2 per sq.Ft. Of small plots or Rs,50,000 per Acre, for big plots at the time of notification under section 4 of the Act. The Government has itself sold the land in the vicinity at about Rs,50,000 per Acre."
19. It may be pertinent to observe that after recording the above the Land Acquisition Officer proceeded to hold as follows:-- "I award compensation of the land on the basis of its market value with reference to its present actual use only at Rs,15.,000 per acre and I am not inclined to consider its value for the compensation-with reference to its future use and its potential value as ideal building site."
20. It may be observed that the factual aspect of the case including the future potential value of the land acquired had been elaborately discussed in the award itself. These findings were not challenged before the Court. However, in determining the quantum of compensation the Land Acquisition Officer committed a serious error of law in not following the legal principle authoritatively laid down by the Honourable Supreme Court and proceeded to premise his award only on the basis of "the present use of the land".. This error the Court was bound to correct and upon doing so it enhanced the quantum of compensation. In my view therefore, the findings are entirely unexceptionable and there is no merit in these appeals, which are liable to be dismissed.
' These are my reasons for the short order announced on 25-6-1998.